Honda Corporate Update - 2018 Autumn · Forecast: Honda Group Unit Sales FY18 Results FY19 Previous Forecast FY19 Revised Forecast FY18 Results FY19 Previous Forecast FY19 Revised

Honda Corporate Update - 2018 Autumn

Acura ILX (North America)

Business Status

Other Topics

Automobile Business Operations

Motorcycle Business Operations

Business Strategy

Honda Corporate Update

2030 Vision

2

Financial Highlights

70

80

90

100

110

120

130

183 203 199 178 196

177 192 182 171 267

461 280

153

501 374

4.2%

6.4%

2.9%

5.5%

6.6%

5.0%

3.4%

6.0%

5.4% 5.0%

-1%

1%

3%

5%

7%

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(P)

PP & Others Finance Motorcycle Automobile O/P Margin

・Earthquake

・Thai flood

2012

USD/JPY

￥110 for

FY19

840

670

IFRS US GAAP

Profit Structure Profile over Past Decade and FY19 Forecast

・Airbag

Inflator Issue

Yen (billion)

790

503

* Forecast as of Oct 30, 2018 3

*

231

569

363

544

833 823

Motorcycles Automobiles Power Products

Unit (thousand)

6,262 6,345 6,345 5,199 5,285 5,285 19,554

20,850 20,850

± 0 ( ± 0 % )

FY19

Previous

Forecast

FY19

Revised

Forecast

Change

FY19

Previous

Forecast

FY19

Revised

Forecast

Change

FY19

Previous

Forecast

FY19

Revised

Forecast

Change

Japan 190 195 + 5 690 695 + 5 300 315 + 15

North

America325 320 - 5 1,940 1,940 - 3,055 3,055 -

Europe 245 240 - 5 175 170 - 5 1,040 1,035 - 5

Asia 18,855 18,845 - 10 2,220 2,220 - 1,535 1,545 + 10

Other

Regions1,235 1,250 + 15 260 260 - 415 395 - 20

Total 20,850 20,850 - 5,285 5,285 - 6,345 6,345 -

± 0 ( ± 0 % )

± 0 ( ± 0 % )

4

Forecast: Honda Group Unit Sales

FY18 Results

FY19 Previous Forecast

FY19 Revised Forecast

FY18 Results

FY19 Previous Forecast

FY19 Revised Forecast

FY18 Results

FY19 Previous Forecast

FY19 Revised Forecast

Motorcycles Automobiles Power Products

Unit (thousand)

12,954 13,775 13,860

+ 85 ( + 0.6 % )

3,689 3,745 3,745

6,262 6,345 6,345

± 0 ( ± 0 % )

± 0 ( ± 0 % )

FY19

Previous

Forecast

FY19

Revised

Forecast

Change

FY19

Previous

Forecast

FY19

Revised

Forecast

Change

FY19

Previous

Forecast

FY19

Revised

Forecast

Change

Japan 190 195 + 5 620 625 + 5 300 315 + 15

North

America325 320 - 5 1,940 1,940 - 3,055 3,055 -

Europe 245 240 - 5 175 170 - 5 1,040 1,035 - 5

Asia 11,780 11,855 + 75 750 750 - 1,535 1,545 + 10

Other

Regions1,235 1,250 + 15 260 260 - 415 395 - 20

Total 13,775 13,860 + 85 3,745 3,745 - 6,345 6,345 - 5

Forecast: Consolidated Unit Sales

FY18 Results

FY19 Previous Forecast

FY19 Revised Forecast

FY18 Results

FY19 Previous Forecast

FY19 Revised Forecast

FY18 Results

FY19 Previous Forecast

FY19 Revised Forecast

FY18 FY19

Results Forecast amount %

Sales revenue 15,361.1 15,800.0 + 438.8 + 2.9% + 350.0

Operating profit 833.5 790.0 - 43.5 - 5.2% + 80.0

Operating margin 5.4% 5.0% - 0.4pt + 0.4pt

Share of profit of investments

accounted for using the equity method247.6 215.0 - 32.6 - 13.2% -

Profit before income taxes 1,114.9 1,010.0 - 104.9 - 9.4% + 80.0

Profit for the year attributable

to owners of the parent1,059.3 675.0 - 384.3 - 36.3% + 60.0

Earnings per share attributable

to owners of the parent (Yen)590.79 382.66 - 208.13 + 34.10

Market average rates (Yen)

110( 1H 110 / 2H 110 )

Yen (billion)

Change Change from

previous

forecast

U.S. Dollar 111 Yen up by 1 yen Yen down by 3 yen

6

FY19 Financial Forecast (Consolidated)

833.5 790.0

+ 169.5 - 40.0

+ 39.0 735.5

Operating margin

5.4%

- 137.0

- 75.0

830.0

*1

Operating Profit - 43.5 ( - 5.2 % )

・Revenue, model mix, etc.

・Cost Reduction, etc. （excl. Raw material price increase）

・SG&A

・R&D

+ 86.5

+ 148.0

- 33.0

- 32.0

7

*1

FY19 Forecast: Change in Operating Profit

Real-term

Currency

Effects

Litigation

Settlement

Etc.

in FY18

Operating margin

4.9%

Operating margin

5.2%

Operating margin

5.0%

Raw material

price

increase

Real-term

profit change

Yen (billion)

FY18

Results

FY19

Forecast

Impact of

Mexico plant

flooding

(Including decrease

of unit sales

due to shutdown)

Litigation settlement and restitution income related to airbag inflator in FY18

【Purpose for the change】

Further improving the Company’s capital strategy

【Points of the change】

Goal: to maintain a

shareholders’ return ratio of

approximately 30%

Goal: to realize a return ratio

alone of approximately 30%

Acquisition of the Company’s

own shares at a timing that it

deems optimal

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.

