Yamaha Y h Corporation C ti Analyst and Investor Briefing on the Fiscal Year Ended March 31, ( ) 2016 (FY2016.3) May 2, 2016 Overview of Performance in FY2016.3 Results Summary Full year sales and income increased year-on-year (for the fourth consecutive year). Operating income exceeded ¥40 billion, a level surpassed only in FY2004.3. Musical instrument sales declined from the previous year due to f t factors including i l di transfer t f off music i school h l operations, ti but b t higher hi h actual sales and improved gross margins led to a sharp increase in income. q p sales and income rose year-on-year, y y , driven by y Audio equipment rallying demand for AV products and strong sales of professional audio equipment. Although electronic device sales were lower than in the previous year the effects of restructuring improved profitability and returned year, income to positive territory in all segments. The target of 10% ROE set for the final year of the YMP2016 Medium-Term Management Plan was met, and all the main goals of the plan were achieved. 2 Performance in FY2016.3 (Billions of yen) Changes from previous the p year FY2016.3 previous p projections FY2015.3 FY2016.3 432.2 435.5 30.1 40.7 (7.0%) (9.3%) 31.2 40.9 (7.2%) (9.4%) 24.9 32.6 ((5.8%) %) ((7.5%) %) US$ 110 120 121 EUR 139 133 133 US$ 109 121 121 EUR 141 134 134 Net Sales Operating Income (Operating Income Ratio) Ordinary Income (Ordinary Income Ratio) Net Income* (Net Income Ratio) +0.8% +34.9% +31.0% 31 0% +30.9% 437.0 41.0 (9.4%) 41.5 (9.5%) 34.5 ((7.9%) %) Changes from the p previous projection -0.3% -0.8% -1.4% 1 4% -5.4% Exchange Rate (yen) Net Sales Operating Income * Net income is presented as net income attributable to owners of parent on the consolidate financial statements **Previous projections were announced on February 4, 2016 3 Performance by Business Segment in FY2016.3 Net Sales Year-on-year change ■Others ■Electronic Devices ■Audio Equipment 432.2 (+0.8%) 24.2 13.4 (-0.3%) 435 5 435.5 24.2 13.1 (-2.7%) (+5 8%) (+5.8%) 112.8 119.4 Operating Income (Billions of yen) Change from the previous projections (-0.3%) 437.0 (+0.7%) 24.0 13.0 (+0.5%) (+0.7%) 40.7 30.1 0.3 0.5 0.5 01 0.1 118.5 0.4 41.0 ■Others 8.7 8.5 31.5 31.5 ■Electronic Devices ■Audio Equipment 6.1 ■Musical Instruments (-1.0%) 281.7 278.9 (-0.9%) 281.5 ■Musical Instruments 25.1 - 1.4 FY2015.3 FY2016.3 Impact of Exchange Rates Year-on-Year FY2016.3 FY2015.3 (previous projections) FY2016.3 FY2016.3 (previous projections) +¥4.4 billion -¥1.7 billion (musical instruments +¥3.5 billion, audio equipment +¥0 7 billion +¥0.7 billion, electronic devices +¥0 +¥0.2 2 billion) (musical instruments -¥0.1 billion, audio equipment -¥1.3 billion electronic devices -¥0.3 billion, ¥0 3 billion) -¥3.0 billion Versus previous (musical instruments -¥2.1 billion, audio equipment projections -¥0.9 billion) * Previous projections were announced on February 4, 2016 ¥0 billion (musical instruments -¥0.1 billion, audio equipment +¥0.1 billion) 4 FY2016.3 Operating Income Analysis Versus same period of the previous year I Impact t off Increase in exchange labor cost rates at overseas factories -¥1.7 +¥9.3 Increase in profitability of electronic devices -¥1.8 ¥1 8 Increase in SG&A 30.1 (Billi (Billions off yen)) Improvement in manufacturing cost Increase in +¥4.4 sales and production 40.7 +¥1.9 -¥1.5 FY2015 3 FY2015.3 FY2016 3 FY2016.3 Versus previous projections Increase in SG&A 41.0 -¥1.7 ¥1 7 Electronic devices not reaching the planned cost measures FY2016.3 (previous projections) * Previous projections were