Yamaha Motor Co Unsp/Adr

Thank you very much for attending the fiscal year 2025 earnings presentation for Yamaha Motor Corporation. Before we move on into the presentation, I'd like to introduce those who are attending. President and CEO, Representative Director, Motofumi Sitara. Executive Officer and Chief General Manager of Corporate Planning and Finance Center, Mitsuru Hashimoto. Today, President Stada will explain the business results, and Executive Officer Hashimoto will give you the details by business segment, and then we will have a Q&A Zoom session for journalists and then analyst investors. The presentation material has been uploaded onto the Yamaha Motors corporate site. I am Motofumi Sitara of Yamaha Motor Corporation. Thank you very much for attending our company's presentation. I would also like to thank you for your understanding and cooperation to our daily business operations. I would now like to go into the presentation of our business results. First, starting with some key points, please refer to page 4. The 2025 results was down in terms of revenue and profit against the previous year. And against the revised forecast, which we released in its second quarter announcement, it was a reduction in revenue but increase in profit. Operating income is moving as scheduled. As a result of reviewing our recoverability of deferred tax assets, net income resulted lower than the revised forecast. Looking at the environment surrounding our company, the tariffs have pushed up costs, and especially the U.S. business environment has changed drastically, and therefore in 2025 and onward, we have has started our company-wide cost structure reform. 2026, we believe that the tariffs will impact throughout the year. Therefore, through cost structure reform and price strategy, we will boost profitability. In addition to this, in our core business, we will increase our sales unit. And also, with the improvement of profitability in strategic businesses, we are looking at a revenue of 2.7 trillion yen, operating income of 180 billion yen, an increase in revenue and profit. In terms of shareholders' return, 25 results. We had a reduction in net income. Therefore, we have an annual dividend of 35 yen in our plans. 26, we are expecting an increase in profit. Therefore, we are looking at an annual dividend of 50 yen per share. And with improved cash flow, we are hoping to have flexible acquisition of treasury stocks as well. Looking at the unit sales and inventory, please refer to page 5. Left side, major products and total demand and unit sales is being compared against the previous year results. Motorcycle, throughout the year in Indonesia, Philippines, and Thailand, we have seen sound shipments. In Vietnam, Hanoi City announced ice regulations, and because of that, demand was slightly down from last year. In October, we were hit by a flood. The factory was inundated, and therefore shipment was down. However, we are working toward recovery, and now, except for some products, production has normalized. Outboard motors. Continuing on from the third quarter in North America, small and mid-range models are moving steadily and shipments have gone up against the previous year. The right-hand graph looks at the market inventory versus the appropriate level. In India, last year in October, because the GST rates were lowered, retail has increased and temporarily the inventory level has gone down. By spring, we are preparing so that production will normalize by then. Indonesia, Vietnam, Philippines, we are below the appropriate level of inventory. However, we will be closely monitoring the supply and demand situation so that the inventory could be at an appropriate level. Looking at the business results, please refer to page 6. 2025 results, revenue, 98% against the previous year at 2,534,2 billion yen operating income, 70% versus the previous year, 126.4 billion yen operating income ratio, minus two points from the previous year at 5%. Net income attributable to owner of parent, 15% against the previous year at 16.1 billion yen. EPS, 15% versus the previous year, 16.59 yen. The exchange rates used were 150 yen against the dollar, 169 yen against the euro. Looking at some factors impacting our operating income, please refer to page 7. As you can see, sales effects, negative 3.5 billion yen, looking at the breakdown. Scale effects, negative 7.3 billion yen. Financial services, positive 1.6 billion yen. Price increase and rebate, which comprises pricing, plus 