Change in the company’s shareholders’ return policy

8

Increase / Decrease

f rom FY18

1st

Quarter End 24 27 + 3 -

2nd

Quarter End 24 28 + 4 + 1

3rd

Quarter End 25 ( 28 ) ( + 3 ) ( + 1 )

4th

Quarter End 27 ( 28 ) ( + 1 ) ( + 1 )

Fiscal Year 100 ( 111 ) ( + 11 ) ( + 3 )

Dividend per Share FY18FY19

(Expectation)

Change from

previous forecast

（Yen）

9

Dividend

10

Recent Shareholders’ Return Summary Trend

FY11

Actual

FY12

Actual

FY13

Actual

FY14

Actual

FY15

Actual

FY16

Actual

FY17

Actual

FY18

Actual

FY19 (Expectation)

Dividend

（Yen）

1st Quarter End 12 15 19 20 22 22 22 24 27

2ndQuarter End 12 15 19 20 22 22 22 24 28

3rd Quarter End 15 15 19 20 22 22 24 25 (28)

4th Quarter End 15 15 19 22 22 22 24 27 (28)

Fiscal Year 54 60 76 82 88 88 92 100 (111)

Dividend ratio* 18.3% 51.1% 37.3% 25.7% 32.2% 46.0% 26.9% 25.1% (29.0%)

Acquisition of the

Company’s Own Shares 25.0 0 0 0 0 0 0 87.0 62.1

97.4 108.1 137.0 147.8 158.6 158.6 165.8 179.0

195.5 25.0

87.1 62.1

122.4 108.1

137.0 147.8

158.6 158.6 165.8

18.3% 51.1%

37.3% 25.7% 32.2%

46.0%

26.9% 25.1% 29.0%

0

100

200

300

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E

257.6

**

266.1

** incl. impact of revaluation of DTA/DTL: 16.9%

**

(billion)

Acquisition of the

Company’s Own

Shares

Total

Dividend Dividend Ratio

(billion Yen)

* US GAAP up to FY15 , IFRS from FY16

Business Status

Other Topics

Automobile Business Operations

Motorcycle Business Operations

Business Strategy

Honda Corporate Update

2030 Vision

11

Financial Highlights

12

Further enhance inter-regional coordination and collaboration and

increase the efficiency of our operations from a global perspective.

Inter-regional coordination and collaboration

Accord 10% Civic

16%

CR-V 14%

Vezel 10%

Fit 8%

Derivative models

Other

Global Models continue to be widely popular representing

approx. 70% of CY2017 global Honda unit sales

Global models: Accord, Civic, CR-V, Vezel/ HR-V and Fit/ Jazz

13

Accord

- All-new Accord launched in October 2017 in N.A. to be

followed by other markets

Civic

- Underwent full model change in 2015 in N.A. and

successfully launched in global market

- Shares commonized platform between sedan, coupe

and hatchback

CR-V

- All-new CR-V underwent full model change in 2016 in N.A.

and global launch to be completed by 2018.

Vezel/ HR-V

- Grew into strong model and became one of the global

models since its launch in 2013

Accord

Civic

CR-V

Vezel/ HR-V

Fit/ Jazz

*Derivative models:

City/Grace, Greiz and XR-V

Sharing of down-sized

turbocharged engine

at some trim levels

Focus on

platform and parts

commonality

Focus on

platform and parts

commonality

5.3mil

CY2017

Global models: Direction of Model Development

2013 2014 2015 2016 2017

CR-V

HR-V

Fit

Global Operation Reform

• Concurrent development

in all six regions

• Adoption of locally

optimized design

• Increase commonality of

platform and parts

(Civic, CR-V and Accord)

Further enhance electrification, autonomous

driving and connectivity technologies.

Spearhead industry effort to realize

a carbon-free and collision-free

mobile society.

14

Accord

• Adopt Lead-Country Introduction

Strategy (Clarification of which region is responsible for

model development leadership and increase

model development efficiency.)

• Introduction of modular strategies

• Introduce advanced platforms to

accommodate electrification of

powertrains

Civic

November

April

March

April

August

Civic

Sedan CY2015 CY2016 CY2017 CY2018 CY2019

North

America

ASIA

China

Brazil

Europe

Japan

Global Model Introductions

September

CR-V

(PE) CY2015 CY2016 CY2017 CY2018 CY2019

North

America

ASIA

Brazil

China

Europe

Japan

April

June

July

September

November

August

Civic Sedan

CR-V

15

16

Regional Models

Introduction of regional models has also been expanding in each region.

China: Brand differentiation between two Joint Ventures

North America:

Light Truck models

Japan: Mini-vehicles Asia: Meet demand in each

country with affordable models

Crider UR-V

Avancier XR-V

Odyssey

Pilot

Ridgeline

BR-V N-Box

N-One N-WGN

N-Box +

GAC Dongfeng

Amaze

Mobilio

Brio

China

Europe

Capacity increase to 5.7 mil Establish stable production structure leveraging regional capacity + mutual parts/model sharing

North America

South America

Asia

Japan

1.06 mil

<Export>

Global Models

& Electrified models 1.92 mil

200,000

Primarily Civic 5D

production

150,000

1.13 mil

<Export>

Acura, L/T models,

Accord & CR-V

930,000

<Export>

• Strengthen mutual parts/model

sharing within Asia

• Export to Africa

<Export>

Leverage local cost benefit for

next markets (Africa)

Middle East and Africa

Jazz

Electrified models

CR-V

Accord &

L/T models

Acura

10-20% for Other regions

80-90% for Local markets

Total Capacity

approx. 5.4 mil units (Since April 2017)

City

■ Utilization Image

Civic 5D

1,000

CR-V, HR-V Civic, CR-V

Flexible Global Production Infrastructure

(Units)

Clarity Series

17

Civic 5D

Mutually Complementary System for our Global Operations

この様に、６極体制を「地域の協調と連携」へと進化させ、グローバルでの競争力を、強化して行きます。 0606八郷さんスピーチ As these examples demonstrate, we

will advance our six-region global

operation structure through inter-

regional cooperation and coordination.

Advance our six-region global operation structure

through inter-regional cooperation and coordination

• Flexible production system complementary production allocation between regions

• Supply Civic hatchback from the UK to North America and Japan

• WR-V was developed mainly for South America but is now also sold in Asia.

18

1,066 1,066 1,066 816

1,923 1,923 1,923 1,923

200 200 200 200

1,080 930 930 930

1,080 +50

1,080 +50

1,200 +50

1,200 +50

151 151 151

151

Mar '16 Apr '17 Plan '19 Plan '22as of

Japan

North

America

Europe

Asia

China

Other

-150 5,550 5,400

(Export only)

Global Production Capacity

(Export only)

5,270

Thailand

-150

FY2017

Unit

(thousand)

19

China

Dongfeng

+120

Plan

5,520 +120 -250

Japan

Saitama

-250

Brazil

Sumare

-120

Itirapina

+120

Plan

To be launched

Automobile New Model Introductions (main models only)

* Please note that “To be launched” models reflect the current plan and is subject to change.

