Management PolicyFrom President

  In April 2010, Yamaha Corporation launched a three-year medium-term management plan entitled “Yamaha Management Plan 125 (YMP125),” the goal of which is to establish a strong foundation for growth, particularly in the musical instruments, music, and audio domains.

  In the fiscal year ended March 31, 2012 (FY2012.3), the second year of the plan, the Yamaha Group continued to face an extremely adverse business environment that included a sharply appreciating yen, the Great East Japan Earthquake, and floods in Thailand. Net sales and operating income declined year on year, and, in particular, a large net loss was recorded following the reversal of deferred tax assets. However, even though we fell short of our targets, the business measures taken have enabled us to strengthen our business base. Buoyed by steady and continued growth in China and other emerging markets, piano business profits improved significantly. The integration of domestic wind instrument manufacturing bases completed at the end of fiscal 2012 has also laid the groundwork for greater profitability of acoustic musical instruments.

  Despite uncertainties including fluctuating exchange rates and European economic trends, the market in the fiscal year ending March 31, 2013 (FY2013.3) appears to be on track toward recovery with the potential for a return to normal production. We view the final year of YMP125 as a critical year for moving into the next growth phase. Recognizing the following three points as key issues, we will steadily implement our growth strategy.

• 1. Accelerate our growth in China and emerging markets
• 2. Promote business structural reforms in Japan
• 3. Create new businesses that sustain the Yamaha Group’s future growth

  This year, the final year of YMP125 marks the 125th anniversary of Yamaha’s founding. With the goal of maximizing corporate value, we will make every effort to build up our businesses centered on the sound and music domains that contribute to the enrichment of society.

  I ask for your continued support in this endeavor.