Yamaha 2010 Annual Report Download - page 40

Others
Sales in fiscal 2010 fell ¥3,371 million, or 10.9%, year on year, to
¥27,461 million. In the automobile interior wood components busi-
ness, inventory adjustments by manufacturers of finished products
were completed, leading to higher sales, but sales of golf products fell
year on year due to cooling of the market both in Japan and overseas.
In the magnesium molded parts business, from which Yamaha with-
drew on March 31, 2010, sales were also down because of a drop in
sales for mobile phone applications. Sales in the factory automation
(FA) business dropped as corporate capital investments fell amid
sluggish economic conditions. In the recreation business, sales
declined due to a drop-off in overnight guests and golf customers.
Sales by Region
In fiscal 2010, sales in Japan declined ¥16,437 million, or 7.0%, to
¥218,406 million. With the exception of the AV/IT business, where
sales of front surround system products were strong, sales were down
in all segments. In particular, sales of musical instruments, semicon-
ductors, and lifestyle-related products fell sharply as a result of the
economic slowdown and adverse market conditions.
Outside of Japan, sales decreased by ¥28,035 million, or 12.5%,
year on year, to ¥196,405 million. Along with declines due to a strong
yen, sales of musical instruments, AV products and other products were
lower compared to the previous year due to the impact of the worldwide
recession. Sales in overseas markets accounted for 47.3% of net sales,
down 1.6 percentage points from the 48.9% noted a year ago.
By region, sales in North America decreased by ¥8,723 million, or
13.1%, year on year, to ¥57,668 million. Sales of products such as
wind instruments and professional audio equipment declined due to
foreign currency effects from the yen’s appreciation and to the eco-
nomic slowdown. In the second half of the fiscal year, however, there
were signs of bottoming out in keyboard instruments such as pianos
and digital instruments, as well as in AV products. Excluding foreign
currency effects, sales in North America declined approximately ¥4.1
billion, or 6.6%, from the previous year.
In Europe, sales declined ¥16,526 million, or 19.0%, to ¥70,284
million. As in North America, sales of products such as pianos, por-
table keyboards and professional audio equipment declined due to
foreign currency effects from the yen’s appreciation and the economic
slowdown. Excluding foreign currency effects, sales in Europe were
down roughly ¥8.6 billion, or 10.9%.
Sales in Asia, Oceania and other areas decreased by ¥2,785
million, or 3.9%, year on year, to ¥68,452 million. Double-digit sales
growth also continued in China, particularly in pianos, but sales in
South Korea, Taiwan and other countries were affected by the eco-
nomic downturn. Overall, excluding foreign currency effects, sales
were up roughly ¥3.4 billion, or 5.3%.
Cost of Sales and Selling, General and
Administrative Expenses
The cost of sales in fiscal 2010 decreased by ¥22,001 million, or 7.6%,
compared to the previous fiscal year, to ¥268,380 million. Factors
contributing to this decline included lower sales, the appreciation of
the yen, lower raw materials prices (approximately ¥2.8 billion), and
decreased fixed costs, including depreciation and amortization
expenses, resulting from structural reforms implemented in fiscal 2009.
The cost of sales ratio rose by 1.5 percentage points compared to the
previous fiscal year, from 63.2% to 64.7%, due to the decline in sales.
Consequently, gross profit decreased by ¥22,471 million, or
13.3%, year on year, to ¥146,431 million. The gross profit ratio
declined by 1.5 percentage points compared to the previous fiscal
year, from 36.8% to 35.3%.
Selling, general and administrative (SG&A) expenses decreased by
¥15,454 million, or 10.0%, from the previous fiscal year, to ¥139,602
million. Advertising expenses and sales promotion expenses declined
by ¥4,725 million, or 20.7%, from ¥22,855 million in the previous year
to ¥18,130 million. Transport expenses also decreased by ¥3,117
million, or 19.4%, from ¥16,083 million in the previous year, to
¥12,966 million, and personnel expenses decreased by ¥3,920 million,
or 6.2%, from ¥63,145 million, to ¥59,225 million. The ratio of SG&A
expenses to net sales declined by 0.1 of a percentage point year on
year, to 33.7%. Excluding approximately ¥4.7 billion in foreign cur-
rency effects from a strong yen, actual selling, general and adminis-
trative expenses decreased by about ¥10.8 billion, or 7.2%, compared
to the previous year. Taking into account the effect of a newly consoli-
dated company (approximately ¥2.1 billion), the decline was approxi-
mately ¥12.9 billion, or 8.4%.
Operating Income
Operating income for fiscal 2010 decreased by ¥7,017 million, or
50.7%, year on year, to ¥6,828 million. Operating income improved in
all business segments other than the mainstay musical instruments
business, which declined significantly. Excluding roughly ¥12.7 billion
of this decline due to foreign currency effects from a strong yen, oper-
ating income increased by around ¥5.7 billion. Key factors included
lower profits due to decreased production and sales, as well as retire-
ment benefit obligation charges (approximately ¥3.5 billion), offset by
the lower cost of raw materials (approximately ¥2.8 billion), the ben-
efits of structural reforms implemented in fiscal 2009 (approximately
¥4.8 billion), Group-wide efforts resulting in a major reduction of
expenses (approximately ¥13.5 billion), and increased sales prices
(approximately ¥7.9 billion).
Operating Income (Loss) by Business Segment
By segment, operating income in the musical instruments segment in
fiscal 2010 was ¥5,117 million, ¥14,080 million, or 73.3%, lower than
Net Sales by Region
(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
■ Japan ■ North America ■ Europe ■ Asia, Oceania and other areas
38 Yamaha Corporation