Yamaha Corporation

I am Atsushi Yamaura, who took office as the President and Representative Executive Officer of Yamaha Corporation on April 1st. I'm pleased to see you all. Allow me to start a briefing on the results of the fiscal year ended March 2024. Let's start by highlighting the results of FY March 2024. Due to the slow recovery in the digital pianos market and the protracted downturn in the Chinese market, the musical instruments' revenue declined in real terms. However, due to the strong B2B sales of audio equipment and the impact of foreign exchange rates, the overall revenue increased year on year. The core operating profit decreased due to factors including lower sales of musical instruments, production adjustments to reduce inventories, and one-time expenses. The net profit decreased due to the low core operating profit and the structural reforms related expenses of 4.3 billion yen, including the impairment loss on piano manufacturing processes. As for the full year forecast of FY ending March 2025, I miss a continued uncertain outlook for the global economy and the economic downturn in China, The revenue is projected to be flat year-on-year. Yet, the profit is expected to increase due to the improvement of model mix, the effects of structure reforms, and other factors. Now I'd like to give you more details of the FY March 2024 results. First, the revenue was 462.9 billion yen, which was 2.5 percentage points higher than the previous year. However, as shown below the table, excluding the impact of exchange rates, it was a decrease year-on-year. The core operating profit was 33.7 billion yen, which was much lower than the previous year.

the net profit also declined accordingly.

Here is the core operating profit analysis in a year-on-year comparison. In the previous year, the profit was 45.9 billion yen. Although we enjoyed positive impacts of exchange rates and ocean freight charges, the increase of labor cost and the decrease in sales, production and model mix, which was 9.5 billion yen, were substantial. Moreover, as I mentioned earlier, we booked a one-time expense that amounted to 4.4 billion yen. Therefore, the overall core operating profit dropped to 33.7 billion yen. The SG&A expenses also increased due to the recovery of some business activities that were suspended during the pandemic, and the profit of industrial machinery components, IMC business and others decreased due to the drop of gold products that enjoyed a special demand in the previous year. A comparison against the previous projection is shown in the bottom half. While we forecasted the profit to be ¥34 billion, The actual profit turned out to be 33.7 billion yen, which was almost in line with expectation. Here are the results of each business segment. The musical instruments revenue was 305.2 billion yen, which seems like a year-over-year increase by 2.5 billion yen, but excluding the exchange rate impact, which gave a big boost that revenue was lower than the previous year. The audio equipment's revenue was 121.1 billion yen, especially due to the remarkable sales of B2B products, it increased year-on-year. As for the IMC business and others, due to the lack of special demand for the golf products, which I mentioned earlier, the revenue declined year-on-year. The next slide shows the full-year forecast of the FY March 2025. The revenue is expected to be 465 billion yen, which is an increase by 2.1 billion yen. We have been struggling very much in China with the pianos business, and it seems to take another while until the demand hits the bottom. Moreover, the wind instruments business, which had enjoyed a good tailwind in the U.S., may lose the momentum with the end of the support program for elementary and middle schools this year. Therefore, we can only expect a slight increase of revenue this year. The core operating profit is expected to be 45 billion yen, which is an increase by 11.3 billion yen from the previous year. The details of the breakdown will be explained in the following slide. The net profit is expected to be 34 billion yen, which is an increase by 4.4 billion yen from the previous year. The exchange rates used as an assumption for the forecast are described in the table below.