Honda Honda Update Update 200 200 9 9

1,016 views
887 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,016
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
43
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Honda Honda Update Update 200 200 9 9

  1. 1. Honda Update 2009 CR-Z Concept 1
  2. 2. Honda Direction and Key Challenges 1. Strengthening Advanced Environmental Technologies 2. Advancement of Motorcycle Business 3. Advancement of Automobile Business 2
  3. 3. Strengthening Advanced Environmental Technologies Hybrid models: Honda recognizes hybrid technologies as the most realistic path for CO2 reduction at this time INSIGHT Early 2009 Launched in U.S., Japan and Europe Excellent Fuel Economy ---- 41mpg Less CO2 ---- 101g/k Affordable Price ---- $19,800~ Integrated Motor Assist (IMA) system CVT Motor Engine path of drive force path of an electronic force a lightweight and compact 500,000 units 1.3-liter engine with a motor Inverter Battery Annual global sales target (beyond 2010) FIT/Jazz Hybrid CR-Z Insight Civic Hybrid 2nd Generation 3rd Generation 2005 2009 2010 3
  4. 4. Strengthening Advanced Environmental Technologies Enhancement of hybrid vehicle lineup - Establishment of Blue Energy Co., Ltd., joint venture with GS Yuasa for lithium-ion batteries for hybrid vehicles - Development of hybrid system for with medium to large-size vehicles Blue Energy Osadano Plant in Kyoto, Japan Production start in Fall 2010 4
  5. 5. Strengthening Advanced Environmental Technologies Applying PGM-FI (fuel injection) system to all models in Thailand by the end of 2009 Redesigned Wave 110 series with PGM-FI is a new Asian core-platform model; – 18% performance improvement – Improved fuel efficiency; 18% mileage improvement – Significant reduction in cost and development time Honda to develop and market Electric Motorcycle around 2010 – Targeting Zero CO2 next generation transportation – Launching in 2 years time 5
  6. 6. Honda Direction and Key Challenges 1. Strengthening Advanced Environmental Technologies 2. Advancement of Motorcycle Business 3. Advancement of Automobile Business 6
  7. 7. Advancement of Motorcycle Business Maintaining strong position particularly in markets with high potential ( Million Units ) CY2008 Unit Sales 8 Subsidiary Joint Venture 100% Other Market Penetration 77% 7 66% 69% 6 60% 75% 5 46% 4 50% Honda’s Market Penetration 3 3 .2 2 25% 2 .9 1 0 .9 1 .2 1 .1 1 .5 0 0% India Indonesia Vietnam Thailand Brazil Source: Honda Penetration Rate (per capita) of Motorcycles GDP per capita (U.S.$) (JETRO 2007) 0 100 200 300 400 500 1,100 1,200 (millions) 100 200 300 400 500 600 700 0 4.6% Population (millions) $941 India 1 unit for 21.7 people $6,938 Brazil 5.9% 1 unit for 16.9 people Units in operation (millions) 14.8% $1,925 Indonesia 1 unit for 6.8 people *As of 2007 *Indonesia as of 2006 $828 Vietnam 23.6% 1 unit for 4.2 people *India as 2005 $3,732 Thailand 25.3% 1 unit for 4.0 people 59.5% $16,697 Taiwan 1 unit for 1.7 people 7
  8. 8. Advancement of Motorcycle Business Growth centered in Asia and South America Unit (millions) 16 Honda Motorcycle Sales Growth (2003 to 2008) 15. 038 Europe Japan 14 North America 1.7 South America 12 1.5 China 1.2 1.0 10 0.8 8 0.8 6 11.1 9.2 9.6 Asia 9.0 4 7.6 5.8 2 0 2003 2004 2005 2006 2007 2008 8
