Annual Report-2019e

Annual Report 2019
YAMAHA PHILOSOPHY
The Yamaha Philosophy expresses the core framework of the Yamaha Group’s management and consists of
four elements: the Corporate Philosophy, Customer Experience,
Yamaha Quality (criteria for quality), and Yamaha Way (mindset and manners).
We utilize the Yamaha Philosophy as a foundation to draw from, 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.
Diagram of the Yamaha Philosophy

BRAND PROMISE
A feeling of enthusiastic excitement lives in sound and music,
through playing or simply listening. We at Yamaha want to inspire peoples’ passion
and help them make a step forward to express their individuality, emotion and creativity.
Make Waves
Just a few notes or a simple melody can send out ripples that trigger an emotional bond with another person.
Sound and music have a transformational impact on individuals and the world around us.
The “Make Waves” concept focuses on our passions and what matters most to people, namely,
expressing themselves and making an impact, to progress personally
as a listener and player, and to come together with others.
Yamaha is committed to empowering people to “Make Waves” with their sound and music.
Yamaha Group Annual Report 2019 01

PUBLISHING ANNUAL REPORT 2019
Takuya Nakata
President and Representative Executive Officer
In April 2019, the Yamaha Group commenced its new medium-term management Scope of This Report
Information in this report covers 62 companies
plan, Make Waves 1.0. Prior to commencing this plan, the Group established the (as of March 31, 2019): Yamaha Corporation,
its 59 consolidated subsidiaries, and its 2
new brand promise Make Waves, and has been promoting a variety of efforts equity-method affiliates. In cases where it is
necessary to specify the scope of reporting,
to further enhance its brand with the aim of realizing its management vision of this report lists the applicable institution
individually.
becoming an indispensable, brilliantly individual company.
Reporting Period
We have an unchanging desire to create an affluent society where an even This report primarily covers fiscal 2019 (April 1,
2018 to March 31, 2019). However, certain
greater number of people enjoy music and understand the joy that music brings. sections of this report include information
from April 1, 2019, and onward.
This desire has been unchanging since Yamaha’s inception as a company. I believe
that the numerous innovations we have achieved with our products and services
centered on our sound and music expertise, which we have cultivated in our over Disclaimer on Forward-Looking Statements
The forward-looking statements such as data
130 years of history, symbolize this desire. I also believe this desire is reflected in and forecasts included in this report are based
on assumptions and information available at
our music education businesses, which we o
perate in Japan and overseas. the time of publication and are subject to
change due to various factors. These state-
Starting in 2018, we reorganized our conventional annual report to also include ments are not guarantees that Yamaha will
achieve its targets and forecasts or realize its
information commonly found in our CSR report, thereby transforming the report anticipated future business results. In addition,
the content of this report may be changed
into a medium for communicating the Group’s medium- to long-term value cre- without prior notice. Accordingly, Yamaha cau-
tions readers not to place undue reliance on
ation vision to our stakeholders, starting with our shareholders and other inves-
these forward-looking statements, which are
tors. Annual Report 2019 represents the second time we have issued such valid only as of the date thereof, and under-
takes no obligation for any negative impact
a report. caused by the use of this report.
When creating Annual Report 2019, we referenced the International Integrated

Reporting Council’s International Integrated Reporting Framework as well as the
Ministry of Economy, Trade and Industry’s Guidance for Integrated Corporate
Disclosure and Company-Investor Dialogues for Collaborative Value Creation.
Summarizing the policies we adopt on a Groupwide basis, this report was created
in sincerity with the cooperation of each division of the Company. I therefore
declare the creation process and the content of this report to be appropriate.
Going forward, we will utilize our annual reports as engagement tools as
we pursue constructive dialogue with our stakeholders. It is our hope that these
reports help our stakeholders feel confident about our efforts to realize a sustain-
able society and elicit their understanding and support of our long-term corporate
value creation.
November 2019
02 Yamaha Group Annual Report 2019

CONTENTS
I. Our Vision and Value Creation 04 III. Foundation for Growth 62
Becoming an Indispensable, Human Resources 64
Our Vision and Value Creation

Brilliantly Individual Company 06 Sustainability 66
History of Growth 08 Special Feature 70
Yamaha’s Business 10 Corporate Governance 74
Management Vision and Value Creation Story 12 Directors 74
Performance Highlights 14 Reasons for Director Appointment 76
Executive Officers and Operating Officers 77
Corporate Governance 78
II. Management Strategy 16
Risk Management 88
Message from the President 18
New Medium-Term Management Plan 26
IV. Financial and Corporate Information 90
Review of NEXT STAGE 12 27
Approach to Formulating the New Medium-Term 11-Year Summary 92
Management Strategy
Management Plan 28 Financial Review 94
Positioning of the New Medium-Term Consolidated Financial Statements and Notes 98
Management Plan 30
Independent Auditor’s Report 127
Four Key Strategies 32
Main Networks 128
Financial Strategies 39
Stock Information 130
Strategies by Business 42
Company Information 131
Musical Instruments Business 42
Audio Equipment Business 46
Industrial Machinery and Components Business 48
Strategies by Function 50
Production 50
Sales 52
Foundation for Growth

Research and Development 54
Branding 59
Design 60
Disclosure Structure Overall Corporate Activities

Corporate website: https://www.yamaha.com/en/
Financial and Corporate Information
Information for Investors Sustainability Information Integrating

https://www.yamaha.com/en/ir/ https://www.yamaha.com/en/csr/ financial and
non-financial
information
Annual Report 2019
Securities Reports Sustainability Reports
Corporate Governance Reports Environmental and Social Data

I. Our Vision and Value Creation
Becoming an Indispensable, Brilliantly Individual Company 06
History of Growth 08
Yamaha’s Business 10
Management Vision and Value Creation Story 12
Performance Highlights 14

06
Becoming an Indispensable,
Brilliantly Individual Company
Boosting brand power to become a highly profitable enterprise
In April 2019, we commenced the new medium-term management plan Make Waves 1.0.
In light of the accomplishments we have made thus far, our new plan aims
to realize our vision and further improve corporate value through the creation of social value.

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.
1887 1900 1950 1960 1970
Founding Period and the Spread of Music Culture and Major Leap as a Comprehensive
Realization of Domestic Venture into New Businesses Musical Instrument
Production Manufacturer
• Ventures into the domestic production of • Starts efforts to popularize music education • Expands product domains to include acous-
organs with the desire to communicate the joy of tic musical instruments and digital musical
• Commences the production of pianos and music to an even greater number of people instruments. In addition, extends lineup of
builds the foundation for the musical instru- • Leverages the technologies and sensibilities musical instruments to include various
ments business, the Company’s core busi- cultivated through the development of musi- instrument types, from wind instruments
ness to this day cal instruments to pursue product develop- to string instruments and drums
ment in new fields, thereby expanding • Becomes involved in the production of a
Yamaha’s business domains diverse range of musical instruments, thereby
becoming a globally unique and comprehen-
sive musical instruments manufacturer
2 2 1 2
1 3 1 3 3 4
1887 Manufactures first organ made in Japan 1 1954 Commences organ classes (predecessor 1959 Develops the world’s first electronic organ
1897 Establishes Nippon Gakki Co., Ltd. of the Yamaha Music School) 1 with an all-transistor design
(currently Yamaha Corporation) Develops audio products 2 (Electone™ D-1) 1
1900 Begins production of upright pianos 2 1965 Begins production of wind instruments 2
Creates prototype of the YA-1 motorcycle 3
1914 Begins production of harmonicas with 1955 Establishes Yamaha Motor Co., Ltd. 1966 Expands product domain to include guitars
trademark butterfly logo 3 and drums 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 (predecessor
of Yamaha Popular Song Contest), led by
young people, that helped popularize a new
music culture
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)

First overseas
Establishment of Overseas production base
Production Bases
Acceleration of Growth
through M&A, etc.

1980 1990 2000 2010 2020
Evolution of Technologies New Value Provision through the Integration of

Diverse Technologies
• Undertakes the in-house production of semiconductors to enhance • Spurs new demand by melding acoustic and electronic technologies to
the sound quality of digital musical instruments develop a lineup of products that offer the merits of both technologies
• Creates numerous innovative digital musical instruments and audio • Accelerates business growth through the acquisition of overseas
equipment with Yamaha’s unique LSIs, thereby driving a genuine companies
transition into the digital era
• Applies production technologies for musical instruments to commence
FA equipment and automobile interior wood components businesses
1 2 1 2
3 4 3 4
1971 Begins production of semiconductors 1 1993 Starts the development of the SILENT™ series through the integration of
1982 Launches Piano Player 2 acoustic and digital technologies 1
1983 Launches DX7 digital synthesizer 3 and Clavinova™ digital piano 2003 Launches VOCALOID™ singing synthesis software
1986 Launches DSP-1 surround sound processor, a pioneer product for home 2006 Launches the Projectphone™ IP audio conference system that combines
theatre audio 4 audio and network technologies 2
1987 Launches DMP7 digital mixer, thereby driving the shift toward digital 2015 Launches MusicCast™ wireless audio system
audio equipment Develops and launches TransAcoustic™ Piano 3
Changes name to Yamaha Corporation Launches RIVAGE™ PM10 flagship digital mixing system equipped with
various cutting-edge technologies 4
2018 Constructs Innovation Center to accelerate efforts to spur innovation
1986 A ustralia / Spain 1990 Indonesia / Italy 2001 South Korea 2013 Vietnam / Turkey
1988 Austria 1995 Netherlands 2002 China
1989 Thailand 1996 Argentina / Taiwan 2004 Poland
1997 UAE 2007 Russia
2008 India
1989 Tianjin, China (digital 1991 Malaysia (AV products) 2002 Suzhou, China (AV products) India (digital musical instruments
2019
musical instruments) 1997 Hangzhou, China 2003 Hangzhou, China (pianos and guitars) and guitars)
Indonesia (guitars) (wind instruments) Indonesia (digital musical
Indonesia (digital musical instru- instruments and piano parts)
ments and wind instruments)
1999 Indonesia (AV products)
2005 Acquires German-based Steinberg Media 2014 Acquires U.S.-based Line 6, Inc.
Technologies GmbH Acquires U.S.-based Revolabs, Inc.
2008 Acquires Austrian-based L. Bösendorfer 2018 Acquires Ampeg brand from
Klavierfabrik GmbH U.S.-based LOUD Audio, LLC
Acquires French-based NEXO SA

YAMAHA’S BUSINESS
Yamaha develops businesses on a global scale in the three domains of musical instruments, audio equipment,
and others.
Others (Industrial Machinery and Components
Sales Composition Musical Instruments Business
Business, etc.)
(Fiscal 2019, J-GAAP) ¥282.0 billion (64.5%)
¥34.7 billion (7.9%) Net sales
437.4 billion
¥
Audio Equipment Business
Operating income
¥120.7 billion (27.6%)

¥ 56.0 billion
Musical Instruments Business

In the musical instruments business, our main Pianos
focus is the manufacture and sale of musical
instruments. In addition, we are involved in a
diverse range of other activities, including the
management of music schools and the produc-
tion and sale of music and video software.
lease see page 42 for details on our strategies in
P
the musical instruments business
Sales Composition by Region
Japan 26.7%
North America 21.0%
Europe 18.1%
China 16.6%
Other regions 17.6% Grand pianos Upright pianos
Digital Musical Instruments Wind, String, and Percussion Instruments
Trumpets
Digital pianos Electone™ electronic organ
Acoustic
Digital audio workstations Venova™ Saxophones violins Acoustic drums
Guitars Music Schools Music-Related Software and Content
Music software
Electric acoustic
guitars Electric guitars Yamaha Music Schools

Sales Composition and Other regions Japan
Number of Employees ¥72.6 billion (16.7%) / ¥129.7 billion (29.6%) /
by Region 7,347 employees 5,736 employees
Overall Yamaha Group
(Fiscal 2019, J-GAAP) China
¥59.2 billion (13.5%) / Number of employees:
5,407 employees 20,375

Europe North America
¥83.9 billion (19.2%) / ¥92.0 billion (21.0%) /

1 ,1 1 7 employees 768 employees
Audio Equipment Business

Music Production
In the audio equipment business, we offer a Commercial Audio Equipment Equipment and Software
wide range of products in both commercial and
consumer domains.
P
the audio equipment business
Sales Composition by Region
Japan 23.7%
North America 24.8%
Europe 26.8%
Digital audio workstation
China 8.1%
Digital mixing systems and software
Other regions 16.6%
AV Products Voice Communication Equipment Network Devices
Unified communication
Sound bars speakerphones Giga access VPN router
Others (Industrial Machinery and Components Business, etc.)

For our other businesses, we offer various Automobile Interior Wood Components FA Equipment
products and services such as electronic
components, centered on semiconductors, as
well as FA equipment and automobile interior
wood components.
P
the industrial machinery and components business
Wood panels
Printed circuit board
Electronic Devices Helium leak detectors testing machine
Golf Products
Resort Facilities
Audio and graphics LSI for Modules for Peltier modules High resolution audio
amusement equipment in-vehicle, hands-free PC speakers
telephone calls

MANAGEMENT VISION AND VALUE CREATION STORY
Value Creation Story
Enhance Corporate Value and Realize Vision by Creating Social Value

Yamaha is strengthening all of its capitals by creating Yamaha corporate value and
social value through its business activities. In this way, Yamaha aims to realize its
management vision by pursuing a cycle that improves both brand and corporate
value. Yamaha’s current value creation process is as described in the table below.
Yamaha value creation

Customers
Finance Brand Technology Value creation process

Social value creation
People
文化・Society,
Culture, 社会・環境 and
Environment
Value Creation Process
Yamaha Philosophy and Brand Promise
Research and Development Production Sales and Marketing

P.54 P.50 P.52, 59
Musical
Instruments Acoustic Global
Business
technologies Craftsmanship network
P.42
Sensibility Integration
Businesses and pervading Yamaha technologies
Value Chain Understanding
Technologies
of high-quality sound Customer interface
Audio Equipment
(broader, deeper and longer)
Business
Sales networks and
Digital store strategies
P.46
technologies Bases for R&D activities, artist
relationships, and service center
Industrial
Customer data platform (CDP) /
Machinery and Digital marketing
Components Business / Mass production technologies
and cost strategies
Others
Activities to popularize music
P.48 Innovation Center Overseas base strategies
Corporate Governance P.74 / Global Business Management Foundation

Management Vision
Boosting brand power to become
a highly profitable enterprise

Corporate value improvement
Customers
Finance Brand Technology
People
Culture, Society, and

Environment
Products and Services

Yamaha Value Creation
P.10
Products and Services Centered

Achieving the management targets adopted
on Sound and Music
under the medium-term management plan
Musical instruments
Make Waves 1.0 (2019–2022)
Audio equipment
Corporate value (market capitalization): ¥1 trillion +
Music schools
Other products and services Financial targets (IFRS standards)
Core operating profit ratio: 13.8%

ROE: 11.5%
Output Outcome EPS (Earnings per share): ¥270
Non-financial targets
Corporate brand value: +30%
Music popularization for learning musical instruments
in emerging markets (cumulative total):
1 million people
Certified timber use: 50% of total use
Investment and shareholder returns
Total return ratio: 50%
Social Value Creation

Contributing to emotionally enriched lifestyles and a more
comfortable society through sound and music

PERFORMANCE HIGHLIGHTS
Financial Highlights (Fiscal 2019) * All explanations are based on figures calculated under J-GAAP. Graphs for fiscal 2019 also include IFRS conversions.
Net Sales / Percentage of Net Sales Overseas Operating Income / Operating Income Ratio
(Revenue / Percentage of Revenue Overseas) (Core Operating Profit / Core Operating Profit Ratio)
(Billions of yen) (%) (Billions of yen) (%)
800 J-GAAP IFRS 100 80 J-GAAP IFRS 20
70.4 70.1 56.0 52.7*

600 75 60 15
437.4 434.4* 12.8 12.1
400 50 40 10
200 25 20 5
0 15/3 16/3 17/3 18/3 J-GAAP IFRS 0 0 15/3 16/3 17/3 18/3 J-GAAP IFRS 0
19/3 19/3
Musical instruments Audio equipment Others Operating income Operating income ratio (right)
Percentage of net sales overseas (right) * Core operating profit (IFRS)
* Revenue (IFRS)
Net sales increased ¥4.4 billion year on year, to ¥437.4 billion, thanks to the solid Operating income was up ¥7.2 billion, reaching a record-high ¥56.0 billion.
performance of the musical instruments business. The percentage of overseas Operating income ratio edged up 1.5 percentage points, to 12.8%.
sales rose 1.3 percentage points, to 70.4%.
Capital Expenditures / Depreciation and Amortization R&D Expenses / Ratio of R&D Expenses to Net Sales
(Billions of yen) (Billions of yen) (%)
40 J-GAAP IFRS 40 J-GAAP IFRS 10.0
30 30 24.9 24.9 7.5
5.7 5.7
20 16.0 16.0 20 5.0
10.8 10.6
10 10 2.5
0 15/3 16/3 17/3 18/3 J-GAAP IFRS 0 15/3 16/3 17/3 18/3 J-GAAP IFRS 0
19/3 19/3
Capital expenditures Depreciation and amortization R&D expenses Ratio of R&D expenses to net sales (right)
Capital expenditures came to ¥16.0 billion, down ¥8.6 billion. The Company’s R&D expenses were up ¥0.1 billion, to ¥24.9 billion. The ratio of R&D expenses
capital expenditures centered on constructing overseas plants (India and to net sales remained unchanged from the previous fiscal year, at 5.7%.
Indonesia), producing new products, and updating existing facilities, and the
amount of capital expenditures exceeded depreciation and amortization of
¥10.8 billion.
ROE / EPS Dividends per Share / Dividend Payout Ratio
(%)(Yen) (Yen)(%)
25 J-GAAP IFRS 500 100 J-GAAP IFRS 80
20 400
75 60
60 60
15 241 222 300
11.4 11.1 50 40
10 200
24.9 27.0
25 20
5 100
0 15/3 16/3 17/3*1 18/3*2 J-GAAP IFRS 0 0 15/3 16/3 17/3 18/3 J-GAAP IFRS 0
19/3 19/3
ROE EPS (right) Dividends per share Dividend payout ratio (right)
Return on equity (ROE) came to 11.4%, which exceeded the 10% level that we The annual divided rose ¥4, to ¥60 per share, marking the sixth consecutive year
adopted as a management target under the previous medium-term management of dividend increases. The dividend payout ratio increased 5.7 percentage points,
plan. Earnings per share (EPS) came to ¥241, which also surpassed the ¥200 to 24.9%. The total return ratio, including the acquisition of treasury stock, stood
level that we adopted as a management target under the previous plan. at 52.1%.
*1. Including the recording of deferred tax assets

*2. Including gain on sales of a portion of shares in Yamaha Motor Co., Ltd.

