Yamaha Motor: Emerging Markets Up
It’s tax time once again and the motorcycle manufacturers have started releasing fiscal numbers from this past year as well as projections for what’s looking like a promising 2011 – let’s hope so at least! One of the first to release details was Yamaha Motor Co., Ltd, outlining details of the 2010 fiscal year.
A slight negative effect on net sales was the result of the increasing value of the yen in relation to the dollar and euro. But though this effected net sales in some major markets, new emerging markets, most located in Asia, as well as a boost in outboard motor sales and Chinese surface mounters, resulted in overall net sales to be up by 140.5 billion yen ($1.68 billion U.S.), or a 12.2% gain, from the previous fiscal year to top 1,294.1 billion yen ($15.48 billion U.S.).
"The appreciation of the yen and increasing material costs were factors negatively affecting profits," the Yamaha release stated, "while increase of net sales, decrease in depreciation and personnel expenses achieved through structural reforms, cost cutting, and a recovery in domestic production volumes of motorcycles and outboard motors worked to strengthen profits."
The result was an operating income boost of 113.9 billion yen ($1.36 billion U.S.) to put them 51.3 billion yen into the black, while ordinary income increased by 14.5 billion yen ($173.5 million U.S.) to make 66.1 billion yen ($790.9 million U.S.), while net income jumped up a promising 234.4 billion yen ($2.80 billion U.S.) to equate to 18.3 billion yen ($218.9 million U.S.).
"On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by six yen from the previous fiscal year against the U.S. dollar, to 88 yen, and by 14 yen against the euro, to 116 yen," added the release.
Yamaha Motor Business Segment Results
Emerging markets out East accounted for a big portion of Yamaha’s 2010 growth: "Wholesales in emerging markets including Indonesia, Vietnam and Thailand up 22.8% year to year to 6.56 million units, and wholesales for the segment as a whole including developed countries were up 19.2% to 6.96 million units (record high)" the release continued.
While in emerging markets net sales rose in conjunction with an increase of sales volumes, in developed markets sales volumes declined. This, combined with the gaining value of the yen, pushed net sales down. In addition, production and shipment adjustments were made in the United States in an effort to complete market stock adjustments.
"As a result of these factors, net sales in the motorcycle business segment rose 10.9% year on year to 906.0 billion yen ($10.8 billion U.S.) and operating income increased 46.9 billion yen ($561.1 million U.S.) to 42.7 billion yen ($510.9 million U.S.)," it stated.
In the powersports division, retail sales of ATVs in the United States declined from year to year. However, wholesales rose due to inventory adjustments implemented in the previous year. "Net sales of power products rose 2.4% to 103.0 billion yen ($1.23 billion U.S.) and operating income increased 22.5 billion yen ($269.2 million U.S.) to yield an operating loss of 11.3 billion yen ($135.2 million U.S.)," continued the report.
Yamaha Motor Forecast for the 2011 Fiscal Year
Come 2011 Yamaha Motor Corp expects to see a continued demand increase in emerging markets, particularly in Asia, but also foresees that it will be some time before a full recovery comes from major markets like Europe and North America. The value of the yen is also expected to remain high and raw material prices will continue to rise, thus as a result, the Yamaha expects "the business environment to remain challenging."
As a result, Yamaha will continue its ongoing structural reforms and aims to reduce business costs by reformed management strategies. They forecast that "consolidated business results for fiscal 2011 will be as follows: 1,350 billion yen ($16.15 billion U.S.) in net sales, an increase of 4.3% from fiscal 2010; 53.0 billion yen ($634.1 million U.S.) in operating income, an increase of 3.3%; 55.0 billion yen ($658.07 million U.S.) in ordinary income, a decrease of 16.8%; and 20.0 billion yen ($239.3 million U.S.) in net income, an increase of 9.3%.
These forecasts are based on the assumption that the U.S. dollar will trade at 82 yen during the period (appreciation of six yen from fiscal 2010), and the euro at 110 yen (appreciation of six yen).