Yamaha 2011 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2011 Yamaha annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 94

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94

57
Annual Report 2011
Management’s Discussion and Analysis
Performance Forecast
Net Sales
y
¥370,000 million
Operating Income
y
¥10,000 million
Net Income
y
¥5,000 million
In fiscal 2012, the outlook is for continued growth in China and emerg-
ing markets, and moderate recovery in Europe and North America.
Nevertheless, the continuing appreciation of the yen and rising prices
for raw materials are likely to have a negative impact on earnings. In
addition, the devastation that parts manufacturers have suffered from
the Great East Japan Earthquake of March 11, 2011 is expected to have
an impact on parts procurement, which will likely affect the manufac-
turing of certain products, including digital musical instruments and
AV products. The Group will minimize the impact by taking every pos-
sible measure, including shifting to replacement parts and changing
design specifications.
Also, we expect the disaster to affect consumer confidence
in Japan and deliveries to corporate customers. Accordingly, we
will further reduce manufacturing costs by lowering material costs,
and increasing the in-house production of products, while cutting
expenses.
Exchange rate assumptions for full fiscal 2012 are: JP¥85 per
US$1, JP¥110 per €1, JP¥80 per AU$1, JP¥80 per CA$1, and US$6.70
per CN¥1. After factoring in foreign currency translation effects and
the aforementioned impact of the earthquake, we forecast a decline in
both sales and earnings in fiscal 2012.
Musical Instruments
By business segment, in the musical instruments business, while
declining consumer confidence remains a concern in Japan, we will
expand sales aggressively in emerging markets, including China, to
accelerate growth. In North America and Europe, Yamaha seeks to
increase sales with a gradual market recovery. As a result, we expect
sales in the musical instruments business to remain largely unchanged
from that of the previous fiscal year.
AV/IT
In the AV/IT business, our goal is to achieve growth by releasing new
audio products that meet trends in market demand. In the commercial
online karaoke equipment business, we will maintain steady and stable
supply of those new products that began shipping in the previous fis-
cal year. We will also seek to expand our share of the router market
by highlighting our product’s advantages. However, considering the
impact that the recent earthquake disaster has had on production, we
foresee declining sales in the AV/IT segment as a whole.
Electronic Devices
In the electronic devices business, we expect to achieve higher sales
by expanding our product lineup of analog devices and increasing
our market share of digital devices such as graphics controllers used in
amusement equipment.
Others
In the others segment, the Company will open up markets for golf
products in China and other emerging markets where growth is
expected. In the automobile interior wood components business, we
will raise our manufacturing capabilities by reducing lead time and
implementing other measures. In the FA equipment business, we will
improve our marketing capabilities. In the recreation business, we have
set our sights on reinforcing our marketing capabilities and raising
operating efficiency by integrating operating companies. However,
recent earthquake disaster seems to have an impact on others seg-
ment as well mainly on the automobile interior wood components
business as we expect our customers to decrease production. As a
whole, sales should decline overall in this segment.
Capital Expenditures Forecast
In fiscal 2012, capital expenditures are expected to rise. Major items
contributing to capital spending in fiscal 2012 will be regular invest-
ment in molds for production of new products, investment for
facility upgrade and refurbishment, investment related to sales and
marketing, and R&D investment and plant rationalization-related
investments. Further investments will be made to increase piano and
wind instrument production in China, and to increase semiconductor
manufacturing capacity.
Depreciation and amortization are forecast to rise.
Profit Distribution Policy (Dividend Forecast)
With an eye on boosting consolidated return on equity (ROE), Yamaha’s
basic policy is to distribute profits in line with consolidated perfor-
mance, while also setting aside an appropriate amount of retained
earnings to strengthen the Company’s business foundation through
investments in R&D, sales and capital expenditure to drive corporate
growth, based on prospective levels of medium-term consolidated
earnings.
Specifically, Yamaha has set a goal of 40% for its consolidated
dividend payout ratio based on continuous and stable dividend pay-
ments. Under this policy, Yamaha plans to pay a total dividend of ¥10
per share for fiscal 2012, including an interim dividend payment of ¥5
per share.
-1.0%
Forecast for Fiscal Year 2012
-24.0%
-1.6%