Yamaha Motor (7272) FY2026 Q1 Earnings Report

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Executive Summary

In Q1 of the fiscal year ending December 2026, Yamaha Motor achieved operating income growth exceeding revenue growth, driven by a significant improvement in the profitability of its core Landmobility Business. Revenue was ¥7,301.2B (YoY +16.6%), Operating Income was ¥626.4B (+43.8%), Profit Before Tax was ¥619.4B (+36.4%), and profit for the quarter attributable to owners of the parent was ¥412.6B (+34.5%). The Operating Income margin improved to 8.6% from 7.0% in the same period of the previous year; however, this improvement resulted from the reduction in the SG&A ratio (21.7%, down from 24.8% in the previous year) exceeding the decline in the gross profit margin (29.8%, down from 31.5% in the previous year). It should be noted that the earnings growth was attributable to the cost structure rather than improvements in costs of sales.

Factors Affecting Performance

【Revenue】Consolidated revenue was ¥7,301.2B, an increase of +16.6% YoY. The core Landmobility segment, at ¥4,799.4B (65.7% of total revenue, YoY +23.7%), led overall growth. MarineProducts (¥1,486.0B, +6.0%), FinancialServices (¥302.5B, +8.7%), and Robotics (¥262.6B, +10.2%) also recorded revenue growth. Meanwhile, OutdoorLandVehicle was ¥412.0B, essentially flat with a slight revenue decline of -0.4% YoY.

【Profit and Loss】Operating Income was ¥626.4B (YoY +43.8%). Operating Income in Landmobility increased significantly to ¥489.8B (YoY +76.3%, margin 10.2%), accounting for 78.2% of consolidated Operating Income. FinancialServices also grew to ¥63.6B (+56.8%). In contrast, MarineProducts reported lower Operating Income of ¥159.7B (-19.2%), with its margin declining to 10.7%, while OutdoorLandVehicle recorded a loss of ¥-77.9B, an expansion of the loss from ¥-49.0B in the previous year. The gap between Profit Before Tax and Net Income was attributable to income taxes and other taxes of ¥171.4B (effective tax rate 27.7%); no extraordinary profit or loss factors were identified. In conclusion, the company achieved both revenue and profit growth.

Segment Analysis

Landmobility was the primary contributor to consolidated profit growth, with Revenue of ¥4,799.4B (65.7% of total revenue, YoY +23.7%) and Operating Income of ¥489.8B (YoY +76.3%, margin 10.2%). MarineProducts recorded Revenue of ¥1,486.0B (20.4% of total revenue, YoY +6.0%), but Operating Income declined to ¥159.7B (YoY -19.2%), with its margin decreasing from the previous year. OutdoorLandVehicle reported Revenue of ¥412.0B (5.6% of total revenue, YoY -0.4%), while its Operating Income loss widened to ¥-77.9B from ¥-49.0B in the previous year. FinancialServices demonstrated high profitability, with Revenue of ¥302.5B (YoY +8.7%) and Operating Income of ¥63.6B (YoY +56.8%, margin 21.0%). In addition, beginning in Q1, an organizational reorganization transferred the results of industrial unmanned helicopters and related businesses from Robotics to the “Other” category. Comparisons with the same period of the previous year have been restated based on the revised classification.

Key Financial Metrics

【Profitability】The Operating Income margin improved to 8.6% from 7.0% in the same period of the previous year, while the Net Income margin was 5.7% (based on profit attributable to owners of the parent). The gross profit margin was 29.8%, down from 31.5% in the previous year, and profit growth was achieved through a reduction in the SG&A ratio (21.7%, down from 24.8% in the previous year). 【Cash Flow Quality】Operating Cash Flow (OCF) was limited to ¥55.8B, representing approximately 0.14x profit attributable to owners of the parent of ¥412.6B, a low level. Increases in finance receivables and trade and other receivables placed pressure on OCF. 【Investment Efficiency】Quarterly ROE was 3.7%; annualizing quarterly profit would result in an estimated annualized ROE above this level. Capital expenditures were ¥377.1B, exceeding depreciation and amortization of ¥230.99B, indicating a phase of growth investment. 【Financial Soundness】The Equity Ratio was 37.7%, down from 39.0% at the end of the previous fiscal year, while the current ratio was approximately 149.5%. Total current and non-current bonds and borrowings amounted to ¥11,818B, increasing from the beginning of the period.

