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No.1-7628

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF AUGUST 2017

COMMISSION FILE NUMBER: 1-07628

HONDA GIKEN KOGYO KABUSHIKI KAISHA

(Name of registrant)

HONDA MOTOR CO., LTD.

(Translation of registrant’s name into English)

1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 

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Contents

Exhibit 1:

On August 1, 2017, Honda Motor Co., Ltd. announced its consolidated financial results for the fiscal first quarter ended June 30, 2017.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: August 4, 2017

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August 1, 2017

HONDA MOTOR CO., LTD. REPORTS

CONSOLIDATED FINANCIAL RESULTS

FOR THE FISCAL FIRST QUARTER

ENDED JUNE 30, 2017

Tokyo, August 1, 2017 — Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal first quarter ended June 30, 2017.

First Quarter Results

Honda’s consolidated profit for the period attributable to owners of the parent for the fiscal first quarter ended June 30, 2017 totaled JPY 207.3 billion (USD 1,851 million), an increase of 18.7% from the same period last year. Earnings per share attributable to owners of the parent for the quarter amounted to JPY 115.04 (USD 1.03), an increase of JPY 18.11 (USD 0.16) from JPY 96.93 for the corresponding period last year. One Honda American Depository Share represents one common share.

Consolidated sales revenue for the quarter amounted to JPY 3,713.0 billion (USD 33,153 million), an increase of 7.0% from the same period last year, due primarily to increased revenue in financial services business and motorcycle business operations as well as favorable foreign currency translation effects.

Consolidated operating profit for the quarter amounted to JPY 269.2 billion (USD 2,404 million), an increase of 0.9% from the same period last year, due primarily to an increase in sale volume and model mix and continuing cost reduction efforts, despite increased SG&A expenses.

Share of profit of investments accounted for using the equity method for the quarter amounted to JPY 52.9 billion (USD 473 million), an increase of 94.5% from the corresponding period last year.

Consolidated profit before income taxes for the quarter totaled JPY 335.0 billion (USD 2,991 million), an increase of 16.1% from the same period last year.

Explanatory note:

United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of JPY 112.00=USD 1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on June 30, 2017.

 

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Consolidated Statements of Financial Position for the Fiscal First Quarter Ended June 30, 2017

Total assets increased by JPY 86.1 billion, to JPY 19,044.3 billion from March 31, 2017, mainly due to an increase in Inventory and Equipment of operating leases, despite a decrease in Cash and cash equivalent. Total liabilities decreased by JPY 74.6 billion, to JPY 11,313.8 billion from March 31, 2017, mainly due to a decrease in Trade payable and Retirement benefit liabilities. Total equity increased by JPY 160.8 billion, to JPY 7,730.4 billion from March 31, 2017 due mainly to increased Retained earnings attributable to increased Profit for the period.

Consolidated Statements of Cash Flows for the Fiscal First Quarter Ended June 30, 2017

Consolidated cash and cash equivalents on June 30, 2017 decreased by JPY 86.5 billion from March 31, 2017, to JPY 2,019.4 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the same period of the previous fiscal year, are as follows:

Cash flows from operating activities

Net cash provided by operating activities amounted to JPY 176.6 billion for the fiscal first quarter ended June 30, 2017. Cash inflows from operating activities increased by JPY 5.2 billion compared with the same period of the previous fiscal year due mainly to an increase in cash received from customers.

Cash flows from investing activities

Net cash used in investing activities amounted to JPY 178.7 billion. Cash outflows from investing activities decreased by JPY 3.2 billion compared with the same period of the previous fiscal year, due mainly to a decrease in Payments for additions to property, plant and equipment.

Cash flows from financing activities

Net cash used in financing activities amounted to JPY 88.5 billion. Cash outflows from financing activities increased by JPY 141.2 billion compared with the same period of the previous fiscal year, due mainly to a decrease in proceeds from financing liabilities.

 

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Forecasts for the Fiscal Year Ending March 31, 2018

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2018, Honda projects consolidated results to be as shown below:

Fiscal year ending March 31, 2018

 

		Yen (billions)				Changes from FY 2017
Sales revenue			14,500.0				+ 3.6	%
Operating profit			725.0				- 13.8	%
Profit before income taxes			900.0				- 10.6	%
Profit for the year			605.0				- 11.0	%
Profit for the year attributable to owners of the parent			545.0				- 11.6	%
		Yen
Earnings per share attributable to owners of the parent
Basic and diluted			302.39

Note: The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar will be JPY 107 for the full year ending March 31, 2018.

