Yamaha Corporation · TSE:7951
Yamaha — FY2006 Earnings Presentation
37 slides from Yamaha's earnings presentation, May 1, 2006
Slide 1: Analyst and Investor Briefing on the Fiscal Year Ended March 31, 2006
Analyst and Investor Briefing on the Fiscal Year Ended March 31, 2006 (FY 2006. 3) May 1, 2006 YAMAHA CORPORATION
Slide 2: FY 2006.3 Results Summary
FY 2006. 3 Results Summary ¾ Sales remained level year-on-year. However, operating income fell compared to FY 2005. 3 due to lower earnings from semiconductors Sales exceeded 3Q projections, while operating income was on target Musical instrument sales rose year-on-year and income remained level
Slide 3: Performance in FY 2006.3
Performance in FY 2006. 3 ¾ Operating income fell year-on-year. Net income increased due to reduction in extraordinary losses and higher equity method income (Billions of yen) FY 2005. 3 FY 2006. 3 Increase/ Previous projections Medium-term Results Results decrease Plan (Feb. 8) Net sales 534.1 534.
Slide 4: Performance by Business Segment in FY 2006.3
Performance by Business Segment in FY 2006. 3 Net Sales Operating Income Recreation & others 534.1 534.1 (0%) 529.0 Lifestyle-related 41.9 42.7 (+2.0) 42.5 Billions of yen products 42.8 45.2 (+5.5) 44.5 Electronic equipment & 69.0 56.2 (-18.7) 56.0 metal products 77.7 75.9 (-2.3) 77.0 AV/IT 35.7 0 L
Slide 5: Musical Instruments
Musical Instruments 4Q Overview FY 2006. 3 Overview • Discounting the effect of exchange rates, actual 4Q • In spite of gains from favorable exchange rates, full-year operating sales rose 4.9% year-on-year and were 2.9% above income remained level year-on-year as a result of lower gross profit previ
Slide 6: AV/IT
AV/IT 4Q Overview FY 2006. 3 Overview • The level of actual 4Q sales was approximately • Sales and income fell year-on-year. Profitability 89% of FY 2005. 3 results and previous declined due to increased competition and projections. lower prices. • Competition heated up in the mid-size router • Actu
Slide 7: Electronic Equipment & Metal Products
Electronic Equipment & Metal Products 4Q Overview FY2006.3 Overview • Sales and income fell year-on-year. Results • Sales and income declined sharply year-on-year. were generally in line with previous • Sales volume and unit prices of core LSI sound chips projections. for mobile phones both fell in
Slide 8: Lifestyle-related Products
Lifestyle-related Products 4Q Overview FY 2006.3 Overview • System kitchens continued to drive sales, which • Structural reform to rebuild lifestyle-related rose year-on-year and exceeded previous business proceeded ahead of schedule, lifting projections. operating income into positive figures. • As
Slide 9: Recreation
Recreation 4Q Overview FY 2006. 3 Overview • 4Q sales were in line with both FY 2005. 3 figures • Full-year sales declined year-on-year. and previous projections. • ¥0.7 billion reduction in depreciation year-on- • Operating income was less than previous year due to shrinking of depreciable assets p
Slide 10: Others
Others 4Q Overview FY2006.3 Overview • Sales rose year-on-year across the • Sales and operating income both increased year-on- segment as a whole. year across the segment as a whole. • In the components and metallic molds business, FA • Operating income was lower than previous continued to show stro
Slide 11: Looking Ahead to the Final Year of YSD50
Looking Ahead to the Final Year of YSD50 Evaluation of Second Year of YSD50 Medium-term Plan z Although partial results are emerging from individual measures, overall the pace of implementation is slow. z FY 2006. 3 sales and operating income were less than Medium-term Plan targets due to demand for
Slide 12: Forecast of Business Performance in FY 2007.3
Forecast of Business Performance in FY 2007. 3 ¾ Although the Medium-term Plan operating income target of ¥50 billion will not be achieved, sales and operating income are targeted to increase year-on-year and plans will call for the achievement of further increases. (Billions of yen) FY 2006. 3 FY 2
Slide 13: Forecast of Net Sales by Business Segment in FY 2007.3
