Yamaha Motor Co., Ltd.

Thank you very much for coming to the first half of fiscal year 2026 earning presentation for Yamaha Motor. Before going on into the presentation, I'd like to introduce the presenters for the day. President and CEO and Representative Director Motofumi Shitara Executive Officer Mitsuru Hashimoto After the business results presentation, we will have an explanation about each business segment, and then we will have separate Q&A Zoom sessions for the media and then for analysts and investors. The presentation material has been uploaded onto the Yamaha Motor corporate site. So we now like to move on into the presentation. I am Shitara from Yamaha Motor. Thank you very much for attending the business results presentation for Yamaha Motor despite your very busy schedules. First, I would like to express my heartfelt sympathy to those who have been affected by the recent Kumamoto earthquake. I sincerely hope for the recovery from the disaster as well as a return to daily life for all those who have been affected. The effect of the earthquake on our company is being checked right now, and any matter to be disclosed will be done so swiftly. Now I'd like to move on into the presentation of our business results. First, some key points. Please refer to page four. The first half results following the first quarter, especially in motorcycle businesses, the shipments were strong and that led to higher revenue. And higher unit sales and cost reduction, as well as the favorable foreign exchange situation, has led to increased operational profit. The sales and operational profit, net income, all have hit new records for the first half of the year. In the US, the structural reform is progressing as planned, and in response to unprofitable businesses, we have formulated a structural reform plan for our OLV business, and the details will be explained later. Based on the first half results and second half outlook, we have revised our full year forecast upward. The situation in the Middle East has caused raw material prices to rise and associated with the OLV business reform we have one-time costs which have been incorporated but we will maintain strong sales, offset higher costs by appropriate price pass-throughs and continue cost reduction efforts and aim for record high for the full year operating profit. Concerning dividends, there are no changes from our initial plan. and we aim to conduct flexible share buybacks. Next, unit sales and inventory. Please refer to page 5. On the left hand chart, you see the main product total demand and unit sales versus the previous year. Motorcycles. Continuing from the first quarter in ASEAN, India, and other major markets, we have seen strong wholesale shipments in many areas have exceeded demand. Indonesia, we have prioritized optimizing supply globally. Domestic shipment has remained flat, but retail has exceeded demand. Outboard motors in North America and Europe, the wholesale shipment was flat versus the previous year. Surface Mounters. In the major market, which is China, we have seen orders grow, and we have seen shipments increase year on year. The right-hand side graph looks at a comparison between the market inventory versus the optimum level. Right now, we are seeing strong sales, and in addition to that, we are reducing inventory. Therefore, we are rather lower than the optimum level. We will review the appropriate inventory levels so that we can further improve our cash conversion cycle. Next is the business results overall. Please refer to page 6. Up to the second quarter of fiscal year 2026, revenue was 117% versus the previous year at ¥1,498,000,000. Operating profit 189% versus the previous year at ¥158.5 billion. Operating profit ratio plus 4 percentage points versus the previous year at 10.6%. Profit attributable to owners of parent was 215% versus the previous year at 113.9 billion yen, and earnings per share was 215% versus the previous year at 117.37 yen. The rates used was 158 yen against the dollar and 185 yen against the euro. Next, looking at the operating profit factors. As you can see on page 7, Sales effect, positive 65.7 billion yen Looking at the breakdown, scale effects, positive 29 billion Financial services, positive 4.9 billion Price increase and rebates, which comprises pricing, positive 21.2 billion yen and others, positive 10.6 billion yen The net cost impact, negative 19.6 billion. Looking at the breakdown, cost reduction, positive 9.1 billion. Cost raises, negative 