Summary of Performance in the First Quarter: Lower Net Sales and Income Compared with the First Quarter of the Previous Fiscal Year
Consolidated net sales for the first quarter of FY2009.3 declined 8.8% from the same period of the previous fiscal year, to ¥123.3 billion. Approximately ¥6.8 billion of this decline was a result of the sale of certain businesses in the electronic equipment and metal product segment and the recreation segment,* and another ¥4.8 billion was due to foreign currency factors. Declines in operating income were reported in all segments except the others segment, and consolidated operating income decreased 22.7%, to ¥5.6 billion.
* As noted below, as a result of the realignment of businesses, the electronic equipment and metal product segment is now the electronic devices segment and the remainder of the recreation segment has been included in the others segment.
Consolidated ordinary income declined 23.9%, to ¥5.7 billion, accompanying the drop in operating income. Since Yamaha reported an extraordinary gain in the same period of the previous fiscal year from the sale of a portion of its holding in Yamaha Motor Co., Ltd., income before income taxes and minority interests for the quarter declined ¥29.9 billion from the same period of the previous fiscal year, to ¥5.5 billion. Net income for the first quarter of the current fiscal year showed a 95.4% decrease, to ¥1.1 billion, owing to the increase in deferred income taxes.
Sales and Operating Income by Business Segment
(Figures in parentheses are changes from the same period of the previous year)
Realignment of Yamaha’s Business Segments
Beginning with the first quarter of the current fiscal year, accompanying the sale and transfer of the shares of an electronic metal products business in the previous fiscal year, the name of the former electronic equipment and metal products segment has been changed to the electronic devices segment. In addition, also in the previous fiscal year, Yamaha sold four of its six facilities operating businesses in its recreation segment, and, beginning with the first quarter of the current fiscal year, the results of the remaining facilities are now included in the others segment.
Sales of ¥81.2 billion (-1.0%) and Operating Income of ¥6.2 billion (-13.8%)
Sales of pianos were below those of the same period of the previous fiscal year because of the overall decline in demand in the domestic market and the weakening of market conditions in the North American market. However, sales of pianos held firm in the European market and the Asian markets (excluding Japan), including the Chinese market. In the electronic musical instruments field, sales of synthesizers decreased in the North American market, but sales of digital pianos increased, primarily in overseas markets. In addition, sales of professional audio equipment increased, led by sales of digital mixers. Guitar sales also reported steady expansion; however, sales of this segment as a whole were at approximately the same level as in the same period of the previous year as a result of the appreciation of the yen against major currencies.
Operating income for this segment declined because of the adverse impact of foreign currency movements, which amounted to ¥0.8 billion, and increases in selling, general and administrative expenses.
Sales of ¥13.8 billion (-9.2%) and an Operating Loss of ¥0.5 billion
(compared with an operating loss of ¥0.3 billion in the same quarter of the previous fiscal year)
Sales declined from the same period of the previous fiscal year because of the impact of the appreciation of the yen and the weakening of market conditions, principally in the European and U.S. markets. In the audio area, sales of front-surround system products held firm, but overall operating conditions were difficult. Sales of online karaoke equipment for commercial use continued to decline. Profitwise, accompanying the decline in sales, the operating loss was larger than for the same period of the previous year.
Sales of ¥7.5 billion (-48.2%) and an Operating Loss of ¥0.2 billion
(compared with operating income of ¥0.5 billion in the same quarter of the previous fiscal year)
The sale of the electronic metal products business resulted in a decline in sales of ¥4.7 billion compared with the same quarter of the previous fiscal year, thus bringing a substantial decrease in sales of this segment. In the semiconductor business, sales of LSI sound chips for mobile phones declined, especially overseas, because of the drop in demand accompanying the ongoing shift to sound generation software. Sales of LSI sound chips for amusement equipment also declined. Profitwise, as a result of the decline in sales, the segment reported an operating loss for the quarter.
Sales of ¥10.5 billion (-8.4%) and an Operating Loss of ¥0.6 billion
(compared with an operating loss of ¥0.1 billion in the same quarter of the previous fiscal year)
Although demand for new housing starts has continued to decline, to strengthen its position in the market for home remodeling, Yamaha is continuing to expand its network of showrooms and further develop its distribution channels. Despite these activities, sales of system kitchens experienced a slight decline compared with the same period of the previous fiscal year, and sales of system baths continued to decline because of the shift to lower-priced units because of more-intense price competition. Profitwise, the decline in sales and higher manufacturing costs owing to higher prices of raw materials resulted in an expansion in the operating loss compared with the same period a year earlier.
Sales of ¥10.3 billion (-14.8%) and Operating Income of ¥0.7 billion
(compared with operating profit of ¥30 million in the same period of the previous fiscal year)
As a result of the sale of certain of Yamaha’s recreation facilities in the previous fiscal year, revenues from this source were ¥2.1 billion lower than they would have been otherwise, and sales of the others segment as a whole declined. This segment’s “inpres” brand golf products continued to win acclaim, and sales expanded in Japan and overseas. Sales of magnesium parts for use in digital cameras and other products were at approximately the same level as for the same period a year earlier, but sales of automobile interior wood components decreased because of a weakening of market conditions. Profitwise, operating income increased accompanying the sale of certain of Yamaha’s recreation facilities.
Consolidated Forecast for FY2009.3
Revision of Initial Forecasts for the Full Fiscal Year Issued on April 30, 2008
Regarding the outlook for the full fiscal year, compared with the previous forecasts announced on April 30, sales of the musical instruments segment and the AV/IT segment are now forecast to be at about the levels previously forecast, but operating income will be lower, and we are now forecasting declines in sales and operating income in the electronic device, lifestyle-related products and others segment. As a result, the initial forecasts for FY2009.3 have been revised as follows. The initial forecasts called for consolidated net sales of ¥540.0 billion, operating income of ¥35.0 billion, ordinary income of ¥32.0 billion, and net income of ¥20.5 billion. The revised forecasts call for consolidated net sales of ¥533.0 billion, operating income of ¥30.5 billion, ordinary income of ¥28.5 billion, and net income of ¥16.5 billion.
Figures for sales and income in the text have, in principle, been rounded up to the nearest hundred million yen. Figures in parentheses are, in principle, rates of change from the corresponding figures a year earlier.
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