43.3 billion yen. Others, negative 41.1 billion yen. Net cost impact, negative 9.2 billion yen. Looking at the breakdown, cost reduction, positive 20.9 billion yen. Cost increases, negative 30.1 billion yen. R&D expenses have increased, negative 24.7 billion yen. SG&A increased, negative 18.6 billion yen. Equity in earnings or losses of affiliates and land sale of Taiwan subsidiary, plus 20.3 billion yen, Forex impact, negative 6.1 billion yen, and tariff effect, negative 13.4 billion yen. Next, the environmental changes in 2025 and initiatives to be taken in 2026. Please refer to page 8. The U.S. tax-related cost increase, as well as the stagnating market, has caused major changes in U.S. business profitability structure from assumptions used for the midterm plan. U.S. tariffs in 2025 had an impact of 17.1 billion yen. In 26, we are looking at 54.3 billion yen profit is being pushed down. And the economy is quite unclear. Demand is weak. And the U.S. market sales are is trending below our initial assumptions. Based on this, as I said at the outset, in 2025, we have started a cross-business cost structure reform. 2026, through these reforms, we will secure profitability and we will establish a revenue structure for the mid to long term that is not reliant on top-line growth, and we will establish a strong company resilient to change. And then on the right-hand side, you can see some of the specific measures to be taken. Just like last year, market and competitors will be closely observed so that we can have appropriate price pass-through. And in order to reduce cost R&D, we will prioritize investment effects and postpone or halt model development appropriately. And also in the U.S., we have water vehicle, RV, and LSM assembly factories operating. and we will try to reduce manufacturing costs by thoroughly reviewing our procurement costs. At the same time, the IT system introduction may be postponed to further reduce costs. Also, based on the changes in production and sales unit, we will adjust staffing level at the U.S. sites in order to reduce fixed costs. And also, we will try to improve cash flow through improved asset efficiency. And with the effect of this, we are looking at $37 billion in 2026. And also, OLB business in deficit, We will make a decision about making further investments or not in 2026 according to our midterm business plan, but considering the current situation, we will accelerate our review, and we will be able to explain our direction in August. So based on these initiatives, this is our forecast for 2026. Please refer to page 9. For core businesses, increase in sales as well as price strategy and the cost structural reform. We will see an increase year on year in revenue and profit. Revenue, 170% against the previous year at 2,700,000,000,000 yen. Operating income, 142% against the previous year, 180,000,000,000 yen. Operating income rate plus 1.7 point against the previous year, 6.7%. Net profit attributable to owner of parent. 621% against the previous year at 100 billion yen EPS, 621% versus the previous year at 103.05 yen. The exchange rate's use is $1.75 against the euro. Some factors affecting the operating income in 2026, please refer to page 10. Sales effects, plus 108.1 billion yen, and that's a sales effect, plus 39.3 billion. Financial services, plus 8.4 billion. Pricing, which is price increase and rebate, plus 24.2 billion. Others, 36.2 billion yen. Net cost impact, negative 14 billion yen. The breakdown is cost reduction, plus 16.9 billion. Cost increase, minus 30.9 billion yen. R&D expenses will increase, so minus 10.5 billion yen. SD&A increase, minus 4.1 billion yen. Equity in earnings and losses of affiliates, plus 1 billion yen. And Forex impact, plus 10.3 billion yen. Tariff impact, minus 37.2 billion yen is expected. Next, looking at shareholder returns. Please refer to page 11. As announced on February 2nd, considering our business performance and financial soundness, in 2025, year-end dividend is of 10 yen, annual dividend of 35 yen is in the plan. 2026 dividend, based on our plan to increase profit, the annual dividend of 50 yen per share is being planned. and also improvement of cash flow will be done, and we will also aim for flexible acquisition of Treasury stocks. Based on stable and continuous dividend policy, we are aiming for a total payout ratio of 40%. We will continue to increase our corporate value and also return to shareholders. That is all from myself. Thank you very much.