Cash Flow Analysis

OCF turned positive at ¥55.8B, compared with ¥-481.3B in the same period of the previous year; however, the delay in converting profit into cash was notable relative to profit attributable to owners of the parent of ¥412.6B. This was attributable to increases of ¥582.5B in finance receivables and ¥549.9B in trade and other receivables, which together absorbed approximately ¥1,132B in cash. Conversely, inventories decreased by ¥307.7B and trade payables increased by ¥250.3B, both of which contributed to higher OCF. Investing Cash Flow was ¥-347.2B, primarily due to capital expenditures of ¥377.1B. Free Cash Flow (OCF + Investing Cash Flow) was negative at ¥-291.4B, indicating that investment activities could not be funded solely through operating activities. This shortfall was covered by Financing Cash Flow of ¥650.3B, including a net increase in short-term borrowings of ¥834.0B and long-term borrowings of ¥910.0B, among other items. Cash and cash equivalents increased from ¥398.9B at the beginning of the period to ¥436.7B. Financing Cash Flow also included an outflow of ¥388.7B for the acquisition of subsidiary interests from non-controlling interests.

Earnings Quality

The earnings growth for the quarter was primarily attributable to the decline in the SG&A ratio, and no temporary extraordinary profit or loss factors were identified. Outside operating activities, finance costs of ¥38.2B exceeded finance income of ¥31.3B, resulting in a slightly negative net finance balance. Share of profit of investments accounted for using the equity method was positive at ¥25.5B, up from ¥16.4B in the previous year, but its contribution relative to Operating Income was limited; the core of earnings was the substantive improvement in the consolidated businesses. Meanwhile, comprehensive income was ¥608.5B (¥571.4B attributable to owners of the parent), exceeding Net Income of ¥448.0B. This was primarily due to a positive foreign currency translation adjustment of ¥145.1B from foreign operations, compared with ¥-381.2B in the same period of the previous year, indicating that favorable foreign exchange movements lifted comprehensive income. The weakness of OCF relative to profit growth and the expansion of accruals due to working capital factors, namely increases in finance receivables and trade and other receivables, should be noted when assessing earnings quality.

Earnings Forecast and Guidance

The full-year company forecast calls for Revenue of ¥27,000B, Operating Income of ¥1,800B (YoY +42.4%), EPS of ¥103.05, and a dividend of ¥50.00. As of the current quarter, there were no revisions to the earnings or dividend forecasts. Q1 progress rates were 27.0% for Revenue and 34.8% for Operating Income, exceeding the standard quarterly progress rate of 25%. Operating Income progress was particularly advanced, suggesting that the improvement in Landmobility profitability is contributing ahead of the full-year plan. However, whether the decline in MarineProducts’ earnings, the widening loss in OutdoorLandVehicle, and the renewed burden from working capital will continue into the second half of the fiscal year and beyond will be key points for assessing full-year achievement.

Shareholder Returns

The full-year dividend forecast is ¥50.00 per share. Based on the average number of shares outstanding during the period of 970,378 thousand shares, the estimated annual total dividend payment is approximately ¥48.5B, resulting in a Payout Ratio of approximately 48.5% against the full-year Net Income forecast of ¥100.0B (a Payout Ratio excluding share repurchases). Dividend payments during Q1 were ¥9.70B, down from ¥24.44B in the same period of the previous year; on the basis of the statement of changes in equity, including dividends paid to non-controlling interests, the amount was ¥17.61B. Cash flow from the acquisition and disposal of treasury shares was effectively zero, and no large-scale share repurchases were identified during the quarter.

Risk Factors

1. Business concentration risk: Landmobility accounts for 78.2% of consolidated Operating Income, creating a structure in which changes in demand, pricing, and the competitive environment in this business could have a significant impact on consolidated earnings.

2. Risk of earnings not converting into cash: OCF was limited to ¥55.8B, representing a low ratio of approximately 0.14x relative to profit attributable to owners of the parent of ¥412.6B. The primary factor was the increase in finance receivables and trade and other receivables (approximately ¥1,132B in total), requiring close monitoring of credit risk and collection management.

