Roland Corporation · TSE:7944
Roland — FY2024 Earnings Presentation
43 slides from Roland's earnings presentation, Feb 13, 2025
Slide 1: Financial Results Highlights FY12/2024
Financial Results Highlights FY12/2024 February 13, 2025 Roland Corporation 『JUNO-D6』
Slide 2: Executive Summary
Executive Summary ⚫ FY12/2024 • YoY decline in Revenue and Profit due to post-pandemic challenges (adjustment of dealer inventory, continued reactional decline in demand) • Various adjustments settled in 2024. From H2/2024, the market gradually recovered ⚫ Progress of the Medium-Term Plan （FY2023-20
Slide 3: Agenda
1 FY12/2024 Results 2 FY12/2025 Forecast 3 Progress of the Medium-Term Plan (FY2023-2025) 4 Shareholder return 5 Supplemental Information
Slide 4: FY12/2024 Results
1 FY12/2024 Results 2 FY12/2025 Forecast 3 Progress of the Medium-Term Plan (FY2023-2025) 4 Shareholder return 5 Supplemental Information
Slide 5: FY12/2024 Financial Results Highlight
FY12/2024 Financial Results Highlight (JPY) Sales • Dealer inventory normalization and price optimization took longer than plan 99.4bn • The reactional decline in demand post-pandemic continued, and we struggled with increasing sales volume and unit prices （-2.9% vs Last year） （-0.5% vs Guidance） •
Slide 6: Consolidated Financial Results
FY12/2024 Financial Results Consolidated Financial Results ⚫ See Supplementary Materials for the October-December period (3 months) results. FY12/20231 FY12/20242 (JPY mn) Actual % of Sales Actual % of Sales YoY Sales 102,445 100.0% 99,433 100.0% -2.9% Gross Profit 43,932 42.9% 42,571 42.8% -3.1% SG
Slide 7: Sales by Category (Q4 YTD)
FY12/2024 Financial Results Sales by Category (Q4 YTD) ⚫ The main reasons for the real YoY decline in the main categories were dealer inventory adjustments in Q1-Q2 and a reactional decline in demand post-pandemic. ⚫ Video & Pro Audio is at a strategic turning point, with plans for re-growth startin
Slide 8: Sales by Region (Q4 YTD)
FY12/2024 Financial Results Sales by Region (Q4 YTD) ⚫ The main reasons for the real YoY decline in the main categories were dealer inventory adjustments in Q1-Q2 and a reactional decline in demand post-pandemic ⚫ In Others, the negative impact was limited due to strong sales in Brazil and Mexico (J
Slide 9: Consolidated Operating Profit (Q4 YTD)
FY12/2024 Financial Results Consolidated Operating Profit (Q4 YTD) Changes (vs Previous year) Factors (JPY bn) Sales Volume change • Sales Volume Selling Price / Cost ratio change ✓ Impact of Dealer's Inventory adjustment SG&A change ✓ Reactional decline in demand post-pandemic FX impact ✓ Inflation
Slide 10: Consolidated Operating Profit (October-December period, 3 months)
FY12/2024 Financial Results Consolidated Operating Profit （October-December period, 3 months) ⚫ Volume below forecast due to delay in recovery of demand in China, optimizing Sell-in in Europe, etc. ⚫ SG&A expenses were controlled in response to the situation, and the results were generally in line w
Slide 11: FY12/2025 Forecast
1 FY12/2024 Results 2 FY12/2025 Forecast 3 Progress of the Medium-Term Plan (FY2023-2025) 4 Shareholder return 5 Supplemental Information
Slide 12: FY12/2025 Full-Year Forecast Highlights
FY12/2025 Full-Year Forecast Highlights (JPY) Sales • The Musical Instruments market gradually turns to Re-growth phase 100.9bn • YoY increase in major regions and categories (YoY: +1.5%) • Plans +4.2% YoY increase without FX impact Operating Profit • Increase in sales volume and the price optimizat
Slide 13: Consolidated Financial Forecast
FY12/2025 Full-Year Forecast Consolidated Financial Forecast ⚫ Gross margin and operating margin improve to 44.2% and 11.1%, respectively, excluding FX impact FY12/20241 FY12/20252 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 99,433 100.0% 100,900 100.0% +1.5% wo/FX 44.2% Gross Profit 42
Slide 14: Sales Forecast by Category
FY12/2025 Full-Year Forecast Sales Forecast by Category ⚫ Perc. & Wind is expected to be a growth driver due to new electronic drums launched last year and DW sales growth. ⚫ Video & Pro Audio will be in a transitional period of policy change and will experience negative growth, but is expected to r
Slide 15: Sales Forecast by Region
