Honda Motor Co., Ltd. Q2 FY2025 earnings call

• Operating profit in the first half of FY’2025 was 742.6 billion yen, up by 46 billion yen year on year. - Motorcycle unit sales were favorable globally, with cumulative sales reaching 10 million units. - Full-year consolidated forecast: Operating profit forecast maintained at 1.42 trillion yen, but profit attributable to the owners of the parent was revised down to 950 billion yen, a decrease of 50 billion yen. - Shareholder returns: Interim dividend of 34 yen and annual dividend of 68 yen maintained; share buybacks increased by up to 100 billion yen. - Automobile business: Unit sales increased in Japan and the U.S., but total unit sales declined in China due to the new energy vehicle market and price competition. - Motorcycle business: Unit sales declined in Thailand but increased in India and Vietnam due to economic recovery.

Automobile business: Unit sales increased in Japan and the U.S., but total unit sales declined globally due to the growing new energy vehicle market and price competition in China. Motorcycle business: Global unit sales favorable, with cumulative sales reaching 10 million units. Power products business: Unit sales declined in North America and Europe. Operating profit by business segment: Motorcycle business reported 325.8 billion yen, automobile business 258 billion yen, financial services business 162.7 billion yen, and power products business and others incurred a loss of 3.9 billion yen.

• Operating profit forecast for FY’2025 maintained at 1.42 trillion yen. - Profit attributable to the owners of the parent revised down to 950 billion yen, a decrease of 50 billion yen from previous forecasts. - Forex assumption for the full year set at 148 yen. - Interim dividend of 34 yen and annual dividend of 68 yen maintained. - Share buybacks increased by up to 100 billion yen, in addition to the previously decided 300 billion yen.

• Forex fluctuations impacting financial results. - Higher-than-expected warranty costs negatively affecting profitability. - Intensifying price competition in China's new energy vehicle market. - Potential impact of U.S. presidential elections on tariffs and market conditions in North America. - Economic slowdowns in certain regions affecting motorcycle unit sales in Thailand.

Q: About North America EV sales incentives and plans to strengthen EV sales A: North America EV net sales planned to increase in the second half, incentives were $7,000 per unit higher than expected, and new Honda-designed EVs from the 2026 model year will be on sale in North America Q: About downward revision in profit attributable to owners A: Impact from sales decline in China, drop in domestic affiliates' profit causing less investment or profits based on equity methods, and appraisal loss of foreign currency-denominated assets Q: About balance between first and second half of FY’2025 A: Costs tend to be skewed to the second half, R&D expenses increase in the second half, currency effects and warranty costs contributed to the balance difference Q: About impact of U.S. presidential election on tariffs and EV investments A: Tariff on Mexico-exported vehicles could have significant impact, but long-term EV investments will proceed with flexible plans based on market conditions Q: About breakdown of expenses in the second quarter A: Warranty costs, forex fluctuations, and other expenses contributed to negative impacts on profit in the second quarter Q: About impact of Mexico tariffs on Honda's business A: Tariff on Mexico-exported vehicles could affect about 160,000 units exported to the U.S., with potential for lobbying and production relocation Q: About EV incentives and CO2 credits in the U.S.

A: EV incentives higher than expected, CO2 credits and regulations affecting profitability, planning to balance unit sales, incentives, and compliance with environmental regulations Q: About profit from 50 cc motorcycles A: 50 cc category to be revived with new regulations, focus on midsize/large motorcycles for steady profits