3. Risk of deteriorating segment profitability: Although MarineProducts recorded revenue growth, its Operating Income declined by -19.2% and its margin decreased, while OutdoorLandVehicle recorded a loss of ¥-77.9B, an expansion from the previous year. The impact of supply-demand and cost trends in both segments on the consolidated profit margin requires close monitoring.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (manufacturing)

Profitability and Returns

The company exceeds the industry median for both metrics, placing its profitability from the middle to slightly above the middle of the industry.

Growth and Capital Efficiency

The Revenue growth rate exceeds the upper bound of the industry IQR (13.9%), demonstrating a high growth rate within the industry.

※Source: Compiled by the Company

Key Points from the Earnings Results

1. During the quarter, the company achieved Revenue growth of +16.6% and Operating Income growth of +43.8%, exceeding revenue growth. However, the primary factor behind the improvement in the Operating Income margin was the reduction in the SG&A ratio, which exceeded the decline in the gross profit margin; the lack of improvement in the cost structure should be noted when assessing earnings quality.

2. OCF was limited to ¥55.8B, and its ratio to profit attributable to owners of the parent was low. The underlying factor was working capital, namely increases in finance receivables and trade and other receivables, making it important to monitor whether profit growth will be reflected in cash flow going forward.

3. The progress rate against the full-year forecast was 34.8% for Operating Income, and progress based on Net Income was also ahead of the standard pace. However, there was variation among businesses, including lower earnings in MarineProducts and a widening loss in OutdoorLandVehicle. The continuation of segment-specific trends will be a key point in assessing full-year performance.

Theoretical Share Price (Reference Value)

Sensitivity: ¥1,172–¥1,240 at ±1% for the cost of equity, and ¥1,205–¥1,206 at ±0.1 for ω.

Note:

• Net assets as of the quarter-end are used (there is a timing difference relative to the full-year forecast).

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; it is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting professionals as necessary.

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AI Financial Analysis

Executive Summary

Yamaha Motor delivered a strong FY2026 Q1 earnings result, with revenue growth translating into materially faster operating-profit and owner-attributable profit growth. Revenue rose 16.6% year on year to JPY730.1bn. Operating income increased 43.8% to JPY62.6bn. Profit attributable to owners increased 34.5% to JPY41.3bn, and basic EPS rose to JPY42.52 from JPY31.47. The operating margin expanded by 162bp to 8.6% from 7.0% in FY2025 Q1. The net margin attributable to owners improved by 75bp to 5.7% from 4.9%. Gross margin, however, declined by 171bp to 29.8% from 31.5%, indicating that the earnings improvement was driven principally by operating-cost leverage and segment mix rather than gross-margin expansion. SG&A increased only 2.2%, substantially below revenue growth, producing strong incremental operating leverage. Land Mobility was the principal earnings driver, with segment profit up 76.3% year on year. Marine remained highly profitable but experienced a decline in both revenue and segment profit. Outdoor Land Vehicle losses widened, partially offsetting the gains elsewhere. Robotics returned to a modest segment profit, representing a positive turnaround from the prior-year loss. The Q1 operating-income progress rate of 34.8% versus the full-year forecast is 9.8 percentage points above the 25% seasonal benchmark, while revenue progress of 27.0% is modestly ahead of that benchmark. Owner-attributable profit progress is also strong at 41.3% of the full-year forecast, although quarterly cash conversion was weak. Operating cash flow was only JPY5.6bn against JPY44.8bn of quarterly net income, principally due to growth in sales-finance receivables and trade receivables. Free cash flow was negative JPY291.4bn after JPY377.1bn of capital expenditure, and the cash deficit was financed through net debt issuance. The near-term investment case therefore rests on the durability of Land Mobility's profit recovery, the containment of Outdoor Land Vehicle losses, and normalization of working-capital cash absorption.

