Presentation of New Medium-Term Management Plan

Yamaha Medium-Term Management Plan

April 2019 – March 2022 Review of the Previous Medium-Term Management Plan

Key strategies progressed largely as planned, and medium-term targets have been achieved. Note: projected figures are as of date of announcement of new medium-term plan (April 12, 2019) Progress on Key Strategies Financial Results NEXT STAGE 12 • Launched many unique products by Sales Develop (billion yen) merging technologies Operating income products with (billion yen) distinctive • Won numerous design awards globally Operating (Good Design Grand Award, etc.) income ratio individuality (%) 12.5% 12% 10.9% 11.3% • Expanded account numbers (as planned) 9.3% Enhance (10% increase in contract dealers, 50% increase in FY2016.3 FY2017.3 FY2018.3 FY2019.3 FY2019.3 audio contractors) results results results projection medium-term customer target interaction • Promoted music popularization for learning musical instruments in emerging markets (to 260,000 people Sales 435.5 408.2 433.0 440.0 465.0 in cumulative total, 160% above target) Operating income 40.7 44.3 48.8 55.0 55.0 Operating • Progress in reducing costs did not fully compensate % % % % % Continually income ratio 9.3 10.9 11.3 12.5 12 for rising procurement prices, and net cost savings reduce costs amounted to ¥5.3 billion (vs. target of ¥8.0 billion) ROE 10.1% 14.0% 14.5% 10.3% 10% level EPS ¥169 ¥249 ¥292 ¥220 ¥200 level Earnings per Share Exchange US$ 120 Strengthen 108 111 111 115 • Global human resource management, establishment rates EUR 133 119 130 128 125 global of three global IT headquarters, and introduction of business IFRS (in April 2019) platforms Total Shareholder Return 168% over 3 years

Management Vision （Our future image Becoming an Indispensable, Brilliantly Individual Company in the medium-to-long term） Boost brand power to become a highly profitable enterprise [Core operating income ratio of 20%]

Enhance corporate value and realize vision by creating social value Business Activities Value Provided Social Value Creation Musical instruments Contribute to rich musical culture Contribute to spiritually rich lives and pleasant societies • Supply products to 161 countries and • Contribute to global music scene Management Vision region in a wide range of categories and advancement of musical culture through sound and music and price brackets as a • Lower the threshold to playing Spiritually rich lives Becoming an comprehensive manufacturer of musical instruments and expand the musical instruments Indispensable, number of players Lives enriched by music Music popularization Diverse forms of expression and self-actualization Brilliantly Individual • Operate music schools for children Spread the joy of music • Create opportunities for children Interpersonal connections and adults in 44 countries to come into contact with music Company • Promote music popularization for Development of global music culture learning musical instruments in • Spread the joy of music in emerging markets countries and regions devoid of Pleasant societies music lessons Audio equipment Convenient, safe and secure lives • Supply diverse products and Contribute to pleasant societies services to customers ranging • Help to enrich cultures and societies Customers from commercial users to by creating sound in a variety of consumers settings • Secure sustainable forest resources Finance Industrial machinery Brand Technology and components (IMC) • Use core technologies to provide People solutions in automotive and industrial equipment sectors Customers

Finance Brand Technology People 3 Copyright 2019 Yamaha Corporation All rights reserved Outlook for Business Environment The world is undergoing major changes at a rapid pace due to accelerated digitization and diversification of values  Combining technology and sensibility presents opportunities for Yamaha

Rising awareness Transformations caused by Greater diversity in of sustainability accelerated digital technologies lifestyles and sense of value • Greater requirements for corporate social • The industrial structure and the world in • AI and IoT technologies are taking responsibility general are undergoing major change due to automation and convenience to new levels • Broad awareness that social contribution advances in digital technologies • As well as material wealth, people are seeking links to corporate value creation in the • Closer, more direct customer interaction greater spiritual satisfaction and authenticity medium to long term

Regional • Although mature economies remain steady, uncertainties are increasing Musical instruments: gradual expansion driven by growing middle class macro- • The pace of growth is slowing in China Market in emerging markets (+6%) economic • The general trend in emerging markets is expansion, but there are outlook Audio equipment: expansion driven by technological innovation and disparities among countries and regions commercial equipment demand (+8%) environment Note: figures in parentheses indicate market growth over 3 years 4 Copyright 2019 Yamaha Corporation All rights reserved Positioning of New Medium-Term Management Plan

Management Vision Become an Indispensable, Brilliantly Individual Company Boost brand power to become a highly profitable enterprise (Core operating income ratio: 20%)

New Medium-Term Management Plan

2019 - 2022 Develop closer ties with Core operating customers and society, and boost income ratio*: 13.8 % value creation capabilities Based on IFRS standards

Operating income ratio 12.5 % Japanese A/C standards Increase brand power 2016-2019 NEXT STAGE 12 Core operating income ratio* 11.9% IFRS standards

2013-2016 YMP2016 Increase profitability Operating income ratio 9.3%

*Core operating income is equivalent to operating income under the Japanese Rebuild business platform Operating income ratio 2.5% accounting standards used prior to adoption of IFRS. However, sales discounts 2010-2013 YMP125 (amounting to ¥3 billion) are deducted from net sales (under Japanese accounting standards, they are classified as non-operating expenses).

5 Copyright 2019 Yamaha Corporation All rights reserved Basic Strategy and Management Objective Basic strategy In a world undergoing major changes at a rapid pace, Develop closer ties with customers and society, and boost value creation capabilities Financial targets Boost profitability while also building stronger business platform for growth (IFRS standards) Core operating income ratio: 13.8 %

ROE: % Customers 11.5 Financial EPS: ¥270 evaluation Non-financial targets Finance Brand Technology Corporate brand value*: +30 % People Music popularization for learning musical instruments in emerging markets: 1 million people Evaluation of: (in cumulative total) -Growth capacity -ESG initiatives, etc. Certified timber use: 50 % of total use Corporate value: ¥1 trillion + Investment and shareholder return (market capitalization) Well-balanced allocation to investment in growth and returns to shareholders Total return ratio: *Brand value added with Yamaha and Yamaha Motor Company: $1.2 billion 50 % (Best Japan Brands 2019 issued by Interbrand) 6 Copyright 2019 Yamaha Corporation All rights reserved Path to Improving Core Operating Income Ratio

Goals for each business Raise core operating income ratio to 14% level • Musical instruments: continue and aim for further increase to improve profitability Core operating ％％ income ratio: 14.1 16.5 （ FY2 0 1 9 . 3 ）（ FY2 0 2 2 . 3 ） Core operating Market • Audio equipment: drive growth income ratio: in business scale Leader 11.9%  13.8% (optimal pricing) （ FY2 0 1 9 . 3 ）（ FY2 0 2 2 . 3 ） Core operating 8.2％ 9.6％ income ratio: （ FY2 0 1 9 . 3 ）（） FY2 0 2 2 . 3 Overwhelming • Industrial machinery and market presence components (IMC): strengthen Sales Growth Unique Products Focused on and Services base with a view to leaping ahead Emerging Markets Yamaha strengths (Global share in fiscal 2018) Core operating ％％ income ratio: 7.4 7.9 （ FY2 0 1 9 . 3 ）（ FY2 0 2 2 . 3 ） Yamaha’s strengths 49% 54% True Yamaha spirit 37% 32% High marginal Technology x Pianos Digital Portable Wind income ratio pianos keyboards instruments sensibility

Enhance Productivity

(billion yen) Net Sales Audio IMC and equipment others Emerging + 4.0 markets Musical (12％) + 10.0 instruments + 14.0 China Impact of Mature （15％） exchange + 13.0 (12％) FY2022.3 markets rates + 19.0 Net Sales + 10.0 (25％) - 4.0 FY2019.3 (7％) 470.0 (4％) (Rate of growth over 3 years) Net Sales (projection) By region 437.0 By business (musical instruments and audio equipment)

Strategic Core Operating Income expenditure Impact of + 5.5 - 6.0 exchange +160Cost rates + 15.5 reductions FY2022.3 - 2.0 Core Operating FY2019.3 Increased sales and Core Operating improved gross Income Income (projection) margins 65.0 52.0

Basic Medium-Term Strategy Develop closer ties with customers and society, and boost value creation capabilities

Yamaha value creation Social value creation

4. Contribute to 1. Develop closer ties 2. Create new value 3. Enhance productivity society through with customers our business

Reflect society’s values in our own Profitability ＝ customer value x productivity values over the medium to long term

(1) Reinforce customer (2) Achieve growth in (3) Expand business interface emerging markets domains

Broader, Deeper, Longer Broader, Deeper, Longer Broader, Deeper, Longer

•Communicate brand appeal •Engage with middle income •Expand audio equipment through brand promise earners and accelerate growth business domain •Develop customer interface Expansion of middle class High income earners •Shift IMC business domain with focus on digital marketing 1.4 billion Above $45,000 people Middle income earners Einto in-vehicle solutions Contribute to lifetime value $10,000-$45,000 China enhancement (communicate value India Low income earners proposition suited to customer life stages) Below $10,000

2015 2020 2025

Source: Ministry of Economy, Trade and Industry Sales = customer numbers (broad) x frequency (deep) ｘ unit price (deep) ｘ duration (long)

Establish emotionally appealing brand promise and roll out globally

Concept encapsulated in brand promise To be a company that inspires its customers' passion and helps them make a step forward to express their individuality, emotion and creativity

Develop customer interface with focus on digital marketing and build direct ties with customers

Contribute to enhanced lifetime value Direct marketing and stores emphasizing hands-on experiences • Build customer data platform (CDP) and maintain • Use CDP to drive store traffic constant ties with customers by communicating • Shift directly-operated stores to stores offering hands- value proposition matched to their life stages on experiences Existing model Future model Yamaha Yamaha Communicate Communicate Direct value proposition value proposition (digital) Dealers Dealers marketing Customer Store interface traffic Customers Customers

Make use of e-commerce (especially for digital keyboard instruments, guitars, and AV products) 12 Copyright 2019 Yamaha Corporation All rights reserved 1-2 Achieve Growth in Emerging Markets: China Achieve 25% sales growth (over 3 years) by expanding sales networks and communicating brand appeal Achieve market growth/expand share Reinforce customer interface Boost product power

■ Pianos (share 36% 40%)  Accelerate sales network expansion  Diverse product lineup • Leverage technological capabilities and brand • Expand into tier-4 and tier-5 cities power to expand share even as pace of market • China-specific models based on local needs • Expand number of outlets nationwide growth slows • Aggressive sales of high-added value products ■ Digital pianos (40% growth in sales) • Double the number of Yamaha exclusive made in Japan stores offering hands-on experiences • Expand demand in educational market as well • Supply pianos made in Indonesia as hobby market • Make efforts to attract new demand of purchases from local manufacturers Efforts to increase ■ Guitars (35% growth in sales) educational demand

• Maximize use of brand, local production, and Stores widely distributed Piano salons in Yamaha sales networks throughout China exclusive stores  Expand music school business and

(billion yen)  Strengthen brand appeal promotional music lessons [ Digital piano ] 30 30 [ Guitar ] • Utilize brand ambassadors • Increase student numbers by 50% % Market Growth 30 30% Market Growth 20 20  Utilize digital tools to achieve  Efforts to increase demand among senior Yamaha citizens Yamaha nationwide coverage 10 share 10 • Roll out music lessons for the 60+ 41% share • Promote e-commerce to expand customer 39% 19% 21% coverage senior age group (240 million people) 0 0 FY2019.3 FY2022.3 FY2019.3 FY2022.3 (projection) (projection) • Accelerate digital marketing efforts 13 Copyright 2019 Yamaha Corporation All rights reserved 1-2 Achieve Growth in Emerging Markets: India, ASEAN, Other Markets Engage with middle income earners to grow by expanding sales networks and

introducing local models * Latin America, Middle East/Africa, and Russia/CIS Achieve 50% sales growth (over 3 years) in Indian market ASEAN/Other Markets*

 Expand sales networks, launch e-commerce  Engage with middle income earners through store- based measures and use of e-commerce • Expand sales networks focusing on cities with • Transform stores to emphasize hands-on populations of 1 million + experiences and expand number of directly • Achieve nationwide coverage with e-commerce operated stores and individual delivery • Utilize e-commerce to establish omni-channel Flagship store  Unified manufacturing sales and marketing Store coverage sales in Singapore systems, products suited to local music culture  Develop local models suited to indigenous music cultures • Chennai plant starts shipping products in April 2019 • Local production of India exclusive models

Models equipped with Examples of local instruments and music local instrument sounds  Promote musical instrument education and develop new markets Chennai plant Local models for Indian market • Promote music popularization for learning musical instruments in  Develop demand from schools by promoting musical school music lessons instrument education 3,000 schools in 7 countries, cumulative total of 1 million students • Target private schools to spread western music education and develop • Develop markets in Africa and Asian countries such as Bangladesh and Myanmar school sales channel 14 Copyright 2019 Yamaha Corporation All rights reserved 1-3 Expand Business Domains Expand business domains into growth markets and accelerate growth

Commercial audio equipment: 30% growth Transform AV product business portfolio In-vehicle components: 30% growth (over 3 years) (over 3 years)

■Accelerate growth in engineering ■ Achieve growth in personal audio ■Shift into total in-vehicle solution and installation domain domain domain

• Full-scale expansion into installation and • Shift product lineup towards wireless • Integrated control of passenger engineering domain for churches, halls, speakers, etc. in line with changing compartment audio, voice, and noise retail spaces, conference rooms, etc. lifestyles

Market scale now ¥200 ¥350 ¥500 ¥250 ¥550 ¥1 ¥1.5 ¥100 ¥100 ¥600 billion billion billion billion billion trillion trillion billion billion billion

＋8% ＋5% ＋10% Market -8% +12% +12% +40% ＋5% ＋40% ＋10% growth Retail space Hi-Fi Wireless Live performances/ Churches/halls/ Sound bars Headphones Interior panels Microphone modules Audio systems music events broadcasting studios background AV receivers speakers music/conference equipment

Yamaha’s existing Yamaha’s existing Yamaha’s existing Further expand domain Further expand domain Further expand domain strengths strengths strengths

Unique products High-quality customer experience and services Mechatronics Materials Joy Beauty Human analysis sensitivity Acoustic evaluation technology technology Confidence Discovery Materials Craftsmanship Analysis & processing simulation Customer feedback Innovation Center started operation in June 2018 Sensibility technology Authenticity pervading Yamaha Innovation Changing world technologies e.g., understanding of high-quality AI Manufacturing sound IoT technology Digital Sound Design sources Express technology Yamaha’s Sensing uniqueness based on M&A Signal Yamaha design • Amalgamated research, development, and design philosophy processing Open Networks departments in pursuit of synergy innovation Excellence • Fully equipped facility for research into world-leading sound 16 Copyright 2019 Yamaha Corporation All rights reserved 2-1 Products and Services Enhance added value by pursuing combination of authenticity and innovation

Authenticity Innovation

Soul-stirring musical expression Wow everybody! ■ Tireless enhancement of expressive power ■ Innovate • Pursue highest levels of expression capable of meeting the • Merge various technologies and create new value expectations of top artists (No.1 product selection for major piano competitions and leading • Use IoT to gather big data on performances, and orchestra wind instruments) accelerate customer-driven development • Use scientific approach to develop premium models that outshine rivals Cutting-edge facilities in • Pursue sound characteristics stemming from materials Innovation Center Develop exquisite instruments for a new era Make music simpler and more enjoyable ■ Scientific study of human sensibility ■ Harness AI for technology innovation • Study human sensibility and tacit knowledge of accomplished • Use deep learning to create new technology players, and forge ahead with development processes that pursue development methods the essence of high-quality sound • Personalize accompaniment and lessons

• Automate/assist professional audio Prototypes Commer- / trials cialization operations YOO, AI ensemble engine, analyzes the performance of players, and Simulation predicts the players' timing and tempo Sensibility Measurement to control a piano to play in synchrony evaluation 17 Copyright 2019 Yamaha Corporation All rights reserved 2-2 Business Platform to Drive Value Creation

Establish business platform to drive “profitability = customer value x productivity”

Digital Transformation (DX) Global HR Management Customer data platform Next-generation SCM Process reforms

 Build CRM platform to  Innovate SCM system  Reform all work processes  Promote cross-border develop closer customer to optimize efficient through DX assignment of personnel ties operation with through improved customer information  Expand introduction of visualization of core Start operating customer agile methods to positions and HR skills data platform (CDP) Start operation of new development process SCM systems Start operation of talent  Seamlessly connect management system accounting systems to business Factory Headquarters Sales company Retail Customers  Enhance diversity and human rights initiatives Consolidated accounting system POS CDP  Utilize robotic process automation to automate routine work New SCM System

ERP* system Distribution contractors

Reduce production Use expenditure Optimize pricing costs strategically

• Reallocate production processes • Enhance added value • Shift to strategic expenditure • Reduce procurement costs • Strengthen efforts to plan to enhancement of showcase product value • Automate manufacturing customer value processes

Further optimize pricing Sustainably reduce production costs  Reallocate production processes  Optimize pricing by enhancing added value and Global process optimization, including transfer of structural appropriately communicating product value component production processes to overseas factories  Reduce procurement costs through global bulk purchasing Perform zero-based analysis on expenditure and promote value analysis/value engineering and expand strategic spending  Automate production processes in overseas factories

 Shift expenditure to enhancement of Image of expenditure shift Reduce factory personnel by introducing automated production lines used in Japan to overseas factories, utilizing IT (introducing customer value Customer value enhancement automated guided vehicles, harnessing production big data), etc. Conduct sweeping review of operating costs, Fixed rebates, etc. and shift spending to costs enhancement of customer value FY2019.3 FY2022.3 projection goal Cost Reduction Analysis

 Review IT related expenditure Image of IT costs (billion yen) Customer interface ¥10.3 billion Shift IT investment to building platforms for Basic +4.8 -6.2 (gross) enhancing customer value, such as CRM, work Labor cost ¥5.5 billion Process -1.6 (net) SCM, e-commerce, etc. increases in Procurement FY2019.3 FY2022.3 reallocation -2.5 Costs in overseas cost projection goal FY2022.3 at and Greater factories reductions Target costs current cost productivity efficiency in  Reform work processes in FY2022.3 rates improvements back-office Reduce personnel expenditure in work back-office divisions by ¥2.5 billion over 3 years

Culture Society Resolve social issues through products Contribute to sustainability of music culture and services, enhance diversity and fulfilment of the people we work with

Environment Co-exist with the natural environment

Culture Contribute to sustainability of music culture Society Resolve social issues through products and services • Support healthy development of youth through music popularization • Contribute to global music scene by supplying a diverse range of activities (Latin America) musical instruments Launch approximately 800 models (over 3 years) • Continue community development through the Oto-Machi Project for • Spread the joy of music widely through music school business creating community filled with music (Japan) 30% growth in students at overseas music schools (over 3 years) Support 10 new projects (over 3 years) • Promote musical instrument education in school music lessons in emerging markets* 3,000 schools in 7 countries, cumulative total of 1 million students

*Collaborate with local education ministries to provide packages of instructors, programs and musical instruments and spread musical instrument education

• Support education in schools for children of migrant workers in I’m a HERO Program in Shibuya Zunchaka! China by donating musical instruments Colombia Oto-Machi Project Support 18 schools (over 3 years)

Society Enhance diversity and fulfilment of the people we work with • Create environment where diverse personnel can give full play to their individuality and creativity Cross-border assignment of 30 employees over 3 years, 17% of management positions occupied by women Spreading musical instrument Supporting education in the • Promote human rights due diligence throughout the value chain education in emerging markets* schools for children of migrant workers in China • Promote work-life balance for employees through telecommuting, in-house childcare facilities, etc. (Japan)

環境 Environment Co-existence with the Natural Environment  Sustainable use of timber • Aim for 50% of wood used to be certified timber, continue due diligence to avoid purchase of timber from illegal sources • Undertake activities to sustainably conserve scarce timber resources in collaboration with local communities • Enhance forest resource education and usage efficiency through cooperation with academic Activities to conserve scarce timber research (Kyoto University and other educational institutions) resources in Tanzania

 Development of environmentally-friendly products • Create environmentally-friendly products through the Yamaha Eco-Products* program *Environmentally-friendly products certified as Deployment of 120 models over 3 years meeting standards established by Yamaha Eco-products • Develop sustainable materials as substitutes for scarce timber resources (environmentally-friendly material)

 Reduction of greenhouse gas (GHG) emissions • Strive to meet Science-Based Target** by installing highly energy-efficient equipment and shifting to renewable energy sources. Eco-products (power-saving products) ** A Science-Based Target to achieve the 2 degrees C GHG emission reduction goal set in the Paris Agreement (32% reduction by 2030). • Reduce emissions throughout the value chain by efforts including development of energy- saving products and streamlining of distribution.

(billion yen) Core Operating (billion yen) Net Sales Wind/string/ Guitars Digital percussion IFRS standards Income Ratio Increased musical instruments +4.5 sales and Strategic IFRS standards Cost instruments +2.0 22/3期 improved reductions expenditure 売上 Impact of Impact of 22/3期 gross margins FY2022.3 exchange +3.5 -2.0 19/3期19/3期exchange +9.0 1,140 Pianos 1,600 rates +9.5 FY2022.3 (見込()見込) rates 297.0 +3.5 FY2019.3 -1.5 FY2019.31,287 -2.5 49.0 (projection)910 (projection) Core Operating Income Ratio 280.5 39.5 16% +

Pianos Digital Musical Instruments

 Expand premium offering with top-end strategy  Develop digital pianos leveraging Yamaha’s strengths in • Achieve 25% growth in premium piano sales over 3 years acoustic products • Enhance presence in music colleges and concert halls (double  Create new value through technological innovation number of installed flagship concert pianos) • Bring superior expressive power to Yamaha products

 Expand sales of high-added-value models  Expand range of keyboards equipped with specialized • Expand percentage of hybrid (integration of acoustic and sound sources suited to local musical styles digital technologies) pianos  Expand customer base by developing new products  Meet growing demand in China with global production targeting young people who want to express themselves through music

Guitars Wind/String/Percussion Instruments

 Collaborate with top artists  Reinforce marketing function from U.S. base  トップアーティスト協業 • Enhance joint development through atelier function • Expand use of local employees’ skills and idea to  Expand sales of mid-range and high-end products strengthen ability to showcase product value  中高級価格帯の拡売• Increase share of market for mid-range and high-end wind • Make effective use of influencers • 頂点モデル投入、ブランド訴求力向上を通じて、instruments (to 30%*) by launching top-end models and including professional players and enhancing brand appeal *Trumpet, saxophone,* clarinet social media users 中高級管楽器におけるシェア向上（シェア30％）  Expand market by promoting brass* トランペット、サックス、クラリネットand wind music • Reinforce artist relations and 吹奏楽普及による市場拡大  • Promote brass and wind music and create demand in China shorten the product development and中国・新興国で吹奏楽普及活動展開し、需要創造 emerging markets (prototype/trial) cycle •  Develop演奏の裾野を広げる新価値楽器展開 musical instruments offering new value to  Expand sales of mid-range and high-end products broaden player horizons

• Use scientific approach to aggressively expand  Enhanceローメンテナンス楽器による製品ライフ向上 product life cycle with low maintenance mid-range and high-end products musical instruments

• Reinforce artist relations and set up custom stores in four Enhance Lifetime Value (LTV) (All Product Categories) key global cities  Contribute to enhancement of LTV and create demand • Communicate appeal of true Yamaha spirit through exciting experiences and value creation • Build mechanisms to prevent customer dormancy

Net Sales (billion yen) Core Operating Increased sales Cost Strategic (billion yen) Professional ICT devices reductions expenditure IFRS standards AV products Income Ratio and improved audio equipment gross margins +1.5 22/3期 IFRS standards +2.0 -3.5 +1.0 22/3期 Impact of 19/3期売上 Impact of 1,600FY2022.3 exchange rates +5.0 19/3期(見込) exchange rates +11.5 1,140 (見込) FY2019.3 -0.5 FY2019.31,287 -1.5 135.0 19/3期(見込) FY2022.3 910(projection) (projection) 13.0 122.5 10010.0

Professional Audio Equipment

 Enhance ability to offer total solutions  Become supplier of choice for more upper  Create new business from stream clients such as facility owners customer support From audio input (microphones) to output (speakers) • Enhance capability to directly approach facility • Introduce remote monitoring and owners, consultants, and systems integrators control tools for audio systems and • Expand system orders by enhancing launch remote support services capability to propose solutions for upper

stream processes in facilities projects Service centers On-site

• Expand lineup of output products featuring next- Obtain lead Develop lead Quote Sale generation speakers that offer a sense of total Facility owner Wholesale dealer Networks immersion Consultant Systems integrator • Offer all-new levels of convenience with AI- Enhance Number of capability for Current Reproduce on-site settings via networks driven automation and assistance functions for projects direct client domain and offer remote support via video mixers approaches communication

Headphone Wireless  Transform business portfolio market speaker market (trillion yen)  Expand product categories and services 2.1 LAN Product Market 1.1 1.5 1 • Leverage strength in routers to expand (billion yen) • Reinforce product lineup launches in the 45 LAN product range (switches, hubs) personal audio market targeting millennials 30

2019 2022 2019 2022 • Provide labor-saving solutions  Develop customer interface and for network management such 2019 2022 strengthen brand appeal as network monitoring and the Yamaha Network Organizer • Communicate the appeal of the Yamaha (YNO) automated management brand outlook to millennials tool. • Expand direct marketing and exclusive display in stores  Differentiate products through technology integration (conference systems)  Enhance product competitiveness with new value propositions • Enhance efficiency of installation and operation for customers through real-time • Launch audio virtual reality headphones Hello! audio optimization, simple system offering totally immersive surround sound installation, etc. experience • Offer wireless sound systems via • Harness audio technology to achieve MusicCast* communication that conveys feelings *Yamaha’s own wireless network system

(billion yen) In-vehicle (billion yen) Core Operating Increased sales Net Sales Other products Strategic components and improved +10 IFRS standards +35 +0.5 22/3期 Income Ratio expenditure 22/3期 22/3期 gross margin FY2022.3 売上 IFRS standards 売上 19/3期 +3.5 19/3期 -0.5 FY2019.319/3期(見込) FY2019.3 +1.0 FY2022.3 (見込) (projection) 290 350 (見込) 350 255 38.0 (projection) 293 34.0 293 2.5 3.0

Expand product and support base, and accelerate growth in the aim of establishing IMC as third pillar of business

 Expand product range and accelerate  Enhance customer value by expanding support growth Scale of in-vehicle audio market (billion yen) base • Expand lineup of in-vehicle communication module 660 • Establish automotive customer support base in China 600 products (improved voice recognition accuracy, • Establish quality standard certification base in Japan for on- assisted onboard conversation, etc.) board microphones • Launch audio systems featuring strengths in integrated control of road noise, voice conversation, 2019 2022 and music playback  Expand solutions through collaboration

• Accelerate development of world’s first practical system for generation of electricity from waste heat

• Expansion of car types using interior wood panels China support base Communication Provide total passenger quality certification compartment solutions system (image) 29 Copyright 2019 Yamaha Corporation All rights reserved Investment, Return to Shareholders, and Governance

Copyright 2019 Yamaha Corporation All rights reserved Investment and Return to Shareholders Maintain well-balanced allocation of cash generated to investment in growth and returns to shareholders Cash flow Investment

 Regular investment: ¥40 billion Flexible Basic investment in existing business (same level as return to depreciation expenses) shareholders, . Strategic investment: ¥50 billion etc. Total • Additional investment in new manufacturing facilities return ratio • Investment in process automation at overseas factories Operating 50% • Additional R&D facilities, enhancement of artist relations, etc. cash flow Dividends • M&A  Strategic marketing, strategic R&D investment (expenses) ¥160 billion branding, reinforcement of customer interface, technological Strategic innovation investment Over 3 years ¥50 billion Return to Shareholders Plant expansion, M&A, etc.  Continual stable dividends will remain the basis of shareholder Regular return policy, but the policy will be implemented flexibly to investment enhance capital efficiency while considering a proper balance ¥40 billion with retained earnings needed for investment in future growth  Total return ratio of 50% over 3 years

Offensive Governance Composition of Yamaha Board of Directors

• Company with Three Committees (transition made in June 2017) • Strive for a more diverse board of directors bearing in mind skillset, nationality, and gender • Of nine directors, six are independent outside directors • Further accelerate implementation of decisions (as of April 1, 2019) underpinned by strong supervisory functions 2018 Grand Prize Winner, Defensive Governance Corporate Governance of the Year Awards*

• Move to a board two-thirds comprised of independent Highly evaluated as a company that has simultaneously reformed outside directors both the form and substance of its corporate governance

• Build effective audit systems by forging close ties with *These awards recognize companies using corporate governance to achieve healthy the Audit Committee, the Internal Auditing Division, medium- to long-term growth and external financial auditors (Organized by the Japan Association of Corporate Directors. Prize winners are selected from approximately 2,000 companies listed on the first section of the Tokyo Stock • Reinforce risk response capabilities through the Risk Exchange) Management Committee

32 Copyright 2019 Yamaha Corporation All rights reserved 33 In this report, the figures forecast for the Company’s future performance have been calculated on the basis of information currently available to 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 US dollar and the euro.