Yamaha Motor Co Unsp/Adr

Ladies and gentlemen, thank you very much for attending Yamaha Motors earnings presentation for the third quarter of fiscal 2023. I'll be serving as the MC. I am Kurabe from Corporate Communications. So first, I would like to introduce today's speaker. Our speaker is our director, Motofumi Sitara. He will first make a presentation. And after that, we will have a Q&A Zoom session for the news media and then for the analysts. The presentation material is available on Yamaha Motors' web page. So we now would like to start the presentation. I am Stara from Yamaha Motor. And thank you very much for attending this business result presentation for Yamaha Motor despite your very busy schedules. And I'd also like to take this opportunity to thank you for your understanding and support for our daily businesses. Now I would like to give you an overview of our business results. First, the third quarter key points. please refer to page 4. In the third quarter, We have achieved a record high sales and profit. Looking at our core businesses, we have seen an increase in shipment for our motor cycles as well as outboard motor of 200 horsepower and above in the marine business. However, in the robotics business, because of the slowdown in the Chinese economy, the impact was large and we are still facing difficulties. Now the outlook for 2024 business environment. Emerging markets domestic demand, we expect to remain steady. The semiconductor supply situation has normalized, providing a tailwind for motorcycle premium model production. However, depending on the region, we may need to keep watch over the economic trends. Concerning cost, ocean freight and logistic costs went down, and the rise in raw material prices are expected to settle down. As for the market, emerging market motorcycle demand is expected to continue to recover, although the situation may differ from country to country. Large outboard motor above 200 horsepower will continue to see strong demand. In the SPV business, e-bike markets may see a prolonged inventory adjustment. Robotics market The slowdown seemed to have hit the bottom and we expect gradual recovery. We will continue to control our expenses and invest in technology so that we can accelerate growth for the future. Also, today we had a board of directors meeting where a resolution on stock split was passed. Next, the units shipped and inventory. Please refer to page five. The left-hand side shows you the major product shipment amount and a comparison with fiscal 2022. Motorcycle. In Indonesia, India, and Brazil especially, we have seen strong demand. Outboard motor. In the mid and small size products, we see a decline, but for the larger ones above 200 horsepower, we still see strong demand. ATV ROV. The slowdown in demand as well as price offensive by other companies have caused a reduction in our shipped units. SPV also, the market inventory increased and shipment decreased. Mounters for Asia, we have seen a decrease in shipment. On the right-hand side, we show you a comparison of the market inventory and a comparison with appropriate level. The inventory is above the appropriate level in Vietnam, Philippine, Thailand and Europe and for the mid to small outboard motor and other some models we are seeing adjustment of production and we are strengthening our promotion activities to reduce inventory. Now, the 2023 third quarter business results, please refer to page 6. On the left, you have the fiscal year 2022 third quarter actual, then the fiscal 2023 third quarter actual, and the difference between the year before. For the fourth quarter, excuse me, we see as a result the sales 109% from the previous year, 1,835,000,000,000,000 operating income, 120% against the previous year, 208.2 billion operating income ratio plus 0.9 At 11.3%, ordinary income 108%, 205.9 billion and net income attributable to shareholders apparent 112%, 149.3 billion. EPS was 114% against the previous year at 444.84 yen. The semiconductor supply situation has improved. and we see an increase in the motorcycle premium model shipment in emerging countries, and the price pass-through effect has expanded, and with the weaker yen, we have seen significant increase in profit. The exchange rate that has been used is 138 yen against the dollar and 150 against the euro, and the emerging market currencies versus the US dollar is shown on the screen. Next fiscal 23 third quarter factors that affect our operating income, please refer to page seven. As you can see, the sales increase was a positive 38.7 billion yen contribution. The breakdown is price increase, positive 60.6 billion. Unrealized profit effect, positive 7 billion. Financial services, negative 2.8 billion. The scale increase, negative 600 million. And MIX and others, negative 25.6 billion yen. Cost reduction, negative 6.8 billion. And the breakdown is cost reduction plus 15.1 billion yen and cost increase, negative 21.9 billion. The growth strategy expense increased and therefore a negative 4.9 billion yen. SG&A increased, negative 27.8 billion. And the Forex impact was a positive 34.9 billion yen. The scale in sales increase. slightly went down however the price increase effect expanded and with the cost reduction activities progressing we have seen a profit increase and the raw material cost especially for steel and aluminum has gone down more than expected next our progress in our medium and long-term measures please turn to page eight