Also, photos are from currently available sources and are not actual specification models.

Acura RDX: N.A.

Mar Apr May Jun Jul Aug Sep

Amaze: India

20

Oct

Already Launched in 2018

Nov Dec

Inspire: China

Insight: N.A.

N-VAN: Japan

Clarity PHEV: Japan

Everus VE-1: China

(2018)

Automobile Operations by Regions

11,588 12,777

14,491 15,600

16,522 17,479 17,550 17,230

0

5,000

10,000

15,000

20,000

CY10 11 12 13 14 15 16 17

Passenger Cars

Light Trucks

1,259 1,147

1,423 1,525 1,541 1,587 1,638 1,641

0

500

1,000

1,500

2,000

CY10 11 12 13 14 15 16 17

AcuraHonda Passenger CarsHonda Light Trucks

4,601 4,753 5,211

5,692 5,297

4,937 5,077 5,195

0

2,500

5,000

7,500

FY11 12 13 14 15 16 17 18

Registered vehicles

Mini vehicles

608 601

717

848 788

704 711 725

0

250

500

750

1,000

FY'11 12 13 14 15 16 17 18

Registered vehicles

Mini vehicles

21

<Industry>

<Honda>

United States Japan <Industry>

<Honda>

Unit (thousands)

Source: Autodata

Source: Honda

Source: JAMA

Source: Honda

Increase production capacity of light truck

models to meet industry demand

Improve capacity utilization through

exporting global models

CR-V

RDX

■ Production Allocation

Indiana

Ohio East

Liberty

Plant

2017 2016

CR-V

MDX

Pilot

Shift

Civic

MDX

Global

Source Civic Export to N.A.

Alabama

Pilot

Global Source

Civic

Ridgeline Odyssey

Odyssey

Ridgeline

Alabama

Production

Plant

■ As of the end of 2017

Indiana

CR-V

Civic

Mexico El Salto

CR-V

HR-V

Shift

Ohio(East Liberty)

RDX

CR-V

MDX

Model Allocation: North America

22

Split

Indiana

RDX

■ Production Allocation

Indiana

Ohio East

Liberty

Plant

2019 2018

CR-V

Civic

Production

Plant

CR-V Civic

CR-V

MDX

Model Allocation: North America

MDX

Accord Ohio

Marysville

Plant

CR-V

CR-V

Insight Brand-New

Insight

Accord

Ohio East

Liberty Marysville

CR-V

RDX

TLX / ILX

Canada Ontario

Civic

CR-V

TLX

23

652 622 599

757 793

1,010

1,256

1,458

0

500

1,000

1,500

CY10 11 12 13 14 15 16 17

Acura SUV

MPV Sedan

※2008-2014 Wholesale

2015-2016 Retail

Automobile Operations by Regions

24

China

<Honda>

13,757 14,473 15,495

17,929 19,701

21,146

24,378 24,719

0

10,000

20,000

30,000

CY10 11 12 13 14 15 16 17

Minivan SUV

MPV Sedan

Unit (thousands)

(excluding commercial vehicles) <Industry>

Source: Honda

Source: Honda

Further expand sister model strategy.

<Industry>

<Honda>

Asia

4,493 4,796

5,696 5,748 5,477 5,464 5,478 5,965

0

4,000

8,000

CY10 11 12 13 14 15 16 17

Malaysia ThailandIndonesia PhilippinesIndia

297

227

356

474 524

587 578 629

0

250

500

750

CY10 11 12 13 14 15 16 17

Malaysia ThailandIndonesia PhilippinesIndia

Source: Honda

Source: Honda

(Five main markets in Asia)

* India: excluding commercial vehicles and pickups

Introduce new models to meet specific

market needs in each Asian market.

Regional model introduction and sales growth in Asia

Sedan H/B MPV SUV

D

C

B

A

Accord

CR-V

Odyssey

Civic

HR-V

StepWGN

City Fit/Jazz

BR-V Mobilio

Amaze

Freed

WR-V

Brio

Industry demand by vehicle segment Honda’s sales models in CY2018

Amaze: India Brio RS: Indonesia

Honda has introduced variety of low-segment models in Asian market past several years,

which lead to sales growth and profit increase at Asian segment.

Also, Honda has announced re-introduction of Civic and CR-V in Indian market.

* Not all the vehicles are sold at all of Asian countries

Introduced in Asian market as Regional models

IHS(Hondaが使用するマーケット調査会社)による定義 Amaze: A seg Brio: A seg Mobilio: B seg BR-V: B seg WR-V: B seg また、BrioをRSとSatyaに分けている理由があれば問題ないが、もしなければ まとめてBrioでよいのではとおっしゃっておりました。

Sedan(4D/5D) SUV MPV

D

GAC

Dongfeng

C

GAC

Dongfeng

B

GAC

Dongfeng

By utilizing common platforms and strengthening local procurement and

R&D functions, successive launch of cost competitive models being realized.

Jade Crider

Odyssey

Spirior

Gienia

Segment

Fit City

Vezel

XR-V

CR-V

(July 2017)

Elysion

Greiz

UR-V

(Mar 2017)

Civic

Avancier

Regional Models: China

26

Two joint ventures

offer different model types

consistent with their

respective brand image

Accord

(May 2018)

Inspire

(Oct 2018)

Everus

VE-1

New BEV

ENVIX Concept

(2019)

Automobile Operations by Regions

27

Brazil

<Honda>

3,329 3,426 3,634 3,580

3,333

2,481

1,989 2,176

0

2,500

5,000

CY10 11 12 13 14 15 16 17

126

93

135 139 138

153

123 131

0

100

200

CY10 11 12 13 14 15 16 17

Unit (thousands)

<Industry>

Source: Honda

Source: ANFAVEA

(Main market in Other Region)

* excluding trucks

Improve Forex toughness by increasing local

procurement and localization of development.

<Industry>

<Honda>

Europe (EU+EFTA)

13,743 13,542

12,452 12,240 12,913

14,095 15,132

15,632

0

5,000

10,000

15,000

20,000

CY10 11 12 13 14 15 16 17

187

150 141 140 133 132 138 120

0

100

200

300

400

CY10 11 12 13 14 15 16 17

(excluding commercial vehicles)

(EU and EFTA)

Source: ACEA / Honda

Source: ACEA / Honda

U.K. has been designated to serve as

global supply base of the Civic Series.

