ヤマハ（7951） – Yamaha New Medium-Term Management Plan “Make Waves 2.0”

PurposeWell-being of People around the WorldApr. 2022 – Mar. 202512th May 2022Review of Previous Medium-Term Management Plan “Make Waves 1.0”Top ConfidentialAlthough the financial targets were not met due to the impact of the COVID-19 pandemic, we have made steady progress in key strategies and achieved non-financial targetsProgress of key strategiesFinancial and non-financial targetsDevelop Closer Ties with Customers✓ Integration of customer data platform progressed, accelerating digital marketing✓ Yamaha automotive sound system domain expanded after acquiring contracts for 5 companies× Sales opportunities lost due to supply shortages caused by semiconductor procurement and logistics difficultiesRevenue (¥ billion)Core operating profit (¥ billion)Core operating profit ratio (%)CreateNew Value✓ Launched distinctive products fusing a wide range of technologies✓ Provided products and services that meet new demands, such as remote access× Promoted development of various business platforms, shifting to utilization phase from the new medium-term management planFinancial targetsResultsResultsResultsResultsPlan targetsMid-term targets✓ Accelerated workstyle reform promotion and business transformation triggered EnhanceProductivityby COVID-19✓ Launched factory in India, expanded production capacity and number of models× Cost increase outweighed cost reduction efforts in the COVID-19 pandemic*Contribute to Society through Our BusinessArabia)CDP✓ Yamaha Music School opened in a new market (first authorized facility in Saudi Non-financial targets〇 Increased corporate brand value by 1.5 times, achieving the target of 1.3 ✓ Yamaha Group is recognized with prestigious “A” score for climate change by 〇 Number of school PJ students reached 1.29 million, achieving the target of times1 million students✓ Selected as a Health & Productivity Stock Selection Brand for 2022〇 Achieved target of 50% of certified timber use rateCopyright © 2022 Yamaha Corporation All Rights Reserved.* Earnings per Share22019/3実績2020/3実績2021/3実績2022/3実績2022/3中計目標売上収益4,3444,1423,7264,0824,700事業利益527464407430650事業利益率12.1%11.2%10.9%10.5%13.8%ROE11.1%10.1%7.4%9.2%11.5%EPS222円195円151円215円270円US$111109106112110EUR13112212113112512.1%11.2%10.9%10.5%13.8%為替レート売上収益(億円)事業利益(億円)事業利益率(%)Make Waves 1.0Revenue434.4414.2372.6408.2470.0Core operating profit52.746.440.743.065.0Core operating profit ratio12.1%11.2%10.9%10.5%13.8%ROE11.1%10.1%7.4%9.2%11.5%EPS¥222¥195¥151¥215¥270US$111109106112110EUR131122121131125Foreignexchange rateA New Society Brought about by Business Environmental ChangesTop ConfidentialBusiness environmental forecastThe revolutionary transformation brought about by the accelerated digitalizationIndustrial structure and the world are changing drastically and more direct and closer ties with customers are becoming stronger.Business environmental forecastGreater diversity in lifestyles and sense of valueNot only functionality and convenience, but also people are seeking greater emotional satisfaction and authenticityBusiness environmental forecastGrowing awareness of sustainabilityGreater demand for corporate social responsibility.Broad awareness that social contribution links to corporate value creation in the medium to long term.COVID-19 has brought about rapid changes in people’s awareness and environment, transitioning to a “new society” post-COVIDIn an era when nature of emotional richness is sought for, as sound and music are needed much more as human necessities•• Shifting of people’s purchasing behavior to digital and online, increasing number of e-commerce users• Changes in the way people enjoy sound/music and communication, such as remote ensembles, online conferences, etc.Copyright © 2022 Yamaha Corporation All Rights Reserved.3The “new society” provides a further opportunity to Yamaha with the combination of its technologies and sensibilities!Top ConfidentialMake Waves 2.0オンラインレッスンEnhance Sustainable Growth Capability in the New SocietyAiming for a world where everyone enjoy sound and music whenever, wherever Confidential44Medium-Term Management Plan Basic PolicyTop ConfidentialEnhance sustainable growth capability in the post-COVID new societyMissionPurposeWell-Being of People around the WorldCorporate PhilosophySharing Passion & PerformanceVisionBecoming an Indispensable, Brilliantly Individual CompanyBoost brand power to become a highly profitable enterpriseManagem ent Vis ion2022-2025MAKE WAVES 2.0Enhance Growth Capability2019-2022MAKE WAVES1.0Boost value creation capabilities2016-2019NEXT STAGE 12Increase brand power2013-2016YMP2016Increase profitabilityCopyright © 2022 Yamaha Corporation All Rights Reserved.5Materiality *1 and Medium-Term Management Plan PoliciesTop ConfidentialCustomers• Connect with customers• Provide new value by incorporating products and servicesTechnology• Create new value through the fusion of