Non-Financial Highlights (Fiscal 2019)
Average Term of Service*1 (As of March 31, 2019) Ratio of Female Managers
(%)

(Years)
25 20
19.3 19.9
20
15
14.9
13.7
15
9.7 10 10.8
10
5
5
0 Male National Female National 0 16/3 17/3 18/3 19/3

average*2 average*2
*1. Figures are for Yamaha Corporation on a non-consolidated basis.
Group (Japan) Group (Japan and overseas total)
*2. According to the results of the Basic Survey on Wage Structure published by the
Ministry of Health, Labour and Welfare of Japan.
As part of our efforts to promote diversity, we are working to establish a work- We have adopted the target of raising the ratio of female managers to more than
place environment where employees can realize a work-life balance and where 17% by fiscal 2022. To this end, we are implementing a broad range of initiatives
women can play an active role. Not only is there no discrepancy between the including enhancing our educational and training programs.
average term of service of our male and female employees, our average term of
service is higher than the national average.
GHG Emissions (Scope 1 + 2) Production Area of Wood Resources*
(t-CO2) Other areas

200,000 4,200 m3 Japan 1,500 m3
Africa 700 m 3 China 7,800 m3
150,000 Europe 9,900 m3
Fiscal 2019
100,000 139,000 North America
Classification of
17,000 m3
logging areas (volume)
50,000 Total: 94,000 m3
22,000 Oceania 14,900 m3

0 15/3 16/3 17/3 18/3 19/3 Southeast Asia
37,800 m3
Scope 1 Scope 2
We are working to reduce our greenhouse gas (GHG) emissions at our produc- To realize sustainable timber procurement that takes into account the preserva-
tion plants through various energy-saving initiatives and fuel conversion. At the tion of forests and biodiversity, we conduct thorough surveys to confirm the
same time, we manage emissions in accordance with the GHG Protocol.* legality and other matters regarding the wood resources we procure and strin-
gently manage the production areas of those resources.
* A standard for calculating and reporting GHG emissions * Excluding products that are not the Yamaha brand and OEM/ODM products
Number of Music Education Initiatives Brand Ranking

(School Project Program) Implemented Overseas
(Schools) (Thousands of people)
1,800 Five countries* 300 Interbrand’s Best Japan Brands 2019*

260
25th
1,500 1,300 250
1,200
Four countries*
200
Ranked
900 150
600 100
Four countries*
300 Two countries* 50
0 16/3 17/3 18/3 19/3 0
Number of schools where initiatives have been implemented (cumulative total)

Number of students receiving lessons (cumulative total) (right)
* Number of countries in which Yamaha offers the program
Since 2015, we have been pursuing initiatives to provide opportunities for chil- Our brand ranking in Japan, which was determined using combined brand value
dren in emerging countries, who may not have access to musical instruments, to of Yamaha Corporation and Yamaha Motor Co., Ltd., was 25th (27th in 2018), with
experience playing an instrument within their school education (see page 71). a brand value of US$1,195 million (US$998 million in 2018).
* Japan’s Best Global Brands Top 40 (2019)—A brand ranking system by Interbrand Japan,
Inc. that evaluates Japanese brands

II. Management Strategy
Message from the President 18
New Medium-Term Management Plan 26
Financial Strategies 39
Strategies by Business 42
Strategies by Function 50

MESSAGE FROM THE PRESIDENT
Launching the New Medium-Term

Management Plan Make Waves 1.0
Before I discuss the new medium-term management plan we made under the medium-term management plans
Make Wavers 1.0 (hereinafter, the new plan), I will first we have promoted to date, it is clear that we are steadily
reflect on the Group’s management over the past 10 years. making progress toward realizing our management vision
Directly after the global financial crisis that occurred in 2008, of becoming an indispensable, brilliantly individual com-
we faced extremely difficult conditions such as declining pany. Under these plans, we have revised our business
demand and the rapid appreciation of the yen. However, structure, rearranged our business organizations, and
I believe that those difficulties helped strengthen the improved profitability. I therefore can say with confidence
Group overall and allowed us to refine our individuality. that we have steadily overcome the challenges we have
I also believe that when looking at the accomplishments faced, one step at a time.
Reflecting on the Previous Medium-Term Management Plan NEXT STAGE 12
Over the three-year period of the previous medium-term factors such as the cost of raw materials rising to a level
management plan NEXT STAGE 12 (hereinafter, the previ- that exceeded our expectations.
ous plan), we took steps to enhance our brand value with Regarding our transition from a business-unit structure
the aim of realizing our medium- to long-term manage- to a function-specific structure, we pursued various efforts
ment vision of becoming an indispensable, brilliantly to enhance efficiency by streamlining production and de
individual company, which in turn helped us improve our velopment functions. One of these efforts included the
operating income ratio. As a result, we made solid accom- establishment of the Yamaha Innovation Center, a new re-
plishments over the past three years from both a financial search and development base constructed on the grounds
and non-financial perspective, achieving our management of our headquarters in 2018. By increasing the amount of
target for an operating income ratio of 12%. Additionally, interaction between our engineers, the Innovation Center
we were able to reach our targets for ROE at the 10% is helping to create new kinds of value through the com
level and EPS (earnings per share) at the ¥200 level. bination of our various technologies. I also feel that the
While we still face several issues, including the Innovation Center has provided us the ability to provide
lower-than-expected growth levels in emerging countries cutting-edge value that cannot be imitated by our compet-
and the slow progress of AV products, we were able to itors through the combination of the diverse elemental
achieve all of the quantitative targets we adopted. In par- technologies we have cultivated over the years. These
ticular, for the musical instruments business, we realized types of organizational and structural changes have
sales growth in both advanced and emerging countries, undoubtedly enhanced our roles and functions.
which helped drive profits. In addition, the professional Now the question is the next step we need to take to
audio equipment business, which we positioned as a further realize our medium- to long-term management
growth driver under the previous plan, made significant vision. As represented by our choice to incorporate our
contributions to our business results, despite the perfor- brand promise of Make Waves into the title of our new
mance fluctuations of certain products and services. We plan, the key to realizing further growth is enhancing our
still have some work to do in terms of cost reductions, brand value to the greatest extent possible.
but our efforts have been greatly impacted by external

社長メッセージ
Management Strategy
Takuya Nakata
President and
Representative Executive Officer

Commencing the Brand Promise “Make Waves”

and the New Medium-Term Management Plan Make Waves 1.0
Yamaha aims to take a proactive step forward to Make to popularize music education to a cumulative total of one
Waves and deliver exciting experiences to its customers. million people in emerging countries and ensure that
In January 2019, the Yamaha Group unveiled its new brand certified timber accounts for 50% of the total timber we
promise, Make Waves. The expression Make Waves cap- use. Our financial targets are achieved through the results
tures the moment when customers feel enthusiastic of our various business initiatives, which means they rep-
excitement. Yamaha wants to be a company that encour- resent the strength of our management at a given point
ages its customers’ passions and helps them take a step in time. Our non-financial targets, however, serve as indi-
forward to express their individuality, emotion, and cre- cators that measure the extent to which we have culti-
ativity. Through Make Waves, we promise our customers vated competitiveness as a company from a long-term
we will become an indispensable, brilliantly individual perspective. As well, corporate value is generally calcu-
company that can make customers feel enthusiastic lated using the formula of market capitalization plus debt.
excitement. We position the new plan as a management However, as the Group has very little debt, we measure
plan that can first put the words Make Waves into action, corporate value improvement by multiplying our EPS with
which is why we chose to call it Make Waves 1.0. For our PER (price-to-earnings ratio). While EPS represents one
customers, we want Make Waves to be the first thing of our financial targets, PER is greatly impacted by our
that comes to mind when they hear the name Yamaha. non-financial targets. We believe that if we achieve our
For our employees, we hope that Make Waves encour- management targets, we should be able to realize corpo-
ages them to take on new challenges without fear while rate value (roughly similar to market capitalization) of over
always keeping the Yamaha Philosophy in mind, which ¥1 trillion.
acts as the cornerstone of the Group’s management. In To elaborate on our core operating profit ratio, we
this way, I am certain that Make Waves will afford both improved this ratio from the 9% level by one point each
our customers and the Group with the opportunity to year under the previous plan, achieving a core operating
take the next step forward. profit ratio of over 12% in fiscal 2019. With the new plan,
With the aim of becoming an indispensable, brilliantly we aim to continue to increase this ratio by one point
individual company, and in light of our performance under each year. However, doing so would mean that after the
the previous plan, under the new plan, we have set a core three-year period of the new plan, our core operating
operating profit ratio of 13.8%, a ROE of 11.5%, and EPS profit ratio would exceed 15%, which is one point higher
of ¥270 as our financial targets. For non-financial targets, than our target of approximately 14%. We therefore
we aim to achieve a 30% increase in the value of our intend to allocate this extra point to growth investments.
corporate brand (which is shared between Yamaha These growth investments, which do not include ordinary
Corporation and Yamaha Motor Company). We also aim investments such as capital expenditures, include
Announcement of the brand promise “Make Waves” at the 2019 NAMM Show (music products trade show) in the United States

investments in brand-related efforts to improve the emo- production processes. Going forward, we intend to allo-
tional value we offer as well as R&D efforts related to new cate a greater amount of cash to new efforts aimed at
technologies and products. enhancing the emotional value we offer. Of course, with
In terms of improving profitability going forward, we our product development, we will be able to actively
will maintain our basic approach of increasing revenue and incorporate new development methods, starting with AI,
decreasing expenditures. From the perspective of reve- to an extent greater than ever before.
nue, achieving growth in emerging countries will be cru- Meanwhile, we will naturally continue our pursuit of
cial. To that end, without missing out on the opportunities thorough cost reductions. Under the previous plan, we
afforded to us due to rising income levels in emerging set a target of reducing costs by ¥8.0 billion on a cumula-
countries, we will strive to increase our customers while tive three-year basis. However, we were only able to
elevating our brand image. As our marginal income ratio is reduce costs by ¥5.3 billion due to such factors as the rise
high, profits will naturally increase if we are able to boost in procurement prices. Over the three-year period of the
sales. In addition, we will continue to engage in efforts new plan, we will strive to reduce costs by a total of ¥5.5
to optimize our selling prices, which we have thus far pro- billion. The reason why this target is close to the results
moted. Our selling price optimization for existing products we achieved with the previous plan is that, in the first year
is nearing its completion, and it may seem as if there is of the new plan, we still have to make up for a certain por-
limited space to further optimize these prices as many of tion of cost reductions that we were unable to achieve in
our products possess the top market share. However, we the previous plan. There are still many things we can
will work to add new value to such products and optimize accomplish when it comes to cost reductions. These
Management Strategy
prices in amounts that correspond to this added value, include streamlining our purchasing functions, which are
thereby improving profitability. currently dispersed across the globe, and further reorga-
For the use of cash, our conventional approach has nizing the roles of our production plants to improve their
been to allocate the majority of cash into improving func- operating ratios. These also include promoting a shift to
tional value and profitability, including efforts to develop robotic process automation (RPA) in our workplace.
technologies, reduce costs, improve quality, and enhance
New Medium-Term Management Plan—Four Key Strategies
When formulating the policies within the new plan, we well as the risks and opportunities that the Group will be
incorporated not only the macroeconomic environment faced with. Going forward, the structure of industries will
and market forecasts in each region but also future esti- rapidly change due to the acceleration of digitalization. As
mations and integrated thinking. This helped us discuss lifestyles and value systems diversify amid this change,
the kinds of changes that will occur around the world as we believe we will see the dawning of an era where there
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 society
1. Develop closer ties with customers 2. Create new value 3. Enhance productivity
through our businesses
Reflect society’s values in our own

Profitability = Customer value × Productivity
values over the medium to long term

will be a greater demand for emotional satisfaction and do to maintain long-lasting relationships with our custom-
authenticity, not simply affluence in terms of material ers will lead to the creation of new value. In addition, the
things. Additionally, with the heightened social awareness experience and information that we gain through such an
of sustainability around the globe, corporations will be approach can be leveraged in the development of new
expected to fulfill their responsibilities to an even larger products. To that end, during the course of the new plan,
degree, which in turn will make corporations more aware we will rebuild our customer database and establish
of the link between social contributions and medium- to frameworks that enable us to make integrated proposals
long-term corporate value improvement. These circum- for products and services to our customers.
stances will bring about tremendous business opportuni- During the period of the previous plan, we were
ties for Yamaha, as we boast strengths in combining able to improve our performance in China to a level that
technology and sensibility. exceeded our expectations. The middle class in China
In light of the accomplishments we have made to and emerging countries is expected to continue to grow,
date, under the new plan, we have adopted the four giving rise to new demand. This means that we must
key strategies of “develop closer ties with customers,” deepen our ties with the customers in these markets.
“create new value,” “enhance productivity,” and “contrib- We made a direct entrance into the Chinese market in
ute to society through our businesses,” which will all pivot the 1980s, ahead of other foreign companies, and have
around the basic strategy of “develop closer ties with cus- worked to establish local production plants in the region.
tomers and society, and boost value creation capabilities.” During the 1980s, major reforms implemented by the
One area of focus with this new plan that differs from pre- Chinese government gave rise to a trend of loosening
vious plans in particular is our approach to linking social restrictions on western music while valuing traditional
value creation with Yamaha value creation. While we pur- Chinese music. This in turn led to a variety of music enter-
sued sustainability as a key initiative under previous plans, ing China. As we expanded our business into China during
these initiatives were always positioned separately from this time period, our presence in China coincided with the
our business strategies. With the new plan, we will no progress of music in the nation. As a result, I can say with
long consider these two aspects as separate things, and confidence that the Yamaha brand in China has obtained a
will adopt an approach that focuses on how we can create premium status that places it above the brands of other
social value centered on our business strategies. companies. Leveraging this status to our advantage, we
There are actually still few companies which create have continued to pursue efforts to enhance our brand
strategies that combine the directions of business growth power through our pianos and digital musical instruments.
and social value creation. However, we are a corporate These efforts have helped strengthen the brand image of
group that has the ability to form such strategies as we our other musical instruments. Going forward, we will uti-
have long engaged in efforts to naturally spread and lize our strong brand power to promote other businesses
develop music culture as well as sustainability activities in China.
such as the procurement of sustainable timber. I am con- Of course, being able to respond thoroughly to local
fident that we can create new value from the perspective needs is an essential part of improving our brand power.
of social value creation even in our existing fields such as For example, in China, we sell keyboards that have been
the musical instruments and audio equipment busi- manufactured specifically for the Chinese market and
nesses. In addition, leveraging our long-cultivated core operate music schools that make use of these keyboards.
technologies, I believe we can contribute to society within In India, where we are working diligently to popularize
completely new fields. While this will be no easy task, we music education, we are offering western musical instru-
will aim to accomplish both. ment products in a manner that caters to the local culture
and needs. Furthermore, thinking from a different perspec-
Key Strategy 1 tive, we can give new life to ethnic musical instruments
Develop Closer Ties with Customers and ethnic music that are on the verge of fading away
First, in order to “develop closer ties with customers,” we through the utilization of the Group’s technologies. The act
will accelerate various initiatives aimed at promoting our of passing on culture itself encapsulates the kind of social
brand through our newly formulated brand promise, value creation we are pursuing under the new plan, and
strengthening both digital and physical contact points with we are actively promoting efforts to do so. Additionally, in
customers, and enhancing lifetime value (LTV). Although India, we expect that the high popularity of the film indus-
the products and services we offer cover all age groups, try will provide major opportunities for our audio equip-
we actually have yet to consider the perspective of how ment business. Not limiting ourselves to just China and
we can utilize these products and services to maintain a India, we are also focusing on the markets in ASEAN coun-
bond with our customers over their lifetimes. In the previ- tries, which are currently in a growth phase. To improve
ous plan, our approach focused on expanding and deepen- our brand value in these markets, it is important that we
ing our customer base, and our new plan incorporates the build our own local production plants and capitalize on the
notion of extending the length of our relationship with our trend of an emerging music culture. Overseas, there is a
customer base. An approach that considers what we can risk of counterfeit products circulating widely in the