Forecast of Net Sales by Business Segment in FY 2007. 3 (Billions of yen) Compared to Medium- Factors behind divergence from term Plan targets Medium-term Plan Year-on-year 590.0 Recreation & (-7.5%) others 534.1 (+2.2%) 546.0 53.0 ¾ Sales projected to be below Medium-term Lifestyle-related 42.7 (+1
Slide 14: Forecast of Operating Income by Business Segment in FY 2007.3
Forecast of Operating Income by Business Segment in FY 2007. 3 (Billions of yen) Compared to Medium- Factors behind divergence from Year-on-year term Plan targets Medium-term Plan Recreation & 50.0 others Lifestyle-related 2.5 ¾ Operating income is projected to reach 2.5 products only half of the Me
Slide 15: Musical Instruments
Musical Instruments - Income was well below target due to failure to reach sales goals and delay in introducing individual measures. - Discounting the effect of exchange rate fluctuations, actual sales were ¥15.5 billion (4.6%) below Medium-term Plan targets. Positive Factors: - The sales for profes
Slide 16: AV/IT
AV/IT - In conjunction with sluggish sales, operating income fell well below Medium-term Plan targets. - Discounting the effect of exchange rate fluctuations, actual sales were ¥24.2 billion (24.7%) below Medium-term Plan targets. Positive Factors: - While markets are flat, sales in the American mar
Slide 17: Electronic Equipment & Metal Products
Electronic Equipment & Metal Products - As sales volume and unit prices of LSI sound chips for mobile phones fell faster than expected, operating income was well below Medium-term Plan targets. - Development and market launch of new applications will be key priorities. - Profitability will be improv
Slide 18: Lifestyle-related Products
Lifestyle-related Products - Restructured businesses and reviewed business models in the first year of the Medium-term Plan. - This resulted in greatly improved profitability from FY 2006. 3, the second year of the Medium-term Plan. - In line with restructuring plans FY 2007. 3 sales are forecast to
Slide 19: Recreation
Recreation - Asset-impairment accounting was introduced ahead of schedule in the first year of the Medium- term Plan (booked an extraordinary loss of ¥32 billion). - Sales fell well short of Medium-term Plan targets due to the slow recovery of the Japanese economy and structural factors (price compe
Slide 20: Others
Others - Considering individual items, while sales of metallic molds and components failed to meet Medium-term Plan targets, production cost reductions are continuing and operating income is generally in line with the Plan. - The automobile interior wood components business has succeeded in increasi
Slide 21: Inventories
Inventories Discounting the effect of exchange rates (¥3.2 billion), actual inventories fell by ¥3.7 billion year- on-year 78.4 77.9 72.1 73.7 (Billions of yen) Other products/ 24.7 23.9 23.9 22.5 Goods in process/Materials 10.1 11.3 9.0 AV/IT 8.2 40.0 43.6 42.7 42.2 Musical Instruments FY 2007. 3 F
Slide 22: Capital Expenditure/Depreciation/R&D Expenses
Capital Expenditure/Depreciation/ R&D Expenses One-off capital expenditure: 4.2 billion yen Capital Expenditure/ - Relocation and concentration of electromagnetic wave measurement facilities: 2.2 (Billions of yen) Depreciation - Construction of Kakegawa piano office: 1.4 - Refurbishment of Europea
Slide 23: Interest-bearing Liabilities
Interest-bearing Liabilities 39.5 (Billions of yen) Free Cash Flows 26.7 7.9 7.4 FY 2004. 3 FY 2005. 3 FY 2006. 3 FY 2007. 3 (projection) Interest-bearing Liabilities 16.8 Long- and short-term borrowings, less cash and deposits -4.6 -8.0 -9.3 As of As of As of As of March March 31, March 31, March 3
Slide 24: Balance Sheet Summary
Balance Sheet Summary (Billions of yen) As of March 31, As of March 31, As of March 31, As of March 31, 2004 2005 2006 2007 (projection) Cash and bank 32.1 51.2 36.4 38.5 deposits Accounts and notes 78.7 71.6 70.3 72.6 receivable 72.1 77.9 78.4 73.7 Inventories Other current assets 18.8 24.4 24.8 25
Slide 25: Dividends
Dividends ¾Stable dividends are distributed in light of group profits (Yen) 40 40 (%) 39.0 Dividends Consolidated per share Excluding dividend ratio 31.3 equity 30 31.1 method 30 income 20 20 20 20 20.0 20.9 20 Including equity method 15 14.7 14.8 income 10 10 12.5 10 10 11.5 2nd half 10 9.4 10 5 7.