28.7 billion yen. Also with R&D expense reduction, we have a positive 7.3 billion yen. SG&A expenses reduction, positive 5.2 billion. Equity method investment gain and loss and others, positive 5.5 billion. Exchange effects, positive 30.3 billion yen. And tariff effects, negative 20 billion yen. Next, looking at the OLV Business Structural Reform. Please refer to page 8. As measures to improve profitability for ROV business, which had some issues with product competitiveness, we will discontinue in-house production. At the same time, we will optimize human resource allocation and improve production and development, as well as optimize procurement so that we can strengthen our business foundation. With the discontinuation of ROV production, the management resources that have been freed up will be focused in the areas where we can leverage strengths with this ATV and golf carts. ATV, especially for sports type and high-end models, we will further improve our competitiveness and profitability. For golf carts, we will enhance product strength and services so that we can solidify the foundation for earnings. As for our ROV business, we will shift toward a collaborative model with business partners for co-development and OEM supply so that we can seek efficiency. We will maintain our product lineup so that we can continue to develop our multi-product strategy in North America. and through this in 2027 we will drastically improve our profit and in 2028 we aim for a single year profitability. Now the cost for structural reform of 12 billion yen has been included in our revised outlook for the year. Next is our multi-product strategy for the North American market. Please refer to page 9. We are an exceptional company which has a wide variety of product lineup for outdoor leisure, and we have our multi-product strategy in the North American market. In the North American market, there are many multi-dealers which handles a variety of categories and brands. Our multi-product strategy allows us to offer a one-stop access to a broad product lineup and through utilizing our strength that other companies and manufacturers do not have, we will enhance our corporate value. The effect is with the multiple products, we can attract new customers and enhance our market share and through cross-selling, we can increase the number of purchased items and total spending per customers as well as enhance our brand recognition. With this strategy in the North American market, we will increase sales of power sports and marine products overall. Next is the revised forecast for fiscal year 2026. Please refer to page 10. As we've said earlier, we have revised our business outlook upward. Revenue We expect an increase by continual sales growth in all businesses. Operating profit in terms of cost due to the Middle East situation, we are looking at a raw material cost increase and a one-time cost for structural reform. Based on this, to continue to reduce expenses as well as including the forex effect, we will aim for an increased profit. Revenue, 114% versus the previous year at ¥2,900,000,000,000, upbringing profit, 206% against the previous year, ¥260,000,000,000,000, upbringing profit ratio up 4 percentage point at 9%. and profit attributable to owner of parent 170 billion yen, the EPS 175.16 yen. The exchange rate we based this on is for the second whole year is 159 yen against the dollar, 182 yen against the euro. And for revenue, operating profit and EPS, we are expecting them all to hit a record high. Next is the operating profit factors. Please refer to page 11. As you can see, compared to the previous year, sales effect, positive 133.9 billion yen, net cost impact, negative 55.9 billion yen, R&D expense increase, negative 1.8 billion yen, SG&N expense reduction causing positive ¥14.4 billion in equity method investment gain and loss and others positive ¥8.3 billion in exchange rate effects ¥45.9 billion tariff effects and also including the refund of reciprocal tariff we are looking at a negative ¥11.2 billion. Next is our return to our shareholders. Please refer to page 12. For fiscal 2026, as we've been announcing, we are looking at an interim dividend of 25 yen per share and an annual dividend of 50 yen per share. We will aim for a continuous and stable dividend payment, and we will aim for a total payout ratio of 40% or more. We will continue to increase our corporate value and continue to provide return to shareholders. That is all from myself. Thank you very much.