announced on February 4, 2016 -¥0.4 Increase in Improvement in sales and manufacturing production cost +¥1.5 ¥1.5 +¥0.3 40.7 FY2016.3 5 Musical Instruments 4Q/Full Year (Billions of yen) ■Net Sales 4Q Music schools, etc. 4Q Overview (Three Months) ■Operating Income • 69 3 69.3 62 1 62.1 20.4 15.0 • Yamaha musical instruments 48.9 47.2 3.1 3.7 • FY2016 3 4Q FY2016.3 FY2015 3 4Q FY2015.3 Full Year Overview Full Year Music schools, etc. 281 7 281.7 278 9 278.9 281 5 281.5 • 78.2 62.8 63.4 • • Yamaha musical instruments 203.5 216.1 218.1 25.1 31.5 31.5 FY2015.3 Sales declined year-on-year, but income rose. Th impact The i t off exchange h rates t and d the th transfer t f off music school operations were the main factors behind lower sales. Digital pianos, wind instruments, and guitars all recorded strong sales. Discounting the effect of exchange rates, overall actual product sales were broadly in line with the year. same period of the previous y FY2016.3 • Sales decreased year-on-year, year on year but income increased sharply. Sales of digital pianos, wind instruments, and guitars were brisk throughout the year. Sales were favorable in Europe and China, and strong in North America. Profitability increased sharply, due to factors g improvements p in the product p mix and including lower manufacturing costs. FY2016.3 (previous projections) * Previous projections were announced on February 4, 2016 6 Musical Instruments: Sales by Region Sales Projections (including software products and music schools) (Billions of yen) *Figures in blue parentheses show actual year-on-year changes, excluding the sales of music school Figures in red parentheses show actual year-on-year changes, discounting the impact of exchange rates 105.0 4Q 26.9 89.0 (97%) (85%) 21.8 (81%) 3Q 50.2 20.5 49.4 50.7 13.5 (103%) (79%) 2Q 24.2 (101%) 56.4 56 4 (104%) 26 1 26.1 13 6 13.6 19.4 14.0 (107%) (80%) 1Q 27.8 27.2 (98%) 12.5 13.0 15 8 (105%) 15.8 11.0 13.1 (101%) FY2015.3 FY2016.3 Japan 9.7 9.4 16.2 16.9 12.8 13.8 10.6 10.7 (108%) 47.8 47.6 (99%) ((101%)) (112%) (109%) (105%) 29.3 7.2 75 7.5 8.5 6.1 35.2 ((112%)) 10 5 11 8 10.5 11.8 6.9 (103%) 8.9 (117%) 14.0 13.2 (99%) (103%) 11.1(114%) 12 3 11.9 12.3 8.3 (114%) 10.1 11.5 FY2015.3 FY2016.3 FY2015.3 FY2016.3 FY2015.3 FY2016.3 North America Europe China (105%) FY2015.3 FY2016.3 Other Regions 7 Audio Equipment 4Q/Full Year (Billions of yen) 4Q 4Q Overview (Three Months) ■■■Net Sales • ■Operating Income ICT devices PA equipment AV products, karaoke 30.3 28.8 3.6 3.5 14 7 14.7 15 0 15.0 12.0 10.3 1.5 • 0.9 FY2016 3 4Q FY2016.3 FY2015 3 4Q FY2015.3 Full Year • 119.4 Full Year Overview 118 5 118.5 13.6 15.2 15.3 • • 47 4 47.4 52.4 51 8 51.8 • 51.9 51.9 51.3 6.1 8.7 8.5 FY2015.3 FY2016.3 112 8 112.8 ICT devices PA equipment AV products, karaoke Sales and income were both down year-on-year, b t actual but t l sales l discounting di ti the th impact i t off exchange rates were on a par with the same period of the previous year. Although AV products rallied, actual sales did not reach the previous year’s 4Q levels. Sales through musical instrument channels and installation of audio equipment in Japan drove g sales of professional audio equipment in strong PA equipment business. Sales and income increased year-on-year. year on year New products drove a rebound in AV product sales, and actual sales of professional audio equipment recorded double-digit growth. Higher income from both key product categories of AV products and professional audio equipment, drove the increase in segment income. FY2016.3 (previous projections) * Previous