FY12/2025 Full-Year Forecast Sales Forecast by Region ⚫ The Chinese market is uncertain, but we expect the main regions will enter a re-growth phase ⚫ Europe has positive effect on sales due to the sales route change for DW products (incorporating agency operations into the group) ⚫ In Others, India
Slide 16: Sales and Profit Forecasts for 1st Half and 2nd Half
FY12/2025 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) ⚫ Expect to increase both sales and income in H1 and H2 excluding FX impact. 1st Half 2nd Half Full-Year (JPY) Sales 46.4bn 54.5bn 100.9bn ・
Slide 17: Consolidated Operating Profit Forecast
FY12/2025 Full-Year Forecast Consolidated Operating Profit Changes (vs Previous year) Factors Sales Volume change (JPY bn) Selling Price / Cost ratio change SG&A change • Sales Volume FX impact ✓ Gradual recovery from reactive decline post-pandemic （Full-Year） ✓ New products effect +1.9 +1.4 • Selli
Slide 18: Progress of the Medium-Term Plan
1 FY12/2024 Results 2 FY12/2025 Forecast 3 Progress of the Medium-Term Plan (FY2023-2025) 4 Shareholder return 5 Supplemental Information
Slide 19: Recognition of the business environment
Progress of the Medium-Term Plan (FY2023-2025) Recognition of the business environment ⚫ Normalization of the global instrument market post-pandemic is expected to be delayed by 2-3 years compared to the assumption at the MTP announcement ✓ Market inventories normalized and market conditions begun t
Slide 20: Progress of the Medium-Term Plan
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Medium-Term Plan ⚫ In the first two years of MTP (FY2023-2024), we focused on responding to post-pandemic issues and careful selection of investments to respond to changes in the environment. ⚫ Despite better performance in the industry,
Slide 21: Core Strategies for Growth
Progress of the Medium-Term Plan (FY2023-2025) Core Strategies for Growth Market Creation by Game Changer Products and Acquiring 1. Creating Demand Potential Customers 2. Expanding Market Re-enter Portable keyboard markets and Expansion Sales in Share Emerging Countries; Expand market share by Rolan
Slide 22: Progress of the Core strategies: Creating Demand
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Core strategies ⚫ New product sales ratio is expected to fall short of the target due to the １. Creating Demand revision of the new product roadmap. ⚫ Game Changer products are performing well, with plans to launch in 2025 New products r
Slide 23: Progress of the Core strategies: Expanding Market Share
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Core strategies ⚫ Portable keyboard sales progressed better than planned ２. Expanding Market ⚫ In Roland Retail, we carefully selected new store openings considering market Share conditions. Our direct stores are performing well ⚫ Chines
Slide 24: Progress of the Core strategies: Increase LTV
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Core strategies ⚫ Percentage of Cloud-Ready products is growing, expected to increase ３. Increase LTV1 further in 2025 ⚫ Slight delay in launching products, services and content Expanding the Cloud-Ready product2 Strengthening customer r
Slide 25: Progress of the Core strategies: Strengthen Foundation
Progress of the Medium-Term Plan (FY2023-2025) Progress of the Core strategies ⚫ Engagement score is slightly distant from Target, but it is increasing every ４. Strengthen year. Foundation ⚫ Steady execution of fundamental investments for mid to long term growth Introduction of the Construction of t
Slide 26: Shareholder return
1 FY12/2024 Results 2 FY12/2025 Forecast 3 Progress of the Medium-Term Plan (FY2023-2025) 4 Shareholder return 5 Supplemental Information
Slide 27: FY12/2024: Year-end dividend and share buyback
Shareholder Return FY12/2024: The year-end dividend (Y85 per share) as planned, and also resolved to buyback own shares Purpose of share repurchase1 The Company has received notice from Taiyo Jupiter Holdings, L.P. (“TJH”), the largest shareholder and a major shareholder of the Company, that TJH int
Slide 28: FY12/2025: Dividends expected same as 2024
Shareholder Return FY12/2025: Dividends are expected to be the same as in 2024 ＜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
Slide 29: Supplemental Information
