Summary of Financial Results for the Fiscal Year Ended March 31, 2004 Record high sales and profits, with an increased dividend payout for the second consecutive year

The Company extended its net sales for the fifth straight year, while expanding profits for the third consecutive year, thus significantly enhancing its financial structure.

Yamaha Motor's consolidated net sales for the fiscal year ended March 31, 2004 increased 0.7 percent from the previous fiscal year, to 1,020.3 billion yen. In terms of profits, consolidated operating income, consolidated recurring profit and consolidated net income all rose - by 8.1 percent to 73.1 billion yen, by 7.5 percent to 72.3 billion yen and by 57.0 percent to 40.1 billion yen, respectively. During the fiscal year under review, with the appreciation of the yen against the U.S. dollar, the Company strove to reduce inventory in North America, its largest market. Against this backdrop, net sales increased for the fifth consecutive year, while profits rose for the third consecutive year. The gains in net sales and profits pushed both figures to record highs for the second consecutive year.

Meanwhile, interest-bearing debt decreased by 80.9 billion yen from the previous fiscal year, to 118.5 billion yen. The equity ratio rose 9.7 percentage points, to 35.5 percent, resulting from the conversion of bonds amounting to 40.4 billion yen during the period, which reflected a rise in the Company's stock price. Due to this excellent business performance and Yamaha Motor's enhanced financial structure, the Company will propose a 2 yen increase in dividend payout at the Annual Meeting of Shareholders for the second consecutive year, raising annual cash dividends per share to 12 yen.
On the exchange rate front, compared with the previous fiscal year, the yen appreciated by 9 yen against the U.S. dollar, to 114 yen, and depreciated by 11 yen against the euro, to 128 yen.

The slight increase in net sales was mainly attributable to growth in motorcycle sales and a dramatic expansion in the "other products" segment, including the IM (industrial robot) business, which offset a negligible decline in marine product sales and a decrease in power product sales.
Broken down by business segment, motorcycle sales rose 1.1 percent from the previous fiscal year, to 535.9 billion yen, led by sales expansion in Asia and favorable sales performance in Europe, reflecting the weaker euro against the yen. The motorcycle sales gains exceeded declines in Japan and North America. Marine product sales fell 0.7 percent, to 210.0 billion yen, reflecting a decrease in boat sales in Japan, and the negative impact of currency translation on outboard motor sales in North America, although outboard motor sales in Europe increased. Power product sales decreased 4.8 percent, to 181.5 billion yen, primarily due to a decline in mainstay all-terrain vehicle (ATV) sales. Sales in the "other products" segment rose 14.4 percent, to 92.8 billion yen. This was due to a significant increase in surface mounter sales, which raised total sales in the IM business sharply from the previous fiscal year - by 44.4 percent - to 33.5 billion yen.

By market segment, sales in Europe increased 12.6 percent from the previous fiscal year, to 237.1 billion yen, and sales in Asia climbed 10.3 percent, to 191.9 billion yen. Sales in "other" areas also rose, by 4.6 percent, to 90.2 billion yen. However, sales in Japan declined 5.1 percent, to 153.8 billion yen, while sales in North America fell 8.7 percent, to 347.3 billion yen, reflecting the negative impact of currency translation, and shipment adjustments made due to the inventory reduction.

Regarding profits, operating income in the motorcycle business, marine business and other products business, including the IM business, all rose - by 7.4 percent, 7.3 percent and 55.9 percent, respectively. By market, operating income jumped about 150 percent in Asia and about 290 percent in Europe. Despite negative factors including a decline in income from the previous year, amounting to 17.6 billion yen, due to a change in the product mix, and a loss from currency translation into yen equaling 1.6 billion yen, operating income, recurring profit and net income registered all-time record highs. These favorable results are attributable to cost reductions achieved through manufacturing reform, totaling 20.0 billion yen, and the curtailment of selling, general and administrative expenses, amounting to 4.7 billion yen. Effective net income, excluding the extraordinary income resulting from the return of the substitutional portion of the Company's employee pension fund, rose 31.1 percent from the previous year, to 33.5 billion yen, also registering a record high.
At the fiscal year-end, the number of consolidated subsidiaries stood at 97, a decrease of two from the previous fiscal year-end, while the number of affiliates accounted for by the equity method was 41, an increase of four from the previous fiscal year-end.