projections were announced on February 4, 2016 8 Audio Equipment: Sales by Region (Billions of yen) 31.3 (100%) (101%) (109%) 30.1 28.7 6.6 24.7 24.9 31.1 Figures in parentheses show actual year-on-year changes, discounting the impact of exchange rates (88%) 7.9 6.5 6.6 (106%) (109%) 19.6 (102%) 4Q 8.8 9.1 9.9 9 9 (111%) 92 9.2 (101%) 10 4(121%) 10.4 4.5 8.5 3Q 5.3 (111%) 8.0 2Q 5.0 (117%) (103%) 6.6 7.5 7.8 5.9 (96%) 1Q 5.5 (105%) 4.1(74%) FY2015.3 FY2016.3 Japan 5.7 6.7 FY2015.3 FY2016.3 North America 6.8 6.4 (99%) FY2015.3 FY2016.3 Europe (115%) 97 9.7 61 6.1 2.5 (103%) 2.5 26 2.6 2.4 2.2 3.5 (132%) FY2015.3 FY2016.3 China 6.4 (110%) 4.8 2.8 (108%) 2.7 (115%) 41 4.1 (113%) 11.5 5.9 20.5 5.3 (111%) 4.1 4.7 FY2015.3 FY2016.3 Other Regions 9 Musical Instruments/Audio Equipment: Sales by Major Product Category (Yamaha branded products) (Billions of yen) Musical Instruments Piano 50.1 Audio Equipment Digital Musical Instruments 85 7 85.7 51 4 51.4 (100%) 11.4 (94%) 19.3 13 1 13.1 (100%) 26 2 26.2 89.3 (103%) 18.4 (101%) 4Q 12.8 3Q 13.3 2Q 12.9 14.7 (105%) 21.5 23.1 (102%) 1Q 11 1 11.1 12 1 12.1 (100%) 18 7 18.7 19 8 19.8 (99%) FY2015.3 FY2016.3 FY2015.3 FY2016.3 Wind Instruments 37.9 42.7 (110%) 9.9 (107%) 8.6 (105%) 9.7 11.7 10.3 12.5 FY2015.3 FY2016.3 (114%) (113%) (110%) String and Percussion Instruments 24.8 9.6 9 6 8.3 28.1 27.3 (109%) AV Products 46.5 10.4 11.5 12.2 (100%) 9.2 8.8 FY2015.3 FY2016.3 (89%) PA Equipment 47.4 14 7 14.7 7.7 (110%) 12.2 62 6.2 7.3 (111%) 10 9 10.9 5.2 6.1 (109%) 9.5 FY2015.3 FY21016.3 Figures in parentheses show actual year-on-year changes, discounting the impact of exchange rates (97%) 17 9 (117%) 17.9 (105%) 7.1 9.5 (103%) 15.5 6.1 6.2 48.3 FY2015.3 52.4 (111%) 15.0 (107%) 13.3 (112%) 12.6 (111%) 11.5 (114%) FY2016.3 10 Electronic Devices 4Q/Full Year (Billions of yen) ■Net Sales 4Q 4Q Overview (Three Months) ■Operating Income • • 2.9 2.6 -0.3 FY2015 3 4Q FY2015.3 -0.5 FY2016 3 4Q FY2016.3 Full Year Overview Full Year • • 13.4 -1.4 FY2015.3 Sales and income were down year-on-year. Reduced gross margins due to lower sales and deterioration in manufacturing profitability were the main factors behind the decline in income. 13.1 13.0 0.1 0.5 FY2016.3 • Although sales declined year-on-year, year on year profitability improved to return income to positive territory. The recoil effect following advance shipment of amusementt equipment i t in i the th first fi t half h lf continued ti d throughout the second half. The effects of fixed cost reduction associated with the transition to fabless production restored profitability. FY2016.3 (previous projections) * Previous projections were announced on February 4, 2016 11 Others 4Q/Full Year (Billi (Billions off yen)) 4Q Overview (Three Months) ■■■■Net Sales 4Q ■Operating Income FA equipment, etc. Resort Golf p products Automobile interior wood component • 65 6.5 63 6.3 1.7 0.9 1.8 18 1.8 0.9 19 1.9 2.0 1.6 0.1 • -0.3 FY2016 3 4Q FY2016.3 FY2015 3 4Q FY2015.3 Full Year Overview Full Year 24.2 FA equipment, 6.4 etc. 24.2 24.0 • 7.0 6.9 • • Resort 47 4.7 48 4.8 49 4.9 Golf products 5.5 5.8 5.7 65 6.5 65 6.5 Automobile interior wood component 77 7.7 0.4 FY2015.3 Sales and income declined year-on-year, resulting lti in i an operating ti loss. l Although sales were on a par with the same period of the previous year, profitability declined due to lower sales of automobile interior wood components and deteriorating gross profit margins in the factory automation business. 