FY18 2nd Quarter Financial Results Accord Honda Motor Co., Ltd. (U.S.) November 1, 2017 1
Topics -Outline of FY18 Six Months Results Summary - Honda Group Unit Sales - Main Markets - News Topics - FY18 Six Months Financial Results - FY18 Financial Forecasts - Dividend 2
Outline of FY18 Six Months Results Summary (Consolidated) Results Summary Operating profit was 422.1 billion yen, a 14.7% decrease compared to the same period last year. Excluding FOREX effects, the multi-district class action litigation settlement and the reverse impact of the pension accounting treatment during the same period last year, robust motorcycle sales, cost reduction efforts and other factors resulted in a real term profit increase of 53.1 billion yen. Profit for the quarter attributable to owners of the parent increased 381.3 billion yen, an 8.4% increase compared to the same period a year ago, due to an increase in share of profit of investments accounted for using the equity method. Unit Sales Revenue / Operating Profit / Profit for the Period Consolidated Unit Sales (Thousand) Yen (billion) 494.9 6,691 381.3 7,489.2 400 2,000 8,000 3,000 1,798 1,807 2,728 2,589 351.7 422.1 5,873 6,734.6 6,000 400 1,500 300 6,000 incl. Pension 2,000 impact 4,000 84.0 （ profit ） 1,000 200 4,000 incl. litigation 200 settlement 1,000 53.7 （ loss ） 2,000 500 100 2,000 0 0 0 0 0 0 Operating Profit Profit for the Period Motorcycles Sales Revenue attributable to owners of the parent 3
Honda Group Unit Sales <FY18 Six Months> Power Unit (Thousand) Motorcycles Automobiles Products 9,937 2,728 2,559 2,589 2,431 8,890 + 1,047 + 128 - 139 ( + 11.8 %) ( + 5.3 %) ( - 5.1 %) FY17 FY17 FY18 FY18 FY18 FY17 Six Months Six Months Six Months Six Months Six Months Six Months FY17 FY18 FY17 FY18 FY17 FY18 Change Change Change Six Months Six Months Six Months Six Months Six Months Six Months 62 84 + 22 302 324 + 22 146 138 - 8 Japan North 149 163 + 14 989 933 - 56 1,291 1,141 - 150 America 120 134 + 14 90 85 - 5 390 406 + 16 Europe 8,010 9,023 + 1,013 935 1,093 + 158 736 741 + 5 Asia Other 549 533 - 16 115 124 + 9 165 163 - 2 Regions 8,890 9,937 + 1,047 2,431 2,559 + 128 2,728 2,589 - 139 Total Honda Group Unit sales include those of Honda, its subsidiaries and affliates which are acounted for using the equity method (mainly wholesale basis). 4
Main Market (Automobiles – Japan) ・ N-Box series was the best-selling model in Japan in fiscal first half Japan Retail - 94 thousand units sold making it the best-selling model in Japan, even including registered vehicles -The new edition, launched in September generated over Vs. FY17 Unit (Thousand) Industry Demand ： 52 thousand unit orders in first month on the market 2,482 (107.6%) Unit Sales ： 333 (103.6% ) ・ New Civic launched （ Sept. ） （Source：Japan Automobile Dealers Association） ・ Expansion of Honda SENSING as standard Unit (Thousand) 333 322 equipment across all trim levels - starting with N-Box followed by Shuttle (Sept.) and Step WGN models (Sept.) + 3.6 % FY18 FY17 N-BOX Six Months Six Months 5
Main Market (Automobiles – U.S.) ・ Despite decrease in industry demand, Honda’s retail sales were on par with the U.S Retail same period last year. -Strong sales of Civic, HR-V and Acura RDX Unit (Thousand) vs. FY17 Industry Demand ： 8,842 (98.1%) ・ Production of the brand-new Accord Unit Sales ： 866 (99.5%) began （ Sept. ） （ Source ：Autodata） Unit (Thousand) ・ Enhancing Honda’s supply network for 871 866 light truck models -Production of Acura MDX was shifted from Alabama plant to East Liberty Plant in Ohio （ May ） - 0.5 % Acura RDX FY17 FY18 Civic Hatchback Six Months Six Months 6
Main Market (Automobiles – China) ・ 729 thousand unit sales in fiscal first half is the highest in history China Retail -Strong sales of Civic, UR-V and Avancier vs. FY17 Unit (Thousand) Industry Demand * ： (103.5%) ・ CR-V Sports Hybrid model launched 13,218 Unit Sales ： (Sept.) (118.9%) 729 * Industry demand is wholesale basis ・ Announced joint development of EVs for （ source ： China Association of Automobile Manufactures ） Unit (Thousand) the Chinese market with a local IT 729 company named Neusoft (Sept.) 613 + 18.9 % Avancier FY18 FY17 CR-V Six Months Six Months 7