  9. 9. Advancement of Motorcycle Business Super Cub series, a big hit for 50 years, continues as a Honda strength Not a performance bike, but meets everyday customer needs – 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 Wave110 (Thailand) Revo (Indonesia) Super Cub (Japan) Biz (Brazil) Unit (millions) Honda Motorcycle Production Unit of cub series produced in 2008 Total unit produced 15 Ratio of cub series 50% 40% 10 30% 20% 5 10% 0 0% FY 01 02 03 04 05 06 07 9
  10. 10. Honda Direction and Key Challenges 1. Strengthening Advanced Environmental Technologies 2. Advancement of Motorcycle Business 3. Advancement of Automobile Business 10
  11. 11. Advancement of Automobile Business Growth of global models makes Honda competitive and efficient Unit: thousands - Unit Sales of Honda’s Global 4 Models +1(Hybrid Models) 4,000 - Growth of 3,500 Hybrid Models 3,000 Others 500,000 2,500 units 2,000 Fit/Jazz/City Annual global 76% sales target 1,500 CR-V (beyond 2010) 1,000 Civic 58% Insight 500 Accord 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Honda Fit/Jazz Civic CR-V Accord 11
  12. 12. Advancement of Automobile Business Global Common Design and Global Purchasing Network - Current Fit model demonstrated that sourcing from Asia contributed to significant cost reduction - Current Fit attained cost reduction compared to previous model (Including City) 270K Previous 220K 160K As volume grows, Thai and China J/V ship more cost competitive FIT / City components to Japan Current FIT Current City 12
  13. 13. Advancement of Automobile Business Flexible model allocation to optimize capacity utilization Passenger cars Light Trucks Annual Location Capacity Small Middle Luxury Crossover Pickup Van Line 1 Line 1 Civic CSX 195 195 Canada Canada Ontario Ontario Alliston Alliston Line 2 Line 2 195 Civic MD-X ZD-X Ridgeline 195 Marysville Marysville 440 440 Accord TL RDX Ohio Ohio East East Liberty Liberty 240 240 Civic CR-V Element Mid 2009 U.S. U.S. Indiana Indiana Greensburg Greensburg 100 100 Civic Line 1 Line 1 Ridgeline Odyssey 150 150 Alabama Alabama Lincoln Lincoln Line 2 Line 2 Accord Odyssey 150 Sedan V6 Pilot 150 Mexico Mexico El Salto El Salto 50 50 CR-V Import Import from Japan Civic Accord CR-V from Japan 13
  14. 14. Advancement of Automobile Business Mature flexible production system to enable Honda to get through anticipated future changes with minimal impact - Production of the Stream was transferred from Suzuka Factory to Saitama Factory in January 2009 - Production of the U.S. and Canada version of the Honda Fit started in Saitama Factory from May 2009 in addition to Suzuka Factory FIT( model) FIT(US model) ■ Saitama Suzuka ■ STREAM 14
  15. 15. Advancement of Automobile Business Reallocation of CAPEX and R&D expenses - In order to minimize the impact of recent changes in the business environment and to focus company resources on necessary areas, All investments and development projects were reviewed. Yorii Assembly Plant 2012~ Sakura R&D Center - Revision of CAPEX for expansion 2010~ Yorii Assembly plant 69% Yachiyo Industry New Mini-vehicle Plant Sakura R&D Center 2011~ 50% Yachiyo Industry new mini-vehicle plant Capital Expenditures & Depreciation 50% 700 654 627 Capital 599 Expenditures 600 Depreciation 500 390 - Revision of R&D activities and expenses 400 417 408 380 300 361 Withdrawal of Acura brand launch for Japan market 200 Discontinue NSX successor model with V10 engine 100 0 Withdrawal from F1 and focus on environmental FY07 FY08 FY09 FY10(P) technologies 15