0.3 FY2016.3 0.5 FY2016.3 (previous projections) * Previous projections were announced on February 4, 2016 • • Although sales were broadly in line with the previous i year and d previous i projections, j ti income i decreased slightly. Golf product sales increased, driven by strong demand in the domestic market. Sales also rose year-on-year in the factory automation and resort businesses. Sales of automobile interior wood components were down from the previous year. The year-on-year decline in income from automobile interior wood components was the main factor behind deteriorating profitability. 12 Forecast for Performance in FY2017.3 Assumptions Despite uncertainty in the market environment, markets are projected to remain firm. firm Musical instruments: growth in actual sales of pianos, digital musical instruments, and guitars. Aiming for increased market share in all product categories. Audio equipment: anticipating full-scale market launches of new AV and professional audio equipment products. Exchange rate forecast: US$1 = ¥110, ¥110 EUR1=¥125 Changes in Segments for Reporting From FY2017.3, soundproof room business, which were previously included in the musical instruments segment, will be recorded in the audio equipment segment. (In FY2016.3 sales from this business were around ¥1.5 billion and had minimal impact on income.) income ) The electronic devices segment will be eliminated from reporting, and results will be listed under industrial machinery and components in the others segment, together with factory automation equipment and automobile interior wood d components. t Note: In subsequent slides, segment results for FY2016.3 have been adjusted to reflect these new arrangements. 13 Forecast for Performance in FY2017.3 (Full Year) Although net sales is expected to decline due to the major impact of exchange rates in FY2017.3, operating income is projected to rise. Net income is anticipated to increase due to recognition of deferred tax assets. ((Billions of yen) y ) FY2016.3 FY2017.3 Projections 435 5 435.5 420 0 420.0 Operating Income 40.7 42.0 (Operating Income Ratio) ((9.3%)) ((10.0%)) Ordinary Income 40.9 42.0 (Ordinary Income Ratio) (9.4%) (10.0%) 32.6 45.5 (7.5%) (10.8%) US$ 120 110 EUR 133 125 US$ 121 110 EUR 134 125 N tS Net Sales l Net Income* Income (Net Income Ratio) Changes from the Year-on-year previous year percentage change -15.5 15 5 -3.6% 3 6% +1.3 +3.3% +1.1 +2.7% +12.9 12 9 +39.4% 39 4% Exchange Rate (yen) Net Sales Operating O ti Income * Net income is presented as net income attributable to owners of parent on the consolidate financial statements 14 Forecast for Performance by Business Segment in FY2017.3 Net Sales Operating Income (Billions of yen) Year-on-year change 435.5 37.2 ■Others ■Audio Equipment 120.8 420.0 37.0 120.0 (-3.6%) (-0.5%) (-0.6%) 40.7 0.4 0 42.0 0.5 8.7 9.0 ■Musical Instruments (-5.2%) 277.5 263.0 FY2016.3 FY2017.3 projections 31.5 32.5 FY2016.3 FY2017.3 projections ■Others ■Audio Equipment ■Musical Instruments Impact of Exchange Rates Year-on-Year -¥24.2 billion -¥6.5 billion (musical instruments -¥15.9 billion, audio equipment -¥7.9 billion, electronic devices -¥0.5 billion) (musical instruments -¥5.2 billion, audio equipment -¥1.4 billion, electronic devices +¥0.1 billion) * The net sales of FY2016.3 has been adjusted to reflect the segment reallocation of soundproof room business. 