1 FY12/2024 Results 2 FY12/2025 Forecast 3 Progress of the Medium-Term Plan (FY2023-2025) 4 Shareholder return 5 Supplemental Information
Slide 30: Consolidated Financial Results (October-December period, 3 months)
Supplemental Information Consolidated Financial Results（October-December period, 3 months) FY12/2023 Q4 3M1 FY12/2024 Q4 3M2 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 31,034 100.0% 29,822 100.0% -3.9% Gross Profit 12,706 40.9% 12,326 41.3% -3.0% SG＆A 8,579 27.6% 8,856 29.7% +3.2% Oper
Slide 31: Sales by Category (October-December period)
Supplemental information Sales by Category （October-December period, 3 months) (JPY mn) Keyboards Perc. & Wind Guitar-related Creation-related Video & Pro Audio Others Total -10.3% -4.4% +2.1% +2.9% -14.0% -2.2% -3.9% YoY1 (-11.9%) (-6.6%) (+0.1%) (+1.8%) (-15.4%) (-3.1%) (-5.7%) 9,159 8,719 8,220 8
Slide 32: Sales by Region (October-December period)
Supplemental information Sales by Region （October-December period, 3 months) (JPY mn) Japan North America Europe China Others Total +0.2% -3.8% -4.9% -18.7% +5.3% -3.9% YoY1 (+0.2%) (-6.4%) (-7.0%) (-21.4%) (+5.8%) (-5.7%) 11,886 11,435 9,376 8,913 4,272 4,498 2,665 2,670 2,833 2,304 2023Q4 2024Q4 2
Slide 33: First Half Forecast
Supplemental Information First Half Forecast FY12/2024 First Half1 FY12/2025 First Half2 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 46,705 100.0% 46,400 100.0% -0.7% Gross Profit 20,183 43.2% 20,300 43.8% +0.6% SG＆A 15,754 33.7% 16,500 35.6% +4.7% Operating Profit 4,428 9.5% 3,800 8.2%
Slide 34: Second Half Forecast
Supplemental Information Second Half Forecast FY12/2024 Second Half11 FY12/2025 Second Half2 (JPY mn) Actual % of Sales Forecast % of Sales YoY Sales 52,728 100.0% 54,500 100.0% +3.4% Gross Profit 22,388 42.5% 23,600 43.3% +5.4% SG＆A 16,865 32.0% 17,300 31.7% +2.6% Operating Profit 5,523 10.5% 6,300
Slide 35: R&D Expenses / Capital Expenditures / Depreciation
Supplemental Information R&D Expenses / Capital Expenditures / Depreciation (JPY mn) R&D Expenses Capital Expenditures1 Depreciation YoY +2.0% +306.3% +8.0% Temporary increase due to construction costs for the new HQ (approx. ¥4.8 bn) 6,087 5,585 5,697 2,892 3,122 1,498 2024 2025 2024 2025 2024 2025
Slide 36: 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 37: Sustainability initiatives (2)
Supplemental Information Sustainability initiatives (2) <Major Initiatives in 2024> Sophistication of supply chain management ⚫ Established CO2 emission reduction ⚫ Improved container loading efficiency target for 2030 ✓ Improved packaging size and strength etc. 2025 Scope1/2 ｰ42％ 2023 2024 Target S
Slide 38: Sustainability initiatives (3)
Supplemental Information Sustainability initiatives (3) <Major Initiatives in 2024> 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 39: Key Consolidated Financials (PL)
Supplemental Information Key Consolidated Financials（PL） (JPY mn) 12/2020 12/2021 12/2022 12/2023 12/2024 Net sales 64,044 80,032 95,840 102,445 99,433 Cost of sales 33,664 43,895 56,484 58,512 56,862 Gross profit 30,379 36,137 39,356 43,932 42,571 Selling, general and 23,264 25,043 28,605 32,060 32
Slide 40: Key Consolidated Financials (B/S)
Supplemental Information Key Consolidated Financials (B/S) (JPY mn) 12/2020 12/2021 12/2022 12/2023 12/2024 Cash and deposits 10,832 8,781 10,506 12,883 14,478 Notes and accounts receivable - trade 5,930 7,444 12,905 13,805 12,538 Inventories 18,075 25,240 32,322 30,144 29,147 Other current assets 1
Slide 41: Key Consolidated Financials (CF)
Supplemental Information Key Consolidated Financials (CF) (JPY mn) 12/2020 12/2021 12/2022 12/2023 12/2024 Profit before income taxes 5,846 10,239 10,529 11,148 8,782 Depreciation 1,568 1,608 1,981 2,397 2,506 Amortization of goodwill 4 4 94 358 386 Decrease (increase) in trade receivables 2,172 (34
Slide 42: Key Consolidated Financials (Sales by Product/Region)
Supplemental Information Key Consolidated Financials (Sales by Product/Region) Product (JPY mn) 12/2020 12/2021 12/2022 12/2023 12/2024 Keyboards 17,842 24,792 29,869 27,546 26,869 Percussion & Wind 14,620 19,053 23,046 29,342 28,588 Instruments Guitar-related Products 16,712 19,093 23,540 25,726 24
Slide 43: Forward-looking statements disclaimer
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