cutting-edge technology, sensibility• Encourage open innovationManufac-turing• Mastery skills and technology• Strengthen resilienceQualitycustomer trust• High quality that leads to absolute Digital Transfor-mation (DX)• Create new value and transform business process in various fieldsGovernance• Strengthen Group governanceMaterialityBusiness FoundationHuman ResourcesKey management issues in business activitiesKey management issues related to human resources as social and corporate assetsEnvironment and SocietyKey management issues as a company that is a member of societyHuman resources• Increase job satisfaction• Respect for human rights and DE&I *2• Foster open organizational culture where people can proactively take on challengesEnvironment• Response to climate change• Sustainable use of timber• Resource savings, reduction of waste and hazardous substances• Contribution to an equal society and Societycomfortable lives• Respect for human rights in the value chainCulture• Spread and development of music cultureBasic policy of the medium-term management plan: Enhance sustainable growth capability in the new societyKey policy 1 Further strengthen the business foundationKey policy 2Set sustainability as a source of valueKey policy 3 Enable Yamaha colleagues to be more valued, more engaged and more committedCopyright © 2022 Yamaha Corporation All Rights Reserved.*1 Material Management Issues *2 DE&I: Diversity, Equity, and Inclusion6Medium-Term Management Plan Policies and Key ThemesTop ConfidentialKey policies to enhance sustainable growth capability in the new society and key themes for realization１．Further strengthen the business foundations２．Set sustainability as a source of value(1) Develop closer ties with customers(2) Create new value[Environment](1) Build a value chain that supports the future of the earth and society[Society](2) Enhance brand and competi-tiveness by contributing to comfortable livesKey poliicesKey themes３．Enable Yamaha colleagues to be more valued, more engaged and more committed(1) Increase job satisfaction(2) Promote respect for human rights and DE&I(3) Be more flexible and resilient[Culture](3) Expand market through the promotion and development of music culture(3) Foster open organizational culture where people can proactively take on challenges Copyright © 2022 Yamaha Corporation All Rights Reserved.7Key Theme 1-(1): Develop Closer Ties with CustomersTop ConfidentialSales channelsValue communicationSales evolution for direct ties with CustomersHybrid value appeal integrating digital marketing and physical storesDealer sales (store + EC)Manufacturer direct sales (EC)Direct (digital) marketingBrand experience baseCommunicate optimal value tailored to each customer based on customer informationCommunicate Yamaha brand promise Make WavesCustomer data platformImprove Customer data platform (Yamaha Music ID) to develop closer ties with users over their lifetimeYamaha Music ID registrations5 million IDsCopyright © 2022 Yamaha Corporation All Rights Reserved.CustomerYamaha8Key Theme 1-(2): Create New ValueTop ConfidentialProductsServicesCreate new products unique to Yamaha through the fusion of acoustic and digital technologiesAccelerate LTV*1 strategy and develop services to make music life more enjoyable through external collaboration and UGC*2Enthusiastic excitementNew productsVersatile, people-friendly featuresNew conceptproducts20 modelsYamaha Music IDDesign optimal services tailored to each individual based on customer data platformYamaha’s StrengthsSimulationMeas-urementSinging synthesisSoundsource×AcousticMaterial analysisMaterial process-ingDigitalSensingSignal process-ingPerformance motion analysisProduct designCustomer sensitivity evaluationManufacturing technologyYamaha MusicConnectNew experi-encesNew ways to enjoy sound and musicOnline lessonsAnytimeConnecting peopleAnywhereEasy production/ presentation of musicAnyoneCreate new emotional experiences with advanced technology and rich sensibilitiesAccom-伴奏paniment練習PracticeAI Technologyto accommodate each person’s individual needsSensitivityfor value creationNetwork technology to connect people遠隔Remote ensemble合奏セキュSecurityリティCopyright © 2022 Yamaha Corporation All Rights Reserved.