Yamaha Corporation · TSE:7951
Yamaha — Investor Presentation (April 2013)
44 slides from Yamaha's investor presentation, Apr 5, 2013
Slide 1: Yamaha Group Medium-Term Management Plan
Yamaha Group Medium-Term Management Plan (April 2013-March 2016) April 5, 2013
Slide 2: Contents
Contents 1. Review of Previous Plan (YMP125) 2. New Medium-Term Management Plan * Figures of FY2013.3 in this document are projections announced on February 6, 2013. 2
Slide 3: Review of Previous Plan (YMP125)
Review of Previous Plan (YMP125)
Slide 4: Positioning of Previous Medium-Term Management Plan YMP125
Positioning of Previous Medium-Term Management Plan YMP125 Yamaha Management Plan 125 Build up a structure for future growth towards 125th anniversary FY2008.3-2010.3 Lehman FY2011.3-2013.3 FY2014.3- Collapse YGP2010 YMP125 Growth phase Build a foundation for growth Quantum leap phase Growth in The
Slide 5: Review of YMP125 Financial Results
Review of YMP125 Financial Results Billions of yen FY2010.3 FY2013.3 YMP125 vs. YMP125 Results Projections Targets Targets 414.8 Net Sales 365.0 427.0 -15% 372.6* Actual growth rate -2%* +15%* over three years Operating 6.8 7.0 25.0 -18.0 Income Operating income 2% 2% 6% ratio ROE -2% 0% 7% FCF - 13
Slide 6: YMP125 Key Strategies
YMP125 Key Strategies Accelerate growth in emerging markets Target: ¥100 billion in five years (¥83.5 billion in three years) Increase market share in developed markets through product strategy Total piano* strategy, combo** strategy, growth in PA equipment and AV products Build optimal producti
Slide 7: Review of YMP125 Key Strategies: Emerging Markets
Review of YMP125 Key Strategies Accelerate growth in emerging markets Billions of yen China Actual growth FY2010.3 YMP125 FY2013.3 vs. YMP125 vs. YMP125 rates over Results Targets Projections Targets Targets (%) three years (excl. forex) 16.3 24.5 24.9 +0.4 102% 106% Other Actual growth Emerging FY2
Slide 8: Review of YMP125 Key Strategies: Developed Markets
Review of YMP125 Key Strategies Increase market share in developed markets through product strategy Billions of yen Actual growth Total Piano FY2010.3 YMP125 FY2013.3 vs. vs. YMP125 rates over Strategy YMP125 three years Results Targets Projections Targets (%) Targets (excl. forex) 72.3 80.0 72.5 -7
Slide 9: Review of YMP125 Key Strategies: Production Structure
Review of YMP125 Key Strategies Build Optimum Production Structure to Meet Trends in Demand Piano Production Restructuring YMP125 Target Result Savings achieved through factory consolidation ¥0.6 billion per annum ¥1.0 billion per annum Completed consolidation of Japanese production at Kakegawa fact
Slide 10: Review of YMP125 Key Strategies: Service Business Models
Review of YMP125 Key Strategies Build New Service Business Models Music Playing Business Student numbers are increasing overseas, especially in Asia, but within Japan adults’ music lessons are not compensating for the decline in music school enrollments due to the falling birth rate, and overall n
Slide 11: Review of YMP125 Key Strategies: Summary
Review of YMP125 Key Strategies Summary Results were well below targets, due to inability to cope with higher-than- anticipated appreciation of the yen As markets recovered from East Japan earthquake and Thai flood damage, actual sales deviated sharply from projected sales, and lower production
Slide 12: New Medium-Term Management Plan
New Medium-Term Management Plan
Slide 13: Corporate Philosophy
Corporate Philosophy Yamaha Group Corporate Philosophy Corporate Objective “CREATING ‘KANDO’ TOGETHER” Yamaha will continue to create ‘kando’ and enrich culture with technology and passion born of sound and music, together with people all over the world. Management Philosophy Customer-Oriented and T
Slide 14: Management Vision
Management Vision
Slide 15: Management Vision
Management Vision What Yamaha is aiming for: A trusted and admired brand Become even more customer-oriented and quality-conscious, further increase brand value Being a company with “operation centered on sound and music” Hone our specialist expertise in sound and music Grow through both products and
Slide 16: Business Domains
Business Domains
Slide 17: Redefinition of Business Domains
