Yamaha 2009 Annual Report Download - page 48

Capital expenditures in the electronic devices segment were
¥3,247 million, up ¥812 million from ¥2,435 million in the previous
fiscal year. This increase reflected investment for the upgrade and
refurbishment of Yamaha Kagoshima Semiconductor Inc. In the
lifestyle-related products segment, capital expenditures were
¥1,006 million, an increase of ¥359 million from ¥647 million in the
previous year, due mainly to investment in showrooms.
Total depreciation and amortization expenses amounted to
¥17,912 million, decreasing by ¥2,377 million, or 11.7%, from the
fiscal 2008 figure of ¥20,289 million.
R&D Expenses
R&D expenses in fiscal 2009 decreased by ¥1,647 million, or
6.6% year on year, to ¥23,218 million. The ratio of R&D expenses
to net sales was 0.6 points higher than in fiscal 2008, rising from
4.5% to 5.1%.
Most of this spending was directed at product development in
digital musical instruments, and in the AV/IT and semiconductor
businesses. Specifically, the spending supported research and
product development of hybrid pianos that blend acoustic and
digital technologies, as laid out in Yamaha’s Total Piano Strategy;
development of digital products leveraging digital network technol-
ogy; and development of high-value-added semiconductors that
integrate MEMS* technology with analog and digital technologies.
R&D budgets also funded programs to research and develop
basic sound- and music-related technologies (sound sources,
voice synthesis, architectural acoustics, etc.), and new devices
such as speakers and sensors.
* Micro Electro Mechanical Systems (MEMS) are devices in which components such as
sensors, actuators and electronic circuitry are integrated on a single silicon substrata.
Specific examples include silicon microphones, sensors, etc.
Forecast for Fiscal Year 2010
Performance Forecasts
The yen is expected to remain strong in the year ending March
31, 2010, and the operating environment surrounding Yamaha’s
businesses will remain as uncertain as the previous year. In this
climate, sales are projected to struggle in the first half of the year
due to the economic slowdown. However, the economy is likely
to mount a recovery in the second half of the year with inventory
adjustments having run their course. Prices for raw materials
should also trend gradually lower.
Business forecasts for fiscal 2010 assume exchange rates for
the full year of ¥95 per U.S.$1, ¥120 per €1, ¥60 per AUD1, ¥75
per CAD1, and U.S.$6.80 per CNY1. Net sales are expected to
decline year on year due to the effects of the global economic
slowdown and the yen’s appreciation. A similar decline is likely for
operating income where, in addition to the yen’s appreciation,
income will be impacted by negative factors that include lower
sales volumes and decreased production stemming from inventory
adjustments. These factors are expected to outweigh Groupwide
cost reductions and efforts to raise wholesale prices, particularly for
musical instruments, as well as benefits gained from lower prices
for raw materials and structural reforms enacted in the previous
year. In contrast, the Company is projecting net income for the year,
reflecting extraordinary losses taken in the previous year.
Capital Expenditure Forecast
Management is projecting total capital expenditures of ¥18,300
million in fiscal 2010, down ¥4,281 million, or 19.0%, from the
fiscal 2009 figure of ¥22, 581 million, as the Company further
restricts investments in a deteriorating economic climate.
Major items contributing to capital spending will be regular
investment in molds for production of new products, investment
for facility upgrade and refurbishment, investment related to sales
and marketing, R&D investment, and rationalization-related
expenses, as well as investment for the consolidation of piano
factories in Japan, investment for increased piano production in
China, and investment for reconstruction of the Ginza Building.
Depreciation and amortization expenses are forecast to
decrease by ¥2,712 million in fiscal 2010 to ¥15,200 million, com-
pared with ¥17,912 million in fiscal 2009.
Profit Distribution Policy (Dividend Forecast)
Prefaced on the aim of boosting consolidated return on equity (ROE),
Yamaha’s basic policy is to distribute profits in line with consolidated
performance, 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 investments in R&D and capital expenditure to drive corpo-
rate 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 total dividend of ¥30 per share for the full fiscal year of
2010, including interim dividend payments of ¥15 per share. The ¥30
comprises a regular dividend per share of ¥10, as well as a special
dividend of ¥20 from the past sale of a portion of the Company’s
equity holdings in Yamaha Motor Co., Ltd.
23,218
25,000
20,000
15,000
10,000
5,000
05/3 06/3 07/3 08/3 09/3
0
R&D Expenses
(Millions of Yen)
n
Others
n
Lifestyle-Related
Products
n
Electronic Devices
n AV/IT
n
Musical Instruments
46 Yamaha Corporation