Consolidated Business Results Summary - First Nine Months of Fiscal Year Ending December 31, 2024 -
November 6, 2024
IWATA, November 6, 2024 - Yamaha Motor Co., Ltd. (Tokyo: 7272) announces its consolidated business results for the first nine months of fiscal 2024.
From WATANABE, Katsuaki
Chairman and Director, and President, Chief Executive Officer and Representative Director
Our results for the third quarter saw us record higher revenue year on year, but operating income was about the same as last year. In the motorcycle business, we posted both higher sales and profits thanks to an increase in shipments of premium models to emerging markets. Sales and profits in the Marine Products business fell due to ongoing production adjustments aimed at optimizing inventory levels and from fewer outboard motor shipments. In the Robotics business, higher demand for generative AI applications brought in higher sales of our semiconductor back-end process manufacturing equipment and this helped narrow the business' deficit.
With regards to our outlook for the future, we are seeing a lull in rising prices due to the lowering of interest rates in the United States, but the situation concerning the external environment remains unclear, such as exchange rates fluctuating based on the monetary policies enacted by each country. Further, the situation each of our business segments is facing is different, but with our competitors having improved their product supply operations, lower demand levels, and other factors, we expect the competitive playing field to remain severe. On top of that, the prices and rates for ocean freight, raw materials, labor, and more are on the rise, so we will need to properly keep costs in check.
We have revised our business results forecast for fiscal 2024 downward. We have our eyes on fiscal 2025, which will mark the first year of our new Medium-Term Management Plan. Accordingly, we have begun reviewing the business structures of the recreational vehicle (RV) and Smart Power Vehicle (SPV) businesses, which are currently operating at a loss, in order to address any detrimental aspects during fiscal 2024 so that we can reset things and get off to a fresh start. At the same time, we will control costs in a flexible manner, improve production efficiencies, and make investments for future growth.
Consolidated Business Results*
Revenues for the period were 1,976.9 billion yen (an increase of 141.7 billion yen or 7.7% compared with the same period of the previous fiscal year) and operating income was 201.0 billion yen (an increase of 1.6 billion yen or 0.8%). Net income attributable to owners of parent was 136.1 billion yen (a decrease of 6.8 billion yen or 4.8%).
For the period, the U.S. dollar traded at 151 yen (a depreciation of 13 yen from the same period of the previous fiscal year) and the euro at 165 yen (a depreciation of 15 yen).
In the Company's core business of motorcycles, Brazil, India, and Indonesia saw higher overall unit sales, which increased revenues. For operating income, the effects of higher revenue and cost-cutting efforts in the motorcycle business as well as the positives of a weaker yen were contributing factors, but lower sales in the Marine Product, RV, and SPV businesses led to profits on par with last year. Net income attributable to owners of parent fell due to an increase in foreign exchange losses and higher interest expenses brought on by a stronger yen at the end of the quarter.
Results by Business Segment
Land Mobility Business
Revenues were 1,324.6 billion yen (an increase of 122.1 billion yen or 10.2% compared with the same period of the previous fiscal year) and operating income was 107.7 billion yen (an increase of 3.3 billion yen or 3.2%).
For the motorcycle business, unit sales rose in developed markets like Europe and the United States, resulting in higher numbers than last year. Demand in emerging markets-primarily Brazil, India, and Indonesia-went up and increased the unit sales recorded for the entire emerging market motorcycle business. Revenues for the motorcycle business went up thanks to the higher unit sales in those three markets as well. For operating income, in addition to the effects of higher revenues, improved supply of premium segment models in emerging markets, cost reductions, and the benefits of a weaker yen brought in higher profits.
With recreational vehicles (all-terrain vehicles and ROVs), market demand as well as shipments fell below last year's numbers, resulting in lower revenues. Furthermore, lower unit sales, a worsening model mix, and higher marketing and promotional expenses accompanying the intensifying competition left the business with lower profits.
For the Smart Power Vehicles business, i.e., electric wheelchairs, electrically power-assisted bicycles (eBikes) and their drive units (e-Kits), unit sales of eBikes in Japan surpassed last year's numbers. However, in Europe, the main market for Yamaha Motor e-Kits, market inventory adjustments have remained ongoing and this brought a decline in unit sales and lower sales overall. In terms of operating income, the lower unit sales, increase in sales promotion expenses, and decreasing value of complete Yamaha models in inventory overseas in the U.S. led to the SPV business posting lower profits.
Marine Products Business
Revenues were 415.5 billion yen (a decrease of 15.8 billion yen or 3.7% compared with the same period of the previous fiscal year) and operating income was 79.3 billion yen (a decrease of 5.0 billion yen or 5.9%).
