Yamaha Motor Co Unsp/Adr

Hello, everyone. I'm Hidaka. Thank you very much for joining FY 2022 Business Results Meeting of Yamaha Motor Company Limited today. At first, I'd like to express my sincere appreciation for all stakeholders who support our activities in this difficult environment. I deeply apologize for the inconveniences caused to customers by continued production delay and inventory shortages. Now let me explain the outline of the business results. Please turn to page 4. In FY 2022, in addition to the robust demand, promotion of break-even point management and price pass-through with a cost increase benefited by foreign exchange, the company surpassed ¥2 trillion in net sales and ¥200 billion in operating income for the first time. As for the financial structure, we established a stable financial base exceeding the mid-term plan target in all indicators with operating margin 10%, ROE 18.7%, ROIC 11.9%, and ROA 11.2%. As for the outlook for 2023... Regarding the external environment, despite the temporary lull in soaring freight cost, we assume the continued rise in labor and material cost in our plan. Semiconductor shortage will gradually recover for the end of the year, but still short supply against the demand will continue for some time. By business, in land mobility business, with strong demand in motorcycles in emerging market, sales will increase. And effects of price hike from the last year will continue. In marine product business, the robust demand for large outboard motors in Europe and North America will continue. In robotics business, automotive demand will remain firm. and the Chinese domestic demand and capex demand, which have been sluggish since last year, will recover in the second half of the year. In financial services business, we closely monitor the effects of the economic slowdown and interest rate trend and make plans with a strict risk appraisal. Finally, as for the shareholder returns, we plan the annual dividend of 125 yen per share for FY2022 with 10 yen increase for the year-end dividend, and we forecast further dividend increase to 130 yen per share in FY2023. Please turn to page 5. For FY2022, net sales were ¥2,248.5 billion, 124% of the previous year. Operating income was ¥224.9 billion, 123% of the previous year. Operating income ratio was 10%, down 0.1 points year-on-year. Ordinary income was ¥239.3 billion, 126% of the previous year. Net income attributable to owners or parent was 174.4 billion yen, 102% of the previous year, and the actual foreign exchange rates are shown at the bottom of the table. Supported by the continued outdoor leisure demand in developed market and economic recoveries in emerging market, we achieve the record high net sales and all incomes. and as a result of the rake-even point management, high operating income ratio of 10% was sustained. Please turn to page 6 for operating income change by factor for FY2022. Sales increase impact was plus 50.5 billion yen, and its breakdown is scale increase with demand recovery is plus 37.9 billion yen. Price raises, etc., was plus 51.2 billion yen. Unrealized profit due to increased inventories was minus 23.2 billion yen, and increased logistic cost for marine freight was minus 15.4 billion yen. While cost reduction impact was plus 23.9 billion yen, cost increase for raw materials and procured parts was minus 61.3 billion yen. Growth strategy expense increase was minus 5.7 billion yen. Increasing SG&A expenses including the variable cost with volume increase was minus 45.1 billion yen. and including the exchange effects of plus 80.3 billion yen, operating income resulted to 224.9 billion yen. Through the increased scale of sales and promotion of price pass-through, we strive to offset the cost increase and SG&A negative impacts, and benefited by foreign exchange profit increased. Please turn to page 7. Last slide shows the operating income change by factor, and this is a change by business. Profit increased in motorcycle business even excluding foreign exchange impact. Marine product business profit decreased, but excluding the unrealized profit impact with the stock replacement, profit increased. While in many businesses affected by cost surge in material and logistic cost, excluding the foreign exchange impact, profit decreased. Question to page 8. As for the forecast for FY 2023, although situation varies by business and region and are elaborated on later, as the overall steady demand will continue and we expect that sales and operating income will exceed those in the previous year in our plan. Net sales will be 2 trillion 450 billion 109% of the previous year. Operating income will be 230 billion 102% of the previous year. Operating income ratio will be 9.4% down 0.6 points year-on-year. Ordering income will be 230 billion 96% of the previous year. Net income attributable to owners or parents will be 160 billion yen. 92% of the previous year, and we plan to renew the record highs in net sales and operating income. Assumed exchange rates for FY2023 are 125 yen