Honda Honda Update Update 200 200 9 9
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HondaHonda UpdateUpdate 20020099
CR-Z Concept
1. Strengthening Advanced Environmental Technologies
2. Advancement of Motorcycle Business
3. Advancement of Automobile Business
Honda Direction and Key Challenges
2
3
500,000units
Annual global sales target(beyond 2010)
Civic Hybrid 2nd Generation 2005 2009 2010
3rd Generation Insight
CR-ZFIT/Jazz Hybrid
Hybrid models: Honda recognizes hybrid technologies as the mostrealistic path for CO2 reduction at this time
a lightweight and compact 1.3-liter engine with a motor
Integrated Motor Assist (IMA) systemCVT
path of drive force
path of an electronic force
Motor Engine
BatteryInvertera lightweight and compact
1.3-liter engine with a motor
Integrated Motor Assist (IMA) systemCVT
path of drive force
path of an electronic force
Motor Engine
BatteryInverter
INSIGHT Early 2009 Launched in U.S., Japan and Europe Excellent Fuel Economy ---- 41mpgLess CO2 ---- 101g/kAffordable Price ---- $19,800~
Strengthening Advanced Environmental Technologies
Enhancement of hybrid vehicle lineup
- Development of hybrid system forwith medium to large-size vehicles
- Establishment of Blue Energy Co., Ltd., joint venture with GS Yuasafor lithium-ion batteries for hybrid vehicles
Strengthening Advanced Environmental Technologies
4
Blue Energy Osadano Plant in Kyoto, JapanProduction start in Fall 2010
Applying PGM-FI (fuel injection) system to all models in Thailandby the end of 2009
Redesigned Wave 110 series with PGM-FI is a new Asian core-platform model; – 18% performance improvement– Improved fuel efficiency; 18% mileage improvement– Significant reduction in cost and development time
Honda to develop and market Electric Motorcycle around 2010
– Targeting Zero CO2 next generation transportation – Launching in 2 years time
Strengthening Advanced Environmental Technologies
5
1. Strengthening Advanced Environmental Technologies
2. Advancement of Motorcycle Business
3. Advancement of Automobile Business
Honda Direction and Key Challenges
6
7
Maintaining strong position particularly in markets with high potential
Advancement of Motorcycle Business
0
100
200
300
400
500
600
700
0 .9 1 .2 1 .1 1 .5
3 .2
2 .9
77%
69%66%
46%
60%
0
12
3
4
56
7
8
India Indonesia Vietnam Thailand Brazil0%
25%
50%
75%
100%Subsidiary Joint VentureOther Market Penetration
( Million Units )
Source: Honda
Honda’s Market Penetration
Penetration Rate (per capita) of MotorcyclesGDP per capita (U.S.$)
(JETRO 2007)
CY2008 Unit Sales
59.5%25.3%
23.6%
14.8%5.9%
4.6%
400 500 1,2001,1003002001000 (millions)
Population (millions)
Units in operation (millions)
*As of 2007*Indonesia as of 2006*India as 2005
Taiwan$16,697
Thailand$3,732
Vietnam$828
Indonesia$1,925
Brazil$6,938
India$941 1 unit for 21.7 people
1 unit for 16.9 people
1 unit for 6.8 people
1 unit for 4.2 people
1 unit for 4.0 people
1 unit for 1.7 people
8
5.8
7.6
9.0 9.2 9.6
11.1
0.8
0.8
1.01.2
1.5
1.7
0
2
4
6
8
10
12
14
16
2003 2004 2005 2006 2007 2008
Advancement of Motorcycle Business
Honda Motorcycle Sales Growth (2003 to 2008)Unit
(millions)
Asia
China
South America
North AmericaJapan
Europe
Growth centered in Asia and South America
15. 038
90
5
10
15
FY 01 02 03 04 05 06 070%
10%
20%
30%
40%
50%
Advancement of Motorcycle Business
Super Cub series, a big hit for 50 years, continues as a Honda strength
Biz (Brazil)Super Cub (Japan)Revo (Indonesia)Wave110 (Thailand)
Honda Motorcycle Production Unit of cub series produced in 2008Total unit producedRatio of cub series
Unit (millions)
– Global Production of Cub Series has reached 60 Million Units– Honda Cub Series sells more than 3 million units a year worldwide– Cub Series achieves high profitability with production efficiency and strong brand
image
Not a performance bike, but meets everyday customer needs
1. Strengthening Advanced Environmental Technologies
2. Advancement of Motorcycle Business
3. Advancement of Automobile Business
Honda Direction and Key Challenges
10
11
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Unit: thousands
Others
Accord
Civic
CR-V
Fit/Jazz/City
- Unit Sales of Honda’s Global 4 Models +1(Hybrid Models)
Source: Honda
Accord Fit/Jazz Civic CR-V
Growth of global models makes Honda competitive and efficient
76%
58%
Advancement of Automobile Business
500,000units
Annual globalsales target
(beyond 2010)
- Growth of Hybrid Models
Insight
12
- Current Fit model demonstrated that sourcing from Asia contributed to significant cost reduction
160K
220K
270K
As volume grows, Thai and China J/V ship more cost competitive FIT / City
components to Japan
- Current Fit attained cost reduction compared to previous model(Including City)
Previous
Global Common Design and Global Purchasing Network
Advancement of Automobile Business
Current FIT Current City
13
AllistonAlliston
Light TrucksPassenger cars
440440
OhioOhio
Line 2
195
Line 2
195
Line 1
195
Line 1
195Canada Canada
AlabamaAlabama
240240
MarysvilleMarysville
East LibertyEast
Liberty
U.S.U.S.