market. However, if we are able to instill a music culture, reorganizing our production processes, enhancing produc-
then we can refine people’s sensibilities to a level where tivity, and reducing procurement costs through global bulk
counterfeit products will lose all appeal. We know firsthand purchasing and the promotion of value analysis / value
that genuine products offering expressive power that goes engineering. We will therefore continue efforts to reduce
above and beyond their price are the preferred choice of costs going forward. Also, to improve our use of expenses
customers, no matter the region. not only at our production plants but also on a Groupwide
As there is still a great deal of room for spreading basis, rather than simply curtailing expenses, we will per-
music culture around the world, we recognize that there form zero-based analysis of our expenses to promote a
is still room for us to expand our operations. It will there- shift toward strategic spending aimed at enhancing cus-
fore be important to develop closer ties with our custom- tomer value in the future. We will leverage expenses as
ers going forward. an investment of resources in an effort to bolster our
profitability.
Key Strategy 2
Create New Value Key Strategy 4
It is imperative that we combine our unique technologies Contribute to Society through Our Businesses
and sensibilities to create new value and offer products I say this often, but music has the amazing power to warm
and services that deliver this value to our customers. To people’s hearts and can transcend language barriers to
that end, to promote the key strategy of “create new inspire people around the world. Music therefore has the
value,” we will meld the various technologies and sensibili- potential to resolve various social issues. No one would
Management Strategy
ties we possess to deliver one-of-a-kind products and ser- argue with the idea that music is an important part of all
vices to our customers, taking into account the changes cultures, and our unshaken faith in the power of music
occurring around the world and the feedback we have acts as the core of the Group’s management. When we
received from customers. The value our products offer tirelessly pursue our work based on the mission of playing
can be divided into two categories: functional value and an important role in spreading and developing music that
emotional value. Through efforts to enhance our products’ we can make into culture, we will be able to make count-
emotional value, we can form even deeper connections less achievements. To me, giving consideration to the
with our customers and society as a whole, thereby fur- sustainability of music culture is the same as giving
ther enhancing our brand power. The utilization of AI and consideration to the sustainability of the Yamaha Group.
IoT has led to dramatic improvements in terms of conve- While it is possible to consider the 17 sustainable
nience. At the same time, consumer value systems are development goals (SDGs) as a risk, I believe we can
shifting away from the possession of material things and leverage the SDGs to improve our competitiveness if we
placing greater importance on the sharing economy and approach each goal through efforts that are unique to
services, leading to a greater demand for emotional satis- Yamaha. For example, rare timber is often used as materi-
faction and authenticity. In such an age, the need for als for musical instruments. If we are truly committed to
emotional value will without a doubt surpass the need ensuring the sustainability of the Group, then we need to
for functional value. Musical instruments have also been realize the sustainable procurement of rare timber on our
something that customers purchase based on sensibilities own accord, rather than leaving that task up to a third
and emotional impression. We view sound and musical party. Timber is not a resource that can be grown in the
instruments as a culture, and have continued to enhance span of one to two years. Accordingly, if we wish to
our sensibilities alongside our technologies. As such a ensure the sustainable procurement of timber in the next
corporate group, the shift toward prioritizing emotional 50 years, then it is imperative that we commence efforts
value provides us with a significant boost. Furthermore, now with that aim. In light of this, we will pursue efforts
throughout our history, we have been taking on the
challenge of scientifically analyzing sensibilities, which
is something that is extremely difficult to quantify. Our
ability to quantify the aspects of emotional value improve-
ment in numerical terms provides us with a tremendous
competitive edge.
Key Strategy 3
Enhance Productivity
An important factor in boosting our profitability is enhanc-
ing our productivity. By improving added value and
strengthening efforts to promote the value our products
offer, we will further pursue sales price optimization. In
addition, in order to lower manufacturing costs, there are
various improvements we need to make, including

toward sustainable procurement with an awareness of for such efforts. However, if culture becomes obsolete,
the fact that threats to the global environment are threats then so do we as a company. On the other hand, if we
to the existence of the Group. can popularize the Yamaha brand alongside efforts to
The development and fostering of music culture is foster music culture, then we can establish a competitive
also something that cannot be done in a short amount of edge that cannot be easily rivaled. In these ways, we
time. In fact, there is no real way we can set a time period understand how risks can be changed into opportunities.
Simultaneously Reforming the Structure and Substance of Our Governance
The Yamaha Group has continued to make consistent At the moment, six of the eight directors on the Board
efforts to strengthen its governance, steadily promoting are outside directors. For personnel on the business exe-
governance reforms such as transitioning to a Company cution side, this composition provides a sense of tension
with Three Committees (Nominating, Audit, and that makes it feel as if we hold a General Meeting of
Compensation committees), introducing a restricted stock Shareholders every month. Our outside directors possess
compensation system, and adopting claw-back clauses. various work careers and expertise, starting with corpo-
Rather than viewing governance as a formality, these rate management, and the accuracy and quality of our
reforms represent the results of our efforts to constantly management has improved thanks to these outside direc-
consider how we as a company can achieve the best pos- tors. Focusing on the future growth of the Group,
sible output and change our frameworks and systems to we believe it is ideal to incorporate even more diverse
enable us to do so while setting in motion a PDCA cycle. perspectives on the Board of Directors. This is why two
Based on the belief that we can strengthen our over- new outside directors were appointed. Mr. Mikio Fujitsuka
sight functions and accelerate our business execution by is well-versed in the finance activities of global corpora-
separating the roles of oversight and execution and dele- tions, and Mr. Paul Candland has experience handling the
gating major authority to the executive officers, we transi- Disney brand, which is one of the most prominent brands
tioned to a Company with Three Committees in June 2017. in the world. These two new directors are a perfect fit for
In addition, we decided to introduce a restricted stock the Group as we are working to enhance our brand power
compensation system with the aim of reinforcing our on a global basis. At every opportunity, I hope that these
management’s responsibility to improve shareholder value two new outside directors offer us their candid opinions
as well as thoroughly committing management to the and instructions based on their long-cultivated insight
future of the Company. and expertise.

Approach to Cost of Capital and Shareholder Returns
Alongside improving profitability, we recognize the the three-year period of the plan. This marks the first time
enhancement of shareholder value as an important man- we have set such a high target for total shareholder
agement issue. Under the new plan, we have adopted the returns. We have thus far worked to flexibly implement
financial targets of achieving a core operating profit ratio shareholder returns with the aim of enhancing capital
of 13.8%, ROE of 11.5%, and EPS of ¥270. With our efficiency, giving consideration to achieving a balance
target for ROE of 11.5%, we have thoroughly clarified our between investments and returns to our shareholders.
aim of reinforcing our ability to generate profits while at However, in order to communicate our commitment to
the same time steadily surpassing the cost of capital and our investors more clearly, we decided to establish a
further enhancing our capital efficiency. specific, quantitative target for shareholder returns.
In terms of shareholder returns, under the new plan,
we set a new target for a total return ratio of 50% over
Approach to Risk and Human Resources
I have provided explanations on our various strategies and employees, from management down. We have created
Management Strategy
policies, centered on those under the new plan. Lastly, new value by reorganizing into a function-specific organi-
I would like to briefly explain our approach to risk and zation. Going forward, we will need to pursue optimal
human resources. organizational integration on a global Groupwide basis that
As uncertainty grows in the macro environment transcends regional boundaries and helps each employee
around the globe, there are a great number of risks that visualize their work. Although we are currently proceeding
are presenting themselves. Aside from sales-related risks, with efforts to build a talent management system that can
the procurement cost of raw materials and the stability support such an integration, a major aspect to achieving
of materials and components supplied to us are two risk this integration is creating a value system that is shared
factors that have the potential to impact our business across regions and roles. What I am looking for most
operations. In fiscal 2019, despite making progress with when it comes to human resources is passion. I believe
initiatives to reduce costs, the actual amount of cost that passion is supported by a strong will, which is what
reductions we achieved was lower than we planned enables people to achieve growth as professionals.
due to the soaring prices of electronic components and People with passion underpinned by will are able to act on
other materials. While the situation in terms of prices and their own accord. We will therefore put forth the utmost
supply have stabilized at the moment, we are further pro- effort to increase the recruitment of such employees and
moting efforts geared toward strategic procurement, such establish a shared value system as we move ahead with
as global bulk purchasing, in order to address these risks. efforts to realize robust business growth.
Additionally, for timber procurement during the new I would like to ask our stakeholders, starting with our
plan, we will carry out due diligence to prevent the use of shareholders and other investors, for their continued sup-
timber from illegal sources. Musical instruments in partic- port as we pursue these endeavors going forward.
ular use a large amount of unique timber. However, even
under this severe circumstance, we have set a target for
raising the percentage of certified timber we use from the November 2019
20% range to 50% over the three years of the plan.
Turning to our current business activities, we are
making use of information systems to a larger extent than
ever before and the importance of doing so has become
even greater. It is therefore crucial to pursue efforts to
respond to risks such as cyberattacks and computer
virus infections. Accordingly, in addition to enhancing
the expertise of our Information Systems Division, we are Takuya Nakata
stepping up efforts to address these kinds of risks on a President and Representative Executive Officer
Groupwide level.
Amid these circumstances, as our businesses expand
globally, I believe that the enhancement of human
resources, who support the Company, is an extremely
significant issue. The key focus of this issue is fostering
a value system that is shared and respected among all

NEW MEDIUM-TERM MANAGEMENT PLAN
Yamaha formulated its new medium-term management plan, Make Waves 1.0, which targets the three-year period starting from April
2019, to follow after its previous medium-term management plan, NEXT STAGE 12, which concluded on March 31, 2019. For the new
plan, we analyzed the rapid changes in the business environment and determined our future outlook. In addition to establishing a
management vision that will act as our future image for the medium to long term, we also unveiled a value creation story that will
serve as our approach to realizing this management vision. At the same time, taking into account the results we have achieved thus
far, we formulated not only a basic strategy but also management targets that comprise the three pillars of financial targets, non-
financial targets, and shareholder returns.
Ahead of the implementation of strategy and targets, in January 2019, we established the new brand promise of Make Waves
to serve as the message we wish to convey to our customers. The expression Make Waves captures the moment when customers
feel enthusiastic excitement. Through Make Waves, we promise our customers we will become an indispensable, brilliantly individual
company that can make customers feel such excitement. We position the new plan as a management plan that can first put the
words Make Waves into action, which is why the title of the plan was determined to be Make Waves 1.0.
Review of NEXT STAGE 12 27

Approach to Formulating
the New Medium-Term Management Plan 28
Positioning of the New Medium-Term Management Plan 30
Four Key Strategies 32

Review of NEXT STAGE 12 (April 2016 to March 2019)

Our key strategies generally progressed as planned, allowing us to achieve
the targets adopted under NEXT STAGE 12
Our medium- to long-term management vision under NEXT STAGE 12 was “Becoming an Indispensable, Brilliantly Individual
Company—Boosting brand power to become a highly profitable enterprise.” Guided by this vision, we worked to reinforce our brand
power and were able to improve our operating income ratio as a result. NEXT STAGE 12 also entailed the four key strategies of
develop products with distinctive individuality, enhance customer interaction, continually reduce costs, and strengthen global busi-
ness platforms. As the result of steadily promoting efforts in accordance with these strategies, we were able to reach our financial
targets of an operating income ratio of 12%, ROE at the 10% level, and EPS at the ¥200 level. We also realized a total shareholder
return ratio of 168% over the three years of the plan.
Accomplishments of Key Strategies

Level of
Key strategy Progress
accomplishment
Develop products with Launched many unique products by merging technologies
Management Strategy
distinctive individuality Won numerous design awards globally (Good Design Grand Award, etc.)
xpanded number of accounts (as planned) (10% increase in contract dealers, 50% increase in
E
audio contractors)
Enhance customer interaction
Promoted music popularization for learning musical instruments in emerging countries
(cumulative total of 260,000 people, 260% above target)
rogress in reducing costs did not fully compensate for rising procurement prices, and net cost
P
Continually reduce costs
reductions amounted to ¥5.3 billion (vs. target of ¥8.0 billion)
Strengthen global romoted global human resources management, established three global IT headquarters, and
P
business platforms introduced IFRS (in April 2019)
: Successful accomplishment : Partial accomplishment
Financial Results (J-GAAP)

NEXT STAGE 12
(2016/4–2019/3)
Net Sales (billions of yen)
Operating income (billions of yen)
Operating income ratio (%)
12.8% 12%
10.9% 11.3%
9.3%
2016/3 2017/3 2018/3 2019/3 Fiscal 2019 target
Net Sales (Billions of yen) 435.5 408.2 433.0 437.4 465.0

Operating income
40.7 44.3 48.8 56.0 55.0
(Billions of yen)
Operating income
9.3% 10.9% 11.3% 12.8% 12%
ratio
ROE 10.1% 14.0% 14.5% 11.4% 10% level
EPS (Earnings per share) ¥169 ¥249 ¥292 ¥241 ¥200 level
Total shareholder return ratio: 168% over three years

Exchange USD 120 108 111 111 115
rates (Yen) Euro 133 119 130 128 125

Approach to Formulating the New Medium-Term Management Plan

Amid the rapid changes occurring in the external environment, the environment within the Company’s business domains, which
center on sound and music, is undergoing particularly dramatic changes. In light of these changes, we formulated our new medium-
term management plan by making use of the backcasting method. Under this method, we established a long-term outlook for the
future and analyzed how the changes in the external environment would impact our businesses. We then examined which domains
would allow us to realize further development as a company as well as the future growth opportunities and risks that may arise.
Assumptions of Our Outlook for the Future Business Environment
The external environment that surrounds Yamaha is experiencing dramatic changes that are happening at an unprecedented
speed. These changes include global population increases, aging populations, a growing middle class, expanding urbanization,
and increasingly more severe environmental issues such as global warming. They also include changes to social, political,
and industrial structures, as well as people’s lifestyles, which have been brought about by the accelerated evolution of IoT, AI,
and other cutting-edge technologies.
Environmental Changes That Majorly Impact Yamaha
As the industrial structure changes rapidly due to the acceleration of digitalization, we are now able to form closer ties with our
customers. Additionally, with remarkably enhanced levels of convenience realized through AI and IoT, we find ourselves enter-
ing into an era where there will be a greater demand for emotional satisfaction and authenticity. We are also seeing an even
greater social awareness of sustainability. Furthermore, we anticipate that there will be a continued trend of expansion in the
regional macroeconomic environment, as the middle class in emerging countries is expected to grow.
Transformations caused by accelerated Greater diversity in lifestyles Heightened awareness

digital technologies and senses of value of sustainability
• The industrial structure and the world in gen- • AI and IoT technologies are taking automa- • There has been a greater requirement of
eral are undergoing major changes due to tion and convenience to new levels. corporate social responsibility.
advances in digital technologies. • In addition to material wealth, people are • Awareness that social contribution is linked
• Customer interaction has become closer and seeking greater emotional satisfaction and to corporate value creation over the medium
more direct. authenticity. to long term has become more widespread.
Regional macroeconomic environment Market outlook

• Although mature economies remain steady, a sense of uncertainty has been • Musical instruments: A gradual expansion will be driven by the growing middle
growing stronger. class in emerging markets (+6%)
• The pace of growth is slowing in China. • Audio equipment: Expansion will be driven by technological innovation and
• The general trend in emerging markets is expansion, but there are disparities commercial equipment demand (+8%)
among countries and regions. Note: Figures in parentheses indicate market growth over three years.

