Summary of Financial Results for the Fiscal Year Ended March 31, 2003 Yamaha Motor raises cash dividends by 2 yen per share, to 10 yen

The Company exceeded 1 trillion yen for net sales, registering an all-time record for profits and significantly reducing interest-bearing debt

In the fiscal year ended March 31, 2003, Yamaha Motor's consolidated net sales increased 7.0 percent from the previous fiscal year, to 1,013.2 billion yen, exceeding 1 trillion yen for the first time in the Company's history and setting a record high for the fourth consecutive year. Consolidated operating income, consolidated recurring profit and consolidated net income totaled 67.7 billion yen, 67.2 billion yen and 25.6 billion yen, respectively, all reaching record highs. Interest-bearing debt decreased significantly -- by 58 billion yen -- from the previous year, to 199.4 billion yen. On the exchange rate front, the yen depreciated by 2 yen against the U.S. dollar (to 123 yen) and by 9 yen against the euro (to 117 yen), respectively, compared with the previous fiscal year.
Because of the record-breaking business performance, the Company will propose a 2 yen increase in cash dividends per share, to 10 yen, which includes an interim dividend of 4 yen per share paid in December 2002, at the Annual Meeting of Shareholders.

The sales increase was mainly attributable to sales growth in almost all business segments, including motorcycles, marine products, and power products. Sales expansion in Asia and North America also contributed to the Company's sales increase.
Broken down by business segment, motorcycle sales rose 6.8 percent from the previous year, to 529.9 billion yen, due to substantial sales growth in Asia, coupled with increased sales in the United States and Japan, all of which exceeded a sales decline in Europe. Performance was especially robust in Asia, where sales rose 33.0 percent. Restructuring the sales network and enhancing sales promotions in main markets, including Indonesia, Thailand and India, in addition to introducing small four-stroke models in those markets, led to the increase.
Marine product sales expanded 12.3 percent, to 211.5 billion yen, reflecting a significant sales increase for environmentally conscious, large outboard motors with more than 200 horsepower, mainly in the United States.
Power product sales rose 4.2 percent, to 190.6 billion yen, due to a sales increase for the expanded lineup of automatic all-terrain vehicle (ATV) models, primarily in the United States.
Sales in other products segment went up slightly from the previous year, to 81.1 billion yen, reflecting a sales increase in the IM (industrial robot) business.
By market segment, sales in North America remained favorable, posting a 7.7 percent increase from the previous year, while sales in Asia also climbed significantly, by 28.4 percent. However, sales in Europe declined 2.0 percent from the previous year.

In terms of profits, consolidated operating income, consolidated recurring profit and consolidated net income registered all-time record highs. These favorable profit results were mainly attributable to such positive factors as: a decrease in cost of sales, amounting to 12.1 billion yen, driven by cost-cutting effects in manufacturing; a sales rise for products with higher profit margins, totaling 13.1 billion yen; and a gain from currency translation into yen, equaling 15.6 billion yen. Increased profits generated by these positive factors exceeded substantially a rise in selling, general and administrative expenses amounting to 10.3 billion yen, thus leading to the record-breaking profit performance.
The number of consolidated subsidiaries stood at 99, an increase of eight from the previous fiscal year-end, while the number of affiliates accounted for by the equity method was 37, an increase of two from the previous fiscal year-end.

Forecasting all-time records for consolidated sales and profits in fiscal 2004

In fiscal 2004, ending March 31, 2004, business conditions are expected to become more demanding, particularly in the United States; however, Yamaha Motor forecasts net sales of 1,030 billion yen, operating income of 68 billion yen, recurring profit of 68 billion yen, and net income of 32 billion yen, all of which would be record highs. The Company will achieve these robust gains by further enhancing its management foundation, pursuant to the new medium-term management plan. In terms of net sales for fiscal 2004, motorcycle sales expansion in Asia and Europe, coupled with other factors, will more than offset declining sales for motorcycles and ATVs in North America.
These business performance forecasts are based on the assumption that the yen will appreciate by 5 yen against the U.S. dollar, to 118 yen, while depreciating 9 yen against the euro, 126 yen.

First-year progress of the new medium-term management plan

Yamaha Motor launched its three-year medium-term management plan, "NEXT 50," in order to create a stronger management foundation ahead of the Company's 50th anniversary in July 2005. By implementing in-house reforms to promote profit-oriented business approaches, and operational reforms, such as improving the cost structure and restructuring the business foundation in the Asian region, the Company has been seeking to achieve numerical targets including net sales of 1,050 billion yen, recurring profit of 65 billion yen, and interest-bearing debt of less than 200 billion yen, by fiscal 2005.

In the first year of the plan, fiscal 2003, net sales exceeded 1 trillion yen, while recurring profit totaled 67.2 billion yen and interest-bearing debt decreased to 199.4 billion yen. Thus, the Company attained the numerical targets set for the second year in fiscal 2003, a year earlier than scheduled.
The Company achieved particularly significant increases in both sales and profits for its mainstay products, including motorcycles, outboard motors and ATVs, by releasing attractive new models. The launch of small four-stroke motorcycle models in the Asian market also pushed up the Company's sales and profits. In terms of reforming low profitability businesses such as the boat business in Japan and the PAS electro-hybrid bicycle business, the Company has been steadily decreasing its losses in these segments through the thoroughgoing reduction of operational costs and expansion of business domains. Furthermore, cost-cutting effects have materialized as planned by promoting the system-supplier system, which integrates manufacturing, development and procurement capabilities based on each motorcycle part system.
Thus, the Company has been steadily transforming itself into a profitable corporate structure by successfully raising its profits amid business conditions less affected by exchange rate fluctuations.

Future Management Policy

Fiscal 2004, ending March 31 2004 -- the second year of the new medium-term management plan -- is the critical, make-or-break year for the plan. Therefore in fiscal 2004, Yamaha Motor is determined to meet the challenge of attaining the same level of sales and profits as in fiscal 2003, even if the North American market slows down.
In fiscal 2004, although profits derived from the North American market are forecast to decline, Yamaha Motor will focus on making up for any losses by increasing profits in businesses and regions outside North America. To this end, the Company will aggressively restructure low profitability businesses, in addition to expanding the business in Asia and working to achieve a 30 percent cost reduction. With these measures, the Company is striving to remain profitable, regardless of any difficulty it may face.
Furthermore, the Company aims to achieve further growth in the next half century after the 50th anniversary by enhancing the financial structure and promoting a growth strategy, both of which are considered key groupwide measures.

Setting stepped-up targets

Yamaha Motor has stepped up its numerical targets for the final year of the new medium-term management plan, ending March 31, 2005. Although Yamaha Motor will first focus on achieving the original targets, the Company then intends to attain yet higher goals for sales and profits, while curtailing interest-bearing debt to below the original target level.