Redefinition of Business Domains Classify competencies according to technologies and know-how, and redefine business domains targeting synergy Business that brings richer sound to more customers Business that offer customers high-quality by concentrating outstanding craftsmanship and lifestyles by b
Slide 18: Outline of New Medium-Term Management Plan YMP2016
Outline of New Medium-Term Management Plan Yamaha Management Plan 2016 (YMP2016)
Slide 19: Management Environment
Management Environment Factors (1) Continuing growth in China and other emerging markets (2) Demand plateauing in developed markets as birth rates fall and populations age (3) Although consumer focus on low prices will intensify, there is also high interest in premium products (4) Trend toward commo
Slide 20: New Medium-Term Management Plan - Management Policies
New Medium-Term Management Plan -Management Policies Attain continual growth Expand sales with focus on emerging markets and electronics business Strengthen profitability to support growth Steadily build on results of structural reform Enhance specialization and professionalism to create new added v
Slide 21: New Medium-Term Management Plan - Positioning
New Medium-Term Management Plan -Positioning The new Medium-Term Management Plan will achieve steady Sales: Sales: ¥500 ¥500 billion billion growth in existing business as the first stage of the Operating Operating income: income: ¥50 ¥50 billion billion “quantum leap” phase The company will invest
Slide 22: New Medium-Term Management Plan - Numerical Targets
New Medium-Term Management Plan -Numerical Targets Billions of yen FY2013.3 FY2016.3 changes Projections Targets Net Sales 365.0 430.0 +65.0 Actual growth rate over three years +14% Operating Income 7.0 30.0 +23.0 Operating income ratio 2% 7% ROE 0% 10% Free Cash Flows 50.0 (over three years) Exchan
Slide 23: R&D Expenses, Capital Expenditures
R&D Expenses, Capital Expenditures Billions of yen FY2011.3-2013.3 FY2014.3-2016.3 changes (over three years) (over three years) R&D Expenses 67.9 68.5 +0.6 Capital Expenditures 35.7 46.0 +10.3 (Depreciation) (36.3) (41.0) +4.7 Special Allocation for - 33.0 - Growth Investment 23
Slide 24: Targets by Segment
New Medium-Term Management Plan -Targets by Segment Net Net Sales Sales Operating Operating Income Income (billions of yen) 450 450 450 430 26 26 400 400 400 21.5 35 Others 365 21.5 35 35 30 Electronic Devices 350 350 350 24 24 Audio Equipment 15.5 15.5 30 30 30 11 114 114 22 Musical Instruments 300
Slide 25: Net Sales Analysis
Net Sales Analysis (billions of yen) Musical Musical Instruments/Audio Instruments/Audio Equipment Equipment AV Products Music North Digital Entertainment Keyboard America Japan PA 3.5 2.5 Instruments -1.2 5.3 Equipment 4.1 Emerging 3.6 Wind/ Educational Others Countries 5.6 Musical 11.4 ICT Devices
Slide 26: Operating Income Analysis
Operating Income Analysis (billions of yen) Increase in actual income (semiconductors/ Effect of others) Actual structural Cost reform (sales improvement increase in Increase in actual and marketing/ SG&A income (musical administration) instruments/ 7.0 -9.7 audio equipment) 1.6 2.0 Impact of 15.5 e
Slide 27: YMP2016 Key Strategies
YMP2016 Key Strategies
Slide 28: Four Key Strategies
Four Key Strategies Accelerate Growth in Emerging Countries Expand Sales in the Electronics Business Domain Strengthen Cost Competitiveness Create New Businesses 28
Slide 29: Accelerate Growth in Emerging Countries
Accelerate Growth in Emerging Countries Three-Year Achieve growth of ¥33.1 billion (actual Target increase of +33%) in China and other emerging countries Priority 1. Focus management resources on key areas and expand Measures sales network 2. Increase music-playing population through music populariz
Slide 30: Accelerate Growth in Emerging Countries: China and Other Emerging Markets
Accelerate Growth in Emerging Countries China Other Emerging Markets Market Market Environment Environment ・・ Ongoing Ongoing urbanization, urbanization, changing changing lifestyles lifestyles Identify priority countries and areas, and ・・ Market Market growth growth inin 3rd- 3rd- and and 4th-tier
Slide 31: Accelerate Growth in Emerging Countries: Priority Measures