*1 LTV: Lifetime Value*2 UGC: User Generated Contents9Key Theme 1-(3): Be More Flexible and ResilientTop ConfidentialManufacturing and technology developmentDigital Transformation (DX)Strengthen supply capacity to respond to demand and environmental changesNew value creation and process transformation through DX- Improve resilience in procurement and production- Create new value• Strategically narrow down the number of suppliers and• Establish a multi-region production system for the samenew technologies Production area 1Supply stoppedProduction area 2Supply availabletypes of partsproduct category• Provide services optimized for each customer by utilizing customer data• Accumulate sound/music performance and sensitivity data, and apply to Market- Process transformation- Increase capacity of existing plants• Capacity expansion of plants in India and Indonesia• Promote smart factory (Utilization of AI, IoT, sensor technology)• Hand down mastery skillsInvestment in production infrastructure¥35 billionEnhance development platform to generate innovation- Establish a new R&D center in the Tokyo metropolitan area(scheduled for completion by the end of March 2024)- Utilize external resources, strengthen collaboration, and develop a common development platformYokohama Minatomirai 21Data strategy for decision-making and execution• Build data management platform• DX human resource developmentSpeeding up and improving efficiency of SCM• Operate a new SCM system that connects production to customers at full scaleStandardize and improve efficiency of sales operations and production management• Implement sales ERP and production ERP• Improve efficiency and quality by promoting digital twin in manufacturingCopyright © 2022 Yamaha Corporation All Rights Reserved.10Key Theme 2-(1) Environment: Build a Value Chain that Supports the Future of the Earth and SocietyTop ConfidentialConservation of the global environmentResponding to climate changeSustainable use of timber- Toward the carbon neutrality in 2050, reduce CO2emissions from energy used at business sites (shift toenergy conservation and renewable energy)Path to achieving carbon neutrality (Scope 1, 2)FY2031/355% reductionFY2051/390% or more reductionAchieving carbon neutrality by offsetting ↑- Energy conservation in products- Reduce CO2 emissions from procurement, logistics, etc. (Collaborate with suppliers and improve logistics loading efficiency)Response to climate change5% reduction of CO2emissions by energy saving*CO2 emissions / productionvolume, compared to FY2018/3CDP climate changeUphold the position as A-list companyEco-Products*15%improvementin logistics loading efficiency- Fostering and conservation activities for rare tree species used as materials for musical instruments- Promote sustainably sourced timber use- Research alternatives that exceed the performance of existing lumbersPlanting of African blackwood (Tanzania)Cultivation and conservationof 3 tree species*2Sustainable use of timberSustainably sourced timber 75%Company standardResource savings, reduction of waste and hazardous substances- Reduce usage of non-recyclable materials and wasteUtilization of recyclable materials, reduction of plastic usage- Longer product lifeHigh durability, upgrades, maintenance and renewal- Reduce volatile organic compounds in paints and adhesivesNew small-sized productsElimination of plastic packaging materialsCopyright © 2022 Yamaha Corporation All Rights Reserved.*1 Eco-Products: Certified environmentally friendly products based on our own standards*2 Three tree species: African blackwood, Sakhalin spruce, Indian rosewood 11Key Theme 2-(2) Society: Enhance Brand and Competitiveness by Contributing to Comfortable LivesTop ConfidentialSolving social issuesCreation of remote environments for the new societyContributing to sound-related health and safetyRemote lessons connecting instructors and studentsComfortable teleconferencing with sound and video technology- Realize comfortable and immersive remote performances and lessons- Realize high-quality, natural remote communicationListening care technology designed to support hearing healthVoice communication module- Provide new value for “ear protection” by solving noise and hearing loss problems- Ensure safety and reduce the damage from traffic accidents through voice solutions(in-vehicle emergency calls, wireless communication, etc.)Respect for human rights in the value chain-Increase the level of supplier human rights due diligence60 companies introduced on-site supplier audits- Contribute to the prevention of dementia, creation of a sense of purpose in life, and improvement of QoL among the elderly through the use of musicCopyright © 2022 Yamaha Corporation All Rights Reserved.12Key Theme 2-(3) Culture: Expand Market through the Promotion and Development of Music CultureTop ConfidentialPromotion and development of music cultureExpansion of the community playing musical instrumentsContribution to local music cultureSchool projects in various countries- Pursue the ideal state of music schools in a new society- Provide opportunities for beginners and dormant users to play musical instruments through performance support functions, applications, and services- Promote instrumental music education to the curriculum of schools in emerging countriesApplications which supportvarious music performancesand practice managementsOverseas music school+100,000 studentsSpread and development of music culturePromote instrumental music education to the curriculum of schools in emerging countries10 countriesCumulative total of 2.3 million studentsDigital musical instruments reproducing regional and ethnic instrumentsLove Piano- Preserve and develop music culture by developing products rooted in local culture and expanding local content- Train instructors and technicians essential for the development of music culture- Support activities of young musicians and music researchers- Expand the activities to piano exhibitions (Love Piano) for trial playing to make the instruments more accessible to the publicCopyright © 2022 Yamaha Corporation All Rights Reserved.