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Summary of Business Results for the Fiscal Year Ended December 31, 2010

February 15, 2011

Consolidated business results

Yamaha Motor Co., Ltd. (the "Company") has released its consolidated business results for the fiscal year ended December 31, 2010 (fiscal 2010). Although there was some negative effect on net sales as a result of the appreciation of the yen, increased sales of motorcycles in emerging countries and a recovery in sales of outboard motors and surface mounters pushed net sales up by 140.5 billion yen, or 12.2%, from the previous fiscal year to 1,294.1 billion yen. The appreciation of the yen and increasing material costs were factors negatively affecting profits, while increase of net sales, decrease in depreciation and personnel expenses achieved through structural reforms, cost cutting, and a recovery in domestic production volumes of motorcycles and outboard motors worked to strengthen profits. As a result, operating income increased 113.9 billion yen to 51.3 billion yen, ordinary income increased 134.5 billion yen to 66.1 billion yen, and net income increased 234.4 billion yen to 18.3 billion yen.

On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by six yen from the previous fiscal year against the U.S. dollar, to 88 yen, and by 14 yen against the euro, to 116 yen.

The number of consolidated subsidiaries at the end of fiscal 2010 was 104, while the number of companies accounted for by the equity method was 33.

Results by business segment

In the motorcycle business segment, wholesales in emerging markets including Indonesia, Vietnam and Thailand were up 22.8% year on year to 6.56 million units, and wholesales for the segment as a whole including developed countries were up 19.2% to 6.96 million units (record high).

In emerging markets, net sales rose in conjunction with increase of sales volumes. In developed markets sales volumes declined, and this combined with the appreciation of the yen to push net sales down. In addition, production and shipment adjustments were made in the United States in an effort to complete market stock adjustments.

As a result of these factors, net sales in the motorcycle business segment rose 10.9% year on year to 906.0 billion yen and operating income increased 46.9 billion yen to 42.7 billion yen.

In the marine business segment, wholesales increased from the previous fiscal year as a result of the strategic introduction of newly developed, next-generation, environmentally friendly outboard motors, inventory adjustments made the previous year in the United States and strong retail sales that rose from the previous year. Outboard motor sales in emerging markets including Russia and Brazil also increased. As a result, net sales of marine products rose 11.3% year on year to 167.1 billion yen, and operating income increased 25.0 billion yen to 700 million yen.

In the power product business segment, retail sales of all-terrain vehicles (ATVs) in the United States declined from the previous year. However, wholesales rose due to inventory adjustments implemented in the previous year. As a result, net sales of power products rose 2.4% to 103.0 billion yen and operating income increased 22.5 billion yen to yield an operating loss of 11.3 billion yen.

In the other product segments, a recovery in demand for surface mounters in China, increased wholesales of automobile engines and increased sales of electrically power assisted bicycles pushed net sales up 37.4% year on year to 118.0 billion yen, while operating income increased 19.5 billion yen to 19.1 billion yen.

Forecast of financial targets for the fiscal year ending December 31, 2011

In fiscal 2011, the Company expects demand to increase in emerging markets, particularly in Asia, but also foresees that it will be some time before a full-scale recovery comes in the European and North American markets. Meanwhile, the value of the yen is expected to remain high and raw material prices will continue to rise. As a result, the Company expects the business environment to remain challenging.

Under such conditions, the Yamaha Motor group will continue its ongoing structural reforms and will reduce business costs by reforming management foundations. The Company forecasts that its consolidated business results for fiscal 2011 will be as follows: 1,350 billion yen in net sales, an increase of 4.3% from fiscal 2010; 53.0 billion yen in operating income, an increase of 3.3%; 55.0 billion yen in ordinary income, a decrease of 16.8%; and 20.0 billion yen in net income, an increase of 9.3%.

These forecasts are based on the assumption that the U.S. dollar will trade at 82 yen during the period (appreciation of six yen from fiscal 2010), and the euro at 110 yen (appreciation of six yen).


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