Honda FY2011 Rating Review

Transcription

1 Honda Information Meeting 2012 Spring Honda FY2011 Rating Review New CR-V 1

2 Honda Information Meeting Honda FY2011 Rating Review Current Honda Business Business Strategy Automobile Business Motorcycle Business FY12 Q4 Financial Highlights 2

3 Honda Business After the Earthquake and Thailand Flood Production Recovery Following Supply-Chain Disruptions Global Production Units (thousand) % 2011 YOY ('11 v.s. '10) Earthquake 98% 91% 81% 55% 66% 47% 49% 97% 99% Flood 66% 91% 107% 131% 142% 150% 130% 110% 90% 70% 50% % 10% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar -10%

4 Honda Business After the Earthquake and Thailand Flood Production Recovery Following Supply-Chain Disruptions Global Sales 4,500 Units (thousand) 4.3 mil (+38%) 4,000 3,500 3, mil 3.1mil 2,500 2,000 Earthquake Flood 1,500 1, ,001 0 FY11 1Q 2Q 3Q 4Q FY11 FY12 1Q 2Q 3Q 4Q FY12 FY13 Forcast 4

5 Honda Automobile Business Growth of global models has contributed to a boost in unit sales Four global models Civic Accord Fit/Jazz CR-V Annual global sales CY2000 global model ratio 58% CY % Civic Accord Fit/Jazz/City CR-V 2,533 thousand units 3,095 thousand units Well-sequenced model changes of core global models New Accord FY 2013 To be launched in the U.S. in the fall of this year New CR-V FY 2012 To be launched in Europe and Asia CR-V historical sales by region The number of CR-V customers has expanded globally with each new model generation. The 4 th generation model is already highly popular in the U.S. and China. Unit: 700 thousands st generation 2nd generation 3rd generation Other China Asia Europe N/A Japan Launch of 4th generation New Civic FY

6 Honda Business Update Strong recovery of operating profit for FY13 Top-line growth and cost reduction Sales units mil (38% increase) Yen (billions) Operating income 231 FY12 R&D cost increase approx. -35 approx. 424 Operating income 620 FY13 (as of Apr. 27) 6

7 Honda Business Update (billion) 1,200 Despite the continued negative impact of the strong yen, Honda forecasts a strong recovery in FY13 USD/JPY O/P margin Profit structure and Strong Recovery in FY13 12% 1, % 6.2% 9.0% 9.1% 7.4% 7.3% 8.8% 7.7% 7.9% Earthquake Flood 6.4% 6.0% 10% 8% 600 Autos 4.2% 2.9% 6% % 4% Motorcycle PowerProducts FINCO FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY13 FY12 2% 0% 7-2%

8 Honda Information Meeting Honda FY2011 Rating Review Current Honda Business Business Strategy Automobile Business Motorcycle business FY12 Q4 Financial Highlights 8

9 Honda Automobile Business Honda forecasts record-high sales of 4.3 mil units in FY13 Unit (thousand) 4,300 Main Drivers for North American Growth 4,000 3,000 3, ,021 3, , Other Regions Asia Europe Civic CR-V -Regain top-selling position in segment as inventory recovers -Top sales in the CUV segment (note: achieved record sales for any quarter in March over 30,000 units) 2, , ,323 1,740 North America Accord (Coupe) -Fully remodeled Accord launch in the fall with all-new power train New 2.4L Direct Injection + CVT 1,000 -Strengthen Acura model line-up Japan 0 FY11 FY12 FY13 Forecast RDX ILX RLX 9

10 Honda Automobile FY2011 Business Rating in Review the U.S. Acura is poised to take off Renewed focus on its core brand values, supported by series of technologies that provide unique synergy between the vehicle and its driver (Early 2013) (May 2012) (Apr 2012) Acura line up all refreshed within 24months, Brand Halo NSX is coming within 3yrs 10

11 Automobile Production in North America Capacity: 680k (MAP 440k / ELP 240k) Ohio Ohio Model Allocation New CR-V production from 2012 MDX to shift to Alabama in 2013 Canada Capacity: 390k Capacity Expansion New plant start-up in 2014 with capacity of 200k units Mexico Production Increase Indiana Indiana factory started 2nd shift from October 2011 Capacity: Existing 60k / New 200k (Total 260k) Model Allocation Capacity: 200k Alabama MDX to be shifted from Canada in 2013 Total Production Capacity Current 1.63mil 1.87mil in 2014 More than 90% of the vehicles sold in the U.S. will be produced in North America from 2012 Capacity: 300k 340k 11