*Love Piano: Pianos installed at train stations, airports, commercial facilities, etc. that the public can freely use.13Key Theme 3: Enable Yamaha Colleagues to Be More Valued, More Engaged and More CommittedTop Confidential(1) Increase job satisfaction (2) Promote respect for human rights and DE&I(3) Foster open organizational culture where people can proactively take on challengesDevelop employee value proposition of YamahaLeverage potential of our diverse workforce- Develop leaders who can drive the business from – Conduct human rights education and human rights due diligence- Promote greater equity and diverse workforce a global perspective and assign competent individuals to the appropriate positions- Strengthen support for individual career development- Support diverse and flexible workstylesBuild an organizational culture where people respect each other and can work comfortably.-Increase various opportunities for communication- Transform further into an organization encouraging to take on challenges without fear of failure.Indicators for job satisfactionEmployee engagement surveyPositive response rate for job satisfactionContinuous improvementAmount of human capital investmentDoubledPercentage of female managersGlobal average19％Cross-borderplacement30 peopleIndicators for workplace environmentEmployee engagement surveyPositive response rate for workplace environmentContinuous improvementCopyright © 2022 Yamaha Corporation All Rights Reserved.14Management Targets (Non-Financial Targets)Top ConfidentialNon-financial targets to enhance sustainable growth capability in the new societyFurther strengthen the businesses foundationSet sustainability as a source of valueIndicators to connect more with customersYamaha Music ID registrations5 million IDsNew indicatorNew value creation indicatorsResilience indicatorsNumber of new concept products introduced20 modelsMake Waves1.0: 10 modelsInvestment in production infrastructure¥35 billionMake Waves 1.0: ¥27 billionMusic culture promotion indicatorsEnvironmental impact reduction indicators10 countries supporting instrumental music educationCumulative total : 2.3 million studentsCurrent: Cumulative total 1.29 millionSustainably sourced timber 75%Current : Assumed 55%*Company standardCO2 emissions5% reductionby energy saving*CO2 emissions / production compared with the FY2018/3 levelsEnable Yamaha colleagues to be more valued, more engaged and more committedIndicators for job satisfactionGender Equity indicatorsIndicators for workplace environmentEmployee engagement surveyPositive response rate for job satisfactionContinuous improvementCurrent results for FY2022/3: 66%Percentage of female managersGlobal average 19％Current results for FY2022/3: 16.5%Employee engagement surveyPositive response rate for workplace environmentContinuous improvementCurrent results for FY2022/3: 66%Copyright © 2022 Yamaha Corporation All Rights Reserved.15Management Indicators (Financial Indicators)Top Confidential[Financial Indicators]Achieving both growth and profitabilityRevenue growth: 20 %Core operating profit ratio: 14 %ROE： 10 % or more（Cost of shareholders’ equity*1：7.8%）ROIC*2： 10 % or more（WACC*1：7.6%）Operating cash flows¥170 billion(For 3 years)Investment and shareholder returns¥170 billion(For 3 years)Depreciation¥40 billionRegular investment¥40 billionSame level as depreciationStrategic investment¥65 billionExpansion of production facilities and equipmentWorkstyle innovation (office reorganization)Sustainability[Investment and shareholder returns]Well-balanced allocation to investment in growth and returns to shareholdersTotal return ratio: 50 % over three yearsNet income¥130 billionNew businessesMarketing, R&DM&A, etc.Shareholder return and dividends¥65 billion*1. As of March 2022*2. ROIC＝Core operating profit after income taxes / (Equity attributable to owners of parent + Interest -bearing debt)Copyright © 2022 Yamaha Corporation All Rights Reserved.16Growth Trajectory (by business and region)Top Confidential[Revenue](¥ billion)FY2022/3Revenue408.2Musical instruments+53.8(+19%/+6%)Industrial machinery and components and othersAudio equipment+31.1(+32%/+10%)+6.9(+20%/+6%)Mature countries+49.5(+20%/+6%)FY2025/3Revenue500.0Emerging countries+17.0(+27%/+8%)China+18.4(+29%/+9%)Figures in parentheses indicate 3-year growth rate/CAGRBy businessBy region (Musical instruments, Audio equipment)* Including foreign exchange impact +¥7.0 billion[Core operating profit][Core operating profit ratio]Industrial machinery and components and othersAudio equipment+11.5+0.8Musical instruments+14.7FY2025/3Core operating profit70.0TotalFY2022/3Core operating profit43.0Copyright © 2022 Yamaha Corporation All Rights Reserved.Foreign exchange rates used in the medium-term management plan: U.S.