My name is Hashimoto. From myself, I will present the details by business segment. By business segment, these are the revenue and operating profit numbers. Please take a look at page 14. For the motorcycle, marine products, robotics and financial services businesses, revenue and profit were up. For the OLV business, revenue was increased and operating losses were reduced. On other products, there was revenue down but operating losses were narrowed. And in the SPV business, revenue was up but operating losses increased. Next, this is the whole year revised forecast by business. Please see page 15. Excluding OLV and other products businesses, revenue is up year on year. and Operating Profit is also forecasted to rise. In the OLV business, one-time expenses related to structural reforms will occur, so revenue and profit are down. On other products business, revenue is down, but operating losses are narrowed year on year. Here are more details by each business. Please look at page 16. First, one of our core businesses, the motorcycle business. The graph on the left, the upper one, shows the first half year main regions total demand versus Yamaha motor shipments year on year. Below that is the fiscal year revised forecast year on year comparison. The graph on the right shows revenues by region. In the first half year, in India, ASEAN and mainly in emerging markets, our wholesale shipments exceeded demand, resulting in an increase in revenue. In terms of operating profit, due to the Middle Eastern situation, we were impacted by the rise in raw material prices. However, in addition to the rise in sales volume, we were able to implement cost pass-through as well as receive favorable benefit from forex, resulting in an increase in profit. In the second half year, robust demand continues in India and ASEAN countries, Driving shipments growth and our annual sales is expected to exceed our original forecast with an increase in our revenue level. For our operating profit, we expect that the raw material price rises will continue. However, with price pass-throughs as well as expenses reductions, we expect our profit to increase. This is a new motorcycle product that I'd like to introduce to you. Please see page 17. You're seeing here a scooter. This is planned to be launched in August in Japan. It is a light motorcycle class sport scooter, the Aerox ABS. The development concept is the closest scooter to a super sport motorcycle. It gives a manual like sporty handling quality. In addition, there are convenient features and equipment for day to day use. It has high practical value as well as being very rider friendly. For customer segments who are looking for a super sport model, we are offering a broad range of options. By doing so, we create new demand and we will aim to expand Kando experiences. Next, the core business, the marine business. Please see page 18. In the first half year, in our outboard motor main market, the United States, the demand slightly slowed. Yamaha Motor sales also saw the same trend. On the other hand, in non-US regions, particularly in Asia, there was a growth in sales. Therefore, the total sales volumes increased and revenue rose. In terms of operating profit, with the increase in sales and expenses reductions, as well as forex exchange favorability, we saw an increase in profit. From the second half year onward, with the increase in the sales volume of outboard motors, our revenue is expected to rise. In terms of operating profit, although we continue to be impacted by U.S. tariffs, with the rise in sales volume, as well as the reduction in R&D as well as SG&A costs and foreign exchange rates, we will shoot for increased profit. Next, the robotics business. Please see page 19. For Yamaha Motor, our main market is China, which is where we'll focus, where we have the good sales of surface mounters, and we've seen an increase in our revenue level. In terms of operating profit, in addition to the increase in sales, continued expenses control has resulted in a rise in profit. In the second half year, in addition to the increase in sales of surface mounters, semiconductor back-end equipment shipment will progress, which will aid us in fulfilling our pending orders and we expect a rise in revenue and profit. Next, the financial services business. Revenue was increased as a result of the higher receivables balance. In terms of operating profit, in addition to the improved interest rate margins, the absence of last year's interest rate swap valuation losses have resulted in an increase in profit. From the second half year onward, we expect the same trends to continue. We are forecasting an increase in revenue and profit for the year. and finally, the SPV and OLV businesses. Please see page 20. First, the SPV business. As a result of the increase in sales volume of e-kits, we saw a rise in revenue. However, due to procurement costs as well as increases in R&D costs, the operating losses increased. Going forward, We will increase sales volume and therefore revenue focused around e-kits and with expenses reduction we expect to narrow our operating losses. In the OLV business, with the increase in ATV sales, revenue rose. In terms of operating profit, although there was continued impact of tariffs, reduction of SG&A costs as well as the favorable foreign exchange rates narrowed our loss level. In the second half year, solid ATV sales are expected to continue. On the other hand, in addition to the reduction in ROV sales, the impact of tariffs as well as the one-time expenses related to structural reforms of 12 billion yen, by including that in our outlook, we expect revenue and profit to reduce. That concludes the fiscal year 2026 first half earnings presentation. Thank you for your attention. That concludes the fiscal year 2026 first half year earnings presentation. For those of you who have been watching on YouTube live, thank you for joining us.