15 FY2017.3 Sales and Operating Income Analysis (Billi (Billions off yen)) Impact of exchange Effect of rates music Increase in school -¥24.2 actual sales transfer Sales 435.5 -¥4.2 +¥12.9 420.0 FY2016.3 FY2017.3 projections Operating Income Cost reduction measures 40.7 Impact of exchange Increase in labor cost rates Increase at overseas -¥6.5 in sales Increase in factories actual +¥4.2 -¥1.7 SG&A Improved gross profit +¥4.2 42.0 +¥3.0 -¥1.9 ¥1.9 FY2016.3 FY2017.3 projections 16 Musical Instruments FY2017.3 Projections Net Sales Projections • • • Although sales are expected to decline from the previous year, income is projected to increase. The effect of exchange rates and the transfer of music school operations will be the main factors behind lower sales. Actual sales are expected to increase, especially for acoustic and digital pianos. S lli price Selling i adjustments, dj t t manufacturing f t i cost reductions, and lower amortization of goodwill are expected to compensate for reduced income due to exchange rates, l di to leading t an overall ll rise i in i income. i Music schools, etc. Yamaha musical instruments (Billi (Billions off yen)) 277.5 263.0 61.4 55.8 216.1 207.2 FY2016.3 FY2017.3 projections Operating Income (11.4%) (12.4%) 31.5 32.5 FY2016.3 * The net sales of FY2016.3 has been adjusted to reflect the segment reallocation of soundproof room business. ** Figures in blue parentheses show operating income ratio FY2017.3 projections 17 Musical Instruments: Sales by Region Sales Projections (including software products and music schools) (Billions of yen) *Figures in blue parentheses show actual year-on-year changes, excluding the sales of music school Figures in red parentheses show actual year-on-year changes, discounting the impact of exchange rates ( (99%) ) (94%) 87 6 87.6 82.6 4Q 21.5 21 3(99%) 21.3 56.4 3Q 52.8 20.2 20.4 (101%) 13.5 (103%) 12.5 (97%) 50.7 48.0 48 0 9.4 (101%) 8.6 (94%) 2Q 19 0 19.0 18.7(99%) (98%) (83%) 1Q 14 0 13.1 14.0 13 1 (103%) 15.8 14.8 (104%) 26.9 22.2 13.1 12.5 (106%) FY2016.3 FY2017.3 FY2016.3 FY2017.3 Japan North America 16.9 16.3(103%) 13 8 12 13.8 12.6 6(100%) ((105%)) 47.6 46.0 (104%) 35.2 33.6(106%) 6.9 7.3 (110%) 8.9 8.3 (104%) 11.1 10.0(102%) 10.5 10.8 (106%) 13.2 13.0 (106%) 12 3 11.9 12.3 11 9 (103%) 10.7 10.5(105%) FY2016.3 FY2017.3 Europe 8.3 8.0 (110%) FY2016.3 FY2017.3 China * The sales of FY2016.3 has been adjusted to reflect the segment reallocation of soundproof room business. 11.5 10.3 FY2016.3 FY2017.3 Other Regions 18 Audio Equipment FY2017.3 Projections Net Sales Projections Sales are expected to decrease year year-onon year, but income is projected to rise. Actual sales of AV, professional audio equipment, and ICT products are anticipated to increase. increase To enhance profitability, the company plans to boost actual sales, adjust selling prices, cut manufacturing costs, and reduce amortization of goodwill to compensate for lower income due to exchange rates. (Billi (Billions off yen)) 120.8 120.0 ICT devices d i 15 2 15.2 15.7 PA equipment 52.4 51.7 AV products, karaoke 53.3 52.7 FY2016.3 FY2017.3 projections Operating Income (7.2%) (7.5%) 8.7 9.0 FY2016.3 * The net sales of FY2016.3 has been adjusted to reflect the segment reallocation of soundproof room business. ** Figures in blue parentheses show operating income ratio FY2017.3 projections 19 Audio Equipment: Sales by Region (Billions of yen) (108%) 31.3 30.7 26.3 27.1 4Q 9.4 (103%) 6.6 6.2 1Q 6.3 4.5 6.6 6.6 (103%) (115%) (109%) 20.5 20.6 96 9.6 4.9 41 4.1 (108%) 4.6 (102%) 11.5 7.7 (108%) 7.8 7.9 (111%) 6.6 (106%) (110%) (114%) %) 10 4 10.0((103%) 10.4 6.3 (102%) 8.0 2Q 31.1 31.2 9.3 (99%) 9.9 3Q 7.2 Figures in parentheses show actual year-on-year changes, discounting the impact of exchange rates (107%) 6.7 6.1 (103%) 6.4 6.6 (111%) 2.5 FY2016.3 FY2017.3 FY2016.3 FY2017.3 Japan North America Europe 6.4 2.3 (95%) 3.0 ((91%) %) 5.3 2.8 2.7 (105%) 2.4 (98%) 4.7 FY2016.3 FY2017.3 China * The sales of FY2016.3 has been adjusted to reflect the segment reallocation of soundproof room business. 