Yamaha Corporation · TSE:7951
Yamaha — Q1 FY2004 Earnings Presentation
33 slides from Yamaha's earnings presentation, Aug 8, 2003
Slide 1: Analyst and Investor Briefing on the First Quarter
Analyst and Investor Briefing on the First Quarter of the Fiscal Year Ended March 31, 2004 (April 1, 2003, to June 30, 2003) August 8, 2003 YAMAHA CORPORATION
Slide 2: Review of Performance in the First Quarter
Review of Performance in the First Quarter ■ Net sales were below initial projections but above the level recorded in the same period of the previous year. AV product sales were below initial projections, primarily in North America, while semiconductor sales were roughly in line with projections. ■
Slide 3: Performance in the First Quarter
Performance in the First Quarter ¾Compared with initial projections sales were lower but profit was higher. Change from Change from (Billions of Yen) same period of 1Q initial projections previous year Net Sales 126.1 Operating Income (Operating Income Ratio) 11.8 (9.4 %) Recurring Profit (Recurring
Slide 4: Sales by Business Segment in the First Quarter
Sales by Business Segment in the First Quarter ¾ Slack economic conditions and the impact of SARS kept sales in most segments below the initial targets. (Billions of Yen) Change from initial Change from same period projections of previous year 1Q Currency Actual Increase/ Currency Actual Increase/ E
Slide 5: Operating Income by Business Segment in the First Quarter
Operating Income by Business Segment in the First Quarter ¾Overall operating income was above the initial projection. (Billions of Yen) Change from initial Change from same period projections of previous year 1Q Currency Actual Increase/ Currency Actual Increase/ Exchange Impact (Decrease) Exchange
Slide 6: Operating Environment in the Second through Fourth Quarter
Operating Environment in the Second ■ Overall through Fourth Quarter • Trends in the global economy remain difficult to predict, but concerns regarding SARS recede ■ Musical Instruments • Significance of China's consumer market increases, and Chinese products emerge in the acoustic musical instrumen
Slide 7: Forecasts of Business Performance in FY2004
Forecasts of Business Performance in FY2004 ¾ The initial assumptions of US$1=¥120 and EUR1=¥125 have been retained for (Billions of Yen) the second through fourth quarter of FY2004. First half FY2004 FY2004 FY2004 FY2004 FY2004 (Initial Forecasts) (Current FY2003 (Initial Forecasts) (Current FY2003
Slide 8: Musical Instruments
■First Quarter Musical Instruments •In the U.S. market, an adjustment in the distribution of inventories at the start of the period depressed sales, keeping sales below the level of the initial projection as well as the level recorded in the first quarter of the previous fiscal year. •The SARS epide
Slide 9: Musical Instrument Sales in Japan
Musical Instrument Sales in Japan In the first quarter of FY2004, Electone® sales were considerably below the level recorded in the first quarter of FY2003, but those of other products were approximately unchanged. For FY2004 as a whole, the Company will strive to maintain sales at about the same le
Slide 10: Musical Instrument Sales in the U.S.
Musical Instrument Sales in the U.S. The adjustment of distribution inventories kept sales below projected levels in April and May, but sales surpassed projections in both June and July. Thus, the recovery in sales is expected to be sustained from the second quarter, and the Company is aiming to inc
Slide 11: Musical Instrument Sales in Germany
Musical Instrument Sales in Germany The German market remains sluggish, but June sales were higher than projected. Sales of digital keyboards and pianos are firm. Because of such initiatives as the establishment of a specialized marketing organization, it is expected that the first quarter slump in
Slide 12: Musical Instrument Sales in the U.K.
Musical Instrument Sales in the U.K. Sales in the first quarter were up 7% from the first quarter of FY2003, and sales have remained strong, particularly those of such acoustic instruments as pianos and wind instruments. The Company will strive to sustain this strength and achieve a 5% year-on-year
Slide 13: Ringing Melodies Distribution Service Development
Ringing Melodies Distribution Service Development Current Domestic situation (Thousands of People • The market is saturated and competition is intensifying due to factors including the emergence of new content providers. Number of ringing • Television commercials aimed at recruiting new members were
Slide 14: AV/IT
AV/IT First Quarter • Sales targets not attained in Europe and North America due to a delay in responding to intensification of competition • Sales in China weak owing to impact of SARS • Inventories at the end of first quarter considerably higher than originally projected Priority Policies for the
Slide 15: Semiconductors
■ First Quarter Semiconductors • Inventory adjustments of Korean and Chinese mobile phone manufacturers restrained shipments of sound chips for mobile phones • Inventory on hand increased ■ Priority Policies for the Second through Fourth Quarter • Obtaining top position in business related to sound
Slide 16: Electronic Metal Products
Electronic Metal Products ■ First Quarter • Invar material production ended in July 2003 • Sales of copper lead-frame materials smooth owing to ongoing demand along with special moves to ensure procurement capabilities to counter the impact of SARS • Sales of mobile phone materials in line with proj
Slide 17: Lifestyle-Related Products
Lifestyle-Related Products First Quarter • Continued decline in new housing construction starts weakened sales • Benefits from operational tie-up with Air Water Living Co., Ltd., still small but began growing Priority Policies for the Second through Fourth Quarter • Lowering the breakeven point by r
Slide 18: Recreation
Recreation ■ First Quarter •Marketing efforts bore fruit and number of customers increased at all but a few facilities •Sunza Villa ceased operation at end of June, as scheduled ■ Priority Policies for the Second through Fourth Quarter •Attracting 2 million customers annually •Lowering the breakeven
Slide 19: Others
Others ■ First Quarter • Continued full-capacity manufacture of magnesium mobile phone components • Decrease in profitability of automobile interior components manufacturing business due to intensification of competition ■ Priority Policies for the Second through Fourth Quarter • Increasing the prof
Slide 20: Inventories
Inventories ØIn the first quarter, inventories grew to higher levels than initially projected. (Billions of Yen) As of the end of As of the end of first half fiscal year 88.5 90.7 88.8 85.9 80.1 73.1 73.1 Goods in 26.8 Process/ 27.6 28.7 27.2 24.8 Materials 25.6 24.3 Others 6.3 4.8 6.7 6.1 AV/IT 12.