Roadmap for Environmental Technologies

2010 2020 2030

DI engine

CVT / DCT

Turbo engine

2000

(CO

2(g

/km

)

0

Global expansion

Global expansion

Technologies to

increase electrical

efficiency

Technologies to

increase thermal

efficiency

ZERO emissions technology

28

2015

Clarity BEV

(2017)

Clarity PHEV

(2017)

Clarity Fuel Cell

(2016)

Accord PHEV

(2013)

FCX Clarity

(2008) FCX

(2002)

Strive to electrify two-thirds of all vehicles we sell globally by 2030

CR-V HEV

(2017)

VE-1@China

CY2018

Clarity Plug-in Hybrid＠Japan

CY2019

Urban EV ＠Europe

CY2020

Urban EV ＠Japan

NEW FCV

FCV

CR-V Hybrid

＠Japan, Europe

Insight Hybrid＠NA

ACCORD Hybrid＠NA

CDX Hybrid＠China

29

Honda’s Approach to Automobile Electrification

Leverage our strengths

Reinforce organization

・Optimize the technologies and experiences cultivated in HEV

development for electrification expansion.

Electric motors ・Established JV with Hitachi AMS for development, manufacture and

sale of Honda’s state-of-the-art electric motors to combine our compact

high-power technology with their mass-production expertise.

×

We expect that two-thirds of global automobile unit sales will be

electrified by 2030.

Electrification = HEV + PHEV + BEV + FCV

Cooperative control

Battery management

Key technologies we will focus on for Electrification

・Maximize cooperative control systems to fully extract and utilize

the performance of the powertrain and related devices.

・Established “Electric Vehicle Development Division” which will oversee

comprehensive vehicle development, including the powertrain

and chassis, in order to further increase development speed.

・Maximize energy management performance and enhance heat

management technologies to extend battery performance.

HEV/PHEV Development Based on 2 Motor i-MMD Hybrid Technology

30

Charge

1.5-2.0L

Atkinson-cycle

DOHC i-VTEC

Engine

Drive Motor

Generation

Motor

Engine-

linked

Clutch

Power

Control Unit

(PCU)

Front Unit

• Engine

• 2 Motors (Electric CVT) • Electric-servo

Brakes

High-power

Lithium-Ion

Battery (1.3

kWh)

DC-DC

Converter

• PCU

Rear Unit

• IPU (Intelligent

Power Unit)

PHEV HEV

Front Unit

• Engine

• 2 Motors (Electric CVT) • Electric-servo

Brakes

• PCU

Rear Unit

• IPU (Intelligent

Power Unit)

High-power

Lithium-Ion

Battery

(6.7 -17kWh)

On-board

Charger

DC-DC

Converter

Battery

Controller

• Charge lid

or

System

overview

Component

devices

+ +

Selectable

drive

modes

Lithium-Ion

Battery

<Drive mode selection>

EV Drive available,

not just Hybrid Drive

and Plug-in Drive

Apply built up technology

and experience to future

electric vehicle development

Achieved energy/output

balance ideal for PHEVs

Left: for PHEVs Right: for HEVs

<Two-motor HEV technology>

Far more fuel-efficient than

previous HEVs

<System /component devices>

Many component devices shared

between HEVs and PHEVs

+

Competitive advantage in

development and sales

• Maintain competitive advantage by developing and selling HEVs and PHEVs with many devices in

common, based on 2 motor i-MMD hybrid technology offering both high driving performance and fuel

efficiency.

• Apply the technology and experience gained through these vehicles to future electric vehicle

development including EVs.

<United States> 2016: Launch of Clarity Fuel Cell

2017: Launch of Clarity Electric / Clarity PHEV

Expand the use of innovative two-motor hybrid powertrain

from passenger cars to light truck lineup in the future

<China> 2018: Launch of Everus VE-1 at GAC Honda

2019: Brand-new BEV will be launched at Dongfeng Honda

Developing the product respond to customer needs by

fully utilizing the R&D capability and resources of the

two JVs and Honda Motor China Technology

<Europe> 2017: Introduction of electrified technologies including Hybrid to all

of the new models (Announced at International Motor Show Germany)

2019: Launch of Honda Urban EV Concept based BEV

2025: Two-thirds of automobile unit sales will be electrified (5 years earlier than global plan) 31

Honda’s Approach to Automobile Electrification

Urban EV Concept

Everus VE-1

Clarity Fuel Cell

Toward realization of a collision-free mobile society

Expanding adoption of Honda SENSING

Japan: Make Honda SENSEING standard equipment on all new models to be introduced

North America/ China/ Europe/ Other regions: Expanding application to all-new models

* For Acura vehicles, called “Acura Watch”

32

- Strive to realize automated lane-changing function which enables the vehicle to drive in

multiple lanes without any command from the driver on highways in 2020

- Strive to achieve the technological establishment of “level 4” automated driving for use in

personal cars by around 2025

Automated Driving Roadmap

✔

✔

33

34

Honda’s approach to the new business environment

SenseTime

Cruise/General Motors

Waymo

Softbank

（Emotion Engine）

Kyoto University

Boston University

（Information Security）

Softbank

（5G Mobile

Communication System）

Alibaba

（Honda CONNECT）

Reachstar （China）

Grab （Asia）

- Motorcycles

Hitachi AMS

（EV Motor）

Neusoft（China EV）

General Motors

（EV Battery, FC Stack）

R&D Center X

Honda Xcelerator

- Global expansion

Electrification Artificial

Intelligence

Car Sharing

New Organizational Structure

Autonomous Driving

Connectivity

Business Status

Other Topics

Automobile Business Operations

Motorcycle Business Operations

Business Strategy

Honda Corporate Update

2030 Vision

35

Financial Highlights

Overview of Motorcycle Business

36

15,061 15,494 17,008 17,592 17,055 17,661

19,554 20,850

5,000

10,000

15,000

20,000

FY2012 2013 2014 2015 2016 2017 2018 2019(P)

