Yamaha 2010 Annual Report Download - page 39

As a result, in fiscal 2010, net sales fell in all segments and
decreased as a whole by 9.7% year on year, to ¥414,811 million. Due
to the decline in sales, operating income was down 50.7% to ¥6,828
million. In addition, the Company recorded extraordinary losses related
to the transfer of the lifestyle-related products subsidiary and impair-
ment losses on idle real estate resulting from business realignment.
Consequently, the Company recorded a net loss for the year of ¥4,921
million, compared to a net loss of ¥20,615 million in the previous year.
Analysis of Management Performance
Net Sales
Sales by Business Segment
Net sales in fiscal 2010 decreased by ¥44,473 million, or 9.7%, to
¥414,811 million. Sales in the mainstay musical instruments segment
and all other segments were down year on year on account of the decline
in sales resulting from foreign currency effects (approximately ¥18.8
billion), and the global slump in demand due to economic conditions.
Musical Instruments
Sales in fiscal 2010 decreased by ¥30,378 million, or 9.9%, to
¥276,252 million. Excluding declines resulting from foreign currency
effects (approximately ¥14.8 billion), sales effectively declined by
roughly ¥15.6 billion, or 5.3%, year on year.
By product, piano sales declined year on year with continued sales
growth in China unable to fully compensate for lower demand in the
European and Japanese markets. Sales volume for pianos worldwide
declined by roughly 4,300 units from the previous year to around
89,900 units. While sales of affordably priced pianos made in China
increased, sales of mid to high-end pianos made in Japan declined,
primarily in developed markets, accelerating the decline in unit sales
prices. Digital musical instruments, like pianos, saw sales fall in the
European and Japanese markets. Although performance in wind,
string and percussion instruments was lackluster overall, leading to
lower sales, sales of electric acoustic guitars grew, mainly in the United
States. Sales of professional audio equipment, most notably digital
mixers, declined year on year as the commercial audio equipment
market felt the impact of the economic downturn. In the music enter-
tainment business, sales were down on lackluster performance in
music distribution and publishing. Sales at music schools also fell,
although English-language school sales rose.
By region, and on a local currency basis, sales in Japan were
lower year on year, and in North America, the persistent economic
downturn caused sales to decline. Europe, too, was hit hard by the
slowdown, with sales declining by double-digits. In China, sales
maintained double-digit year-on-year growth as piano production at
Hangzhou Yamaha Musical Instruments Co., Ltd. (Hangzhou Yamaha)
increased. Other regions felt the impact of the slowdown in the first
half of the fiscal year, but continued growth in Asian and other mar-
kets resulted in full-year sales growth.
AV/IT
Sales in fiscal 2010 declined ¥2,313 million, or 4.1%, year on year, to
¥54,409 million. Excluding declines resulting from foreign currency
effects (approximately ¥3.9 billion), sales effectively increased by
roughly ¥1.6 billion, or 3.0%, year on year.
In Japan, sales of front surround system products with furniture
stands and Digital Sound Projector™ grew significantly alongside
higher demand for flat-panel TVs. Although AV receivers recovered in
the European and North American markets in the second half of the
fiscal year, sales were impacted by the global economic slowdown.
Sales of commercial online karaoke equipment produced on an
OEM basis and conferencing systems were up year on year, but sales
of routers were down slightly.
Electronic Devices
In fiscal 2010, sales decreased by ¥2,230 million, or 10.2%, year on
year, to ¥19,745 million. Sales of digital amplifiers for flat-panel TVs and
mobile phones and LSIs for automobile devices were up, but sound
generators for mobile phones fell, reflecting the ongoing shift to sound-
generation software for mobile phones in overseas markets and lower
sales volumes for mobile phones in the Japanese market. Shipments of
graphics controllers used in amusement equipment were also lower
year on year, hit hard by deteriorating market conditions.
Lifestyle-Related Products
Sales in fiscal 2010 decreased by ¥6,178 million, or 14.3%, year on
year, to ¥36,942 million. Sales of system kitchens and system bath-
rooms fell on a major decline in new housing starts and increasingly
severe price-based competition. Amid this environment, the company
strove to strengthen the remodeling business, increasing the contribu-
tion of this business to overall segment sales to 25%, up 4 percentage
points from 21% in fiscal 2009. On March 31, 2010, Yamaha trans-
ferred 85.1% of its shares in consolidated subsidiary Yamaha Livingtec
Corporation, which operated the lifestyle-related products business, to
a limited investment partnership managed and operated by Japan
Industrial Partners, Inc. and to other parties. As a result, Yamaha
Livingtec and its subsidiaries Yamaha Living Products Corporation and
Joywell Home Corporation were removed from the scope of consoli-
dation that same day.
Net Sales by Segment
(Millions of Yen)
600,000
08/3
400,000
200,000
0
09/3 10/307/306/3
534,084 550,361 548,754
459,284
414,811
■ Musical Instruments ■ AV/IT ■ Electronic Devices* ■ Lifestyle-Related Products
■ Others ■ Recreation**
* Following the handover of the Electronic Metal Products business, the Electronic Equipment
and Metal Products segment was renamed the Electronic Devices segment starting from
the year ended March 31, 2009.
** Following the handover of a portion of the resort facilities, figures of the Others segment
from the year ended March 31, 2009 include that of the Recreation segment.
Annual Report 2010 37
Financial Section