LincolnLincoln
IndianaIndiana 100100GreensburgGreensburg
Location AnnualCapacity
CSX
Small Middle Luxury Crossover Pickup Van
5050Mexico Mexico El SaltoEl Salto
Line 2
150
Line 2
150
Line 1
150
Line 1
150
Importfrom Japan
Importfrom Japan
Element
OntarioOntario
Flexible model allocation to optimize capacity utilization
TL RDX
Civic
Civic
Civic
Civic
Pilot
Accord
Accord
AccordSedan V6
CR-V
CR-V
CR-V
Ridgeline
Ridgeline Odyssey
Odyssey
MD-XCivic
Mid 2009
Advancement of Automobile Business
ZD-X
FITFIT((US modelUS model))
Mature flexible production system to enable Honda to get through anticipated future changes with minimal impact
STREAMSTREAM
Advancement of Automobile Business
- Production of the Stream was transferred from Suzuka Factory to SaitamaFactory in January 2009
- Production of the U.S. and Canada version of the Honda Fit startedin Saitama Factory from May 2009 in addition to Suzuka Factory
■■ SaitamaSaitama
SuzukaSuzuka ■■
14
Advancement of Automobile Business
- Revision of CAPEX for expansion
- Revision of R&D activities and expenses
Yorii Assembly plant
Discontinue NSX successor model with V10 engine
Sakura R&D Center Yachiyo Industry new mini-vehicle plant
Withdrawal of Acura brand launch for Japan market
- In order to minimize the impact of recent changes in the businessenvironment and to focus company resources on necessary areas,All investments and development projects were reviewed.
Withdrawal from F1 and focus on environmentaltechnologies
Reallocation of CAPEX and R&D expenses
15
50%
50%
YoriiAssembly Plant
2012~
Yachiyo IndustryNew Mini-vehicle Plant
2011~
SakuraR&D Center
2010~
69%
50%
50%
YoriiAssembly Plant
2012~
Yachiyo IndustryNew Mini-vehicle Plant
2011~
SakuraR&D Center
2010~
69%
627654
599
390
361
417 408380
0
100
200
300
400
500
600
700
FY07 FY08 FY09 FY10(P)
CapitalExpendituresDepreciation
Capital Expenditures & Depreciation
Cost StructureReform
In market deterioration due to the financial crisis, our goal is for business to be in the black in FY10 based on cost structure reforms
Operating income
189.6
Operating income
10.0
CurrencyEffect
- 193.0
Revenue, model mix,
etc.
- 334.8 Cost Reduction, etc.
- 39.0
Decrease
in SG&A
+ 339.0
Decrease in R&D
+ 48.2
Yen (billions)Operating Income - 179.6 bn. yen ( - 94.7 %)
Cost StructureReform
-Effects of cost reductions, etc
+30B yen
Cost Structure Reform-Reducing sales incentive, etc
+50B yen
- Total Amount of Cost Structure Reform Approx. 250B yen
- Targetingbusiness
in the black
16
FY09 FY10
Cost Structure Reform-Decrease in quality related expenses-Withdrawal from some racing activities-Revision of expenses, etc
+125B yen
1. Honda global business environment
2. North America
3. Japan
4. Europe
5. Asia
6. Other Regions
Industry and Major Market Outlook
17
Honda motorcycle sales up by 30% in April in India
Honda UK plant shut down from Feb to May
Russia auto sales down by 54% in April
Lack of consumer confidence
Auto sales down by 12% in Western Europe in April
Scrap incentives will start in U.K. from May
April SAAR 9.3M
Monetary measures “TALF”
Used vehicle prices recover since end of 2008
U.S. unemployment rate remain high -- 8.9% in April
Gas price stable around $2
IPI tax cut extended until JuneBrazil auto sales down by 6% in April
Tax cut program for Eco-vehicle started from April
Honda announced voluntary separationopportunity in America
FY10 auto demand forecast 4.3mill (JAMA)Auto sales down by 23% in April
Auto sales increased 20% in Germany due to scrap incentives in April
Auto sales increase approx. 30% in China
Brazil motorcycle sales downby 16% in April
Interest rate cut down 7.25% in Indonesia
Motorcycle sales in April down 30% in Indonesia.
