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Summary of Business Results for the Fiscal Year Ended December 31, 2009

February 12, 2010

Consolidated business results

Yamaha Motor Co., Ltd. (the "Company") has released its consolidated business results for the fiscal year ended December 31, 2009 (fiscal 2009). Net sales decreased by 450.2 billion yen, or 28.1 percent, from the previous fiscal year, to 1,153.6 billion yen. In terms of profits, the Company recorded an operating loss of 62.6 billion yen, representing a decrease in operating income of 111.0 billion yen from the previous fiscal year; an ordinary loss of 68.3 billion yen, a decrease in ordinary income of 127.2 billion yen; and a net loss of 216.1 billion yen, a decrease in net income of 218.0 billion yen.


The Company has decided to cancel its dividend payout for fiscal 2009.


On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by nine yen from the previous fiscal year against the U.S. dollar, to 94 yen, and by 23 yen against the euro, to 130 yen.

Broken down by business segment, motorcycle sales decreased 20.6 percent from the previous fiscal year, to 817.1 billion yen. In Asia (excluding Japan), motorcycle sales fell 7.9 percent, to 479.0 billion yen, due to the negative impact of the stronger yen, although unit sales increased during the period. Motorcycle sales in North America and Europe declined 45.9 percent and 33.2 percent, respectively. This was mainly attributable to sluggish demand and the negative impact of the stronger yen, coupled with significant production cutbacks designed to reduce market stocks (distributors' stocks and Group inventories).


Marine product sales fell 37.1 percent, to 150.1 billion yen, due to reduced sales of outboard motors, personal watercraft, and other products in North America and Europe, along with the negative impact of the stronger yen and production cutbacks designed to reduce market stocks.


Power product sales dropped 52.8 percent, to 100.6 billion yen, due to a fall in sales of all-terrain vehicles and side-by-side vehicles in the United States, as well as the negative impact of the stronger yen and production cutbacks designed to reduce market stocks.


Sales in the "other products" segment declined 30.2 percent, to 85.9 billion yen, due mainly to reduced sales of automobile engines and surface mounters, although sales of electrically power assisted bicycles rose substantially.


Due to the stronger yen, coupled with production cutbacks designed to reduce market stocks, the Company registered an operating loss of 4.2 billion yen in the motorcycle segment, representing a decrease in operating income of 37.8 billion yen from the previous fiscal year; an operating loss of 24.3 billion yen in the marine product segment, a decrease of 30.4 billion yen; an operating loss of 33.8 billion yen in the power product segment, a decrease of 37.3 billion yen; and an operating loss of 0.4 billion yen in the "other products" segment, a decrease of 5.5 billion yen.


Positive factors affecting operating income include a drop in selling, general and administrative expenses totaling 63.9 billion yen from the previous fiscal year; cost reductions in procurement operations - including savings from the Urgent Cost Reduction Project - totaling 18.5 billion yen; decreases in raw material prices totaling 15.4 billion yen; a decline in research and development expenses totaling 17.3 billion yen; and a reduction in depreciation expenses totaling 5.6 billion yen. However, these were more than offset by such negative factors as a 74.8 billion yen decrease in gross profit due to reduced net sales; the impact of exchange translation totaling 68.9 billion yen; and the impact of a change in the product mix reflecting production cutbacks in Japan and related factors totaling 88.0 billion yen.


The number of consolidated subsidiaries at the end of fiscal 2009 decreased by six from the previous fiscal year, to 107, while the number of companies accounted for by the equity method remained the same, at 33.

Forecast consolidated business results for the fiscal year ending December 31, 2010

In fiscal 2010, the Company is focusing on aggressively implementing its profitability structural reforms, including reorganizing its manufacturing layout, downsizing workforce, and reducing costs, all of which are specified in the new medium-term management plan that runs from 2010 through 2012. With these efforts, the Company aims to return to profitability on a consolidated basis in fiscal 2010.


Reflecting these anticipated developments, the Company forecasts its consolidated business results for fiscal 2010 as follows: 1,250 billon yen in net sales, an increase of 96.4 billion yen from fiscal 2009; 10.0 billion yen in operating income, an increase of 72.6 billion yen; 10.0 billion yen in ordinary income, an increase of 78.3 billion yen; and zero yen in net income, an increase of 216.2 billion yen.


These forecasts are based on the assumption that the U.S. dollar will trade at 88 yen during the period (an appreciation of six yen from fiscal 2009), and the euro at 128 yen (an appreciation of two yen).

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