to US dollar and 135 yen to a euro. As for emerging countries, 15,500 Indonesian rupiah to a dollar and 5.3 Brazilian rial to a dollar. Please turn to page 9. This is a unit sales by major product and region in 2023 compared to those in 2022 and 2021, which serves as a basis for the annual plan presented before. Demanding motorcycles in 2023 will be strong mainly in margin market, but situation will be varied due to semiconductor shortages. Supply shortage will be improving toward the end of the year, but in the first half of the year, it will continue. Pass and electrically power-assisted bicycles which suffered in parts procurement are now in the recovery phase. Sales of large outboard motors will increase year-on-year despite the concern for the impact of U.S. port disruptions. Please turn to page 10 for operating income change by factor in FY2023. Sales increase impact is 142.9 billion. Its breakdown is scale increase with demand recovery is plus 68.9 billion. Price raises, etc. is 16.1 billion. Reversal gain from unrealized profit is plus 51 billion yen. Decrease in logistic cost of marine freight is plus 6.9 billion yen. While cost reduction is plus 16.1 billion yen, cost increase in raw materials and procured parts impact is minus 56.2 billion yen. Increase in gross strategy expenses is minus 9.8 billion yen. Increasing SG&A expenses with labor cost increase and variable cost increase with volume growth is minus 56.9 billion yen, and including minus 30.9 billion yen from exchange effect operating income will be 230 billion yen. We observe the cost increase and SG&A expenses increase by sales scaling increase, and despite the foreign exchange headwind, profit will increase. Please turn to page 11. This is the operating income change by factor in 2023. Excluding foreign exchange, profit is planned... to increasing all businesses except the financial services business. In the financial services business, our plan is based on the strict assumption for economic slowdown impact and interest hike risk. And we'll increase the growth strategy expenses to accelerate the new business development for the future and initiatives for carbon neutrality. Please turn to page 12. I'll explain the key financial indicators. This slide shows a chart of ROE, ROIC, ROA for efficiency and equity ratio of the results of 2021-22 and the plan for 2023. In 2022, ROE was 18.7%, ROIC 11.9%, ROA was 11.2%, and equity ratio was 45.9%. In 2023, due to net profit decrease, each indicator falls, but they continuously exceed the mid-term management plan target. Accelerating the investment for growth, we continue to generate returns above the cost of capital. Please turn to page 13 for returns for shareholders. For FY 2022, backed by strong performance, we will increase the dividend to 125 yen per share for the full year, up 10 yen from the previous forecast of 115 yen, and we will put it on the agenda for the AGM. In 2023, in addition to the 130 yen of dividend per share, we plan to acquisition of the treasury stock of 30 billion yen. We continue to strive for the stable and consistent returns for shareholders. Please turn to page 14. In the new Metro Management Plan announced last year, we announced to aim to create value in new mobility society and toward connecting with people and striving as a company, we put the offering of safety riding and peace of mind as one of our key priorities. Aiming for zero traffic fatalities, in 2050 with customers, we established the safety vision of Jinki Kanno, Jinki Anzen. We believe it important to improve driving skills of riders and to connect riders and mobility in addition to the technology to support riding. As for the progress in 2022, in the field of technology, we announced Tracer 9 GT+, equipped with adaptive cruise control, the world's first millimeter-wave radar-linked UBS. In the field of skills, we implemented safety training and promotional activities worldwide for 130,000 people in the with COVID environment. In the field of connectivity, we are proud of the prominent records of 920,000 connected vehicles sold and 2.6 million registered Yamaha motor IDs as a leading performance in the industry. We continue to promote these three activities steadily and aim for an accident-free society by providing the pleasure and inspirations that will be felt through customers' enhancement of their capabilities while having fun. This concludes my presentation. Thank you for your attention. I'm Sitara. Next, I'll explain details by business segment. Please turn to page 16. I'll explain net sales and operating income by business. The chart covers the results of 2021-22 and the forecast for 2023. As for the results of 2022, net sales increased in all businesses except robotics, and operating income increased in land mobility and marine product businesses. As for the forecast for 2023, net sales were increasing in all businesses, and operating income were increasing in marine products, robotics, and other product businesses. In the next page onward are explained by