Key to Growth / Yamaha’s Strengths
Transformations caused by accelerated Greater diversity in lifestyles Heightened awareness

digital technologies and senses of value of sustainability
• Long-cultivated, cutting-edge digital • Scientific insight on sensibilities • Utilization of advanced materials
technologies • Provision of emotional satisfaction through technologies
• Utilization of network technologies the unique strength of combining technolo- • Initiatives toward sustainable timber
• Progression of direct digital marketing gies and sensibilities procurement
• Progression of direct digital marketing • Initiatives to resolve social issues through
sound and music
Management Strategy
Regional macroeconomic environment and market outlook
• Musical instruments: Continuous growth and acceleration in the markets of China and emerging countries
• Audio equipment: Business domain expansion by investing management resources in growth domains (commercial audio equipment and personal audio domains)
where we can leverage company strengths
The value our products offer can be divided into two catego- a doubt provide a positive boost to the Yamaha Group, which
ries: functional value and emotional value. In the era in has assessed sound and musical instruments as a part of
which there is greater demand for emotional satisfaction culture itself and has striven to refine its technologies and
and authenticity, the need for emotional value will unques- sensibilities.
tionably surpass the need for functional value. It is therefore imperative that we fully leverage our
Our business domains center on sound and music, which strengths to capitalize on this growth opportunity by enhanc-
offer significant value in the form of sensibilities and emo- ing our ties with customers and society as well as our con-
tional impact. Accordingly, these kinds of needs will without nection to market growth and growth domains.
The world is undergoing major changes at a rapid pace due to accelerated digitalization
and diversification of value systems.
Combining technologies and sensibilities presents

growth opportunities for Yamaha

Positioning of the New Medium-Term Management Plan

Looking back on our medium-term management plans to date, an indispensable, brilliantly individual company. Guided by this
YMP125 was carried out in a period when our businesses faced vision, we worked to boost our brand power in an effort to take
tough conditions due to yen appreciation. The period of YMP125 the next step toward further growth as a company. As a result,
was positioned as a phase for rebuilding our business platforms we raised our operating income ratio to 12.8% (J-GAAP).
through such means as restructuring our core businesses and Taking into account the achievements we have made thus far,
integrating our sales offices in Europe and plants. we have positioned the three years of the new medium-term
After completing that phase, we commenced YMP2016, management plan, Make Waves 1.0, as a period in which we will
under which we transitioned from a business-unit organizational aim to develop closer ties with customers and society, and boost
structure to a function-specific one, promoted optimized pricing, value creation capabilities, and we have adopted that aim as the
and moved forward with selection and concentration from a basic strategy of the plan. Based on this strategy, we will pursue
multifaceted perspective to focus on core businesses. Through a two-pronged approach of boosting profitability and reinforcing
these efforts, we were able to achieve an operating income ratio our growth foundation. By fiscal 2022, the final year of plan, we
of 9.3%. plan to increase our core operating profit ratio to 13.8% as a step
With the previous medium-term management plan, NEXT toward reaching our long-term target of 20%, which we adopted
STAGE 12, we established the management vision of becoming under our management vision.
Management Vision
Boost brand power to become a highly profitable enterprise
(Core operating profit ratio: 20%)
New Medium-Term Management Plan (2019–2022)
Develop closer ties with customers and society, and boost value
creation capabilities
Core operating profit* ratio: 13.8% (IFRS)
NEXT STAGE 12 (2016–2019)

Increase brand power
Operating income ratio 12.8% (J-GAAP) /

Core operating profit* ratio 12.1% (IFRS)
YMP2016 (2013–2016)
Increase profitability
Operating income ratio 9.3%
YMP125 (2010–2013)
Rebuild business platform
Operating income ratio 2.5%
* Core operating profit is equivalent to operating income under the Japanese

accounting standards used prior to adoption of IFRS.

Management Vision and Value Creation Story

We established a new value creation story that serves as our approach to realizing the management vision (medium- to long-term
vision) that we adopted under the previous medium-term management plan, NEXT STAGE 12.
Management Vision Becoming an Indispensable, Brilliantly Individual Company

(Our future image in Boost brand power to become a highly profitable enterprise
the medium to long term) (Core operating profit ratio of 20%)
Value Creation Story Enhance corporate value and realize vision by creating social value
Basic Strategy
In a world undergoing major changes at a rapid pace,
we will develop closer ties with customers and society, and boost value creation capabilities.
Management Objectives
Management Strategy
Financial targets (IFRS) Core operating profit ratio 13.8%
Boost profitability while also
building stronger business
ROE 11.5% Financial
Customers
platforms for growth evaluation

EPS (Earnings per share) ¥270
Corporate brand value* +30% Finance Brand Technology
Music popularization for learning
musical instruments in emerging
1 million
Non-financial targets
markets (cumulative total) people
People
Certified timber use

50% of
Evaluation of:
total use
- Growth capacity
Investment and shareholder returns - ESG initiatives, etc.
Well-balanced allocation to
investment in growth and
Total return ratio 50% Corporate value: ¥ trillion + 1
(market capitalization)
returns to shareholders
*Brand value added with Yamaha and Yamaha Motor Company: US$1.2 billion (Best Japan Brands 2019 issued by Interbrand)
Path to Improving Core Operating Profit Ratio

We will leverage our unique strengths to increase our core
Raise core operating profit ratio to
operating profit ratio to the 14% level over the three years of 14% level and aim for further increase
the plan, with the overall goal of reaching our long-term target
of 20%, which was adopted under our management vision.
Focusing on reaching a core operating profit ratio of 20%, a
target we adopted under our medium- to long-term vision, or Market Leader
management vision, we set a goal of increasing core operating (optimal pricing)
profit ratio to the 14% level over the three years of the new
Overwhelming
medium-term management plan. While providing unique prod- market presence
ucts and services that cannot be imitated by our competitors, we
will achieve a leading position in the market by leveraging our
strengths such as our tremendous market presence and high Sales Growth Focused Yamaha strengths Unique Products
market share. We will also work to optimize pricing. In these on Emerging Markets (Global share in fiscal 2018) and Services
ways, we will enhance profitability.
49% 54%
In addition, our high marginal income ratio and sales growth 37% 32%
centered on emerging countries are two strengths that will also Yamaha’s strengths
Pianos Digital
pianos
Portable Wind
keyboards instruments True Yamaha spirit
help us boost profitability. Furthermore, increasing profitability High marginal
Technology ×
income ratio sensibility
through efforts to reduce costs will contribute significantly to
improving our core operating profit ratio.

Four Key Strategies

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 society
1. Develop closer ties with customers 2. Create new value 3. Enhance productivity
through our businesses
Reflect society’s values in our own

Profitability = Customer value × Productivity
values over the medium to long term
To promote our basic strategy of “develop closer ties with customers and society, and boost value creation capabilities,” we established
four key strategies. By steadily executing these key strategies, we will realize Yamaha value creation and social value creation.
We will create customer value by developing closer ties with customers and offering them new value. We will also increase our
profitability by enhancing productivity. Furthermore, we strive to contribute to society through our business activities, which we believe
will lead to improvement in corporate value over the medium to long term.
1 Develop Broader, Deeper, Longer Ties with Customers

Develop Closer Ties with Customers
To develop broader, deeper, and longer ties with our customers, we will promote our brand through our new brand promise and develop
digital and physical customer interfaces with a focus on digital marketing. We will also take steps to contribute to lifetime value enhance-
ment. Additionally, in emerging countries centered on China and ASEAN, we will engage with middle-income earners and accelerate growth.
For the audio equipment business and the industrial machinery and components business, we will achieve growth by expanding our busi-
ness domains in growth markets.
Reinforce customer interface Achieve growth in emerging markets Expand business domains
Broader, Deeper, Longer Broader, Deeper, Longer Broader, Deeper, Longer
ommunicate brand appeal through brand

C ngage with middle-income earners and
E xpand audio equipment business domain
E
promise accelerate growth Shift IMC business domain into in-vehicle
Develop customer interface with focus on solutions
digital marketing
Contribute to lifetime value enhancement
(communicate value proposals suited to
customer life stages)
Sales = customer numbers (broad) × frequency (deep) × unit price (deep) × duration (long)

Reinforce Customer Interface Achieve Growth in Emerging Markets

Deeper, Longer Broader
Communicating Brand Appeal through Brand Promise By strengthening our ties with the growing middle class in
To Make Waves with our customers, we will offer original prod- emerging countries, starting with China and India, we will
ucts and services that exceed their expectations. We will also accelerate growth and expand our customer base.
leverage our brand promise to engage in communication with
customers around the world as we work to become a brand that Expected Expansion of Middle Class in China and India
customers admire and cherish. In these ways, we will aim to
High income earners:
develop deeper and longer ties with our customers. above $45,000
1.4
billion Middle income earners:
people
$10,000–$45,000
Low income earners:

below $10,000
India
China India
Management Strategy
2015 2020 2025
Rendered image of Make Waves in action
Source: Ministry of Economy, Trade and Industry of Japan
Developing Direct Ties with Customers with a Focus on

Growth in China
Digital Marketing
Aiming for 25% Growth over the Next Three Years through Sales Network
In addition to engaging in conventional customer communication
Expansion and Brand Promotion
at stores, we will leverage digital marketing to directly promote
Achieve Market Growth and Share Expansion
value that caters to our customers. At the same time, we will use
In the Chinese market, Yamaha is known as a brand admired by
digital marketing to encourage customers to visit our stores,
many, which has helped us attain a high market share and realize a
where they can experience our products and services firsthand.
high level of profitability. In addition, the growth rate of the market
Through these efforts, we will further develop contact points
itself in China has been strong for many years. Going forward, we
with our customers.
will achieve a sales growth rate that surpasses the rate of this
Communicate value
strong market growth and further expand our market share
Customer interface
proposals through such initiatives as promoting the strength of our products
Dealers
and brand, expanding our sales networks, and pursuing digital
Customers marketing.
Customer interface
Direct digital marketing
Store traffic Market Growth and Share Expansion in China

(Billions of yen)
Digital piano (Billions of yen) Guitar
30 30
Contributing to Lifetime Value Enhancement

We will work to build customer data platforms and establish 20 30% Market Growth 20 30% Market Growth
structures that allow us to promote our brand in manner that best
Yamaha
fits each and every one of our customers and enables us to con- share
10 10
tinue to maintain ties with them. Yamaha 41%
39% 21%
share 19%
0 19/3 22/3 0 19/3 22/3
(Forecast) (Forecast)
Note: Yamaha estimation
Boost Product Power

In the Chinese market, we will roll out China-specific models
based on local needs, expand the sales of high-value-added
products made in Japan, and supply pianos made in Indonesia.
In these ways, we will move forward with proposals that meet
customer needs through a diverse product lineup.

Realizing Growth in India, ASEAN, and Other Markets

Aiming for 50% Growth over the Next Three Years in the Indian
Expand Business Domains
Market by Engaging with Middle-Income Earners through the
Broader
Expansion of Sales Networks and Introduction of Local Models
Expanding Sales Networks and Launching
E-Commerce Sales (India)
Expanding Business Domains into Growth Markets and
The market in India is expected to continue to
Accelerating Growth
grow in the future. In this market, we will
We will expand our domains in the audio equipment business
expand our sales networks primarily in cities
and promote a shift in the industrial machinery and components
with over 1 million people. Additionally, we will
business to focus on in-vehicle solutions. In these ways, we will
leverage e-commerce and individual delivery to
expand sales in growth markets.
cover areas where we do not have physical stores.
Commercial audio equipment: Realize 30% growth

Unifying Manufacturing and Sales Systems and Offering
over three years
Products Suited to Local Music Culture (India)
We will pursue a full-scale expansion into commercial audio
Our newly constructed Chennai Plant began shipping products in
equipment domains including not only live performances and
April 2019 and has been gradually increasing its production capac-
music events but also in churches, concert halls, retail spaces,
ity since. Going forward, by realizing integrated manufacturing
and corporate conference rooms.
and sales operations, we will promote the production and sale of
products that incorporate the local needs of customers in the
Indian market.
Retail space
Churches / halls /
Live performances / background music /
broadcasting
music events conference
studios
equipment
Market scale ¥200 billion ¥350 billion ¥500 billion

Market
+8% +5% +10%
growth rate
Yamaha’s existing Further expand

Chennai Plant Local portable keyboard model for the Direction
strengths domain
Indian market
Focusing on Store-Based Measures and Use of E-Commerce

Following the rise in income AV Products: Transform our business portfolio
levels in emerging countries, We will realize growth by shifting product lineups toward the per-
there has been a rapid increase sonal audio domain, such as wireless speakers, to accommodate
in middle-income earners who changing lifestyles.
are purchasing educational,
hobby, and luxury products
more frequently. In response to
this trend, we will expand
Directly owned store in Singapore Hi-Fi, AV receivers Sound bars Wireless speakers Headphones
stores that emphasize hands- Market scale ¥250 billion ¥550 billion ¥1 trillion ¥1.5 trillion
on experiences and communicate the high-quality value we offer. Market
−8% +12% +12% +40%
We will also utilize e-commerce to establish omnichannel sales growth rate
that cater to local customers. In these ways, we will strengthen
our approach to middle-income earners. Direction
strengths domain
Developing Local Models Catered to Local Music Cultures

We will strive to expand our customer base through the devel-
In-vehicle components: Realize 30% growth over three years
opment and sale of models equipped with local musical instru-
Going beyond interior wood panels, we will leverage our
ment sounds reflecting local music cultures in regions such as
strengths to expand into the comprehensive in-vehicle solutions
Asia, the Middle East, Africa, and Latin America.
domain, including integrated sound, voice, and noise control
systems for vehicle interiors.
Promoting Musical Instrument Education and Developing
New Markets
To date, we have provided a cumulative total of approximately
260,000 children with musical instrument education within their
school education. Going forward, we will expand this provision to Interior panels
Microphone
Audio systems
modules
cover a cumulative total of 1 million children in seven countries.
Market scale ¥100 billion ¥100 billion ¥600 billion
Through these activities, we will seek to understand and analyze
Market
the conditions of music-related activities in the markets of Asian +5% +40% +10%
growth rate
and African countries, thereby developing new markets.
Direction
strengths domain

2 Create New Value by Combining Technology and Sensibility

Create New Value
We will create new value by leveraging our unique strength of combining technologies and sensibilities. Based on the changes occurring
around the world and the feedback we have received from customers, we will provide unique products and services to our customers by
making full use of our technologies for the scientific evaluation of assessing human sensibilities as well as our analysis and simulation
technologies. We will also offer such products and services by melding the technologies we possess, including our acoustic and digital
technologies.
High-quality customer experience

Mechatronics Unique products
Materials
analysis and services
Human Joy Beauty
Acoustic technology sensibility
evaluation
Craftsmanship technology Customer
Materials
Analysis & feedback Confidence Discovery
processing
simulation
technology
Sensibility
pervading Yamaha Innovation
Management Strategy
Authenticity Innovation Center started operation in June 2018
technologies
e.g., understanding of Changing world
Manufacturing high-quality sound AI
technology IoT
Sound
Design Digital sources
Express Yamaha’s
uniqueness based on
technology
Sensing
Yamaha design
philosophy Signal
M&A
processing • Amalgamated research, development, and design
Open innovation Networks departments in pursuit of synergy
Excellence • Fully equipped facility for research into
world-leading sound
instruments domain, we will strengthen our ties with leading

artists. At the same time, through a scientific approach, we will
Yamaha Strength of Combining Technologies
aim to develop products that pursue the highest levels of expres-
and Sensibilities
sive power. In the audio equipment domain, we will pursue audio
characteristics by leveraging various cutting-edge technologies,
such as materials technology and analysis and simulation
Evaluating sensibilities regarding what determines a good sound
technology.
or a good sound environment is not something that can be done
Scientific study of human sensibility: We will study human sen-
simply by analyzing quantitative data. The source of our competi-
sibility and tacit knowledge of accomplished players and forge
tiveness lies in our deep understanding and insight toward sensi-
ahead with development processes that pursue the essence of
bility value cultivated through our long history, which started with
high-quality sound. By doing so, we will promote the develop-
the creation of musical instruments. Leveraging our core compe-
ment of products that cannot be imitated by competitors.
tency pertaining to this sensibility evaluation as our foundation,
we are able to combine a wide variety of technologies, including
Pursuing Innovation
acoustic and digital technologies, human sensibility evaluation
Efforts to spur innovation: In June 2018, we established the
technologies, and analysis and simulation technologies. This in
Innovation Center research and development building with equip-
turn enables us to provide unique products and services that
ment that handles leading-edge research and experiments at our
cannot be imitated by competitors. In addition, by earnestly
headquarters, thereby bringing together all of our engineers.
dealing with the changes occurring around the world and the
Leveraging the Innovation Center, we will meld various technolo-
feedback from our customers, we will draw on our diverse
gies in a manner that goes beyond business domains in order to
lineup of technologies to the greatest extent possible in order
create new value. In addition, we will use IoT to not only provide
to provide new value, products, and services.
customer support but also accelerate the development of
customer-driven products and services.
Harness AI for technological innovation: By promoting our long-
Products and Services
cultivated strength of combining technologies and sensibilities
Enhance added value by pursuing combination
together with AI technologies, we will personalize accompani-
of authenticity and innovation
ment and music lessons as well as automate and assist profes-
sional audio equipment operations. In these ways, we will pursue
Pursuing Authenticity the development of products and services unique to Yamaha.
Tireless enhancement of expressive power: In the musical