2009 auto demand forecast over 10mill units
Chrysler began Chapter 11 bankrupcy procedures
Honda Insight No.1 sales in April in Japan(registered car segment)
Palm oil price raise in Indonesia for 5monthPreferential vehicle purchase tax cut (below 1.6L) from 10% to 5% in China
Japan
South America
North AmericaEurope
Asia
Honda Global Business Environment
63.1156.3116.097.0128.4118.295.7114.4
-107.4
94.5 22.5 70.0
-15.7%
4.3%
9.5%7.5%
6.7% 6.1%7.7%7.3%7.8%
6.3%
1.6%
5.7%
-150
-100
-50
0
50
100
150
FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q-16%
-12%
-8%
-4%
0%
4%
8%
12%
16%
Yen (billions)
Operations in North America
4Q operating income in North America down due to sluggishsales in U.S., increase in fixed cost and higher yen
19
20
0
5,000
10,000
15,000
20,000
CY03 04 05 06 07 08 09(E)
Passenger CarsLight Trucks
Unit(thousands)
0
500
1,000
1,500
2,000
CY03 04 05 06 07 08 09(P)
Passenger CarsLight Trucks
Source: Honda
Industry Demand Honda Unit SalesUnit
(thousands)
1,349 1,394 1,462 1,50916,14816,831 16,88416,652 16,556
1,551
(aggregate numbers of Honda brand and Acura brand)
13,3001,428
Source: Honda
Production capacity & flexible lines New Indiana plant , New Canadian Engine plant started productionAccord V6 will be produced in Alabama plant
Innovative technologies to achieve CAFE Leadership
( 10,500 )
Fit (Aug 2008)Pilot (May 2008)Acura TSX (May 2008) FCX Clarity (Jul 2008)
Major Markets – Honda Automobile Business in U.S.
Operations in North America
Strategy in N.A Market
Acura TL (Sep 2008) Insight (Mar 2009) Acura ZDX (Fall 2009)
※Retail Sales ※Retail Sales
2.3
56.273.360.668.241.968.948.9
-176.0
37.9 40.9
-64.3
-23.8%
0.2%
4.5%6.0%5.9%5.2%5.4%
3.4%4.4%3.3% 3.4%
-6.0%
-200
-150
-100
-50
0
50
100
FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q-24%
-18%
-12%
-6%
0%
6%
12%Yen
(billions)
4Q operating income in Japan down by higher yen anddecrease in revenue and model mix change, etc
Operations in Japan
21
22
Enhancing product line up with efficiency- Strengthen Hybrid model- Cost reduction by using global purchasing network
Enhancing sales network- Enhancing sales and marketing function for hybrid vehicles- Improving stability of consolidated sales subsidiaries
0
2,000
4,000
6,000
CY03 04 05 06 07 08 09(E)
Registered vehicle
Mini
Source: Honda
Industry Demand Honda Unit Sales
0
100
200
300
400
500
600
700
800
900
FY04 05 06 07 08 09 10(P)Source: Honda
Mini
Small
Minivan
Others
Unit(thousands)
Unit(thousands)
732 717 710 720
580
640
(572)5,082
5,829 5,855 5,854 5,7395,354
Accord (Dec 2008) Insight (Feb 2009)
FREED (May 2008) Odyssey (Oct 2008) Life (Nov 2008)
FCX Clarity (Nov 2008)
Mature Markets - Honda Automobile Business in Japan
Operations in Japan
Strategy in Japan Market
※Retail Sales※Retail Sales
**
**Apr.09-Mar.10
18.65.816.710.312.63.79.06.4
-10.5
11.2 8.3 1.1
-4.0%
4.2%
1.6%
4.3%
2.9% 2.6%
2.9%
1.4%2.0%
3.1%
2.4%
0.4%
-15
-5
5
15
25
FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q-5%
0%
5%
10%
Operations in Europe
4Q operating income in Europe (including Russia)down, due to sluggish sales in Western Europe
Yen (billions)
23
24
Industry Demand(EU15+EFTA)
(excluding commercial vehicles)
Honda Unit Sales(EU15+EFTA)
0
5,000
10,000
15,000
CY03 04 05 06 07 08 09(E)
PetrolDiesel
Unit(thousands)
0
50
100
150
200
250
300
350
CY03 04 05 06 07 08 09(P)
Civic
Accord
Jazz
CR-V
Unit(thousands)
Source: HondaSource: Global Insight
232Others
13,558
194
256272 280
220
Accord (Jun 2008)
Insight (Mar 2009)Jazz (Oct 2008)
Strategy in Western Europe Market
Environmental strategyLow CO2 emission models; Insight 101g/km, Jazz 125g/km
Flexible Production Lines and Production Allocation Jazz production starts at UK plant within 2009
Operations in EuropeMature Markets - Honda Automobile Business in Western Europe
※Retail Sales ※Retail Sales
21.938.333.436.919.220.218.219.4
-6.3
48.3 33.4 24.9
-1.9%
5.3%
9.3%
8.0%
5.8%
9.4%
5.2%
6.7%6.8%
11.6%
8.4%
6.5%
-10
0
10
20
30
40
50
FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q-3%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
Operations in Asia
Operating income in Asia exceeded 100 billion in FY09with auto and motorcycle growth
Yen (billions)
25
26
0
5,000
10,000
15,000
20,000
25,000
CY03 04 05 06 07 08 09(E)
India Indonesia Thailand Vietnam
Industry:Unit ( thousands )
Source: Honda
Industry Demand in Major Asian Motorcycle Markets
