Corporate Profile Aiming to Become an “Indispensable, Brilliantly Individual Company” We at the Yamaha Group share our corporate philosophy “Sharing Passion & Performance,” and contribute to the enriched lifestyles of people while focusing our business on sound and music. In January 2019, we established our new brand promise “Make Waves” that captures that special moment when our customers’ hearts tremble. With this brand promise as our pledge to our customers, we committed to further promoting manufacturing that values the customers’ perspective, an approach we inherited and have followed since our foundation in 1887. Yamaha has defined its management vision of “Becoming an Indispensable, Brilliantly Individual Company” that can “Boost brand power to become a highly profitable enterprise” as its future image in the medium-to-long term. In order to realize this management vision, we outlined our basic strategy to “develop closer ties with customers and society, and boost value creation capabilities” in our medium- term management plan “Make Waves 1.0” that encompasses the three-year period from April 2019. We will continue to merge technologies and sensibility to create new value and to propose lifetime value for each customer by developing closer ties with our customers. We at Yamaha Group want to be a company that support the challenges and passion of each and every one of our customers. We will continue to make every effort to be a company that can meet everyone’s expectations and to be able to stay with you, and we greatly appreciate your ongoing support. Takuya Nakata President and Representative Executive Officer Yamaha Corporation New Medium-Term Management Plan Management Vision Become an Indispensable, MAKE WAVES 1.0 Brilliantly Individual Company Develop closer ties with customers and society, Boost brand power to and boost value creation capabilities become a highly profitable Core operating Income ratio* enterprise Core operating income ratio* 13.8% (Based on IFRS standards) 20% 2019-2022 2016-2019 NEXT STAGE 12 Increase brand power Operrating Income ratio % (Japanese GAAP standards) 2013-2016 12.8 Core operating Income ratio* 12.1% (IFRS standards) YMP2016 Increase profitability Operrating Income ratio % 2010-2013 9.3 YMP125 *Core operating income corresponds to operating income under Rebuild business platform Operrating Income ratio Japanese GAAP. However, sales discounts of ¥3 billion are 2.5% deducted from revenue (non-operating expenses under At Yamaha Corporate Museum "Innovation Road" Japanese GAAP). 2 3 Sharing Passion & Performance Summary of Businesses Our history began in 1887 when Yamaha founder Torakusu Yamaha completed a difficult repair job on Drawing on the strengths we have nurtured as the a reed organ at a Japanese primary school. Perhaps no one thought at the time that this event would Sales by Business Segment Sales by Business Segment world’s largest manufacturer of musical instruments, mark the beginning of 130-plus year history during which Yamaha would become a world-leading brand we are driving ahead globally in our three fields of in musical instruments, audio equipment, and other products and services dear to the hearts of people Others Others musical instruments, audio equipment, and industrial everywhere. 34.7 billion yen 34.7 billion yen (7.9%) machinery/components and other. (7.9%) With our unique expertise and sensibilities, gained from our devotion to sound and music, We have Yamaha Group companies and branches we are committed to creating Fiscal Year ended in more than 30 countries and regions, and are Fiscal Year ended March 2019 March 2019 excitement and cultural inspiration expanding operations to meet the needs of customers 437.4 billion yen 437.4 billion yen together with people around the world. around the world and to deepen our engagement with our valued customers. Audio equipment Musical Audio equipment Musical instruments instruments 120.7 billion yen 120.7 billion yen (27.6%) 282.0 billion yen (27.6%) 282.0 billion yen (64.5%) (64.5%) Sales by Region Sales by Region Japan Japan Europe 29.7% Europe 29.7% 19.2% China North America 19.2% China North America 13.5% 21.0% 13.5% 21.0% fiscal fiscal 2019 2019 Other areas Other areas 16.6% 16.6% Net Sales Operating Income* *Core operating income (ratio) for 2022/3 Net Sales Operating Income* *Core operating income (ratio) for 2022/3 (Billions of yen) (Billions of yen) 13.8 (%) (Billions of yen) (Billions of yen) 13.8 (%) 470.0 70 Operating Income 12.8 14 470.0 70 Operating Income 12.8 14 500 432.2 435.5 433.0 437.4 500 432.2 435.5 433.0 437.4 408.2 Ratio* (%) 11.3 65.0 408.2 Ratio* (%) 11.3 65.0 60 10.9 12 60 10.9 12 400 9.3 56.0 400 9.3 56.0 50 48.8 10 50 48.8 10 7.0 44.3 7.0 44.3 300 40 40.7 8 300 40 40.7 8 30 6 30 6 200 30.1 200 30.1 20 4 20 4 100 100 10 2 10 2 0 0 0 0 0 0 2015/3 2016/3 2017/3 2018/3 2019/3 2015/3 2016/3 2017/3 2018/3 2019/3 2015/3 2016/3 2017/3 2018/3 2019/3 2015/3 2016/3 2017/3 2018/3 2019/3 Target2022/3 for Target2022/3 