segment. Please turn to page 17. This is a core business, the motorcycle business. Chart on the left shows sales by region of developed market and emerging market. In 2022, although we were affected by the large impact of parts procurement shortage, development, manufacturing and sales work together to minimize its impact. In the bulk market, demand continued to be firm and the unit sales increased in Europe and America and we achieved profitability. In emerging market, demand increased with the recovery in economic activities and the unit sales increased in Indonesia, Vietnam and India, among others. As a result, net sales increased to 1,291.7 billion yen and operating income ratio increased to 6.6% with profit increase. In 2023, we expect that the strong demand centering on the emerging market will continue, and the unit sales will increase with supply increase, and the net sales will grow to 1,391 billion yen. While operating income ratio will be 4.8% affected by the material cost surge and increasing SG&A expenses due to the sales scale increase. Please turn to page 18 for core business, marine product business. Left chart shows the net sales by-product. In 2022, in the first half, despite the remaining logistic issues, the shipping from Japan improved and the unit sales increased. As a result, net sales were 517 billion yen and operating income ratio was 21.1%. and the net sales and operating income in marine product businesses mark the record highs. In 2023, we continue the stable supply of large outboard motors for the robust demand. In 2022, unrealized profit, with the inventory increases negatively affected, profit by 18 billion yen, but in 2023, it will positively affect profit by 34.6 billion yen. As a result, as the effect of price pass-through implemented from the second half of the previous year will be materialized to the fall, net sales will increase to 541 billion yen and operating income ratio will improve to 21.8%, expecting the record high net sales and operating income for three consecutive years. and will double the investment for the future growth and accelerate the production capacity expansion of large outboard motors and the new model development. Please turn to page 19. For core business, R&B business in land mobility segment. In 2022, partly due to price pass-through and the positive impact of depreciation of yen, net sales increased to 123.3 billion yen, but operating income ratio decreased to minus 2.3% due to a lower utilization at the production base in the U.S. and the increase in manufacturing cost. But in 2023, through the quick improvement in utilization rate, we achieved a net sales of 141,000,000 yen and recovered to the profitability with 2.8% operating income ratio. Please turn to page 20 for core business, financial services business. Left chart shows the receivables balance and its reasonable breakdown, and the right chart shows net sales and operating income ratio. As shown by the left chart, receivables balance increased to 505.5 billion at the end of 2022. Net sales increased to 62.2 billion yen, and on the profit front, funding rate increased affected by the interest hike, and in addition to the allowance for the doubtful accounts posted, as the allowance for the doubtful account decreased as one-off factor in the previous year, operating income ratio decreased to 28.2%. In 2023, receivables balance will increase in all regions to 525 billion yen and the net sales will increase to 71 billion yen, but operating income ratio will decrease to 21.1% with stricter assumption of the interest hike risk. Please turn to page 21 for gross business, SPV business in land mobility segment. In 2022, production delayed substantially caused by pause shortages due to Shanghai lockdown, and despite the recovery effort, unit sales decreased. But due to the foreign exchange benefit, net sales increased slightly. As a result, net sales in 2022 increased to 53.3 billion yen and operating income ratio was 10.6%. In 2023, net sales are expected to increase to 79 billion yen, recovering the delay in production in the previous year. SG and the expenses were temporarily increased due to the sales channel expansion in Europe. but operating income ratio will be eight point nine percent with profit increase please turn to page twenty two for gross business robotics business in twenty twenty two sales grew in stable manner in developed market centering on japan through the automotive related large investment in surface monitors but capex demand in china and taiwan decreased due to the delay in economic recovery besides the impact of shanghai lockdown As a result, net sales decreased to 115.9 billion yen, and the operating income ratio was 10.3% due to the soaring parts and logistic costs. In 2023, we expect the moderate recovery in China and Taiwan and the robust automotive demand in the developed market. The necessary increase to 129 billion yen and operating income ratio will be 10.9%. With this, I conclude my presentation. Thank you for your kind attention.