(18.3mil)
Operations in Asia
(7.4mil)
(6.5mil)
(1.7mil)
(2.7mil)
(7.4mil)(7.8mil)(6.8mil)(6.0mil)(5.4mil)
(4.9mil)(4.6mil)(5.1mil)
(3.9mil)
(1.6mil)(1.9mil)(2.1mil)
(2.0mil)
(2.9mil)(2.4mil)(1.8mil)
(1.4mil)
(1.3mil)
(2.8mil)
(1.8mil)
※Wholesale
0
2,000
4,000
6,000
8,000
10,000
CY03 04 05 06 07 08 09(E)
27
Other brandsHero Honda Honda Motorcycle & Scooter India
Industry: Unit (thousands)
Source : Honda
In India, motorcycle business foundation solidified behindtwo companies, Hero Honda and HMSI
Principal models of Honda Motorcycle & Scooter India
Splendor NXG
Principal models of Hero Honda Motors Limited
Passion+ CBF Stunner
(979)
(3,516)
Operations in Asia
ActivaFMC Apr. 09 Debut in June. ‘08Debut in May. ‘07 Debut in May. ‘07
Super SplendorDebut in May. ‘07
※Wholesale
28
0
200
400
600
800
1,000
1,200
1,400
CY03 04 05 06 07 08 09(E)
Industry: Unit (thousands)
Source : Honda
Steady Growth of Honda Motorcycle & Scooter India (HMSI), a subsidiary of Honda in India
Principal models of HMSI
Debut in June. ‘08
CBF StunnerAviatorDebut in Feb. ‘08
(979)
ActivaFMC Apr. 09
Operations in Asia
※Wholesale
29
0
1,000
2,000
3,000
4,000
5,000
6,000
CY03 04 05 06 07 08 09(E)
Added annual production capacity in Sep. 2005 (2,000 → 3,000 thousand units)
Other brandsHonda
Source: Honda
Industry: Unit (thousands)
Principal models
Continuously introducing innovative productsto the Indonesian motorcycle market
(2,875)
Revo110cc
FMC Jan.09
Operations in Asia
CS1125cc
Debut Apr. 08
BeAT110cc
AT ModelDebut Jun. 08
Blade110cc
Debut Dec.08
※Wholesale
30
0
500
1,000
1,500
2,000
2,500
3,000
3,500
CY03 04 05 06 07 08 09(E)
Other brandsHonda
Source: Honda
Industry: Unit (thousands)
Principal models
Honda to enhance product pipeline for Vietnamese motorcycle market
(1,247)
Operations in Asia
Click110cc
AT ModelDebut Oct. 06
Future Neo FI125cc
Fuel InjectionDebut Apr 07
Air Blade110cc
AT Model Debut Apr 07
Wave S 100cc
Debut May 07
Wave α100cc
MMC Jul 08
※Wholesale
31
0
50
100
150
200
250
CY03 04 05 06 07 08 09(P)
Malaysia Thailand
Indonesia Philippines
0
500
1,000
1,500
2,000
2,500
CY03 04 05 06 07 08 09(E)
Malaysia Thailand
Indonesia Philippines
Source: Honda
Honda Unit SalesUnit (thousands)
Industry DemandUnit (thousands)
Source: Honda
123
156148
138146
Optimal allocation to enhance production efficiency
Production of FREED in Indonesia starting in June 2009
Enhance complementary approach in ASEAN region
Strengthening of purchase function to flexibly consolidateand re-allocate
1901,892
Freed (Jun 2009) Jazz (May 2008) City (Sep 2008)
Strategy in Southeast Asian Market
Honda Automobile Business in Southeast AsiaOperations in Asia
※Wholesale ※Retail Sales
32
0
20
40
60
80
CY03 04 05 06 07 08 09(P)
213 242 244 294 299 264
299362 357
425521
531
249
303
302 405
195
135
0
500
1,000
1,500
CY03 04 05 06 07 08 09(E)
Premium
"A"
800cc
Industry Demand(excluding commercial vehicles, SUV and MUV)
Unit (thousands) Unit
(thousands)
Honda Unit Sales
City
Accord
Civic
Source: Honda
CR-V
Category
Source: Global Insight
15
3540
55
6153
Established 2nd plant (parts) in Sep 2008to supply body panels and engine components to the 1st plantto export engine components to Asian countries
Introduce Jazz in India in mid 2009to enjoy excise duty benefit for small-sized car
1,200
City (Nov 2008) Jazz (Mid 2009)
Operations in AsiaHonda Automobile Business in India
Strategy in India Market
※Wholesale ※Retail Sales
Operations in Other Regions
32.731.730.121.719.516.021.415.2 32.721.7 48.7 41.8
4.1%
10.4%11.2%11.3%10.9%
9.6%
8.4%8.3%8.6%
12.4%
14.0% 13.8%
0
10
20
30
40
50
FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q0%
5%
10%
15%
Operating income in Other regions in FY09 centers on Brazil to grow
Yen (billions)
33
34
0
500
1,000
1,500
2,000
CY03 04 05 06 07 08 09(E)
Other brandsHonda
Source: Honda
Industry: Unit (thousands)
Principal models
Solid operation as a market leader in Brazilian motorcycle marketIntroducing PFM-FI (Fuel Injection) models to meet Euro3
Exceed one million units per year(1,459)
CG 150 TitanCG 125 FAN Biz 125CG 150 Titan Mix
Flex FuelDebut Mar 09
Operations in Other Regions
※Wholesale
0
20
40
60
80
100
120
140
160
180
200
03 04 05 06 07 08 09(P)0
1,000
2,000
3,000
CY03 04 05 06 07 08 09(E)
Unit (thousands)
Unit (thousands)
Source: HondaSource: Global Insight
32
5057
67
Brazil
86
Confidential
118
( Flexible Fuel Vehicle)( Petrol Engine Vehicle)
