Yamaha Motor Aktie

Good afternoon, and thank you very much for attending our presentation today. We would now like to start the Fiscal Year 2026 First Quarter Earnings Presentation for Yamaha Motor. Before the presentation, I would like to introduce the presenter for the day, our Executive Officer, Mitsuru Hashimoto.

Today, we will first have the earnings presentation. And then after that, there will be a detailed explanation by business segment. After that, we will have a Q&A session for the media and then a separate session for analysts and investors through Zoom. The presentation material has been uploaded on the Yamaha Motors corporate website. So then let us start the presentation.

I am Hashimoto from Yamaha Motor. Thank you very much for attending the Yamaha Motor earnings presentation today despite your very busy schedules. I would also like to take this opportunity to express our sincere appreciation for your continued support and understanding for our business operations.

Now I would like to present our business results. First, starting with the key points. Please refer to Page 4. The 2026 results compared to the same period of the previous year, we have seen an increase in revenue and profit. Across our business, especially in motorcycle business, we have seen an increase in sales, which led to growth in revenue. The U.S. tariffs and the rising raw material prices have had an impact. However, with increased sales and appropriate control of expenses and because of the favorable foreign exchange situation, we have seen an increase in profit. Also, as we have presented in the February presentation, the structural reforms in the United States is going as scheduled.

The future outlook reciprocal tariffs have been ruled unconstitutional, and our products have been exempted from the steel and aluminum tariffs. And therefore, we have -- we are expecting a reduction in tariff-related impact. The raw material prices are on the increase and also the unclear situation -- unclear outlook situation will continue. And therefore, however, we have maintained our full year plan. We will not change it, and we will continue to strive to achieve the plan.

The rise in raw material prices as well as raw rare earth elements and semiconductor shortage, because of these, we have tried to turn to alternative component procurement and also cost reduction so that we can minimize the impact. The U.S. structural reform has been carried out at accelerated pace and in order to improve our profitability.

The Middle East situation has had an impact on manufacturing and procurement. However, with the collaboration with our suppliers and also a review of allocation among key sites, we believe that this only has a very limited impact currently. And we will continue our measures, and we will closely monitor the impact on our business performances.

Next, unit sales and inventory. Please refer to Page 5. The table on the left shows the core products, total demand and unit sales and a comparison with the previous year. Our motorcycles in ASEAN and India and other major markets, we have seen a strong wholesale shipment. Last year, the shipment was down in Vietnam, but now the plant operation has normalized and sales is recovering steadily.

Thailand, India, Philippines, demand is growing, and our shipment actually is exceeding that demand growth. Indonesia, the levying of provincial taxes have been delayed, which had a favorable effect on demand and our retail sales increased. Outboard motors in North America and in Europe, the sales has been steady and unit sales has exceeded the previous year.

Looking at the right-hand graph, market inventory is compared with the appropriate level. where market sales is trending well, the inventory level is slightly below the appropriate level. However, we do not want to miss this opportunity. Therefore, we would like to catch up in the production of our products.

Next, the overall business results. Please refer to Page 6. First quarter of 2026, revenue versus the previous year was 117% at JPY 730.1 billion. Operating income against the previous year, 144% at JPY 62.6 billion. Operating income ratio, plus 1.6 points from the previous year at 8.6%. Net income attributable to owners of parent against the previous year was 135% at JPY 41.3 billion. EPS versus the previous year, 135% at JPY 42.52. The actual exchange rates utilized was JPY 157 against the dollar and JPY 184 against the euro.

Moving on to factors behind changes in the operating income. Please refer to Page 7. As you can see, sales effect was plus JPY 24.1 billion. Looking at the breakdown, Scale effects, plus JPY 18.7 billion; Financial Services, plus JPY 2.9 billion, Price Increase Effects and Rebates totaling -- for the pricing was plus JPY 7.1 billion and others was negative JPY 4.6 billion.

Net cost impact, plus JPY 6.8 billion; breakdown, cost reduction, plus JPY 4.3 billion, and cost raises plus JPY 11.1 billion. Also, R&D expenses reduction, plus JPY 900 million. SG&A expenses reduction caused a plus JPY 1.9 billion, equity method investment gain and loss and others, plus JPY 1.8 billion; exchange rate effects, plus JPY 12.3 billion and tariff effects, minus JPY 15.1 billion.

