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Summary of Consolidated Business Results for the Second Quarter of the Fiscal Year Ending December 31, 2014

August 5, 2014

Consolidated business results

IWATA, August 5, 2014–Yamaha Motor Co., Ltd. (Tokyo:7272) announces Consolidated business results for the Second Quarter (first half-year)
Net sales for the consolidated accounting period in the first half of the fiscal year ending December 31, 2014 were 756 billion yen – an increase of 53.2 billion yen (+7.6%) compared with the same period the previous fiscal year – showing an increase across all business segments. Operating income surged significantly to 49.1 billion yen, an increase of 18.9 billion yen (+62.4%) against the same period the previous fiscal year.
In developed markets, income increased as the effect of sales increases in the motorcycle and marine businesses and the depreciating yen etc. outweighed the increases in expenses towards active investments in development and sales. For the motorcycle business segment in emerging markets, income was similar to the previous term as the increase in income through cost reduction and model mix improvements absorbed the increase in procurement costs due to weak currencies.
Ordinary income was 49.1 billion yen (an increase of 18.5 billion yen or 60.6% against the same period the previous year), and net income for the period was 32.2 billion yen (an increase of 11.8 billion yen/57.6%).
For the first half consolidated accounting period, the U.S. dollar traded at 102 yen (a depreciation of 6 yen from the same period the previous fiscal year), and the euro at 140 yen (a depreciation of 14 yen).

Progress of the medium-term management plan

1. Each business segment has been launching 'unique new products' onto the market.
2. As part of strategic objectives, introduction of global models and platform-based models was begun, initiating changes to the concept of ‘Monozukuri'.
3. Implementation of structural reform initiatives has progressed, including the streamlining of domestic production and European business structures, and cost reductions.
4. Measures have been taken against weak currencies in emerging countries such as Indonesia and Brazil.

Results by business segment

Motorcycles

Global net sales of motorcycle products were 481.4 billion yen (an increase of 14.5 billion yen/3.1% compared with the same period in the previous fiscal year), and operating income was 11.2 billion yen (an increase of 7.6 billion yen/208.5%).
Unit sales in developed markets have increased substantially from the same period in the previous year (+23% in Europe, +17% in Japan) thanks to the effects of new products such as MT-09 and MT-07. Regarding unit sales in emerging markets, despite the increase in sales of scooters in India, sports models in Indonesia, and 150cc models in Brazil, the overall unit sales decreased due to the decline in sales in Thailand and Vietnam as the overall demand in the two countries dropped. As a result, global unit sales dropped slightly.
On the other hand, net sales have increased thanks to growth in sales of models in the higher price range. Operating income has increased as net sales increases, cost reductions and model mix have led to improvements in income that outweigh the increase in procurement and development costs due to weak currencies in emerging markets.


Marine

Net sales of the marine segment were 150.7 billion yen (an increase overall of 19.2 billion yen/14.6% compared with the same period in the previous fiscal year), and operating income was 27.8 billion yen (an increase of 6.2 billion yen/28.8%).
The introduction of the new F115B outboard motor, an increase in the sales ratio of large outboard models, and an increase in net sales of boats and water vehicles led to increased sales and income overall.


Power Products

Net sales of power products were 61.0 billion yen (an increase of 11.0 billion yen/21.9% compared with the same period the previous fiscal year), and operating income was 3.3 billion yen (an increase of 2.9 billion yen/653.9%) compared with the same period the previous fiscal year).
Sales increased thanks to the launch of the new recreational off-highway vehicle VIKING, and increased sales of snow mobiles and golf cars also led to an increase in sales and income.


Industrial Machinery & Robot Products

Net sales of the industrial machinery and robots business were 19.9 billion yen (an increase of 4.3 billion yen/28.0%), and operating income was 3.4 billion yen (an increase of 1.7 billion yen/106.9%).
Increases in sales and income were achieved thanks to a significant increase in surface mounter sales, aided by the recovery of equipment investment demands in Asia.


Other Products

Net sales of other products business overall were 43.0 billion yen (an increase of 4.2 billion yen/10.8%), and operating income was 3.5 billion yen (an increase of 0.5 billion yen/15.8%).
Unit sales of electrically power-assisted bicycles have significantly increased overall, thanks to substantial sales growth in Japan, as well as the commencement of full-scale export of the E-Kit drive system to Europe.


Forecast of consolidated business results

No changes have been made to the forecast net sales for the fiscal year as the sales increase in the marine business segment as well as motorcycle business segment in developed markets is expected to absorb the sales decrease of the motorcycle business segment in Thailand and Vietnam. On the other hand, income will exceed our initial forecast, and we expect to reach our operating income target of the 2013-2015 medium-term management plan (80 billion yen by 2015) one year earlier thanks to an increase in the sales ratio of large models in the marine business segments as well as higher-than-expected recovery of the motorcycle business segment in developed markets.


Net Sales 1,500 billion yen
(No changes from the initial forecast)
(6.3% increase from the previous term)
Operating Income 83 billion yen
(10.7% increase from the initial forecast)
(50.5% increase from the previous term)
Ordinary Income 85 billion yen
(10.4% increase from the initial forecast)
(41.4% increase from the previous term)
Net Income 50 billion yen
(11.1% increase from the initial forecast)
(13.5% increase from the previous term)

Note: The initial forecast refers to the business forecast released on February 12, 2014.

The exchange rates for the second half of the fiscal year are based on the U.S. dollar at 100 yen (no changes from the initial plan, and identical to the same period the previous fiscal year), and the euro at 135 yen (no changes from the initial plan, and a depreciation of 1 yen compared with the same period the previous fiscal year). The exchange rates for the entire fiscal year are based on the U.S. dollar at 101 yen (a depreciation of 1 yen compared with the initial plan, and a depreciation of 3 yen compared with the same period the previous fiscal year), and the euro at 138 yen (a depreciation of 3 yen compared with the initial plan, and a depreciation of 8 yen compared with the same period 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 dividends that reflect comprehensive consideration of the business environment, including trends in business performance and retained earnings, while maintaining a minimum payout ratio of 20% of consolidated net income.
With the improvement over the previous forecasts in the new anticipated consolidated business results for the fiscal year ending December 31, 2014 announced today, and based on a payout ratio (consolidated) of 20%, the forecast dividend for the year was revised to 29 yen per share (initial forecast: 26 yen). Accordingly, the interim dividend is set at 14.50 yen per share, and the year-end dividend forecast has been revised to 14.50 yen per share.

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