Establishing a Foundation for Global Human Resource

Business Platform to Drive Value Creation Management
Establish business platform to drive profitability We will transition from region-specific human resource systems
Profitability = customer value × productivity to a Groupwide, globally shared system. We will also promote
the cross-border allocating of human resources and the discovery
and development of managerial talent. Additionally, we will step
Promoting a Digital Transformation
up our efforts toward diversity and protecting human rights.
To deepen our ties with customers, we will focus our efforts on
reinforcing business platforms such as our customer data plat-
form (CDP) and SCM systems. In addition, through the promotion
of a digital transformation (DX), we will transform our business
processes themselves in an effort to promote productivity.
Digital Transformation Initiatives

Initiative Aim Implementation process
Establishment Development and

Build CRM platform to develop closer customer ties Full-scale start of operations and global rollout
of CDP establishment of CDP
Operation of Innovate SCM systems to optimize efficient operation with

next-generation System trial Full-scale start of operations and global rollout
SCM systems customer information
Reform all work processes through DX

Establishment of systems Advancement of DX activities
Promotion of xpand introduction of agile methods to development
E and frameworks (optimization and reforms)
business process process
transformation Seamlessly connect accounting systems to business
2019/42022/3
Utilize robotic process automation to automate routine work
3 Boosting Profitability by Improving Productivity

We will work to optimize pricing by enhancing added value and strengthening efforts to showcase our product value. At the same time,
we will strive to continuously reduce production costs. In addition, we will perform a zero-based analysis of expenditures and promote
a shift toward strategic spending aimed at improving customer value. In these ways, we will reinforce profitability going forward.
Optimize pricing Reduce production costs Use expenditures strategically
by each plant, to regional-specific procurement as well as com-

prehensive purchasing by our headquarters. In this way, we will
Optimize Pricing, Reduce Production Costs, and
work to lower procurement costs. Additionally, we will signifi-
Use Expenditures Strategically
cantly reduce costs by expanding automated production lines
used in Japan to overseas locations and promoting labor-saving
activities through the use of IT. Through such efforts, we aim to
Optimizing Pricing achieve cost reductions totaling ¥5.5 billion over the three-year
We will create new added value for our products and services period of the new medium-term management plan.
and make concerted efforts to promote product value. By doing
so, we will optimize our selling prices to reflect the increased Using Expenditures Strategically
amount of added value, thereby improving profitability. We will perform a zero-based analysis of expenditures and
promote a shift toward strategic spending aimed at improving
Reducing Production Costs future customer value, rather than simply pursuing cost reduc-
We will reduce product costs by reorganizing production pro- tions. This shift will be realized in such ways as transforming our
cesses on a global scale, including transferring production pro- business processes through a digital transformation.
cesses conventionally performed in Japan to our overseas plants.
For procurement, we will transition from our conventional com-
ponent procurement methods, which were previously conducted

Cost Reduction Analysis

(Billions of yen)
Process reallocation
Labor cost increases and productivity 10.3 Projected shift in expenditure
in overseas factories improvements (Gross)
+4.8 5.5
(6.2) (Net) Customer value
enhancement
Costs in Procurement cost

fiscal 2022 reductions
Greater efficiency in
at current (1.6) back-office work Target costs Fixed costs
cost rates (2.5) in fiscal 2022
2019/3 2022/3
(Target)
Contribute to Society through Our Businesses

4 Contributing to the Sustainable Development of Music Culture and Society
We will contribute to the global music scene through the provision of diverse musical instruments. We will work to spread musical instru-
ment education in emerging countries. In this manner, we will not only contribute to the sustainability of music culture but also work to
resolve social issues through our products and services. Also, we will realize a peaceful coexistence with the natural environment through
such efforts as promoting the sustainable procurement of timber and developing environmentally friendly products.
Management Strategy
Society
Culture Resolve social issues through products and services
Contribute to sustainability of music culture Enhance diversity and fulfilment of the
people we work with
Environment
Coexist with the natural environment
Contribute to global music scene by supplying a diverse range

Culture of musical instruments
Launch approximately 800 models (over 3 years)
Spread the joy of music through music school business

Contributing to the Sustainability of Music Culture
By offering a diverse lineup of musical instruments, we will con-
30% growth in students at
tribute to the global music scene. In addition, through such initia- overseas music schools (over 3 years)
tives as globally expanding Yamaha Music Schools and promoting
activities to spread musical instrument education at schools in
emerging countries (see page 71), we will extensively convey the Promote musical instrument education in school music
joy of music across the globe. lessons in emerging markets (see page 71)
3,000 schools in 7 countries,
cumulative total of 1 million students
Support education in schools for children of migrant

workers in China by donating musical instruments
Support 18 schools (over 3 years)
Spreading musical instrument education Supporting education in the schools for
in emerging markets children of migrant workers in China

Environment
Society
Coexistence with the Natural Environment
Resolving Social Issues through Our Products and Services Utilizing Sustainable Timber
We will support the healthy development of youth through music We will promote due diligence to avoid the purchase of timber
popularization activities in Latin America (see page 72). We will from illegal sources. Additionally, we will aim to expand our utili-
also work to revitalize communities through the Oto-Machi proj- zation rate of certified timer (target of 50%), which is produced
ect, which aims to create communities filled with music in Japan. from sustainable forests. Furthermore, we will promote the
By doing so, we will carry out continuous efforts to leverage our sustainable use of timber through a broad range of efforts, such
products and services with the aim of resolving the various social as undertaking activities to sustainably conserve scarce timber
issues facing each country and region of operation. resources in collaboration with local communities and promoting
collaborative research with academia including Kyoto University
Enhancing Diversity and Fulfillment among All Employees (see page 67).
We will take steps to create an environment where diverse per-
sonnel can make full use of their individuality and creativity (see
page 64). Also, with the aim of preventing human rights viola-
tions, we will promote human rights due diligence across our
entire supply chain.
Activities to conserve scarce timber Yamaha Eco-Products (environmentally-

resources in Tanzania friendly material)
Developing Environmentally Friendly Products

I’m a HERO Program in Colombia Shibuya Zunchaka! Oto-Machi Project We will create environmentally friendly products through
in Japan the Yamaha Eco-Products Program*1 (deployment of 120 models
over three years) and promote the development of sustainable
resources that can be used in place of scarce timber.
Reducing Greenhouse Gas Emissions

We will work to meet our
Science Based Target (SBT)*2
through such means as install-
ing highly energy-efficient
Promoting flexible workstyles such as Establishment of an in-house childcare
telecommuting facility (August 2019) equipment and shifting toward
renewable energy sources.
Also, we will work to reduce
GHG emissions throughout
our entire value chain through the development of energy-saving
products and the streamlining of distribution, among other initia-
tives (see page 67).
*1. E
nvironmentally friendly products certified as meeting standards established by
Yamaha
*2. A Science Based Target to achieve the 2 degrees Celsius GHG emission reduction
goal set in the Paris Agreement (32% reduction by fiscal 2031)

FINANCIAL STRATEGIES
Drawing from our new medium-term

management plan, which incorporates
integrated thinking, we will pursue even
greater corporate growth from a financial
perspective.
Satoshi Yamahata
Director and Managing Executive Officer
Executive General Manager of Corporate Management Unit and
Executive General Manager of Operations Unit
Steady Achievement of Management Targets under ROE (J-GAAP)

(%)
Management Strategy
the Previous Medium-Term Management Plan 20
—————
14.0*2 14.5*
3
Consolidated results for fiscal 2019, the final fiscal year of 15

11.4
medium-term management plan NEXT STAGE 12 (herein 10.1 10.0% level
after, the previous plan), were net sales of ¥437.4 billion, 10 8.1
operating income of ¥56.0 billion, and net income attribut-
5
able to owners of parent of ¥43.8 billion, with operating
income increasing for the seventh consecutive fiscal year
0 15/3 16/3 17/3 18/3 19/3 Target under
and reaching its highest total to date. the previous plan
Driving these strong results was topline growth in the

Previous medium-term
musical instruments business. Despite somewhat sluggish management plan
sales growth in Europe due to the impact of changing the
terms and conditions for selling instruments and the macro- EPS (J-GAAP)
(Yen)
economic situation, in addition to higher purchasing costs 400
due to the weakness of currencies in emerging countries,
292*3
the Company experienced strong development overall, with 300 249*2 241
double-digit growth in China for the fourth consecutive year, ¥200 level
and 9% growth in North America compared with the previ- 200 169
129
ous fiscal year. As a result, operating income landed above
100
initial forecasts and the previous plan’s target of ¥55.0 billion.
In addition, the Company attained an operating income
0 15/3 16/3 17/3 18/3 19/3 Target under
ratio of 12.8%, ROE of 11.4%, and EPS of ¥241, all of the previous plan
which exceeded the management targets put forth in the

previous plan.*1 management plan
*1. Operating income ratio of 12%, ROE at 10% level, and EPS at ¥200 level
Operating Income Ratio (J-GAAP)

(%)
Make Waves 1.0—A New Medium-Term
15
12.8
12.0% Management Plan with Integrated Thinking
10.9 11.3

9.3
10 In April 2019, we launched our new Medium-Term
7.0 Management Plan, Make Waves 1.0 (hereinafter, the new
plan). Formulating this plan was a process spanning 1.5
5
years, beginning with internal SDG study groups and fore-
casts of future business environments, with considerable
0 15/3 16/3 17/3 18/3 19/3 Target under
the previous plan
time given toward reaffirming Yamaha’s ideal vision for the
future and sharing the policies needed to achieve that vision.
management plan After this step, we applied major Companywide policies to

specific plans for each business. The result of this process is Approach to Capital Efficiency
a new plan that hinges on integrated thinking to encompass and Shareholder Returns
financial and non-financial perspectives. —————
The special features of the plan in terms of depicting our Equity ratio at the end of March 2019 was at 74.1%, which
story for improving corporate value creation are its approach reflects the success of our efforts to promote structural
toward enhancing our value as a company by improving our reforms starting from around the time of the global financial
social value and the adoption of both financial and non- crisis. This result also shows that we have established an
financial targets. extremely robust financial base. Going forward, we will
Market capitalization, an indicator of corporate value, can optimize Groupwide fund and asset efficiency, including
be calculated using the following formula: EPS (earnings per promoting thorough inventory management and enhancing
share) × PER (price-to-earnings ratio) × the total number of the efficiency of subsidiary financing.
issued shares. While EPS is a financial figure, PER is a way We have also set a goal for ROE of 11.5% for fiscal
to evaluate long-term efforts related to future growth, brand- 2022. This is indicative of our goal to improve capital effi-
ing, and the SDGs. In this regard, setting up non-financial ciency and further exceed the cost of capital.
targets in addition to financial targets to improve corporate When looking at investments and shareholder returns,
value is a natural process. we maintain a careful balance between our growth invest-
ments and returns to shareholders. In fiscal 2019, we
Strengthening Profitability Together increased dividends by ¥4.0 compared to the previous
with Our Foundation for Growth year—our sixth consecutive year-on-year increase—for a
————— total payout of ¥60.0 per share, and a dividend payout ratio
We are moving forward with efforts to both strengthen of 24.9%. Our total return ratio was 52.1% as a result of
profitability and build a stronger foundation for growth as acquiring treasury stock totaling ¥20.0 billion. In fiscal 2020,
financial policies in the new plan. To increase our core oper- we plan to increase dividends by ¥6.0 for a total dividend of
ating profit ratio, we are promoting four efforts: 1) sales ¥66.0 yen per share, with a payout ratio of 27.7%.
growth focused on emerging markets; 2) increased added Our previous approach to shareholder returns was to
value through unique products and services; 3) further put forth goals in terms of our dividend payout ratio.
enhancing productivity; and 4) establishing an overwhelm- However, the new plan marks the first time we are setting
ing market presence with optimal pricing. Reaching our a target in terms of a total return ratio, with a target of 50%
target core operating profit ratio of 13.8% is ultimately a over a three-year period. Drawing from a principal amount
step toward our long-term vision that not only pursues of ¥160.0 billion of operating cash flow over three years, we
immediate results, but also incorporates strategic investments plan to commit ¥40.0 billion to regular investment and
that will build a stronger growth foundation. In terms of each ¥50.0 billion to strategic investment, with the remainder put
business unit, we will promote strategies to strengthen toward dividends, flexible shareholder returns, and other
profitability in the musical instruments business unit while purposes.
focusing on further growth in the audio equipment business While continual and stable dividends remain the basis
unit and the IMC business unit. of our shareholder return policy, the policy will be
Core Operating Profit Ratio (IFRS) ROE (IFRS) EPS (IFRS)

(%) (%) (Yen)
15 15 300
13.8% ¥270
12.1 12.4
11.5% 238
11.1 11.3 222
10 10 200
5 5 100
0 19/3 20/3 Target under 0 19/3 20/3 Target under 0 19/3 20/3 Target under
(Forecast) the new plan (Forecast) the new plan (Forecast) the new plan

Financial Strategy
Cash flow creation Growth investments Shareholder returns
Improve cash flow generation capabilities Based on a policy of issuing steady

through efforts to enhance asset efficiency Actively implement strategic investments and continuous dividends, flexibly
via structural reforms and to heighten for future growth in addition to regular carry out shareholder returns in an
profitability by increasing competitiveness capital expenditures appropriate manner with the aim of
and reducing costs improving capital efficiency
implemented in a flexible manner so as to enhance capital

efficiency while considering a proper balance with retained Conducting Constructive Dialogues with the Market
earnings needed for investment in future growth. (see page 85)
Engagement, comprising constructive dialogues and discus-
Aiming to Further Increase Corporate Value sions with institutional investors, is a top priority to achieve
the sustainable growth and medium- to long-term increases
—————
in corporate value required by the Japan Stewardship Code
In order to increase the transparency of financial information
and Corporate Governance Code. To that end, we hold busi-
for the global capital market, and to further increase our level
Management Strategy
ness briefings and facility tours throughout the year as
of management, we have adopted the International Financial needed, in addition to regular events such as financial results
Reporting Standards (IFRS) from fiscal 2020. Accordingly, briefings.
financial targets for the new plan*4 (core operating profit ratio
of 13.8%, ROE of 11.5%, and EPS of ¥270) have been set
based on IFRS standards.
We will pursue further increases in corporate value by
aiming to achieve these financial targets alongside our non-
financial targets. We are proud to be in a unique position that
is unlike any other, as a Company with an overwhelming
market presence that is contributing to the fundamentally
human culture of music. We will remain committed to this
unique position, while engaging with the capital market in Business briefings for securities analysts and institutional investors
good faith and fulfilling our responsibilities to shareholders
and investors.
*4. P
erformance in fiscal 2019: core operating profit of 12.1%, ROE of 11.1%, and
EPS of ¥222 (based on IFRS standards)
Acquisition of
Plans for Cash Flows Returns to Shareholderstreasury stock
Acquisition of ¥20.0 billion
(Yen)(%)
treasury stock
80 ¥25.0 billion 100
66
Flexible shareholder Acquisition of 60
returns, etc. treasury stock 56
60 52 75
Total return ¥20.0 billion
ratio 50%
40 50
Dividends
Operating 20.9
*2 24.9 27.7
cash flows 20 *3 25
¥160.0 billion Strategic investment
19.2
¥50.0 billion
Plant expansion, 0 14/3 15/3 16/3 17/3 18/3 19/3 20/3 0
(Forecast)
M&A, etc.
Previous medium-term New medium-term
Regular investment management plan management plan
¥40.0 billion (J-GAAP) (IFRS)
Annual per-share dividend Dividend payout ratio (right)