  16. 16. 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 - Total Amount of Cost Structure Reform Approx. 250B yen Yen (billions) Operating Income - 179.6 bn. yen ( - 94.7 %) - Targeting Currency Cost Structure Cost business Effect Reform Structure in the black - 193.0 -Effects of Reform FY09 cost reductions, etc FY10 + 48.2 Operating +30B yen Operating income Decrease income Decrease in R&D 189.6 10.0 in SG&A Revenue, model mix, + 339.0 Cost Structure Reform Cost Structure Reform etc. -Decrease in quality related expenses -Reducing sales incentive, etc -Withdrawal from some racing activities - 334.8 Cost Reduction, etc. -Revision of expenses, etc +50B yen - 39.0 +125B yen 16
  17. 17. Industry and Major Market Outlook 1. Honda global business environment 2. North America 3. Japan 4. Europe 5. Asia 6. Other Regions 17
  18. 18. Honda Global Business Environment North America Europe U.S. unemployment rate remain high -- 8.9% in April Lack of consumer confidence Monetary measures “TALF” Auto sales down by 12% in Western Europe in April Gas price stable around $2 Russia auto sales down by 54% in April April SAAR 9.3M Auto sales increased 20% in Germany due to scrap incentives in April Chrysler began Chapter 11 bankrupcy procedures Scrap incentives will start in U.K. from May Used vehicle prices recover since end of 2008 Honda UK plant shut down from Feb to May Honda announced voluntary separation Japan opportunity in America Tax cut program for Eco-vehicle started from April Auto sales down by 23% in April FY10 auto demand forecast 4.3mill (JAMA) Honda Insight No.1 sales in April in Japan (registered car segment) South America IPI tax cut extended until June Asia Brazil auto sales down by 6% in April Interest rate cut down 7.25% in Indonesia Brazil motorcycle sales down by 16% in April Palm oil price raise in Indonesia for 5month Preferential vehicle purchase tax cut (below 1.6L) from 10% to 5% in China Auto sales increase approx. 30% in China 2009 auto demand forecast over 10mill units Honda motorcycle sales up by 30% in April in India Motorcycle sales in April down 30% in Indonesia.
  19. 19. Operations in North America 4Q operating income in North America down due to sluggish sales in U.S., increase in fixed cost and higher yen Yen (billions) 150 16% 12% 100 9.5% 7.8% 7.7% 7.5% 6.7% 7.3% 6.1% 8% 6.3% 5.7% 50 4% 4.3% 1.6% 114.4 95.7 118.2 128.4 97.0 116.0 156.3 63.1 94.5 22.5 70.0 0 0% -107.4 -4% -50 -8% -100 -12% -15.7% -150 -16% FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q 19
  20. 20. Operations in North America Major Markets – Honda Automobile Business in U.S. Industry Demand Honda Unit Sales Unit Unit (thousands) (aggregate numbers of Honda brand and Acura brand) (thousands) 2,000 20,000 Passenger Cars ※Retail Sales ※Retail Sales Light Trucks 16,652 16,884 Passenger Cars 16,831 16,556 16,148 Light Trucks 1,551 1,509 1,500 1,462 1,428 15,000 1,349 1,394 13,300 ( 10,500 ) 10,000 1,000 5,000 500 0 0 CY03 04 05 06 07 08 09(E) CY03 04 05 06 07 08 09(P) Source: Honda Source: Honda Strategy in N.A Market Production capacity & flexible lines New Indiana plant , New Canadian Engine plant started production Acura TSX (May 2008) Pilot (May 2008) Fit (Aug 2008) FCX Clarity (Jul 2008) Accord V6 will be produced in Alabama plant Innovative technologies to achieve CAFE Leadership Acura TL (Sep 2008) Insight (Mar 2009) Acura ZDX (Fall 2009) 20
  21. 21. Operations in Japan 4Q operating income in Japan down by higher yen and decrease in revenue and model mix change, etc Yen 100 (billions) 12% 5.9% 6.0% 4.5% 5.4% 5.2% 50 4.4% 3.4% 6% 3.3% 3.4% 0.2% 48.9 68.9 41.9 68.2 60.6 73.3 56.2 37.9 40.9 0 0% 2.3 -64.3 -6.0% -176.0 -50 -6% -100 -12% -150 -18% -200 -23.8% -24% FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q 21
