Yamaha Motor Stock

Thank you very much for coming to the first half of fiscal year 2026 Earnings 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 on to the Yamaha Motor corporate site. So we'd 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 4. 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 U.S., 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 onetime costs, which has been incorporated, but we will maintain strong sales, offset higher costs by appropriate price pass-throughs and continued 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. The 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, 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 JPY 1,498 trillion. Operating profit, 189% versus the previous year at JPY 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 JPY 113.9 billion, and earnings per share was 215% versus the previous year at JPY 117.37. The rates used was JPY 158 against the dollar and JPY 185 against the euro.

Next, looking at the operating profit factors. As you can see on Page 7, sales effect, positive JPY 65.7 billion. Looking at the breakdown, scale effects, positive JPY 29 billion; Financial Services, positive JPY 4.9 billion; price increase and rebates, which comprises pricing, positive JPY 21.2 billion; and others, positive JPY 10.6 billion. The net cost impact, negative JPY 19.6 billion, looking at the breakdown, cost reduction, positive JPY 9.1 billion; cost raises, negative JPY 28.7 billion.

Also with R&D expense reduction, we have a positive JPY 7.3 billion. SG&A expenses reduction, net -- positive JPY 5.2 billion, equity method investment gain and loss and others, positive JPY 5.5 billion; exchange effects, positive JPY 30.3 billion and tariff effects, negative JPY 20 billion.

Next, looking at the OLV business structural reform. Please refer to Page 8. As measures to improve profitability for ROV business, which was -- which had some issues with product competitiveness, we have -- 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 strength with the 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 multiproduct 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 JPY 12 billion has been included in our revised outlook for the year.

Next is our multiproduct 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 multiproduct 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 multiproduct 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 multiproduct -- 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 powersports 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 onetime cost structural reform -- onetime 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 JPY 2.9 trillion; operating profit, 206% against the previous year, JPY 260 billion. Operating profit ratio up 4 percentage points at 9% and profit attributable to owner of parent, JPY 170 billion and EPS, JPY 175.16. The exchange rate we based this on is for the first -- for the second full year is JPY 159 against the dollar, JPY 182 against the euro. And for revenue, operating profit and EPS, we are expecting them all to hit a record high.

Next is the operating factor -- operating profit factors. Please refer to Page 11. As you can see, compared to the previous year, sales effect, positive JPY 133.9 billion, net cost impact, negative JPY 55.9 billion, R&D expense increase, negative JPY 1.8 billion, SG&A expense reduction causing positive JPY 14.4 billion in equity method investment gain and loss and others, positive JPY 8.3 billion in exchange rate effects, JPY 45.9 billion, tariff effects and also including the refund of reciprocal tariff, we are looking at a negative JPY 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 JPY 25 per share and an annual dividend of JPY 50 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 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, onetime 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 are 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 sports scooter, the Aerox ABS. The development concept is the closest scooter to a super sport motorcycle. It gives a manual-like sport 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-U.S. 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 foreign exchange favorability, we saw an increase in profit. From the second half year onwards, 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 onetime expenses related to structural reforms of JPY 12 billion 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. For members of the press, we will now have a Q&A session. Please hold.

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

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.