Yamaha Corporation · TSE:7951
Yamaha — H1 FY2005 Earnings Presentation
35 slides from Yamaha's earnings presentation, Nov 2, 2004
Slide 1: Analyst and Investor Briefing on the First Half of the Fiscal Year Ending March 31, 2005
Analyst and Investor Briefing on the First Half of the Fiscal Year Ending March 31, 2005 (April 1, 2004 to September 30, 2004) November 2, 2004 YAMAHA CORPORATION
Slide 2: Overview of Performance in the Interim Period
Overview of Performance in the Interim Period Results for 2Q Net sales and income were below the level for 2Q of the previous fiscal year and below the projections announced on August 2, 2004. Operating income was substantially below 2Q 2003, because of decrease of sales in semiconductors due to
Slide 3: Performance in the Interim Period of FY2005
Performance in the Interim Period of FY2005 ¾ Increase in net sales but decline in income compared with the same period of the previous fiscal year. Net sales and income below August 2 projections. (Billions of Yen) FY2004 Change FY2005 Change from FY2005 (1H) 2Q (1H) (1H) from FY2004(1H) Projection
Slide 4: Net Sales by Business Segment in the Interim Period of FY2005
Net Sales by Business Segment in the Interim Period of FY2005 (Billions of Yen) 266.3 268.6 (+0.9%) 272.5 (+2.4) 273.5 267.2 (-2.3%) Recreation & Others 23.6 21.0 (-11.0) 21.0 21.5 21.0 (-2.3) Electronic Equipment and 36.4 38.4 (+5.5) 38.4 41.5 38.4 (-7.5) Metal Products Lifestyle-Related 23.2 21.2
Slide 5: Breakdown of Operating Income in the Interim Period of FY2005
Breakdown of Operating Income in the Interim Period of FY2005 (Billions of Yen) Decrease in Decrease Manufactur- in Gross ing Costs Profit Gain on Increase in SG&A Foreign Exchange +3.4 (3.1) Expenses (3.2) +0.7 26.4 24.2 FY2004 1H FY2005 1H Operating Income Operating Income
Slide 6: Operating Income/Loss by Business Segment in the Interim Period of FY2005
Operating Income/Loss by Business Segment in the Interim Period of FY2005 (Billions of Yen) FY2004 FY2005 Increase/ Currency Actual Aug. 2 Exchange Increase/ (1H) (1H) (Decrease) Impact (Decrease) Projections Musical Instruments 9.7 9.9 +0.2 (0.3) + 0.5 11.0 AV/IT 1.4 2.4 +1.0 +1.0 0 2.5 Lifestyle-R
Slide 7: Non-Operating Income/Extraordinary Income (Loss) in the Interim Period of FY2005
Non-Operating Income/Extraordinary Income (Loss) in the Interim Period of FY2005 FY2005 1H FY2004 1H FY2005 1H (Aug. 2 projections) (Billions of Yen) Non-Operating Income Equity method income 5.2 5.6 4.2 Net financial income (loss) (0.4) 0.1 0.1 Other (1.5) (1.6) (1.8) Total +3.3 +4.1 +2.5 Extraordi
Slide 8: Forecast for Business Performance in FY2005 (Full Year)
Forecast for Business Performance in FY 2005 (Full Year) (Billions of Yen) FY2004 Actual FY2005 Projections Change from Previous Fiscal Year 1H 2H Total 1H 2H Total Net Sales 266.3 273.2 539.5 268.6 277.9 546.5 +1.3% Operating Income 26.4 18.7 45.1 24.2 13.8 38.0 (15.7)% Operating Income Ratio (8.4%
Slide 9: Forecasts of Business Performance in FY2005 (Full Year)
Forecasts of Business Performance in FY2005 (Full Year) (Billions of Yen) 539.5 546.5 (+1.3%) 550.8 (+2.1%) 554.5 545.1 (-1.7%) Recreation & 42.5 (-8.0) 42.5 43.0 42.5 (-1.2) 46.2 Others Electronic 72.0 (-6.4) 72.0 77.5 72.0 (-7.1) Equipment and 76.9 Metal Products 42.0 (-6.2) 42.0 44.0 42.0 (-4.5)
Slide 10: Breakdown of Operating Income in FY2005 (Full Year)
Breakdown of Operating Income in FY2005 (Full Year) (Billions of Yen) Decrease in Decrease Manufactur- in Gross ing Costs Profit Increase in SG&A Expenses Gain on Foreign Exchange FY2004 FY2005 Operating Income Operating Income
Slide 11: Operating Income/Loss by Business Segment in Fiscal 2005 (Full Year)
Operating Income/Loss by Business Segment in Fiscal 2005 (Full Year) (Billions of Yen) FY2005 Increase/ Currency Actual Aug. 2 FY2004 (New Exchange Increase/ Projections projections) (Decrease) Impact (Decrease) Musical Instruments 10.5 15.5 +5.0 (0.6) +5.6 15.5 AV/IT 4.4 4.5 +0.1 +0.7 (0.6) 4.5 Lif
