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Summary of Business Results for the First Half of the Fiscal Year Ending December 31, 2011

August 3, 2011

Consolidated business results for first half-year

Yamaha Motor Co., Ltd. (the "Company") has released its consolidated business results for the first half of the fiscal year ending December 31, 2011, which were affected by the appreciation of the yen and by the Great Eastern Japan Earthquake and Tsunami. As a result, net sales dropped 1.9% year on year, to 663.1 billion yen. Although income was also influenced by foreign exchange conversion and the March earthquake, a combination of positive factors  recovery in sales of outboard motors and other products, cost reduction through structural reform and a reversal of the accrual for product liabilities  allowed the Company to post 41.5 billion yen in operating income for an 18.6% year-on-year increase, ordinary income of 48.8 billion yen for an 11.4% increase, and net income of 29.0 billion yen for a 21.8% increase.

On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by nine yen from the same period of the previous fiscal year against the U.S. dollar, to 82 yen, and by six yen against the euro, to 115 yen.

Results by business segment

In the motorcycle business segment, although sales in Japan and Central and South America increased year on year, decreased sales in Europe, the United States and Asia, exacerbated by the appreciation of the yen, led to decreases in net sales by 3.8% year on year to 462.3 billion yen, and in operating income, which declined by 20.2% year on year to 23.6 billion yen.

In the marine business segment, renewed demand for outboard motors and personal watercraft were among the factors contributing to a 6.5% year-on-year increase in net sales, which totaled 102.0 billion yen, and a 40.9% year-on-year growth in operating income, which came to 5.9 billion yen.

In the power product business segment, an increase in wholesale of all-terrain vehicle (ATV) units was one factor leading to net sales of 44.8 billion yen, a 0.8% year-on-year increase. Operating income, meanwhile, improved by 9.8 billion yen year on year to 5.7 billion yen, mostly due to the reversal of the accrual for product liabilities and cost reductions achieved through structural reform.

In the other product segments, there were year-on-year increases in net sales of surface mounters and other products of the IM business and of electrically power assisted bicycles. However, due to the decrease in automotive engine wholesales caused by the earthquake in Japan, combined with other factors, net sales declined by 2.5% year on year to 54.1 billion yen. Operating income, however, rose by 17.4% for the same period, to 6.5 billion yen.

Consolidated business forecasts for the full year

The consistently high exchange rate of the yen, further increases in the price of raw materials, the effects of the Great Eastern Japan Earthquake, as well as accelerated research and development aimed at shifting to a growth-oriented footing, the business conditions facing the Company continue to be very challenging. Nonetheless, the Company predicts that consolidated business results for the full year will exceed the initial forecast (issued on February 15), due to the improvement in profits for the first half-year and the fact that continued growth in sales for the motorcycle business in Central and South America and the marine business overall are expected as well as further cost reductions achieved through structural business reform.

As a result, consolidated business forecasts for the fiscal year ending December 31, 2011, have been revised upwards as follows: net sales 1,350 billion yen (unchanged from original forecast); operating income 68.0 billion yen (a 15.0 billion yen increase); ordinary income 78.0 billion yen (a 23.0 billion yen increase); net income for the fiscal year 35.0 billion yen (a 15.0 billion yen increase).

The exchange rates forecast for the full year are 81 yen to the U.S. dollar, seven yen higher than for the previous fiscal year and 1 yen higher than the original forecast; and 113 yen to the euro, three yen higher than for the previous fiscal year and 3 yen lower than the original forecast.

Year-end dividend

A decision on the year-end dividend for the fiscal year ending December 31, 2011, had been left pending. However, with the steady implementation of structural reform leading to improved business results, and an improvement in financial resilience also expected, the Company is in a position to resume payment of dividends. Thus, the payment of a year-end dividend is planned for the first time in three years. Based on a dividend ratio of 20% with regard to consolidated net profit for the full fiscal year, a year end dividend of 20 yen per share is envisaged.


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