6.1 (115%) 3.5 2.7 FY2016.3 FY2017.3 10 4(97%) 10.4 5.5 (109%) 4.4 FY2016.3 FY2017.3 Other Regions 20 Musical Instruments/Audio Equipment: Sales by Major Product Category (Yamaha branded products) (Billions of yen) Musical Instruments Piano 51.4 Digital Musical Instruments 50.3 (105%) 89 3 89.3 18.4 4Q 3Q 2Q 1Q 11.4 13.1 14.7 12.1 FY2016.3 11.6 (105%) 12.9 (106%) 13.9 (104%) 11.9 (108%) FY2017.3 Wind Instruments 42.7 9.9 8.6 11.7 40.0 9.2 8.2 28.1 23.1 19.8 12.5 11.6 FY2016.3 FY2017.3 84 3 84.3 17.7 26 6 26.6 21.3 18.7 (98%) (102%) (105%) 47.0 9.5 9.7 17.9 16.3 12.2 12.1 8.8 8.9 (105%) (99%) (101%) (104%) 27.3 26.6 6.1 5.9 (109%) (112%) FY2016.3 FY2017.3 String and Percussion Instruments PA Equipment 52.4 51.7 15.0 15.0 13.2 (104%) (99%) (106%) (102%) (106%) 7.4 (103%) 13.3 7.3 7.0 (104%) 12.6 12.9 6.1 6.3 (113%) 11.5 10.7 (103%) FY2016.3 FY2017.3 (101%) (100%) 48.3 (102%) (99%) (95%) AV Products (101%) FY2016.3 FY2017.3 7.7 10.9 Audio Equipment Figures in parentheses show actual year-on-year changes, discounting the impact of exchange rates FY2016.3 (111%) FY2017.3 21 Others FY2017.3 Projections (Billi (Billions off yen)) Net Sales Projections The others segment will include electronic devices. Sales and operating income are projected to be on a par with the previous year. 37.2 37.0 Others Resort G lf products Golf d t 2.2 4.8 58 5.8 1.7 5.0 57 5.7 Industrial machinery and components 24.4 24.5 FY2016.3 FY2017.3 projections Operating Income (1.4%) (1.1%) 04 0.4 FY2016.3 * Figures in blue parentheses show operating income ratio 05 0.5 FY2017.3 projections 22 Full Year Non-Operating Income/Loss & Extraordinary Income/Loss (Billions of yen) FY2015.3 full year Non-Operating Income/Loss N t fi Net financial i l income i 26 2.6 Other Total FY2016.3 full year Others -Structural reform expenses -¥1.8 -Impairment loss on fixed asset -¥0.9 Total projections 27 2.7 33 3.3 -1.5 -2.5 -3.3 1.1 0.2 0 -Gain on disposal of idle land +¥9.0 -Others -¥0.7 Extraordinary Income/Loss Income from (loss on) disposal of fixed assets FY2017.3 full year 0 8.3 -0.2 -2.7 -7.6 0.2 -2.7 0.7 0 Income Taxes and Other Expenses -Immediate I di t amortization ti ti off goodwill d ill off Line Li 6 -¥4.5 ¥4 5 -Immediate amortization of goodwill of Revolabs -¥2.3 -Impairment loss on fixed asset -¥0.8 Income taxes -current 7.3 9.5 9.9 I Income taxes t -deferred d f d -3.9 -0.6 -13.5 0.2 0.1 0.1 3.6 9.0 -3.5 Minority interests in income Total An extraordinary loss was recorded in 4Q for a ¥2.3 billion immediate amortization of partial goodwill in the U.S. subsidiary Revolabs. In conjunction with the recent improvement in profitability, scope for recording deferred tax assets will be expanded from FY2017.3, and deferred tax assets of ¥13.5 billion are expected to be recorded. 23 Inventories Inventories at the end of fiscal 2016 amounted to ¥91.9 billion, actual inventories increased drastically due to the major impact of exchange rates compared to the previous year Inventories at the end of fiscal 2017 are forecast to be ¥87.8 billion 87.8 Goods in process/ materials Other products Audio Equipment Musical Instruments 27.7 91.9 87.8 27.1 24.6 39 3.9 4.7 16.7 18.6 3.6 3 6 17.1 38.8 42.3 42.5 FY2015.3 FY2016.3 (Billions of yen) FY2017.3 (projections) Impact of Exchange Rates Year-on-Year -¥4.7 billion -¥1.3 billion 24 Capital Expenditure/Depreciation/R&D Expenses (Billi (Billions off yen)) Capital Expenditure (Depreciation) Capital expenditure in FY2017.3 will increase due to projects including construction of the new Innovation Center on the headquarters site and investment in overseas production facilities. From FY2017.3 all group companies will shift to the straight-line method of depreciation as a uniform standard. 