Next, business performance by business segment. Please find details on Page 9. Motorcycle, Robotics and Financial Services. Motorcycle Robotics, Financial Services achieved increases in both revenue and operating income. Marine business operation recorded higher revenue, but tariff pushed down the profit. SPV business also posted revenue growth, while its operating loss remained at the same level as the previous year. Other businesses recorded lower revenue, but higher profit, while OLV reported revenue on par with the previous year, although its profit declined.

Let me walk you through the details of each business segment. First on Motorcycle business on Page 10. Revenue increased due to higher unit sales in developed markets and in ASEAN and India. Operating income also increased, supported by thorough expense control and positive effects from the weaker yen. From the second quarter onward, we will continue working to strengthen our competitiveness by responding steadily to strong demand.

Next, Marine Products. Revenue increased as outboard motor sales remained solid in Europe and North America. Although we reduced R&D and SG&A expenses, operating income declined year-on-year due to higher costs resulting from the U.S. tariffs. As the impact of tariffs is expected to ease from the second quarter onward, we will work to secure profits by maintaining solid sales performance.

Let me introduce our new motorcycle model. Please take a look at Page 11. The scooter on this page is Fazzio, a Class-2 moped launched in April in Japan. It has long enjoyed strong popularity in Indonesia, and we decided to respond to the customer demand at home. In addition to its unique and clean design, Fazzio is Yamaha's first domestic model featuring the power assist function that kicks in during initial acceleration as a domestic model. It is a highly attractive model in terms of functionality as well. Through the launch of this model, we aim to create new demand in the domestic business and drive future sales growth.

Let me now discuss Robotics business. Please turn to Page 12. Driven by strong sales of surface mounters, particularly in China, our key market, we recorded higher revenue. Operating income also increased due to higher sales and tighter expense control. Next, on Financial Services. Revenue increased as a result of growth in outstanding receivables. Operating income also increased mainly because no valuation losses were recorded this period on interest rate swaps, which had negative impact results on the previous year's outcome.

Lastly, SPV and OLV businesses on Page 13. First, on SPV business. Although R&D expenses and other costs increased, revenue rose, thanks to higher e-Kit sales. Operating loss remained at the same level as the previous year. As for OLV business, sales of ATV increased due to lower sales of ROV and LSM. However, revenue remained roughly the same as the previous year. In addition, increased R&D expenses and tariff-related impacts pushed down operating income. We will further push the structural reforms in the United States to strengthen our earnings structure.

This concludes our presentation on the financial results for the first quarter of the fiscal year ending December 2026. Thank you very much for your attention.

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 Shitara; Executive Officer and Chief General Manager of Corporate Planning and Finance Center, Mitsuru Hashimoto. Today, President, Shitara 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 on to the Yamaha Motors corporate site.

I am Motofumi Shitara 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 the second quarter announcement, it was a reduction in revenue but increase in profit. Operating income is moving as scheduled. But 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 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 JPY 2.7 trillion, operating income of JPY 180 billion, an increase in revenue and profit.

In terms of shareholders' return, '25 results was -- we had a reduction in net income. Therefore, we have an annual dividend of JPY 35 in our plans. '26, we are expecting an increase in profit. Therefore, we are looking at an annual dividend of JPY 50 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 with -- 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 JPY 2,534.2 billion; operating income, 70% versus the previous year, JPY 126.4 billion; operating income ratio, minus 2 points from the previous year at 5%. Net income attributable to owner of parent, 15% against the previous year at JPY 16.1 billion; EPS, 15% versus the previous year, JPY 16.59. The exchange rates used were JPY 150 against the dollar, JPY 169 against the euro.

Looking at some factors impacting our operating income, please refer to Page 7. As you can see, sales effects, negative JPY 3.5 billion, looking at the breakdown, scale effects, negative JPY 7.3 billion; Financial services, positive JPY 1.6 billion; price increase and rebate, which comprises pricing, plus JPY 43.3 billion; others, negative JPY 41.1 billion. Net cost impact, negative JPY 9.2 billion, looking at the breakdown, cost reduction, positive JPY 20.9 billion; cost increases negative JPY 30.1 billion. R&D expenses have increased negative JPY 24.7 billion. SG&A increased negative JPY 18.6 billion. Equity in earnings or losses of affiliates and land sale of Taiwan subsidiary, plus JPY 20.3 billion; ForEx impact, negative JPY 6.1 billion and tariff effect, negative JPY 13.4 billion.