12 Honda Automobile Business 4,000 3,000 Honda forecasts record-high sales of 4.3 mil units in FY13 Unit (thousand) 3, ,021 incl China 652 3, incl China 622 4, ,310 incl China Other Regions Asia Europe Main Drivers for Asian Growth Asia FY k FY k FY k Factories in Asia back to normal production by April - approx. 190 k units of production lost in FY12 due to flood Increase sales of BRIO in Thailand, India and Indonesia Introduction of fully remodeled Civic and CR-V in Asia 2, ,458 1,323 1,740 North America China FY k FY k FY k 1,000 Increase sales with fully remodeled and new vehicles such as Civic, CR-V, Crosstour 2.4L and CIIMO Japan 0 FY11 FY12 FY13 Forecast Civic (Oct 11) CR-V (Mar 12) Crosstour 2.4L (Apr 12) CIIMO (Apr 12) (8,000 sales orders in April) 12

13 Capacity Expansion Plan Annual Capacity : 770k More than 1.0 mil in 2014 WDHAC (Dongfeng Honda) ( 240k 360k in 2013) GHAC (Guangqi Honda) ( 480k 600k in 2014) (thousand units) Honda Dealer Network Expansion Plan Acura WDHAC 291 China: Expansion and Highest Customer Satisfaction CHAC (Honda export factory) ( 50k ) CHAC WDHAC 240 GHAC , J.D. Power and Associates Asia Pacific 2011 China Customer Service Index Study GHAC No.1: Guangqi Honda -No.2: Dongfeng Honda

14 Honda Automobile Business Honda forecasts record-high sales of 4.3 mil units in FY13 Unit (thousand) 4,000 3, ,108 4, ,310 Other Regions Asia Main Drivers for Japan Growth Mini vehicles Sales increase Unit (thousands) % 356 3,000 2,000 1, , , ,740 Europe North America FY12 FY13 N Box : 100 thousand cumulative orders in 5 months Top sales in mini-segment in April Launched Dec ,000 Launch derivative models from same platform - enhance product line-up efficiency Japan 0 FY11 FY12 FY13 Forecast Fall 2012 Summer

15 Honda Information Meeting Honda FY2011 Rating Review Current Honda Business Business Strategy Automobile Business - Production Capacity Motorcycle business FY12 Q4 Financial Highlights 15

16 Global Automobile Production Capacity (Unit : 1,000) 5, , , , , Other 4,000 3,000 2,000 1, k k k Increase capacity in in Alabama 1,630 1,630 1,670 Start-up of Yorii Plant +120k Increase capacity Increase capacity Increase capacity in in Dongfeng, China in in Dongfeng, China in in Guanqi China +120k Increase capacity in in Indonesia +200k New plant in in Mexico starts-up in in ,870 1,000 1,000 1,000 1,000 + α + α + α + α China Asia Europe North America Japan 16

17 Honda Information Meeting Honda FY2011 Rating Review Current Honda Business Business Strategy Automobile Business - Core technologies Motorcycle business FY12 Q4 Financial Highlights 17

18 Honda Automobile Business In 2011, Honda announced the next-generation technologies Next-generation gasoline engines Next-generation CVTs All-new compact diesel engine New hybrid system Electric powertrain for EVs Aim to achieve industry top-class fuel economy and fun-to-drive performance in every category within three years 18

19 Earth Dreams Technology Honda will introduce new engines and new transmissions into all categories Wide range of new gasoline engines New CVT transmissions 1.5L class engine 1.8L class engine 2.4L class engine 3.5L class V6 engine Minivehicle Minivehicle Compact vehicle Mid-sized vehicle New 660cc New 2.4L Direct Injection + CVT New 3.5L DI New L DI + CVT New L DI + CVT N Box Accord (Coupe) RLX CY ~ 19

20 Earth Dreams Technology INTEGRATED MOTOR ASSIST Enhance Hybrid Line-up Next-generation IMA One-Motor Hybrid system Civic Hybrid CR-Z Fit/Jazz Hybrid Freed / Spike Hybrid Acura ILX Hybrid Two-Motor hybrid system for mid-to-large sized vehicles Accord Plug-in Hybrid 2012 Fit Shuttle Hybrid Accord Hybrid 千 Hybrid ratio in Japan 25% 22% 24% 29% 32% 31% 35% 30% 25% Three-Motor Sports Hybrid SH-AWD system for Acura models RLX NSX 14% 10% 20% 15% FY11 Q1 Q2 Q3 Q4 FY12 Q1 Q2 Q3 Q4 10% 5% 0%

