Major Business Strategies

NEXT STAGE12
Musical Instruments

Increase profitability through technology development capabilities and marketing that takes advantage of Yamaha’s business scale

Net Sales (billions of yen),FY2016.3: 280.0,FY2019.3: 283.5
Operating Income (billions of yen),FY2016.3 projection: 31.6,FY2019.3: 41.0

1.Improve profitability through growth in digital musical instruments, improvement in gross margin, and cost reduction

  • Expand high-margin digital musical instruments business
  • As demand of digital pianos increases worldwide, expand Yamaha’s market share
    • In portable keyboards, strengthen the product lineups suited to local needs
  • Improve gross margins through product mix and reviewing of selling prices
  • Continue steady cost reduction
Digital Musical Instruments Market Growth Rate: 7%(over 3 years)

2.Accelerate enhancing product competitiveness through pursuing the essence of musical instruments using Yamaha original technology of "scientific evaluation of assessing human sensitivities"* and offering new value

  • *Yamaha's original technology which quantitatively and qualitatively evaluates and analyzes the tacit relationships between human sensitivities and physical properties of product

Intensifying the essence of acoustic instruments

Pursue the ultimate in sound, expression, and play experience

  • Draw on analytical and simulation technologies and continue to incorporate further innovations in materials, structure, and design

Further evolvement of digital musical instruments

Lift to new heights the sound, expressiveness, and play experience of instruments

  • Pursue further the fusion of digital, mechatronics, and audio technology
  • Create new enjoyment through joining smart devices and networks

Proposal of new values based on hybrids

Offer value that transcends that of acoustic instruments

  • Provide the experience of playing acoustic instruments, overcoming restraints, such as time and place, while adding added-value of digital musical instruments
  • Realize completely new sound through the use of trans-acoustic technology

3.Optimise marketing and points of contact with customers by region to promote increase in brand power and enhance customer interaction

Mature Markets

Raising brand power in countries of western musical culture

  • Strengthen artist relations activity
  • Launch guitar marketing and sales promotion activity starting from the U.S.

Connecting with customers who aspire to play musical instruments/lapsed players

  • Propose new instrument to promote enjoyment at home
  • Effectively expand sales channels for proposing new lifestyles
Market growth rate: 4%(over 3 years)

China

Increasing piano market share

  • Firmly capture growing demand of high-added-value models

Continue expanding sales networks in regional cities

Achieving growth in the expanding digital piano market

  • Strengthen sales initiatives in response to growing demand driven by educational needs
  • Achieve growth in guitar sales by establishing strong position for brand ahead of competitors
Market growth rate: 11%(over 3 years)

Other Emerging Markets

Expanding access to new middle classes centered on Yamaha music school and education

  • Roll out music education programs in public elementary schools : 5 countries including the ASEAN region
    • Collaboration in developing musical instrument instruction program
    • Development of music classes and extracurricular lessons (total of 100,000 pupils over three years)
  • Enhance support for youth orchestras: 7 countries of Latin America
    • Help nurture Yamaha-certified instrument maintenance technicians
  • Provide support, etc. for smaller dealerships and expand sales networks into regional areas

Collaborating with Yamaha Motor Co., Ltd. to boost brand image (in India, Taiwan, Vietnam, Malaysia, etc.)

Market growth rate: 9%(over 3 years)

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Audio Equipment

Accelerate growth through expanding the business domain with combination of technological innovation and enhanced customer support

Net Sales (billions of yen), FY2016.3: 120.0, FY2019.3
138.0
Operating Income (billions of yen), FY2016.3 projection:  8.4, FY2019.3: 12.0

Professional Audio Equipment
1.Accelerate growth by expanding applications of PA equipment for various venues

Various venues

Established Yamaha strengths= Live performances/concerts: Market scale
¥550 billion/Market growth +8%, Domains for further expansion= Background music in retail stores: Market scale ¥50 billion/Market growth +12%, Corporate conference rooms: Market scale ¥400 billion/Market growth +12%, Living spaces (custom installation): Market scale ¥100 billion/Market growth +9%

Professional Audio Equipment
2.Pursue evolution of audio systems through progressing and fusing of signal processing and network technologies

Further improvement of sound quality and reliability

Further strengthen Yamaha’s own technology through active application to new venue

  • Promote more in-depth development in new acoustic environments of signal processing technology that supports the high sound quality that Yamaha has developed from live concerts (effecters and howling cancellation function, etc.)
  • Further improve the high stability of audio systems with network technology, which has won Yamaha a reputation for reliability in the router business

Usability enhancement of Audio Systems

Develop audio systems through a fusion of technologies that offer superior convenience

  • Easier equipment setting, automatic adjustments
  • Visualize audio systems (monitoring)
  • Improve parameter presetting in accordance with system composition and place of installation

Total solution offering

Provide total audio systems with a high degree of flexibility

  • Secure flexibility of system equipment composition, including formation of alliances with other companies
  • Respond to need for a wider range of specifications by expanding the lineups of equipment

Professional Audio Equipment
3.Increase the number of audio contractors who partner with Yamaha by 50% through reinforcing support system

Reinforce systems engineering and sales staff, especially in Europe, North America, Japan, and the ASEAN region (approx. 80 personnel)
Sales growth rate 20% (actual rate 26%) FY2019.3 (over 3 years)

Prioritise enhancement of support systems for audio contractors

  • Propose solutions to reduce costs and increase operational added value
Simplify system design / Make composition and condition of audio systems visible / Provide greater convenience when conducting maintenance

Support tie-ups between IT contractors and audio contractors

  • Offer integrated system of sound and ICT networks, a solution that combine professional audio equipment, AV products, and ICT devices
  • Support installation through automated audio setting function

AV Products
4.Propose unrestricted listening styles tailored to consumer needs

Reinforce branding of MusicCast*, a strategic product creating an environment where one can easily enjoy music from any source throughout the home, through expanding product lineups

Sales growth rate 8% (actual rate 15%) (over 3 years)
  • *New audio network enables one to enjoy superior sound quality from any music source in keeping with one's lifestyle

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Industrial Machinery and Components

Establish the third platform of Yamaha business as provider of solutions offering comfort, safe, and security

Net Sales (billions of yen), FY2016.3 projection: 24.5, FY2019.3: 30.0
Operating Income (billions of yen), FY2016.3 projection: 0.8, FY2019.3: 1.5

Transform the business from a semiconductor manufacturer to a solutions vendor, and, thereby build foundation for growth through expansion in product lineups and customer base

Expanding product lineups and customer base, and enhance customer support system in onboard device market

  • Offer total sound solutions achieving pleasant and comfortable sound targeted at the trend toward vehicles becoming living spaces as connected cars become commonplace
  • Develop thermoelectric solutions with a view to creating eco-friendly motorized societies
  • Assign design personnel to strengthen response to customers in the U.S.

Developing product for home healthcare market

Develop new solution that contribute to healthy everyday living by applying Yamaha's sound and sensor technologies

Launching new products into industrial machinery market

  • Lead the industry in FPC testing equipment with further enhanced testing capability
  • Launch hydrogen-based leak testing equipment
  • Expand customer support system in China and Taiwan

In this report, the figures forecast for the Company’s future performance have been calculated on the basis of information currently available to Yamaha and the Yamaha Group. Forecasts are, therefore, subject to risks and uncertainties.

Accordingly, actual performance may differ greatly from our predictions depending on changes in the economic conditions surrounding our business, demand trends, and the value of key currencies, such as the U.S. dollar and the euro.