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 JPY 17.1 billion. In '26, we are looking at JPY 54.3 billion profit is being pushed down. And the economy is quite unclear. Demand is weak and the U.S. market sales 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 that 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, and we will try to reduce manufacturing cost 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 cost. And also, we will try to improve cash flow through improved asset efficiency. And with the effect of this, we are looking at JPY 37 billion in 2026. And also OLV 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, 107% against the previous year at JPY 2,700 billion; operating income, 142% against the previous year, JPY 180 billion; operating income rate plus 1.7 points against the previous year, 6.7%. Net profit attributable to owner of parent, 621% against the previous year at JPY 100 billion; EPS, 621% versus the previous year at JPY 103.05. The exchange rates used is JPY 155 against the dollar and JPY 175 against the euro.

Some factors affecting the operating income in 2026, please refer to Page 10. Sales effect, plus 10 -- excuse me, JPY 108.1 billion, and that's scales effect, plus JPY 39.3 billion. Financial services, plus JPY 8.4 billion; pricing, which is price increase and rebate, plus JPY 24.2 billion; others, JPY 36.2 billion. Net cost impact, negative JPY 14 billion. The breakdown is cost reduction, plus JPY 16.9 billion; cost increase, minus JPY 30.9 billion. R&D expenses will increase, so minus JPY 10.5 billion; SG&A increase, minus JPY 4.1 billion; equity in earnings and losses of affiliates plus -- excuse me, JPY 1 billion and ForEx impact, plus JPY 10.3 billion; tariff impact, minus JPY 37.2 billion is expected.

Next, looking at shareholder returns. Please refer to Page 11. As announced on February 2, considering our business performance and financial soundness in 2025, year-end dividend of JPY 10, annual dividend of JPY 35 is in the plan. 2026 dividend based on our plan to increase profit, the annual dividend of JPY 50 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 for 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 FY '25 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 and increase in SG&A costs such as R&D and personnel costs and the impact of U.S. 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 EC-06. The electric sports scooter, Indian AEROX E as part of our midterm 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, EC-06 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 cost 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 asset 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 organization structure. In OLB, 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.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you very much for attending our briefing today. We'd now like to start Yamaha Motor Company's Third Quarter of Fiscal Year 2025 Earnings Presentation. Before going on into the presentation, I'd like to introduce the presenter, Executive Officer and Chief General Manager of Corporate Planning and Finance Center, Mitsuru Hashimoto.

First, he will make an earnings presentation, and then he will go into details by business segment. And then after that, we will have a Q&A session for the media and then for analysts and investors. The presentation materials are available on our corporate website.

So we now would like to start the presentation.

I am Hashimoto from Yamaha Motor. Thank you very much for attending this presentation despite your very busy schedule. I would also like to take this opportunity to thank you for your continued understanding and support to our daily business operations. Now allow me to start my presentation.

First, some key points. Please refer to Page 4. Our third quarter performance maintained the trend from the first half of the year. In terms of revenue, it is in line with the previous year, but operating income declined. In terms of revenue, in our core business, we have seen steady performance, especially in our motorcycle business in the third quarter alone, we have achieved increase in revenue and profit.

However, on operating income, we have booked impairment losses on fixed assets in OLV business, which we have been incorporated as risks. We have also seen the U.S. tariff impact becoming apparent, and we have seen a decline in operating income. As for our business result forecast for the fiscal year 2025, it remains unchanged. Business conditions are still challenging. But through rigorous management of costs, we will continue to promote select and focus initiatives to seek mid- to long-term growth.

Next, unit sales and inventory levels. Please refer to Page 5. On the left-hand side table, you will be able to see the total demand and unit sales for our main products compared with the previous year. Yamaha's motorcycle business in Indonesia, Thailand and the Philippines have exceeded market demand and remains strong. In the latest 3 months, in India, the performance was better than last year. And in Brazil, it was comparable to the previous year. So sales in main markets are on a steady recovery track.

Outboard motors, Yamaha's sales in North America, especially in the mid- to small horsepower range, it was quite steady. In Europe, in all horsepower ranges was better than the previous year. Inventory levels, currently, the retail is moving very steadily in Brazil, India and the Philippines. And therefore, the inventory levels are rather tight.

But we will be looking closely on the supply and demand trend in each region so that we can control inventory levels appropriately and maintain stable supply. Next, business results. Please refer to Page 6. In the third quarter, our revenue compared to the previous year was 97% at JPY 1,910.3 billion. Operating income, 56% against the previous year at JPY 112.4 billion. Operating income ratio compared to the previous year, minus 4.3 points at 5.9%.