2,671
FFV
2,377
1,844
1,6181,532
1,339
35
Expansion of production capacityBrazil: Expand capacity to 120,000 units in Aug 2008
Environmental strategy(FFV->Brazil)
Fit FFV (Nov 2008) Civic FFV
Strategy in South America Market
Honda Unit SalesStrong sales of FFV models contributed to growth
Industry Demand(including commercial vehicles)
Operations in Other Regions
Honda Automobile Business in Brazil
※Retail Sales※Retail Sales
FY 09 4Q Results- Outline
- Business Segment Information- Profit Analysis
FY 10 Forecasts
Dividend per Share
Financial Highlights
36
37
EPS (Yen) 330.54 75.50 - 77.2%( - 255.04 yen)
Note : Shares which are based on calculation of EPS
approx.1,815,356,000 shares
approx.1,814,561,000 shares
Outline of FY09 Twelve Months Financial Results (Consolidated)
Unit (Sales)FY09 Twelve Months
FY08 FY09 Change
Motorcycles 9,320 10,114 + 8.5%
Automobiles 3,925 3,517 - 10.4%
Power Products 6,057 5,187 - 14.4%
Financial resultsFY09 Twelve Months
FY08 FY09 ChangeNet sales & other operating revenue 12,002.8 10,011.2 - 16.6%
Operating income 953.1 189.6 - 80.1%
Income before income taxes 895.8 161.7 - 81.9%
Equity in income of affiliates 118.9 99.0 - 16.7%
Net income 600.0 137.0 - 77.2%
US Dollar 114 101 Yen up by 13 yen
Euro 162 142 Yen up by 20 yen
Average Rates (Yen)
Yen(billions)
Major Change Factors
Business Environment
(weighted average number of shares outstanding )
(weighted average number of shares outstanding )
Unit (thousands)
Motorcycle market
Automobile market
Unit SalesMotorcycles:
Automobiles:
Power Products:
Net sales & other operating revenue
Operating income
<Decrease Factors>
<Increase Factors>
Crude oil and raw material prices rose significantly worldwide in the first half, then declined in the second half. The economy in the U.S. and Europe deteriorated caused by the financial crisis. A further downturn due to the negative economic cycle is feared. In China and India, economic growth slowed down in the second half.In Japan, both capital expenditures and consumer spending declined, and the economy is rapidly deteriorating Yen appreciation against the U.S. dollar and Euro
Demand in the U.S declined significantly Due to strong sales in the first half, industry-wide sales volume in Brazil, India and Thailand maintained YOY despite reduced sales in the second half
Demand in the U.S., Western Europe and Japan declined significantly in the second half. Overall market size was increased in Brazil, China and India despite a temporary decline in demand.
Asia and other regions including Brazil contributed to gain in operating profit, offsetting deterioration in major markets.
Decline due to lower sales volume of automobiles and power productsNegative currency translation effects
Increases in Asia and “Other” Region, which includes Middle East Decreases in North America, Europe and Japan
Favorable sales in Asia and Other Regions, which includes BrazilDecreases in North America, Japan and Europe
Strong sales in Asia and BrazilDecreases in North America, Japan and Europe
Decrease in revenue and model mix change, etc.Increased raw material costsIncreased fixed cost due to production cutCurrency factors
Effects of cost reductionDecrease in R&D
Change in Income before Income Taxes < FY09 Twelve Months >
FY08 12 Months
Yen (billions)
FY09 12 Months
895.8
161.7
- 247.7
- 182.5
- 88.3+ 24.7 - 269.5
+ 85.7 - 56.4
Operating income
953.1Operating
income
189.6
Revenue, model mix, etc.
Cost Reduction, the effect of raw
material cost , etc. Decrease in R&D
Currency Effect Fair value of derivativeinstruments
Others
Increase in SG&A
Income before Income taxes - 734.1 bn. yen (- 81.9%)
Operating Income- 763.4 bn. yen ( - 80.1 % ) Other Income &
Expenses+ 29.3 bn. yen
<Increase Factors>• Change in pricing for the new model year• Decrease in sales incentives for North America automobile business
<Decease Factors>• Decline in profit attributable to lower unit sales•Model mix impact, etc.
<Increase Factors>• Effects of cost reductions, etc.<Decease Factors>• Impact of increase in raw material prices• Increase in fixed cost due to production cut , etc.
<Increase Factors>• Decrease in quality related expenses , etc.<Decease Factors>• 0ne-off expenses related to withdrawal from some racing activitiesand cancellations of new model developments
• Increase in provisions for credit loss and residual loss , etc.