Slide 26: Establishment of Rules for Major Acquisitions
Establishment of Rules for Major Acquisitions Policy on Response to Proposals for ¾ Rules set for acquisitions of 20% or more Major Acquisitions Proposal to acquire [1] 20% or more [1]Submit Submitstatement statement - Name, address, representative of of purchaser, etc. ofintent intent Purchaser [1]
Slide 27: Appendix
Appendix
Slide 28: Performance in the Fourth Quarter of FY 2006.3
Performance in the Fourth Quarter of FY 2006. 3 ¾ Sales were approximately ¥5 billion above the previous projections (issued February 8), largely due to increased musical instrument sales Operating income was in line with the previous projections (Billions of yen) FY 2005. 3 FY 2006. 3 Increase/ Pre
Slide 29: Non-operating Income (Loss)/Extraordinary Income (Loss)
Non-operating Income (Loss)/ Extraordinary Income (Loss) FY 2007. 3 FY 2005. 3 FY 2006. 3 (projections) Non-operating (Billions of yen) income Equity method income 9.1 14.8 14.8 Net financial income -0.3 -0.2 -0.7 Other -3.2 -3.5 -4.1 Total + 5.6 + 11.1 +10.0 Extraordinary income (loss) Income from
Slide 30: Musical Instrument Sales in the Japanese Market
Musical Instrument Sales in the Japanese Market Wholesale Amount YAMAHA’s Wholesale Amount (By category, excluding PA) (By category, excluding PA) Figures in (Billions of yen) parentheses indicate 120 year-on-year 105.9 103.2 102.3 percentage changes (97%) (99%) 100 60 53.8 Wind instruments 50.0 (93
Slide 31: Musical Instrument Sales in the U.S. Market
Musical Instrument Sales in the U.S. Market Wholesale Amount YAMAHA’s Wholesale Amount (By category, excluding PA) (By category, excluding PA) Figures in (Billions of yen) parentheses indicate 277.0 279.7 year-on-year 300 276.8 (100%) (101%) percentage changes Wind instruments 70 62.7 250 59.0 (106%
Slide 32: Musical Instrument Sales in the European Market
Musical Instrument Sales in the European Market Wholesale Amount YAMAHA’s Wholesale Amount (By category, excluding PA) (By category, excluding PA) Figures in 236.8 242.5 parentheses indicate (102%) (Billions of yen) 233.7 (101%) year-on-year 250 percentage changes Wind 54.3 instruments 60 51.7 (105%
Slide 33: World Market for Professional Audio Equipment
World Market for Professional Audio Equipment Wholesale Amount of the World Market YAMAHA’s Wholesale Amount 632.5 650 612.8 580.4 600 Other 550 Wholesale Japan amount 500 (billions of yen) 450 Europe 400 350 35 30.8 300 30 27.2 Other 250 North 25 23.1 Japan 200 America 20 Europe 150 15 100 10 North
Slide 34: Scale of Global Market for Home Theater Products
Scale of Global Market for Home Theater Products (Home theater systems + AV amplifiers/receivers) Home Theater Systems AV Amplifiers/Receivers - World market has leveled off at just under 13 million units. - World market is shrinking by 2-3% annually Prices continue to fall. - Europe & U.S.: Market
Slide 35: YAMAHA's AV Market Share
YAMAHA’s AV Market Share Japan Home theater systems: AV amplifiers: Share of total sales amount (GfKJ) Share of total sales amount (GfKJ) 20% 40% 30% 10% 39% 20% 14% 35% 33% 31% 34% 11% 10% 12% 9% 10% 0% 0% ’02 ’03 ’04 ’05 ’06 ’02 ’03 ’04 ’05 ’06 U.S. Home theater systems: Share of AV receivers: tot
Slide 36: Sales Breakdown
Sales Breakdown Electronic Equipment (Billions of AV/IT and Metal Products yen) FY 2005. 3 FY 2006. 3 FY 2007. 3 FY 2005. 3 FY 2006. 3 FY 2007. 3 (actual) (actual) (projection) (actual) (actual) (projection) AV 70.6 69.4 68.7 Semi- 56.7 43.7 41.0 conductors Routers 7.1 6.5 7.3 Electronic 12.3 12.5 1
Slide 37: Forecast figures 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