Regarding outboard motor demand, while the United States-the Company's main market-lowered its policy interest rate in September, the still high level of interest rates in general as well as ongoing price raises led to decreased demand. Unit sales of new Yamaha outboard models were positive, but sales were lower for the outboard business overall. For personal watercraft, those subsistent high interest rates made customers hesitate to purchase and demand decreased. Despite this lower demand showing effects in the third quarter period, unit sales increased thanks to improvements addressing last year's lack of parts and supply chain disruptions, which had forced us to place limits on product supply. As a result, sales and profits fell for the Marine Products business overall. Also, Yamaha Motor's third quarter consolidated business results include the performance recorded by German electric marine propulsion manufacturer Torqeedo GmbH during the period of April to September 2024.
Robotics Business
Revenues were 77.5 billion yen (an increase of 6.6 billion yen or 9.2% compared with the same period of the previous fiscal year) with an operating loss of 2.2 billion yen (down from an operating loss of 2.3 billion yen).
In the surface mounter market, unit sales decreased in developed markets, but increased overall thanks to higher numbers recorded in China and other Asian markets. With industrial robots, higher unit sales were posted, but the model mix suffered. Also, higher demand for generative AI applications and advanced packaging yielded higher sales of Yamaha semiconductor back-end process manufacturing equipment. As a result of all these developments, the Robotics business as a whole took in higher sales. The operating loss was due to higher development costs and other sales and administrative expenses, putting figures roughly on par with last year's.
Financial Services Business
Revenues were 84.2 billion yen (an increase of 22.8 billion yen or 37.2% compared with the same period of the previous fiscal year) and operating income was 15.7 billion yen (an increase of 2.1 billion yen or 15.5%).
As financial receivables increased, we made progress in passing procurement interest rates on to customers and this pushed revenues up. As for operating income, in addition to higher income from interest payments, the appraised losses derived from interest rate swaps last fiscal year were converted to appraisal gains this fiscal year. This upped profits for the period.
Other Products Business
Revenues were 75.0 billion yen (an increase of 6.0 billion yen or 8.7% compared with the same period of the previous fiscal year) and operating income was 0.4 billion yen (compared to an operating loss of 0.7 billion yen).
A higher demand for golf cars in North America drove up unit sales and those higher sales led to increased revenue and profits.
Forecast of Consolidated Business Results
In light of the worsening market conditions the Marine Product, RV, SPV, and Robotics businesses are facing, as well as inventory write-downs for the SPV business and others, the Company has made the following downward revisions to its incomes forecast for fiscal 2024:
From WATANABE, Katsuaki
Chairman and Director, and President, Chief Executive Officer and Representative Director
Our results for the third quarter saw us record higher revenue year on year, but operating income was about the same as last year. In the motorcycle business, we posted both higher sales and profits thanks to an increase in shipments of premium models to emerging markets. Sales and profits in the Marine Products business fell due to ongoing production adjustments aimed at optimizing inventory levels and from fewer outboard motor shipments. In the Robotics business, higher demand for generative AI applications brought in higher sales of our semiconductor back-end process manufacturing equipment and this helped narrow the business' deficit.
With regards to our outlook for the future, we are seeing a lull in rising prices due to the lowering of interest rates in the United States, but the situation concerning the external environment remains unclear, such as exchange rates fluctuating based on the monetary policies enacted by each country. Further, the situation each of our business segments is facing is different, but with our competitors having improved their product supply operations, lower demand levels, and other factors, we expect the competitive playing field to remain severe. On top of that, the prices and rates for ocean freight, raw materials, labor, and more are on the rise, so we will need to properly keep costs in check.
We have revised our business results forecast for fiscal 2024 downward. We have our eyes on fiscal 2025, which will mark the first year of our new Medium-Term Management Plan. Accordingly, we have begun reviewing the business structures of the recreational vehicle (RV) and Smart Power Vehicle (SPV) businesses, which are currently operating at a loss, in order to address any detrimental aspects during fiscal 2024 so that we can reset things and get off to a fresh start. At the same time, we will control costs in a flexible manner, improve production efficiencies, and make investments for future growth.
Consolidated Business Results*
Revenues for the period were 1,976.9 billion yen (an increase of 141.7 billion yen or 7.7% compared with the same period of the previous fiscal year) and operating income was 201.0 billion yen (an increase of 1.6 billion yen or 0.8%). Net income attributable to owners of parent was 136.1 billion yen (a decrease of 6.8 billion yen or 4.8%).
For the period, the U.S. dollar traded at 151 yen (a depreciation of 13 yen from the same period of the previous fiscal year) and the euro at 165 yen (a depreciation of 15 yen).
In the Company's core business of motorcycles, Brazil, India, and Indonesia saw higher overall unit sales, which increased revenues. For operating income, the effects of higher revenue and cost-cutting efforts in the motorcycle business as well as the positives of a weaker yen were contributing factors, but lower sales in the Marine Product, RV, and SPV businesses led to profits on par with last year. Net income attributable to owners of parent fell due to an increase in foreign exchange losses and higher interest expenses brought on by a stronger yen at the end of the quarter.
Results by Business Segment
Land Mobility Business
Revenues were 1,324.6 billion yen (an increase of 122.1 billion yen or 10.2% compared with the same period of the previous fiscal year) and operating income was 107.7 billion yen (an increase of 3.3 billion yen or 3.2%).
