Yamaha Motor Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥1.91T
• Operating Income: ¥112.43B
• Net Income: ¥52.55B
• EPS: ¥44.65

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Yamaha Motor (7272) FY2025 Q3 consolidated (IFRS) shows top-line resilience but sharp margin compression. Revenue declined 3.4% YoY to 19,102.72, while operating income fell 44.1% to 1,124.27, indicating pronounced negative operating leverage. Gross margin remained healthy at 33.7%, but the operating margin compressed to 5.9%, suggesting elevated fixed-cost absorption, mix deterioration, or reduced pricing tailwinds versus the prior year. EBITDA was 1,742.58 (9.1% margin), reflecting additional pressure below gross profit due to SG&A and other operating items. Profit before tax was 1,132.11, only slightly above operating income, implying a small net non-operating gain in aggregate. Net income dropped 68.1% to 433.86 (net margin 2.3%), with an elevated effective tax rate of 39.9% and a sizable portion of profit not attributable to owners implied by the difference between PBT, tax, and reported net income. DuPont analysis yields a 3.7% ROE, driven by a low net margin (2.3%), moderate asset turnover (0.694x), and financial leverage of 2.37x. Despite earnings pressure, cash generation was robust: operating cash flow reached 1,918.47 (OCF/NI = 4.42x), and FCF was positive at 963.78. The balance sheet remains solid with total assets of 27,513.46, total equity of 11,600.88 (equity ratio 40.2%), and liabilities of 15,569.15; debt-to-equity is 1.34x on a total liabilities basis. Working capital intensity is notable with inventories at 5,741.05 and receivables at 1,781.86, while current liabilities data is unreported, limiting precise liquidity ratio analysis. Dividends paid in the period were 484.06; the calculated payout ratio is 117.3%, likely inflated by temporarily depressed earnings, while FCF coverage appears comfortable at 1.89x. The quality of earnings looks better than the P&L suggests, given strong OCF relative to net income, but sustainability hinges on margin recovery and inventory discipline. Segment disclosures are not provided here; however, Yamaha Motor’s portfolio exposure (motorcycles, marine, robotics, financial services) typically introduces FX and product-mix sensitivities that can amplify quarter-to-quarter volatility. Key watchpoints include normalization of tax rate, non-controlling interest impact, pricing vs. cost trends, and inventory trajectory into year-end. Overall, the quarter underscores resilient cash flows but weakened profitability, with a need for margin repair to lift ROE above the current subdued level. Data constraints (non-reported items in XBRL) limit granularity on interest burden, current liabilities, and capex, so conclusions focus on available non-zero disclosures.

Profitability Analysis

ROE_decomposition: ROE 3.7% = Net margin 2.3% x Asset turnover 0.694x x Financial leverage 2.37x. The weakest link is net margin, which fell sharply on a modest revenue decline, indicating significant margin compression. margin_quality: Gross margin at 33.7% is respectable, but the operating margin contracted to 5.9% (1,124.27 / 19,102.72). EBITDA margin is 9.1%. The high effective tax rate (39.9%) and the gap between PBT and net income imply elevated below-the-line drag (taxes and likely non-controlling interests), depressing bottom-line margin. operating_leverage: Revenue decreased 3.4% YoY, yet operating income fell 44.1% YoY, indicating strong negative operating leverage. This suggests fixed-cost pressure, adverse mix (e.g., lower-margin products/geographies), or attenuation of prior pricing/FX benefits.

Growth Assessment

revenue_sustainability: Revenue of 19,102.72 declined 3.4% YoY. Without segment detail, sustainability depends on demand in motorcycles and marine, and FX dynamics. The modest top-line decline contrasts with outsized profit drop, suggesting the revenue base is relatively stable but less profitable. profit_quality: Despite net margin compression, OCF is strong at 1,918.47 (4.42x NI), indicating non-cash charges and working capital contributed positively. EBITDA of 1,742.58 supports underlying earnings capacity, but conversion to net income is currently constrained by taxes and NCI. outlook: A margin-led recovery is required for profit growth. Key drivers will be pricing discipline, cost normalization (materials/logistics), product mix (marine/high-value vehicles/robotics), and FX stabilization. Absent a rebound in operating margin and a more normal tax/NCI profile, EPS growth may lag revenue.