21 Earth Dreams Technology 1.6L New Diesel Engine Europe Civic CR-V Lightweight (industry top-class) Reduces CO2 output by over 15% (95g/km) Start production in 2012 To be launched in spring 2013 Battery EV Debut in Japan and the U.S. in the summer of 2012; prepare for production in China Driving range: 123 miles or 210 km (JC08mode) 92kw electric motor 20kw lithium-ion battery Battery fully recharges in less than 3 hours (240 volt) Equipped with 3 driving modes (SPORT, NORMAL, ECON) 21

22 Honda Information Meeting Honda FY2011 Rating Review Current Honda Business Business Strategy Automobile business Motorcycle Business FY12 Q4 Financial Highlights 22

23 Unit (thousands) 20,000 Expansion of Motorcycle Business Honda Brand Total Global Motorcycle Sales Double-digit growth to continue in FY13 16,660 15,000 10,000 Hero HHML Honda 2,909 3,239 9,333 9,720 3,247 3,640 10,720 11,100 4,507 11,435 5,269 13,062 15,061 More than 10% Honda 5,000 0 FY (P) 23

24 Production Capacity Capacity in Asia to reach approx. 15 mil from current 12.1 mil Total Capacity in ASEAN countries, India and Pakistan Unit (millions) % approx Current 2013 ~ India Vietnam Indonesia +26% % % Current 2013 ~ Current Current 2013 ~ 2013 ~ 24

25 Honda s Current Share and Market Size in 2011 Thailand 2 million 69% Vietnam 3 million 61% India Indonesia 52% 8 Brazil 14% million 2 million 13 million 82% 25

26 Motorcycle Demand in India 25 Forecast of Significant Increase in Demand Unit (millions) India CY Motorcycle India Market Penetration India 6.0% Significant Growth Expected 1,180 Indonesia 20.8% 231 Brazil Vietnam Thailand Taiw an 7.6% 29.6% 25.4% Number of motorcycles Population India -Population continues to increase -Current penetration: ONLY 6% Huge Potential 62.4% 22 (millions) 26

27 Motorcycle Production Capacity Expansion in India Rajasthan 2 nd plant Bangalore 3 rd plant Manesar 1 st plant Expansion Plan Annual Capacity : 2.2 mil 2 nd 1 st 3 rd 4.0mil Over 4 mil 2.8mil mil Future Honda Growth (P) 2013(P) 2014(P) Product Line-up Expand capacity to meet growing demand Introduce new 110cc model, Dream Yuga Improve fuel economy of scooter models Launch New 110cc Motorcycle 110cc AT-Scooter Activa Dream Yuga 27

28 Next-generation Global Models Export of cc Models from Asia Latest Technological Development Europe Japan North America Asia Australia South America - New 125cc esp engine improves fuel economy by 25% Product line-up PCX / PCX 150 CBR250R CRF250L FMC New New -125cc/ 150cc scooters with new esp engine -produced in Thailand -250cc road sport model - produced in Thailand and India -250cc on / off-road model - produced in Thailand 28

29 Global Next-generation Mid-sized Motorcycle Engine New Mid: 700cc MC Latest Technological Development Product Line-up -Newly developed 700cc engine INTEGRA with 6-Speed Transmission with Dual Clutch Transmission -Fuel economy improved by over 40% CROSSTOURER Cultivate demand in the U.S., Japan, Europe and other regions NC700X 29

30 Honda Information Meeting Honda FY2011 Rating Review Current Honda Business Business strategy Automobile business Motorcycle business FY12 Q4 Financial Highlights 30

31 Outline of FY12 4th Quarter Financial Results (Consolidated) Unit (Sales) (thousand) ( 千 台 ) 4Q Results (Three Months) FY11 FY12 Change Motorcycles 2,934 3, % Automobiles % Power Products 1,746 2, % Financial results EPS attributable to Honda Motor Co., Ltd. (Yen) 4Q Results (Three Months) FY11 FY12 Change Net sales & other operating revenue 2, , % Operating income % Income before income taxes % Equity in income of affiliates Yen (billion) Net income attributable to Honda Motor Co., Ltd. Note : Shares which are based on calculation of EPS Average Rates (Yen) approx. 1,802,302,000 shares (weighted average number of shares outstanding ) % % approx. 1,802,302,000 shares (weighted average number of shares outstanding ) US Dollar Euro Yen up by 2 yen Yen up by 9 yen Financial Summary A swift recovery in auto production after the earthquake and flood, along with new model momentum mainly in Japan and N.A., led to a big rise in sales. A new motorcycle unit sales record for a quarter and earnings from stable financial services business led to much higher income in each category. Financial Highlights Unit Sales: Motorcycle: Increased in Asia and Other regions including South America Record high for a quartre Automobile: Increased in North America and Japan Decreased mainly in Asia due to Thailand flood Power Products: Increased mainly in North America and Asia Net sales & other operating revenue -Increased in motorcycle and automobile businesses -Negative currency translation effects Operating income -Increased R&D expenses -Negative currency effects due to appreciation of the Japanese yen -Positive change in sales volume and model mix -Decreased SG&A expenses 31

