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Summary of Business Results for the First Nine Months of the Fiscal Year Ending December 31, 2011. Securing profitability in all business segments

November 4, 2011

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, 2011. Net sales were at similar levels to the same period of the previous fiscal year, dropping just 0.2% to 985.8 billion yen due to foreign exchange conversion losses of 51.8 billion yen, which offset the actual rises in sales of motorcycles and outboard motors in emerging markets.

On the income front, positive growth in gross profit from higher sales and cost savings through structural reforms effectively absorbed negative factors such as yen appreciation, rising raw material prices and the impact of the Great East Japan Earthquake. As a result, operating income rose 24.5% from the same period of the previous fiscal year to 60.7 billion yen, ordinary income rose 10.5% to 67.9 billion yen, and net income rose 28.7% to 40.0 billion yen. This resulted in the ratio of operating income to net sales increasing 1.3 points from the same period of the previous fiscal year to 6.2%, while the ratio of ordinary income to net sales rose 0.7 points to 6.9% and net income rose 1.0 points to 4.1%.

Additionally, net cash flow provided by operating activities was 53.4 billion yen and net cash flow for investment was -34.0 billion yen, resulting in 19.4 billion yen in free cash flow. Interest-bearing debt shrank 31.1 billion yen from the same period of the previous fiscal year to 291.3 billion yen, with a debt/equity ratio (gross) of 1.0.

The average exchange rate of the yen during the period under review for the first nine months of this fiscal year (January-September) appreciated by eight yen from the same period of the previous fiscal year against the U.S. dollar to 81 yen, and by five yen against the euro to 113 yen.

Results by business segment

In the Motorcycles segment, net sales were similar to the same period of the previous fiscal year at 691.5 billion yen, (0.4% decrease), with large increases in unit sales in Vietnam, India and Brazil, while Indonesia and Thailand also increased unit sales year-on-year. These gains compensated for falling sales in Europe and foreign exchange conversion losses. Operating income fell 22.9% from the same period of the previous fiscal year to 32.9 billion yen, mainly due to foreign exchange conversion losses and rising raw material prices.

In the Marine segment, net sales rose 5.1% from the same period of the previous fiscal year to 140.4 billion yen, thanks to rising sales of outboard motors in Russia, Central and South America and North America, and a recovery in demand for personal watercrafts. Operating income likewise increased by 131.0% from the same period of the previous fiscal year to 8.5 billion yen.

In the Power Products segment, a drop in sales of all-terrain vehicles (ATVs) in North America coupled with foreign exchange conversion losses saw net sales fall 5.2% from the same period of the previous fiscal year to 71.2 billion yen, although operating income improved by 16.5 billion yen to 9.3 billion yen, thanks to reversal of accrual for product liability and ongoing savings in operating expenses.

In the Other Products segment, net sales fell 2.0% from the same period of the previous fiscal year to 82.7 billion yen, as an increase in sales of electrically power assisted bicycles was offset by the negative impact of the Great East Japan Earthquake on both sales of automobile engines and shipments of surface mounters. Operating income however rose 4.3% from the same period of the previous fiscal year to 9.9 billion yen.

In summary, all business sectors secured profitability for the period under review for the first nine months of this fiscal year (January-September).

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

Although projections have been surpassed in the first three quarters of the fiscal year, the stubborn persistence of the strong yen and the impact of the recent floods in Thailand present uncertainties for the near future. For these reasons, no changes have been made to the consolidated financial targets for the full fiscal year ending December 31, 2011 that were presented in the second quarter report on August 3, namely: 1,350 billion yen in net sales, 68.0 billion yen in operating income, 78.0 billion yen in ordinary income and 35.0 billion yen in net income for the fiscal year.

These forecast figures are based on foreign exchange rates of 81 yen to the U.S. dollar during the fiscal year (an appreciation of seven yen from fiscal 2010) and 113 yen to the euro (an appreciation of three yen from fiscal 2010).


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