  22. 22. Operations in Japan Mature Markets - Honda Automobile Business in Japan Industry Demand Honda Unit Sales Unit (thousands) 900 Unit Registered vehicle (thousands) Mini 800 ※Retail Sales 732 ※Retail Sales 5,829 5,855 5,854 717 710 720 6,000 5,739 5,354 700 640 5,082 580 (572) 600 Others 4,000 500 Minivan 400 300 Small 2,000 200 Mini 100 0 0 ** FY04 05 06 07 08 09 10(P) CY03 04 05 06 07 08 09(E) Source: Honda **Apr.09-Mar.10 Source: Honda Strategy in Japan Market Enhancing product line up with efficiency - Strengthen Hybrid model - Cost reduction by using global purchasing network FREED (May 2008) Odyssey (Oct 2008) Life (Nov 2008) Enhancing sales network - Enhancing sales and marketing function for hybrid vehicles - Improving stability of consolidated sales subsidiaries FCX Clarity (Nov 2008) Accord (Dec 2008) Insight (Feb 2009) 22
  23. 23. Operations in Europe 4Q operating income in Europe (including Russia) down, due to sluggish sales in Western Europe Yen (billions) 10% 25 15 4.3% 4.2% 5% 3.1% 2.9% 2.4% 2.9% 2.6% 5 2.0% 1.4% 1.6% 0.4% 6.4 9.0 3.7 12.6 10.3 16.7 5.8 18.6 11.2 8.3 1.1 0% -10.5 -5 -4.0% -15 -5% FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q 23
  24. 24. Operations in Europe Mature Markets - Honda Automobile Business in Western Europe Industry Demand Honda Unit Sales Unit (EU15+EFTA) (thousands) (excluding commercial vehicles) Unit (thousands) (EU15+EFTA) Petrol ※Retail Sales 350 ※Retail Sales 15,000 Diesel 13,558 300 272 280 256 250 232 Others 220 10,000 200 194 Jazz 150 CR-V 5,000 Accord 100 50 Civic 0 0 CY03 04 05 06 07 08 09(E) CY03 04 05 06 07 08 09(P) Source: Global Insight Source: Honda Strategy in Western Europe Market Environmental strategy Low CO2 emission models; Insight 101g/km, Jazz 125g/km Flexible Production Lines and Production Allocation Jazz production starts at UK plant within 2009 Insight (Mar 2009) Jazz (Oct 2008) Accord (Jun 2008) 24
  25. 25. Operations in Asia Operating income in Asia exceeded 100 billion in FY09 with auto and motorcycle growth Yen (billions) 50 15% 13% 40 11.6% 11% 9.4% 9.3% 8.4% 30 8.0% 9% 6.8% 6.7% 7% 5.8% 20 6.5% 5% 5.2% 5.3% 10 3% 1% 19.4 18.2 20.2 19.2 36.9 33.4 38.3 21.9 48.3 33.4 24.9 0 -6.3 -1% -1.9% -10 -3% FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q 25
  26. 26. Operations in Asia Industry Demand in Major Asian Motorcycle Markets 25,000 Industry: Unit ( thousands ) ※Wholesale 20,000 India Indonesia Thailand Vietnam (18.3mil) (2.7mil) 15,000 (2.4mil) (2.9mil) (1.8mil) (1.7mil) (2.1mil) (1.9mil) (1.6mil) (1.4mil) (2.0mil) (1.3mil) 10,000 (6.5mil) (4.6mil) (4.9mil) (5.1mil) (1.8mil) (3.9mil) (2.8mil) 5,000 (6.0mil) (6.8mil) (7.8mil) (7.4mil) (7.4mil) (5.4mil) 0 CY03 04 05 06 07 08 09(E) Source: Honda 26
  27. 27. Operations in Asia In India, motorcycle business foundation solidified behind two companies, Hero Honda and HMSI Industry: ※Wholesale Unit (thousands) 10,000 Other brands Hero Honda 8,000 Honda Motorcycle & Scooter India 6,000 4,000 (3,516) 2,000 (979) 0 Source : CY 03 04 05 06 07 08 09(E) Honda Principal models of Principal models of Hero Honda Motors Limited Honda Motorcycle & Scooter India Splendor NXG Super Splendor Passion+ Activa CBF Stunner Debut in May. ‘07 Debut in May. ‘07 Debut in May. ‘07 FMC Apr. 09 Debut in June. ‘08 27
