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Summary of Financial Results for the Fiscal Year Ended March 31, 2002

May 16, 2002

Consolidated/Non-consolidated business results

Consolidated basis

The company registered record highs for both net sales and ordinary income

During the fiscal year ended March 31, 2002, the yen depreciated by 14yen against the U.S. dollar and by 11yen against the euro, compared with the previous fiscal year. Amid this exchange environment, Yamaha Motor's consolidated net sales for fiscal 2002 increased 7.1 percent from the previous year, to 946.8 billion yen, setting a record high for the third consecutive year. Ordinary income rose as well, by 30.3 percent, to 32.7 billion yen, also extending an all-time record.

The net sales increase was mainly attributable to sales gains in motorcycles, marine products and power products, which more than offset sales decreases in other businesses, including the IM (industrial robot) business.
Broken down by business segment, motorcycle sales rose 11.9 percent, to 496.1 billion yen, led by sales growth in North America, Asia excluding Japan, and Latin America. The growth came despite sluggish sales in Japan. In addition, marine product sales climbed 7.0 percent, to 188.3 billion yen, reflecting favorable outboard motor sales in North America, while power product sales rose 13.7 percent, to 183.0 billion yen, due to expanded ATV (all-terrain vehicle) sales. However, sales in other product areas, including the IM business, fell 23.6 percent, due to a significant decline in sales of IM mainstay surface mounters, which mount electronic components on printed circuit boards. The sales decline for surface mounters was attributable to depressed capital investment resulting from slow IT markets.
In terms of geographic segment, overseas sales throughout major markets, including North America, Asia, and Latin America, increased 12.5 percent, while in Japan, sales dropped 13.5 percent. Results were particularly favorable in North America, where sales rose 9.5 percent, and in Asia excluding Japan, which enjoyed a 39.7 percent gain, due to increased sales generated by the Company's Indonesian and Taiwanese subsidiaries, and the new consolidation of its Indian and Thai subsidiaries. Consequently, overseas consolidated sales represented 83.1 percent of consolidated net sales, a four percent gain from the previous year.

Operating income increased 17.1 percent from the previous year, to 37.2 billion yen, due mainly to such positive factors as a gain from currency translation into yen totaling 34.9 billion yen, resulting from the yen's depreciation during the period, and a decline in cost of sales amounting to 9.5 billion yen. However, there were also negative factors, including a rise in selling, general and administrative expenses totaling 25.1 billion yen, and a change in the makeup of operating income by product segment, which had an effect on the figure worth 13.9 billion. Ordinary income rose 30.3 percent, to 32.7 billion yen, reflecting an improvement in the balance of non-operating income and expenses amounting to 2.2 billion yen. Net income rose 25.3 percent from the previous year, to 9.5 billion yen, in spite of extraordinary losses of 8.1 billion yen-- half the amount of the shortage in the provision for employees' retirement benefits to be written off in fiscal 2001 and 2002 -- and 1.2 billion yen for structural reform of the boat business in Japan.
The number of consolidated subsidiaries at the fiscal year-end stood at 91, an increase of seven from the previous fiscal year-end. The number of affiliates accounted for by the equity method was 35, a decrease of nine from the previous fiscal year-end.

Non-consolidated basis

Sales decreased, yet profits rose

Non-consolidated net sales declined for the second consecutive year, by 5.5 percent, to 557.7 billion yen, affected mainly by drops in sales in the motorcycle and IM businesses. However, operating income rose 2.1 times, to 12.4 billion yen, an increase generated by positive factors including a gain from currency translation resulting from the yen's depreciation, totaling 24.8 billion, and a decline in cost of sales amounting to 6.2 billion yen. The jump in operating income came in spite of such negative factors as a change in makeup of operating income by product segment, amounting to 22.5 billion yen, and a rise in selling, general and administrative expenses equaling 1.9 billion yen.
Ordinary income climbed 32.1 percent, to 15.0 billion yen, despite an increase in non-operating expenses worth 3.7 billion yen, including outplacement support costs. Net income also rose 18.0 percent, to 5.1 billion yen.

