A1: Conflicts will arise with existing businesses, so we are thinking of starting with products that are not yet being handled by our distributors and dealers. As for countries, we have already started in India, and we will continue to move forward while keeping an eye on the situation of our sales channels in each market. Our basic idea is not to migrate everything, but to utilize EC for those areas that we have not been able to approach through our existing sales channels.
Q&A on the New Medium-Term Management Plan(Held on May 12, 2022)
Q1: You mentioned embarking on direct EC sales, starting with AV products in the U.S. What are your thoughts on the future expansion to other countries and products?
Q2: Please comment on the steps leading up to the target of 5 million Yamaha Music IDs.
A2: We have had various membership registration programs in place at each of our locations for some time. Together with the number of those registrants, we currently have contact with about 4 million customers. We have set a target of adding another 1 million registrants to this collective by shifting to a new unified system.
Q3: I understand that the music schools are operated by the non-consolidated Yamaha Music Foundation. Is there any change in the business model?
A3: Music schools and music promotion are segregated between Yamaha Corporation and the Yamaha Music Foundation, and there is no change in the concept of business management. The foundation creates the curriculum, operates the school business, and trains the instructors. Our company's directly managed schools in Japan separate themselves from school promotions and school business operations and structure their business within their earnings. While overseas, we are developing Yamaha Music Schools with the cooperation of the foundation, and the actual school operations are carried out by local distributors. In some regions, such as China, we operate the business directly.
Q4: In the previous medium-term management plan, strategic investment was set at about ¥50 billion, but what is the background behind the increase to ¥65 billion for the new medium-term management plan? You have chosen the theme of production resilience, but has there been a change in your strategy?
A4: Strategic investments have increased as allocations due to an increase in cash inflow. We have secured a larger area of land at our new production bases in Indonesia and India, which we will begin to utilize. Our approach to production has not changed significantly. Although, we are thinking of investing in resilience improvement, such as multi-regional production, based on the reflection that we have sought efficiency too much in the past.
Q5: In past medium-term management plans, M&A was limited, but will you take more aggressive actions under the major theme of enhancing sustainable growth capability?
A5: We have examined various projects in the past, but have not found any worthy of investment. Although we do not know if there will be a suitable investment project during the new medium-term management plan, we are presenting this plan in order to make the target area clearer and to make the members promoting the relevant businesses aware of them from an internal perspective.
Q6: How much of the sales growth is attributable to the recovery from the effects of COVID-19 and semiconductor shortages?
A6: Sales were affected by semiconductor procurement difficulties to the extent of ¥35 billion, and that portion is the recovery.
Q7: Your company transitioned to a company with three committees in 2017. Please let us know if there is any progress regarding the appointment of a successor to the CEO.
A7: We recognize that the selection of a successor is a major mission of the Board of Directors and the Nominating Committee. We have created a program as the evaluation process is underway, starting with the sharing of candidates by the Nominating Committee. We are also working to ensure objectivity and transparency by incorporating evaluations not only by Nominating Committee members but also by outside organizations. Progress is monitored by the Board of Directors and the phase is progressing smoothly.
Q8: Could you give us a sense of the scale of sales and profits for the new service over the three years of the medium-term management plan? Also, what image do you have for software business?
A8: We believe that we can offer value in both hardware and software. We have launched initiatives and introduced it to make the necessary investment this time. But in terms of sales and profits, we do not expect any large lumps in the current medium-term management plan period. We have a broad concept in software, and while the foundation will continue to operate the specific business of Yamaha Music Schools as before, we believe that we can provide a wider range of other services and will work firmly to create value.
Q9: As you expand your business, can you introduce how you view the recent trend towards the metaverse?
A9: We recognize this as a notable technology and trend. Although we are not at the level of introducing it at this stage, we believe that we can be proactive in this area and are discussing how we can utilize the metaverse in various divisions.