Accelerate Growth in Emerging Countries Priority Measures 1. Focus management resources on key areas and expand sales network Increase sales and marketing staff by 300 personnel, develop and strengthen sales networks Establish sales subsidiary in Vietnam and branch in Turkey, and begin operation
Slide 32: Accelerate Growth in Emerging Countries: Music Popularization
Accelerate Growth in Emerging Countries Priority Measures 2. Increase music-playing population through music popularization activities Continuing expansion of Yamaha Music Schools • Establish 160 new schools and increase enrollments by 64,000 Expand development of local schools with a focus on cr
Slide 33: Expand Sales in Electronics Business Domain
Expand Sales in Electronics Business Domain Three-Year Achieve growth of ¥34 billion (actual growth of Target +28%) for digital keyboard instruments, professional audio equipment, and ICT devices Priority Measures (billions of yen) ICT devices Digital keyboard instruments 1. Expand market share thou
Slide 34: Expand Sales in Electronics: Digital Keyboard Instruments
Expand Sales in Electronics Business Domain Digital keyboard instruments Priority Measures 1. Expand market share though rigorous differentiation Develop new, highly realistic sound and real-touch keyboard Enhance local content (style data, sound) to better match market needs 2. Respond to lower
Slide 35: Expand Sales in Electronics: Professional Audio Equipment
Expand Sales in Electronics Business Domain Professional audio equipment Priority Measures 1. Enhance development capabilities to expand key product line-up and maintain solid growth Strengthen development capabilities through personnel increased in fiscal 2013 (approx. 100) Expand digital mixer
Slide 36: Expand Sales in Electronics: ICT Devices
Expand Sales in Electronics Business Domain ICT devices Priority Measures 1. Transform router business into network device solution business Extend the product range of switch and access point devices in addition to routers Offer solution services to resolve issues encountered by small-medium ne
Slide 37: Strengthen Cost Competitiveness
Strengthen Cost Competitiveness Three-Year Target: Achieve cost savings of ¥15 billion by improving operating rates in existing production bases and cutting unit costs Priority Measures 1. Transform Japanese production to create compact structure capable of dealing flexibly with change 2. Further st
Slide 38: Strengthen Cost Competitiveness: Priority Measures
Strengthen Cost Competitiveness Priority Measures 1. Transform Japanese production to create lean structure capable of dealing flexibly with change Realign musical instrument production divisions to set up subsidiaries (April 2014) Utilize imported parts and materials to reduce costs, and harness
Slide 39: Develop New Businesses
Develop New Businesses Three-Year Target: Develop new businesses to accelerate growth in quantum leap phase Priority Measures 1. Invest in M&A and capital tie-ups 2. Invest in venture firms 3. Pursue new business projects in-house 39
Slide 40: Develop New Businesses: M&A, Ventures, In-House Projects
Develop New Businesses 1. Invest in M&A and capital tie-ups Accelerate growth through M&A and capital tie-ups in fields expected to expand, such as commercial audio equipment Special allocation for growth investment: ¥30 billion 2. Invest in venture firms Invest in venture firms to discover next
Slide 41: Human Resource Development
Human Resource Development Strengthen and Utilize Individuals’ Specialist Capabilities Priority Measures 1. Enhance development of global human resources Develop managers for subsidiaries worldwide Develop personnel with highly specialized skills in the areas of development, production, sales, a
Slide 42: Growth Investment and Return to Shareholders
Growth Investment and Return to Shareholders Actively invest in growth while continuing stable dividends Three year cash flow distribution plan Shareholder Return Target payout ratio of 30% or more Investment for Growth in New Cash Flows Business from Operating ¥33 billion Activities ¥95 billion Inv
Slide 43: Forward-looking statements 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, actual performance may differ greatly from our pre
Slide 44: YEARS
125 YEARS OF PASSION & PERFORMANCE