Yamaha Motor Co ((JP:7272)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Yamaha Motor Co. revealed a mixed sentiment as the company celebrated significant revenue growth and strategic investments in new technologies, while also grappling with a substantial decline in profits. These challenges were particularly felt in the marine and SPV business sectors, which have been facing notable obstacles.
Increased Revenue in 2024
Yamaha Motor achieved remarkable revenue of JPY2,576.2 billion in 2024, representing a 107% increase compared to the previous year. This impressive growth came despite a reduction in profits, highlighting the company’s ability to drive sales even in challenging conditions.
Motorcycle Business Growth
The earnings call highlighted outstanding growth in the motorcycle segment, particularly in Brazil and India, where unit sales surged. The stable supply of premium models in Indonesia also contributed to this positive trend, indicating strong market demand for Yamaha’s offerings.
2025 Forecast for Higher Revenue and Profits
Looking ahead, Yamaha Motor is optimistic about 2025, forecasting revenue of JPY2.7 trillion and operating income of JPY230 billion. This projection underscores the company’s expectations for continued growth in both revenue and profits.
Investment in New Technologies and Expansion
Yamaha Motor is committed to innovation, planning to increase R&D expenditures by JPY130 billion over the previous medium-term plan. The focus will be on new technologies such as software services and intelligent systems, aiming to drive future growth and competitiveness.
Lower Profits in 2024
Despite revenue growth, Yamaha Motor faced a decline in profits by approximately JPY62 billion from last year. This was primarily due to one-off expenses related to reviewing unprofitable business structures and quality-related provisions linked to recalls.
Marine Business Challenges
The marine business sector encountered difficulties, with reduced operating profits and declining demand. Production was adjusted downward due to inventory corrections, reflecting the challenges faced by this segment.
SPV Business Decline
In 2024, the SPV business experienced a downturn in revenue and profits, affected by prolonged demand stagnation in Europe and costs associated with withdrawing from the North American market.
Impact of One-off Factors
Approximately JPY50 billion of profit loss in 2024 was attributed to transient factors such as business structure reviews and fixed asset impairments, which significantly impacted the company’s bottom line.
Guidance for Future Growth
Yamaha Motor’s guidance for the upcoming fiscal years emphasizes a focus on key financial metrics and strategic initiatives. The company anticipates higher revenues of JPY2.7 trillion and improved profits in 2025, with an operating income ratio of 8.5%. Despite facing challenges like rising raw material and labor costs, Yamaha Motor remains committed to enhancing its core motorcycle business and expects a recovery in the marine sector. The company is also targeting growth in robotics and generative AI markets, particularly looking towards a market recovery in China by the year’s second half.
In conclusion, Yamaha Motor Co.’s earnings call reflects a mixed outlook with strong revenue growth and strategic investments counterbalanced by profit declines due to specific one-off challenges. The company remains optimistic about future growth, driven by technological innovations and market recovery strategies, aiming to overcome current obstacles and enhance its market position.
