Yamaha Corporation · TSE:7951
Yamaha — H1 FY March 2006 Earnings Presentation
32 slides from Yamaha's earnings presentation, Nov 1, 2005
Slide 1: Analyst and Investor Briefing on the First Half of the Fiscal Year Ending March 31, 2006
Analyst and Investor Briefing on the First Half of the Fiscal Year Ending March 31, 2006 (April 1, 2005 to September 30, 2005) November 1, 2005 YAMAHA CORPORATION
Slide 2: Overview of Performance in the First Half
Overview of Performance in the First Half First Half Results Net sales and operating income were lower than both the previous year and initial projections on April 28. Net sales declined ¥11.4 billion compared to the first half of last year. Electronic equipment and metal products decreased ¥10.1
Slide 3: Business Performance in First Half FY March 2006
Business Performance in First Half FY March 2006 ¾Net sales and operating income declined from the first half of the previous year and were lower than initial projections. (Billions of yen) Change from FY Mar 05 FY Mar 06 FY Mar 05 FY Mar 06 (1H) Change from 2Q (1H) (1H) Projections Projections (1H)
Slide 4: Performance by Business Segment in First Half FY March 2006
Performance by Business Segment in First Half FY March 2006 Net Sales Operating Recreation & Others 268.6 257.2 (-4.2%) 261.5 (-1.6%) Income 21.0 Lifestyle- 20.0 (-4.8) 20.5 ( -2.4) Related 21.2 Products 22.6 (+6.6) 21.0 (+7.6) Electronic (Billions of yen) Equipment 38.4 28.3 (-26.3) 28.0 (+1.1) 24.
Slide 5: Forecast for Business Performance in FY March 2006 (Full Year)
Forecast for Business Performance in FY March 2006 (Full Year) ¾Downward revision of full year net sales and operating income (Billions of yen) FY Mar 05 Actual FY Mar 06 Projections Change from (Initial Previous Projections) 1H 2H Total 1H 2H Total Fiscal Year Net Sales 268.6 265.5 534.1 257.2 279.
Slide 6: Forecast for Performance by Segment in FY March 2006 (Full Year)
Forecast for Performance by Segment in FY March 2006 (Full Year) Net Sales Operating (-1.7%) Income Recreation 534.1 536.5 (+0.4%) 546.0 & Others (-3.4) (Billions of yen) 41.9 42.5 (+1.4) 44.0 Lifestyle- 43.0 41.5 (+3.6) Related 42.8 (+0.5) Products Electronic 57.5 (-16.7) 58.5 (-1.7) Equipment and
Slide 7: Musical Instruments
Musical Instruments Full Year Overview and 1H Overview 2H Priorities •Lower sales and income than year-ago 1H and initial projections •Projections for full year performance revised downward: Plan net sales at ¥310.0 billion and operating •Real sales after translation adjustment decreased 1.1% year-o
Slide 8: Toward Medium-Term Growth and Improved Profitability
Toward Medium-Term Growth and Improved Profitability 1. Laying Groundwork for Growth Markets Chinese Market • Yamaha music schools November grand opening – 100 sites and 20,000 pupils by 2010 • Continue developing piano sales network Plan to prepare 60 sites by term-end • Move forward on increasing
Slide 9: Toward Medium-Term Growth and Improved Profitability
Toward Medium-Term Growth and Improved Profitability 3. Stimulating the Domestic Market Music School Enrollment • Increase enrollment at music schools Children increased year-on-year for the first time in 15 years. Adults topped 100 thousand. Estimating 80 “Core 100” urban schools for adults by Marc
Slide 10: AV/IT
AV/IT Full Year Overview 1H Overview and 2H Priorities •Lower sales and income than year-ago 1H and initial •Full year sales projections revised downward by projections ¥5.5 billion to ¥83.5 billion. Operating income also •Real sales after translation adjustment decreased revised downward to ¥4.0 bi
Slide 11: Electronic Equipment and Metal Products
Electronic Equipment and Metal Products 1H Overview Full Year Overview and 2H Priorities •Year-on-year decline in sales and income due to lower •Downward revision of full year results projections demand for LSI sound chips for mobile phones and •Secure market share by increasing sales of new LSI sou
Slide 12: Lifestyle-Related Products
Lifestyle-Related Products Full Year Overview and 2H 1H Overview Priorities •Higher sales and income than year-ago •2H net sales and operating income right at 1H and initial projections. initial projections •Considerable year-on-year sales growth •Steadily market new products including the due to re
Slide 13: Recreation
Recreation Full Year Overview and 2H 1H Overview Priorities •Lodging was generally solid owing in part to •Downward revision of full year results more rooms at Haimurubushi™, but sales projections. overall were lower than both year-ago 1H levels •Aim to improve income by developing and initial proje
Slide 14: Others
Others Full Year Overview and 2H 1H Overview Priorities •Lower sales than year-ago 1H for the segment •Full year forecast has not changed from initial overall, but higher than initial projections. projections. •Sales of automobile interior wood components and •For automobile interior wood components
Slide 15: 2H Priority Products - 1
2H Priority Products - 1 zTyros2 Shipments commenced in October primarily to Europe (November for North America) The Tyros2 is the successor to Tyros™, which sold 25,000 units after put on the market in September 2002. New MEGA VOICE added to previous model, which was particularly well-received by s