143 110

177 192 182 171

267

10.6%

8.2%

10.5% 10.4% 10.1% 9.9%

13.1%

0

100

200

300

FY2012 2013 2014 2015 2016 2017 2018

*Operating profit and margin, and Unit sales until FY13 are based on US GAAP while FY14 and after are based on IFRS

Honda M/C Business = High Profitability + Stability + Growth Potential

Yen

(billion)

Unit (thousand) Honda Global Unit Sales

Operating Profit and Margin

グル台（卸売）を

転記

2011年はHero Hondaを含めており、18m台と多いので、見通し入れて8年にした

（本来は10年と考える）

Indonesia

Malaysia

Thailand

Vietnam India

Pakistan China

Japan

Bangladesh

Brazil

Argentine

Peru

Nigeria

Kenya

Italy U.S.A

(ATV, S×S) Mexico

Philippines

28%

India

19.2 mil

72%

Vietnam

3.3 mil

75%

Indonesia

5.9 mil

82%

Brazil

0.8 mil

80%

Thailand

1.8 mil

21%

U.S.A (MC+ATV)

0.7 mil

44%

0.4 mil

16% Europe

1.1 mil

Motorcycle production

at 35 plants in 21 countries

Annual Production Capacity in India

6.4mil in 2017 7.0mil in 2020

*Market share excluding 50cc

Motorcycle Market Size and Honda Share (CY2017)

37

Thailand

Vietnam

Indonesia

India

Number of motorcycles units in operation

Population

1,339

264

96

69 40%

33%

25%

8%

Significant growth expected

Motorcycle Market Penetration in Asia (millions)

Source: Honda & IMF

http://www.imf.org/e

xternal/ns/cs.aspx?id

=28 より直近の実

績値を反映(2016/3/1)

Penetrationのグラフ

を更新する際は積み上げグラフになっているので注意するこ

と！

人口から普及台数を引き算した数字をインプットしないと％のスケールがおかしく

なる！

0.2mil

Growth in Motorcycle Popularity

Next Markets Growing Markets Mature Markets

1,000

2,000

3,000

4,000

(USD)

India 19.2 mil

Indonesia 5.9mil

Thailand

Vietnam

Pakistan

Philippines

Bangladesh

Myanmar

GDP per capita 1.8mil

3.3mil

(CY2017)

Kenya

Nigeria

38

GDPは2016の数字 （World Bankで確認）

人口はUNより

Source: Honda & United Nations

Note: penetration rate is as of 2017

94期～

広報QAから

ミャンマーやﾊﾟｷスタンなどが

なくなったため、

パキスタンから

左の国の数字を

削除した

記：18年5月14日

18%

82%

In CY2011

33%

67%

In CY2017

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

CY2010 2011 2012 2013 2014 2015 2016 2017

Motorcycle Market Share Trend in India

■ Scooter Unit Sales of Honda / Competitors

and Honda Share in Scooter Market

SC SC

MC MC

■ Fast Growing Segment

Scooter / Motorcycle Sales Ratio (Industry)

0%

10%

20%

30%

40%

50%

60%

70%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

CY2010 2011 2012 2013 2014 2015 2016 2017

Competitors (Unit)

Honda (Unit)

Honda Share(%)

Honda

Honda is now No.2 in market share.

India

Company C

Company A

Company B

Company D

(Wholesale)

39

Hero Honda

1.6 1.6 1.6 1.6 1.6

1.2 1.2 1.2 1.2 1.2

1.2 1.8 1.8

2.4 2.4

1.2 1.2

1.8

CY2013 2015 2016 2017 2020

1st

2nd

3rd 4.0mil

4.6mil

7.0mil

5.8mil 4th

Manesar

Rajasthan

Karnataka

Gujarat

3rd

2nd

4th

1st

Product Line-up

110cc AT-Scooter

Activa

110cc AT-Scooter

Dio

110cc Motorcycle

Dream Yuga

125cc Motorcycle

CB Shine

India Motorcycle Operations

6.4mil

40

Announced the expansion of annual production

capacity to 7.0 mil by 2020.

Capacity Expansion

41

Electrification in Motorcycle and Mobile Battery

Battery Stations

EV Motorcycle Introduce PCX ELECTRIC / PCX HYBRID in Japan (2018).

For future expansion of electric motorcycles/scooters: - Honda and Panasonic to Begin Research Experiment on Battery Sharing Using

Detachable Mobile Batteries and Electric Motorcycles in Indonesia

- Utilizing electric commuters, which feature a detachable mobile battery is under

consideration (in collaboration with the Japan Post Co., Ltd.)

- E-KIZUNA project with Saitama-city and Yamaha Motor Co., Ltd. is conducting an

experiment involving electric motorcycles and replacement of batteries. EV

motorcycle sharing scheme also under consideration.

PCX ELECTRIC Honda Mobile

Power Pack Honda Mobile Power Pack Exchanger

写真出所

左半分・・・Media

Web（TMS）

右半分・・・環境安全 加藤さん撮影（CEATEC）

Business Status

Other Topics

Automobile Business Operations

Motorcycle Business Operations

Business Strategy

Honda Corporate Update

2030 Vision

42

Financial Highlights

43

2030 Vision

44

2030 Vision

- Focus on three areas: Mobility, Robotics and Energy

- Strive to further expand the joy of people by offering products and services

- Strive to become No.1 in the areas of the environment and safety

Business Status

Other Topics

Automobile Business Operations

Motorcycle Business Operations

Business Strategy

Honda Corporate Update

2030 Vision

45

Financial Highlights

InternalOutside

DirectorsTotal

Female

Directors

Directors

(excluding Audit and Supervisory

Committee Members)

7 2 9 1

Directors

(serving as Audit and Supervisory

Committee Members)

2 3 5 1

Total 9 5 14 2

The Company with Audit and Supervisory Committee

- For faster decision making, transfer of authority to Executive Council from Board of Directors

to resolve most matters

- Board of Directors will focus more on discussions of mid to long term business strategies,

as well as strengthening of oversight function

- Introduced a new stock-based remuneration system which is linked with the Company’s

financial performance over the medium to long term period 46

2019年3月期に「取締役等の中長期での企業価値の持続的な向上に対する貢献意識をより高めるとともに、株主の皆様との利益共有を図ることを目的」として、取締役等に対し、中長期の業績と連動した株式報酬制度を新たに導入いたしました。 In the fiscal year ended March 31, 2019, Honda introduced a new stock-based remuneration system for Directors, etc., which is linked with the Company’s financial performance over the medium to long term, in order to further enhance the motivation of Directors, etc. for contributing to the sustainable growth of corporate value over the medium to long term, and to promote sharing of interests between the Directors, etc. and shareholders. Internal

Outside

DirectorsTotal

Directors

(excluding Audit and Supervisory Committee Members)7 2 9

Directors

(serving as Audit and Supervisory Committee Members)2 3 5

Total 9 5 14

External Evaluation on Honda’s Stakeholder Engagement

47

In October 2017, CDP released the results of a survey on climate

change initiatives and reduction of GHG emissions for 5,000

major companies worldwide.