Yamaha Motor is implementing its medium-term management plan "NEXT 50" from April 2002 through March 2005, in order to transform itself into a company capable of steadily generating profits, even at an exchange rate of 100 yen, both to the U.S. dollar and the euro. During the course of NEXT 50, the Company has been making all-out, groupwide efforts to reach the plan's targets, focusing on improving the profitability of existing businesses; solidifying the foundation of businesses in Asian countries; promoting a growth strategy; and enhancing its financial structure.
In fiscal 2003, the first year of NEXT 50, the Company successfully launched its drive toward creating a more profitable structure, by introducing attractive products in the motorcycle, ATV and outboard motor segments, while achieving substantial cost-cutting through the System Supplier system, which integrates manufacturing, development and procurement functions. These efforts significantly contributed to the Company's outstanding results for the period: exceeding one trillion yen in net sales, doubling recurring profit from the prior term, to 67.2 billion yen, and reducing interest-bearing debt to under 200 billion yen.
In fiscal 2004, the second year of the plan, the Company took on the challenge of trying to better the previous year's record-high results, while promoting inventory reduction in the highly lucrative North American market as the yen appreciated against the U.S. dollar. Due to the success of these efforts, net sales exceeded one trillion yen for the second consecutive year; recurring profit increased 7.5 percent, to 72.3 billion yen, and interest-bearing debt decreased to below 120 billion yen. In terms of specific operations and markets, these excellent business results were mainly attributable to the growth of the motorcycle business in Asia, improved profitability in Europe, and expansion of the IM business, combined with cost reductions and reforms in low profitability businesses, which together more than offset decreases in sales and profits in the North American market. Thus, the Company has been steadily establishing a profitable corporate structure, achieving the upgraded targets set for the final year of the NEXT 50 plan one year ahead of schedule.
In the next term, the final year of the NEXT 50 plan, the Company will strive to completely resolve key medium-term management issues, seeking to ingrain a profitable corporate structure in Yamaha Motor's "DNA."

(Completely resolving medium-term management issues)

(1)	To improve profitability, the Company will make an all-out effort to create systems that keep mainstay products at a competitive advantage in its core businesses, including motorcycles, outboard motors, ATVs, and IM (industrial robots), while achieving far-reaching cost reductions and returning low profitability businesses to the black.
(2)	To further grow the motorcycle business in Asia, the Company will strive to launch new products, strengthen the sales network, and expand sales through a branding campaign in ASEAN countries. The Company also will work hard to restructure the motorcycle market in India, while formulating and implementing a business strategy for China.
(3)	In promoting a growth strategy, the Company will focus on developing and popularizing electric vehicles, and will move to full-scale operation in its botanical biotechnology-related business.
(4)	To enhance its financial structure, the Company will continue to promote SCM activities and the effective utilization of tangible fixed assets by strengthening operational management from the consolidated business reform perspective.

The Company aims to increase net sales for the sixth consecutive year, and to expand operating income and recurring profit, each for the fourth consecutive year, on the basis of a 12-month accounting period.

In the next fiscal year, the Company will change its closing date, moving the fiscal year-end from March 31 to December 31. As a result, the number of months in the next fiscal year will vary within the Yamaha Motor Group: 12 months as usual for group companies in Europe and Asia; and an irregular period of nine months for parent company Yamaha Motor and group companies in Japan and North America. Focused on attaining all the official targets specified in the medium-term management plan, Yamaha Motor expects to achieve 920.0 billion yen in net sales; 57.0 billion yen in operating income; 57.0 billion yen in recurring profit; and 30.0 billion yen in net income. When converted to the normal 12-month accounting period used in previous terms (April 1 through March 31of the following year), these figures translate to 1,070.0 billion yen in net sales; 74.0 billion yen in operating income; 73.0 billion yen in recurring profit; and 38.0 billion yen in net income. As such, the Company aims to increase net sales for the sixth consecutive year and to expand operating income and recurring profit, each for the fourth consecutive year, thus exceeding the upgraded targets set for the final year of the medium-term management plan.
Net income, excluding extraordinary income due to the return of the substitutional portion of the Company's pension fund, is also forecast to rise from the effective figure for this term, registering a record high for the fourth consecutive year. With this profits projection as the backdrop, the Company plans to pay cash dividends of 10 yen per share for the next fiscal year, ending December 31, 2004. This figure was calculated on the basis of the profits to be generated during an irregular nine-month accounting period. If the next fiscal year were the normal 12-month accounting period, the Company would pay cash dividends of 12 yen per share.
All of the business performance forecasts highlighted above are based on the assumption that one U.S. dollar will trade at 105 yen over the period (a nine yen appreciation from the previous year), and one euro will equal 128 yen (the same as the previous year's level).

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