Three-year plan
(cumulative total from fiscal 2020 to fiscal 2022)

STRATEGIES BY BUSINESS
■ MUSICAL INSTRUMENTS BUSINESS

By enhancing our developmental capabilities in terms of
hard and soft technologies and strengthening our brand
power, we will achieve overwhelmingly high levels of profit.
Teruhiko Tsurumi
Operating Officer
Executive General Manager of
Musical Instruments Business Unit
Business Overview Review of NEXT STAGE 12

In the musical instruments business, which represents our core Over the course of the previous medium-term management plan,
business, we possess numerous core technologies related to NEXT STAGE 12, we achieved our target of improving our operat-
sound and music that have been cultivated over our long history. In ing income ratio from 11% in fiscal 2016 to over 15% by the end
addition to developing acoustic instruments such as pianos, wind, of the plan. Moving forward with the development and sale of
string, and percussion instruments, and digital musical instruments 176 product models with distinctive individuality, such as Venova™
that leverage electronic technologies, we are also rolling out other and TransAcoustic™ products, we accelerated efforts to strengthen
products such as hybrid instruments that meld both acoustic and the competitiveness of our products and enhanced our market
digital technologies. In recent years, we have been utilizing AI, presence. At the same time, to further deepen and expand the ties
kansei (sensibility) engineering, and simulation technologies to we have with our customers, we promoted marketing initiatives
take on challenges in the digital network environment and other optimized for each region and improved customer access through
new domains. Through our diverse product lineups and global the enhancement of our sales network, thereby expanding our
sales and service structures, which also include the music school customer base. Additionally, we expanded sales of highly profitable
and software content businesses, we have secured a position as digital musical instruments and mid-range and high-end products
the world’s leading comprehensive musical instruments while working to optimize our selling prices, thereby improving our
manufacturer. operating income. In addition, we contributed to society in such
ways as popularizing music education in emerging countries and
promoting activities to support technicians.
Revenue / Core Operating Profit / Core Operating Profit Ratio Sales of Major Products
(Billions of yen) (Billions of yen) (Billions of yen)
400 J-GAAP IFRS 80 120 +11.8%
16.5% 100
300 15.2% 14.6% 15.1% 60
12.5% 12.6% 80
+8.7%
+5.7%
200 40 60
40 +30.7%
100 20
20
0 17/3 18/3 19/3 19/3 20/3 22/3 0 0 Pianos Digital musical Guitars Wind instruments
(Forecast) (Planned) instruments
Revenue (left) Core operating profit (right) Core operating profit ratio 17/3* 18/3* 19/3 20/3 (Forecast) 22/3 (Planned)
*J-GAAP
Overview of Markets by Mainstay Product / Yamaha’s Strengths / Main Competitors

Overview of Markets and Yamaha’s Operations Yamaha’s Strengths Main Competitors
■ ontinued high level of growth in the piano market in China
C ■ roduct lineup that enables proposals that meet all kinds of
P Steinway & Sons (Germany
■
Expansion of new value proposals (silencing / automated customer demands and the U.S.)
instruments) in maturing markets ■
Development capabilities and brand power realized through Guangzhou Pearl River Piano
Pianos ■
Diminishing competition centered on local Chinese our long-cultivated technologies Group Co., Ltd. (China)
manufacturers Kawai Musical Instruments
Manufacturing Co., Ltd.
(Japan)
■ ontinuous growth for digital pianos underpinned by
C ■ Product lineup that can meet diverse user needs Casio Computer Co., Ltd.
growing demand for music education and music hobbies ■ cceleration of growth in emerging markets and increase in
A (Japan)
Digital musical ■ High level of growth in the portable keyboard market in India customers through the expanding sales of high-end Roland Corporation (Japan)
instruments
products Kawai Musical Instruments
Manufacturing (Japan)
■ Growing demand in China and emerging countries ■ Global leader in number of acoustic guitars sold* Fender Musical Instruments
■ dvancement in new concept guitars, diversification
A Corporation (the U.S.)
Guitars in ways people enjoy music Gibson Brands, Inc. (the
■ Increased number of competitors U.S.)
C.F. Martin & Co. (the U.S.)
■ table growth primarily in developed countries supported by
S ■ trengthening of development and value promotion and
S Conn-Selmer, Inc (the U.S.)
demand from schools and bands expanded sales of mid-range and high-end musical Buffet Crampon (France)
Wind, string, and ■ Trend of expansion in China and emerging markets instruments Jupiter Band Instruments,
percussion ■
Demand creation and expanded customer base resulting Inc. (Taiwan)
instruments
from activities to popularize music in China and emerging
countries
* Yamaha estimation, as of March 31, 2019

M A K E W A V E S 1.0
Business Strategies of the New Medium-Term Management Plan

Business Vision
Receive the highest possible evaluation from an even greater number of customers
Realize overwhelmingly high levels of profitability by enhancing our brand power
Targets for Fiscal 2022 (Based on IFRS)
Revenue: ¥297.0 billion (6.3% growth compared with fiscal 2019)
Core operating profit: ¥49.0 billion (20.1% growth compared with fiscal 2019)
■ Improvement in the promotion of value that fits the life stage of each customer through
■ hift toward making direct connections with
S digital marketing
our customers on a global basis due to the ■ ignificant improvement in product development for pursuing the essence of musical
S
acceleration of digitalization, dramatic changes instruments due to the progression of digital technologies and AI; enhancement of
in approach to brand recognition and consumer Opportunities manufacturing efficiency through IoT
behavior, etc. ■ Incorporation of demand from the middle class in emerging markets through the expansion
Business ■ ramatic improvement in analysis, evaluation,
D of sales networks and e-commerce; capturing of demand through the development of prod-
Environment
simulation, and other technologies for product uct models that cater to local music cultures; and incorporation of demand from new growth
development due to the progression of IT and in the musical-instrument-playing population through music popularization activities
digital technologies ■ ntrance of manufacturers from IT and other industries, potential for saturation of
E
Management Strategy
■ urther economic growth in the middle class in
F e-commerce brands utilizing OEMs
China and emerging countries Risks
■ otential for the trend of growth in the sharing economy and secondhand market to
P
accelerate
Key Strategies
Promote the Yamaha brand and contribute to society through our businesses
Develop global connections and ties with customers
Specific Initiatives
Promote efforts to form direct ties with customers
Enhance product lineup and launch products that cater to local characteristics
Realize high levels of profit by expanding our business
portfolio Strengthen response capabilities to address diversifying product usage and the needs of
customers in each age group
Create value through the combination of essential value Promote the essence of musical instruments and integrate IT and digital technologies
enhancement and elemental technologies Strive to create new value by forming broader, deeper, and longer ties with users
Business Policy under the New Medium-Term countries, we will incorporate local needs within our product devel-
Management Plan opment, including local music culture and education, as we work
We will promote three key strategies in the musical instruments to create demand and expand our operations in these regions.
business to enhance our brand power and realize a high level of Also, we will reinforce our response capabilities to meet the broad
profit. At the same time, we will continue to promote efforts range of needs in all customer age groups, from young to old.
aimed at revising our selling prices and reducing costs. The third strategy is to promote new value creation that forms
Additionally, we will advance measures to create new value deep connections with users by melding the sensibilities and intui-
through technological innovation and expand sales of product tive nature of our musical instruments with the latest digital tech-
models with high added value. nologies. Some examples of products that encapsulate our aim
with this strategy are our TransAcoustic™ pianos and guitars and
Main Points of Key Strategies the NU1 hybrid piano. Going forward, we will provide value that is
The first strategy is to develop closer ties with customers. This uniquely Yamaha while working to integrate 5G networks—which
involves building relationships with customers and society that are will progress rapidly in the future—wireless technologies, and AI
broader, deeper, and longer in nature. Under this strategy, we will technologies.
promote ways to enjoy musical instruments at each stage in life
and maximize lifetime value (LTV). We will also enhance stores Efforts to Accomplish Our Business Vision
where customers can experiment with musical instruments from a As we promote the initiatives explained above, we, as a manufac-
qualitative and quantitative perspective as well as establish and turer, are thoroughly promoting a 6P approach, which adds on pop-
strengthen digital marketing platforms. By doing so, we create ularization and PSI*1 to the so-called 4Ps*2 of Marketing, within
frameworks for forming direct connections with customers both our daily business processes. By linking these kinds of earnest
digitally and in real life. Additionally, we will move forward with efforts to the creation and promotion of brand value in accordance
activities to popularize music that will also help us contribute to with our three key strategies, we will realize top-line growth and
society through our businesses. overwhelmingly high levels of profit going forward.
The second strategy is to grow our business portfolio and real- *1. PSI: Production, sales, and inventory
ize business expansion across the entire musical instruments busi- *2. 4Ps of Marketing: Product, price, place, and promotion
ness. In China, we will focus on expanding sales of mid-range and

high-end models in the piano business, which has continued to
perform favorably. At the same time, in India and other emerging

■ MUSICAL INSTRUMENTS BUSINESS
PIANO BUSINESS
Global market share for Yamaha’s products Pianos: 38%* Revenue: ¥56.0 billion
Business Overview
The piano business is a business we have cultivated for over a century and
can be considered a core part of the Yamaha Group’s operations. In this busi-
ness, we create Yamaha pianos that meld acoustic and digital technologies to
cater to the emotions of all customers who wish to play piano at all skill
levels. Rather than remaining satisfied with the current conditions in the
piano business, we will aim to propose products with diverse value so that
Yamaha pianos will be the preferred choice of customers around the world.
Targets for Fiscal 2022 Points of Emphasis in Achieving Targets

Growth in the Chinese market and strengthen brand power and We are focusing our attention on a wide range of efforts with the aim
added-value promotion in maturing markets of becoming the brand that continues to be the No. 1 choice of all
Key Strategies customers, from professional pianists to beginners. In order to
Achieve 25% growth in premium piano sales over enhance our brand power, we are establishing relationships with vari-
Expand premium offerings three years ous music colleges and concert halls. We are also working to expand
through the high-end
sales of CFX premium pianos, which represent our highest-grade
strategy Enhance presence in music colleges and concert

halls
model. In addition to moderately priced models, we are taking steps
Expand sales of Expand percentage of hybrid (integration of acoustic to expand the sales of high-value-added models, including hybrid
high-value-added models and digital technologies) piano sales
models that integrate Yamaha’s unique technologies and sensibilities.
Meet growing demand We are also striving to increase the opportunities for customers to
Establish global production structure to support
in China with global
production
growth experience our pianos at stores and improving efforts to promote our
brand. Through these means, we will significantly increase sales in
the piano business.
DIGITAL MUSICAL INSTRUMENTS BUSINESS

Global market share for Yamaha’s products Digital pianos: 49%* Portable keyboards: 54%* Revenue: ¥92.9 billion
Business Overview
In the digital musical instruments business, our product lineup spans from
digital pianos and portable keyboards, for which we boast a world-leading
market share, to synthesizers, stage pianos, and Electone™ electronic
organs. We also possess a strong competitive edge in terms of hybrid prod-
ucts that meld acoustic and digital technologies. With these strengths, we
offer attractive products that leverage our superior technological capabilities.
In this business, we are presented with significant opportunities primarily in
emerging countries, including the growing market of India. Capitalizing on
these opportunities, we will create emotional musical experiences that meet
the needs of our customers.

Achieve further growth in digital pianos and cultivate future For digital pianos, without taking our current success for granted, we
customers by pursuing challenges in new domains will promote product development that allows us to offer even more
Key Strategies emotional experiences to our customers. In terms of portable key-
Develop digital pianos Deepen our understanding of emotional and physi- boards, we will deepen our understanding of local music and needs in
leveraging Yamaha’s cal phenomena to further realize expressive power emerging markets as we work to achieve business expansion. In the
strengths in acoustic Propose diverse product value that meets a wide market of India, which boasts tremendous potential, we will leverage
products range of needs
models produced at local plants in an efforts to expand our customer
Create new value through
technological innovation
Bring superior expressive power to Yamaha products base. Furthermore, to cultivate customers in the future, we will
Expand range of key-

develop new products that readily offer musical and creative experi-
boards equipped with spe- Provide solutions and content based on local needs ences to young customers. We will also reinforce our branding and
cialized sound sources Expand customer base by developing and utilizing marketing activities.
suited to local musical local models
styles
Expand customer base by Develop models that can readily provide musical
developing new products and creative experiences
targeting young people Increase the number of new customers by
who want to express strengthening branding activities aimed at young
themselves through music customers

GUITAR BUSINESS
Global market share for Yamaha’s products Guitars: 8%* Revenue: ¥27.3 billion
Business Overview
Since we commenced the manufacture and sale of domestic guitars in
1966, our guitars have been recognized for their craftsmanship and genuine
quality, which has helped us expand guitar sales globally, centered on entry-
level products. In recent years, we have been developing attractive new
products such as the TransAcoustic™ Guitar, which is equipped with unique
Yamaha technologies. We have also been promoting R&D and marketing
activities that leverage our relationships with major music artists.

Improve selling prices and reinforce existing business In 2018, we established global marketing functions in the United
foundation with a focus on strengthening mid-range and States, which is the epicenter of the guitar market. We also began
high-end products and creating new value
efforts to strengthen the capabilities of local employees and enhance
Key Strategies our relationships with local artists. By doing so, we have been work-
Expand use of local employees’ skills and ideas to ing to develop attractive products, promote the effective communica-
strengthen our ability to showcase product value tion of information, and accelerate marketing activities. To further
Management Strategy
Reinforce marketing
functions from our
Make effective use of influencers including profes- expand sales of mid-range and high-end products, we will strategically
sional guitar players and social media users

U.S. locations set up custom shops in major global cities and promote attractive
Reinforce artist relations and shorten the product
development prototype cycle product value that is unique to Yamaha. In these ways, we will aim to
Use scientific approach to aggressively expand mid- be the brand chosen by guitar players around the globe.
Expand sales of mid-range range and high-end products
and high-end products Set up custom stores in four key global cities
Create new value Communicate appeal of true Yamaha spirit through
exciting experiences and value creation
WIND, STRING, AND PERCUSSION INSTRUMENTS BUSINESS (EXCLUDING GUITARS)

Global market share for Yamaha’s products Wind instruments: 32%* Drums: 11%* Revenue: ¥53.1 billion
Business Overview
The wind, string, and percussion instruments business spans a wide range of
products, from over 15 different kinds of musical instruments such as trum-
pets and saxophones and string instruments such as violins, to acoustic and
digital drums and timpani. With this wide range of products, the Yamaha brand
is able to compete for the leading position in various musical genres. We are
also involved in the creation of custom models that meet the needs of major
artists and are played in educational settings around the world.