Net income attributable to owners of parent compared to the previous year, 32% at JPY 43.4 billion. EPS, 32% against the previous year at JPY 44.65. The effective exchange rate we used was JPY 148 against the dollar and JPY 166 against the euro.

Next, our operating income factors. Please refer to Page 7. As you can see, sales effect was minus JPY 14.6 billion. But if you look at the breakdown, scale effects was minus JPY 12 billion; Financial Services, plus JPY 1 billion; pricing, which is price increase plus rebates, was plus JPY 38.9 billion and others, minus JPY 42.4 billion.

The net cost impact was minus JPY 8.5 billion. Looking at the breakdown, cost reductions, plus JPY 14.7 billion, but with cost increases, minus JPY 23.3 billion. With an increase in R&D expenses, minus JPY 22.4 billion, with an increase in SG&A expenses, minus JPY 17.6 billion.

Equity method investment gain and loss and others, minus JPY 10.8 billion. Exchange rate impact was minus JPY 11.3 billion and tariff effects, minus JPY 3.4 billion. Next, our mid- to long-term initiatives for growth.

Please refer to Page 8. Our company is holding exhibits at the Japan Mobility Show 2025, which is now being held at Tokyo Big site. The Yamaha booth has as its theme, Feel. Move. And we have 16 total models, including 6 world premier models, which is being showcased for the first time.

Electrification, hydrogen and other multi-pathway initiatives are introduced through our concept models. We will continue to strengthen competitiveness in our core business segments through strategic investments by promoting new value creation.

Next, details by business segment. Third quarter revenue and operating income. Please refer to Page 10.

The businesses of Motorcycle, Marine Products, OLV, Robotics, Financial Services and others marked lower revenue and lower income. SPV business revenue declined and its operating loss was reduced compared to the previous year.

The core business, MC business and Marine business. The motorcycle business maintained the unit sales and revenue on par with the previous year. While the currencies of emerging economies are on the path of recovery, the operating profit of MC business declined due to deteriorating model mix and cost increase caused by the inflationary impact.

On the other hand, in the third quarter alone, MC business achieved increase in revenue and operating income, securing stable profits even under difficult business conditions, and it will continue to support the sustainable growth of the company as a whole.

Next, Marine business. Revenue and operating income exceeded the previous year's result with the strong outdoor outboard motor sales in Europe and the U.S., but due to the lower sales of motor vehicles and revenue declined. And the fourth quarter, we will work to secure stable profits by implementing countermeasures against the tariffs and by prioritizing our activities. Now let me introduce a new motorcycle. Please refer to Page 12. In October, we launched the motorcycle super sports model, YZF-R9, ABS in Japan. It embodies the strongest truck performance in the middle class to offer both the biggest excitement and the familiarity to caters to riders regardless of their driving skills and the state of they are in.

Next, motor vehicle, and let me introduce another new product. Please refer to Page 13. The new product, CrossWave, is the biggest in size in the industry with the multifunctional capability to be launched next year in the U.S., four people can get on board, and it has large storage space and stable deck. Accessories for fishing can be installed. It's great not only for cruising, but also for fishing with comfort.

We aim to win customers with this product in the PWC Fishing Category that is gaining popularity today. Next, SPV business and Robotics business. Please refer to Page 14. In the SPV business, domestic sales of electronic electric-assisted bicycles and e-Kits increased, but its revenue decreased due to withdrawal from the finished bicycle business in some of its overseas markets last year and other optimization measures of sales areas on the other hand, operating income increased due to rebound from inventory valuation reductions of last year and the reduction in SG&A expenses.

Following the acquisition of Brose E-kit subsidiary, its business was integrated in the newly established company, Yamaha Motor e-bike Systems, and it began its full-scale operations in August. In then SPV business, through selection and concentration, we aim to further improve profitability and competitiveness.

Next, in the Robotics business, the sales of semiconductor manufacturing back-end process manufacturing equipment for generative AI and advanced packaging increased, but sales of mounters fell below that of the previous year. As a result, its revenue remained at the same level as the previous year.

And as for its operating income, the marginal profit ratio improved as a result of sales measures aiming for profitability. But due to the increase in the allocation of company-wide expenses as well as G&A expenses, operating income declined.