Honda received an A- rating, a score at the leadership level, in

recognition of activities deemed to be best practices in

environmental management in the CDP Japan 500 Climate

Change Report 2017, one of those categories.

CDP is an international NPO that provides a global system for

measuring, disclosing, managing and sharing important

environmental information from companies and cities.

Company initiatives in environmental challenges are evaluated in

the four stages of information disclosure, awareness,

management and leadership.

Securing an A- on the CDP Japan 500 Climate

Change Report 2017

Honda was selected for the third year running with a Bronze Class

rating in the Automobiles sector of the Sustainability Award 2018

issued by Switzerland-based RobecoSAM. RobecoSAM

evaluates sustainability of approximately 2,500 companies

worldwide in terms of economic, environmental and social criteria.

Companies deemed to be particularly outstanding in each sector

are rated in categories of Gold Class, Silver Class and Bronze

Class each year.

Selected for the Third Straight Year with a Bronze

Class Rating in the RobecoSAM Sustainability Index

In September 2017, Honda was selected for the first time as a

component of the Dow Jones Sustainability World Index after

being ranked fifth in the global Automobiles sector in the annual

review of the Dow Jones Sustainability Indices (DJSI), one of the

key benchmarks for socially responsible investing. At the same

time, the Company was selected for the third consecutive year as

a component of the Dow Jones Sustainability Asia/Pacific Index.

The DJSI are investment indices run and offered cooperatively by

U.S.-based S&P Dow Jones Indices and Switzerland-based

RobecoSAM. The sustainability of the world’s leading companies

are evaluated from three perspectives in terms of economic,

environmental and social criteria and select companies that

demonstrate overall excellence for inclusion in the indices.

Selected to the Dow Jones Sustainability World

Index

Business Status

Other Topics

Automobile Business Operations

Motorcycle Business Operations

Business Strategy

Honda Corporate Update

2030 Vision

48

Financial Highlights

Unit (thousand)

FY18 FY19Honda Group Unit Sales

Consolidated Unit Sales

01002003004005006007008009001,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,3002,4002,5002,6002,7002,8002,9003,0003,1003,2003,3003,4003,5003,6003,7003,8003,9004,0004,1004,2004,3004,4004,5004,6004,7004,8004,9005,0005,1005,2005,3005,4005,5005,6005,7005,8005,9006,000

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,700

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,700

01002003004005006007008009001,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,3002,4002,5002,6002,7002,8002,9003,0003,1003,2003,3003,4003,5003,6003,7003,8003,9004,0004,1004,2004,3004,4004,500

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,700

5,238 5,315 1,292 1,246 1,258 1,262

3,446 3,533 907 875

1,258 1,262

Honda Group Unit Sales

・Increase in motorcycle unit sales due mainly to sales growth in Indonesia, Vietnam and Brazil

・Decrease in automobile unit sales due mainly to sales decline in North America and China

despite a growth in sales in Japan

FY18 FY19 Change

Motorcycles 5,238 5,315 + 1.5%

Automobiles 1,292 1,246 - 3.6%

Power Products 1,258 1,262 + 0.3%

FY18 FY19 Change

Motorcycles 3,446 3,533 + 2.5%

Automobiles 907 875 - 3.5%

Power Products 1,258 1,262 + 0.3%

Honda Group

Unit Sales

2Q Results (3 Months)

Consolidated

Unit Sales

2Q Results (3 Months)

(thousand)

(thousand)

49

FY19 2nd Quarter Unit Sales

Motorcycles Automobiles Power Products

Motorcycles Automobiles Power Products

Operating Margin

FY18FY19

7.3%

4.1%

7.2%

3.2%

7.4%

5.6%

0%

2%

4%

6%

8%

10%

第１四半期 第２四半期 第３四半期 第４四半期

FY18 FY19 Change

Sales revenue 3,776.1 3,841.7 + 1.7%

Operating profit 152.9 214.4 + 40.2%

Operating margin 4.1% 5.6% + 1.5pt

Share of profit of investments

accounted for using the equity method 82.2 63.9 - 22.3%

Profit before income taxes 242.6 283.0 + 16.7%

Profit for the period attributable

to owners of the parent 174.0 210.7 + 21.1%

Earnings per share attributable

to owners of the parent (Yen) 96.55 119.66 + 23.11

Market average rates (Yen)

U.S. Dollar 111 111 Yen down by 0 y en

Operating Profit Yen (billion)

Financial Results

Yen (billion)

2Q Results (3 Months)

269.2

152.9

284.5

126.8

299.3

214.4

0

100

200

300

第１四半期 第２四半期 第３四半期 第４四半期

FY18

FY19

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Financial Summary

Sales revenue increased by 1.7% primarily

due to an increase in sales revenue in

financial services and motorcycle business

operations.

Operating profit increased by 40.2% due

primarily to the positive impact from

revenue and model mix and

the multi-district class action litigation

settlement in the same period last year.

50

(excl. litigation

settlement 5.5%)

FY19 2nd Quarter Financial Results (Consolidated)

4,699 5,238 4,870 4,747

5,352 5,315

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

+ 77 ( + 1.5 % )

＜Asia＞

・Increased sales in Indonesia and Vietnam

＜Other Regions＞

・Increased sales in Brazil

1Q 2Q 3Q 4Q 1Q 2Q

FY19

Japan 42 42 42 41 49 55

North

America80 83 69 81 72 78

Europe 81 53 39 61 80 61

Asia 4,219 4,804 4,437 4,260 4,840 4,824

Other

Regions277 256 283 304 311 297

Total 4,699 5,238 4,870 4,747 5,352 5,315

FY18

PCX

(Indonesia)

51

Unit (thousand)

Motorcycles - Honda Group Unit Sales (Motorcycles, All-Terrain Vehicles, Side-by-Sides etc.)

