Yamaha Corporation · TSE:7951
Yamaha — FY2008 Earnings Presentation
39 slides from Yamaha's earnings presentation, May 1, 2008
Slide 1: Analyst and Investor Briefing on the Fiscal Year Ended March 31, 2008
Analyst and Investor Briefing on the Fiscal Year Ended March 31, 2008 (FY2008.3) May 1, 2008 YAMAHA CORPORATION
Slide 2: FY2008.3 Results Summary
FY2008.3 Results Summary Sales declined slightly year-on-year, but operating income increased. Net income rose year-on-year due to increased operating income and gain on sales of shares in Yamaha Motor Co., Ltd. Sales and operating income were both lower than 3Q projections (issued on February 6,
Slide 3: Performance in FY2008.3
Performance in FY2008.3 ¾Sales declined year-on-year, while operating income rose. Sales and operating income were both lower than previous projections. (Billions of yen) Previous FY2007.3 FY2008.3 Increase/ Increase/ Results Results projections decrease decrease (Feb. 6, 2008) Net sales 550.4 548.8
Slide 4: Performance by Business Segment in FY2008.3
Performance by Business Segment in FY2008.3 Net Sales Operating Income 550.4 548.8 (-0.3%) 554.0 (-0.9%) (Billions of yen) Recreation & others 50.2 47.4 (-5.5) 47.5 (-0.2) Recreation Lifestyle- & others related 46.6 45.5 (-2.3) 46.0 (-1.0) 32.8 0.6 33.5 1.0 related products Lifestyle- 54.8 45.0 (-17
Slide 5: Musical Instruments
Musical Instruments 4Q Overview FY2008.3 Overview • Sales and income rose year-on-year • Discounting the effects of exchange rates, actual 4Q Discounting the impact of exchange rates, actual sales sales were at a similar level to the previous year. increased 2.8% year-on-year. Actual sales were slig
Slide 6: Musical Instruments: Sales by Region (FY2007.3/FY2008.3)
Musical Instruments: Sales by Region (FY2007.3/FY2008.3) Japan • Actual year-on-year change, discounting impact of (Billions of yen) exchange rates 150 136.5 135.0 Japan (-1%) , North America (-3%) , 100 Europe (+4%), China (+20%), Other regions (+18%) 50 0 FY2007.3 FY2008.3 (Billions of yen) North
Slide 7: Musical Instruments: Sales by Product (FY2007.3/FY2008.3)
Musical Instruments: Sales by Product (FY2007.3/FY2008.3) (Billions of yen) Electronic Musical Instruments Pianos (Billions of yen) (Excluding Electones) 73.8 79.6 80 60 53.4 +2% 54.6 +8% 60 40 40 20 20 0 0 FY2007.3 FY2008.3 FY2007.3 FY2008.3 (Units) Piano sales FY2007.3 FY2008.3 volumes Professiona
Slide 8: AV/IT
AV/IT 4Q Overview FY2008.3 Overview • Actual 4Q sales were lower than previous projections, • Sales and income declined year-on-year. but only slightly down on the previous year. • Discounting the impact of exchange rates, actual sales Operating income declined year-on-year. fell 5.5%. • YSP shipmen
Slide 9: Electronic Equipment & Metal Products
Electronic Equipment & Metal Products 4Q Overview FY2008.3 Overview • Sales declined year-on-year in conjunction with the • Semiconductor sales and income declined year- handover of electronic metal products business. on-year. Sales were lower than previous projections, while income was higher. • In
Slide 10: Lifestyle-Related Products
Lifestyle-Related Products 4Q Overview FY2008.3 Overview • Sales were lower than previous projections, • Sales and income declined year-on-year. while income was higher. • Sales fell in the face of fewer housing starts due to delays • New housing starts continued to decline. in confirming constructi
Slide 11: Recreation
Recreation 4Q Overview FY2008.3 Overview • Sales and income were both lower than previous • Sales declined year-on-year due to the handover of projections. four facilities, but operating income improved. • Katsuragi focused on hosting the Yamaha Ladies Open, • Sales for the remaining two facilities
Slide 12: Others
Others 4Q Overview FY2008.3 Overview • Sales were in line with previous projections. • Sales and income increased year-on-year • Income was lower than previous projections, due to • Automobile interior wood components business delay in improving yields for magnesium molded parts. became more profita
Slide 13: Progress in the First Year of the YGP2010 Medium-Term Business Plan
Progress in the First Year of the “YGP2010” Medium-Term Business Plan 1. Growth in “The Sound Company” Business Domain Key Measures Progress Expand piano business through “Total -Launched expansion project and started new product development Piano Strategy” -Prepared for introduction of new marketin