Lastly, OLV business and Financial Services business. Please refer to Page 15. In the OLV business, unit sales of RV and LSM declined and R&D and SG&A expenses increased and an impairment loss on fixed assets, which had been factored in as a risk was recorded. And as a result, both revenue and operating income decreased. We will continue to review our cost structure and improve asset efficiency.

Next, in the Financial Services business, despite an increase in sales finance receivables, revenue remained nearly the same as the previous year due to the impact of foreign exchange rates. And operating income decreased as the valuation gain on interest rate swaps recorded in the previous term turned into a valuation loss in this time.

And this concludes the explanation for each business segment. The third quarter was largely in line with plan, and we will continue to operate steadily according to the plan for the remaining 3 months so that we can maintain a stable revenue base and ensure sound business operations.

And that concludes the fiscal 2025 December results announcement. Thank you very much for your attention.

And that concludes the announcement of the third quarter result in December 2025. And thank you very much for your attention.

Ladies and gentlemen, thank you all for taking time out of your busy schedules to attend Yamaha Motor's briefing on the first half earnings for the fiscal year ending December 2025. I am Kurabe from the Corporate Communications Department, and I'm honored to serve as your MC today. Before starting the presentation, allow me to introduce today's participants. Motofumi Shitara, President, CEO and Representative Director of Yamaha Motor; and Mitsuru Hashimoto, Executive Officer of Yamaha Motor. Today, an overview of our financial results will be presented followed by details of each business segment. After this session, a separate Q&A session will be held via Zoom for the press, analysts and investors. Presentation material is also available on Yamaha Motor's corporate site. Without further ado, let's start the program.

This is Shitara of Yamaha Motor. Thank you very much for your attendance today despite your very busy schedule. I would also like to express our sincere gratitude for your continued understanding and generous support of our business activities. Now let me start my presentation beginning with an outline of the business results. First some key points of our earnings under review. Please turn to Page 4. During the first half, the impact of additional U.S. tariffs was limited, but our first half results showed decreases in both revenue and profit due to lower unit sales and increases in R&D as well as SG&A expenses. While motorcycle sales were slightly lower than last year, they grew in our key ASEAN markets. Our outboard motor market share in the U.S. also expanded, strengthening the presence of our core business despite challenging market conditions. We will continue to select and focus on key areas, promoting strategic investments for mid- to long-term growth.

While there was some impact on profitability during the period under review, we view this as a critical challenge to sharpen our competitiveness and achieve sustainable growth going forward. Against this backdrop, we are revising our full year earnings forecast downward. Sales will remain on par with last year, but operating income is projected to decrease due to anticipated risk factors, including additional U.S. tariffs. Given the prolonged impact of tariffs and other risk factors, we will review our conventional approach to cost management. By upgrading our company-wide management framework and further selecting and focusing our activities, we will work to quickly improve our profit structure. In the medium to long term, we aim to evolve into a more robust company and maximize corporate value. Regarding shareholder returns, the dividend planned at the beginning of the fiscal year will remain unchanged. Next, on the unit sales and inventory levels. Please turn to Page 5.

The table on the left compares total demand and unit sales by major product with last year's results. Our motorcycle performed well in key markets such as the Philippines and Indonesia. In the first quarter, production and shipments were temporarily suspended in Vietnam, but recovered from the second quarter onwards. In Brazil, sales volume fell below last year's levels as a reaction to the lifting of supply constraints caused by last year's low water levels in the Amazon River. Our sales are progressing in line with initial expectations. Market demand for outboard motors remained sluggish, but last-minute demand ahead of U.S. price revision significantly boosted our shipments from last year, particularly for small and medium horsepower models. The graph on the right compares our market inventory with the desired level. While inventory levels vary across different regions and products, they have now generally settled at appropriate levels.

In Brazil, inventory remained low until the first quarter, but is now at sufficient levels, and we have a system in place to respond to strong demand. Meanwhile, in regions with strong demand such as Vietnam and Thailand, inventory levels remain below the appropriate level. We will continue to monitor supply and demand trends in each region, striving to maintain appropriate inventory levels and ensure a stable supply system. Let's turn to business results during the first half. Please turn to Page 6. For the first half, revenue was JPY 1,277.8 billion, 95% of the previous year. Operating income was JPY 84.1 billion, 55% of the previous year. Operating income ratio was 6.6%, down 4.8 points from the previous year. Profit for the period attributable to owners of the parent was JPY 53.1 billion, 47% of the previous year, and EPS was JPY 54.61, 48% of the previous year. The prevailing exchange rates were JPY 148 to the U.S. dollar and JPY 162 to the euro. Next on the factors behind operating income fluctuations. Please turn to Page 7.