Currency effect due to difference between average rates and transaction rates: +33.0 bn. yenInterest rate swap cost, etc. : - 89.4 bn.yen
<Currency Effects >Impact on Operating income - 269.5 bn. yen (due to difference of average rates and translation effects)Impact on Other income & expenses + 33.0 bn. yen (due to difference between average rates and transaction rates)Impact on Income before income taxes - 236.5 bn. yen (see also Exhibit 1)
(Exhibit 2)
38
EPS (Yen) 14.01 - 102.59 -( - 116.60 yen)
Note : Shares which are based on calculation of EPS
approx.1,814,587,000 shares
approx.1,814,610,000 shares
Outline of FY09 4th Quarter Financial Results (Consolidated)
Unit (Sales)4Q Results
FY08 FY09 Change
Motorcycles 2,368 2,002 - 15.5%
Automobiles 1,051 680 - 35.3%
Power Products 2,092 1,531 - 26.8%
Financial results4Q Results
FY08 FY09 ChangeNet sales & other operating revenue 3,055.5 1,783.8 - 41.6%
Operating income 168.8 - 283.0 -
Income before income taxes 146.8 - 309.5 -
Equity in income of affiliates 24.3 2.7 - 88.7%
Net income 25.4 - 186.1 -
US Dollar 106 94 Yen up by 12 yen
Euro 158 121 Yen up by 37 yen
Average Rates (Yen)
Yen(billions)
(weighted average number of shares outstanding )
(weighted average number of shares outstanding )
Unit (thousands)
Major Change Factors
Business Environment
Motorcycle market
Automobile market
Unit SalesMotorcycles:
Automobiles:
Power Products:
Net sales & other operating revenue
Operating income
<Decrease Factors>
<Increase Factors>
Decreased unit sales in all the regions
Decreased unit sales in all the regions
Decreased unit sales in all the regions
Financial crisis and deterioration of real economy led the U.S. and Europe recession to deepen and become more serious. Japan economy deteriorated rapidly due mainly to a decline in exports.Pace of economic expansion has further slowed down in AsiaYen appreciation against the U.S. dollar and Euro
Steep deterioration not only in the U.S. but in Thailand and IndonesiaDemand in India has recovered from the previous quarter.
Steep downturn in the U.S., Japan and Western EuropeDemand in Russia continued to decline largely.Expanding markets in India, Brazil and China
Honda earned operating profit for the fiscal year, however it posted operating loss in the 4Q due to decreased volume in all businesses under rapid market deterioration.
Decline mainly due to decreased unit sales of automobilesNegative currency translation effects
Decrease in revenue and model mix change, etc.Increased fixed costs due to production cutIncreased raw material costsCurrency factors
Effects of cost reductionDecrease in SG & A
39
Change in Income before Income Taxes <FY09 4th Quarter>Yen
(billions)
146.8
-309.5
- 357.9
- 107.9
+ 21.5 + 19.3 - 26.8- 7.6 + 3.0
Revenue, model mix, etc.
Cost Reduction, the effect of raw
material cost , etc.
Decrease in R&D Currency Effect Fair value of derivativeinstruments
OthersDecrease in SG&A
FY09 4QFY08 4Q
Operating income
168.8
Operating income
-283.0
Income before Income taxes - 456.4 bn. yen
Operating Income - 451.8 bn. yen Other Income
& Expenses
- 4.5 bn. yen
<Increase Factors>• Decrease in quality related expenses• Decreased expenses for advertising, sales promotion, etc.<Decease Factors>• 0ne-off expenses related to withdrawal from some racing activitiesand cancellations of new model developments , etc.
<Increase Factors>• Effects of cost reductions, etc.<Decease Factors>• Increase in fixed cost due to production cutImpact of increase in raw material prices,
etc.
<Increase Factors>• Change in pricing for the new model year, etc.
<Decease Factors>• Decline in profit attributable to lower unit sales •Model mix impact, etc.
<Currency Effects >Impact on Operating income - 26.8 bn. yen (due to difference of average rates and translation effects)Impact on Other income & expenses +12.4 bn. yen (due to difference between average rates and transaction rates)Impact on Income before income taxes - 14.4 bn. yen (see also Exhibit 1)
Currency effect due to difference between average rates and transaction rates: +12.4 bn. yenInterest rate swap cost, etc. : - 9.3 bn.yen
(Exhibit 2)
40
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Motorcycle Unit Sales (Motorcycles + All-Terrain Vehicles, etc.)Unit
(thousands) FY09 4QChange from
FY 08 4QMajor increase/decrease factors
Japan 51 - 15- Increase of leisure model such as Monkey- Decrease in sales of scooters such as TODAY and
FORZA
North America 72 -78 - Decrease of sports bikes such as CBR1000RR and
custom bikes such as VTX1300C
Europe 71 - 18 - Increase of scooters such as SH150 in Italy- Decrease of scooters such as SH125 in Spain
Asia 1,449 -168 - Increase of Unicorn、Shine in India- Decrease of Wave、CLICK in Thailand
Other Regions 359 -87 - Increase of CG125 in Brazil
- Decrease of CG150 TITAN, BIZ125 in Brazil
Total 2,002 -366
* Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda’s affiliates accounted for under the equity method.
371
1,623958084
2,253
Approx 1,100 Approx 1,020
392
1,64568
121107
2,333
- 366( - 15.5% )
Approx 1,160
401
1,74861
10254
2,366446
1,61789
15066
2,368
Approx 1,280
436
2,050918058
2,715
Approx 1,210
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
1,610
6,633
313453311
9,320
Approx 4,580
509
2,146669379
2,893
Approx 1,260
+ 794( + 8.5% )
1,763
7,523
276320232
10,114
Approx 4,700
459
1,878487544
2,504
Approx 1,110
3591,449
71
51
2,002
72
Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries
AsiaEurope
Other Regions
JapanNorth America
Approx 1,100
Unicorn (India)
Monkey (Japan)
41
Motorcycle Business Net Sales/Operating Income/Operating Margin
Yen(billions)
Operating Margin
Operating Income
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
1,411.51,558.6274.4342.8401.0393.0444.0364.6381.6368.3Net Sales
12 Months12 Months4Q3Q2Q1Q4Q3Q2Q1QFY09FY08FY09FY08
Yen(billions)
- 2.8
25.2
46.3
31.1
52.7
30.337.031.1
151.2
99.9
- 1.0%
7.4%
11.6%
9.7%7.9%
11.9%
8.3%8.5%9.7%
7.1%
-20
0
20
40
60
80
100
120
140
160
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
<Increase Factors>• Effects of cost reduction, etc.<Decrease Factors>• Increase in raw material costs,• Decrease in revenue and model mix change, etc.