The reasons for the increases or decreases in the forecasts of the operating profit, and profit before income taxes for the fiscal year ending March 31, 2018 from the previous year are as follows.

 

		Yen (billions)
Revenue, model mix, etc.			+ 59.3
Cost reduction, the effect of raw material cost fluctuations, etc.			+ 75.0
SG&A expenses			- 37.0
R&D expenses			- 54.0
Currency effect			- 75.0
The impact of pension plan amendments			- 84.0
Operating profit compared with fiscal year ended March 31, 2017			- 115.7
Share of profit of investments accounted for using the equity method			+ 15.2
Finance income and finance costs			- 6.4
Profit before income taxes compared with fiscal year ended March 31, 2017			- 106.9

 

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Dividend per Share of Common Stock

Fiscal first quarter dividend is JPY 24 per share of common stock. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2018, is JPY 96 per share.

This announcement contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that the actual results of the Company could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in the principal markets of the Company, its consolidated subsidiaries and its affiliates accounted for by the equity-method, and fluctuation of foreign exchange rates, as well as other factors detailed from time to time. The various factors for increases and decreases in profit have been classified in accordance with a method that Honda considers reasonable.

 

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Consolidated Financial Summary

For the three months ended June 30, 2016 and 2017

Financial Highlights

 

		Yen (millions)
		Three months ended Jun. 30, 2016				Three months ended Jun.  30, 2017
Sales revenue			3,471,730				3,713,096
Operating profit			266,843				269,211
Profit before income taxes			288,492				335,025
Profit for the period attributable to owners of the parent			174,699				207,335
		Yen
Earnings per share attributable to owners of the parent
Basic and diluted			96.93				115.04
		U.S. Dollar (millions)
						Three months ended Jun. 30, 2017
Sales revenue							33,153
Operating profit							2,404
Profit before income taxes							2,991
Profit for the period attributable to owners of the parent							1,851
		U.S. Dollar
Earnings per share attributable to owners of the parent							1.03
Basic and diluted

 

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[1] Condensed Consolidated Statements of Financial Position

 

		Yen (millions)
		Mar. 31, 2017				Jun. 30, 2017
Assets
Current assets:
Cash and cash equivalents			2,105,976				2,019,418
Trade receivables			764,026				725,451
Receivables from financial services			1,878,938				1,861,152
Other financial assets			149,427				148,498
Inventories			1,364,130				1,444,970
Other current assets			292,970				318,024
Total current assets			6,555,467				6,517,513
Non-current assets:
Investments accounted for using the equity method			597,262				645,890
Receivables from financial services			3,070,615				3,116,256
Other financial assets			364,612				393,238
Equipment on operating leases			4,104,663				4,164,365
Property, plant and equipment			3,200,378				3,158,791
Intangible assets			778,192				765,212
Deferred tax assets			121,509				112,176
Other non-current assets			165,425				170,870
Total non-current assets			12,402,656				12,526,798
Total assets			18,958,123				19,044,311
Liabilities and Equity
Current liabilities:
Trade payables			1,183,344				1,089,446
Financing liabilities			2,786,928				2,830,318
Accrued expenses			417,736				373,089
Other financial liabilities			119,784				121,841
Income taxes payable			45,507				69,381
Provisions			348,095				315,470
Other current liabilities			527,448				537,054
Total current liabilities			5,428,842				5,336,599
Non-current liabilities:
Financing liabilities			4,022,190				4,019,344
Other financial liabilities			47,241				50,078
Retirement benefit liabilities			494,131				444,677
Provisions			248,935				241,106
Deferred tax liabilities			900,450				944,202
Other non-current liabilities			246,708				277,871
Total non-current liabilities			5,959,655				5,977,278
Total liabilities			11,388,497				11,313,877
Equity:
Common stock			86,067				86,067
Capital surplus			171,118				171,118
Treasury stock			(26,189	)			(26,192	)
Retained earnings			6,712,894				6,877,387
Other components of equity			351,406				363,514
Equity attributable to owners of the parent			7,295,296				7,471,894
Non-controlling interests			274,330				258,540
Total equity			7,569,626				7,730,434
Total liabilities and equity			18,958,123				19,044,311

 

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[2] Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Income

For the three months ended June 30, 2016 and 2017

 

