Yamaha Corporation · TSE:7951
Yamaha — Investor Day (November 2010)
42 slides from Yamaha's investor day presentation, Nov 26, 2010
Slide 1: Accelerating Growth of Musical Instruments Business
Accelerating Growth of Musical Instruments Business November 26, 2010
Slide 2: Contents
Contents 1. Positioning of musical instruments business within Yamaha 2. Musical instruments market and Yamaha's position 3. Yamaha's business strategy • Turning acoustic musical instruments business into profit • Growth in Chinese and emerging markets 2
Slide 3: Positioning of Musical Instruments Business within Yamaha
Positioning of Musical Instruments Business within Yamaha
Slide 4: Musical Instruments Segment
Musical Instruments Segment Core Business Domain Focused on “Musical Instruments, Music, and Audio" Musical Products Services instruments segment Musical instruments Music school Professional audio Music software equipment Audio products 4
Slide 5: Musical Instruments Segment – Sales & Operating Income
Musical Instruments Segment – Sales & Operating Income Billions of yen 600 Lifestyle-Related Products Sales Operating Profit Other than musical inst. 500 Musical Instruments Billions of yen 414.8 427.0 400 30 300 25.0 309.0 20 200 18.5 276.3 10 100 6.8 5.1 0 0 FY2007.3 FY2008.3 FY2009.3 FY2010.3 FY2
Slide 6: Musical Instruments Market and Yamaha's Position
Musical Instruments Market and Yamaha’s Position
Slide 7: Size of Global Musical Instruments Market
Size of Global Musical Instruments Market Estimated size of global market by product (unit: Billions of yen, at wholesale price) Piano 120 PA equipment Digital 370 keyboard Market size: 130 Approx. ¥1,010 billion Guitar/Drum Wind 240 instruments 150 Yamaha's share: 18% *Based on our own estimation.
Slide 8: Past Trend in Musical Instruments Market
Past Trend in Musical Instruments Market Trend in Trend in developed countries emerging countries Sign of recovery from Steady increase in demand demand contraction following economic crisis – Small impact of economic crisis – Increasingly low price – Growing BRICs market – Reduced public expenditur
Slide 9: Projection of Musical Instruments Market Growth (by product group)
Projection of Musical Instruments Market Growth (by product group) represents impact of exchange rate attributable to Billions of yen yen appreciation. Figures do 1,400 1,080 1,130 not reflect the impact of exchange rate. 1,200 1,010 PA equipment 1,000 Digital 800 keyboard 600 Wind instruments 400 G
Slide 10: Projection of Musical Instruments Market Growth (by region)
Projection of Musical Instruments Market Growth (by region) represents impact of Billions of yen exchange rate attributable to 1,400 yen appreciation. Figures do 1,130 not reflect the impact of 1,080 exchange rate. 1,200 1,010 China 1,000 800 Asia Pacific 600 Europe 400 North America 200 Japan 0 FY2
Slide 11: Market Environment Recognition and Yamaha
Market Environment Recognition and Yamaha Category Share Market Condition and Outlook (2010) The world-largest Chinese market will grow further. Sales Piano 33% in developed countries will gradually decrease in the future. Yamaha has the No.1 position in the global market. Demand is increasing mainl
Slide 12: Market Size and Yamaha's Share by Product Group
Market Size and Yamaha's Share by Product Group Piano 2010 33％ 2013 Yamaha Yamaha's share Digital keyboard 2010 49％ 2013 Other than Yamaha Guitar/Drum 2010 7％ 2013 Wind instruments 2010 20％ 2013 PA equipment 2010 8％ 2013 0 100 200 300 400 Billions of yen Estimated 2010 market sizes and shares. Yamah
Slide 13: Yamaha's Business Strategy
Yamaha's Business Strategy
Slide 14: Musical Instruments Business: Medium-Term Sales & Operating Income Targets
Musical Instruments Business: Medium-Term Sales & Operating Income Targets Sales (Billions of yen) Operating income 350 40 309.0 300 276.3 270.0 30 250 200 18.5 20 150 100 7.0 10 5.1 50 0 0 FY2010.3 FY2011.3 FY2012.3 FY2013.3 5 years-later US$ =93 US$ =87 US$ =90 Euro=131 Euro=112 Euro=127 Targeted
Slide 15: Breakdown of Changes in Sales for Medium-Term Plan