$1 = ¥115 and €1 = ¥13017FY22/3FY25/3Growth in 3yearsRevenue276.2330.0+53.8Core operating profit37.352.0+14.7Core operating profit ratio13.5%15.8%+2.2PRevenue96.9128.0+31.1Core operating profit1.513.0+11.5Core operating profit ratio1.6%10.2%+8.6PRevenue35.142.0+6.9Core operating profit4.25.0+0.8Core operating profit ratio11.8%11.9%+0.1PRevenue408.2500.0+91.8TotalCore operating profit43.070.0+27.0Core operating profit ratio10.5%14.0%+3.5PIndustrial machineryand componentsand othersMusical instrumentsAudio equipmentGovernanceTop ConfidentialCorporate governanceGroup governanceGuide medium- to long-term management direction and strengthen supervisory function by improving the effectiveness of the Board of DirectorsAchieve sound and solid management by improving global risk responsiveness- Board of Directors Structure: Company with a Nominating Committee, etc. – Risk management・ Board of Directors where two-thirds of the Board members are composed of independent outside directors(transitioned in June 2017)• Timely update risk maps in response to changes in the business environment• Strengthen global risk reduction activities based on risk scenarios・ Further diversify the board members in terms of skills, nationality, and genderBCP- Audit structure・ Audit Committee is composed of independent outside directors only・ Auditing through collaboration with the internal audit division・ Appoint audit officers of the same rank as operating officers-Improving effectiveness of the Board・ Conduct a questionnaire to evaluate the effectiveness of the Board of Directors every year and improve the effectiveness evaluation while updating evaluation termsResults of the Board of Directors effectiveness evaluation questionnaireFY2020/3FY2021/3FY2022/3Items with a positive evaluation of 75% or moreEffectiveness evaluationContinuous improvement・ Strengthen response capabilities by examining damage assumptions for BCPs at all global sites.Finance & Tax・ Reduce transfer pricing risk by expanding APAs in emerging countries・ Raise compliance awareness through constant education for all employees・ Operating the whistleblowing system at all global locationsComplianceIT・ Implement global personal information protection measures thoroughly・ Strengthen cyber security measures globally-Internal audit• Strengthen global internal audit systemCopyright © 2022 Yamaha Corporation All Rights Reserved.18Business Portfolio and DirectionTop ConfidentialFosterGuitarsGrowthCAGR10%CAGR9%Industrial Machinery and ComponentsElectronic devicesNew servicesAudio EquipmentCAGR10%Develop future pillars while improving profitability by actively investing and expanding scaleLowRebuildStrengthen revenue basethrough expanding business domain and salesiHghGrowthrateLowDigital musical instrumentsCAGR7%Drive market growth to expand business scalethrough demand creationPianosCAGR5%Wind, strings, percussion instrumentsCAGR7%Earning ratio HighCoreIncrease profitability as a pillar of business through expansion of high-value-added productsActively seek M&A and other opportunitiesWork on external alliances to accelerate business growth*CAGR: Average annual growth rate over the three years ofmanagement planthe medium-termCopyright © 2022 Yamaha Corporation All Rights Reserved.19PurposeWell-Being of People around the WorldStrategy by BusinessYamaha New Medium-Term Management Plan20Musical Instruments Business BroaderTop ConfidentialDevelop new growth areasGrowth marketsNew concept productsLaunching new concept products with which people can enjoy music anytime, anywhereContinue to expand sales share in the growing China market- Establish a growth product category to complement piano- Expand sales channels through both e-commerce and physical storesvalue communicationeducational institutions- Develop showrooms in two major cities to strengthen brand – Cultivate demand from seniors through collaboration with Spread and development of music cultureFurther grow in emerging countriesof local production for local consumptionExpand sales country-wide through e-commerce – ASEAN: Draw in the middle-income market as new customers by expanding sales networkFocus on the Philippines, one of our priority growthmarkets- Continue to support community-based music education activities Guitars3-year sales growth +33%ASEAN3-year sales growth +35%Number of stores increased*+70 stores-India: Gain an overwhelming market share on the strength – Provide easy-to-play but authentic musical instruments to lower the learning curve for playing and to make music more accessible .