32 Outline of FY12 Financial Results (Consolidated) Unit (Sales) 4Q Results (Three Months) FY11 FY12 Change (thousand) ( 千 台 ) Motorcycles 2,934 3, % Automobiles % Power Products 1,746 2, % Financial 4Q Results (Three Months) results Yen (billion) FY11 FY12 Change Net sales & other operating revenue 2, , % Operating income % Income before income taxes % Equity in income of affiliates Net income attributable to Honda Motor Co., Ltd. EPS attributable to Honda Motor Co., Ltd. (Yen) Note : Shares which are based on calculation of EPS Average Rates (Yen) approx. 1,802,302,000 shares (weighted average number of shares outstanding ) % % approx. 1,802,302,000 shares (weighted average number of shares outstanding ) US Dollar Euro Yen up by 2 yen Yen up by 9 yen Twelve Months FY11 FY12 Change 11,445 12, % 3,512 3, % 5,509 5, % Twelve Months FY11 FY12 Change approx. 1,806,360,000 shares 8, , % % % % % (weighted average number of shares outstanding ) approx. 1,802,300,000 shares (weighted average number of shares outstanding ) Yen up by 7 yen Yen up by 6 yen 32

33 Change in Income before Income Taxes <FY12 4th Quarter> Income before Income taxes Yen (billion) Operating Income Decrease in SG&A Increase in R&D Other Income & Expenses Cost Reduction, etc. Currency Effects Unrealized gains and losses related to derivative instruments (Exhibit 2) Revenue, model mix, etc. <Increase Factors> - Decreased fixed cost per unit due to increased production - Cost reduction effort, etc. <Decrease Factors> - Increased raw material cost, etc. Others - Currency effect due to difference between average rates and transaction rates: Others Operating Income 46.2 FY11 4Q <Increase Factors> -Increase in unit sales and model mix in automobile business, - Decreased sales incentives, etc. Operating Income FY12 4Q 33

34 Change in Income before Income Taxes <FY12 Twelve Months > Income before Income taxes Yen (billion) Operating Income <Increase Factors> - Decreased quality-related expenses, etc. Other Income & Expenses Revenue, model mix, etc Cost Reduction, etc Decrease in SG&A <Increase Factors> - Cost reduction effort, etc. <Decrease Factors> - Increased fixed cost per unit due to decreased production - Increased raw material cost, etc. Increase in R&D Currency Effects -Currency effect due to difference between average rates and transaction rates: Others Unrealized gains and losses related to derivative instruments (Exhibit 2) One time expense effect to O/P Others Operating Income FY11 Twelve Months <Increase Factors> -Decreased sales incentives, etc. <Decrease Factors> -Decrease in unit sales and model mix in automobile business, etc. Operating Income FY12 Twelve Months 34

35 Operations by Business Segment 70 Yen (billions) Motorcycle Business =Operating Income =Operating Margin 22% 17% %13.6% % 9.7% 8.5% 11.9% 11.6% 8.3% 7.9% 7.4% 8.4% 9.8% 9.6% 9.6% 10.9% 8.5% 9.2% 12% 5.8% 7% % 2.2% 3.4% % % -10 FY07 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q Q 3Q 4Q FY10 1Q 2Q 3Q 4Q FY11 1Q 2Q 3Q 4Q FY12 1Q 2Q 3Q 4Q -3% 300 Yen (billions) Automobile Business =Operating Income =Operating Margin 25% % %9.0% 7.1% 6.5% 6.4% 6.7% 3.6% 3.4% 3.6% % 0.9% % 1.4% % % 5.0% % % -1.2% -2.2% 5% -5% % % -21.2% -300 FY07 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q FY10 1Q 2Q 3Q 4Q FY11 1Q 2Q 3Q 4Q FY12 1Q 2Q 3Q 4Q -25% 35