( - 34.0% )
(- 38.2%) (- 9.4%)
42
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
43
Unit(thousands) FY09 4Q Change from
FY 08 4Q Major increase/decrease factors
Japan 141 - 50 - Increase of FREED, INSIGHT, etc.- Decrease of FIT, etc.
North America 219 -240 - Increase of FIT, etc.
- Decrease of Accord, Civic, CR-V, etc.
Europe 103 - 6 - Increase of Civic and CR-V in Russia- Decrease of CR-V and Civic in the U.K., Spain and Italy
Asia 151 -52- Decrease of component parts for China (Accord and
CR-V, etc.) - Decrease of CR-V, in Indonesia, etc.
Other Regions 66 -23 - Increase of CR-V in Brazil
- Decrease of Civic, CR-V in Australia
Total 680 - 371
Automobile Unit Sales
* Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda’s affiliates accounted for under the equity method.
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
- 371( - 35.3% )
6618792
465
946
136
72177100
445
937
143
87
18890
481
991
145
89203109
459
1,051
191
78
22175
460
962
128
91
20487
401
935
152
314
755
391
1,850
615
3,925
322
793
350
1,496
556
3,517
- 408( - 10.4% )
CR-V (Brazil)
87
217
85
416
940
135
INSIGHT (Japan)
66151103219
680
141
AsiaEurope
Other Regions
Japan
North America
Automobile Business Net Sales/Operating Income/Operating Margin
Yen(billions)
Yen(billions) Operating Margin
Operating Income
7,674.49,489.31,301.41,974.22,170.62,228.02,356.62,449.02,356.42,327.2Net Sales
12 Months12 Months4Q3Q2Q1Q4Q3Q2Q1QFY09FY08FY09FY08
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
24.5
661.6
148.3213.0 220.7
79.5161.2
79.0 70.5
- 286.2
0.3%
7.0%
6.4% 9.0%
3.4%7.2%9.0%
3.6% 3.6%
-22.0%
-300
-200
-100
0
100
200
300
400
500
600
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
(- 96.3%)
700
(- 44.8%) (- 19.1%)
<Increase Factors>• Effects of cost reductions, • Decrease in SG&A expenses etc.<Decrease Factors>• Decrease in revenue and model mix change , etc.• Increase in fixed cost due to production cut• Increase in raw material costs etc.
44
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
45
FY094Q
Change from FY 08 4Q
Major increase/decrease factors
Japan 101 - 50- Increase of gas-powered mini-tiller Pianta FV200, etc- Decrease of GX series engines for OEM generators
North America 655 - 233 - Decrease of GC/GC(V) series for OEM washer
pressure and lawn mower in United States
Europe 472 - 199- Decrease of general purpose engines, such as
GX/GC series engines for OEM construction machinery and generators
Asia 200 -51 - Increase of water pumps in Indonesia- Decrease of generators in India
Other Regions 103 -28
- Decrease in general purpose engines, such as the GX series generators in Australia
Total 1,531 - 561
Power Products Unit Sales
* Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda’s affiliates accounted for under the equity method.
- 561(- 26.8%)
97220
390
687
135
1,529
116242
280
479
141
1,258
140202352
361
123
1,178
131251
671
888
151
2,092
119249
319
493
159
1,339
127
296
231402
146
1,202
484
915
1,693
2,415
550
6,057
502
970
1,306
1,893
516
5,187
- 870(- 14.4%)
153225284
343110
1,115 103200
472
655
101
1,531
Unit(thousands)
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
Pianta FV200 (Japan)
Asia
Europe
Other Regions
Japan
North America
Power Product & Other Businesses Net Sales/Operating Income/Operating Margin
Yen(billions)
Yen(billions)
Operating Margin
Operating Income
368.9442.779.479.5103.0106.8122.3100.2105.0115.2Net Sales
12 Months12 Months4Q3Q2Q1Q4Q3Q2Q1QFY09FY08FY09FY08
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
- 15.4
22.3
7.9 6.92.2 5.1
0.2 - 0.9- 2.8
- 11.9- 4.2%
5.0%6.9%
2.3%4.2%
0.2%
6.6%
- 0.9%- 3.5%
- 15.0%-20
-15
-10
-5
0
5
10
15
20
25
-16%
-12%
-8%
-4%
0%
4%
8%
12%
16%
20%
<Increase Factors>• Decrease in SG&A expenses<Decrease Factors>• Decrease in revenue
and model mix change, etc.• Increase in R&D expenses
for Other Businesses (expenses related to start-up
of new businesses) , etc.