Slide 21: Interest-Bearing Liabilities
Interest-Bearing Liabilities ¾In the second through fourth quarter, the Company will return approximately ¥10 billion in resort security deposits as well as redeem an issue of convertible bonds. (Billions of Yen) Free Cash 27.2 18.6 Flows 11.4 (2.0) （2-4Q） (14.5) （1Q） 70.4 Convertible bonds 24.3 55.
Slide 22: Balance Sheet Summary
Balance Sheet Summary (Billions of Yen) As of September As of March 31, As of June 30, As of September As of March 31 30, 2002 2003 2003 30, 2003 2004 Cash and Bank Deposits 40.3 44.5 33.2 40.1 42.8 Accounts and Notes Receivable 81.4 79.1 81.9 89.8 77.5 Inventories 90.7 80.1 88.5 88.8 73.1 Other Cur
Slide 23: Appendix
Appendix
Slide 24: Slide 24
Slide 25: Trends in the Domestic Piano Market
Trends in the Domestic Piano Market ◆Shipments of Pianos in Japan ◆Yamaha's Shipments of Source: Musical Instrument Monthly, Shizuoka Prefecture Musical Instrument Manufacturing Association Pianos in Japan *( )=% of previous years’ figure Yamaha's market share increases due (95%) (98%) FY2002 to the
Slide 26: Trends in the U.S. Musical Instrument Market
Trends in the U.S. Musical Instrument Market ◆ Overall Musical Instrument ◆Yamaha (wholesale sales) Market （retail sales） Source: Music Trade (103%) *( )=% of previous years’ figure FY2002 FY2003 (100%) (101%) (96%) (110%) (93%) (116%) (110%) １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q
Slide 27: Home Theater Market Scale in the U.S.
Home Theater Market Scale in the U.S. Trends in the Number of Annual Shipments (CEA) 4,446 Thousand Units Stand-alone + HTiB 2,795 2,640 Stand-alone 1,651 1,654 986 HTiB '98/1 '99/1 '00/1 '01/1 '02/1 '03/1 10 10 10 10 10 4 7 4 7 4 7 4 7 4 7 4 Wholesale Sales Value （Millions of Dollars） ） Source: Con
Slide 28: Germany Japan
Retail Sales Value Germany (Millions of EURO 470 Source: GfK AG (133%) (Projections for FY2004 made by Yamaha) 353 Home Theater Systems 330 206 47.5 36.4 (130%) 147 140 AV Receivers April to April to FY2003 FY2004 May, May, (Projected) 2002 2003 Japan Source: Japan Electronics and Information Techno
Slide 29: Trends in the Global Market for Mobile Phones
Trends in the Global Market for Mobile Phones Situation in 2002 • Sales begin rising again and annual sales exceed 400 (Millions Units) million • Models with camera functions stimulate replacement demand • Korea-based Samsung rapidly increases is domestic and export sales • Chinese market expands ra
Slide 30: Mobile Phone Sales Volume and Sound Chip Business Conditions
Mobile Phone Sales Volume and Sound Chip Business Conditions Mobile Phones Annual Sales of In Use Mobile Phones Trends in Sound Chip Markets (million units) (million units) • Mobile phone market saturated but introduction of camera functions stimulating strong replacement demand Japan 70 40 • Most m
Slide 31: YAMAHA's Strengths in the Sound Chip Business
YAMAHA's Strengths in the Sound Chip Business Recognition in the Japanese market of the benefits of YAMAHA's Synthetic music Mobile Application Format (SMAF) solutions proposals • The provision of sound generation, data format (SMAF), authoring tools, and content in a single package has led major
Slide 32: Overview of the New MA-5 Sound Chip
Overview of the New MA-5 Sound Chip Maximum number of polyphony notes: 64 FM sound source: 32 notes + Wave Table Sound Source: 32 notes Expanding variety of voices enabling response to future diversification of contents (Example: humanoid voices capable of pronouncing simple words that meet the
Slide 33: Forecast figures and risk 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