Realize market expansion and increased sales by boosting To ensure that the Yamaha brand is chosen by an even greater number
the strengths of our products and creating environments for of customers, we will strengthen our brand power and introduce
musical performances
attractive products into the market through joint development with
Key Strategies major artists. We will also focus on promoting the value of our mid-
Enhance joint product development through collabora- range and high-end products and creating engaging marketing activi-
tion with major artists ties under the aim of expanding sales. In the markets of China and
Expand sales of mid-range Launch high-end models and enhance brand appeal emerging countries, where there is high potential, we will promote
and high-end products activities to popularize music and newly introduce new products
Increase market share for mid-range and high-end

wind instruments (trumpets, saxophones, and catered to each market. In this manner, we will work to create
clarinets) demand and expand our customer base.
Promote brass and wind instrument bands and create
demand in China and emerging countries
Expand market by promot-
Develop musical instruments with new value to
ing brass and wind instru-
broaden player horizons
ment bands
Improve product lifecycle with low-maintenance
musical instruments
* Results for fiscal 2019 are based on amounts estimated by Yamaha (IFRS)

■ AUDIO EQUIPMENT BUSINESS

Drawing on our passion for sound cultivated in the
musical instruments business, we will create products
and services that resonate in people’s hearts.
Akira Iizuka
Executive Officer
Executive General Manager of Audio
Products Business Unit

The audio equipment business acts as the second business pillar At the conclusion of NEXT STAGE 12, the operating income ratio in
of Yamaha, a business developed and centered on sound and the audio equipment business landed at 8.8%, just barely below
music, after the musical instruments business. In this business, our management target of the 9% level. In PA equipment, we
we offer PA equipment for commercial and facility use and AV maintained growth in each fiscal year under the plan and were able
products for consumers. In addition, we provide ICT devices such to strengthen the sales network at our local subsidiaries and
as network devices and voice communication equipment. By lever- expand our sales channels. For AV products, although sound bars
aging not only our strengths in terms of audio networks but also performed favorably, growth was stagnant as our efforts to expand
our ICT technologies, we position the audio equipment business our portfolio in the personal audio domain are still ongoing. Growth
as a growth domain, centered on professional audio equipment. of ICT devices was limited owing to the impact of lower OEM
product sales, despite brisk growth in network equipment. As a
result, while we made steady progress with the key strategies of
NEXT STAGE 12, this progress did not lead to sales growth.
Revenue / Core Operating Profit / Core Operating Profit Ratio Sales of Major Products
150 J-GAAP IFRS 15 80 +28.8%
120 9.6% 12
9.0% 8.8% 8.8% 8.9% 60
8.0% +3.0%
90 9
40
60 6
+2.4%
20
30 3
0 17/3 18/3 19/3 19/3 20/3 22/3 0 0 PA equipment AV products ICT devices
(Forecast) (Planned)
Revenue (left) Core operating profit (right) Core operating profit ratio 17/3* 18/3* 19/3 20/3 (Forecast) 22/3 (Planned)
* J-GAAP
Overview of Markets by Mainstay Product / Yamaha’s Strengths / Main Competitors

Overview of Markets and Yamaha’s Operations Yamaha’s Strengths Main Competitors
■ rogression in the integrated management, remote operations,
P ■ bility to propose comprehensive solutions in accordance
A Harman International
and automation of networks and facilities with customer needs, covering everything from micro- Industries (the U.S.)
■
Strong demand for high reliability and support structures phones and speakers to mixers and music production Music Group (the
PA equipment
equipment Philippines)
Robert Bosch GmbH
(Germany), etc.
■ igh level of growth maintained in the headphones market,
H ■ ursuit of the true essence of sound to provide True Sound
P Sonos (the U.S.)
with continuous growth in the sound bar and wireless experiences Bose Corporation (the U.S.)
speaker markets as well ■
Strengthened the proposal of value from development Sony Corporation (Japan),
AV products ■
Further advancement in personalization free of time and focused on home theaters to network audio products etc.
space restrictions following popularization of streaming ■
Introduction of new surround sound amplifiers that leverage
content AI technologies
■ ontinuous market growth following the further shift to IT,
C ■ xpanded mainstay commercial-use routers as well as LAN
E Cisco Systems, Inc. (the U.S.)
progression in quality-based competition products Allied Telesis (Japan)
■ Expansion of remote communication environments and ■ Reinforcement of equipment proposal capabilities as well as Polycom Inc. (the U.S.), etc.
ICT devices changes in the office environment due to the diversification service capabilities
of working styles and the promotion of productivity
initiatives


Business Vision
Transform our business framework and realize dramatic growth to become the second pillar next to the
musical instruments business

■ dverse impact on capital investment projects

A ■ Increase in potential products by strengthening proposals in upstream sales channels
due to the instability in international relations. Opportunities ■ urther expansion of market share in the PA equipment field centered on the superi-
F
Business Meanwhile, creation of intermediate domains
ority of our networks and AI technologies
Environment for PA equipment (BtoB) and AV products
(BtoC) and further integration of online confer- ■ otential for the adverse impact of unstable international relations spreading to
P
Risks
ence systems in the ICT domain capital investment projects in the BtoB domain
Key Strategies
Management Strategy
Become supplier of choice for upstream clients such as facility owners and consultants
PA equipment Strengthen product competitiveness through automation technologies
Improve system performance through remote monitoring and control
Expand business portfolio in the personal audio domain
AV products Strengthen the appeal of the Yamaha brand among millennials
Create new value in audio-visual domain
Expand product categories and services

ICT devices
Achieve differentiation from competitors through the integration of technologies
Business Policy under the New Medium-Term In terms of AV products, we will continue to promote the sales
Management Plan of sound bars, which are achieving a strong performance. We will
To achieve growth that rivals the musical instruments business, also accelerate the expansion of our business portfolio in the per-
we are pushing forward with efforts to strengthen technological sonal audio domain, which includes headphones and wireless
innovation and support systems in the audio businesses of PA speakers and where we anticipate high-level growth going for-
equipment and AV products as well as communications busi- ward. Furthermore, to raise our level of recognition as an audio
nesses related to ICT devices. We are also aiming to expand our brand, we will promote direct marketing that communicates the
business domains in growth markets. Going forward, we will intro- appeal of Yamaha’s unique worldview to primarily millennials, in
duce new products that meet today’s needs and pursue efforts to addition to enhancing sales displays specializing in the Yamaha
strengthen our sales structure and value promotion capabilities. By brand at stores. Through these efforts, we will systematically
doing so, we will steadily realize growth for the audio equipment establish contact points with customers.
business overall. Meanwhile, in the field of ICT devices, we will not only expand
our lineup of LAN products but also steadily promote efforts to
Main Points of Key Strategies respond to cloud technologies and shift toward virtualization and
For PA equipment, we will further enhance our ability to propose other software technologies. Also, for conference systems, we will
system solutions. During the period of the previous medium-term improve usability and performance while pursuing differentiation
management plan, we took steady steps to gradually reinforce the from competitors through our commitment to sound technologies
sales structures of our local sales subsidiaries. We also improved that can convey emotions.
the precision of collecting information pertaining to capital invest-
ment projects. Through these means, we increased our connec- Efforts to Accomplish Our Business Vision
tions with upstream clients such as facility owners and audio Throughout our long history, we have cultivated various sound
consultants, thereby gaining the ability to promote sales activities technologies and a passion for sound itself. Leveraging these
aimed at more upstream-oriented proposals. In addition to concert strengths, we will develop audio products that resonate in people’s
halls, we have received orders for a wide variety of projects in hearts. We will also provide the world with communication prod-
commercial facilities, cultural centers, government offices, and ucts that facilitate not only digital exchanges but also the exchange
other locations. Additionally, from the perspective of products, we of human emotion. Over the three-year period of the new
will promote efforts for comprehensively strengthening everything medium-term management plan, we will steadily execute our key
from the input of sound (microphones) to the output (speakers) strategies with a view to transforming our business framework
and for simplifying and enhancing our operations through the use and realizing dramatic growth far above the market average.
of AI and network technologies. In this manner, we will aim to
expand our market share.

■ INDUSTRIAL MACHINERY AND COMPONENTS BUSINESS

Promoting a shift in the domains of our business
portfolio through comprehensive solutions centered
on sound
Shigeki Fujii
Executive Officer
Executive General Manager of IMC
Business Unit and Technology Unit

The industrial machinery and components business covers a broad For the in-vehicle solutions domain, an important theme under
range of fields, such as electronic devices, which started with the NEXT STAGE 12, we commenced the mass production and sales
development of LSI for digital musical instruments; factory auto- of in-vehicle modules for emergency alert systems, which are
mation (FA) equipment, which originated in our musical instruments required to be installed in vehicles in Europe. These modules have
manufacturing facilities; and automobile interior wood components been adopted by a large number of automobile manufacturers. We
for luxury automobiles, which started from the integration of our have also been making steady progress with the development of
lumber processing and coating technologies. thermoelectric devices, which convert heat and electricity. With
For electronic devices, we are promoting a shift toward com- this progress, we have made a genuine entrance into the phase for
ponent modules related to sound, an area in which the Company constructing a new growth foundation. In terms of FA equipment,
excels. We are also transitioning toward the total in-vehicle solu- sales of printed circuit board testing machines for major smart-
tions domain. Furthermore, we are achieving results in terms phone manufacturers and processing equipment grew at a rate
of in-vehicle communication module products (modules for in- that was higher than expected.
vehicle hands-free telephone calls geared toward emergency Meanwhile, sales of electronic components for amusement
alert systems), in-vehicle sound systems, thermoelectric devices, equipment declined as the market continued to contract. In addi-
and other products. For the future, we are focusing our efforts to tion, we faced delays in launching business in new domains.
establish a foundation to position the industrial machinery and Owing to the impact of these factors, growth in the industrial
components business as our third business pillar, alongside the machinery and components business over the three years of the
musical instruments and audio equipment businesses. plan was restrained at 3%.
Revenue / Core Operating Profit / Core Operating Profit Ratio Revenue Projection in Fiscal 2022
40 J-GAAP IFRS 4 50
In-vehicle components Others
+3.5 +0.5 38.0
40 34.0*
30 9.5% 3
7.7% 30
7.1% 6.7%
20 2
20
4.9%
10 1
2.9% 10
0 17/3 18/3 19/3 19/3 20/3 22/3 0 0 19/3* 22/3

(Forecast) (Planned) (Planned)
Revenue (left) Core operating profit (right) Core operating profit ratio Note: The above graph shows figures for the industrial machinery and components
Note: The above graph shows figures for the industrial machinery and components business and other businesses
business and other businesses * Estimated figures at the time the new medium-term management plan was
announced. Actual performance in fiscal 2019: ¥34.8 billion (IFRS)
Major Products / Overview of Markets / Yamaha’s Strengths

Major Products Overview of Markets Yamaha’s Strengths
Modules for in-vehicle, hands-free telephone calls, ■ ontraction in the market for amusement equip-
C ■ roduct strengths that leverage our core sound
P
Electronic graphics LSI for amusement equipment, semicon- ment, revitalization of the infrastructure, mobile, technologies, design capabilities that can meet
devices ductors for sound generation, magnetic sensors, and in-vehicle communication domains customer needs
thermoelectric devices, etc.
Flexible printed circuit board manufacturing and ■ luggish demand for printed circuit board testing
S ■ utting-edge technologies that realize high-
C
detection equipment, precision machines, polish- machines used in smartphones, trend of expan- speed, high-precision FA equipment
FA equipment
ing robots, and leak detectors, etc. sion in demand for leak detectors for in-vehicle
batteries, etc.
Interior wood components for luxury cars of both ■ eceleration of the Chinese economy, which has
D ■ umber processing and coating technologies cul-
L
Automobile
Japanese and overseas automotive manufacturers driven global sales volumes of automobiles, lead- tivated through the manufacture of traditional
interior wood
that leverage the lumber processing and coating ing to a trend of stagnating growth pianos
components
technologies used for pianos


Business Vision
Shift our focus to providing comprehensive solutions to in-vehicle audio domain
Expand product and support foundation to accelerate growth toward becoming the third business pillar

■ usiness growth in the massive in-vehicle audio market by leveraging Yamaha’s core
B
■ enuine entrance into the in-vehicle solutions
G
strengths
domain, including audio. Despite concerns over Opportunities
the impact of unstable international relations, ■ rowing demand for flexible printed circuits following the shift toward IoT and automotive
G
Business smart technologies
the in-vehicle solutions domain is seen as one
Environment
in which Yamaha can leverage its unique ■ Uncertain international relations starting with the trade conflict between the U.S. and China
strengths. Recognition of the domain’s signifi- Risks ■ articularly long lead times and demand for high quality unique to automobile-related
P
cant growth potential
domains
Key Strategies
Management Strategy
Electronic devices (in-vehicle audio) Strengthen appeal of proposals for comprehensive solutions centered on sound
Expand adoption of in-vehicle sound modules and
in-vehicle thermoelectric devices Promote optimal value that appeals to each target segment
Enhance level of market recognition and propose value Establish a development and production structure that can handle the increase in devel-
that meets the needs of customers opment projects
FA equipment Leverage core technologies to develop solutions for other fields
Develop new detection solutions and expand customer Expand customer base for printed circuit board testing machines and ultrasound inspection
base equipment
Automobile interior wood components Improve short-term and medium-term profitability
Expand customer base for vehicle interior panels Expand sales by securing new orders
Business Policy under the New Medium-Term achieve differentiation as we aim to promptly acquire a share in the
Management Plan massive market for in-vehicle audio, which exceeds ¥600.0 billion.
In the industrial machinery and components business, we moved Additionally, we will work to realize the world’s first practical
beyond our conventional business structure that relied too heavily application of waste heat power generation for automobiles and
on semiconductors. Now, we are promoting operations centered develop interior panels using new materials. In these ways, we will
on the three fields of in-vehicle modules, automobile interior wood expand the scope of our operations through collaboration with
components, and FA equipment. Under the new medium-term other companies.
management plan, we will approach the first two fields in an inte- In the FA equipment field, we will strive to maintain our lead-
grated fashion as comprehensive in-vehicle solutions as we shift ing market share for flexible printed circuit board testing machines
our emphasis toward automobile-related domains. We will also on a Groupwide basis. By swiftly responding to customer
enhance our product and support foundation to accelerate growth demands for high quality, which are growing year by year, we will
aimed at establishing the industrial machinery and components reinforce the trust-based relationships we have with customers as
business as our third business pillar. we aim for the further adoption of our FA equipment. Furthermore,
we will make proposals for leak tests that use hydrogen and
Main Points of Key Strategies develop nondestructive inspection devices that leverage ultra-
For the in-vehicle solutions domain, we will accelerate proposals sound technologies. Through these means, we will create new
that leverage our core sound technologies. Vehicle interiors are uses for our equipment and actively cultivate new markets.
brimming with a broad array of sounds, including the sound of
the engine, the sound of tires in motion, music, and people’s Efforts to Accomplish Our Business Vision
voices. Accordingly, we will provide various types of models that We recognize that the most important theme of the new medium-
can provide optimal solutions for these types of sounds. Recently, term management plan is maintaining a sense of speed. Many of
following the widespread adoption of electric vehicles and hybrid the initiatives we plan to carry out are expected to turn a profit in
vehicles, there is now a need to keep in-vehicle noise to reason- the final year of the plan, so it is extremely important that we
able volumes and install exterior warning devices from the per- secure new projects during the plan’s first year to achieve our
spective of safety and comfort. Our signal processing technologies quantitative targets. While keeping a sharp focus on quality control,
are being utilized to address these types of needs. In light of our we will steadily expand the scale of the industrial machinery and
track record in this area, we will make a genuine entrance into the components business through strategies that strike a balance
in-vehicle audio domain. By pursuing our passion for sound in the between offensive and defensive approaches.
unique sound environment inside automobiles, we will work to

STRATEGIES BY FUNCTION
■ PRODUCTION
While pursuing our strengths of craftsmanship and advanced technologies,
we will establish optimal foundations for global production and bolster our
production capacity to industry-leading levels. By doing so, we will further
enhance our production operations in terms of quality, cost, delivery, safety,
and the environment (QCDSE).
Shinobu Kawase
Managing Executive Officer
Executive General Manager of Musical
Instruments & Audio Products Production Unit
The Strengths of Yamaha’s Production We also worked to establish a new factory in Indonesia, which is
Craftsmanship and Technologies slated to start production during fiscal 2020. As for our strategy
Amid our long history of being involved in the production of musi- to reduce costs, we were unable to achieve the amount of cost
cal instruments, we have refined the craftsmanship capabilities reductions we aimed for due to soaring procurement prices for
that have helped us put the finishing touches on even better musi- electronic components. However, we did make such accomplish-
cal instruments. Craftsmanship involves creating products through ments as reorganizing our production processes and establishing
the vision and handiwork of people, and our craftsmanship is a sig- a global procurement structure. For our supply chain management
nificant element in differentiating ourselves from other companies. (SCM) strategy, we standardized business processes by improving
Linking our craftsmanship capabilities with our proprietary technol- our current systems and made progress with collaboration
ogy for the scientific evaluation of assessing human sensibilities is between business units. We also enhanced the precision of our
another important factor in realizing further differentiation. production plans. Additionally, we have been gradually moving
Meanwhile, through scientific research of each production pro- forward with preparations to introduce new SCM systems under
cess and the utilization of cutting-edge techniques, we have accu- the new medium-term management plan.
mulated a foundation of industry-leading manufacturing technologies.
The fact that we are able to maintain and integrate our refined New India Factory (Chennai)
craftsmanship capabilities and advanced technologies at a high Start of product shipping in April 2019
level is what sets our production processes apart from other This factory aims to realize integrated pro-
companies. It also serves as a source of our competitiveness. duction and sales operations while provid-
ing affordable products with high levels of
cost competitiveness through planning,
Global Production Structure procurement, production, and distribution
that is optimized for India.
From early on in our history, we have established overseas produc-
tion bases. Currently, we have key production bases in Japan,
China, Indonesia, Malaysia, and India. The establishment of a
global production structure optimized to each of our business Approach under the New Medium-Term
domains is another factor that contributes to our overwhelmingly Management Plan
high level of competitiveness. Our production strategy under the new medium-term manage-
ment plan is built upon the three pillars of production engineering,
Yamaha Technical Skills Training production information management, and global production ser-
Putting the finishing touches on a musical instrument is a kind of vices. For production engineering, we will create value by innovat-
craftsmanship that represents both an art and a technique. By ing our production methods. In terms of production information
working to visualize and transform tacit knowledge of craftsman- management, we will consider how we can best manage produc-
ship to explicit knowledge, we established the Yamaha Technical tion information with a view to improving and evolving our overall
Skills Training, thereby enabling this know-how and craftsmanship production operations. Global production services essentially boils
to be transmitted and shared across the Company. In this way, we down to establishing a production infrastructure, as this part of our
made it easier for our young technicians to inherit the exceptional strategy involves the organizational and personnel structure of our
skills of their predecessors and pass those skills down to future production operations as well as the procurement of materials and
generations. Recently, we have been making use of IT and IoT components. In tandem with pursuing the three pillars of our pro-
within this training. duction strategy, we will combine our craftsmanship capabilities
In our efforts to establish a global production structure, and advanced technologies at a high level, thereby further enhanc-
the Yamaha Technical Skills Training has been playing a key role ing our production operations in terms of quality, cost, delivery,
in cultivating personnel responsible for production at each pro safety, and the environment (QCDSE).
duction base. In regard to the continuous reduction of production costs, a
major theme of the new medium-term management plan, we aim
Review of NEXT STAGE 12 for a gross cost reduction of ¥10.3 billion and a net cost reduction
We made progress with the major initiatives of the previous of ¥5.5 billion over the plan’s three-year period. To reach this target,
medium-term management plan and results were generally in we will promote the following three efforts: Reorganize our global
line with our expectations. production processes, reduce procurement costs by promoting
In terms of our strategy for production bases, we established bulk purchasing and value analysis/value engineering, and auto-
a new factory in India, which commenced operations in April 2019. mate production processes at overseas factories.