Management policy

Launching "NEXT 50," the new medium-term management plan

Yamaha Motor Co., Ltd. has initiated a new medium-term management plan "Next 50" to be implemented over three years, from April 2002 through March 2005. Next 50 is aimed at creating a stronger management foundation ahead of the 50th anniversary of the Company's establishment, which will be commemorated in July 2005. The ultimate goal is to achieve further growth in the next half century.
In order to bolster its foundation, Yamaha Motor will take on four pressing management issues: improving the profitability of existing businesses; solidifying the foundation of businesses in China, India and ASEAN countries; promoting a growth strategy; and enhancing the Company's financial position. By successfully addressing these issues, the Company, by fiscal 2005, aims to: achieve 1,050 billion yen in consolidated net sales and 65 billion yen in consolidated ordinary income; generate 70 billion yen in free cash flows and ensure 10 percent or higher ROE; raise the equity ratio to 30 percent, and hold consolidated borrowings under 200 billion yen.

Key challenges in fiscal 2003

Yamaha Motor's performance in fiscal 2003 " the first year of the new medium-term management plan " will be the key determinant of the Company's success during the entire three year period. Therefore, the Company will make all-out, group-wide efforts to address the four critical challenges before us.

Specifically, to improve the profitability of existing businesses, the Company will enhance its development capabilities toward marketing more attractive products, including motorcycles, outboard motors and ATVs. Among other measures to boost profitability, the Company will work hard to achieve a 30 percent cost reduction, while promoting the System Supplier system, and expanding the procurement of Chinese-made parts by utilizing the Company's subsidiary in China, Yamaha Motor (Suzhou) Co., Ltd. The Company is also determined to return unprofitable segments to the black, including the boat business in Japan and the PAS (electro-hybrid bicycle) business.
In solidifying the foundation of businesses in China, India and ASEAN countries, the Company will take measures including aggressively producing and marketing 4-stroke motorcycles, such as the recently released commuter vehicle "NOUVO," the first Yamaha of its kind in the ASEAN region. In addition, the Company will enhance its sales network and bolster its business foundation by establishing an Asian Headquarters, integrating production, sales, engineering, procurement, financing and other operations in the region.

The Company will strive to attain its objectives for enhancing its financial position by steadily implementing SCM (supply-chain management) reform, launched in the previous medium term, and designed to generate more free cash flow by improving asset turnover through the effective utilization of fixed assets. SCM reform also seeks to reduce borrowings, and raise the equity ratio.

In terms of promoting its growth strategy for the next half century, Yamaha Motor will focus on areas including  but not limited to  core technology. In core technology areas, the Company will take on the challenge of actively developing new power sources, compact engines and components. At the same time, however, the Company is committed to pioneering business models in new areas, such as biotechnology- and information technology-related fields. The goal in branching out is to transform these new technologies and businesses into an integral part of the profit structure.
Yamaha Motor will pursue a corporate brand strategy that helps promote structural reform as well as support growth, and will develop and market products and services that differentiate it from the competition. The Company will be guided by its "Touching Your Heart" brand slogan, as well as its landmarks in the markets  the distinctive value that each of its business operations can offer.

Record consolidated sales and profits forecast in fiscal year 2003

The Company forecasts its consolidated business results for fiscal 2003, ending March 31, 2003, as follows: net sales of 980 billion yen; operating income of 49 billion yen; ordinary income of 46 billion yen; and net income of 20 billion yen. Net sales are expected to reach a record high for the forth consecutive year, and profits will also grow to a new all-time record. The non-consolidated business results forecast for fiscal 2003 are: net sales of 570 billion yen; operating income of 14 billion; ordinary income of 12 billion; and net income of 6 billion yen.

These business performance forecasts are based on the assumption that one U.S. dollar will equal 125yen (a 4yen depreciation from the previous year), and one euro will equal 111yen (a 3yen depreciation).

Financial Results for Fiscal Year Ended March 31, 2002
FY2002 Financial Report

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