- Create a new playing experience by fusing acoustic and digital technologies- Develop original products that go beyond the stereotypes of musical instruments and propose new ways to enjoy musicCopyright © 2022 Yamaha Corporation All Rights Reserved.*Number of ASEAN stores: Increase in the number of exclusive Yamaha stores/stores with Yamaha display corner in the ASEAN market 21Spread and development of music cultureSpread and development of music cultureMusical Instruments Business Closer and EverlastingTop ConfidentialProvide services that support closer and everlasting ties with customersServices for connecting closerSupport for everlasting tiesEnhance support for musical activities through applications and contentProvide services to help customers continue to play instruments in better conditionYamaha Music Connect- Develop services on Yamaha Music Connect that provides new enjoyment of musical instruments such as automated accompaniment and self-study support- Develop a multi-country product package of lesson content to support improvement of the performance skills of each person- Provide solutions for online distribution at home and remote sessionsjourneySilent Piano retrofit unit- Make each person’s playing environment more comfortable by adding functions suited to their lifestyle- Keep instruments in better condition for a long time with after-sales support packages – Provide long-lasting support to customers’ musical Spread and development of music cultureContribution to an equal society and comfortable livesResource savings, reduction of waste and hazardous substancesCopyright © 2022 Yamaha Corporation All Rights Reserved.22Musical Instruments Business Points by Business UnitTop ConfidentialEnhance brand power and achieve a sustainable, highly profitable structurePianosDigital musical instrumentsExpand market share of premium pianos and grow sales in the Chinese market- Strengthen the presence of Yamaha brand in music colleges and halls to expand premium piano market share- Expand customer base and increase sales by strengthening Premium pianos3-year sales growth+30%sales network in China- Penetrate and expand sales of high-value-added products by improving instrument performance and strengthening value communicationDeveloping demand in emerging countries and recovering market share of digital pianos-Improve quality of digital pianos by leveraging our expertise in acoustics- Expand customers in emerging countries by strengthening local content centered on portable keyboards- Develop a new customer group by leveraging the flexibility of digital technologyPortable keyboards3-year sales growth+27% Wind, string, percussion instrumentsGuitarsReinvigorate the brass band market and strengthen the brand power in the high price rangeShift to mid-to-high price range through expanded brand recognition- Reinvigorate the domestic brass band market. – Growing guitar business by winning the trust of customersMedium-high end wind instruments3-year sales growth+25%- Propose comprehensive new value through digital technology and peripherals- Develop custom stores in major cities to establish customer contact pointsCreate opportunities for performances- Develop premium instruments in collaboration with top artists- Expand sales in the high price range in collaboration with influencersCopyright © 2022 Yamaha Corporation All Rights Reserved.Medium-high end acoustic guitar3-year sales growth+50%23Audio Equipment Business StrategyTop ConfidentialRebuild the business in response to market changes and expand into new / growing marketsExpand business domainsAV productsPA equipment ICT equipmentPrevious [Products] CategoryNew [Market]Category音響事業New growth marketsResponding to demand for streaming and other creative uses of sound Personal and home audioLive events and entertainmentNew growth markets, inc. enterprise and educationResponding to demand for hybrid (remote and face-to-face) servicesIIndividualndividuIndividualConsumerBusinessImprove development efficiency- Flexibly combine our own technological assets and create a development platform to introduce products efficiently into each market- Develop unique products and services by combining digital technology (signal processing), acoustic technology (spatial acoustic control), and network technologyCopyright © 2022 Yamaha Corporation All Rights Reserved.24Audio Equipment Business For Business UseTop ConfidentialExpand customer base by offering simplified solutions from expertise and technology for live concert and entertainmentLive concert and entertainmentEnterprise and educationMeet new event demands in the COVID-19 eraProvide a simple solution to the demand for hybrid (remote and face-to-face) services -Include an audio distribution mix function to create events with live and real time streaming sound- Provide new customer experiences with 3D audio technology for live sound and streaming – Automate optimum placement and sound field environment settings when installing audio equipment such as conference systems- Provide straightforward