Slide 16: 2H Priority Products - 2
2H Priority Products - 2 zDigital Sound Producers YSP800 and YSP1000 32-inch compatible YSP800 and 42-inch compatible YSP1000, the successor to the YSP1, both launched on market in September. Plan to ship approximately 90,000 units domestically and to overseas. YSP800: Current Market Price $799 YSP1
Slide 17: Inventories
Inventories Inventories at the end of the first half were higher than the previous year and initial projections. We will work to reduce inventories ahead of the term-end. (Billions of yen) 1H-End Term-End 89.4 90.7 Goods in 81.0 78.4 Process 30.6 28.7 69.9 69.4 /Materials 27.0 27.3 25.2 25.4 / 12.5
Slide 18: Slide 18
Slide 19: Appendix
Appendix
Slide 20: Non-Operating Income/Loss & Extraordinary Income/Loss for First Half FY March 2006
Non-Operating Income/Loss & Extraordinary Income/Loss for First Half FY March 2006 FY Mar 05 (1H) FY Mar 06 (1H) FY Mar 06 (1H) (Initial Projections) Non-Operating (Billions of yen) Income (Loss) Equity method income 5.6 8.5 5.6 Net financial 0.1 0 (0.2) income (loss) Other (1.6) (1.6) (2.4) Total +
Slide 21: Full Year Non-Operating Income/Loss, Extraordinary Income/Loss for FY March 2006
Full Year Non-Operating Income/Loss, Extraordinary Income/Loss for FY March 2006 FY Mar 05 FY Mar 06 FY Mar 06 New Projections Initial Projections Non-Operating (Billions of yen) Income (Loss) Equity method income 9.1 13.7 11.0 Net financial (0.3) (0.6) (0.6) income (loss) Other (3.2) (4.1) (4.9) To
Slide 22: Capital Expenditure/Depreciation/R&D Expenses
Capital Expenditure/Depreciation/R&D Expenses Capital Expenditure/Depreciation (Billions of yen) 1H Full Year 24.0 24.0 22.7 4.5 4.8 5.3 14.5 (19.0) (19.5) (19.9) 5.8 5.6 11.1 2.4 5.0 Others 9.8 1.4 1.7 Electronic 2.3 (9.5) 1.7 (9.2) 4.7 (9.7) 1.1 Equipment and Metal Products 3.0 2.2 1.0 AV/IT 0.6 0
Slide 23: Interest-Bearing Liabilities (Actual Balance)
Interest-Bearing Liabilities (Actual Balance) (Billions of yen) 29.1 25.1 Free Cash Flows - 2.4 - 18.0 FY Mar 05 FY Mar 05 FY Mar 06 FY Mar 06 1H 2H 1H 2H (New Projections) Interest-Bearing Liabilities 23.1 16.8 15.5 Long-and short- term borrowings, less cash and deposits -4.6 - 6.7 As of As of As o
Slide 24: Balance Sheet Summary
Balance Sheet Summary (¥100 million) As of March As of Sept. 30, As of March As of Sept. 30, As of March 31, 2004 2004 31, 2005 2005 31, 2006 Cash and Bank 32.1 42.5 51.2 31.3 33.0 Deposits Accounts and Notes Receivable 78.7 85.8 71.6 81.4 72.0 Inventories 72.1 89.4 78.4 90.7 69.9 Other Current 18.8
Slide 25: YAMAHA Musical Instrument Sales in the Japanese Market
YAMAHA Musical Instrument Sales in the Japanese Market Sales in the first half were 95% of the same period the previous year as shipments of the Electone™ STAGEA™ ran their course. Other products were about the same as the previous year. Enrollment in music schools increased for the first time in 15
Slide 26: YAMAHA Musical Instrument Sales in the U.S. Market
YAMAHA Musical Instrument Sales in the U.S. Market Piano sales in the first half recovered to 110% of the same period the previous year. Professional audio equipment, especially digital mixers, performed well, with sales coming in at 120% of the same period the previous year. Portable keyboards enco
Slide 27: YAMAHA Musical Instrument Sales in the German Market
YAMAHA Musical Instrument Sales in the German Market Retail conditions overall were slow. Sales of products other than pianos stagnated. Large drop-off in portable keyboards. Launched Tyros2, an electronic instrument for which expectations are high, for the year-end sales rush. Its sound quality has
Slide 28: YAMAHA Musical Instrument Sales in the U.K. Market
YAMAHA Musical Instrument Sales in the U.K. Market Musical instruments faced difficult market conditions, as pianos, electronic instruments, and wind instruments fell short of the levels posted in the first half last year. Professional audio equipment performed well though, with sales amounting to 1
Slide 29: YAMAHA Musical Instrument Sales in the Chinese Market
YAMAHA Musical Instrument Sales in the Chinese Market Although shipments of pianos increased owing to ramped up production of Hangzhou- made pianos, inventory made and distributed by Chinese manufactures increased and unit prices fell. In the area of professional audio equipment, products were exhib
Slide 30: Scale of Home Theater Market
Scale of Home Theater Market (Home theater systems, amplifiers and receivers) Home Theater Systems AV Amplifiers and Receivers •N. America: Rapid decline in growth rates for both HTiB and •N. America: Forecast approx. 10% decrease on a home theater systems with DVD volume basis •Europe: Shrinking mo
Slide 31: AV Market Share
AV Market Share Japan Home Theater Systems: AV Amplifiers: Share of Total Sales Share of Total Sales Amount (GfKJ) Amount (GfKJ) 39 14 14 13 35 33 31 11 10 23 ’01 ’02 ’03 ’04 ’05(Jan.-Aug.) ’01 ’02 ’03 ’04 ’05(Jan.-Aug.) U.S. AV Receivers: Share of Total Sales Home Theater Systems: Amount (INTELECT)
Slide 32: 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