For the motorcycle business, unit sales rose in developed markets like Europe and the United States, resulting in higher numbers than last year. Demand in emerging markets-primarily Brazil, India, and Indonesia-went up and increased the unit sales recorded for the entire emerging market motorcycle business. Revenues for the motorcycle business went up thanks to the higher unit sales in those three markets as well. For operating income, in addition to the effects of higher revenues, improved supply of premium segment models in emerging markets, cost reductions, and the benefits of a weaker yen brought in higher profits.
With recreational vehicles (all-terrain vehicles and ROVs), market demand as well as shipments fell below last year's numbers, resulting in lower revenues. Furthermore, lower unit sales, a worsening model mix, and higher marketing and promotional expenses accompanying the intensifying competition left the business with lower profits.
For the Smart Power Vehicles business, i.e., electric wheelchairs, electrically power-assisted bicycles (eBikes) and their drive units (e-Kits), unit sales of eBikes in Japan surpassed last year's numbers. However, in Europe, the main market for Yamaha Motor e-Kits, market inventory adjustments have remained ongoing and this brought a decline in unit sales and lower sales overall. In terms of operating income, the lower unit sales, increase in sales promotion expenses, and decreasing value of complete Yamaha models in inventory overseas in the U.S. led to the SPV business posting lower profits.
Marine Products Business
Revenues were 415.5 billion yen (a decrease of 15.8 billion yen or 3.7% compared with the same period of the previous fiscal year) and operating income was 79.3 billion yen (a decrease of 5.0 billion yen or 5.9%).
Regarding outboard motor demand, while the United States-the Company's main market-lowered its policy interest rate in September, the still high level of interest rates in general as well as ongoing price raises led to decreased demand. Unit sales of new Yamaha outboard models were positive, but sales were lower for the outboard business overall. For personal watercraft, those subsistent high interest rates made customers hesitate to purchase and demand decreased. Despite this lower demand showing effects in the third quarter period, unit sales increased thanks to improvements addressing last year's lack of parts and supply chain disruptions, which had forced us to place limits on product supply. As a result, sales and profits fell for the Marine Products business overall. Also, Yamaha Motor's third quarter consolidated business results include the performance recorded by German electric marine propulsion manufacturer Torqeedo GmbH during the period of April to September 2024.
Robotics Business
Revenues were 77.5 billion yen (an increase of 6.6 billion yen or 9.2% compared with the same period of the previous fiscal year) with an operating loss of 2.2 billion yen (down from an operating loss of 2.3 billion yen).
In the surface mounter market, unit sales decreased in developed markets, but increased overall thanks to higher numbers recorded in China and other Asian markets. With industrial robots, higher unit sales were posted, but the model mix suffered. Also, higher demand for generative AI applications and advanced packaging yielded higher sales of Yamaha semiconductor back-end process manufacturing equipment. As a result of all these developments, the Robotics business as a whole took in higher sales. The operating loss was due to higher development costs and other sales and administrative expenses, putting figures roughly on par with last year's.
Financial Services Business
Revenues were 84.2 billion yen (an increase of 22.8 billion yen or 37.2% compared with the same period of the previous fiscal year) and operating income was 15.7 billion yen (an increase of 2.1 billion yen or 15.5%).
As financial receivables increased, we made progress in passing procurement interest rates on to customers and this pushed revenues up. As for operating income, in addition to higher income from interest payments, the appraised losses derived from interest rate swaps last fiscal year were converted to appraisal gains this fiscal year. This upped profits for the period.
Other Products Business
Revenues were 75.0 billion yen (an increase of 6.0 billion yen or 8.7% compared with the same period of the previous fiscal year) and operating income was 0.4 billion yen (compared to an operating loss of 0.7 billion yen).
A higher demand for golf cars in North America drove up unit sales and those higher sales led to increased revenue and profits.
Forecast of Consolidated Business Results
In light of the worsening market conditions the Marine Product, RV, SPV, and Robotics businesses are facing, as well as inventory write-downs for the SPV business and others, the Company has made the following downward revisions to its incomes forecast for fiscal 2024:
The above figures are based on the U.S. dollar trading at 150 yen during the fiscal year (a depreciation of 10 yen from the original forecast and a depreciation of 9 yen compared with the same period of the previous fiscal year) and the euro at 164 yen (a depreciation of 14 yen and 12 yen).
No changes have been made to the annual dividend forecast of 50 yen per share.
*From this fiscal year, the Yamaha Motor group has switched from Japanese Generally Accepted Accounting Principles (J-GAAP) to International Financial Reporting Standards (IFRS), and as such, figures from fiscal 2023 have been converted to IFRS standards for comparison and analysis.
No changes have been made to the annual dividend forecast of 50 yen per share.
*From this fiscal year, the Yamaha Motor group has switched from Japanese Generally Accepted Accounting Principles (J-GAAP) to International Financial Reporting Standards (IFRS), and as such, figures from fiscal 2023 have been converted to IFRS standards for comparison and analysis.