Breakdown of Changes in Sales for Medium-Term Plan (unit: Billions of yen) PA N. America/ equipment Europe/Japan (+8%) Wind 10.6 inst. Asia 16.6 Guitar/ Drum 3.5 Pacific Piano/ (+21%) Digital Digital keyboard 6.4 309.0 piano China 8.8 (+50%) 2.1 10.1 7.3 ) 276.3 ( +12% .7 +32 FY2010.3 FY2013.3 By bu
Slide 16: Turning Piano Business into Profit
Turning Piano Business into Profit
Slide 17: Turning Piano Business into Profit
Turning Piano Business into Profit Structural reform of Piano Division • Review of operations and functions • Review of operation volume • Premium pianos • Locally-sourced • Prestige pianos parts • Affordable pianos • Review of wood procurement • Pianos made in Indonesia Reduction Strengthening in p
Slide 18: Enhancing Operational Effectiveness: Review of Piano Division functions
Turning Piano Business into Profit – Enhancing Operational Effectiveness Review of Piano Division functions Achieve equidistance between Piano Division and three factories. Transfer indirect functions (incl. product development) from Piano Division (HQ) to three factories. Piano Division should
Slide 19: Enhancing Operational Effectiveness: Review of Piano Division functions
Turning Piano Business into Profit – Enhancing Operational Effectiveness Review of Piano Division functions Achieve equidistance between Piano Division and three factories. Transfer indirect functions (incl. product development) from Piano Division (HQ) to three factories. Piano Division should
Slide 20: Piano Manufacturing Cost Reduction
Turning Piano Business into Profit – Manufacturing Cost Reduction Kakegawa Overseas Factories Supply of knock down parts Factory (China/Indonesia) ・・Reduce Reducecostcostand andstrengthen •• Accelerate strengthen Acceleratein-house in-housemanufacturing manufacturingand and price price competitivene
Slide 21: Enhancing Product Competitiveness and Increasing Profitability of Kakegawa Factory
Enhancing Product Competitiveness and Increasing Profitability of Kakegawa Factory Respond to polarizing demand for “individual preferences-oriented” and “price-oriented” Flagship model "CFX" → Premium Piano series Development of new products with attributes inherited from CFX → Prestige Piano s
Slide 22: Manufacturing Base Strategy
Turning Piano Business into Profitability – Manufacturing Base Strategy 140,000 129,100 units 116,000 units 120,000 100,000 China 83,000 units 82,000 units 63,000 80,000 20,000 36,000 60,000 24,000 Indonesia 40,000 37,600 20,000 34,000 20,000 39,000 26,000 20,000 Kakegawa 19,000 0 FY2007.3 FY2010.3
Slide 23: Improve the Operating Income by ¥5 billion from FY2010.3 to FY2013.3
Increasing Piano Business Profitability Improve the Operating Income by ¥5 billion from FY2010.3 to FY2013.3 Effect of consolidating Japanese Factories: ¥0.8 billion Logistics cost Energy cost Lowering Kakegawa's Effect of production breakeven point: increase: ¥2.6 billion ¥1.6 billion Increase prod
Slide 24: Piano Business – Numerical Targets
Piano Business – Numerical Targets FY2010.3 FY2013.3 Target for the 5th Result Target year Sales (Billions of yen) 40.3 45.0 50 Operating Operating income margin income negative +0 5% 24
Slide 25: Strengthening Profitability of Wind Instruments Business
Strengthening Profitability of Wind Instruments Business
Slide 26: Strengthening Profitability of Wind Instruments Business
Strengthening Profitability of Wind Instruments Business Implement manufacturing reform ahead of the original schedule Accelerate cost reduction efforts Increase market competitiveness & profitability Consolidate domestic manufacturing bases Drastically boost sales in China (To be completed in F
Slide 27: Wind Instruments Business – Manufacturing Base Strategy
Wind Instruments Business – Manufacturing Base Strategy k (thousand) units 400 k units 400 350 k units 330 k units Indonesia 310 k units • Woodwind instruments 300 production base 23% • Full production of woodwind instrument 38% parts 14% 200 China • Brass instruments production base for all 25% mar