36 Operations by Business Segment % Yen (billions) Power Product & Other Businesses =Operating Income =Operating Margin 15% 10% 6.9% 5.8% 6.6% 4.2% 2.3% 5% % -0.9% % -0.5% % -0.2% % -3.5% % -4.0% -6.4% -8.1% -2.8% -2.8% -2.7% -3.2% -5% -10% -20 FY07 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q FY % 1Q 2Q 3Q 4Q FY11 1Q -15% 2Q 3Q 4Q FY12 1Q 2Q 3Q 4Q *Honda Trading related out-of-period adjustment is not included Yen (billions) 34.6% Financial Services Business 29.4% 35.8% 34.8% 32.9% 29.8% 32.0% 38.7% 32.0% 29.5% 27.4% 33.2% 28.8% 40% 30% 26.4% % 21.3% 16.4% 22.1% 19.2% 14.9% 13.1% 20% % 10% FY07 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q FY10 1Q Q 3Q 4Q FY11 1Q 2Q 3Q 4Q FY12 1Q 2Q 3Q 4Q 0% 36

37 FY13 Financial Forecasts (Consolidated) FY12 Results FY13 Forecasts Change amount % Net sales & other operating revenue 7, , , % Operating income % Income before income taxes % Equity in income of affiliates % Net income attributable to Honda Motor Co., Ltd % EPS attributable to Honda Motor Co., Ltd. (Yen) Yen (billion) Note : Shares which are based on calculation of EPS approx. 1,802,300,000 shares (weighted average number of shares outstanding ) approx. 1,802,299,559 shares (weighted average number of shares outstanding ) Average Rates (Yen) US Dollar Yen down by 1 yen Euro Yen up by 3 yen 37

38 Guidance: Units Sales by Business Segment Motorcycles Automobiles Power Products "Honda Group Unit Sales" Unit (thousand) 20,000 15,000 10,000 5,000 18,331 1,690 16, ,539 ( % ) 15,061 2,031 12,412 16,600 2,080 13,820 4,000 3,000 2,000 1,000 3, , , ,192 ( % ) 3, ,323 4, ,310 Asia 230 1,740 Other Regions Europe North America 8,000 6,000 4,000 2,000 5, ,325 1,174 2, ( % ) 5, ,472 1,121 2,314 6, ,670 1,150 2, FY FY FY13 Forecasts FY FY FY13 Forecasts Japan FY FY FY13 Forecasts Motorcycles Automobiles Power Products "Consolidated Unit Sales" Unit (thousand) 12,000 9,000 6,000 3,000 7,415 1,690 5, ,250 ( % ) 8,650 2,031 6,001 9,900 2,080 7,120 4,000 3,000 2,000 1,000 2, , ,058 ( % ) 2, ,323 3, ,740 Other Regions Asia Europe North America 8,000 6,000 4,000 2,000 5, ,325 1,174 2, ( % ) 5, ,472 1,121 2,314 6, ,670 1,150 2, FY FY FY13 Forecasts FY FY FY13 Forecasts Japan FY FY FY13 Forecasts 38

39 Forecast: Change in Income before Income Taxes Yen (billion) Income before Income taxes ( % ) Operating Income ( % ) * * Other Income & Expenses Cost Reduction, etc. Increase in SG&A Increase in R&D * ± Currency Effect Unrealized gains and losses related to derivative instruments Others Revenue, model mix, etc. * The impact of the change in depreciation method which is anticipated to cause a decrease in depreciation expense by approximately JPY 40.0 billion in total, is included. Operating Income FY12 Operating Income FY13 Forecasts 39

40 Forecast: Capital Expenditures, Depreciation, R&D Expenses Yen (billion) FY12 Results FY13 Forecasts Change Capital Expenditures* * Depreciation and amortization ** R&D expenses * ** Depreciation and amortization in results and the forecast aforementioned exclude depreciation of investment in operating leases and amortization of intangible assets Honda uses the straight-line method for calculating the forecasts for the depreciation of property, plant and equipment for the year ending March 31,

41 Dividend (Yen) Dividend per share FY11 Results FY12 Results & Projection Increase/Decrease from FY11 Results FY13 Projection Increase/Decrease from FY12 1 st quarter End ( 19 ) ( + 4 ) 2 nd quarter End ( 19 ) ( + 4 ) 3 rd quarter End ± 0 ( 19 ) ( + 4 ) 4 th quarter End 15 ( 15 ) ( ± 0 ) ( 19 ) ( + 4 ) Fiscal Year 54 ( 60 ) ( + 6 ) ( 76 ) ( + 16 ) 41

42 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. 42

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