Slide 12: Non-Operating Income/Extraordinary Income (Loss) in Fiscal 2005 (Full Year)
Non-Operating Income /Extraordinary Income (Loss) in Fiscal 2005 (Full Year) FY2005 FY2005 FY2004 (New projections) (Aug. 2 Projections) (Billions of Yen) Non-Operating Income Equity method income 10.4 9.3 7.0 Net financial income (loss) (1.0) (0.5) (0.4) •Gain on return of Other (3.5) (4.3) substit
Slide 13: Musical Instruments
Musical Instruments 1H Overview Propriety Policies for 2H z Higher sales and income from the previous interim period z Projections for net sales for the full fiscal year were adjusted z Real sales increased 3.5% compared with 1H 2003. upward, but projections for income were left unchanged. ' Major i
Slide 14: New Products (1)
New Products (1) ¾ ElectoneTM “STAGEATM” Since the introduction in March 2004 through the end of September, 17,000 units have been shipped. Projections call for sales of 25,000 units for the full fiscal year ending March 2005. Plans for the next fiscal year call for continued development of new cust
Slide 15: New Products (2)
New Products (2) ¾ Clavinova New CVP Series Introduced in May in Europe and Australia, in August in North America, and in September in Japan. The first electronic piano that can connect directly to the Internet. Initial sales performance has been good, with 13,500 units sold during the interim perio
Slide 16: Growth in Music Schools for Adults and Recovery/Growth in Schools for Children
Growth in Music Schools for Adults and Recovery/Growth in Schools for Children ¾ Beachhead established with "Core ¾ Establishing a presence through 100" urban schools for adults "UniStyle" suburban-type concept schools Projections call for setting up 65 sites by the end Projections call for setting
Slide 17: Strategies for the Chinese Market
Strategies for the Chinese Market Yamaha Music & Electronics (China) Co., Ltd. (YMEC) (Regional headquarters company for China) Began operations in April 2003 ¾ Development and introduction of products into the Chinese market Beijing • Sales of musical instruments produced at the Xiaoshan plant Sale
Slide 18: Reform Measures for Musical Instrument Manufacturing
Reform Measures for Musical Instrument Manufacturing Progress made through the end of the interim period zIncrease productivity and reduce costs through adoption of a cell production system at the Toyooka plant (for ElectoneTM and PA) zExpansion of partner companies in wind instrument TPM activiti
Slide 19: AV/IT
AV/IT 1H Overview Propriety Policies for 2H z Sales and income increased in comparison with the interim z Sales increased in comparison with the previous term. Outlook period of the previous fiscal year for sales for the full fiscal year, however, have been revised z Actual sales of the AV business
Slide 20: Electronic Equipment and Metal Products
Electronic Equipment and Metal Products 1H Overview Propriety Policies for 2H z Increase in sales but a decline in income compared with the z Previous projections have been adjusted downward in view of interim period of the previous year. expected market conditions. z LSI sound chips for mobile phon
Slide 21: Lifestyle-Related Products
Lifestyle-Related Products 1H Overview Propriety Policies for 2H z Sales were down 8.6% year on year because of difficult z Projections for sales for the full fiscal year have been revised conditions in the wholesale distribution channels, leading to a downward by a further ¥2.0 billion, to ¥42.0 bi
Slide 22: Recreation
Recreation 1H Overview Propriety Policies for 2H z “Kiroro” experiences tough operating conditions as the z Sales and income projections have been reduced from Hokkaido economy was generally weak. Other facilities were previously announced targets. hit by the series of typhoons in 2004, and sales we
Slide 23: Others