20.6 13.8 0.8 0.6 2.8 ■Others ■Electronic Devices ■Audio Equipment ■Musical Instruments 1.4 (12 6) (12.6) 9.5 FY2015.3 11.2 (12.7) (12 7) 0.8 0.6 3.1 6 8 (12.6) 6.8 (12 6) 12 4 12.4 6.7 FY2016.3 R&D E Expenses FY2017.3 projections j ti 25.4 1.4 3.4 24.8 1.9 2.2 25.9 4.0 11.0 11.5 12.5 9.6 9.3 9.4 FY2015.3 FY2016.3 FY2017.3 projections 25 Balance Sheet Summary (Billions of yen) As of March 31, 2015 As of March 31, 2016 As of March 31, 2017 projections Cash and deposits 79.3 88.2 98.0 Notes and accounts receivable 60.3 47.8 48.5 Inventories 87.8 91.9 87.8 Other current assets 20.2 27.2 23.7 Fi d assets Fixed t 282 4 282.4 214 6 214.6 229 5 229.5 Total assets 530.0 469.7 487.5 Notes and accounts payable 23 2 23.2 19 4 19.4 20 3 20.3 Short- and long-term loans 11.8 8.5 10.5 Other liabilities 146.3 137.9 120.6 Total net assets 348.7 303.9 336.1 Total liabilities and net assets 530.0 469.7 487.5 26 Key Financial Figures (Billions of yen) FY2015.3 FY2016.3 FY2017.3 FY2019.3 Projections Mid-term target 432.2 435.5 420.0 465.0 Operating Income 30 1 30.1 40 7 40.7 42 0 42.0 55 0 55.0 Operating Income Ratio 7.0% 9.3% 10.0% 12% ROE 8.1% 10.1% 14.3% 10% level Earnings per Share (EPS) (yen) ( ) ¥129 ¥169 ¥243 ¥200 level l l US$ 110 120 110 115 EUR 139 133 125 125 US$ 109 121 110 115 EUR 141 134 125 125 Net Sales Exchange Rate (yen) Net Sales Operating Income 27 Return to Stockholders: Stock Buyback and Dividends Completed the acquisition of treasury stock which was decided at the Board of Directors meeting on February 4 Reason: To increase the return profits to shareholders and improve capital efficiency Type of shares to be acquired: Common stock of Yamaha Corporation T t l number Total b off shares h acquired: i d 6,182,400 6 182 400 shares h Total amount acquired: 20,000,000,000 yen Acquisition period: From February 5, 2016 to April 8, 2016 Acquisition method: Purchase in the market through a trust bank Annuall di A dividends id d ffor FY2016 FY2016.3 3 is i ¥44 and d iis forecast f t tto b be ¥52 ffor FY2017.3. FY2012.3 Annual per-share dividend (yen) Dividend payout ratio ¥10 - FY2013.3 FY2014.3 FY2015.3 FY2016.3 FY2017.3 projections p j ¥10 ¥27 ¥36 ¥44 ¥52 47 0% 47.0% 22 8% 22.8% 28 0% 28.0% 26 1% 26.1% 21 4% 21.4% (Fore reference only) Projected dividend payout ratio for FY2017.3 excluding the tax effect is 30.5% 28 Appendix Quarterly Sales and Income (Billi (Billions off yen)) 118.3 116.9 108 9 108.9 106.8 108 0 108.0 105.5 99.7 99.6 8.8 6.2 1Q 115.0 111.9 10.6 2Q 3Q FY2015 3 FY2015.3 Net Sales Operating Income 4.4 4Q ¥432.2 ¥20.1 8.9 1Q 12.4 15.7 2Q 3Q FY2016 3 FY2016.3 Net Sales Operating Income 3.7 4Q ¥435.5 ¥40.7 101.0 96.0 8.5 12.5 16.0 5.0 1Q 2Q 3Q 4Q FY2017 3 (projections) FY2017.3 ( j ti ) Net Sales Operating Income ¥420.0 ¥42.0 30 Key Products in FY2017.3 Hybrid piano TransAcoustic Piano YUS1SHTA C3X-SHTA TransAcoustic piano is a hybrid piano born from the fusion of cutting cutting-edge edge technology and more than a century of piano-crafting experience. It seems like an acoustic piano with volume control, or a digital piano with strings. transducer Transducers inside the TransAcoustic p piano effectively transmit vibrations to the acoustic piano soundboard, thereby allowing digital sound to be produced directly from the soundboard without using conventional speakers or amplifiers. 