The sales effect had a negative impact of JPY 14.5 billion. The breakdown is minus JPY 11.1 billion from changes in scale, minus JPY 1.2 billion from financial services, plus JPY 24.7 billion from pricing, which is the sum of the price increase effect and rebates and minus JPY 26.8 billion from other factors. The cost impact was minus JPY 6.7 billion, consisting of a positive JPY 10.2 billion from cost reductions and a negative JPY 16.9 billion from cost increases. Increased R&D expenses was minus JPY 17.1 billion. SG&A expenses, minus JPY 16.9 billion and other items, including equity method investment gains and losses, minus JPY 4.1 billion. Foreign exchange impact was minus JPY 10.2 billion and tariffs minus JPY 600 million. Next, on our revised full year forecast for FY 2025. Please turn to Page 8.

Taking into account the current business environment and the full-scale impact of additional U.S. tariffs expected and after the second half, we have revised our earnings forecast downward. While revenue is expected to remain on par with the previous year, operating income is projected to decline due to the negative impact of additional tariffs on marginal profit and increased R&D expenses. Net income has been forecast to reflect these factors as well as the risk of partial reversal of deferred tax assets due to additional U.S. tariffs. Revenue is expected to be JPY 2,570 billion, the same as the previous year. Operating income is forecast at JPY 120 billion, 66% of the previous year. Operating income ratio is expected to be 4.7%, down 2.3 points from the previous year. Net income attributable to owners of the parent is projected at JPY 45 billion, 42% of the previous year, and EPS is expected to be JPY 46.34, 42% of the previous year. The assumed exchange rates are JPY 147 to the U.S. dollar and JPY 161 to the euro.

Let's turn to the factors impacting operating income. Please turn to Page 9. As shown, compared to the last fiscal year, the sales effect is projected to be plus JPY 16.7 billion, the net cost impact, minus JPY 11.3 billion, increased R&D expenses, minus JPY 27.0 billion, increased SG&A expenses, minus JPY 6.3 billion; foreign exchange impact, minus JPY 21.1 billion and tariff impact, including mitigation from price revisions, minus JPY 12.6 billion. Next, on returns to shareholders. Please turn to Page 10. While we have revised our earnings forecast, we will maintain our initial plan for shareholder returns, keeping the annual dividend at JPY 50 per share. Yamaha placed its importance on the management policy of stable and continuous shareholder returns. Our decision also reflects our current financial situation for us to do so. We will continue to aim for a total payout ratio of over 40%, striving to balance improving corporate value with providing returns to shareholders.

Next, I'd like to explain by business segment. So for -- by business segment, the first half revenue and operating income, please refer to Page 12. For motorcycles, Marine, OLV, Financial services and other products businesses all saw a decrease in revenue and operating income. SPV, revenue remained flat. Operating loss was down from the previous year. Robotics business saw an increase in revenue. Operating loss was down from the previous year. Next is the full year revised forecast. Please refer to Page 13. Motorcycle, Marine, Robotics, Financial Services, if you look at the revenue, we expect to be at the same level as last year. Operating income will go down. OLV, both revenue and operating income, we expect this to go down. SPV, we will -- we expect a drop in revenue. However, the operating loss is expected to become smaller than the previous year. Looking at the details by business segment, please refer to Page 14.

First, core business. We look at the motorcycles business. The left-hand graph, the top is the first half total demand in major regions and our shipped amount compared with the previous year. The bottom shows the full year revised forecast versus the previous year. The right-hand graph looks at the revenue by region. In the first half, in developed countries, Indonesia and the Philippines, we have achieved shipments above demand. But in Vietnam and India, the unit sales went down and thus, revenue was down. Operating income, as sales unit decreased and with the weaker emerging countries' currencies, which pushed up procurement costs and also an increase in R&D, personnel expenses and other SG&A, we have seen a drop in operating income. Second half, with the recovery in Vietnam and sound demand continuing in Philippines and Brazil, we expect that the full year sales will be on par with the previous year. Operating income, with the U.S. additional tariff and the weaker emerging country currencies pushing up procurement costs and also with increased R&D expenses, we are expecting a drop in operating income.