  28. 28. Operations in Asia Steady Growth of Honda Motorcycle & Scooter India (HMSI), Industry: a subsidiary of Honda in India ※Wholesale Unit (thousands) 1,400 1,200 (979) 1,000 800 600 400 200 0 Source : CY 03 04 05 06 07 08 09(E) Honda Principal models of HMSI Activa Aviator CBF Stunner FMC Apr. 09 Debut in Feb. ‘08 Debut in June. ‘08 28
  29. 29. Operations in Asia Continuously introducing innovative products Industry: to the Indonesian motorcycle market Unit (thousands) ※Wholesale Other brands 6,000 Honda 5,000 4,000 3,000 (2,875) 2,000 1,000 Added annual production capacity in Sep. 2005 (2,000 → 3,000 thousand units) 0 CY03 04 05 06 07 08 09(E) Source: Honda Principal models BeAT CS1 110cc Blade Revo 125cc AT Model 110cc 110cc Debut Apr. 08 Debut Jun. 08 Debut Dec.08 FMC Jan.09 29
  30. 30. Operations in Asia Honda to enhance product pipeline for Industry: Vietnamese motorcycle market Unit (thousands) Other brands ※Wholesale Honda 3,500 3,000 2,500 2,000 1,500 1,000 (1,247) 500 0 CY03 04 05 06 07 08 09(E) Source: Honda Principal models Click Future Neo FI Air Blade Wave α 110cc 125cc 110cc Wave S 100cc 100cc AT Model Fuel Injection AT Model MMC Jul 08 Debut Oct. 06 Debut Apr 07 Debut Apr 07 Debut May 07 30
  31. 31. Operations in Asia Honda Automobile Business in Southeast Asia Industry Demand Honda Unit Sales 2,500 Unit (thousands) 250 Unit ※Wholesale (thousands) ※Retail Sales Malaysia Thailand Indonesia Philippines Malaysia Thailand 2,000 1,892 200 Indonesia Philippines 190 156 1,500 148 146 150 138 123 1,000 100 500 50 0 0 CY03 04 05 06 07 08 09(E) CY03 04 05 06 07 08 09(P) Source: Honda Source: Honda Strategy in Southeast Asian Market Optimal allocation to enhance production efficiency Production of FREED in Indonesia starting in June 2009 Enhance complementary approach in ASEAN region Jazz (May 2008) City (Sep 2008) Freed (Jun 2009) Strengthening of purchase function to flexibly consolidate and re-allocate 31
  32. 32. Operations in Asia Honda Automobile Business in India Industry Demand Honda Unit Sales 1,500 (excluding commercial vehicles, SUV and MUV) 80 Unit (thousands) ※Wholesale Unit ※Retail Sales Category (thousands) 1,200 Premium 61 "A" 60 53 55 1,000 405 800cc 302 CR-V 303 Civic 40 195 249 40 35 135 521 425 531 500 362 357 299 20 15 City 294 299 264 213 242 244 0 Accord CY03 04 05 06 07 08 09(E) 0 CY03 04 05 06 07 08 09(P) Source: Global Insight Source: Honda Strategy in India Market Established 2nd plant (parts) in Sep 2008 to supply body panels and engine components to the 1st plant to export engine components to Asian countries Introduce Jazz in India in mid 2009 City (Nov 2008) Jazz (Mid 2009) to enjoy excise duty benefit for small-sized car 32
  33. 33. Operations in Other Regions Operating income in Other regions in FY09 centers on Brazil to grow Yen (billions) 50 15% 14.0% 13.8% 12.4% 40 11.3% 11.2% 10.9% 10.4% 9.6% 8.6% 10% 30 8.3% 8.4% 20 5% 4.1% 10 15.2 21.4 16.0 19.5 21.7 30.1 31.7 32.7 21.7 48.7 41.8 32.7 0 0% FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q 33
  34. 34. Operations in Other Regions Solid operation as a market leader in Brazilian motorcycle market Introducing PFM-FI (Fuel Injection) models to meet Euro3 Industry: ※Wholesale Unit (thousands) Other brands Honda 2,000 Source: Honda 1,500 Exceed one million units per year (1,459) 1,000 500 0 CY03 04 05 06 07 08 09(E) Principal models CG 150 Titan Mix CG 125 FAN Biz 125 CG 150 Titan Flex Fuel Debut Mar 09 34
