Summary of Business Results for the First Half of the Fiscal Year Ending December 31, 2013

August 6, 2013

Consolidated Business Results for First Half-Year

IWATA, August 6, 2013 – Sales for Yamaha Motor Co., Ltd.'s consolidated accounting period for the first half of the fiscal year ending December 31, 2013 were 702.8 billion yen, an increase of 11.2% compared with the same period the previous fiscal year. In the second quarter (April – June), product sales have shown a level above the previous year, however, the accumulated total for the first half of the year will be slightly down on the last. Despite this, due to the depreciated state of the yen, sales have actually increased.
Regarding operating income, developed markets showed favorable conditions, including higher than expected marine sales in the US, and the effects of the depreciated yen bringing in higher income. Cost reductions also contributed to higher income out of emerging markets giving an overall total of 30.2 billion yen (45.3% increase on the previous year). Ordinary income was 30.6 billion yen (an increase of 27.0% against the same period the previous fiscal year), and net income for the period was 20.5 billion yen (an increase of 40.8%).
For the first half of the fiscal year, the U.S. dollar traded at 96 yen (a depreciation of 16 yen from the same period in the previous fiscal year), and the euro at 126 yen (a depreciation of 23 yen).

Results by Business Segment

Motorcycle Business

Global net sales of motorcycle products were 466.9 billion yen (an increase of 12.6% compared with the same period in the previous fiscal year), and operating income was 3.6 billion yen (a decrease of 19.4%). Sales increased in Japan, and increased in North America in the second quarter (April - June) compared to the previous year due the introduction of new products and retail promotion initiatives. However, sales in Europe decreased due to the market slump, and therefore decreased in developed markets overall. In India, sales overall increased due to strong sales of scooters, and in Indonesia, sales in the second quarter (April - June) increased compared to the previous year. However, sales in Thailand, Vietnam, and Brazil decreased due to the economic slowdown, and therefore decreased in emerging markets overall. As a result, while product sales decreased overall, sales increased due to the effect of the depreciation of the yen.
Operating income in emerging markets increased due to cost reduction measures. For developed markets, proactive development & promotional costs have increased as well as restructuring costs in Europe which have all exceeded the effect of the depreciating yen. As a result, income decreased overall.

Marine Business

Net sales of the marine segment increased overall by 15.8% from the previous fiscal year to 131.6 billion yen, and operating income increased by 103.7% from the previous fiscal year to 21.5 billion yen.
Sales of outboard motors in the U.S.A. increased due to the effect of introduction of new models, and an expansion of the large-capacity model lineup, and along with the effect of the depreciation of the yen, led to increases in sales and income.

Power Products Business

Global net sales of power products were 50.0 billion yen (an increase of 9.4% compared with the same period the previous fiscal year), and operating income was 0.4 billion yen (an increase of 67.7%).
Increases in sales of golf cars and snowmobiles and the effect of the depreciation of the yen absorbed the decrease in sales of all-terrain vehicles, leading to increases in sales and income.

Industrial Machinery and Robots Business

Net sales of industrial machinery and robots decreased overall by 10.9% from the previous fiscal year to 15.6 billion yen, and operating income decreased by 47.8% from the previous fiscal year to 1.6 billion yen.
Sales of surface mounters decreased due to the global decline in equipment investment demand, but in the second quarter (April - June) returned to the same level as the previous year.

Other Products

Total net sales of other products were 38.8 billion yen (a decrease of 4.6% compared with the same period the previous fiscal year), and operating income was 3.0 billion yen (an increase of 27.5%). While sales of electrically power assisted bicycles increased through the effect of introduction of new products, sales of automotive engines decreased.

Forecast for the Fiscal Year Ending December 31, 2013

While a gradual economic recovery is continuing in the U.S.A., the market slump in Europe is ongoing and the base of economic growth in emerging markets is decelerating, and so the business conditions facing the Company continue to be challenging.
Our operating income in emerging markets is holding on our initial forecast. In developed markets, our operating income is expected to increase overall on initial forecasts mainly due to favorable sales of marine products in developed markets such as the US and the effects of the depreciating yen.
The consolidated business results for the full year are expected to be higher than what was initially forecasted, and this is updated in the chart as shown below:

The exchange rates for the second half of the fiscal year are based on the U.S. dollar at 95 yen (a depreciation of 8 yen compared with the initial plan, and a depreciation of 15 yen compared with the same period the previous fiscal year), and the euro at 125 yen (a depreciation of 10 yen compared with the initial plan, and a depreciation of 23 yen compared with the same period the previous fiscal year). The exchange rates for the whole fiscal year are based on the U.S. dollar at 95 yen (a depreciation of 8 yen compared with the initial plan, and a depreciation of 15 yen compared with the previous fiscal year), and the euro at 125 yen (a depreciation of 10 yen compared with the initial plan, and a depreciation of 22 yen compared with the previous fiscal year).

Dividends

Recognizing that shareholders’ interests represent one of the Company’s highest management priorities, the Company has been striving to meet shareholder expectations by working to maximize its corporate value through a diversity of business operations worldwide. The Company aims to maintain a balance between proactive investment for growth, and returns to shareholders and the repayment of borrowings, and provide shareholder returns that reflect comprehensive consideration of the business environment, including trends in business performance and retained earnings, while maintaining a minimum dividend payout ratio of 20% of consolidated net income. Building on the improvement of the new forecast for the consolidated business results for the fiscal year ending December 31, 2013 announced today over the previous forecast, and based on the dividend payout ratio (consolidated) of 20%, the yearly dividend forecast has been revised to 20 yen per share (initial forecast: 17 yen per share). Accordingly, the interim dividend is set at 10 yen per share, and the year-end dividend forecast has been revised to 10 yen per share.