Slide 1: Financial Results Highlights FY12/2023
Financial Results Highlights FY12/2023 February 14, 2024 Roland Corporation TSE Prime : 7944
Slide 2: Executive Summary
Executive Summary ⚫ FY12/2023 • Sales and Operating Profit increased YoY to record high • Promptly responded to a business environment that has changed significantly from expectations • Steady progress in reducing finished goods inventories, record Free Cash Flow ⚫ Progress of the Medium-Term Plan •
Slide 3: Agenda
1 FY12/2023 Results 2 Progress of the Medium-Term Plan (FY2023-2025) 3 FY12/2024 Forecast 4 Shareholder return 5 Supplemental Information
Slide 4: Agenda
1 FY12/2023 Results 2 Progress of the Medium-Term Plan (FY2023-2025) 3 FY12/2024 Forecast 4 Shareholder return 5 Supplemental Information
Slide 5: FY12/2023 Financial Results Highlight
FY12/2023 Financial Results Highlight (JPY) Sales • Sell-in affected by dealer inventory adjustments, lower demand for electronic pianos, and difficulties in China 102.4bn • Sales increase due to the FX effects and the new consolidation of Drum (YoY: +6.9%) Workshop (DW) Operating Profit • SG&A expe
Slide 6: Consolidated Financial Results
FY12/2023 Financial Results Consolidated Financial Results ⚫ Operating Profit Margin before amortization of goodwill was 11.9% FY12/20221 FY12/20232 (JPY mn) Actual % of Sales Actual % of Sales YoY Sales 95,840 100.0% 102,445 100.0% +6.9% Gross Profit 39,356 41.1% 43,932 42.9% +11.6% SG＆A 28,605 29.
Slide 7: Consolidated Financial Results (Excluding the effect of new consolidation of DW)
FY12/2023 Financial Results Consolidated Financial Results (Reference: Excluding the effect of new consolidation of DW) ⚫ Operating Profit Margin excluding the effect of new consolidation was 13.2% FY12/20221 FY12/20232 (JPY mn) Actual % of Sales Actual % of Sales YoY Sales 95,840 100.0% 95,684 100.
Slide 8: Sales by Category (Q4 YTD)
FY12/2023 Financial Results Sales by Category (Q4 YTD) ⚫ Keyboards struggled globally due to subdued stay-at-home demand, price competition and dealer inventory adjustments ⚫ Although Percussion & Wind continued to be stagnant in China, total sales increased significantly due to DW consolidation ⚫ V
Slide 9: Sales by Region (Q4 YTD)
FY12/2023 Financial Results Sales by Region (Q4 YTD) ⚫ In North America, Sell-in struggled by dealer inventory adjustment, while Sell through remained at the same level YoY ⚫ Delayed recovery in China, also affected by the double reduction policy ⚫ Other regions were polarized (emerging countries ◎,
Slide 10: Consolidated Operating Profit
FY12/2023 Financial Results Consolidated Operating Profit Changes (vs Previous year) Factors (JPY bn) Sales Volume change Selling Price / Cost ratio change • Sales Volume SG&A change ✓ Decrease in Sell-in due to dealer inventory FX impact adjustments DW Consolidation (Q1-3) ✓ Decrease in demand for
Slide 11: Agenda
1 FY12/2023 Results 2 Progress of the Medium-Term Plan (FY2023-2025) 3 FY12/2024 Forecast 4 Shareholder return 5 Supplemental Information
Slide 12: Recognition of the business environment
Progress of the Medium-Term Plan (FY2023-2025) Recognition of the business environment At the time of planning (FY2022) Now ⚫ Expected to return to the normal growth trajectory after the ⚫ FY2022-2024 is a period of adjustment to normalization; pandemic Negative growth in the global Musical Instrume
Slide 13: Response to Temporary Changes in the Business Environment
Progress of the Medium-Term Plan (FY2023-2025) Response to Temporary Changes in the Business Environment ⚫ Minimizing the impact and getting over the COVID-19 pandemic Impact on Roland Response Secured FY2023 ⚫ Emergency response to maximize profits Profit increase ⚫ Decrease in sales volume ⚫ Deter
Slide 14: Core Strategies for Growth
Progress of the Medium-Term Plan (FY2023-2025) Core Strategies for Growth No change in core strategy; steady implementation of measures for renewed growth from FY2025 Market Creation by Game Changer Products and Acquiring 1. Creating Demand Potential Customers 2. Expanding Market Re-enter Portable k
Slide 15: Progress of the Medium-Term Plan: Creating Demand
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Medium-Term Plan ⚫ Development and launch well underway 1. Creating Demand ⚫ Further contribution from new products expected from 2024 onwards New products ratio1 New Products launched in FY12/2023 2025 2022 2023 Target Approx. Approx. 4