  35. 35. Operations in Other Regions Confidential Honda Automobile Business in Brazil Industry Demand Honda Unit Sales (including commercial vehicles) Strong sales of FFV models contributed to growth Unit Unit (thousands) ※Retail Sales (thousands) ※Retail Sales 3,000 200 2,671 180 2,377 Brazil ( Flexible Fuel Vehicle) 160 ( Petrol Engine Vehicle) 2,000 1,844 140 118 1,618 120 1,532 1,339 100 86 80 67 57 FFV 1,000 60 50 32 40 20 0 0 CY03 04 05 06 07 08 09(E) 03 04 05 06 07 08 09(P) Source: Global Insight Source: Honda Strategy in South America Market Environmental strategy (FFV->Brazil) Expansion of production capacity Brazil: Expand capacity to 120,000 units in Aug 2008 Fit FFV (Nov 2008) Civic FFV 35
  36. 36. Financial Highlights FY 09 4Q Results - Outline - Profit Analysis - Business Segment Information FY 10 Forecasts Dividend per Share 36
  37. 37. Outline of FY09 Twelve Months Financial Results (Consolidated) Business Environment FY09 Twelve Months Unit (Sales) Crude oil and raw material prices rose significantly worldwide in the first Unit (thousands) FY08 FY09 Change 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. Motorcycles 9,320 10,114 + 8.5% In China and India, economic growth slowed down in the second half. In Japan, both capital expenditures and consumer spending declined, and Automobiles 3,925 3,517 - 10.4% the economy is rapidly deteriorating Yen appreciation against the U.S. dollar and Euro Power Products 6,057 5,187 - 14.4% Motorcycle market 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 Automobile market FY09 Twelve Months Demand in the U.S., Western Europe and Japan declined significantly in Financial results the second half. FY08 FY09 Change Overall market size was increased in Brazil, China and India despite a Yen(billions) temporary decline in demand. Net sales & other operating revenue 12,002.8 10,011.2 - 16.6% Major Change Factors Asia and other regions including Brazil contributed to gain in Operating income 953.1 189.6 - 80.1% operating profit, offsetting deterioration in major markets. Income before income Unit Sales taxes 895.8 161.7 - 81.9% Motorcycles: Equity in income of Favorable sales in Asia and Other Regions, which includes Brazil affiliates 118.9 99.0 - 16.7% Decreases in North America, Japan and Europe Automobiles: Net income 600.0 137.0 - 77.2% Strong sales in Asia and Brazil Decreases in North America, Japan and Europe Power Products: - 77.2% Increases in Asia and “Other” Region, which includes Middle East EPS (Yen) 330.54 75.50 ( - 255.04 yen) Decreases in North America, Europe and Japan Note : Shares which are based approx. approx. Net sales & other operating revenue on calculation of EPS 1,815,356,000 shares 1,814,561,000 shares (weighted average number (weighted average number Decline due to lower sales volume of automobiles and power of shares outstanding ) of shares outstanding ) products Negative currency translation effects Average Rates (Yen) Operating income Yen up by <Increase Factors> Effects of cost reduction US Dollar 114 101 13 yen Decrease in R&D <Decrease Factors>Decrease in revenue and model mix change, etc. Yen up by Increased raw material costs Euro 162 142 20 yen Increased fixed cost due to production cut Currency factors 37
