PowerSports Business

Sept 4, 2017

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FINANCE 16 • September 4, 2017 • Powersports Business www.PowersportsBusiness.com Japanese parent sees North American motorcycle sales decrease Yamaha Motor Co., Ltd. has announced its consolidated business results for the first half of 2017, and motorcycle net sales were up versus the first half of 2016. Net sales for the company's consolidated accounting period for the first half were 828.1 billion yen, an increase of 49.7 billion yen (6.4 percent) compared with the same period the previous fiscal year. Operating income was 82.2 billion yen, an increase of 16.8 billion yen (25.7 percent); ordinary income was 83.5 billion yen, an increase of 28.2 billion yen (51.1 percent); and net income for the period attributable to parent company shareholders was 60.8 billion yen, an increase of 28.4 billion yen (87.5 percent) compared with the previous fiscal year. Each of these income figures was the company's highest ever. In the emerging markets motorcycle busi- ness segment, net sales increased compared with the same period the previous fiscal year thanks to increased unit sales, and operating income increased significantly thanks to prof- itability improvements in the ASEAN region and through structural reform in Brazil. In the developed markets business, net sales increased compared with the same period the previous fiscal year thanks to increased sales of motor- cycles, marine, industrial machinery and elec- trically power assisted bicycles, etc. In terms of operating income, the effects of increased sales and profitability improvements absorbed the impact of adjustments for unrealized income in the marine products business and recreational off-highway vehicles (ROV) inventory adjust- ment, leading to increased income. As exchange rates were relatively stable, cost reductions through development methods such as for platform and global models and manufacturing methods such as for theoretical- value-based production, the provision of new product value, and product mix and pricing improvements, etc., have led to progress in profitability improvements for each business. Net sales of motorcycle products overall were 509.2 billion yen (an increase of 31.7 bil- lion yen or 6.6 percent compared with the same period the previous fiscal year), and operating income was 33.8 billion yen (an increase of 15.7 billion yen or 86.8 percent). Unit sales in emerging markets such as Vietnam, the Philippines, Thailand and Taiwan increased, and despite decreasing in Indonesia due to the market slump there, the unit sales figure increased overall. Net sales increased, and operating income increased significantly thanks to the effects of product mix improve- ments and cost reductions. Regarding unit sales in developed markets, sales in Europe were on a similar level to the previous year — despite the launch of new products such as the MAX series — due to the impact of environmental regulations. In North America, sales decreased due to weakening demand, leading to an overall decrease in sales. Net sales were on a similar level to the previous year thanks to product mix improvements, and operating income moved into the black. POWER PRODUCTS Net sales for the entire power products segment were 67.0 billion yen (a decrease of 2.8 billion yen or 4.0 percent compared with the same period the previous fiscal year), and operating income was 1.0 billion yen (a decrease of 1.7 billion yen or 64.2 percent). Sales and income decreased due to the impact of inventory adjustment in recreational off- highway vehicle (ROV) products. MARINE Net sales across the entire marine business seg- ment were 179.7 billion yen (an increase of 9.4 billion yen or 5.5 percent compared with the same period the previous fiscal year), and oper- ating income was 36.9 billion yen (a decrease of 1.4 billion yen or 3.5 percent). Net sales increased thanks to healthy unit sales in North America, but operating income decreased due to the remaining effects of adjustments for unrealized income, increased research and development expenses for the system supplier strategy, etc. PSB Yamaha Motor Co. reports first half earnings results Stock Price Percent Company Ticker 8/11/17 Change Spy Inc. XSPY $0.06 20.0% Speedway Motorsports, inc. TRK $20.92 12.8% MarineMax, Inc. HZO $15.45 5.5% ArvinMeritor ARM $18.59 4.6% Dover Corporation DOV $85.05 2.6% Polaris Industries, Inc. PII $89.35 -5.3% CDK Global CDK $61.29 -5.8% Universal Technical Institute UTI $3.42 -7.3% Brunswick Corp. BC $54.78 -9.0% Cooper Tire & Rubber CTB $33.80 -12.4% POWERSPORTS BUSINESS WINNERS AND LOSERS MARKET WATCH Change 8/11/17 from 7/21 % Change Powersports Business Index 264.616 -12.38 -4.47% Dow Jones Index 190.120 2.42 1.29% S&P 500 Index 166.161 -2.12 -1.26% Source: Wells Fargo Securities LLC 0 50 100 150 200 250 300 1/20/17 2/22/17 3/10/17 4/7/17 5/4/17 5/19/17 6/16/17 7/21/17 8/11/17 PSB INDEXED DOW JONES INDEXED S&P 500 INDEXED STOCK MARKET ACTIVITY NORTHWEST -0.7% Parts Department -7.8% Service Department 1.2% Major Units – 0.0% Overall WEST -3.3% Parts Department -7.0% Service Department -0.9% Major Units -2.2% Overall MIDWEST -2.0% Parts Department -0.9% Service Department 2.6% Major Units 2.0% Overall NORTHEAST -7.0% Parts Department -7.6% Service Department -2.7% Major Units -4.0% Overall SOUTH -8.2% Parts Department -7.5% Service Department -2.6% Major Units -3.4% Overall UNITED STATES -4.5% Parts Department -6.0% Service Department -0.8% Major Units -1.8% Overall DEALER FINANCIAL SNAPSHOT STOCK MARKET WATCH JULY 2017 Same Store Sales for 1,642 CDK Global Rec- reation dealers were down 1.8 percent overall in July, compared to the same month in 2016. The Midwest saw the only positive increase overall, up 2 percent, while the Northeast saw the biggest decline, down 4 percent overall. The South, West and Northeast experienced decreases in all four categories. PARTS SALES 638 dealers were up in parts and 1,004 down. SERVICE SALES In service, 638 dealers were up and 964 down. MAJOR UNIT SALES Major units saw 671 dealers up and 750 down. Though motorcycle and scooter sales in Europe were flat, Yamaha saw an overall increase in motorcycle sales for the first half of the year. Photo courtesy Yamaha Motor Europe FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: cdkrecreation.com/dataservices

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