Yamaha 2008 Annual Report Download - page 62

60 Yamaha Corporation
Electronic Devices
Starting in fiscal 2009, the name of the former electronic equip-
ment and metal products segment has changed to the electronic
devices segment accompanying the transfer of the electronic
metal products business. In the semiconductor business,
Yamaha will work to sustain the business for LSI sound chips for
mobile phones by providing added value to mobile phone manu-
facturers. The Company is also actively proceeding with expan-
sion of sales of digital amplifiers as well as sound-source and
graphics LSIs. Product development and enhancement of pro-
duction systems are also proceeding for silicon microphones, for
which growth in sales is expected.
Management forecasts fiscal 2009 segment sales at ¥37.0
billion, down ¥8.0 billion, or 17.8%, relative to the fiscal 2008
figure of ¥45.0 billion. Segment operating income is forecast at
¥1.5 billion, a decline of ¥400 million, or 19.5%, from ¥1.9 billion
in fiscal 2008. Taking into consideration the transfer of the elec-
tronic metal products business, management is planning for an
increase of 3.4%, or ¥1.2 billion, in sales from the fiscal 2008
figure of ¥35.8 billion, and a ¥200 million, or 15.4%, gain in
operating income from ¥1.3 billion in fiscal 2008.
Lifestyle-Related Products
Yamaha plans to continue pursuing a growth strategy focused on
system kitchens. In the system bathroom business, where com-
petition continues to intensify, Yamaha is targeting growth through
a differentiation strategy involving products such as bathtubs
made from artificial marble. Yamaha also aims to make steady
progress in marketing activities including developing sales chan-
nels and showrooms with the aim of establishing a presence in
the home remodeling sector, where demand is expected to grow.
Management forecasts fiscal 2009 segment sales at ¥48.0
billion, up ¥2.5 billion, or 5.4%, relative to the fiscal 2008 figure of
¥45.5 billion. Segment operating income is forecast at ¥1.5 billion,
up ¥900 million, or 154.8%, from ¥600 million in fiscal 2008.
Others
Starting in fiscal 2009, the recreation segment has been reclassi-
fied to the others segment due to the decrease in sales resulting
from the transfer of certain resort facilities. Yamaha aims to raise
profits by boosting production yields and by developing produc-
tion systems to enable a more flexible response capability to
changes in customer orders, both in magnesium parts and in
other areas of the metallic molds and components business, as
well as in the automobile interior wood components business. In
the recreation business, Yamaha aims to restore profitability by
attracting guests and further improving operating efficiency. In
the golf products business, the Company aims to raise sales by
improving inpresTM brand recognition through implementing
advertisement and other sales promotion activities.
Management forecasts fiscal 2009 segment sales at ¥42.5
billion, down ¥4.9 billion, or 10.3%, relative to the fiscal 2008
figure of ¥47.4 billion. Taking into account the change resulting
from the transfer of four resort facilities, this represents sales
growth of ¥300 million, or 0.7%. Segment operating income is
forecast at ¥2.0 billion, up ¥1.4 billion, or 218.4%, from ¥600
million in fiscal 2008. This reflects the reduction in unprofitable
facilities in the recreation business and gain in income in the
metallic molds and components business.
Capital Expenditure Forecast
Management expects total capital expenditures of ¥32.0 billion
in fiscal 2009, up ¥7.6 billion, or 31.2%, from the fiscal 2008
figure of ¥24.4 billion.
Major items contributing to an increase in capital spending
will be regular investment in molds for production of new prod-
ucts, investment for facility refurbishment, investment in market-
ing operations policy, R&D investment, and rationalization-related
expenses, as well as investment in semiconductor equipment for
the production of silicon microphones (¥2.0 billion), investment
for production of magnesium casings in China (¥2.0 billion) and
investment for increased piano production at Hangzhou Yamaha.
Depreciation and amortization expense is forecast to increase
by ¥700 million in fiscal 2009 to ¥21.0 billion, compared with
¥20.3 billion in fiscal 2008.
Medium-Term Management Plan
Yamaha has formulated a medium-term management plan
“Yamaha Growth Plan 2010 (YGP2010),” which covers the
three-year period from fiscal 2008 to fiscal 2010.
Under the medium-term management plan, the current busi-
ness areas have been redefined into two major areas, “The
Sound Company” and the “Diversification” business domains.
Yamaha has defined “The Sound Company” business domain as
a growth area and will actively invest management resources in
this domain with the aims of further strengthening the core musi-
cal instrument business and targeting expansion of the sound,
audio and network domains. At the same time, the businesses in
the “Diversification” business domain will work to establish firm
industry positions and to substantially increase earnings power
with the aim of contributing to the corporate value of the Yamaha
Group through sound business management.
For fiscal 2010, the final year of the plan, Yamaha has estab-
lished consolidated performance targets of ¥590.0 billion in net
sales and ¥45.0 billion in operating income.
Profit Distribution Policy (Dividend Forecast)
Based on the aim of boosting consolidated return on equity
(ROE), Yamaha’s basic policy is to distribute profits more in line
with consolidated performance than previously, while, based on
prospective levels of medium-term consolidated earnings, also
setting aside an appropriate amount of retained earnings to
strengthen the Company’s management position through invest-
ments in R&D and capital expenditure to drive corporate growth.
Specifically, Yamaha will endeavor to sustain consistent and stable
dividend payments and has set a goal of 40% for its consolidated
dividend payout ratio. Based on this policy, Yamaha plans to pay a
dividend of ¥55 per share for the full fiscal year of 2009, comprising
a regular dividend per share of ¥35, as well as a special dividend of
¥20, and including an interim dividend payment of ¥27.5 per share.
In addition, in June 2008, Yamaha completed an acquisition
of its own shares in the amount of ¥18.0 billion from the stand-
point of enhancing shareholders’ equity.