31 Key Products in FY2017.3 TransAcoustic Guitar The Yamaha TransAcoustic guitar recreates an experience of playing in a rich, live room without needing any external amplification lifi ti or effects, ff t just j t the th guitar it itself. it lf An A actuator t t installed on the inner surface of the guitar back vibrates, thereby generating authentic reverb and chorus sounds from inside the body. LL-TA Vintage Tint LS-TA Brown Sunburst 32 Key Products in FY2017.3 Electric Guitar Revstar series Drawing inspiration from London and Tokyo’s vintage street-racing motorbikes, Japan’s heritage of engineering excellence and the 50-year legacy of Yamaha guitar craftsmanship, every detail of each Revstar model has been carefully engineered to bring out the unique personality of each guitar in the lineup. 33 Key Products in FY2017.3 Electric Violin YEV104 and YEV105 A new kind of electric violin taking its design inspiration from the organic beauty of wood, the simplicity of clean lines, and the comfort of light weight, combined with innovative Yamaha sound to create this gorgeous live-performance f instrument. YEV104 YEV105 34 Key Products in FY2017.3 Mobile mini keyboard reface series For keyboardists, music creators and sound designers - reface mobile mini keyboards are reimagined interfaces of classic Yamaha keyboards. reface series reface CS, reface DX, reface YC, reface CP (from upper left to lower right) 35 Key Products in FY2017.3 Guitar peripheral products from Line 6 Guitar processor Helix Rack Guitar wireless system Relay G10 Helix is a guitar processor, the most comprehensive master controller for guitar systems delivering attributes and nuance that weren’t previously attainable from modeling, giving the players classic boom and gooey compression on some amp models, and powerful gut punch on others. Relay G10 is a plug-and-play digital guitar wireless system which allows the player an incredible sound quality, rock-solid performance, and freedom of digital wireless all from the easiest, most compact instrument wireless system. Line 6 guitar processor Helix Rack Line 6 guitar wireless system Relay G10 36 Key Products in FY2017.3 Digital mixing system RIVAGE PM10 Rivage PM10 is a new generation of PM console, a thoroughly refined flagship model realizing a state-of-the-art sound quality operation, functionality, reliability and expandability p y bringing g g true innovation to the evolving g live sound scene. 37 Key Products in FY2017.3 Network Hi-Fi receiver R-N602 R-N602 is a high sound quality network Hi-Fi receiver compatible with MusicCast and packed with network functions which can deliver wireless multiroom audio playback, all controlled by a simple app. app It realizes an ultimated enjoyment of many different sound sources including high-resolution sources, smartphones and streaming services. R-N602 38 Key Products in FY2017.3 USB conference phone from Revolabs FLX UC 500 FLX UC 500 is a PC-based unified communication phone specifically designed to be the audio solution for conference rooms rooms, small offices and homes. homes It provides professional quality audio through powered tweeter and mid-woofer speaker elements offering the best in class audio performance. mid woofer tweeter FLX UC 500 39 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 predictions depending on changes in the economic conditions surrounding our business, demand trends, and the value of key currencies, such as the U.S. dollar and the euro.