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Summary of Business Results for the First Quarter of the Fiscal Year Ending December 31, 2010

May 12, 2010

Consolidated business results

Yamaha Motor Co., Ltd. (the "Company") has released its consolidated business results for the first quarter (January 1 through March 31) of the fiscal year ending December 31, 2010. Net sales increased 16.3% from the previous first quarter, to 309.9 billion yen, due to strong sales of motorcycles in the ASEAN region as well as favorable sales in the marine product segment and the "other products" segment (which includes surface mounters and automobile engines). These factors, combined with expanded sales in ASEAN nations, the positive impact of exchange rates, and reductions in depreciation and personnel expenses realized by reforming the profitability structure of businesses in developed nations, improved operating income by 25.1 billion yen from the previous first quarter, to 9.6 billion yen; ordinary income by 31.8 billion yen, to 15.5 billion yen; and net income by 23.3 billion yen, to 7.5 billion yen.


Meanwhile, net sales, operating income, ordinary income and net income for the first quarter exceeded the targets by 24.9 billion yen, 12.1 billion yen, 18.0 billion yen and 12.0 billion yen, respectively.


On the foreign exchange front, the average value of the yen during the period under review appreciated by three yen from the previous first quarter against the U.S. dollar, to 91 yen, and depreciated by three yen against the euro, to 125 yen.

Broken down by business segment, motorcycle sales rose 16.0 percent from the previous first quarter, to 218.0 billion yen. This increase was attributable to a 36.7% rise in unit sales in Asia (excluding Japan), coupled with the positive impact of the weaker yen against the currencies in emerging nations, although motorcycle sales in developed nations decreased.


Marine product sales increased 16.4 percent, to 43.0 billion yen, due to an increase in wholesale shipments of outboard motors following the normalization of market stocks in the United States.


Power product sales dropped 13.8 percent, to 20.3 billion yen. The decrease was attributable to a continued decline in demand for all-terrain vehicles in Europe and the United States.


Sales in the "other products" segment soared 58 percent, to 28.6 billion yen, due principally to the recovery in demand for automobile engines and surface mounters.


Reductions in fixed costs realized by reforming the profitability structure of businesses in developed nations, the positive impact of exchange rates and other factors all combined to help increase operating income from the motorcycle segment by 8.6 billion yen from the previous first quarter, to 10.4 billion yen, and from the marine product segment, by 5.4 billion yen, to 1.2 billion yen. The same factors led to an improvement of 7.0 billion yen in operating income from the power product segment, reducing the operating loss to 5.2 billion yen. In the "other products" segment, they helped improve operating income by 4.1 billion yen, to 3.2 billion yen.


A number of factors positively affected operating income. These include a drop in selling, general and administrative expenses totaling 11.2 billion yen from the previous first quarter; the favorable impact of exchange translation, totaling 5.1 billion yen; a reduction in depreciation expenses totaling 4.5 billion yen; a 3.3 billion yen rise in gross profit due to increased sales; a decrease in research and development expenses totaling 2.4 billion yen, caused by budget delays; and cost reductions in procurement operations totaling 1.4 billion yen. These increases far exceeded the negative impact resulting from fluctuations of raw material prices totaling 0.7 billion yen and a change in the product mix and related factors totaling 2.0 billion yen.


The number of consolidated subsidiaries at the end of the first quarter increased by one from the end of the previous fiscal year, to 108, while the number of companies accounted for by the equity method remained the same at 33.

Forecast business results

The Company has not changed its consolidated forecast results for the first half and full fiscal year ending December 31, 2010 from the figures announced on February 12, 2010 with the release of "Consolidated Financial Results for the Fiscal Year Ended December 31, 2009," due primarily to uncertainties concerning sales conditions in Europe and the United States during the peak demand period and the unclear trend of exchange rates. Thus, the forecast remains 625 billion yen in net sales; 2 billion yen in operating income; 2 billion yen in ordinary income; and 2.5 billion yen in net loss for the first half, and 1,250 billion yen in net sales; 10 billion yen in operating income; 10 billion yen in ordinary income; and 0 yen in net income for the full fiscal year ending December 31, 2010.


These forecast figures are based on the assumption that the U.S. dollar will trade at 88 yen during the period (an appreciation of 6 yen from fiscal 2009), and the euro at 128 yen (an appreciation of 2 yen from fiscal 2009).

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