for Target2022/3 for Target2022/3 for 4 5 Musical Instruments Business Audio Equipment Business Yamaha's core business begins with the manufacturing With sound and music at its core, and drawing on and marketing of musical instruments, and extends its accumulated know-how in digital and acoustic to the management of music schools. These products technologies, Yamaha’s audio equipment business and services, which have earned high marks from delivers best-in-class commercial and consumer music enthusiasts from beginners to professionals, solutions. The audio equipment business spans are supported by research and development that professional audio equipment, music production progress through dialogue with artists as well as fine- equipment and software as well as audiovisual tuned sales and service activities via networks spread equipment, commercial online karaoke systems, throughout the world. Digital Mixing System network devices and unified communication devices. RIVAGE PM10 Grand Piano Tenor Saxophone Speaker System CFX YTS-875EX VXL Series Advanced Production System Nuage NEXO Steinberg Speaker Digital Audio Workstation STM Series Stage Piano Digital Piano Bösendorfer Software CP88 Clavinova CSP-170PE Grand Piano Cubase Pro 10.5 Model 185VC Acoustic Drums Live Custom Hybrid Oak Premium Bookshelf Speaker NS-5000 Sound Bar YAS-109 Power Amplifier Line 6 M-5000 Guitar Processor HX Stomp Wireless Speaker MusicCast 20 Sound Bar MusicCast BAR 400 Pre-Amplifier C-5000 Turntable Electric Acoustic Guitar Electric Guitar GT-5000 FG/FS Red Label FGX5 Revstar RSP20CR Simple L2 Switch Marimba Video Sound Collaboration System SWX2100-24G YM-6100 for Huddle Rooms Yamaha CS-700 Music School VPN Concentrator RTX830 Personal Speakerphone Recorder YVC-200 YRS-401 Pianica P-32EP/P-32E 6 7 Human sensitivity Industrial Machinery/Components and Other Businesses Research & Development Materials evaluation Mechatronics Analysis & analysis technology simulation technology Acoustic technology Our industrial machinery/components businesses Over its long history of manufacturing acoustic instruments, Innovation Materials Craftsmanship Sensibility comprise electronic devices, centered on Yamaha has produced a broad array of original technologies, processing pervading AI Yamaha semiconductors, factory automation, and automobile guided by the expertise passed on from generation to Sound technologies IoT sources interior wood components. Yamaha also manufactures generation and our keen sensitivity in sound creation. Authenticity Digital golf products and operates resort business. While in the field of digital instruments and audio equipment, technology Manufacturing Signal Our diverse businesses draw on the technology, know- Yamaha has developed groundbreaking electronics technology. technology Sensing processing Design how, and sensitivities Yamaha has accumulated By drawing on the strengths of these technologies and fusing M&A Networks through the manufacturing and marketing of musical them, Yamaha continues to create value in unique ways as well Open innovation Excellence instruments to offer products and services that as new ways to enjoy and utilize sound and music. galvanize the emotions of customers. True Yamaha spirit Create new value by combining technology and sensibility Real wood luxury automotive interior components The Innovation Center, completed in 2018, features the Graphic controller latest research and testing equipment for further enhancing for amusement equipment Yamaha’s core technologies and create new value YGV637 Core Technologies In the musical instruments domain, Yamaha has a long In the audio equipment sphere, Yamaha draws on its strengths Speakers for high resolution history of R&D related to processing wood, metal, and other in advanced software and electronic technologies, primarily personal computers materials and draws on this legacy to present its customers in digital signal processing and network technologies and NS-N25 with more and more fulfilling sound and music experiences. leverages its expertise as well as its know-how about sound What is more, through ongoing research of technologies on in innovative ways. Yamaha offers high-value-added products the mechanisms of keyboard actions, sound generation and like AV products and PA equipment as well as network devices. effects, and acoustics, we have a passion for developing superior sound and making outstanding performance possible. Modules for in-vehicle, Electronic circuit board hands-free telephone calls Fusion of Core Technologies testing machine Yamaha fuses its technologies to invent new hybrid instruments and to enhance its existing products. Conical pipe Venova Casual Wind Instrument The Venova is a completely new type of acoustic wind instrument with Branched an innovative branched-pipe structure with meandering shape that was cylindrical pipe Peltier modules developed to allow players to enjoy the rich sound of a conical bore YKH Series wind instrument like saxophone with ease.