		Yen (millions)
		Three months ended Jun.  30, 2016				Three months ended Jun.  30, 2017
Sales revenue			3,471,730				3,713,096
Operating costs and expenses:
Cost of sales			(2,677,660	)			(2,874,789	)
Selling, general and administrative			(361,663	)			(394,823	)
Research and development			(165,564	)			(174,273	)
Total operating costs and expenses			(3,204,887	)			(3,443,885	)
Operating profit			266,843				269,211
Share of profit of investments accounted for using the equity method			27,222				52,948
Finance income and finance costs:
Interest income			7,440				8,997
Interest expense			(3,092	)			(2,854	)
Other, net			(9,921	)			6,723
Total finance income and finance costs			(5,573	)			12,866
Profit before income taxes			288,492				335,025
Income tax expense			(98,626	)			(109,517	)
Profit for the period			189,866				225,508
Profit for the period attributable to:
Owners of the parent			174,699				207,335
Non-controlling interests			15,167				18,173
		Yen
Earnings per share attributable to owners of the parent
Basic and diluted			96.93				115.04

 

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Condensed Consolidated Statements of Comprehensive Income

For the three months ended June 30, 2016 and 2017

 

		Yen (millions)
		Three months ended Jun. 30, 2016				Three months ended Jun. 30, 2017
Profit for the period			189,866				225,508
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans			—				—
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			(10,921	)			5,817
Share of other comprehensive income of investments accounted for using the equity method			(2,084	)			(1,182	)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations			(376,380	)			6,492
Share of other comprehensive income of investments accounted for using the equity method			(36,264	)			3,349
Total other comprehensive income, net of tax			(425,649	)			14,476
Comprehensive income for the period			(235,783	)			239,984
Comprehensive income for the period attributable to:
Owners of the parent			(224,797	)			219,855
Non-controlling interests			(10,986	)			20,129

 

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[3] Condensed Consolidated Statements of Changes in Equity

As of and for the three months ended June 30, 2016

 

		Yen (millions)
		Equity attributable to owners of the parent																								Non- controlling interests				Total equity
		Common stock				Capital surplus				Treasury stock				Retained earnings				Other components of equity				Total
Balance as of April 1, 2016			86,067				171,118				(26,178	)			6,194,311				336,115				6,761,433				270,355				7,031,788
Comprehensive income for the period
Profit for the period															174,699								174,699				15,167				189,866
Other comprehensive income, net of tax																			(399,496	)			(399,496	)			(26,153	)			(425,649	)
Total comprehensive income for the period															174,699				(399,496	)			(224,797	)			(10,986	)			(235,783	)
Reclassification to retained earnings															5,307				(5,307	)			—								—
Transactions with owners and other
Dividends paid															(39,650	)							(39,650	)			(29,421	)			(69,071	)
Purchases of treasury stock											(3	)											(3	)							(3	)
Total transactions with owners and other											(3	)			(39,650	)							(39,653	)			(29,421	)			(69,074	)
Balance as of June 30, 2016			86,067				171,118				(26,181	)			6,334,667				(68,688	)			6,496,983				229,948				6,726,931

As of and for the three months ended June 30, 2017

 

		Yen (millions)
		Equity attributable to owners of the parent																								Non- controlling interests				Total equity
		Common stock				Capital surplus				Treasury stock				Retained earnings				Other components of equity				Total
Balance as of April 1, 2017			86,067				171,118				(26,189	)			6,712,894				351,406				7,295,296				274,330				7,569,626
Comprehensive income for the period
Profit for the period															207,335								207,335				18,173				225,508
Other comprehensive income, net of tax																			12,520				12,520				1,956				14,476
Total comprehensive income for the period															207,335				12,520				219,855				20,129				239,984
Reclassification to retained earnings															412				(412	)			—								—
Transactions with owners and other
Dividends paid															(43,254	)							(43,254	)			(35,919	)			(79,173	)
Purchases of treasury stock											(3	)											(3	)							(3	)
Total transactions with owners and other											(3	)			(43,254	)							(43,257	)			(35,919	)			(79,176	)
Balance as of June 30, 2017			86,067				171,118				(26,192	)			6,877,387				363,514				7,471,894				258,540				7,730,434

 

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[4] Consolidated Statements of Cash Flows

 