  38. 38. Change in Income before Income Taxes < FY09 Twelve Months > Yen Income before Income taxes - 734.1 bn. yen (- 81.9%) (billions) Operating Income- 763.4 bn. yen ( - 80.1 % ) Other Income & <Increase Factors> Expenses • Effects of cost reductions, etc. + 29.3 bn. yen <Decease Factors> • Impact of increase in raw material prices • Increase in fixed cost due to production cut , etc. 895.8 - 247.7 <Increase Factors> • Decrease in quality related expenses , etc. <Decease Factors> • 0ne-off expenses related to withdrawal from some racing activities and cancellations of new model developments - 182.5 • Increase in provisions for credit loss and residual loss , etc. Revenue, model mix, etc. Currency effect due to difference between average rates and transaction rates: +33.0 bn. yen - 88.3 Interest rate swap cost, etc. : - 89.4 bn.yen Cost Reduction, + 24.7 - 269.5 the effect of raw material cost , etc. Increase in SG&A Decrease in R&D + 85.7 - 56.4 161.7 (Exhibit 2) Operating <Increase Factors> Others Operating income Currency Effect Fair value income • Change in pricing for the new model year of derivative 953.1 • Decrease in sales incentives for North America instruments 189.6 automobile business FY08 <Decease Factors> FY09 12 Months • Decline in profit attributable to lower unit sales 12 Months •Model mix impact, etc. <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) 38
  39. 39. Outline of FY09 4th Quarter Financial Results (Consolidated) Business Environment 4Q Results Unit (Sales) Financial crisis and deterioration of real economy led the U.S. and Unit (thousands) FY08 FY09 Change Europe recession to deepen and become more serious. Japan economy deteriorated rapidly due mainly to a decline in Motorcycles 2,368 2,002 - 15.5% exports. Pace of economic expansion has further slowed down in Asia Automobiles 1,051 680 - 35.3% Yen appreciation against the U.S. dollar and Euro Power Products 2,092 1,531 - 26.8% Motorcycle market Steep deterioration not only in the U.S. but in Thailand and Indonesia Demand in India has recovered from the previous quarter. Automobile market 4Q Results Steep downturn in the U.S., Japan and Western Europe Demand in Russia continued to decline largely. Financial results Expanding markets in India, Brazil and China Yen(billions) FY08 FY09 Change Net sales & other operating revenue 3,055.5 1,783.8 - 41.6% Major Change Factors Honda earned operating profit for the fiscal year, however it Operating income 168.8 - 283.0 - posted operating loss in the 4Q due to decreased volume in all businesses under rapid market deterioration. Income before income Unit Sales taxes 146.8 - 309.5 - Motorcycles: Decreased unit sales in all the regions Equity in income of affiliates 24.3 2.7 - 88.7% Automobiles: Decreased unit sales in all the regions Net income 25.4 - 186.1 - Power Products: Decreased unit sales in all the regions - EPS (Yen) 14.01 - 102.59 ( - 116.60 yen) Net sales & other operating revenue Decline mainly due to decreased unit sales of automobiles Note : Shares which are based approx. approx. Negative currency translation effects on calculation of EPS 1,814,587,000 shares 1,814,610,000 shares (weighted average number of shares outstanding ) (weighted average number of shares outstanding ) Operating income <Increase Factors> Average Rates (Yen) Effects of cost reduction Yen up by Decrease in SG & A US Dollar 106 94 12 yen <Decrease Factors> Decrease in revenue and model mix change, etc. Yen up by Increased fixed costs due to production cut Euro 158 121 37 yen Increased raw material costs Currency factors 39
