President Message

Message from the management of Yamaha Motor

Business Results for 2015 and Forecasts for 2016
President, Chief Executive Officer and Representative Director Hiroyuki Yanagi

Dear Employees

The consolidated management accounts for 2015 were net sales of 1,615.4 billion yen (an increase of 6% over the previous year), and operating income of 120.4 billion yen (an increase of 38%). The HQ unit accounts were net sales of 659.0 billion yen (an increase of 10% over the previous year), and operating income of 35.1 billion yen (an increase of 21%). The currency rates for the year saw the dollar trade at 121 yen (a depreciation of 15 yen) and the euro trade at 134 yen (an appreciation of 6 yen). The Indonesian rupiah and the Brazilian real experienced significant depreciations against the U.S. dollar of 14% and 40% respectively.

Sales and income increased in developed market businesses. They were driven by the effect of sales increases in global models and products in the higher price range in the motorcycle business segment, increased sales of large models and the effect of yen depreciation on exports in the marine business segment, the effect of new products in the recreational vehicles business segment, etc. Sales in the emerging markets motorcycle business segment decreased overall, but operating income was maintained at a level equivalent to that of the previous year. Increased sales in Vietnam, the Philippines, and Taiwan, as well as increased sales of products in the higher price range - and cost reductions in each region - absorbed the reduction in sales and currency depreciation effects in Indonesia, Brazil, and China etc.

2015 was also the final fiscal year of Yamaha Motor's medium-term management plan, which began in 2013. Sales and income continued to increase during these three years, with results targets being broadly met. In particular, new growth investment and proactive stock dividend payments become possible when operating income continues above the 120.0 billion yen level, and working capital (excluding financial credits) increases due to early reductions in inventory held and accounts receivable. We believe that this has created a platform to enable sustainable growth that will lead into the new Medium-term Management Plan from 2016. I would like to thank you all for your efforts.

The status of each of our businesses is as follows (the data shown here is based on management accounting values).

Motorcycles

Net sales overall increased by 4% from the previous fiscal year to 1,010.4 billion yen, and operating income increased by 57% from the previous fiscal year to 34.3 billion yen.
Unit sales increased in developed markets such as North America and Europe, and in Japan, sales of large motorcycle products increased while scooter sales decreased. Unit sales in emerging markets such as Vietnam, the Philippines, and Taiwan increased, but decreased in Indonesia, Brazil, and China etc.
Net sales increased thanks to the effects of new products such as the MT series and increased sales of products in the higher price range. Operating income also increased due to factors such as cost reductions and the effect of greater scale and product mix generating increased income, which absorbed negative factors such as currency depreciation and increases in development costs in emerging markets.

Marine

Net sales overall increased by 7% from the previous fiscal year to 262.8 billion yen, and operating income increased by 30% from the previous fiscal year to 52.0 billion yen.
Increases in sales and income were achieved thanks to increased unit sales of large outboard motors and water vehicles in North America, as well as the effects of yen depreciation.

Vehicles & Solutions

Net sales overall increased by 16% from the previous fiscal year to 226.7 billion yen, and operating income increased by 68% from the previous fiscal year to 19.0 billion yen.
In RV business segment, sales increased by 22% into profitability of 4.1 billion yen thanks to the increases in sales due to the expansion of the recreational off-highway vehicle (ROV) product line-up etc.
The IM business segment saw increased sales of 25% and income of 51% thanks to increased sales of surface mounters and robots, and the progression of business absorption by the acquisition of assets from the Hitachi High-Technologies Corporation.
The Smart Power Vehicle Business Unit experienced increased sales of 13% thanks to increased sales of PAS both domestically as well as in exports (up 16% on a drive units basis), however income was reduced slightly due to foreign exchange effects on imports.
The Power Product business segment experienced increased sales of 6%, however income decreased by 8% as sales of golf cars and generators both domestically and in emerging markets did not increase.
The UMS business segment experienced increased sales and income due to increased sales of unmanned helicopters. In addition, a slight decrease in sales and income was experienced in the Pool business segment due to the effect of special procurement demand the previous year.

Other

The Overseas Market Development Operation Business Unit segment experienced increased sales of 25% and income of 67% thanks to increased sales of motorcycles and outboard motors in African markets etc.
The Automotive Business Unit segment experienced a slight decrease in sales and income due to unit sales not increasing in engine model replacement for Toyota.
The Parts Business segment experienced increased sales of 7% and income of 12% thanks to the progression of the life-time marketing roll out in developed markets and the expansion of time commitment service in emerging markets.

2016 is the first fiscal year of our new Medium-term Management Plan. The consolidated management forecasts for net sales and operating income are set at 1,760 billion yen and 120.0 billion yen respectively. We expect that a reasonably solid business climate will continue in developed markets, and for further uncertainty in emerging markets due to factors such as low resource prices and weaker currencies. These forecasts are based on the assumption that the U.S. dollar will trade at 117 yen and the euro at 127 yen (an appreciation of the yen in both cases), and for further depreciations of the Indonesian rupiah and the Brazilian real. In order to make steady progress on improvements in profitability such as optimization of pricing, cost reductions, and restricting expenses, please conduct business management that absorbs negative factors such as foreign exchange effects. Moreover, please make significant improvements in work and product quality, one of the major points to reflect on from last year, conducting business management that provides a Yamaha brand that customers will trust.

We hope to provide a range of platforms which will help you take on new challenges at work. Each and every employee should take a leading role in making a significant contribution to creating "a unique company that continues to achieve dynamic milestones."

Hiroyuki Yanagi

IM :Intelligent Machinery
PAS:Electrically Power Assisted Bicycle
UMS:Unmanned System