My name is Hashimoto. I will be presenting information by business segment. This is the revenue and operating income by business segment. Please see page 13. In the motorcycle and financial services business segment, revenue was up and profit down. In SPV and robotics business segments, although revenue was down, operating losses were less than prior year. Across marine products, OLC and other products business segments, revenue and profit were down. Next, the 2026 revenue and operating income forecasts by business segment. Please see page 14. From 2026, some segments have been changed. Up to now, robotics had included the UMS business segment. However, this has been transferred to other products. The FY25 numbers on this slide have been retrospectively amended in line with this change. For the 2026 forecast, motorcycle, marine, robotics, and financial services expect an increase in revenue and in income. For SPV and OLV, revenue up and operating losses reduced. And for other products, revenue down and operating losses reduced is our forecast. Now, each business segment in detail. Please see page 15. First, the core business segment of motorcycles. The graph on the left compares in the upper half the total demand in main regions and Yamaha Motors' prior year shipments. The lower half compares the 2026 forecast against prior year. The graph on the right shows the revenues by region. In 2025, although in Vietnam the production and shipment stoppage had an impact, in Indonesia and the Philippines the shipments increased, and revenue was the same level as prior year. In terms of operating income, rising procurement costs, an increase in SG&A costs such as R&D and personnel costs, and the impact of US tariffs resulted in a profit decrease. In 2026, in the Philippines and India, our pursuit of the premium strategy to expand shipments and the recovery in Vietnam means we have planned for an increase in both revenue and profit. I'd like to introduce some new motorcycle products. Please see page 16. In November 2025, we announced, in India, the Yamaha Motors developed electric sports scooter, the Aerox E, and, in a collaborative development with Indian motorcycle startup, River, the EC06. The electric sports scooter Aerox E, as part of our mid-term plan, is one of our high-value added models in line with our premium strategy for ASEAN and emerging countries. In the field of EV, Yamaha Motors is aiming to build a premium image in the Indian market. and the electronic scooter EC06 is based on River's production model and has been developed for a broader customer range. With these products as the core, we will achieve our environmental targets and promote the capturing of EV demand. Next, the core business segment of marine products. Please see page 17. In 2025, in our main market, the United States, with the impact of high prices and interest rates, the total demand was sluggish. In terms of our outboard motors, the small to medium brake horsepower mainly saw a growth in sales exceeding prior year. For outboard motors of 300 brake horsepower or more, the U.S. boat building demand was flat and sales reduced. For water vehicles, due to total demand reduction and increase in market inventory, the sales volume reduced. As a result, the marine products business segment as a whole saw a reduction in revenue. In terms of operating income, with the impact of U.S. tariffs and reduced water vehicle sales volumes, and cost increases through higher costs of sales and R&D cost rises, profit was reduced. For 2026, in terms of demand in the U.S., our main market, the reducing trend has bottomed out and is expected to remain flat. Growth is expected to continue in small to medium outboard motors, and by aiming to expand sales of large outboard motors, leveraging new products for improved maneuverability, our forecast is a rise in revenue and profit. Next, robotics. Please see page 18. In 2025, although revenue was at the same level as prior year, implementation of sales measures with profitability in mind resulted in an improved marginal profitability for mounters, and in addition, reduced manufacturing expenses contributed to an increase in profit. For 2026, as we continue a sales policy that views profit as critical, our forecast includes expanded generative AI-related demand and recovering demand for AI applications, and we expect an increase in revenue and profit. Next, financial services. In 2025, although revenue rose with an increase in retail receivables, the interest rate swap valuation gains in the prior period translated into losses in this period with great impact and profit was reduced. In 2026, in addition to increased retail receivables, the forecast is for a rise in profit due to improved gross profitability. Finally, SPV and OLV business segments. Please see page 19. First, SPV. Although domestic power-assisted bicycles have sold well, we've withdrawn from the overseas completed units business, and therefore the overall sales volume was down, as was revenue. On the other hand, The inventory write-down and fixed assets impairment carried out last year have had an impact, and the operating losses have been reduced. In 2026, sales both domestically and overseas will grow with a forecast of increased revenue and profit. In Germany, from August last year, YMESG has been in operation, and to create synergy, we will progress with building an organisation structure. In OLV, for RV and LSM, there were reduced sales volume and increased R&D and SG&A costs, and by booking the fixed assets impairment that we had built in as a risk, revenue and profit were down. As was explained earlier, the cost structure review, as well as the improved asset efficiencies, will give a 2026 forecast of reduced operating losses. That ends the FY 2025 earnings presentation. Thank you for your attention.