		Yen (millions)
		Three months ended Jun. 30, 2016				Three months ended Jun. 30, 2017
Cash flows from operating activities:
Profit before income taxes			288,492				335,025
Depreciation, amortization and impairment losses excluding equipment on operating leases			167,075				177,979
Share of profit of investments accounted for using the equity method			(27,222	)			(52,948	)
Finance income and finance costs, net			(10,901	)			14,519
Interest income and interest costs from financial services, net			(30,522	)			(30,983	)
Changes in assets and liabilities
Trade receivables			93,656				43,116
Inventories			(19,740	)			(75,532	)
Trade payables			(90,990	)			(48,379	)
Accrued expenses			(21,539	)			(55,386	)
Provisions and retirement benefit liabilities			(40,175	)			(26,299	)
Receivables from financial services			27,098				(5,461	)
Equipment on operating leases			(158,531	)			(51,744	)
Other assets and liabilities			(17,245	)			(71,802	)
Other, net			(3,198	)			4,225
Dividends received			20,362				20,726
Interest received			53,294				57,816
Interest paid			(20,206	)			(22,018	)
Income taxes paid, net of refunds			(38,322	)			(36,217	)
Net cash provided by operating activities			171,386				176,637
Cash flows from investing activities:
Payments for additions to property, plant and equipment			(132,375	)			(124,693	)
Payments for additions to and internally developed intangible assets			(38,460	)			(35,828	)
Proceeds from sales of property, plant and equipment and intangible assets			5,169				4,529
Payments for acquisitions of subsidiaries, net of cash and cash equivalents acquired			(2,835	)			—
Payments for acquisitions of investments accounted for using the equity method			—				(2,450	)
Payments for acquisitions of other financial assets			(45,572	)			(52,603	)
Proceeds from sales and redemptions of other financial assets			32,253				31,536
Other, net			(200	)			719
Net cash used in investing activities			(182,020	)			(178,790	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities			2,411,374				1,878,152
Repayments of short-term financing liabilities			(2,158,928	)			(1,766,270	)
Proceeds from long-term financing liabilities			226,200				212,833
Repayments of long-term financing liabilities			(364,795	)			(335,354	)
Dividends paid to owners of the parent			(39,650	)			(43,254	)
Dividends paid to non-controlling interests			(9,114	)			(23,748	)
Purchases and sales of treasury stock, net			(3	)			(3	)
Other, net			(12,367	)			(10,904	)
Net cash provided by (used in) financing activities			52,717				(88,548	)
Effect of exchange rate changes on cash and cash equivalents			(126,732	)			4,143
Net change in cash and cash equivalents			(84,649	)			(86,558	)
Cash and cash equivalents at beginning of year			1,757,456				2,105,976
Cash and cash equivalents at end of period			1,672,807				2,019,418

 

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[5] Assumptions for Going Concern

None

[6] Notes to Consolidated Financial Statements

[A] Segment Information

Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and Power product and other businesses, which are based on Honda’s organizational structure and characteristics of products and services. Operating segments are defined as components of Honda for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The accounting policies used for these reportable segments are consistent with the accounting policies used in the Company’s condensed consolidated financial statements.

Principal products and services, and functions of each segment are as follows:

 

Segment		Principal products and services		Functions
Motorcycle Business		Motorcycles, all-terrain vehicles (ATVs), side-by-sides (S×S) and relevant parts		Research and Development, Manufacturing, and Sales and related services
Automobile Business		Automobiles and relevant parts		Research and Development, Manufacturing, and Sales and related services
Financial Services Business		Financial services		Retail loan and lease related to Honda products, and Others
Power Product and Other Businesses		Power products and relevant parts, and others		Research and Development, Manufacturing, Sales and related services, and Others

1. Segment information based on products and services

As of and for the three months ended June 30, 2016

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Power Product and  Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers			432,404				2,498,985				464,674				75,667				3,471,730				—				3,471,730
Intersegment			—				37,126				3,296				5,245				45,667				(45,667	)			—
Total			432,404				2,536,111				467,970				80,912				3,517,397				(45,667	)			3,471,730
Segment profit (loss)			31,198				184,533				50,577				535				266,843				—				266,843
Segment assets			1,302,343				7,155,959				8,538,313				319,772				17,316,387				(213,726	)			17,102,661
Depreciation and amortization			19,691				142,959				154,900				3,682				321,232				—				321,232
Capital expenditures			7,838				130,493				524,795				2,163				665,289				—				665,289
As of and for the three months ended June 30, 2017
		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Power Product and  Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers			508,540				2,589,935				536,957				77,664				3,713,096				—				3,713,096
Intersegment			—				34,635				2,732				5,449				42,816				(42,816	)			—
Total			508,540				2,624,570				539,689				83,113				3,755,912				(42,816	)			3,713,096
Segment profit (loss)			78,842				140,344				49,864				161				269,211				—				269,211
Segment assets			1,440,194				7,781,275				9,494,404				318,045				19,033,918				10,393				19,044,311
Depreciation and amortization			18,210				155,103				182,232				3,733				359,278				—				359,278
Capital expenditures			9,914				102,638				465,785				1,688				580,025				—				580,025

 

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Explanatory notes:

 

1.	Intersegment sales revenues are generally made at values that approximate arm’s-length prices.

 

2.