Profitability Analysis

Annualized DuPont ROE is 13.7%, comprising a 5.7% net profit margin, 0.946x annualized asset turnover, and 2.56x financial leverage. This places ROE in the good 10-15% range, although leverage is an important contributor to shareholder returns. The most notable operational change was margin expansion: operating margin reached 8.6%, up 162bp year on year, while net margin improved 75bp to 5.7%. Gross margin moved in the opposite direction, falling 171bp to 29.8%, so the operating-margin increase came from SG&A discipline and favorable operating mix rather than improved product gross profitability. SG&A rose to JPY158.6bn from JPY155.2bn, an increase of only 2.2% against 16.6% revenue growth. This indicates substantial fixed-cost absorption and operating leverage in the quarter. The tax burden was 0.666, equivalent to a 27.7% effective tax rate, while the interest burden was 0.989, showing that finance costs had only a limited effect on EBIT-to-pre-tax-profit conversion. Equity-method income increased to JPY2.6bn from JPY1.6bn and supported operating income, but represented only 4.1% of consolidated operating income. Segment performance confirms that the core business was Land Mobility, which generated JPY489.8bn of revenue, up 23.7%, and JPY49.0bn of segment profit, up 76.3%; its implied segment margin improved to 10.2% from 7.2%. Marine generated JPY148.6bn of revenue, up 6.0%, but segment profit fell 19.2% to JPY16.0bn, reducing its implied margin to 10.8% from 14.1%. Outdoor Land Vehicle revenue was broadly flat at JPY41.2bn, while its segment loss widened to JPY7.8bn from JPY4.2bn. Robotics revenue increased 10.2% to JPY26.3bn and segment profit turned positive at JPY0.7bn from a JPY0.7bn loss. Financial Services revenue increased 8.7% to JPY30.2bn and segment profit rose 56.8% to JPY6.4bn. The sustainability of the consolidated margin expansion depends on whether Land Mobility can retain its improved profitability while Marine margin pressure and Outdoor Land Vehicle losses are contained.

Growth Assessment

Revenue growth was broad enough to lift consolidated sales by JPY104.2bn year on year, with Land Mobility contributing JPY91.9bn of the increase. Land Mobility therefore accounted for the overwhelming majority of incremental revenue and more than offset weaker profitability in Marine and Outdoor Land Vehicle. Marine's revenue increase was modest relative to the company total, while its profit decline suggests less favorable product, pricing, or cost conditions than in Land Mobility. Outdoor Land Vehicle remains the principal drag on earnings growth because sales were stable but losses deepened. Robotics' return to profit is constructive, but its JPY0.7bn segment profit remains small relative to group earnings. Financial Services' segment profit growth is supportive, though its business model also consumes funding as receivables expand. The full-year forecast calls for revenue of JPY2,700.0bn, operating income of JPY180.0bn, and owner-attributable profit of JPY100.0bn. Q1 revenue represents 27.0% of the full-year plan, 2.0 percentage points above the standard 25% Q1 progress rate. Q1 operating income represents 34.8% of the full-year plan, 9.8 percentage points above the standard rate and close to the threshold for a material early-year outperformance signal. Q1 owner-attributable profit represents 41.3% of forecast, 16.3 percentage points above the standard rate. No forecast revision was announced, which implies management retains caution over demand conditions, foreign exchange, and the remaining businesses despite the strong first-quarter profit outcome. Revenue sustainability should be assessed through Land Mobility volume and pricing resilience, Marine margin recovery, and the pace of improvement in Outdoor Land Vehicle.

Financial Health

Liquidity is adequate, with current assets of JPY1,846.0bn versus current liabilities of JPY1,235.0bn, implying a current ratio of 1.49x. This is below the 1.5x healthy reference point but well above the 1.0x warning threshold. Net working capital was JPY611.0bn at quarter-end. Cash and cash equivalents rose JPY37.8bn from year-end to JPY436.7bn. Balance-sheet leverage nevertheless increased during the quarter: current bonds and borrowings rose to JPY678.2bn from JPY615.8bn, while non-current bonds and borrowings rose to JPY503.6bn from JPY428.5bn. Total interest-bearing borrowings were therefore JPY1,181.8bn, up JPY137.5bn from year-end. Gross borrowings were approximately 0.98x total equity, while the reported debt-to-equity ratio was 1.56x; neither measure breaches the 2.0x aggressive-leverage warning level. Short-term bonds and borrowings of JPY678.2bn are covered by cash of JPY436.7bn plus trade receivables of JPY239.3bn and other current financial assets of JPY55.9bn, although the business also carries substantial sales-finance receivables of JPY481.1bn within current assets. Total liabilities increased JPY179.0bn from year-end, materially faster than the JPY5.1bn increase in total equity. The equity ratio declined to 37.7% from 39.0% a year earlier, reflecting balance-sheet expansion funded partly by debt. Accounts receivable increased 31.7% year on year to JPY239.3bn, a notable movement that requires monitoring because it coincided with a JPY55.0bn operating cash outflow. Sales-finance receivables also increased by JPY58.2bn during the quarter, reinforcing the financing intensity of growth. Property, plant and equipment increased JPY15.2bn from year-end to JPY520.0bn, consistent with ongoing investment. Goodwill and intangible assets were JPY103.1bn, or only 3.3% of total assets, limiting balance-sheet dependence on acquired intangible values. Net defined-benefit liabilities were JPY54.8bn and should remain part of long-term liability monitoring.

