News Release

Consolidated Results for Fiscal Year 2018

Revenues for FY 2018 were 796.6 billion JPY, a 4.0% increase from the previous year (766.1 billion JPY). Ordinary income was 13.9 billion JPY, a 19.5% decrease from the previous year (17.3 billion JPY), with an ROS of 1.8%. Net profit was 2.1 billion JPY, a 80.4% decrease from the previous year (10.8 billion JPY). In addition, revenue from international operations was 415.1 billion JPY, a 6.3% increase from the previous year (390.4 billion JPY). International operations accounted for 52.1% of consolidated revenue.

FY 2018 Consolidated Results (millions JPY)

For developed countries in the global economy during fiscal year 2018, the US maintained strong growth despite slowing real estate and capital spending, mainly due to improved employment levels and consumer spending. The European economy stagnated slightly, affected by negative corporate sentiment based on uncertainty from US-China economic relations and decreasing exports from a drop in overseas demand. In China, there was a gradual decline in growth due to decreasing investment in infrastructure and consumer spending, which had up until now bolstered the economy. For Japan, there was a temporary decline due to multiple natural disasters, but economic growth eventually recovered because of a rise in domestic demand, which came from capital investment and improved employment and earnings. The world economy will continue to be influenced by US economic policies and its trade relations with China, as well as negotiations for Britain’s exit from the European Union. In such a challenging economic climate, the Yanmar Group continued to focus on the following key strategies to achieve growth.

In FY 2018, international demand for engines continued to be strong in China, Europe, and North America, leading to increased revenue. In the construction business, North America and Europe continued to show strong demand with increased demand in China for small construction equipment for urban construction, leading to increased revenue. In the agricultural business, while demand in Thailand for ag equipment recovered, policy changes in China resulted in less demand for ag equipment, leading to a decrease in revenues.

For the domestic market, agricultural business revenues increased helped by tractor sales. Construction business revenues also increased due to a strong real estate market, demand for new development and disaster recovery efforts. In the energy system business, while flooding resulted in a negative impact on heating, ventilation and air conditioner (HVAC) sales, demand for greater emergency generation capacity drove growth in sales in the generator business. Based on the performances of these businesses, revenue for FY2018 marked the highest in Yanmar's history.

Outlook for Fiscal Year 2019

For the domestic market, demand for construction equipment and gas heat pumps is expected to increase. For international markets, demand in Europe for construction equipment is expected to remain strong, despite a tightening of emissions regulations for industrial engines. Growth is expected in North America and Southeast Asia for industrial engines and construction equipment.

Under these circumstances, revenue is expected to increase due to increased production in the engine business, the introduction of the YM tractor in South East Asia in the agricultural business, and the impact of Yanmar Group company, Himoinsa's new North American factory realizing its first full year of operation in the energy system business. Also, the solution business is expected to strengthen due to collaboration with Germany's KKU Group in Europe. International revenues are expected to increase in line with greater international expansion.

Based on these factors, projections for FY 2019 are for revenue of 860 billion JPY (8.0% increase from the previous year), operating income of 20.7 billion JPY (155.4% increase from the previous year), ordinary income of 22 billion JPY (57.8% increase from the previous year), and net profit of 13.3 billion JPY (526.8% increase from the previous year).

FY 2019 Consolidated Projections (millions JPY)

Projections are based on the following exchange rates: 1 USD = 105 JPY, 1 EUR = 125 JPY.

About Yanmar

With beginnings in Osaka, Japan, in 1912, Yanmar was the first to succeed in making a compact diesel engine of a practical size in 1933. Then, with industrial diesel engines as the cornerstone of its enterprise, Yanmar has continued to expand its product range, services, and expertise to deliver total solutions as an industrial equipment manufacturer. As a provider of small and large engines, agricultural machinery and facilities, construction equipment, energy systems, marine equipment, machine tools, and components, Yanmar's global business operations span seven domains.

On land, at sea, and in the city, Yanmar's mission of "providing sustainable solutions focused on the challenges customers face, in food production and harnessing power, thereby enriching people's lives for all our tomorrows" is a testament to Yanmar's determination to provide us with "A Sustainable Future." For more details, please check out the official website of Yanmar Co., Ltd.:

• https://www.yanmar.com/global/about/