I'd like to introduce our new motorcycle product. Please refer to Page 15. In August, in the Philippines, in the scooter premium category, our new model AEROX has been launched. Last year, in Indonesia, the same model was launched and has become very popular. But in the Philippines also, we are expecting this will be favored by many customers. The launch of this popular model, we believe, will drive motorcycle business in the second half. Next, another core business, Marine business. Please refer to Page 16. First half, Outboard motor's major market, the U.S. demand decreased. However, our unit sales in the small and mid horsepower size, we have seen a last-minute demand before price revisions and was above last year. For 300 horsepower and above, our shipment was below last year. However, in retail, just like demand, was flat. Water vehicles, demand dropped and also the market inventory increased, with that, the unit sales went down. And the overall marine business also has seen a decline.

Operating income. Water vehicle unit sales was down and with the increase in R&D expenses as well as a review of procurement prices where we responded flexibly, the cost was increased, and therefore, we have seen a decrease in operating income. From the second half and onward, the F350B sales increase and also with an expansion of our outboard motor lineup, we are expecting that revenue will be maintained on the previous year's level. Operating income, with the U.S. additional tariffs causing a worsening in marginal profit rate and also an increase in R&D expense for future growth, we are expecting a reduction in operating income. The strength and current status of our core businesses. Please refer to Page 17. The business environment is changing drastically, but we are seeing a temporary adjustment period. But our core business is increasing its market presence. In motorcycle business, the sales volume and profitability is growing and improving from the past, and the premium strategy is showing steady effects.

In the current MTP, in our focus markets, we will be steadily raising the ratio of our premium products and the Marine business. The market environment is challenging, but our main market, which is the U.S., we will enhance our shares of outboard motors and water vehicles. In our midterm management plan, we will strengthen competitiveness of our core business. This will be our top priority. In our motorcycle business, we will advance our premium strategy in Marine business, we will promote maximizing customer value. And we will aim to further enhance our presence in the market. Next, SPV and Robotics businesses. Please refer to Page 18. On the left is our SPV business. First half, domestic power-assisted bicycle unit sales due to demand recovery has increased. For e-Kit, in the first half, we have received a significant order and therefore, the unit sales went up. However, because of the impact of model mix, revenue was flat, operating loss shrunk from the previous year.

For the full year forecast, revenue, e-Kit reduction in sales and overseas completed vehicles where we had a withdrawal from the North American market, we expect a decline and also because of the certain fixed asset impairment impact, which were recorded last year, we are expecting a decline in operating loss. On right-hand side, robotics business, the semiconductor back-end process manufacturing equipment for generative AI and advanced packaging, we will see an increase in revenue and also an operating loss has decreased. Second half, a steady demand in generative AI will support us. And for the full year revenue, we believe this will remain flat. But for operating income, of the mounter unit sales will go down and regional sales structure as well as model mix will worsen, and we are expecting a decrease in operating income.

Lastly, OLV business and Financial Services business. Please refer to Page 19. Left-hand side, OLV business. First half, unit sales was down, marginal profit ratio worsened. R&D expenses and SG&A expenses went up, and therefore, we have seen a drop in revenue and profit. In the second half onwards, with the U.S. additional tariff impacts and with the continuing challenging business environment, we are expecting a drop in both revenue and profit. OLV to maintain our competitiveness, we will strengthen our R&D investment, and we will review our cost structure and also improve our asset efficiency. Through such efforts, which are carried out in phases, it may take some time, but we will convert towards a sustainable business foundation.

Next, right-hand side, Financial Services business. In the first half, outstanding foreign currency-denominated receivables increased. But with the yen's appreciation, we have seen a drop in revenue. And also last year, the valuation losses on interest rate swaps -- last year's interest rate drops -- valuation losses have converted into appraisal loss, and therefore, we have seen a drop in revenue and income. For the full year outlook, outstanding balances will remain flat. In the first year, losses from interest rate swap valuation will turn into a -- will have an impact in a drop in operating income. We will continue to watch. Without the interest rate swap valuation effect, we are seeing steady operation activities, and we will continue to look at the credit risk and interest rate fluctuation for a sound business operation. Thank you very much for your attention.

With this, Yamaha Motor's briefing on the first half earnings for the fiscal year ending December 2025 is complete. Thank you very much for you watching this program. For the press, we'll be having a separate Q&A session. So please remain tuned in.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]