Yamaha 2010 Annual Report Download - page 20

Review of Operations
Fiscal 2010 Business Results
Review by Major Products
Performance in all product categories was impacted by the eco-
nomic downturn. Signs of a recovery in consumer spending
emerged in the fiscal year’s second half. However, excluding sales to
consumers, sales associated with investment in facilities and busi-
ness for academic institutions were weak throughout the fiscal year.
Piano sales were lower in Japan due to a decline in orders for
grand pianos and other high-priced models. Sales decreased in
Europe as well because of challenging market conditions. In China,
by contrast, double-digit sales growth continued.
Sales of digital pianos increased in North America in terms of
volume and monetary basis due to the benefits of expanded sales
channels. Meanwhile in Japan and Europe, a rapid increase in the
preference of consumers for lower-priced models brought down
sales. Portable keyboard sales were down in Europe due to the
absence of new models that made a big contribution to sales and
the influence of the economic recession.
Sales of wind instruments were down in all regions. There was a
particularly sharp decline in sales of midrange and high-end instru-
ments to individuals in Japan and North America. In addition, demand
was sluggish in the North American rental instrument market.
Fiscal 2010 Performance Overview
Sales in this segment declined 9.9% year on year in fiscal 2010 to ¥276,252
million. The segment posted operating income of ¥5,117 million, down 73.3%
compared to the previous fiscal year.
Sales in all major product categories were down from one year earlier because
of the yen’s strength and poor market conditions caused by the economic reces-
sion. Sales continued to climb in China and other emerging markets but were
lower in developed markets such as Japan, North America and Europe. Although
earnings benefited from cost reductions, the decline in sales and foreign exchange
losses caused a sharp drop in operating income.
Business Strengths
● Crafting of sound and craftsmanship in acoustic musical instruments such as pianos and wind instruments
● Development of high-quality products through building relationships with artists
● Manufacturing of high-added-value musical instruments utilizing cutting-edge electronics technology
● Provision of system solutions using digital network technology for professional audio equipment
● Global strategy built on Yamaha’s localized marketing and service activities in each country
● A variety of activities through the operation of music schools to increase the music playing population
Key Business Indicators
(Millions of Yen)
06/3 07/3 08/3 09/3 10/3
Net Sales ¥314,078 ¥325,989 ¥340,021 ¥306,630 ¥276,252
Operating Income 14,132 22,037 27,924 19,198 5,117
Capital Expenditures 11,877 14,817 16,472 14,793 11,663
Deprecation Expenses 8,632 9,242 10,156 10,042 9,511
R&D Expenses 11,356 11,437 11,597 10,780 9,910
Musical Instruments
■ Net Sales (Left) ■ Operating Income (Right)
Net Sales/Operating Income
(Millions of Yen)
400,000 40,000
300,000 30,000
200,000 20,000
100,000 10,000
0
0
06/3 07/3 08/3 09/3 10/3
Electric acoustic guitar APX500FM
Even as the market for electric acoustic
guitars shrinks, Yamaha is capturing market
share because of the popularity of its lineup
of these guitars.
Digital piano: ARIUS™ YDP-160
Designed for beginners, this digital piano
became an immediate success by offering the
simplicity that matches the needs of today’s
piano players. This model delivers a dynamic
piano tone and incorporates only the func-
tions that are most useful for piano lessons.
In string and percussion instruments, sales of electric acoustic
guitars grew, most notably in North America.
Sales of professional audio equipment were lower in North
America and Europe as concert halls and other facilities cut back
or eliminated budgets for this equipment in response to the slump-
ing economy.
18 Yamaha Corporation