First, in the new businesses area of medical and healthcare, we established Tuning Fork Bio Inc., utilising antibodies to develop a medical and healthcare business. By analysing antibodies in the blood and visualising a person's state of health, we aim to suppress the onset of disease, select the most appropriate medicine for each individual and conduct drug discovery research. We also made progress in addressing environmental and resource issues. On the left, we used a plant-derived material, cellulose nanofiber reinforced resin, to produce watercraft and sports boats that are now available in North America. Using this material for mass production of transportation equipment parts is a global first. Compared to existing resin materials, this material has superior recyclability, which can lead to reduction in plastic use and greenhouse gas emissions. On the right shows you advances in our research on hydrogen engines. An ROV powered by a 100% hydrogen engine that emits zero CO2 was unveiled at the Japan Mobility Show just the other day. hydrogen engines are still in the research stage. But this technology has the potential to combine both decarbonisation and internal combustion engines. Sound and vibration while driving are part of what make internal combustion engines so attractive. So we will continue to explore the possibilities into the future. Next, notice of a stock split. Please turn to page nine. At a meeting of the board of directors today the board passed a resolution regarding a stock split the company will carry out a three for one stock split of its common stock, with a record date of December 31 2023. By reducing the unit price of investment in our shares we aim to create an investment friendly environment and expand our investor base. The annual dividend forecast for fiscal 2023 remains unchanged, based on the pre share split basis. And regarding our shareholders special benefit plan the content of the current plan will be maintained and through a review of the standards for health chairs, we will effectively enhance the program next details by business segment. First, net sales and operating income by business for the first half. Please turn to page 11. The land mobility segments motorcycle rv and marine businesses reported higher sales and higher profits. Financial services and other businesses posted higher sales, but lower profits and in the land mobility segment the SPV and robotics businesses reported lower sales and profits next by detail the details by business, please turn to page 12. First, our core businesses. On the left is the motorcycle business. The graph shows sales by region. there was continued strong demand in Europe and the US, and economic recovery in emerging countries, semiconductor procurement improved, leading to sales increasing in almost all regions, resulting in higher revenues. In particular, in Indonesia, Brazil and India, there was significant increase. In terms of profit, due to the expanded effect of price pass-through, the profit margin improved. Going forward, through improved semiconductor procurement, we will begin shipping premium models in earnest. Next on the right is our marine business. The graph shows sales by product. In outboard motors, demand for small and medium-sized models declined. Demand for larger models at 150 to 200 horsepower has stabilized, but models with 200 horsepower or more remained steady. We will continue to increase production capacity of large models as planned. Demand for watercraft remained strong. At our company, at our US plant, the production efficiency has improved, enabling us to increase supply. As a result, sales increased and our operating margin also improved. We are pleased to introduce our new products. Please turn to page 13. This is the recently announced XSR900GP. It's scheduled for release in Europe in 2024. It went on show at the Japan Mobility Show and EICMA 2023 International Motorcycle Exhibition. The embodiment of Yamaha racing history is the design concept. The design pays homage to the 80s Grand Prix machine, the YZR500. You can feel what Yamaha has cultivated at the world's most prestigious road races, the history and the spirit. In Japan, the XSR900GP is scheduled to be launched after the summer of 2024. That's something to look forward to. Next, our RV and financial services businesses. Please turn to page 14. On the left is our RV business. Although demand slowed and shipments declined, at our US plant, production efficiency improved. In part due to the positive effect of the weekend, both sales and income increased. The outdoor leisure boom led to more new buyers, and we expect their replacement purchases will support demand. next on the right is our financial services business thanks to the increasing unit sales across all regions sales finance receivables increased resulting in higher sales We will continue to implement price pass-throughs associated with higher interest rates, but funding costs have increased. In addition, due to the expansion of receivables, bad debt expense increased and a loss on valuation of interest rate swaps was incurred. As a result, since the second quarter, profit margins have gradually improved, but profits declined year on year. For the next fiscal year, a similar trend is expected, but we will steadily promote price pass-through to new credits. Finally, our growth businesses, SPV and robotics, please turn to page 15. On the left is our SPV business. In the market, inventory adjustment continues and we are also adjusting our production. As a result, unit sales declined, resulting in lower sales and lower profits. Inventory optimization is planned for next fiscal year and beyond next on the right is the robotics business in developed countries demand for automotive and industrial equipment remains strong, but due to the impact of the sluggish Chinese economy both sales and profits declined. Although there are signs that the market has recently bottomed out, recovery is expected to proceed slowly in the next fiscal year. This concludes the explanation for the third quarter of the fiscal year ending in December 31, 2023. Thank you for your kind attention.

So with this, we would like to end the presentation for the third quarter of fiscal year 2023.