Yamaha 2009 Annual Report Download - page 27

Fiscal 2009 Performance Overview
Sales in Yamaha’s lifestyle-related products business, in which
Yamaha Livingtec Corporation is the principal Yamaha Group
subsidiary, fell 5.3% from the previous year, to ¥43,121 million.
The segment posted an operating loss of ¥305 million, com-
pared to ¥588 million in operating income in the previous year.
Although there was an increase in demand for new housing
starts owing to the tax incentive scheme for housing loans
effective before the end of December 2008, sales declined due
to a massive drop in new housing starts once the limit expired,
as well as lower home remodeling demand caused by weaker
Lifestyle-Related Products
Business Strengths
n Artificial marble processing technology (MARBLE CRAFT™)
n Wood processing and coating technologies
n Original design capabilities
Market Trends and Business Strategy
Market Trends
Persistent decline in new housing starts; efforts by all com-
panies to strengthen remodeling business
Consumer sentiment is expected to fall lower amid continued and
increasing economic uncertainty. In this climate, competition in the
home fixtures and equipment market is expected to increase due
to the contraction in Japan’s new housing market, which is
forecast at around 1 million homes in fiscal 2010, as well as
further price drops. Accordingly, companies throughout the
industry are channeling their efforts into expanding their respec-
tive home remodeling businesses and strengthening business in
the Asian market, as well as launching new products and adver-
tising activities, in a race for continued survival. In the remodel-
ing business, it will be vital to build stronger alliances with client
companies and to stimulate user demand, as consumer interest
in home improvements remains strong.
Business Strategy
Aiming to generate stable earnings in the medium to long term
In the remodeling market, Yamaha Livingtec will promote the material
business of “one-point remodeling,” encouraging customers to
replace their existing kitchen countertops with Yamaha’s artificial
marble countertop materials. This drive will consist of bolstering
initiatives targeting sales channels, mainly through moderately-
priced products, in a bid to expand the remodeling business.
For the medium to long term, the company is striving to build
a business base capable of generating stable earnings irrespective
of new housing demand. To this end, the company will take steps
to develop new sales channels for interior building materials,
water-related housing equipment, and household equipment, with
focus on the remodeling business, as well as energy-related
channels, while extensively pursuing efficiency management in all
business processes. In particular, the company aims to improve
its earnings structure by reducing the retail sales companies’
dependence on the manufacturer. To this end, it will clarify the
roles of each player and strengthen its links to sales channels
that are strong in installations.
The home fixtures and equipment industry is seeing both
increased product quality uniformity and more intense price
competition. Going forward, the company intends to differentiate
its business from competitors by leveraging its strengths in artificial
marble processing technology, wood processing and coating
technologies, and original design capabilities.
Net Sales/Operating Income (Loss)
(Millions of Yen)
Key Business Indicators
(Millions of Yen)
05/3 06/3 07/3 08/3 09/3
Net Sales ¥42,844 ¥45,214 ¥46,573 ¥45,520 ¥43,121
Operating Income (Loss) (24) 1,169 1,150 588 (305)
Capital Expenditures 1,195 1,245 1,303 647 1,006
Depreciation Expenses 1,518 1,062 1,007 1,063 1,021
R&D Expenses 1,236 1,260 1,403 1,351 894
50,000
05/3 06/3 07/3 08/3 09/3
2,000
40,000 1,600
30,000 1,200
20,000 800
10,000 400
0 0
–400
n Net Sales
(Left)
n Operating
Income (Right)
consumer spending. Furthermore, the company has decided to
withdraw from the kerosene-fired water heater business in light of
tremendous changes in the structure of energy demand and the
lack of visible prospects for demand in the future.
Annual Report 2009 25