Slide 14: Progress in the First Year of the YGP2010 Medium-Term Business Plan (2)
Progress in the First Year of the YGP2010 Medium-Term Business Plan 2. Greater Profitability in the “Diversification” Business Domain Key measures Progress Handover of four facilities in recreation -Handover completed on October 1 business Handover of electronic metal products -Handover completed on
Slide 15: Forecast of Business Performance in FY2009.3
Forecast of Business Performance in FY2009.3 (Billions of yen) Increase/decrease in sales (億円)(-8.8 YoY) FY2008.3 FY2009.3 Increase/ Results Forecasts decrease •Effect of business handover -14.4 •Effect of exchange rates -19.4 Net sales 548.8 540.0 - 1.6% Increase in actual sales +25.0 (+4.7%) Opera
Slide 16: Forecast of Performance by Business Segment in FY2009.3
Forecast of Performance by Business Segment in FY2009.3 (Billions Net Sales Operating of yen) 548.8 540.0 (-1.6%) Income Others 47.4 (-10.3) Lifestyle-related 42.5 Others products (+5.4) 45.5 48.0 35.0 2.0 Electronic Electronic (-17.8) 32.8 Lifestyle- 45.0 devices 37.0 0.6 related equipment & 1.5 me
Slide 17: Musical Instruments
Musical Instruments Market Environment Priority Measures • Slowdown in US market • Establish high-profit structure for musical • Polarization of demand (high-added-value products instruments as a core Yamaha business versus low-priced products) • Continually enhance product lineup from • Expansi
Slide 18: Musical Instruments: Sales by Region (FY2008.3/FY2009.3 Projections)
Musical Instruments: Sales by Region (FY2008.3/FY2009.3 Projections) Japan (Billions of yen) • Actual year-on-year change, discounting 150 135.0 137.8 impact of exchange rates Japan (+ 2%), North America (+ 6%), Europe 100 (+ 6%), China (+ 10%), Other regions (+ 8%) 50 0 FY2008.3 FY2009.3 projection
Slide 19: Musical Instruments: Sales by Product (FY2008.3/FY2009.3 Projections)
Musical Instruments: Sales by Product (FY2008.3/FY2009.3 Projections) Pianos Electronic Musical Instruments (Billions of yen) (Billions of (excluding electones) yen) 60 54.6 55.4 80 79.6 79.4 60 40 40 20 20 0 0 FY2008.3 FY2009.3 proj ection (Units) FY2008.3 FY2009.3 proj ection Piano sales FY2008.3
Slide 20: AV/IT
AV/IT Market Environment Priority Measures • Build AV business in line with market changes • Market for AV receivers is growing again in conjunction with expansion of market for flat-panel • Expand sales of mid- and high-level AV TVs receivers • Growth in market for TV peripherals (integrated •
Slide 21: Electronic Devices
Electronic Devices Market Environment Priority Measures • Mobile phone market expanding. Growing • Maintain mobile phone LSI sound chip business needs for high quality and low power by offering added value consumption. • Increase digital amplifier sales and maintain and • Increase in automotive
Slide 22: Lifestyle-Related Products
Lifestyle-Related Products Market Environment Priority Measures • Delays in new housing starts are beginning to • Implement growth strategy focused on kitchen be resolved, but the number of new starts is products declining • Reinforce remodeling business (Develop sales • The industry is shifting
Slide 23: Others
Others Market Environment Priority Measures • Reduce manufacturing costs in metallic molds and • Mobile phone market expanding. Use of digital components businesses by further boosting yields cameras becoming more widespread. and ensuring they can respond smoothly to • Recreation business is exp
Slide 24: Inventories
Inventories (Billions of yen) 82.2 77.9 76.3 75.7 28.6 Goods in 26.3 25.5 23.5 process/materials 3.7 3.9 3.1 3.0 Other products 9.7 9.1 9.1 8.9 AV/IT 38.2 40.6 38.6 40.3 Musical instruments FY2006.3 FY2007.3 FY2008.3 FY2009.3 (projections) ¾ Total inventories as of March 31, 2008 were ¥5.9 billion l
Slide 25: Capital Expenditure/Depreciation/R&D Expenses
Capital Expenditure/Depreciation/R&D Expenses (Billions of yen) Capital Expenditure/ Depreciation 32.0 25.2 24.4 4.8 22.9 4.7 Others (18.9) 4.5 (20.0) 3.5 (20.3) (21.0) Electronic 4.4 2.4 3.2 equipment & 4.4 2.0 metal products 5.5 1.5 AV/IT 1.1 16.5 19.3 Musical 14.8 instruments 11.9 FY2006.3 FY2007
Slide 26: Balance Sheet Summary
Balance Sheet Summary (Billions of yen) As of March As of March As of March As of March 31, 31, 2006 31, 2007 31, 2008 2009 (projections) Cash and bank deposits 36.4 46.7 104.0* 79.9 Accounts & notes 70.3 76.6 65.1 71.6 receivable Inventories 77.9 82.2 76.3 75.7 Other current assets 24.8 25.5 30.3 2