Notable B/S Changes

Accounts receivable: +JPY57.5bn (+31.7% YoY) to JPY239.3bn - receivable growth exceeded revenue growth and contributed JPY55.0bn of operating cash outflow; collection quality and customer credit should be monitored. Sales-finance receivables, current: +JPY77.5bn from year-end to JPY481.1bn - expansion supports Financial Services activity but consumes cash and increases credit and funding requirements. Current bonds and borrowings: +JPY62.4bn from year-end to JPY678.2bn - short-term funding increased to support balance-sheet growth and negative free cash flow. Non-current bonds and borrowings: +JPY75.1bn from year-end to JPY503.6bn - longer-term funding also increased, raising total interest-bearing borrowings by JPY137.5bn during Q1. Property, plant and equipment: +JPY15.2bn from year-end to JPY520.0bn - consistent with elevated JPY37.7bn quarterly capital expenditure and ongoing manufacturing investment. Non-controlling interests: -JPY25.5bn from year-end to JPY40.6bn - primarily associated with the JPY38.9bn transaction involving ownership interests in subsidiaries while control was retained.

Cash Flow Quality

Cash-flow quality is the principal financial concern in FY2026 Q1. Operating cash flow was JPY5.6bn, equivalent to only 0.14x quarterly net income of JPY44.8bn and materially below the 0.8x quality threshold. The low conversion was driven primarily by a JPY58.2bn increase in sales-finance receivables and a JPY55.0bn increase in trade and other operating receivables. These receivable movements absorbed more cash than the JPY30.8bn inventory reduction and JPY25.0bn increase in trade payables generated. The inventory reduction is favorable for cash generation, but annualized inventory days of 101 remain above both the 90-day warning level and the 60-day manufacturing efficiency benchmark. High inventory days create risks of future discounting, production adjustment, or inventory valuation pressure if end-market demand weakens. The JPY25.0bn increase in payables supported quarterly operating cash flow, so cash conversion would have been weaker absent supplier financing. The combination of receivable growth, payables growth, and weak OCF-to-income conversion warrants close scrutiny of working-capital normalization in subsequent quarters. Capital expenditure was JPY37.7bn, equal to 5.2% of quarterly revenue, within the typical 3-8% manufacturing range. However, because OCF was minimal, free cash flow was negative JPY291.4bn. Investing cash outflow rose to JPY347.2bn from JPY163.6bn a year earlier, mainly reflecting increased capital expenditure and lower proceeds from investment-security sales. Financing cash inflow of JPY650.3bn funded the negative free cash flow, led by an JPY83.4bn net increase in short-term borrowings and net JPY33.7bn of long-term borrowing proceeds after repayments. Cash rose despite weak internally generated cash, which means quarter-end liquidity improvement was debt-funded rather than operating-cash-funded. The reported accruals ratio of 1.2% remains below the 5% concern threshold, but it does not negate the immediate cash-conversion weakness caused by receivables and financing assets.

Dividend Sustainability

The full-year dividend forecast is JPY50.00 per share against forecast EPS of JPY103.05, implying a prospective dividend payout ratio of approximately 48.5%. This is below the 60% sustainability benchmark and is supported by a substantial retained-earnings balance of JPY981.0bn. Q1 dividends paid to owners were JPY9.7bn, below Q1 owner-attributable profit of JPY41.3bn. However, quarterly free cash flow was negative JPY291.4bn, so dividends and capital investment were not covered by internally generated cash in the period. Financing inflows, rather than free cash flow, supported cash balances and capital allocation during Q1. Dividend sustainability is consequently more dependent on receivable collections, inventory discipline, and full-year operating cash-flow recovery than on reported Q1 earnings alone. No dividend forecast revision was announced. There were no share buybacks in the quarter, so the prospective shareholder-return assessment is appropriately focused on the dividend payout ratio rather than a total return ratio.