Main Market (Motorcycle – India) ・ Sales surpass pace of overall market for fiscal first half India Wholesale (vs. FY17 :117.7%) -Strong sales of scooters such as Activa and DIO Unit (Thousand) vs. FY17 Industry Demand ： 10,504 ( 110.2%) Unit Sales ： ・ Expantion of production at Number 4th line 3,146 ( 117.7%) of the Number 3rd plant in Narsapura, （ Source ： Honda ） Karnataka 3,146 -Honda’s overall motorcycle production capacity in India Unit (Thousand) increased to 6.4 million units 2,673 + 17.7 % “Line-off ceremony” of the Number 4th FY18 FY17 line at the 3rd plant Six Months Six Months 8
News Topics ・ Announced evolution of automobile production system to further enhance Mono-zukuri (the art of makingthings/manufacturing) in Japan - To produce new technologies such as for the electrification of vehicles, automobile production at the Sayama Plant and Yorii Plant will be consolidated at the Yorii Plant by the fiscal year ending March 31, 2022 - Within the Yorii Plant, a function to create, standardize and globally share new automotive production technologies, including electrification, to be established ・ 100 Million-Unit Cumulative Global Production Milestone for Super Cub Series （ Oct. ） -Production of Super Cub 110 began at Yamato Plant Yorii Plant in Saitama in August,1958 -Currently produced at 16 plants in 15 countries and sold in more than 160 countries Super Cub 110 commemoration model ・ Selected as a component of the Dow Jones Sustainability World Index （ Sept. ） -Selected for the first time as a component of “Dow Jones Sustainability World Index ”, which benchmarks for socially responsible companies -Selected for 3 rd cumulative year as a component of “Dow Jones Sustainability Asia/Pacific Index”, which targets companies in Asia/Pacific 9
FY18 Six Months Financial Results (Consolidated) Six Month Results Financial Results FY18 FY17 Change Yen (billion) 6,734.6 7,489.2 Sales revenue + 11.2% 494.9 422.1 Operating profit - 14.7% 7.3% 5.6% Operating margin - 1.7pt Share of profit of investments 67.0 135.2 + 101.6% accounted for using the equity method 559.0 577.6 Profit before income taxes + 3.3% Profit for the period 351.7 381.3 + 8.4% attributable to owners of the parent (Yen) *1 Earnings per share 195.19 211.59 + 16.40 attributable to owners of the parent For *1, please refer to footnote on page 43 Market average rates (Yen) Yen down by 105 111 US Dollar 6 yen 10
FY18 Financial Forecasts (Consolidated) Yen (billion) Change FY18 FY17 Change from previous forecast Amount % Forecast Results 13,999.2 15,050.0 + 1,050.8 + 7.5% + 550.0 Sales revenue 840.7 745.0 - 95.7 - 11.4% + 20.0 Operating profit 6.0% 5.0% - 1.0pt - Operating margin Share of profit of investments 164.7 205.0 + 40.2 + 24.4% + 25.0 accounted for using the equity method Profit before income 1,006.9 955.0 - 51.9 - 5.2% + 55.0 taxes Profit for the year 616.5 585.0 - 31.5 - 5.1% + 40.0 attributable to owners of the parent (Yen) Earnings per share *1 - 15.84 342.10 326.26 + 23.87 attributable to owners of the parent For *1, please refer to the footnote on page 43 Market average rates (Yen) 109 Yen down 108 Yen down by 1 yen US Dollar (1H 111 / by 2 yen 3Q 110 / 4Q 105 ) 11
FY18 Shareholders’ return （Yen） FY18 FY17 Dividend per Share change (Expectation) 1 st Quarter End 22 24 + 2 2 nd Quarter End 22 24 + 2 3 rd Quarter End 24 ( 24 ) ( - ) 4 th Quarter End 24 ( 24 ) ( - ) 92 ( 96 ) ( + 4 ) Fiscal Year 【 Acquisition of the Company’s Own Shares 】 ・ Total number of shares to be acquired : Up to 24 million shares (shares of common stock) (1.3% of total number of issued shares (excluding treasury stock)) ・ Total amount of shares to be acquired : Up to 90 billion yen ・ Period of acquisition: Starting on November 2, 2017 and ending on January 31, 2018 ・ Method of acquisition: Market purchases on the Tokyo Stock Exchange 1.Purchases through the Tokyo Stock Exchange Trading Network Off-Auction Own Share Repurchase Trading System (ToSTNeT-3) 2.Market purchases based on the discretionary investment contracts regarding acquisition of own shares 12
Change in the company’s shareholders’ return policy 【 Purpose for the change 】 Further improving the Company’s capital strategy 【 Points of the change 】 Acquisition of the Company’s own shares at a timing that it deems optimal Goal: to maintain a Goal: to realize a return ratio shareholders’ return ratio of alone of approximately 30% approximately 30% With respect to the redistribution of profits to its shareholders, the Company’s basic policy is to determine such distributions after taking into account, among others, its retained earnings for future growth and consolidated earnings performance based on a long-term perspective. 13
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