Yamaha Motor Management Plan

Yamaha Motor Co., Ltd. has formulated its New Medium-term Management Plan for the three-year period from 2016. The New Medium-term Management Plan builds on the targets of the current (2013-2015) Medium-term Management Plan (being "improving corporate value by achieving sustainable growth") and increases the earning power of existing businesses, to increase growth investment and stock dividends while securing a more stable financial foundation. Based on this, Yamaha Motor is embarking on a new mission of "further new growth from net sales of 2 trillion yen and an operating income ratio standard of 10%" by 2018, aiming to evolve into a unique company that continues to achieve dynamic milestones. Medium-term Management Plan Targets 2012 Results 2015 Forecast 2018 Goals Consolidated net sales 1,207.7 billion yen 1,650.0 billion yen 2,000.0 billion yen Consolidated operating income 18.6 billion yen 125.0 billion yen 180.0 billion yen Consolidated operating income margin 1.5% 7.6% 9.0% Equity ratio 32.0% 38.5% 42.5% ROE (3-year average) 6.5% 13.8% 15.0% Cost reduction (3 years) 34.0 billion yen 42.5 billion yen 60.0 billion yen Foreign exchange ($/€) 80/103 119/134 115/130 Financial Strategies - Increasing the earning power (marginal profit, investment efficiency, and business efficiency) of existing businesses, and generate new growth from a stable financial foundation Increase investment and stock dividends - Creating a stable financial foundation Aim for equity ratio of 42.5%, ROE of 15%, and income per share of 300 yen or more. - Investing management resources into growth strategies Increase efficiency of existing businesses and investing 130.0 billion yen in new growth strategies. - Bolstering stock dividends Increase dividend payout ratio from the previous "20% or more" to "30%." - Expanding financing business Support for existing businesses. Expansion focusing on North America, and work towards a business with a receivable balance of 300.0 billion yen. Management Strategies ■ Business areas and growth strategies: "Promoting 4 growth strategies in 3 business areas" Within the business areas of "fulfilling lifestyles," "enjoyment in personal mobility," and "innovative technologies that harmonize with people, the Earth and society", promoting growth strategies in "the growing world of personal mobility", "competing in the 3-trillion-yen global marine market," "solutions business", and "foundational technology development". ■ Product competitiveness: "The source of brand power and earning power" Increasing product competitiveness through new concepts, technology that creates exhilaration and trust among customers, refined designs, and marketing abilities to launch 270 new models. ■ Global management: "Development of human resources who embody the YAMAHA brand" Further advancing global management by initiatives such as increasing the proportion of overseas production, and strengthening diversity through increasing the appointments of local human resources staff and female managerial staff. ■ Cost reductions: "Aiming for a 5% reduction in material purchase costs" Increasing platform model competitiveness, expanding global sourcing layout initiatives, and advancing theoretical-value-based production and logistics. Key Business Strategies ■ Motorcycle business: "Moving towards highly-efficient business management" - Promoting the building of a stable profit structure through high management efficiency and product competitiveness regardless of unit volume. - ASEAN: "Promoting platform strategies, capturing market share and high profitability" Delivering products "promptly", "quickly", and with "freshness" to diversifying customers. - India: "Expanding product lineup, achieving stable profit through volume scale" Launching emerging-market strategy models for mass market areas, developing regional sales networks, and strengthening customer contact points. - Developed markets: "Communicating high brand power, achieving stable profit through structural reform" Establishing a unique brand in each aspect of the lineup from commuter to supersport models. Sales network policies that respond to customer tastes, and advancing customer development on the theme of "from tangibles to intangibles". ■ Marine business: "Competing in the 3-trillion-yen global marine market" - "From an engine supplier to a system supplier" Deepening tie-ups with boat builders, promoting our engine/peripheral equipment and hull strategy, and providing broader corporate value. - "An even stronger global brand, the No. 1 brand" Creating a dominant brand through "overall business strength" as a system supplier, "reliability" as a product/business partner, and "network strength" from global development, manufacturing, sales, and service activities. ■ Power products and other business segments: "Creating a unique business model" - RV - Becoming the third core business: "Building a business model with net sales of 200.0 billion yen and an operating income ratio of 10%" Accelerating the launch of products which thoroughly increase differentiation and added value in the ROV market, which continues to expand. - IM - Becoming a high-profitability business by leveraging its strengths: "Building a business model with net sales of 60.0 billion yen and an operating income ratio of 20%" Targeting fields of strength (automotive and home appliances) through fast-moving management that unifies development, manufacturing, and sales. - UMS - Taking on the challenge of global growth: "Building a business model with net sales of 10.0 billion yen in the global market" Advancing the transition to a business model of "product sales + solutions", development of global markets, and technology development (toll roads, increases in autonomy, safety measures, etc.)