solutions for a variety of spaces, by providing a seamless, end-to-end lineup of products from sound input to output3D audioRemote conferencingContribution to an equal society and comfortable livesProvide technologies and services that meet the demands of economic rationalityProvide a one stop shop of products and services to gain the confidence of installers and expand sales channels- Develop small- and medium-sized products with multiple functions and applications-Introduction of products with optional add-on functions depending on the application- Labor-saving functions for operations through remote monitoring and control- Provide product training and system design support to installers who are not audio system specialists, increasing confidence and reducing their workload.- Expand sales channels to IT and other installers, and develop new markets such as corporations, public facilities and schools平等な社会と快適なくらしへの貢献Copyright © 2022 Yamaha Corporation All Rights Reserved.25Audio Equipment Business For Consumer UseTop ConfidentialExpand customer base with straightforward, high quality audio solutions and the concept of “TRUE SOUND”Personal and home audioContent creation and streamingHeadphones and earphones: Grow through our reputation for high quality sound and hearing healthDeliver high quality sound with simple operation, developed utilizing HiFi and professional audio technologiesContribution to an equal society and comfortable lives- Propose high-definition production and distribution systems that can be easily connected and configured- Create products which convey an immersive and sense of reality for gaming- Pursue “TRUE SOUND” that can even convey your feelings-Incorporate “Listening Care” acoustic technology for high quality sound, even at low volume, in all productsHome Audio: Expand with authentic, simple to install surround sound- Develop products that deliver high quality, wireless surround sound, which are easy to install and configureSpread and development of music cultureSound and communications for gamingAudio production and distributionStrengthen ties with customers through expansion of in-house e-commerce and direct value appeals- Expand in-house e-commerce from North American market- Develop digital marketing to target users who are particular about sound quality-Increase awareness with TRUE SOUND brandingCopyright © 2022 Yamaha Corporation All Rights Reserved.26Industrial Machinery and Components BusinessTop ConfidentialGrow as a “sound solution vendor” in the new automobile eraElectronic devices: Automotive sound systemsFA equipmentAccelerate growth by providing comprehensive solutions for “automobile audio systems”Expand business by contributing to the realization of a safe and secure society through ultrasonic and sensing technologies- Acquired adoption results of our products at 5 companies*, further accelerate expansion into priority markets *As of April 2022- Provide lightweight, high-quality sound speaker units for the EV era- Reinforce sales, technology and quality assurance function in the Chinese market to expand customer base- Grow the ultrasonic inspection business to prevent lamination defects in food/medical packaging and batteries- Expand sales of leak detectors for Li-ion batteries to ensure safety in the shift to EVs- Launch remote maintenance/remote service for Spatial surround technology in vehicle spaceequipmentUltrasonic inspection machine to 超音波ラミネート検査機prevent lamination defectsContribution to an equal society and comfortable livesResource savings, reduction of waste and hazardous substancesResponse to climate changeElectronic devices: Vehicle space voice solutionAutomobile interior wood componentsExpand adoption of voice processing technology that realizes safety and comfort- Reduce damage from traffic accidents by improving the sound quality of the emergency call system (e-Call)- Provide a comfortable communication environment through voice processing optimized for various purposes, such as voice commands and remote conferencingContribution to an equal society and comfortable livesEstablish a sustainable profitability structure for in-vehicle space production in the CASE era- Acquire new customers in North America and China- Elimination of petroleum and zero volatile organic compounds, balancing environmental responsiveness and profit growthResource savings, reduction of waste and hazardous substancesCopyright © 2022 Yamaha Corporation All Rights Reserved.27Top Confidentialthe figures forecastfor the Company’s futureIn this report,performance have been calculated on the basis of informationcurrently available to Yamaha and the Yamaha Group. Forecastsare, therefore, subject to risks and uncertainties.Accordingly, actual performance may differ greatly from ourprojections depending on changes in the economic conditionssurrounding our business, demand trends, and the value of keycurrencies, such as the U.S. dollar and the Euro.