Slide 16: Progress of the Medium-Term Plan: Expanding Market Share
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Medium-Term Plan 2. Expanding Market ⚫ The overall strategy is progressing well Share ⚫ Chinese market is slow to recover Re-enter Portable keyboard markets Roland Retail sales2 ratio Sales in emerging markets ⚫ Launched Entry level keyb
Slide 17: Progress of the Medium-Term Plan: Increase LTV
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Medium-Term Plan ⚫ Cloud-ready products have steadily expanded 3. Increase LTV1 ⚫ Further acceleration of product, service and content launches from 2024 onwards Expanding the Cloud-Ready product2 Strengthening customer relationships Exp
Slide 18: Progress of the Medium-Term Plan: Strengthen Foundation
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Medium-Term Plan 4. Strengthen ⚫ Improved engagement scores Foundation ⚫ Steady progress on the new headquarters and each of the systems investments Introduction of the Construction of the Engagement scores ERP update SCP2 system new hea
Slide 19: Agenda
1 FY12/2023 Results 2 Progress of the Medium-Term Plan (FY2023-2025) 3 FY12/2024 Forecast 4 Shareholder return 5 Supplemental Information
Slide 20: FY12/2024 Full-Year Forecast Highlights
FY12/2024 Full-Year Forecast Highlights (JPY) Sales • The other categories cover sales to counter the declining demand category (electronic pianos), which was boosted by stay-at-home demand 99.9bn • Major regions generally flat YoY, emerging countries grow (YoY: -2.5%) • Expected to be flat YoY (+0.
Slide 21: Consolidated Financial Forecast
FY12/2024 Full-Year Forecast Consolidated Financial Forecast ⚫ Gross profit margin expected to improve +1.7pts FY12/20231 FY12/20242 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 102,445 100.0% 99,900 100.0% -2.5% Gross Profit 43,932 42.9% 44,600 44.6% +1.5% SG＆A 32,060 31.3% 33,200 33.2%
Slide 22: Sales Forecast by Category
FY12/2024 Full-Year Forecast Sales Forecast by Category ⚫ Keyboards, Video & Pro Audio continue to be affected to some extent by reactionary decline from boosted by stay-at-home demand, and intensified competition ⚫ In Percussion & Wind, electronic wind instruments expected weak, Percussion increase
Slide 23: Sales Forecast by Region
FY12/2024 Full-Year Forecast Sales Forecast by Region ⚫ Major regions expected to be generally flat, excluding the FX effects ⚫ In Others region, India, Indonesia, Latin America, etc. continue to be strong (JPY mn) Japan North America Europe China Others Total YoY1 -2.0% -1.6% -5.9% -4.5% +2.8% -2.5
Slide 24: Sales and Profit Forecasts for the 1st Half and 2nd Half
FY12/2024 Full-Year Forecast Sales and Profit Forecasts for the 1st Half and the 2nd Half of the Year (See Supplementary Materials for details of 1H and 2H PL) ⚫ Q1 assumes a decline in volumes as a reaction to aggressive destocking sales in the previous Q4 and to normalize pricing strategies (Sales
Slide 25: Consolidated Operating Profit
FY12/2024 Full-Year Forecast Consolidated Operating Profit Changes (vs Previous year) Factors Sales Volume change (JPY bn) Selling Price / Cost ratio change • Sales Volume SG&A change ✓ Dealer inventory adjustment FX impact ✓ Normalization of sales strategy +3.7 （Full-Year） • Selling Price / Cost ra
Slide 26: Initiatives to Improve the Profitability of Capital
FY12/2024 Full-Year Forecast Initiatives to Improve the Profitability of Capital ⚫ Although capital efficiency remains high, ROIC declines due to recent risk response and growth investments ⚫ Further strengthening of ROIC management to improve ⚫ Proactive response to SCM disruptions minimizes lost s
Slide 27: Agenda
1 FY12/2023 Results 2 Progress of the Medium-Term Plan (FY2023-2025) 3 FY12/2024 Forecast 4 Shareholder return 5 Supplemental Information
Slide 28: Dividends in 2024 are expected to be the same as in 2023
Shareholder Return Dividends in 2024 are expected to be the same as in 2023 ＜Policy＞ The Company’s shareholder return policy is to make sustainable and stable dividend payments while flexibly purchasing treasury shares taking into account various factors, including stock market trends and capital ef
Slide 29: Agenda
1 FY12/2023 Results 2 Progress of the Medium-Term Plan (FY2023-2025) 3 FY12/2024 Forecast 4 Shareholder return 5 Supplemental Information
Slide 30: First Half Forecast