Financial Health

liquidity: Current ratio and quick ratio are not calculable due to unreported current liabilities and cash. Working capital reported as 16,083.68 reflects current assets, but without current liabilities disclosure, precise liquidity assessment is limited. solvency: Equity ratio is 40.2%, with total liabilities of 15,569.15 against total assets of 27,513.46. Debt-to-equity of 1.34x (total liabilities basis) indicates a balanced capital structure for a manufacturing company. Interest coverage cannot be computed due to unreported interest expense; however, PBT near operating income suggests limited net financial burden this period. capital_structure: Total equity totals 11,600.88, supported by retained earnings of 9,791.88 and capital surplus of 633.75. Financial leverage of 2.37x (DuPont) aligns with the reported equity ratio, indicating moderate leverage with capacity to support operations.

Cash Flow Quality

earnings_quality: OCF/NI at 4.42x indicates strong cash earnings relative to accounting profit, mitigating concerns from the low net margin. D&A of 618.31 substantiates non-cash add-backs, while working capital appears to have been a positive contributor given the magnitude of OCF versus EBITDA. FCF_analysis: FCF is positive at 963.78 after investing CF of -954.69. Capex is unreported, but aggregate investing outflows were well covered by OCF, supporting balance sheet self-funding. working_capital: Inventories are sizable at 5,741.05 and receivables at 1,781.86, with payables at 1,499.22. Without prior-period benchmarks, we cannot quantify turns or days; however, given revenue softness, inventory discipline is a key focus to avoid cash drag in subsequent quarters.

Dividend Sustainability

payout_ratio_assessment: The calculated payout ratio is 117.3%, elevated due to depressed quarterly earnings. This single-period reading likely overstates structural payout pressure if margins normalize. FCF_coverage: FCF coverage of dividends is 1.89x, and operating CF of 1,918.47 comfortably exceeds dividends paid of 484.06, indicating near-term cash coverage is solid. policy_outlook: While DPS figures are unreported here, Yamaha Motor historically targets stable to progressive shareholder returns. Sustainability hinges on restoring operating margin and maintaining strong cash conversion; a normalized tax/NCI burden would also support coverage.

Risk Assessment

Business Risks:

• Demand cyclicality in core end markets (motorcycles, marine, power products)
• Adverse product/geographic mix impacting margins
• Raw material and logistics cost volatility
• FX fluctuations affecting both revenue and cost base
• Competitive pricing pressure across emerging markets
• Execution risk in higher-value segments (marine, robotics) to offset volume weakness

Financial Risks:

• Elevated effective tax rate compressing net income
• Potential non-controlling interest drag on attributable profit
• Inventory build risk if demand slows further
• Limited visibility on interest burden and current liabilities due to unreported items
• Possible working capital volatility impacting OCF in subsequent periods

Key Concerns:

• Sharp operating margin compression despite modest revenue decline
• Low ROE at 3.7% relative to capital intensity
• High payout ratio on depressed earnings, requiring margin recovery to normalize

Investment Implications

Key Takeaways:

• Top line relatively resilient but profitability under significant pressure
• OCF strength (OCF/NI 4.42x) indicates solid cash conversion despite weak net income
• Balance sheet remains sound with a 40.2% equity ratio and moderate leverage
• FCF positive at 963.78 supports ongoing shareholder returns near term
• Margin repair is the principal driver for ROE improvement from 3.7%

Metrics to Watch:

• Operating margin trajectory and EBITDA margin recovery
• Inventory levels and turns vs. sales trends
• Tax rate normalization and non-controlling interest impact on net income
• FX rates versus key currencies and pricing actions
• Order intake and mix in higher-margin businesses (e.g., marine/robotics)
• OCF/NI ratio and FCF sustainability
• Any disclosed capex and its alignment with growth/margin initiatives

Relative Positioning: Within Japanese transportation and machinery peers, Yamaha Motor exhibits stronger cash conversion this quarter but weaker profitability momentum, resulting in a subdued ROE relative to capital employed; balance sheet strength is a relative positive versus more leveraged peers, but near-term operating leverage is unfavorable until margins recover.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis