Annual Report Annual Report 2018 Yamaha Philosophy

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Annual Report Annual Report 2018 Yamaha Philosophy Yamaha Group Annual Report 2018 Group Yamaha Annual Report 2018 Yamaha Philosophy The Yamaha Philosophy expresses the philosophical framework of the Yamaha Group and consists of five elements: the Corporate Slogan, Corporate Philosophy, Customer Experience, Yamaha Way (mindset and manners), and Yamaha Quality (criteria for quality). We utilize the Yamaha Philosophy as a foundation to draw from, and try to think from the customer’s viewpoint, and consistently provide high quality products and services that exceed the expectations of our customers, and to create excitement and cultural inspiration together with people around the world. The Diagram of the Yamaha Philosophy Yamaha Group Annual Report 2018 Yamaha Group Annual Report 2018 Ⅰ Ⅲ . Our Vision and Value Creation . Foundation for Growth Our Vision and Value Creation Becoming an Indispensable, Sustainability 48 Brilliantly Individual Company 04 Human Resources 52 History of Growth 06 Corporate Governance 56 Yamaha’s Business 08 Dialogue between the President and Yamaha’s Value Creation 10 an Outside Director 56 Financial and Non-Financial Highlights 12 Directors 60 Reasons for Director Appointment 62 Ⅱ. Management Strategy Executive Officers and Operating Officers 63 Corporate Governance 64 Message from the President 16 Risk Management 74 Financial Strategies 25 Strategies by Business 28 Management Strategy Musical Instruments Business 28 Ⅳ. Financial and Corporate Information Audio Equipment Business 30 11-Year Summary 78 Industrial Machinery and Components Business 32 Financial Review 80 Strategies by Function 34 Consolidated Financial Statements and Notes 84 Production 34 Independent Auditor’s Report 115 Sales 36 Main Networks 116 Marketing 38 Stock Information 118 Research and Development 39 Company Information 119 Design 44 Foundation for Growth Foundation Editorial Policy Disclosure Structure The Annual Report 2018 is published as a tool for communicating the medium- to long-term value creation of the Yamaha Group from both a financial and non-financial Overall Corporate Activities perspective. Through this report, the Yamaha Group hopes that its stakeholders, starting with its shareholders and other investors, are able to gain an understanding Corporate website: https://www.yamaha.com/en/ of the Group’s efforts aimed at realizing a sustainable society as well as the corporate value the Group creates over the long term. Financial Information Non-Financial Information When editing this report, the Group referenced the International Integrated IR activities Sustainability activities Reporting Council’s “International Integrated Reporting Framework” as well as the Financial and Corporate Information Ministry of Economy, Trade and Industry’s “Guidance for Integrated Corporate https://www.yamaha.com/en/ir/ https://www.yamaha.com/en/csr/ Disclosure and Company-Investor Dialogues for Collaborative Value Creation.” Additional comprehensive and detailed information can be viewed on Yamaha’s website. Scope of This Report Information in this report covers 62 companies (as of March 31, 2018): Yamaha Corporation, its 59 consolidated subsidiaries, and its 2 equity-method affiliates. In cases where it is necessary to specify the scope of reporting, this report lists the applicable institution individually. Reporting Period This report primarily covers fiscal 2018 (April 1, 2017 to March 31, 2018). However, certain sections of this report include information from April 1, 2018, and onward. Annual Report 2018 (This report) Disclaimer on Forward-Looking Statements The forward-looking statements such as data and forecasts included in this report are based on assumptions and information available at the time of publication and are subject to change due to various factors. These statements are not guarantees that Yamaha will achieve its targets and forecasts or realize its anticipated future business results. In addition, the content of this report may be changed without prior notice. Accordingly, Yamaha cautions readers not to place undue reliance on these forward-looking statements, which are valid only as of the date thereof, and undertakes no obligation for any negative impact caused by the use of this report. Yamaha Group Annual Report 2018 01 Becoming an Indispensable, Brilliantly Individual Company 04 History of Growth 06 Yamaha’s Business 08 Yamaha’s Value Creation 10 Financial and Non-Financial Highlights 12 02 Yamaha Group Annual Report 2018 Our Vision and Value Creation 03 Management Strategy Foundation for Growth Foundation Financial and Corporate Information Yamaha Group Annual Report 2018 Becoming an Indispensable, Brilliantly Individual Company Boosting brand power to become a highly profitable enterprise 04 