Yamaha Corporation · TSE:7951
Yamaha — H1 FY2004 Earnings Presentation
29 slides from Yamaha's earnings presentation, Nov 10, 2003
Slide 1: Analyst and Investor Briefing on the First Half of Fiscal Year Ended March 31, 2004
Analyst and Investor Briefing on the First Half of the Fiscal Year Ended March 31, 2004 (April 1, 2003, to September 30, 2003) November 10, 2003 YAMAHA CORPORATION
Slide 2: Review of Performance in the Interim Period
Review of Performance in the Interim Period Second Quarter TSecond quarter sales and income exceeded levels recorded in the same period of the previous year as well as August 8, 2003, projections. TThanks to hedging through futures contracts for the sale of euros, foreign exchange gains were ¥1.1 bi
Slide 3: Performance in the Interim Period
Performance in the Interim Period ¾ Compared with projections announced on August 8, 2003, and the FY2003 interim period, both sales and profit were higher. （Billions of Yen） ） FY2003 Change FY2004 (1H) Change FY2004 from from (1H) (1H) FY2003(1H) projections projections Ｑ 2Ｑ Net Sales 253.7 266.2 4
Slide 4: Breakdown of Operating Income/Loss in the Interim Period
Breakdown of Operating Income/Loss in the Interim Period Decrease in （Billions of Yen） ） SG&A Decrease in Expenses Pension Manufacturing +1.1 Obligations Actual Costs Increase in (0.6) Sales +4.5 (+9.9) Gain on Foreign +5.3 Exchange +3.0 26.4 13.1 FY2003(1H) FY2004 (1H) Operating Income Operating In
Slide 5: Non-Operating and Extraordinary Income (Loss), Taxes
FY2003 FY2004 FY2004 (1H) (1H) (1H) 8/8/2003 Projections （Billions of Yen） ） Non-Operating Income (Loss) Equity method income 3.5 5.2 3.9 Net financial expenses (0.6) (0.4) (0.7) Other (1.8) (1.5) (2.2) Total +1.1 +3.3 +1.0 Extraordinary Income (Loss) Income (loss) from disposal of fixed assets (0.5
Slide 6: Net Sales by Business Segment
Net Sales by Business Segment （Billions of Yen） ） 266.2 (+4.9%) 263.6 (+3.9%) 264.0 265.5 (+0.6%) 253.7 Recreation and 23.6 (+14.6) 23.6 23.5 23.6 (+0.4) Others 20.6 Electronic Equipment 24.9 36.4 (+46.2) 36.4 33.0 36.4 (+10.3) and Metal Products Lifestyle- Lifestyle-Related 23.6 23.2 (-1.7) 23.2 23
Slide 7: Operating Income by Business Segment in the Interim Period
Operating Income by Business Segment in the Interim Period （Billions of Yen） ） Currency Actual FY2003 FY2004 Increase/ 8/8/2003 Exchange Increase/ (1H) (1H) (Decrease) Projections Impact (Decrease) Musical Instruments 6.0 9.7 +3.7 +1.9 +1.8 7.0 AV/IT 1.0 1.4 +0.4 +1.1 (0.7) 1.5 Lifestyle-Related Pro
Slide 8: Recovery of Profitability in the Musical Instruments Business
Recovery of Profitability in the Musical Instruments Business ¾ The interim period ratio of operating income to net sales improved to a level last seen in the first half of the year ending March 31, 2001. Operating Income to Net Sales Ratio 6.5 6.5 （％） 4.1 2.6 （Billions of Yen） ） Operating Income 9.
Slide 9: Improvement in Profitability in the Electronic Equipment and Metal Products Business
Improvement in Profitability in the Electronic Equipment and Metal Products Business ¾ The interim period ratio of operating income to net sales improved significantly compared with the same period of the previous year. Operating Income to Net Sales Ratio 39.0 （％） 23.7 14.9 14.1 （Billions of Yen） ）
Slide 10: Background of the Strong Performance of the Semiconductor Business
Background of the Strong Performance of the Semiconductor Business T The growth in the mobile phone market and the spread of the use of polyphonic sound in mobile phones (expansion in the market) T YAMAHA’s unique FM sound generator + Wave Table (PCM sound generator) ÆThe FM sound generator features
Slide 11: Principal Measures and Topics for the First Half of Fiscal 2004
Principal Measures and Topics for the First Half of Fiscal 2004 T Business z Began China-based holding company operations (April 2003) The effects of SARS have stunted progress. The piano plant in China faced delays in real estate acquisition and the start of production has been delayed for six mont
Slide 12: Business Environment in the Second Half of Fiscal 2004
Business Environment in the Second Half of Fiscal 2004 T Overall Instability and unpredictability in global economy to continue T Musical Instruments Increase of Chinese-manufactured pianos and wind instruments Expansion in software and network markets T AV/IT Home theater component market to shrink
Slide 13: Forecasts of Business Performance in FY2004
Forecasts of Business Performance in FY2004 （Billions of Yen） ） FY2003 Results FY2004 Projections Increase 1H 2H Total 1H 2H Total Net Sales 253.7 271.0 524.7 266.2 277.8 544.0 3.6% Operating Income 13.1 18.9 32.0 26.4 15.6 42.0 31.3% (Operating Income Ratio) (6.1%) (7.7%) Recurring 47.5 Profit 14.2
Slide 14: Breakdown of Operating Income/Loss in FY2004