  40. 40. Change in Income before Income Taxes <FY09 4th Quarter> Yen Income before Income taxes - 456.4 bn. yen (billions) Other Income Operating Income - 451.8 bn. yen & Expenses <Increase Factors> - 4.5 bn. yen • Change in pricing for the new model year, etc. <Decease Factors> 146.8 - 357.9 • Decline in profit attributable to lower unit sales •Model mix impact, etc. Operating income <Increase Factors> 168.8 • Decrease in quality related expenses • Decreased expenses for advertising, sales promotion, etc. <Decease Factors> FY08 4Q • 0ne-off expenses related to withdrawal from some racing activities FY09 4Q and cancellations of new model developments , etc. Currency effect due to difference between average rates and transaction rates: +12.4 bn. yen - 107.9 Interest rate swap cost, etc. : - 9.3 bn.yen Operating income Revenue, model mix, etc. + 19.3 - 26.8 -283.0 + 21.5 - 7.6 + 3.0 Decrease in R&D Currency Effect Fair value Others Cost Reduction, the effect of raw Decrease in SG&A of derivative -309.5 material cost , etc. instruments (Exhibit 2) <Increase Factors> • Effects of cost reductions, etc. <Currency Effects > <Decease Factors> Impact on Operating income - 26.8 bn. yen (due to difference of average rates and translation effects) • Increase in fixed cost due to production cut Impact on Other income & expenses +12.4 bn. yen (due to difference between average rates and transaction rates) Impact of increase in raw material prices, Impact on Income before income taxes - 14.4 bn. yen (see also Exhibit 1) etc. 40
  41. 41. Motorcycle Unit Sales (Motorcycles + All-Terrain Vehicles, etc.) Unit Change from (thousands) FY09 4Q Major increase/decrease factors FY 08 4Q + 794 16,000 - Increase of leisure model such as Monkey ( + 8.5% ) Japan 51 - 15 - Decrease in sales of scooters such as TODAY and FORZA North - Decrease of sports bikes such as CBR1000RR and America 72 -78 custom bikes such as VTX1300C 14,000 Monkey (Japan) - Increase of scooters such as SH150 in Italy Europe 71 - 18 - Decrease of scooters such as SH125 in Spain - Increase of Unicorn、Shine in India Asia 1,449 -168 - Decrease of Wave、CLICK in Thailand Approx 4,700 12,000 Approx 4,580 Other - Increase of CG125 in Brazil Regions 359 -87 - Decrease of CG150 TITAN, BIZ125 in Brazil Total 2,002 -366 Unicorn (India) 10,114 10,000 Unit sales of Honda-brand 9,320 motorcycle 1,763 products that are manufactured and 1,610 8,000 sold by overseas affiliates accounted for - 366 under the equity ( - 15.5% ) method, but do not use any parts 6,000 supplied by Honda and its subsidiaries 7,523 Approx 1,260 6,633 Approx 1,210 4,000 Approx 1,160 Approx 1,280 Approx 1,110 Approx 1,100 Approx 1,020 2,893 Approx 1,100 2,715 2,504 2,253 2,333 2,366 2,368 509 401 436 459 2,002 371 392 446 2,000 359 Other Regions 1,623 1,645 1,748 1,617 2,050 2,146 1,878 1,449 Asia 95 68 61 89 91 66 48 71 Europe 313 276 80 121 102 150 80 93 75 72 North America 453 320 0 84 107 54 66 58 79 44 51 Japan 311 232 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 12 Months 12 Months FY08 FY09 FY08 FY09 * 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. 41
  42. 42. Motorcycle Business Net Sales/Operating Income/Operating Margin FY08 FY09 FY08 FY09 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 12 Months 12 Months Net Yen Sales 368.3 381.6 364.6 444.0 393.0 401.0 342.8 274.4 1,558.6 1,411.5 (billions) (- 38.2%) (- 9.4%) Operating Margin Operating Income <Increase Factors> • Effects of cost reduction, etc. <Decrease Factors> Yen (billions) • Increase in raw material costs, • Decrease in revenue and model mix change, etc. 160 16% 140 14% ( - 34.0% ) 11.9% 11.6% 120 12% 9.7% 9.7% 100 8.5% 7.9% 10% 8.3% 7.4% 7.1% 80 8% 151.2 60 6% 99.9 40 4% 52.7 46.3 37.0 20 31.1 30.3 31.1 2% 25.2 0 0% - 1.0% -20 - 2.8 -2% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 12 Months 12 Months FY08 FY09 FY08 FY09 42

×