Slide 27: Return to Shareholders
Return to Shareholders ¾A per-share dividend of ¥55 is planned for FY2009.3 (regular dividend ¥35, special dividend ¥20) ¾A share buyback worth ¥18 billion is planned for FY2009.3 Per-share 5555.3 (Yen) dividend 50 Consolidated earnings/ dividend ratio Special 22.5 dividend 20 20 26.1 21.1 15 16.6 1
Slide 28: Slide 28
Slide 29: Appendix
Appendix •Performance in the Fourth Quarter of FY2008.3 •FY2009.3 Non-Operating Income/Loss & Extraordinary Income/Loss •Elements of Balance Sheet Change •Musical Instrument Sales in the Japanese Market •Musical Instrument Sales in the North American Market •Musical Instrument Sales in the European
Slide 30: Performance in the Fourth Quarter of FY2008.3
Performance in the Fourth Quarter of FY2008.3 ¾Fourth quarter sales and operating income were lower than previous projections (Billions of yen) Previous Increase/ FY2007.3 FY2008.3 Increase/ decrease 4Q results 4Q results projections against decrease projections (Feb. 6, 2008) Net sales 133.9 119.9
Slide 31: FY2009.3 Non-Operating Income/Loss & Extraordinary Income/Loss
FY2009.3 Non-Operating Income/Loss & Extraordinary Income/Loss FY2007.3 results FY2008.3 results FY2009.3 projections (Billions of yen) Non-operating income (loss) •Yamaha Motor Co., Ltd. •Yamaha Motor Co., Ltd. dividend 1.7 dividend 1.7 Equity method 0.1 0 income 17.8 Net financial income 0.1 2.9 1
Slide 32: Elements of Balance Sheet Change
Elements of Balance Sheet Change Notes & accounts -11.5 receivable Other current assets -5.9 +4.8 Investment securities -40.5 (including Yamaha Motor Co., Ltd. -26.9) Inventories +57.3 Effect of business handover -3.8 •Income taxes payable +8.9 •Deferred income taxes •Yamaha Motor Co., Gain on sale
Slide 33: Musical Instrument Sales in the Japanese Market
Musical Instrument Sales in the Japanese Market Although electronic pianos and wind instruments showed strong growth amid generally declining demand for musical instruments, sales of large keyboard instruments (pianos, electronic organs) faced an uphill struggle, and overall Yamaha musical instrumen
Slide 34: Musical Instrument Sales in the North American Market
Musical Instrument Sales in the North American Market Piano sales struggled in the face of the housing market situation. Sales of low-priced keyboard products also fell as mass merchandisers scaled back musical instrument stocks. However, sales of musical instruments for school use were at a similar
Slide 35: Musical Instrument Sales in the European Market
Musical Instrument Sales in the European Market Although the impact of the economic slowdown was felt in the second half of fiscal 2007, full-year results were slightly better than those for the previous year. Growth in Eastern Europe made up for sluggishness in the UK, Germany, France and other maj
Slide 36: Musical Instrument Sales in the Chinese Market
Musical Instrument Sales in the Chinese Market Due to progress in developing sales networks and enhancement of local production capabilities, piano sales grew by 30% and drove overall performance. Following acoustic pianos, electronic pianos and wind instruments are expected to be key items, and sal
Slide 37: Musical Instrument Sales in Other Markets
Musical Instrument Sales in Other Markets The Asian, Latin American, and Middle East/African markets all achieved double-digit growth. Oceania also achieved growth above last year’s results. In FY2008.3 the Russian market was spun off from our European operation and wholesale sales almost doubled. P
Slide 38: World Market for Professional Audio Equipment
World Market for Professional Audio Equipment Sales are expanding steadily in the professional audio equipment market, driven by a focus on digital mixers. Output-side products achieved significant year-on-year growth. Sales of professional audio equipment in musical instrument stores also rose year
Slide 39: In this report, the figures forecast for the Company’s future performance have been calculated
In this report, the figures forecast for the Company’s future performance have been calculated on the basis of information currently available to Yamaha and the Yamaha Group. Forecasts are, therefore, subject to risks and uncertainties. Accordingly, actual performance may differ greatly from our pre