Unallocated corporate assets, included in reconciling items, amounted to JPY 261,040 million as of June 30, 2016 and JPY 394,601 million as of June 30, 2017 respectively, which consist primarily of cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

In addition to the disclosure required by IFRS, Honda provides the following supplemental information for the financial statements users:

2. Supplemental geographical information based on the location of the Company and its subsidiaries

As of and for the three months ended June 30, 2016

 

		Yen (millions)
		Japan				North America				Europe				Asia				Other Regions				Total				Reconciling Items				Consolidated
Sales revenue:
External customers			464,178				1,970,643				172,895				691,777				172,237				3,471,730				—				3,471,730
Inter-geographic areas			441,509				98,160				10,100				139,521				614				689,904				(689,904	)			—
Total			905,687				2,068,803				182,995				831,298				172,851				4,161,634				(689,904	)			3,471,730
Operating profit (loss)			(19,777	)			171,271				1,246				90,321				14,326				257,387				9,456				266,843
Assets			4,198,043				9,579,288				578,115				2,324,820				593,279				17,273,545				(170,884	)			17,102,661
Non-current assets other than financial instruments and deferred tax assets			2,432,536				4,119,488				104,429				633,799				173,399				7,463,651				—				7,463,651
As of and for the three months ended June 30, 2017
		Yen (millions)
		Japan				North America				Europe				Asia				Other Regions				Total				Reconciling Items				Consolidated
Sales revenue:
External customers			507,944				2,008,877				166,748				827,096				202,431				3,713,096				—				3,713,096
Inter-geographic areas			517,080				121,248				46,519				154,606				1,431				840,884				(840,884	)			—
Total			1,025,024				2,130,125				213,267				981,702				203,862				4,553,980				(840,884	)			3,713,096
Operating profit (loss)			21,536				101,589				6,653				97,833				14,730				242,341				26,870				269,211
Assets			4,202,768				10,838,441				663,091				2,794,158				643,550				19,142,008				(97,697	)			19,044,311
Non-current assets other than financial instruments and deferred tax assets			2,475,066				4,797,297				109,051				703,479				174,345				8,259,238				—				8,259,238

Explanatory notes:

 

1.	Major countries or regions in each geographic area:

 

North America		United States, Canada, Mexico
Europe		United Kingdom, Germany, Belgium, Turkey, Italy
Asia		Thailand, Indonesia, China, India, Vietnam
Other Regions		Brazil, Australia

 

2.	Sales revenues between geographic areas are generally made at values that approximate arm’s-length prices.

 

3.

Unallocated corporate assets, included in reconciling items, amounted to JPY 261,040 million as of June 30, 2016 and JPY 394,601 million as of June 30, 2017 respectively, which consist primarily of cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

 

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Table of Contents

[B] Other

1. Loss related to airbag inflators

Honda has been conducting market-based measures in relation to airbag inflators. Honda recognizes a provision for specific warranty costs when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. There is a possibility that Honda will need to recognize additional provisions when new evidence related to the product recalls arise, however, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report.

In the United States and Canada, various class action lawsuits and civil lawsuits related to the above mentioned market-based measures have been filed against Honda. The plaintiffs have claimed for properly functioning airbag inflators, compensation of economic losses including incurred costs and the decline in the value of vehicles, as well as punitive damages. Most of the class action lawsuits in the United States were transferred to the United States District Court for the Southern District of Florida and consolidated into a multidistrict litigation.

Honda did not recognize a provision for loss contingencies because the conditions for a provision have not been met as of the date of this report. Therefore, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report because there are some uncertainty, such as the period when these lawsuits will be concluded.

2. Impairment loss on investments accounted for using the equity method

For the three months ended June 30, 2016, the Company recognized impairment losses of JPY 12,871 million on certain investments accounted for using the equity method because there is objective evidence of impairment from declines in quoted market values. The impairment losses are included in share of profit of investments accounted for using the equity method in the condensed consolidated statement of income. For the three months ended June 30, 2017, the Company did not recognize any significant impairment losses.

 

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