Yamaha Group Annual Report 2018 Our Vision and Value Creation Management Strategy Becoming an Indispensable, Brilliantly Individual Company Boosting brand power to become a highly profitable enterprise Foundation for Growth Foundation Financial and Corporate Information Yamaha Group Annual Report 2018 05 History of Growth The origins of the Yamaha Group date back to 1887, when company founder Torakusu Yamaha repaired an imported reed organ. Since then, Yamaha has aimed to contribute to the enriched lifestyles of people while centering its business on sound and music. Guided by this aim, Yamaha has continued to move forward with a history that spans over 130 years and three centuries. Founding Period and the Realization of Spread of Music Culture and Venture into Major Leap as a Comprehensive Musical Domestic Production New Businesses Instrument Manufacturer Company founder Torakusu Yamaha ventured into the With the desire to communicate the joy of music to a Yamaha expanded its product domains to extend from domestic production of organs after being asked to great number of people, Yamaha began efforts to acoustic musical instruments to digital ones and repair an imported reed organ. Shortly thereafter, he popularize music. While spreading music culture, encompass various instrument types, such as string began the production of pianos. In this way, Torakusu Yamaha began leveraging the technologies and sensi- instruments, wind instruments, and drums. By doing Yamaha laid the foundation for Yamaha’s musical tivities cultivated through the development of musical so, Yamaha became a globally unique and comprehen- instruments business, which remains the Company’s instruments to develop new products, thereby sive musical instrument manufacturer involved in the core business to this day. expanding its business domains. production of a diverse range of musical instruments. 2 1 2 1 2 3 1 3 3 4 1887 Manufactures first organ made in 1954 Commences organ classes (predeces- 1959 Develops the world’s first electronic Japan 1 sor of the Yamaha Music School) 1 organ with an all-transistor design 1897 Establishes Nippon Gakki Co., Ltd. Develops audio products 2 (Electone™ D-1) 1 (currently Yamaha Corporation) Creates prototype of the Yamaha YA-1 1965 Begins production of wind instruments 1900 Begins production of upright pianos 2 motorcycle 3 2 1914 Begins production of harmonicas with 1955 Establishes Yamaha Motor Co., Ltd. 1966 Expands product domain to include guitars and drums 3 trademark butterfly logo 3 1958 Begins production of sports equipment using fiber-reinforced plastics (FRP) 1967 Develops concert grand piano to compete with some of the world’s most renowned musical instruments 4 1969 Begins composition contest (predeces- sor of Yamaha Popular Song Contest), led by young people, that helped popularize a new music culture 1887 1900 1950 1960 1970 Major Shifts in Global Expansion 1958 Mexico 1960 U.S.A. 1970 Canada First overseas subsidiary 1966 Germany / Singapore 1971 The United Kingdom Establishment of 1973 France / Brazil Overseas Sales Offices 1974 Malaysia 1975 Sweden / Panama 1969 Taiwan 1975 Indonesia (pianos) Establishment of First overseas production base Overseas Production Bases Acceleration of Growth through M&A, etc. 06 Yamaha Group Annual Report 2018 Our Vision and Value Creation New Value Provision through the Integration of Evolution of Technologies Diverse Technologies Recognizing the need to develop electronic components on its own in order to Combining acoustic and electronic technologies, Yamaha is working to revitalize improve the sound quality of digital musical instruments, Yamaha began the in-house demand through the development of new product lineups that combine the manufacture of semiconductors. Yamaha’s unique LSI helped the Company create strengths of both technologies. In addition, Yamaha has included overseas compa- a large number of original digital musical instruments and audio equipment, thereby nies under its corporate umbrella through M&A that will contribute to the future driving a genuine trend of digitization. Also, Yamaha made use of its production growth of its businesses. technologies for musical instruments to commence its FA equipment and automobile interior wood components businesses. Management Strategy 1 2 1 2 3 4 3 4 1971 Begins production of semiconductors 1 1993 Starts the development of the SILENT™ series through the integra- 1982 Launches Piano Player 2 tion of acoustic and digital technologies 1 1983 Launches DX7 digital synthesizer 3 and 2003 Launches VOCALOID™ singing synthesis software Clavinova digital piano 2006 Launches the Projectphone IP audio conference system that com- bines audio and network technologies 2 1986 Launches DSP-1 surround sound processor, a pioneer product for for Growth Foundation home theatre
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