Supplemental Information First Half Forecast FY12/2023 First Half1 FY12/2024 First Half2 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 46,096 100.0% 45,100 100.0% -2.2% Gross Profit 19,772 42.9% 19,700 43.7% -0.4% SG＆A 15,516 33.7% 16,400 36.4% +5.7% Operating Profit 4,256 9.2% 3,300 7.3%
Slide 31: Second Half Forecast
Supplemental Information Second Half Forecast FY12/2023 Second Half1 FY12/2024 Second Half2 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 56,349 100.0% 54,800 100.0% -2.7% Gross Profit 24,159 42.9% 24,900 45.4% +3.1% SG＆A 16,544 29.4% 16,800 30.7% +1.5% Operating Profit 7,615 13.5% 8,100
Slide 32: Cost of Capital and Share Price Conscious Management (1) Current Recognition
Supplemental Information Actions to Achieve Cost of Capital and Share Price Conscious Management (1) Current Recognition All indicators are well above the average of TSE Prime listed companies1 (FY12/2023) ROE ROIC PBR 22.2% 17.2% 3.04X Electronic MI Thorough Business Visualization No large Invested
Slide 33: Cost of Capital and Share Price Conscious Management (2) Issues and initiatives
Supplemental Information Repeat Actions to Achieve Cost of Capital and Share Price Conscious Management (2) Issues and initiatives ⚫ Although capital efficiency remains high, ROIC declines due to recent risk response and growth investments ⚫ Further strengthening of ROIC management to improve ⚫ Proa
Slide 34: Cost of Capital and Share Price Conscious Management (3) ROIC Tree
Supplemental Information Actions to Achieve Cost of Capital and Share Price Conscious Management (3) ROIC Tree ⚫ Implement a PDCA monitoring system that clarifies who is responsible for each action KGI KPI Action Enhancement of Corporate Value Optimization of unit sales price (new products) Focus in
Slide 35: Sustainability Initiatives (1)
Supplemental Information Sustainability Initiatives (1) ■ Importance of Realizing the Sustainability ■ Materiality Sophistication of Investment for the growth supply chain management (in intangible assets) Support of the development Unrelenting reinforcement of musical and video cultures of the corp
Slide 36: Sustainability initiatives (2)
Supplemental Information Sustainability initiatives (2) <Major Initiatives in 2023> Sophistication of supply chain management ①Human rights protection in the supply chain ②Improvement of supply chain efficiency ⚫ Developing human rights and procurement policies ⚫ Container loading rate: improved by
Slide 37: Sustainability initiatives (3)
Supplemental Information Sustainability initiatives (3) <Major Initiatives in 2023> Support of the development Unrelenting reinforcement of musical and video cultures of the corporate governance Social contribution in the musical/video Strengthening of risk management / and neighboring fields compli
Slide 38: Key Consolidated Financials (PL)
Supplemental Information Key Consolidated Financials（PL） (JPY mn) 12/2019 12/2020 12/2021 12/2022 12/2023 Net sales 63,247 64,044 80,032 95,840 102,445 Cost of sales 33,006 33,664 43,895 56,484 58,512 Gross profit 30,240 30,379 36,137 39,356 43,932 Selling, general and 24,971 23,264 25,043 28,605 32
Slide 39: Key Consolidated Financials (B/S)
Supplemental Information Key Consolidated Financials (B/S) (JPY mn) 12/2019 12/2020 12/2021 12/2022 12/2023 Cash and deposits 8,815 10,832 8,781 10,506 12,883 Notes and accounts receivable - trade 8,913 5,930 7,444 12,905 13,805 Inventories 14,215 18,075 25,240 32,322 30,144 Other current assets 1,1
Slide 40: Key Consolidated Financials (CF)
Supplemental Information Key Consolidated Financials (CF) (JPY mn) 12/2019 12/2020 12/2021 12/2022 12/2023 Profit before income taxes 4,080 5,846 10,239 10,529 11,148 Depreciation 1,537 1,568 1,608 1,981 2,397 Amortization of goodwill 4 4 4 94 358 Decrease (increase) in trade receivables (846) 2,172
Slide 41: Key Consolidated Financials (Sales by Product/Region)
Supplemental Information Key Consolidated Financials (Sales by Product/Region) Product (JPY mn) 12/2019 12/2020 12/2021 12/2022 12/2023 Keyboards 17,104 17,842 24,792 29,869 27,546 Percussion & Wind 14,205 14,620 19,053 23,046 29,342 Instruments Guitar-related Products 16,744 16,712 19,093 23,540 25
Slide 42: Forward-looking statements notice
This material contains information that constitutes “forward-looking statements” of Roland Corporation. Statements other than those related to past or present facts are all statements that constitute forward-looking statements. Such forward-looking statements are based on our assumptions and decisio