Breakdown of Operating Income/Loss in FY2004 （Billions of Yen） ） Decrease in Increase in Actual Manufactur- SG&A Increase in ing Costs Expenses Pension Sales Obligations Gain on (+21.4) +4.3 (1.8) Foreign (1.1) Exchange +4.2 +4.4 42.0 32.0 Operating Income Operating Income for FY2003 for FY2004
Slide 15: Second Half Non-Operating and Extraordinary Items
FY2003 FY2004 FY2004 (2H) ） (2H） (2H) New Projections 8/8/2003 Projections （Billions of Yen） ） Non-Operating Income (Loss) Equity method income 4.1 5.0 5.1 Net financial expenses (0.8) (0.6) (0.8) Other (2.6) (2.2) (2.3) Total +0.7 +2.2 +2.0 Extraordinary Income (Loss) Income (loss) from disposal of
Slide 16: Forecasts of Net Sales by Business Segment
Forecasts of Net Sales by Business Segment （Billions of Yen） ） 544.0 （+3.7%) 546.1 （+4.1%) 541.0 547.3 （+1.2%) 524.7 46.0 47.5 （+3.3) 47.5 （+13.6) 47.5 Recreation and 41.8 Others 70.5 61.5 70.5 (+14.6) Electronic Equipment 60.6 70.5 (+16.3) and Metal Products 45.5 45.5 (0) Lifestyle- Lifestyle-Relat
Slide 17: Forecasts of Operating Income by Business Segment
Forecasts of Operating Income by Business Segment （Billions of Yen） ） Currency Actual FY2004 Increase/ 8/8/2003 FY2003 Exchange Increase/ Projections (Decrease) Projections Impact (Decrease) Musical Instruments 9.8 12.0 +2.2 +2.4 (0.2) 12.0 AV/IT 3.2 4.0 +0.8 +2.0 (1.2) 3.7 Lifestyle-Related Product
Slide 18: Musical Instruments
TFirst Half Musical Instruments • In the U.S. market, the adjustment in the distribution of inventories has run its course and sales exceeded projections as well as previous interim period sales. Business performance overall in Europe was strong. • Sales in Asia increased, led by the Middle East and
Slide 19: Ringing Melodies Distribution Service Development
Ringing Melodies Distribution Service Development TJapan Number of YAMAHA Members is Stagnant. Overall Conditions: T The market is saturated and new content providers are beginning to emerge. The size of the market is estimated to be between ¥70.0 and ¥80.0 billion and Chaku-uta (reproduction of bri
Slide 20: AV/IT
AV/IT TFirst Half • Sales have declined compared with both previous fiscal year interim period results and our plans due to intensified competition and delays in adapting to changes in the market. • Small-scale corporate-use router sales were strong. TPriority Policies for the Second Half • Securing
Slide 21: Electronic Equipment and Metal Products
Electronic Equipment and Metal TFirst Half Products • Mobile phone sound chips rebounded in the second quarter and semiconductors continued to perform well. • The profitability of the electronic metals business improved along with the withdrawal from the invar materials business. • Due to deteriorat
Slide 22: Semiconductors
TFirst Half Semiconductors • Mobile phone sound chips lost momentum in the first quarter due to inventory adjustments and the SARS epidemic, but in the second quarter they staged a recovery centered in China and South Korea. • Chips for amusement machines (Pachinko, Pachislo, etc. ) maintained their
Slide 23: Trends in the Global Market for Mobile Phones
Trends in the Global Market for Mobile Phones ■Situation in 2003 • Mobile phone sales rose 18% in the January-March (Millions Units) quarter from the same quarter of 2002, and increased 12% 500 in the April-June quarter from the same quarter of 2002. • The effects of SARS had nearly played out as of
Slide 24: 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) • Rush for new handsets with cameras, increase in replacement demand Japan 78.6 48.0 • Market for third generation (3G) mobil
Slide 25: Electronic Metal Products
Electronic Metal Products TFirst Half •Invar material production ended on schedule in July 2003. •Sales improved due to our focus on lead frame materials. TPriority Policies for the Second Half •Expand share of market for lead frame materials, focusing on copper lead frames •Improve profitability th
Slide 26: Lifestyle-Related
TFirst Half Lifestyle-Related • Competition was fierce in principal wholesale routes and sales declined from the same period of the previous year. • Profits increased due to successful cost cutting measures. TPriority Policies for the Second Half • Lower the breakeven point by reducing fixed asset c
Slide 27: Recreation
TFirst Half Recreation • Due to an unseasonably cool summer, number of day-trippers and golf-related sales declined, but overnight guest stayed surpassed levels in the previous year as well as targets. • Sunza Villa ceased business at the end of June, as scheduled. TPriority Policies for the Second
Slide 28: Others
TFirst Half Others • YAMAHA continued full-capacity production of Mg-molded parts for mobile phones. • Income from automobile interior components increased compared with previous forecasts due to increased production. • Profitability in golf operations was firm thanks to high market evaluations and
Slide 29: Forward-looking statements 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