Slide 28: Wind Instruments Business – Numerical Targets
Wind Instruments Business – Numerical Targets FY2010.3 FY2013.3 Target for the 5th Results Plan year Sales (Billion of yen) 31.0 34.5 36.0 Operating income 3% 10% >10% margin 28
Slide 29: Growth in Chinese Market
Growth in Chinese Market
Slide 30: Musical Instruments Segment Sales Plan for China and Emerging Countries
Musical Instruments Segment Sales Plan for China and Emerging Countries Billions of yen 90 85 80 68 Mature Market 70 S. Korea, Taiwan, 57 Australia, 60 52 Singapore, etc. 50 Growth Market 40 Russia, CIS, India, ASEAN, Latin 30 America, Middle East, and Africa 20 China 10 0 FY2010.3 FY2011.3 FY2013.3
Slide 31: Chinese Musical Instruments Market
Chinese Musical Instruments Market Billions of RMB 14 Domains covered by Yamaha 12.0 PA 12 equipment 10 9.8 B&O Price range 8 Guitar/Drum 7.0 6 Digital Keyboard 4 Piano 2 0 Volume FY2010.3 FY2013.3 FY2015.3 5 years later The market has a pyramid The market is led by piano products: As of 2010, struc
Slide 32: Growth Strategy: Promoting Market-Tailored Products
Growth Strategy: Promoting Market-Tailored Products Increase sales of musical instruments segment to 1.5 billion yuan in 3 years and 2.3 billion yuan in 5 years. Price range Number of pianos sold in (1,000 RMB) retail market by price range 35-40 Up to 2008, Yamaha lowest price was set at Tianjin Fac
Slide 33: Growth Strategy: Expansion of Sales Network
Growth Strategy: Expansion of Sales Network March 2010 March 2013 1,000 stores 1,500 stores 2010 → 2013 In local cities, Yamaha aims to open a general Piano 350 500 musical instruments store as a starting point. Wind instruments 170 260 In large cities, Yamaha will expand and Digital keyboard 250 50
Slide 34: Yamaha in Growing Chinese Market
Yamaha in Growing Chinese Market Projection of market growth (number of units) (1,000 units) 2010 2013 5 years later Piano 250 280 300 Market Digital piano 100 140 160 Portable keyboard 370 460 530 Guitar 500 670 800 Wind instruments 310 370 430 (1,000 units) 2010 2013 5 years later 32 50 65 Yamaha
Slide 35: Growth in Other Emerging Countries
Growth in Other Emerging Countries
Slide 36: Sales Plan for Other Regions
Sales Plan for Other Regions In the next 5 years, "emerging market" will account for 48% of total sales in the Asia-Pacific region. Billions of yen 60 +38% 54.8 48.3 50 41.2 Emerging 39.7 25.8 market 40 21.8 15.6 17.4 Medium-growth 30 market 10.8 20 8.3 9.0 10.8 Mature market 10 17.9 15.7 15.1 15.3
Slide 37: Sales Plan for Emerging Countries
Sales Plan for Emerging Countries In emerging markets, achieve a growth rate of 40% in 3 years and 66% in 5 years. Billions of yen 30 25.8 +66% Other developing 25 3.2 markets 2.1 Middle East/ 20 6.4 Africa/CIS 15.6 1.9 5.1 15 1.8 4.4 6.0 Brazil 4.1 5.5 10 4.4 3.9 5.3 Indonesia 4.9 5 3.3 3.5 1.7 Ind
Slide 38: Increasing Middle-Income Population
Increasing Middle-Income Population Middle-income population is rising in rapidly-growing emerging countries. Upper-income population: 1-5% Middle-income population: 10-35% Increase sales by introducing low-priced products Local-taste models CIS-compliant Low-priced keyboard PA equipment Low-priced
Slide 39: Yamaha's Presence in Emerging Markets
Yamaha's Presence in Emerging Markets Completion of operational base establishment in every emerging market ⇒ Shift to the full profit-maximization phase Russia (2007) S. Korea (2001) Dubai (1997) China (2002) India (2008) Taiwan (1996) Mexico (1958) Thailand (1989) Malaysia (1974) Panama (1975) Rus
Slide 40: Key Points of Strategies for China and Emerging Countries – Wrap up
Key Points of Strategies for China and Emerging Countries – Wrap up ● Introduce strategic products to the expanding middle-income population – Shift the primary target of product development from developed countries to China and emerging markets. • Develop new piano models that target most selling p
Slide 41: 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
Slide 42: Yamaha – Creating Kando Together
@ YAMAHA CREATING KANDO TOGETHER