Others 1H Overview Propriety Policies for 2H z For this segment as a whole, sales and income will be below z Reduce the breakeven point in the magnesium mobile phone the levels of the interim period of the previous fiscal year. component business z FA business activities reported a strong performanc
Slide 24: Inventories
Inventories ¾Inventories at the end of the interim period were above the same period of the previous fiscal year and above projections ¾Plans call for reducing inventories below the level of the previous projections by the end of the fiscal year. (Billions of Yen) 86.5 89.4 86.1 80.1 72.1 69.5 70.4
Slide 25: Capital Expenditure/Depreciation/R&D Expenses
Capital Expenditure/Depreciation/ R&D Expences (Billions of Yen) Capital Expenditure/Depreciation 24.1 21.2 (18.7) 4.6 (19.8) 16.6 16.9 (17.6) 4.9 (17.5) Others 5.3 3.8 3.1 4.4 Electronic Equipment and 1.9 3.4 Metal Products 11.9 14.2 Musical 10.9 10.4 Instruments/ AV/IT Products FY2002 FY2003 FY200
Slide 26: Interest-Bearing Liabilities (Actual Balance)
Interest-Bearing Liabilities (Actual Balance) ¾ Expect to reach goal set in YSD50 of reducing actual interest-bearing liabilities to zero in the latter half of the fiscal year, ahead of schedule (Billions of Yen) Free Cash Flows 32.9 1.8 15.0 (2.4) FY2004 FY2004 FY2005 FY2005 1H 2H 1H 2H (Projection
Slide 27: Balance Sheet Summary
Balance Sheet Summary ¾ (Billions of Yen) As of March As of Sept. 30, As of March As of Sept. 30, As of March 31, 2003 2003 31, 2004 2004 31, 2005 Cash and Bank Deposits 44.5 44.2 32.1 42.5 45.2 Accounts and Notes Receivable 79.1 88.6 78.7 85.8 77.0 Inventories 80.1 86.5 72.1 89.4 69.5 Other Current
Slide 28: Appendix
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Slide 29: YAMAHA Musical Instrument Sales in the Japanese Market
YAMAHA Musical Instrument Sales in the Japanese Market Conditions in the piano market are tough because of the decline in demand, but shipments of the STAGEATM are holding firm (with 17,213 units sold since introduction) and sales for the interim period were above the level of the previous year for
Slide 30: YAMAHA Musical Instrument Sales in the U.S. Market
YAMAHA Musical Instrument Sales in the U.S. Market Overall sales of pianos remain slow, but there is trend toward recovery, especially in the grand piano segment. Shipments of electronic musical instruments, especially portable keyboards and electronic pianos, are holding steady ahead of the year-en
Slide 31: YAMAHA Musical Instrument Sales in the German Market
YAMAHA Musical Instrument Sales in the German Market The German economy has shown some signs of recovery, but there are shipment problems related to the integration of European warehouses and stocks are somewhat short. Newly introduced medium to low-priced portable keyboards have been favorably accl
Slide 32: YAMAHA Musical Instrument Sales in the U.K. Market
YAMAHA Musical Instrument Sales in the U.K. Market Piano sales are strong, assisted by special pricing schemes and measures to cut inventories. Sales of wind instruments for the school market are also favorable. Among electronic instruments, conditions are difficult for portable keyboards, but plans
Slide 33: Scale of Global Market for Home Theater Products
Scale of Global Market for Home Theater Products (Home theater systems + AV amplifiers/receivers) (Million Units) <Home theater systems > 11.15 <AV amplifiers/receivers> 10.09 Others Japan 8.36 Europe 5.70 4.39 3.43 3.51 3.25 2.97 3.05 North Others America Japan Europe North America 01 02 03 04 05 0
Slide 34: YAMAHA's AV Amplifier Market Share
YAMAHA’s AV Amplifier Market Share Japan Home theater systems: AV amplifiers Share of Total Sales Amount (GfKJ) Share of Total Sales Amount (GfKJ) 20% 40% 30% 39 35 10% 20% 31 33 14 13 11 10 10% 0% 0% 2001 2002 2003 2004 2001 2002 2003 2004 (Jan-Sept.) (Jan-Sept.) AV receivers Share of Total Sales A
Slide 35: Forward-looking figures notice
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, our actual performance may differ greatly from our