1,267 1,292 1,344 1,296 1,305 1,246

0

500

1,000

1,500N-VAN

(Japan)

1Q 2Q 3Q 4Q 1Q 2Q

FY19

Japan 157 167 174 198 162 170

North

America481 452 491 478 518 428

Europe 42 43 42 56 42 38

Asia 523 570 578 495 520 551

Other

Regions64 60 59 69 63 59

Total 1,267 1,292 1,344 1,296 1,305 1,246

FY18

1Q(列幅で調整) 2Q(列幅で調整) 3Q(列幅で調整) 4Q

- 46 ( - 3.6 % )

＜North America＞

・ Negative impact of the Mexico plant flooding ＜Asia＞

・Decreased sales of CR-V in China

＜Japan＞

・ Positive impact of the new N-VAN introduction

and increased sales of N-BOX

中国 △14.0 (Civic +14.4、Fit +11.1、 CR-V △14.7、Crider △13.3 など)

52

Automobiles - Honda Group Unit Sales

Unit (thousand)

- JPY / USD

- USD / Others

(BRL, CAD, MXN)

- JPY / Asian Currencies

(INR, THB, VND, CNY, IDR)

- USD / ARS

- Others

- 1.5

- 12.0

- 2.0

- 8.0

- 13.2

SGAとR&Dから 増加・減少の文言 を取る （他との整合性＆ ±で分かる為）

1Q 2Q 3Q 4Q

Operating

Profit

152.9

Operating

Profit

214.4

242.6

+ 78.3 - 12.4

- 2.7

+ 16.2

283.0

- 37.7

- 18.3 - 36.7

“売上変動構成差”はひとつのことば

金融事業のみ売上減の場合は

“台数変動及び構成差”にする

金融以外の事業セグの時も

“台数変動及び構成差”にする

+ 53.7

Operating Profit + 61.5 ( + 40.2 % )

Profit before Income Taxes + 40.4 ( + 16.7 % )

・円 対 米ドル

・米ドル 対 他通貨 **

・円 対 アジア通貨 ***

・その他

- 120 億円

+ 50 億円

- 15 億円

- 94 億円

<Decrease Factors>

- Increase in warranty, etc.

53

Change in Profit before Income Taxes <FY19 2nd Qtr>

Revenue,

model mix,

etc.

Cost

Reduction,

etc. SG&A

R&D

Currency

Effects

Share of profit

of investments

accounted

for using

the equity

method

Finance

income

and

Finance

costs

Yen (billion)

FY18 2Q FY19 2Q

Litigation

Settlement

In FY18

- Currency Effects

- Interest rate swap

/currency swap

- Others

+ 1.8

- 4.4

- 0.2

Excluding currency effects

and litigation settlement

+ 44.4

Unit (thousand) FY19

Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q

Honda Group

Unit Sales 4,699 5,238 4,870 4,747 5,352 5,315(Consolidated

Unit Sales) (3,245) (3,446) (3,096) (3,167) (3,615) (3,533)

Sales Revenue 508.5 510.1 499.1 520.9 554.9 539.3

Yen (billion) Operating Profit Operating Margin

FY18

78.8 68.5 64.8 54.8

92.1 85.0

15.5% 13.4% 13.0%

10.5%

16.6% 15.8%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

0

20

40

60

80

100

120

140

160

180

( + 5.7 % )

+ 29.2 (Currency effect - 29.6)

1Q 2Q 3Q 4Q 1Q 2Q

FY19FY18

Excel埋め込み有

Excel埋め込み有

経会 概況

1Q(列幅で調整) 2Q(列幅で調整) 3Q(列幅で調整) 4Q

( + 24.1 % )

54

Motorcycle Business Sales Revenue/Operating Profit (Margin)

<Increase Factors>

・Positive impact from sales volume

and model mix, etc.

Unit (thousand) FY19

Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q

Honda Group

Unit Sales 1,267 1,292 1,344 1,296 1,305 1,246(Consolidated

Unit Sales) (900) (907) (932) (950) (952) (875)

Sales Revenue 2,624.5 2,693.0 2,901.4 2,826.1 2,845.1 2,670.1

Yen (billion) Operating Profit Operating Margin

FY18

140.3

39.2

167.4

26.7

151.6

69.8

5.3%

1.5%

5.8%

0.9%

5.3%

2.6%

-20%

-10%

0%

10%

0

50

100

150

200

250

300

350

400

450

500

1Q 2Q 3Q 4Q 1Q 2Q

FY19FY18

Excel埋め込み有

Excel埋め込み有

経会 概況

1Q(列幅で調整) 2Q(列幅で調整) 3Q(列幅で調整) 4Q

( - 0.9 % )

- 22.9 (Currency effect - 40.0)

( + 78.0 % )

+ 306

為替影響 - 250

和解金 +537

実質影響 + 18

<Increase Factors>

・The impact of litigation settlement

in FY18

55

Automobile Business Sales Revenue/Operating Profit (Margin)

(excl. Litigation

settlement：3.4%)

0.1

-2.0

1.5

-3.0 -1.6

0.4

0.2%

-2.3%

1.7%

-2.8% -1.8%

0.5%

-10%

-5%

0%

5%

10%

-101Q 2Q 3Q 4Q 1Q 2Q

FY19FY18

Unit (thousand) FY19

Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q

Honda Group *

Unit Sales 1,331 1,258 1,196 2,477 1,341 1,262(Consolidated

Unit Sales) (1,331) (1,258) (1,196) (2,477) (1,341) (1,262)

Sales Revenue 83.1 87.8 93.4 106.7 87.8 86.9

Yen (billion) Operating Profit Operating Margin

FY18

(For reference)

Operating profit

from aircraft and

aircraft engines- 8.5 - 13.6 - 8.0 - 11.5 - 10.0 - 9.3

*Honda Group Unit Sales and Consolidated Unit Sales includes only power product units.

Excel埋め込み有

Excel埋め込み有

経会 概況

1Q(列幅で調整) 2Q(列幅で調整) 3Q(列幅で調整) 4Q

( - 1.0 % )

- 0.8 (Currency effect - 0.8)

56

Power Product & Other Businesses Sales Revenue/Operating Profit (Margin)

<Increase Factors>

・Decreased expenses in other

businesses operations etc.

