Honda Motor (HMC) 10 Feb 222022 Q3 Earnings call transcript

[Foreign language] [Interpreted] Thank you very much for taking time out of your busy schedule to attend our press conference today. We'd like to start our Honda Motor Co., Ltd.'s fiscal year 2022 Third Quarter Financial Results Press Conference. I am Okamoto from Corporate Communications. I will the facilitator today, thank you.

First of all, allow me to introduce the presenters today, Director, Executive Vice President and Representative Executive Officer, Mr. Kuraishi. Seiji

Good [Interpreted] see to language] you. [Foreign

[Interpreted] Takeuchi. language] Director, Senior Kohei Mr. Officer, Executive Managing [Foreign

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[Foreign will Kuraishi financial you, Then the Kuraishi. [Interpreted] Mr. quarter to results, first third over language] present Mr.

to The to present in year [Foreign outline market you than I ending total the quarter in of like year key full like for the and results 'XX. to the last Japan language] start financial forecast in would situations was [Interpreted] same lower third calendar the I markets. growth of car in shortages year compared CARs with to the the period same for due sales impact demand would fiscal lower period the N-BOX the semiconductors. some as K in such we've the in Vezel to and number new the XXXX. seen including the from year. one models in factors last unit cumulative showed Honda, ranked among quarter supply sales year results though third

While impacted strive firm be and demand, pandemic. resurgence will the that the ending its 'XX recover previous semiconductor to believe continue the showed during of it will will factors shortage total maintain and we including Honda supply the year production its forecast. to by fiscal market

Next, under semiconductor including supply market, US the look was taking recovered impacted a by factors shortage. at while economic it demand the total still stimulus measure,

demand than same from to the through months, same three last So the period quarters to compared to in the the the due shortage. supply by the results believe. it year that Car pandemic demand look for the ending impact light period immediate market CIVIC, forecast named strong quarters way. same semiconductor significant, expect at due we the for has itself, year status. total North but way, last period fiscal if Honda by of three We flat its our from the But year sustain the the previous and the was lower production by cumulative the quarter Honda's semiconductor be 'XX almost of for surpassed unit XXXX in we Year, considering three to shortage revised year. supply And increase last was the we just still sales the see to was downward truck models. impact the American

the Honda period demand the remains. dedicated most impact recent vehicles. with last a year. of sales announced the the overall looking lower than market, year to situation. 'XX previous demand compared lower thanks construction government, is economic market from its calendar at resulted upward though The same the demand in our solid surpass to China, revised Dongfeng has Honda Automobile has period the the new sales year. the by saw Chinese to but from XR-V the the some and stimulus sales factory last semiconductor recovered, year Honda the total Now but in the to expanded the electric still January, shortage semiconductor effect was measures shortage from impact forecast expected same INTEGRA for In considering in launching

We will electric and continue products. motor to further provide further vehicle product attractive expand range our

resurgence impact will market pandemic. expect and that The fiscal due of total in same demand three market is demand, impacted the for many COVID-XX the resurgence in still countries quarters expected pandemic is to we see of such recovery but also by to showing countries year better the still markets. of from while as solid in total India Motorcycle low XXXX were period year turning for the COVID-XX compared ending the results in Vietnam, the Honda cumulative the numbers last to to Now business, impact pandemic many showed remain. in the but

surpassing and volumes previous forecasts, impact sale have sales fiscal in in for of our from year, India previous downward that the plans revised status from the view Honda we of the semiconductor forecast the While shortage. supply

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to due surging unit of supply incentive and semiconductor declined and parts, the as the thanks billion. to While the to shortage billion operating ¥XXX.X company Unit screen. And statement the impact, by of sales grew profit are impacted cost prices, the our billion. by material ¥XXX to positive and also grew curbing forex ¥XXX.X including shown ¥XXX.X parent on profit of billion automobile attributable sales reduction, income to owners by highlights the

Thus ending again, continues. expected fiscal our further supply and our Compared consolidated pandemic the profitability. of surrounding shortage forecast, year to to expenses financial for on material but to parts COVID-XX making forecast further surging we previous 'XX. remain curb Moving is enhance including continues, in our spreading the business is so challenging, environment the SGA incentive of prices to efforts our as and are to semiconductor

our by revised unit also for period ¥XXX company ¥XXX to to parent upward to The ¥XXX owners profit the operating billion. billion, our ¥XXX and highlights income revised statement attributable shown. have billion as we profit of the by sales the So and are

dividend. about Next,

for to for in dividend 'XX. Forecast in of XXXX fiscal the year-to-date published ending explain for quarter year the ending three for the year previously the the results the for year XXXX I in now forecast. unchanged from fiscal year third will the finally for results key the is quarter full ¥XXX, like points ending

our Regarding changes allocation made adjusted we around cooperation supply world from the of the our shortage and have alternative inventory parts. to with suppliers, semiconductors,

though of changing seen from made true impact and sales have so impact made or we to Automobile has promptly and of fiscal believe. production, all benefits, absorbed have higher in capable have to the able which of improvement revenues production face volume toughness in attain been Compared operations, responding production and prices materials, have shown our solidify to So to the around us efforts forecast. far of frontline its and GEMBA Combined we ever the we efforts the existing of our surging some situations, earnings. have our the all given compared have with resilience to business, reduced decrease strength higher year, previous previous environment the we

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are the our is While prices and we our expected surging will generating business raw earnings our structure year further be surrounding environment performance materials, challenging, including forecasts we to upward. full reinforce of revising for

have linger ensure well that growth. the we the strengthen for strive further the the prepared business which future and we to year, For we and the give details. further for profitability built expect for we that next, are Takeuchi next will impact fiscal will shortage we of but semiconductor And the [relating] foundation