Risk Assessment

Business risks include Land Mobility concentration: the segment generated JPY49.0bn of JPY62.6bn consolidated operating income, so any downturn in motorcycle, mobility, or export demand would have a disproportionate effect on group earnings., Outdoor Land Vehicle profitability: the segment loss widened to JPY7.8bn despite stable revenue, creating execution risk around product mix, pricing, production costs, and demand recovery., Marine margin pressure: Marine segment profit declined 19.2% and implied margin fell to 10.8% from 14.1%, which could constrain consolidated margins if the trend persists., Manufacturing inventory risk: annualized inventory days of 101 exceed the 90-day warning level, increasing exposure to demand volatility, discounting, model-cycle obsolescence, and production-adjustment costs., Demand, foreign-exchange, commodity-cost, supply-chain, regulatory, product-quality, and recall risks are material for a global powersports and marine manufacturer..

Financial risks include Earnings-quality alert: OCF/net income was 0.14x, as receivables and sales-finance receivables absorbed substantial cash despite strong reported earnings., Funding dependence: negative JPY291.4bn free cash flow was covered by JPY650.3bn of financing inflow, while total interest-bearing borrowings increased by JPY137.5bn from year-end., Receivables risk: trade receivables increased 31.7% year on year to JPY239.3bn, and sales-finance receivables increased JPY58.2bn during Q1, raising credit, collection, and funding exposure., Capital structure: the equity ratio declined to 37.7%, while liabilities expanded substantially faster than equity during the quarter., Foreign-currency translation movements added JPY145.1bn to OCI, highlighting the sensitivity of reported equity and comprehensive income to exchange-rate movements..

Key concerns include Highest priority: conversion of strong operating profit into cash, particularly the timing and collectability of sales-finance and trade receivables., High priority: whether inventory days decline from 101 without requiring margin-dilutive clearance activity., High priority: whether Land Mobility's 10.2% segment margin can be sustained and whether Marine margin deterioration stabilizes., Medium-high priority: the scale and duration of Outdoor Land Vehicle losses., Medium priority: the ability to reduce debt-funded free-cash-flow deficits as capital expenditure and financing receivables grow..

Investment Implications

Key takeaways include Revenue increased 16.6%, operating income increased 43.8%, and owner-attributable profit increased 34.5%, demonstrating strong Q1 operating momentum., Operating margin expanded 162bp to 8.6% because SG&A growth of 2.2% remained far below revenue growth, despite a 171bp gross-margin decline., Land Mobility is the core earnings engine, while Outdoor Land Vehicle losses and Marine margin contraction are the major offsets., Q1 operating-income and owner-attributable-profit progress versus full-year guidance are strong at 34.8% and 41.3%, respectively., Cash conversion is weak: OCF/net income was 0.14x and free cash flow was negative JPY291.4bn, requiring debt-funded financing., The prospective JPY50 per-share dividend implies a 48.5% payout ratio versus forecast EPS and appears earnings-covered, subject to full-year cash-flow recovery..

Metrics to watch include Land Mobility revenue growth and segment margin, Marine segment margin and profit trajectory, Outdoor Land Vehicle segment loss reduction, Operating cash flow relative to net income, Sales-finance receivable and trade-receivable growth, Annualized inventory days and inventory liquidation without gross-margin erosion, Capital expenditure, free cash flow, and net borrowing trends, Progress against FY2026 revenue, operating-income, and EPS guidance.

Regarding relative positioning, Yamaha Motor combines a good annualized ROE of 13.7% and an 8.6% operating margin with strong Q1 operating leverage, placing profitability in a solid range for a global manufacturing company. Relative positioning is tempered by inventory days above manufacturing benchmarks, weak quarterly cash conversion, and a higher reliance on debt to fund receivables, capital expenditure, and cash generation in the period.