49.8 47.2 50.7 48.2 57.1 59.1

9.2% 8.8% 9.6% 9.1% 9.6% 9.9%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0

20

40

60

80

100

120

FY19

Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q

Total Assets of

Finance Subsidiaries 9,494.4 9,688.7 9,867.1 9,409.2 9,783.2 10,153.8

Sales Revenue 539.6 539.5 527.1 530.8 593.1 600.2

Yen (billion) Operating Profit Operating Margin

FY18

Excel埋め込み有

Excel埋め込み有

経会 概況

1Q(列幅で調整) 2Q(列幅で調整) 3Q(列幅で調整) 4Q

1Q 2Q 3Q 4Q 1Q 2Q

FY19FY18

( + 11.3 % )

+ 60.7 (Currency effect + 0.7)

( + 25.3 % )

57

Financial Services Business Total Assets/Sales Revenue/Operating Profit (Margin)

＜Increase Factors＞

・Increase in operating lease revenues, etc.

34.3 -0.6 2.5

110.3

12.0 27.4 53.4

0.2

127.5

7.9

-50

0

50

100

150

+ 15.7 % - 20.2 % - 33.4 %

Yen (billion) FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19

Sales

Revenue1,058.2 1,205.6 2,067.9 2,131.2 208.9 210.7 1,094.2 1,113.6 202.6 176.4

Operating Profit : Yen (billion)

2Q 2Q 2Q 2Q 2Q

Japan North America Europe Asia Other Regions

FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19

2Q 2Q 2Q 2Q 2QExcel埋め込み有

Excel埋め込み有

1Q 2Q 3Q 4Q

経会 概況

<日本> - 69

為替影響 + 25

実質影響 - 95

<北米> + 541

為替影響 - 69

実質影響 + 611

<アジア> + 172

為替影響 - 102

実質影響 + 274

58

Sales Revenue/Operating Profit by Geographical Segment <FY19 2nd Qtr>

incl. litigation

settlement

53.7（loss）

From Asia 46.3 57.9 47.0 55.8 44.6 49.7

1Q 2Q 3Q 4Q 1Q 2Q

FY19FY18

52.9

82.2

54.5 57.9 54.3 63.9

0

20

40

60

80

100

- 18.3

( - 22.3 % )

Excel埋め込み有

1Q(列幅で調整) 2Q(列幅で調整) 3Q(列幅で調整) 4Q

59

Share of Profit of Investments Accounted for Using the Equity Method

Yen (billion)

60

FY19 Forecast: Capital Expenditures, Depreciation and R&D

0%

2%

4%

6%

8%

0

200

400

600

800

FY12 13 14 15 16 17 18 19P0%

2%

4%

6%

8%

0

200

400

600

800

FY12 13 14 15 16 17 18 19P0%

2%

4%

6%

8%

0

200

400

600

800

FY12 13 14 15 16 17 18 19P

Capital Expenditures Depreciation

Amounts % against Sales

US GAAP IFRS US GAAP IFRS US GAAP IFRS

R&D Expenditures

FY18 FY19

Results Forecast

Capital expenditures *1 433.8 480.0 + 46.2 -

Depreciation and

amortization *1467.3 455.0 - 12.3 -

Research and development

expenditures *2 730.7 790.0 + 59.2 -

Yen (billion)

ChangeChange from

previous forecast

No changes have been made to the previous forecasts (on July 31, 2018)

*1 Capital expenditures as well as Depreciation and amortization in results and forecast aforementioned exclude investment in operating leases,

finance leases and intangible assets.

*2 Research and development expenditures are research and development activity related costs incurred during the reporting period.

In accordance with IFRS, a portion of research and development expenditures is recognized as an intangible asset and amortized over its estimated

useful life. As such, this amount is not in conformity with "Research and development" on our Consolidated Statements of Income.

+ 538.2 - 332.8 - 247.7

+ 34.3

Net Change - 7.9

Free cash flow

+ 205.4 Net Cash

1,683.7

Net Cash

1,678.1

2,002.5

- 290.8 - 165.7 + 32.1

Net Cash

1,627.9

Net Cash

1,524.8

Net Change + 100.4

Free cash flow

+ 234.0

1Q 2Q 3Q 4Q

+ 524.9

2,102.9

2,150.1 2,142.2

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Cash Flows of Non-financial Services Businesses

Cash & Cash equivalents

at beginning of FY18

Cash flows from operating activities

Cash flows from investing activities Cash flows from

financing activities Effect of exchange

rate changes

Yen (billion)

Cash & Cash equivalents

at end of period

FY18 Six Months

FY19 Six Months

Cash & Cash equivalents

at beginning of FY19

Cash flows from operating activities

Cash flows from investing activities Cash flows from

financing activities Effect of exchange

rate changes

Cash & Cash equivalents

at end of period

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 fluctuation of foreign exchange rates, as well as other factors detailed from time to time.

Accounting standards: Our consolidated financial statements are prepared in conformity with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards

Board (IASB)

Notice on the Factors for Increases and Decreases in Income: With respect to the discussion above of the change in Operating profit, 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)“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, etc.”, 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 “Revenue, model mix, etc.”, 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 sales revenue 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.

(5) With respect to “Research and Development expenses”, management has analyzed reasons for an increase/decrease in research and development expenses from the

previous fiscal year net of currency translation effects.

Unit sales: Motorcycle Business Honda Group Unit Sales is the total unit sales of completed products, including motorcycles, ATVs, and Side-by-Side of Honda, its consolidated subsidiaries and its affiliates and

joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external

customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries.

Automobile Business Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity

method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of

completed products of Honda and its consolidated subsidiaries. Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance

subsidiaries and sold through our consolidated subsidiaries are accounted for as operating leases in conformity with IFRS and are not included in consolidated sales revenue to

the external customers in our Automobile business. Accordingly, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our Automobile

business.

Power Product Businesses Honda Group Unit Sales is the total unit sales of completed power products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the

equity method. Consolidated Unit Sales is the total unit sales of completed power products corresponding to consolidated sales revenue to external customers, which consists of

unit sales of completed power products of Honda and its consolidated subsidiaries. In Power Product business, there is no discrepancy between Honda Group Unit Sales and

Consolidated Unit Sales since no affiliate and joint venture accounted for using the equity method was involved in the sale of Honda power products.

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