Yamaha Corporation · TSE:7951
Yamaha — FY2007 Earnings Presentation
40 slides from Yamaha's earnings presentation, May 1, 2007
Slide 1: Analyst and Investor Briefing on the Fiscal Year Ended March 31, 2007
Analyst and Investor Briefing on the Fiscal Year Ended March 31, 2007 (FY2007.3) May 1, 2007 YAMAHA CORPORATION
Slide 2: FY2007.3 Results Summary
FY 2007.3 Results Summary ¾Sales and operating income rose year-on-year. Net income remained at a similar level to the previous year due to an increase in extraordinary losses Sales and operating income exceeded 3Q projections (issued on February 7). Musical instrument sales and income rose year
Slide 3: Performance in FY2007.3
Performance in FY2007.3 ¾Sales and operating income rose year-on-year. Net income remained at the same level as the previous year due to higher extraordinary losses resulting from factors including impairment loss on resort facilities and dissolution of overseas production subsidiaries. (Billions of
Slide 4: Performance by Business Segment in FY2007.3
Performance by Business Segment in FY2007.3 Recreation Net Sales Operating Income & others 534.1 550.4 (+3.1%) 542.5 Lifestyle- 50.2 related 42.7 (+17.6) 47.5 (Billions of yen) products 46.6 (+3.1) 46.0 45.2 Electronic 54.8 (-2.5) 55.0 equipment & 56.2 metal 72.8 products 75.9 (-4.1) 72.0 Lifestyle-
Slide 5: Musical Instruments
Musical Instruments 4Q Overview FY2007.3 Overview • Discounting the effects of exchange rates, • Sales and income were up year-on-year. actual 4Q sales rose 0.4% year-on-year and • Operating income increased significantly from the previous were 1.6% above previous projections. year due to gains from
Slide 6: Musical Instruments
Musical Instruments Sales Increase/Decrease by Region YoY (Billions of yen) Year-on-year change in actual sales, +6.7 discounting the impact of exchange rates +5.5 Japan: ±0% N. America: -6% Europe: +1% +1.7 China: +19% Other regions: +8% -0.3 -1.7 Japan N. America Europe China Other regions Sales I
Slide 7: AV/IT
AV/IT 4Q Overview FY2007.3 Overview • Although actual 4Q sales were down year-on-year, • Sales declined year-on-year, chiefly due to they were generally in line with previous projections. falling sales of on-line karaoke equipment. • Operating income was at a similar level to the Operating income ro
Slide 8: Electronic Equipment & Metal Products
Electronic Equipment & Metal Products 4Q Overview FY2007.3 Overview • Sales and income fell year-on-year. • Operating income declined sharply year-on-year, largely Results were generally in line with due to falling semiconductor sales. previous projections. • Sales volumes for LSI sound chips for mo
Slide 9: Lifestyle-related Products
Lifestyle-related Products 4Q Overview FY2007.3 Overview • Sales and income rose year-on-year • Sales rose year-on-year. Operating income remained and exceeded previous projections. at the same level as the previous year, partly due to increased costs resulting from higher material prices. • Sales b
Slide 10: Recreation
Recreation 4Q Overview FY2007.3 Overview • Although 4Q sales exceeded previous • Sales again declined year-on-year. projections, they were down year-on-year, • Operating losses were reduced as partly due to closure of Tsumagoi and depreciation costs fell. Katsuragi for refurbishment. • Four faciliti
Slide 11: Others
Others 4Q Overview FY2007.3 Overview • Sales rose significantly year-on-year • Sales and operating income both increased year-on-year across the segment as a whole and were across the segment as a whole. well above previous projections. • In the components and metallic molds business, • Production o
Slide 12: Framework for Achieving Results in FY2008.3
Framework for Achieving Results in FY2008.3 ¾As the first year of the new YGP2010 Medium-term Business Plan, FY 2008.3 will be a term for steadily meeting sales and income targets, leading to the achievement of management objectives set for FY2010.3 FY2007.3 FY2008.3 FY2010.3 (projection) (target) N