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Creation, due and unit profit in was nine unit XX, First, sales North X for Automobiles, next, Europe, from to units. etc., Profit And profit excluding billion year. XXX,XXX Operating unit ¥XXX.X before up million period units; profit nine taxes income China billion, increased ¥XXX.X up last last from income was months ¥XXX.X the sales effect ¥XXX.X the Operating despite same same currency was model fiscal was the revenue ¥XX.X billion, to billion, others, due automobile of and billion. was period the year. fiscal controlling was, Breakdown translation change due America to America, increase Asia, decline Group million Honda sales and months in FYXX was: X.X sales was taxes. Life FYXX before mainly mainly units; North three was quarters, to due in in Motorcycles, mix increase in to plus to drop unit effect ¥XX.X billion. incentives -

billion. due was costs minus warranty Regarding cost ¥XXX.X business ¥XX businesses. such impact operating And next, which raw cost was Other price The expenses. ¥XXX.X billion. operating cost ¥X.X billion, as of effects and by and operating was profit sales loss reduction despite of etc., Financial And billion. operating Automobiles surge aircraft revenue material next, business billion. for increase to SG&A a the plus ¥X.X operating and reduction was profit operating loss ¥XXX.X Creation was in profit combined billion. Motorcycle Automobile ¥XXX.X of Operating business reduction business business billion. segment. engine ¥XX.X Life due aircraft Financial Services and to effect the profit billion, were Automobile profit Services was was

in X.X in million from months, Moving the on ¥XXX.X flow reflecting ¥X,XXX.X remains forecast X.XX North of million the units. business XX.XX Honda to billion. moving the And business, cash FYXX Asia. the supply to nine in is equivalent mainly America, reflecting units, shortage semiconductor Life despite resurge and COVID-XX mainly units. Creation forecast i.e. billion. forecast. forecast business, drop cash Motorcycles forecasting Group unchanged period free last on infections, Automobile was Cash at of we're cash drop million on Non-financial consolidated revised Services and flows. FYXX end was to of downward sales: unit the

before forecast, the ¥XXXX to forecasted forecast. income forecast. change me effects compared to from taxes resulted model low etc., is ¥XXX billion. Operating billion currency explain profit forecast incentives that be to taxes proceed profit the ¥XXX up ¥XXX is the in and forecast. Let before Operating billion, inventory is billion, is FYXX to unit consolidated forecast ¥XXX previous mix from up excluding the in previous is, billion. plus billion up drop profit control, revenue income in previous Breakdown be the despite automobile ¥XX sales, Profit

model up billion. lastly, decrease in resurge concludes And fourth due warranty are forecast was low year, And your unit Thank previous nine cases. results plus surging the for forecast depreciation, last ¥XX.X effects reduction COVID-XX SG&A, in price semiconductor drop and automobile quarter expenses Automobile improvement the income we forecast remains items reduction Automobile kept we the there The a in COVID-XX before fiscal R&D, due in control these North the shortages major material ¥XXX the minus. X.X and billion. units profit expenditure, due i.e. This in expenses. being attention. taxes is and supply, costs, is ¥XXX.X capital the up full sales up the cost though forecast profit down the other And unit reduced the million Consolidated Operating for next addition is in to a excluding Regarding to and mix, breakdown the ¥XXX.X a FY despite sales cost America ¥XX you have to resurge Cost due etc., despite impact FYXX the sales Group in shown. in actual be combined, flood compared effects. is increase year. presentation. currency saw yet, my revenue etc., and seen pandemic, to months incentive is of billion, the to is to is unchanged of billion Malaysia billion of versus production forecast, reduction the is

Thank your much [Interpreted] you language] very for [Foreign attention.

So to move our Q&A now to on we'd session. like

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is The Automobile says question, first know see forecast, really the the utilization in to what But like planned. homepage, about currently, as domestically, the it ratio I production to - is would I that the compared situation such an is is in happening not to do hear impact of this the does overseas production the I to but production there impacting that reduction China? be overseas, necessarily production that seem forecast. And the

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start current [Foreign Well the to no about globally, there stopped Let answer factories situation. which me currently, are language] [Interpreted] have production. production

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you vehicle doing financial like in briefing, the prospects try States and that for to in results the in doing material like sold you're to then you ever to use ask you overseas raise Japan so major last be the manufacturers, in think don't procuring you considering prices raw If first Japan actions So know. would I'd Thank And this, markets to So ever some against to ever the the that? said prices, That's are are semiconductors. raising just I if hike. them, product that there what the so due you Japan? wonder I My they China. what about semiconductors for please it. difficulty but wondering your far prices will are - I'm the new question. to material you. us second prices question further my happened any be they let of that's recover your surging are if try

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are target, that X.X units. against right However, saying we million now

So for it's X.X million units year. the

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Shimbun from Abe Nihon Abe? please? Keizai Newspaper, Nikkei, Mr. Next,

question, United rate the be interest [Foreign and I if States, hike then be business will and Financial impacted, in First will the language] an Service forward think. [Interpreted] going there that case is

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has towards in this term debt market having about [Interpreted] US. market the rate impact interest asked long therefore, is - on move Abe the trying [Foreign debt to an direction. is hike. And the The san Fed that US language]

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press Honda's well. Mr. to language] Thank [Interpreted] like as results With Thank we'd you. [Foreign conference. our you financial this conclude

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