(- 35.1%) (- 16.7%)
46
Financial Services Business Net Sales/Operating Income/Operating Margin
Yen(billions)
Yen(billions)
Operating Margin
Operating Income
596.5549.0138.3146.0162.6149.5141.7139.6137.8129.8Net Sales
12 Months12 Months4Q3Q2Q1Q4Q3Q2Q1QFY09FY08FY09FY08
4Q3QFY09FY08FY09FY08
12 Months12 Months1Q 2Q4Q3Q2Q1Q
(- 2.4%) (+ 8.6%)
(- 31.5%)(- 42.3%)
18.09.4
24.328.731.322.9
29.334.2
117.7
80.6
13.1%
6.5%
14.9%
21.3%
19.2%
22.1%
16.4%
26.4%
21.5%
13.5%
0
10
20
30
40
50
60
70
80
90
100
110
120
130
0%
10%
20%
30%
<Increase Factors>• Increase in finance receivables and property on operating leases, etc.<Decrease Factors>• Increase in provisions for residual loss, etc.
47
Change
- 97.0
- 49.0
- 151.7
- 179.6
- 1,641.2
Amount
40.0
50.0
10.0
10.0
8,370.0
FY10Forecasts
- 49.5%99.0Equity in income of affiliates
- 70.8%
- 93.8%
- 94.7%
- 16.4%
%
137.0Net income
161.7Income before income taxes
189.6 Operating income
10,011.2Net sales & other operating revenue
FY09Results
Yen (billions)
Note : Shares which are basedon calculation of EPS (as of Mar. 31, 2009)
Approx. 1,814,561,000 shares Approx. 1,814,609,000 shares
FY10 Financial Forecasts (Consolidated)
- 53.46 - 70.8%22.0475.50 EPS (Yen)
Yen up by 17 yen
Yen up by 6 yen
125
95
142Euro
101U.S. Dollar
Average Rates (Yen)
(weighted average number of shares outstanding )
※Net income FY10 means attributable toshareholders of Honda
※
48
Japan
Europe
Other Regions
Asia
NorthAmerica
Automobiles Power Products
FY09Results
Motorcycles
FY10Forecasts
Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries
Unit(thousands)
FY09Results
FY09Results
Forecast: Unit Sales by Business Segment
* Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda’s affiliates accounted for under the equity method.
FY10Forecasts
FY10Forecasts
0
3,000
6,000
9,000
12,000
15,000
0
1,000
2,000
3,000
4,000
5,000
6,000
0
1,000
2,000
3,000
4,000
- 307 - 527- 1,519
10,114
Approx 5,380
8,595
Approx 4,700
3,2103,517
5,187
7,523
320232
276
1,763
350
556
1,496
322
793
1,306
516
1,893
502
970
6,500
190
205
1,465
235
290
555
1,350
240
775
4,660
1,230
420
1,690
440
880
49
CurrencyEffect
OthersFair value of
derivativeinstruments
FY09Results
Yen
(billions)
Forecast: Change in Income before Income Taxes
Revenue, model mix,
etc. Cost Reduction, etc.
Decrease in R&D
Decrease in SG&A
FY10Forecasts
161.7
10.0
Operating Income - 179.6 bn. yen ( - 94.7 %) Other Income &
Expenses + 27.9 bn. yen
- 334.8
- 39.0
+ 339.0
+ 48.2 - 193.0
+ 20.0 + 7.9
Income before income taxes - 151.7 bn. yen ( - 93.8 %)
Operating income
189.6
Operating income
10.0
50
Yen
(billion)
Forecast: Capital Expenditures, Depreciation, R&D Expenses
- 48.1
- 28.2
- 209.1
Change
563.1
408.2
599.1
FY09Results
515.0
380.0
390.0
FY10Forecasts
R&D expenses
Depreciation and
amortization *
Capital
expenditures *
125
95
Yen up by 17 yen
Yen up by 6 yen
142 Euro
101U.S. Dollar
* “Capital expenditures” in results and the forecast aforementioned exclude investment in operating leases and acquisition of intangible assets.
* “Depreciation and amortization” in results and the forecast aforementioned exclude depreciation of investment in operating leases and amortization of intangible assets.
51
Dividend to Shareholders
(Yen)(Yen)
±0
- 14 8 + 222201st quarter End
- 14 8 22222nd quarter End
- 3 8 - 1111223rd quarter End
±08 - 14 8224th quarter End
- 3132 - 2363 86Fiscal Year
Increase/Decreasefrom
FY08 Results
FY08Results
Increase/Decreasefrom
FY09 Results
FY10Projection
FY09Results &Projection
Dividend per share
Projection as of Apr. 28th
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
52
Caution with Respect to Forward-Looking Statements:This slide contains forward-looking statements about the performance of Honda, which are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time.
Accounting standards: Our consolidated financial standards are prepared in conformity with U.S. generally accepted accounting principles.
Notice on the Factors for Increases and Decreases in Income:With respect to the discussion above of the change in operating income, management has identified the factors set forth below and used what it believes to be a reasonable method to analyze the respective changes in such factors. Each of these factors is explained below. Management has analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries.
(1)“Foreign currency effects” consist of translation adjustments, which come from the translation of the currency of foreign subsidiaries’ financial statements into Japanese Yen, and foreign currency adjustments, which result from foreign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries which have been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen.
(2) With respect to “cost reduction and effects of raw material cost fluctuations”, management has analyzed cost reduction and effects of raw material cost fluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in North America, Europe and other regions.
(3) With respect to “changes in net sales and model mix”, management has analyzed changes in sales volume and in the mix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certain other reasons for increases/decreases in net sales and cost of sales.
(4) With respect to “selling, general and administrative expenses”, management has analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year net of currency translation effects. 53