Slide 13: Forecast of Business Performance in FY2008.3
Forecast of Business Performance in FY2008.3 (Billions of yen) FY2007.3 FY2008.3 FY2010.3 target Results Forecasts Increase (Medium-term Plan) Net sales 550.4 551.0 +0.1% 590.0 Operating income (operating income 27.7 30.0 +8.3% 45.0 ratio) (5.0%) (5.4%) Recurring profit (recurring profit ratio) 42.6
Slide 14: Forecast of Performance by Business Segment in FY2008.3
Forecast of Performance by Business Segment in FY2008.3 Net Sales Operating Income Recreation & others 550.4 (+0.１%) 551.0 50.2 (-22.3) 39.0 (Billions of yen) Lifestyle-related products 49.0 46.6 (+5.2) Electronic equipment & 54.8 (-16.1) 46.0 metal products 72.8 (+8.5) 79.0 Recreation & others AV/I
Slide 15: Musical Instruments
Musical Instruments Market • Polarization of demand (high-added-value products versus low-priced environment products) • Rise of Chinese manufacturers and products • Ongoing restructuring of distribution channels (large chain stores, mass merchandisers) • Growth of adult market and guitar market
Slide 16: Musical Instruments
Musical Instruments Sales Increase/Decrease by Region YoY Year-on-year change in actual sales, discounting the impact of exchange rates Japan: -2% (Billions of yen) North America: +11% +6.4 Europe: +7% China: +16% +3.8 Other regions: +8% +2.3 +1.7 By product, sales growth plans focus on -2.2 profess
Slide 17: AV/IT
AV/IT Market • Home theater market is shrinking and becoming more competitive • Hi fi business is rebounding environment • Market for flat-panel TVs is expanding • Growth of networked societies •Build AV business in line with market changes Priority - Reinforce 2-channel hi-fi business with focus
Slide 18: Electronic Equipment & Metal Products
Electronic Equipment & Metal Products Market • Mobile phone market expanding. Growing needs for high quality and low environment power consumption. • Increasing computarized automobiles • Rapid expansion of market for flat-panel TVs • Ensure survival in LSI sound chips for mobile phones Priority •
Slide 19: Lifestyle-related Products
Lifestyle-related Products Market • New housing starts have peaked and young first-time buyers are increasing environment • Trend toward remodeling, especially among baby boomers • Growing demand for safety and high quality in housing • Ongoing industry reorganization Priority • Implement growth s
Slide 20: Recreation
Recreation Market • Ongoing polarization: low-priced products vs. aspiration for authenticity environment • Growing numbers of baby boomers with financial freedom • Industry reorganization • Achieve smooth handover of four facilities earmarked for transfer Priority • Further enhance value of remai
Slide 21: Others
Others Market • Mobile phone market expanding. Use of digital cameras becoming more widespread. environment • Increasing corporate capital expenditure as economy recovers Priority • Ensure component and metallic mold businesses can respond smoothly to fluctuations in orders and further boost yield
Slide 22: Inventories
Inventories Discounting the effect of exchange rates (¥2 billion), actual inventories rose by ¥2.3 billion year-on-year. Goods in process and materials increased. 82.2 77.9 (Billions of yen) 74.6 26.3 28.6 Goods in 23.3 process/Materials 3.7 3.9 4.3 Other products 9.7 9.1 8.5 AV/IT 40.6 Musical 38.2
Slide 23: Capital Expenditure/Depreciation/R&D Expenses
Capital Expenditure/Depreciation/ R&D Expenses • Construction of (Billions of yen) Ginza building: 1.7 Capital Expenditure/ • Unit No. 3 at Hangzhou plant: 0.8 Depreciation Capital Expenditure 25.2 26.0 22.9 Depreciation Others 3.5 4.5 (21.5) 4.4 (18.9) (20.0) 2.9 Electronic equipment & metal 4.4 2.
