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Outline of Performance for Fiscal 2007, Ended March 31, 2007 (FY2007.3), and Outlook for FY2008.3 |
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| Performance for the Fiscal Year—Increases in Sales, Operating Income, and Recurring Profit; Slight Decline in Net Income |
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Yamaha’s consolidated net sales for FY2007.3 rose 3.0% from the previous fiscal year, to ¥550.4 billion, despite declines in sales of the AV/IT, electronic equipment and metal products, and recreation segments, as the core musical instruments segment as well as the lifestyle-related products segment and the other segment reported higher sales.
Consolidated operating income for the fiscal year rose 14.7%, to ¥27.7 billion, in spite of a substantial decline in the electronic equipment and metal products segment, as the musical instruments segment posted a major increase in operating income and the recreation segment reported a smaller operating loss. In addition, recurring profit rose 20.9%, to ¥42.6 billion, as equity in earnings of unconsolidated subsidiaries and affiliates increased, owing to the strong performance of Yamaha Motor Co., Ltd.
On the other hand, consolidated net income slipped 0.9%, to ¥27.9 billion, because of extraordinary losses due to impairment write-offs on assets of the recreation segment and costs associated with the closure of certain overseas manufacturing subsidiaries.
Compared with the forecast for the full fiscal year issued at the time of the announcement (on February 7, 2007) of results for the third quarter of FY2007.3, consolidated net sales were ¥7.9 billion higher than forecast. In addition, operating income was ¥1.7 billion above the anticipated level and recurring profit was ¥1.6 billion higher. Net income, however, was ¥2.6 billion below the forecast. |
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| Sales and Operating Profit by Segment |
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| (Figures in parentheses are changes from the previous fiscal year’s figures unless otherwise indicated.) |
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Musical Instruments — Sales of ¥326.0 billion (3.8%) and Operating Income of ¥22.0 Billion (55.9%)
Sales of pianos were robust in Europe and in China and other markets in Asia (outside Japan), but owing to the adverse effect of weak conditions in the North American market, overall sales were approximately the same as for the previous fiscal year. Among electronic musical instruments, sales of Electone™ electronic organ products declined, but sales of portable keyboards and other electronic musical instruments in overseas markets continued to be strong. In addition, revenues from professional audio products expanded substantially in overseas markets, and sales of wind instruments were favorable. Revenues from educational services, including music and English-language schools, also held firm, but sales from content distribution were down because of the shrinkage of the market for ring tones for mobile phones. Operating income showed a major increase because of the positive effect of foreign currency exchange rate movements, an improvement in gross margins, and other factors.
AV/IT Products — Sales of ¥72.8 billion (-4.1%) and Operating Income of ¥2.1 Billion (1.2%)
In audio products, sales expanded, supported by growth in sales of AV receivers, one of the main products in this business, in Europe and North America, and revenues from digital sound projectors posted gains over the previous fiscal year. However, sales of commercial online karaoke equipment declined, leading to an overall decrease in segment sales. Operating income for the segment increased slightly because of the positive impact of foreign currency exchange rate movements and other factors.
Electronic Equipment and Metal Products —Sales of ¥54.8 billion (-2.4%) and Operating Income of ¥3.1 Billion (-60.9%)
Semiconductor sales declined because of lower demand for LSI sound chips for mobile phones. In the electronic metal products area, higher product prices, reflecting the rise in raw material costs, resulted in a gain in sales, but, for the segment as a whole, sales showed a slight decline. Operating income dropped sharply, reflecting lower semiconductor sales and declining profit margins.
Lifestyle-Related Products —Sales of ¥46.6 billion (3.0%) and Operating Income of ¥1.2 Billion (-1.6%)
Sales of system baths declined along with increased competition and lower unit prices, but sales of system kitchens featuring artificial marble sinks remained strong, resulting in an overall increase in segment sales. Operating income slipped, reflecting the increase in prices of plastic and other raw materials.
Recreation —Sales of ¥17.8 billion (-1.2%) and an Operating Loss of ¥1.5 Billion
(versus a loss of ¥1.8 billion in the previous fiscal year)
The number of persons visiting this segment’s one-day outing facilities rose, but the decline in revenues from wedding-ceremony and ski-lodging facilities owing to warm weather during the winter led to a slight overall decline in sales. The operating loss shrank, mainly because of lower depreciation and selling, general and administrative costs.
Other —Sales of ¥32.4 billion (31.2%) and Operating Income of ¥0.8 billion (36.5%)
Sales of golf goods increased because of a strong performance in the domestic market and expansion in exports. A major increase was reported in the metal molds and parts business, as sales of magnesium parts and plastic parts expanded sharply, and sales of the automobile interior wood component business also expanded, leading to a substantial overall rise in the sales of this segment. Operating income increased accompanying the rise in sales.
Non-Consolidated Performance —Increases from the Previous Year in Sales and Profits on a Non-Consolidated Basis
On a non-consolidated accounting basis, Yamaha Corporation reported sales of ¥323.0 billion (0.6%), above the forecast issued at the time of the announcement of third quarter results for FY2007.3. Similarly, operating income amounted to ¥12.6 billion (57.3%) and recurring profit was ¥19.9 billion (42.4%), both figures above the previously announced forecasts. On the other hand, net income came to ¥11.3 billion (10.4%), but was below the forecast level because of the posting of extraordinary losses.
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| Outlook for FY2008.3— Forecasts Call for Increases in Sales and Profits |
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FY2008.3 is the first year under Yamaha’s new medium-term business plan “YGP2010 (Yamaha Growth Plan 2010),” and the Yamaha Group is implementing a range of initiatives to attain the objectives of the new plan. Although the electronic equipment and metal products segment is forecast to show declines in sales and profits because of the drop in demand for LSI sound chips for mobile phones and the sale of the Company’s electronic metal products business, increases in sales and profits are anticipated in the musical instruments, AV/IT, and lifestyle-related segments. Although sales of the recreation segment will decline because of the sale of four of the Group’s recreational facilities, profitability is expected to improve in this segment, and the other segment is forecast to report an increase in sales.
As a consequence, on a consolidated basis, the Company is forecasting net sales for FY2008.3 of ¥551.0 billion, operating income of ¥30.0 billion, recurring profit of ¥43.0 billion, and net income of ¥30.0 billion.
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| Basic Policy for Allocation of Profits and Dividends for FY2007.3 and FY2008.3— |
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The Company has adopted a basic policy for allocating profit that is based on the level of consolidated net income in the medium term and provides for increasing the ratio of consolidated net income to shareholders’ equity by making additions to retained earnings that are appropriate for strengthening the Company’s management position through investments in R&D, sales capabilities, capital equipment and facilities, and other areas, while also placing more emphasis than in the past on providing a return to shareholders that reflects consolidated performance. Specifically, the Company will endeavor to sustain stable dividends and sets a goal of 25% for its dividend payout ratio.
Based on this policy, for FY2007.3, the Company is scheduled to pay a cash dividend of ¥22.5 per common share (including an interim dividend of ¥10). For FY2008.3, the Company anticipates paying a cash dividend of ¥30 per common share (including an interim dividend of ¥15).
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For further information, please contact
Yamaha Corporation
Public Relations Division,
Public & Investor Relations Group
TEL. +81-3-5488-6601
FAX. +81-3-5488-5060
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Flash Report