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

November 4, 2010

Consolidated business results

Yamaha Motor Co., Ltd. (the "Company") has released its consolidated business results for the first nine months of the fiscal year ending December 31, 2010 (fiscal 2010) Net sales for the nine months increased 15.0 percent from the same period of the previous fiscal year, to 987.4 billion yen. This was mainly attributable to continued favorable sales of motorcycles in Asia (excluding Japan), Latin America and other emerging markets, increased sales of surface mounters and outboard motors and enhanced sales of all-terrain vehicles as a reaction to shipping adjustments made in the previous fiscal year, despite decreased motorcycle sales in developed nations due to reduced demand and the effects of the stronger yen against the euro and U.S. dollar.
In terms of profits, the Company recorded operating income of 48.8 billion yen, an improvement of 93.7 billion yen; ordinary income of 61.4 billion yen, an improvement of 105.3 billion yen; and net income of 31.1 billion yen, an improvement of 189.8 billion yen. These profits were principally derived from increased sales, cost reductions realized through profitability structure reform, reduced expenses, and an increase in marginal profit as a result of a recovery in production in Japan, despite the negative effects of the stronger yen and increased raw material prices.


On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by six yen from the same period of the previous fiscal year against the U.S. dollar, to 89 yen, and by twelve yen against the euro, to 118 yen.


Broken down by business segment, motorcycle sales rose 13.2 percent from the same period of the previous fiscal year, to 688.3 billion yen. Sales in developed nations decreased, but increased significantly in Asia (excluding Japan), Latin America and other emerging markets by 33.3 percent to 543.4 billion yen from the same period of the previous fiscal year.

Marine product sales increased 13.2 percent, to 133.5 billion yen, reflecting a recovery in wholesale shipments of outboard motors in the United States and expanded shipments in Asia due to an upturn in commercial demand.


Power product sales increased 4.8 percent, to 75.1 billion yen from the same period of the previous fiscal year due to expanded shipments as a reaction to shipping adjustments made in the United States the previous fiscal year, despite demand for all-terrain vehicles in Europe and the United States continuing to decline.


Sales in the "other products" segment rose by 48.0 percent, to 90.5 billion yen, driven mainly by continued robust sales for surface mounters, particularly in China and South Korea, and strong sales of automobile engines and electrically power assisted bicycles.


Meanwhile, operating income from the motorcycle segment improved by 41.3 billion yen from the same period of the previous fiscal year, to 38.0 billion yen. Operating income from the marine product segment grew by 19.6 billion yen, to 3.7 billion yen. Operating loss from the power product segment totaled 7.2 billion yen, an improvement of 16.4 billion yen. Operating income from the "Other products" segment increased by 16.5 billion yen, to 14.2 billion yen.


Positive factors affecting operating income include a 45.9 billion yen rise from the same period of the previous fiscal year in gross profit due to increased sales; a 34.3 billion yen increase from profitability structure reform and cost reductions and a 19.5 billion yen growth in marginal profit resulting from expanded production volumes in Japan. These far exceeded the effects of negative factors, including the impact of exchange translation amounting to 9.0 billion yen and raw material price fluctuations totaling 4.9 billion yen.


The number of consolidated subsidiaries decreased by two from December 31, 2009, to 105 on September 30, 2010, while the number of companies accounted for by the equity method remained the same, at 33.

Forecast business results

In the business results for the first half of the fiscal 2010 announced on August 4, 2010, the Company revised upward its consolidated forecast business results for the full fiscal year ending December 31, 2010. Forecast figures have been revised again in light of the current appreciation of the yen against the US dollar, anticipated increase in sales of motorcycles in ASEAN markets and effects of further cost reduction measures.


The revised forecast calls for 1,300 billion yen in net sales, unchanged from the previous forecast officially announced on August 4, 2010; 50.0 billion yen in operating income, an increase of 5.0 billion yen; 64.0 billion yen in ordinary income, an increase of 9.0 billion yen; and 26.0 billion yen in net income, an increase of 1.0 billion yen.


These forecast figures are based on the assumption that in the fourth quarter of the fiscal year the U.S. dollar will trade at 80 yen (an appreciation of 5 yen from the assumed rate in the forecast announced on August 4, 2010) and the euro at 110 yen (a depreciation of 2 yen from the assumed rate in the forecast announced on August 4, 2010). Forecast figures for the full fiscal year were based on the assumption that the U.S. dollar will trade at 87 yen during the period (an appreciation of 7 yen from fiscal 2009), and the euro at 115 yen (an appreciation of 15 yen from fiscal 2009).


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