Slide 24: Interest-bearing Liabilities (Actual balance)
Interest-bearing Liabilities (Actual balance) (Billions of yen) Free Cash Flows 26.9 17.3 7.4 FY2006.3 FY2007.3 FY2008.3 (Projection) Interest-bearing Liabilities Long- and short-term borrowings, less cash and deposits -8.0 -21.2 -34.8 As of March As of March As of March 31, 2006 31, 2007 31, 2008 (
Slide 25: Balance Sheet Summary (Projection)
Balance Sheet Summary (Projection) (Billions of yen) As of March As of March As of March As of March 31, 31, 2005 31, 2006 31, 2007 2008 Cash and bank deposits 51.2 36.4 46.7 52.3 Accounts and 71.6 70.3 76.6 73.9 notes receivable Inventories 78.4 77.9 82.2 74.6 Other current 24.4 24.8 25.5 17.1 asse
Slide 26: Dividends
Dividends ¾Based on a policy of paying stable ongoing dividends, aim for a consolidated dividend ratio of 25% and strive for greater returns to shareholders 30 Consolidated dividend ratio (%) Consolidated 22.5 50.3 dividend ratio 20 20 45.9 (Excluding equity 39.0 method income) 15 31.1 10 Dividends
Slide 27: Measures for Dealing with Major Acquisitions
Measures for Dealing with Major Acquisitions ¾Review rules announced last year for major acquisitions which increase a purchaser’s interest to 20% or more. Establish independent committee to examine proposals and make adoption of defensive measures a matter for resolution by the general meeting of s
Slide 28: Slide 28
Slide 29: Appendix
Appendix
Slide 30: Performance in the Fourth Quarter of FY2007.3
Performance in the Fourth Quarter of FY2007.3 ¾Sales and operating income exceeded previous projections (issued February 7). Net income fell due to impairment loss on resort operations. (Billions of yen) Previous FY2006.3 FY2007.3 Increase/ decrease projections 4Q Result 4Q Result (Feb.7) Net sales
Slide 31: Non-operating Income (Loss)/Extraordinary Income (Loss)
Non-operating Income (Loss)/ Extraordinary Income (Loss) FY2006.3 FY2007.3 FY2008.3 Result Result (projections) Non-operating income (Billions of yen) 14.8 17.8 17.7 Equity method income 0.1 -0.1 -0.2 Net financial income Other -3.5 -3.0 -4.6 Total +11.1 +14.9 +13.0 Extraordinary income (loss) • Res
Slide 32: 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 parentheses indicate year-on- 120 year percentage (Billions of yen) changes 99.4 97.8 97.9 (98%) (100%) 100 60 String and String and percussio
Slide 33: Musical Instrument Sales in the North American Market
Musical Instrument Sales in the North American Market Wholesale Amount Yamaha’s Wholesale Amount (By category, excluding PA) (By category, excluding PA) Figures in parentheses 296.0 indicate year-on- 290.1 (Billions of yen) (102%) year percentage 300 291.2 (100%) changes 70 250 String and 59.3 59.6
Slide 34: 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 parentheses 236.4 239.9 indicate year-on- 250 231.6 (102%) (101%) year percentage (Billions of yen) changes 55.1 60 53.6 (103%) String and (10
Slide 35: Musical Instrument Sales in the Chinese Market
Musical Instrument Sales in the Chinese Market Wholesale Amount Yamaha’s Wholesale Amount (By category, excluding PA) (By category, excluding PA) Figures in parentheses indicate year-on- year percentage 70 60.8 changes (Billions of yen) 58.6 (104%) String and 60 56.4 (104%) percussion 15 instruments
Slide 36: Musical Instrument Sales in Other Markets
Musical Instrument Sales in Other Markets Wholesale Amount Yamaha’s Wholesale Amount (By category, excluding PA) (By category, excluding PA) Figures in parentheses indicate year-on- 120 year percentage (Billions of yen) 100.5 102.5 changes 99.6 (102%) (101%) 50 String and percussion 90 instruments 4
Slide 37: World Market for Professional Audio Equipment
World Market for Professional Audio Equipment Wholesale Amount of the World Market Yamaha’s Wholesale Amount 600 501.7 487.5 (103%) 478.4 (102%) (Billions of yen) 500 Other China 400 Japan 40 33.5 300 30.2 (111%) Europe (114%) Other 30 26.4 China 200 Japan 20 North Europe 100 America 10 North Americ
Slide 38: 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 • Global market is shrinking, especially Europe and North America • North America: Market recovering, with 2007 projected to (to 10 million unit level) be al
Slide 39: Yamaha's AV Market Share
Yamaha’s AV Market Share Japan Home theater systems: AV amplifiers: 20% Share of total sales amount (GfKJ) Share of total sales amount (GfKJ) 40% 30% 10% 20% 39% 14% 33% 31% 10% 12% 13% 13% 30% 25% 10% 0% 0% ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 Jan. - Feb. Jan. - Feb. U.S. Home theater systems: S
Slide 40: 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