Production Strategy under the New Medium-Term Management Plan
Basic Policy
Pursue the latest production techniques and the analysis
Establish foundation for optimal global production services
and utilization of information
Continuous improvements in terms of QCDSE (from the perspective of key KPIs for improvement)
Quality Cost Delivery Safety Environment

Pursue high quality Achieve cost reduction targets Achieve 100% rate of Zero accidents and accidents 50% utilization rate of
Reduce the rate of defects, etc. on-time delivery requiring suspension of work certified timber
(Target of the new medium-
term management plan)
Three Pillars of Our Production Strategy Cost Reduction Analysis
Management Strategy
(Billions of yen)
Reorganization of produc- 10.3
tion processes, establish- (gross)
Production engineering ment of new factories,
(Production hardware) promotion of process
automation and RPA,
Develop technologies to innovate produc- +4.8
development of produc- (6.2) 5.5
tion processes tion methods and material (net)
development, enhance-
Establish competitive production processes Labor cost
ment of production
processes increases in
overseas
Process (1.6)
reallocation
Establishment and evolu- factories Procurement
and (2.5)
tion of SCM systems, utili-
Major Initiatives
productivity cost
Production information management zation of IoT, analysis of
production information Costs in improvements reductions Greater
(Production software) Fiscal 2022
and improvement in utili- efficiency in
Realize a digital transformation (DX) within zation capabilities, estab- at current back-office
our production management lishment of production cost rates work
structure linked to market Target costs
trends in fiscal 2022
Global production services Establishment of regional

(Production infrastructure) headquarters, develop-
ment and optimal alloca-
Strengthen production structure (organization of human resources,
tion and personnel) establishment and
enhancement of global
Stabilize procurement and reduce costs by procurement structure,
establishing a procurement structure (see promotion of sustainable
graph on right) forest resources
Efforts toward Sustainable Timber forests and the volume of timber resources, it is imperative that
A large number of instruments are made from primarily timber, we ensure our supply chain is economically sustainable as well. It
including pianos, string and percussion instruments, and wood- is also important to contribute to the development of local commu-
wind instruments. Taking into account the fact that we use a nities in timber-producing areas through the creation of employ-
diverse range of timber in our business activities, we are actively ment opportunities and the establishment of infrastructure. Under
promoting efforts to maintain valuable timber resources and utilize the new medium-term management plan, one of our management
these resources sustainably with a focus on 50 to 100 years in the targets is the non-financial target of achieving a 50% utilization rate
future. In addition to giving consideration to the preservation of of certified timber for the first time.
Collaborative Research
with academia
(Kyoto University, etc.)
Concluded a comprehensive
research agreement with
Kyoto University aimed at the
sustainable cultivation and
use of forest resources in
October 2018. Through this
agreement, we intend to con-
duct research on scarce
Efforts related to timber resources in Tanzania timber in Africa and Asia that is essential in creating quality sounds. We also plan on
A project to create a business model that enables the sustainable use of materials for engaging in research on forest conservation ecosystems that will lead to new employ-
woodwind instruments. This project aims to realize sustainable timber procurement ment opportunities as well as research on new materials.
and forest management that encourage coexistence with local communities.

■ SALES
In our business domains centered on sound and music, we will expand and
optimize our contact points with customers and strive to gain an accurate
understanding of market trends and customer needs. At the same time, we
will promote the value that our products and services offer to the greatest
extent possible. In these ways, we will aim to expand sales.
Seiichi Yamaguchi
Executive Officer
Executive General Manager of Musical
Instruments & Audio Products Sales Unit
The Strengths of Yamaha’s Sales operation, helping to grow sales by 8% over the three-year period
Global Sales Activities That Are Deeply Rooted in Local of the plan.
Communities We steadily promoted sales activities with a particular focus
We have established sales offices in over 30 countries and regions on expanding our sales networks, promoting activities to popular-
around the world, thereby rolling out our business on a global ize music education based on local needs, improving our personnel
scale. In key markets, we have established direct sales networks structure to strengthen customer support, and expanding our prod-
supported by our local subsidiaries. In emerging markets, we ucts and services to meet customer needs. In the musical instru-
approach customers through our authorized distributors. Our sales ments business, we took steps to establish sales networks and
networks cater to local characteristics and span a wide range of music schools centered on emerging countries, thereby expanding
outlets, including specialty stores, chain stores, mass retailers, our customer contact points. For the audio equipment business, in
and e-commerce. The ability to ascertain local music cultures and addition to strengthening our internal personnel structure, we sig-
customer needs through these sales networks and promote sales nificantly increased the number of audio contractors who partner
strategies in accordance with local characteristics represents one with us. This enabled us to cultivate new customers and establish
of our major strengths. a foundation and structure for the next stage of growth.
Added Value Promotion and Price Optimization Status of Music Popularization Activities
We give sufficient consideration to such factors as the market Music Schools (As of June 2019)
environment, competitive relationships, and product features in Number of venues
Number of students
order to promote efforts to optimize our prices so that they appro- (classrooms)
priately reflect the value a product offers. In addition to revising the Japan (total for children
2,900 357,000
sales price of existing products, we work to enhance added value and adults)
when introducing new products, or when adding new services to Overseas (total from over 40
1,500 230,000
countries and regions)
existing products, and attach prices that appropriately reflect this
added value. → Plan to increase number of overseas students by 30%
over the next three years
Artist Relations and Service Locations
To develop even more attractive products and services, we are
Expansion of School Project* (As of March 2019)
expanding and enhancing our locations for maintaining relations
Total number of
with artists around the world. Our extensive network with the Countries offering the program
students
world’s top artists and music education institutions is another one 5 countries 260,000
of our major strengths.
→ Plan to achieve a cumulative total of 1 million students
Review of NEXT STAGE 12 in seven countries over the next three years
We promoted “enhance customer interaction,” a key strategy * Project that provides opportunities for children to play musical instruments in schools
adopted under NEXT STAGE 12, in each country and region of with the aim of spreading musical instrument education and increasing the music-
playing population (see page 71)
Sales Growth by Region (Year-on-year change on an actual basis that excludes the impact of exchange rates)
(Billions of yen)
150 97% 99%
106% 104%
100 98% 98% 100% 102% 107%
102%
109% 103% 111% 105%
99% 102%
102% 105%
50 105% 103% 116% 110%
97% 104% 100% 102% 112%
80% 91% 103%
0 18/3* 19/3* 19/3 20/3 18/3* 19/3* 19/3 20/3 18/3* 19/3* 19/3 20/3 18/3* 19/3* 19/3 20/3 18/3* 19/3* 19/3 20/3
(Forecast) (Forecast) (Forecast) (Forecast) (Forecast)
Japan North America Europe China Other regions
Note: Asterisks indicate values

Musical instruments business Audio equipment business Industrial machinery and components business and other businesses
based on J-GAAP. Data without an
asterisk are based on IFRS.

Strategy under the New Medium-Term Management Plan

Targets for Fiscal 2022 (Based on IFRS) Analysis for Revenue Growth by Region (Musical Instruments
Revenue: ¥470.0 billion, Business and Audio Equipment Business)
(Billions of yen) Emerging 470.0
up 8.2% (over three-year period) Maturing China
countries
+10.0
markets +13.0 (15%)
■ ncouraging customers to seek out the Yamaha
E 437.0* +10.0 (25%) Fiscal
(4%) 2022 (plan)
brand by promoting customer value Fiscal 2019
■ Promoting new sales frameworks on a global basis
Note: Figures in parentheses represent growth rate over three years.

* Estimated figures at the time the new medium-term management plan was
announced. Actual fiscal 2019 results: ¥434.4 billion (IFRS)
Direct Digital Marketing that customers seek out the Yamaha brand, we will reestablish
In addition to our conventional approach of promoting the value frameworks for our communication strategy and sales structure
of our brand at stores, we will promote direct marketing via digi- and improve the value of our services. In these ways, we will
tal platforms. Over the three-year period of the new medium- enhance our contact points with customers.
term management plan, we will set up a structure for
Communicate value
establishing direct ties with customers on a global basis.
Management Strategy
proposals Customer interface
As a manufacturer, efforts to communicate the value of our Dealers

products and brand to customers will help us strengthen cus- Customers
Customer interface
tomer value. These efforts will also encourage customers to visit
our stores and experience the value we offer firsthand. To ensure Direct digital marketing
Store traffic
Key Strategies
Improve ability to communicate brand Communicate value to customers through direct marketing
and product value Promote reforms to sales frameworks
Develop broader, deeper, longer ties with customers through the introduction of lifetime
Improve service value

value (LTV) and the enhancement of product support services, etc.
Accelerate growth in emerging countries such as India and ASEAN by incorporating demand
Expand contact points with customers from the middle class, promoting e-commerce and store-based initiatives, introducing
models catered to each region, and expanding the music-playing population.
Promote global human resource management systems

Establish global management foundation
Build next-generation enterprise resource planning (ERP) systems
Improving Ability to Communicate Brand and establish an omnichannel approach that integrates e-commerce
Product Value and physical stores. We will also promote the adoption of new
Thus far, our contact point with customers has been through our business models at stores to place more emphasis on experi-
authorized retail shops, and expanding that contact point has led ences, in conjunction with efforts to expand our sales networks.
to the expansion of our businesses overall. Going forward, we
will establish frameworks that allow us to form direct relationships
with customers and promote the value of the Yamaha brand via Initiatives in Key Emerging Markets (figures in parentheses
represent the changes from fiscal 2019)
digital platforms.
China: Increase number of outlet stores to 2,300 (15%
Improving Service Value increase)
As more value is gradually being placed on the experience of using Increase number of piano specialty stores to 470
a product rather than owning one, there has been a growing (two-fold increase)
number of customers who are not overly concerned with owner- India: Increase store numbers to 500 (35% increase)
ship. To place more emphasis on the value of lifestyles enriched by Commence in-house e-commerce initiatives and direct
musical instruments and to form broader, deeper, and longer ties delivery from factories to cover the entire country
with our customers, we will continue to make proposals that cater
to the life stages of each customer and strive to maximize our LTV.
For the School Project in emerging countries, we will contribute to
Expanding Contact Points with Customers education-related social issues by creating opportunities for chil-
To incorporate the new demand generated by the growing middle dren to play musical instruments as a part of their school educa-
class in emerging countries such as India and ASEAN, we will tion. By doing so, we will create future demand.

■ RESEARCH AND DEVELOPMENT

By further refining and enhancing the combination of technologies and
sensibilities, which represents our long-cultivated core competence, we will
develop products and services that are overwhelmingly competitive and con-
tribute to profit generation and business growth.
Koichi Morita
Operating Officer, Senior General Manager of Research &
Development Division, Technology Unit
The Strengths of Yamaha’s Research and Review of NEXT STAGE 12

Development (R&D) One of the four key strategies adopted under the previous
We have inherited the craftsmanship capabilities and sensi- medium-term management plan was to develop products
bilities toward sound creation that Yamaha has cultivated over with distinctive individuality. By combining the numerous
its long history, which spans generations. With these capabil- unique technologies we possess, we developed and launched
ities and sensibilities as our foundation, we possess a deep products with distinctive individuality and competitive prod-
understanding of and vast insight related to sensibilities for ucts that our competitors cannot imitate. These included
determining a good sound and a good sound environment. Venova™, a casual wind instrument that realizes a rich tone
These serve as our unique strengths and enable us to differ- with a compact size, as well as the TransAcoustic™ Guitar,
entiate ourselves from our competitors. We have established which enables brand-new musical performance experiences.
sensibility evaluation technologies as a means to effectively The development and launch of such products contributed
utilize our insight on sensibilities. Leveraging these technolo- to our business performance growth.
gies, we are striving to meld our various other technologies, Reflecting on NEXT STAGE 12 with an emphasis on tech-
such as our acoustic, digital, and electronic technologies, nologies, we made gradual progress with research on sensi-
which in turn will enable us to offer unique products and ser- bility evaluation technologies, analysis and measurement
vices that cannot be imitated by competitors. Our foundation technologies, materials technologies, and sensing technolo-
of organizational knowledge pertaining to sensibilities toward gies, all of which we focused on as major themes. In addi-
sound, which have been cultivated over our long history, and tion, we saw positive results from our product design and
sensibility evaluation technologies serve as a major source of development activities, which contributed to our solid
our competitiveness in the global market. performance.
What Does the Combination of Technologies and Sensibilities Entail?

Yamaha’s strength of combining technologies and sensibilities essentially boils down to gaining a scientific understanding on the value of sen-
sibility centered on sound, and leveraging this understanding to commercialize products. The value of human sensibilities for determining what
constitutes a good sound and a good sound environment is not something that can be represented by simple quantitative data. In addition,
scientifically analyzing the appeal and value of music and incorporating these elements into products and services is also something that
requires a deep understanding on the value of sensibility centered on sound. At Yamaha, we have cultivated such a scientific understanding
and insight through our long history, which began with the creation of musical instruments. Drawing on this sensibility value as our core com-
petence, we are able to provide truly unique products and services through the combination of our wide range of technologies.
Various Technologies That Serve as a Source of Competitiveness

■ Acoustic technologies
Technologies that support acoustic musical instruments Mechatronics
Materials
Craftsmanship capabilities, materials analysis, material Human
analysis
processing, mechatronics, etc. sensibility
■
evaluation
Digital technologies Acoustic technology technology
Analysis &
Electronic technologies, best represented by our digital signal simulation Innovation
technology
processing technologies Craftsmanship
Materials
Sound source, signal processing, networks, sensing, IoT, AI, etc. processing Sensibility
■ Sensibility evaluation technologies pervading Yamaha
Evaluation technologies pertaining to human recognition and technologies AI
e.g., understanding of IoT
sensibilities toward sound
high-quality sound
■ Analysis and simulation technologies Authenticity Sound
Manufacturing Digital sources
Analysis and simulation technologies related to sound, audio, technology
music, etc. Sensing
technology
Design
Express Yamaha’s Signal
■ Manufacturing technologies uniqueness based on process-
Technologies pertaining to production processes, such as M&A Yamaha design Networks ing
manufacturing methods and RPA Open innovation
philosophy
Excellence

R&D Strategies under the New Medium-Term Management Plan

Creating New Value through the Combination of Technologies and Sensibilities—Enhancing Added Value
with the Pursuit of Authenticity and Innovation
■ Strengthen technologies in the fields of materials, elemental components, and AI

■ Establish and innovate design and development methods
■ Develop elemental technologies that extensively provide new value to customers on a continuous basis
■ Develop technologies that contribute to sustainability and reduce environmental burden
Reaching New Heights of Competitiveness by Establishing and Innovating Design and

Enhancing Our Strengths in the Fields of Materials, Development Methods
Elemental Components, and AI We will work to scientifically analyze and systematically
By incorporating innovative technologies in the fields of organize design methods in order to promote more sophis-
cutting-edge materials, elemental components, and AI, we ticated and e
fficient R&D activities. By logically systematiz-
will acquire an overwhelming level of competitiveness that ing and standardizing elemental technologies such as
will allow us to win out over the competition. measurement, analysis, simulation, and sensibility evalua-
Management Strategy
tion technologies, we will strive to establish and innovate
Fields of Materials and Elemental Components our design methods on a Companywide level.
In the fields of materials and elemental components, we Additionally, we will dramatically enhance the speed of
will systematically organize our materials technologies our development by utilizing AI analysis and simulation.
(development and processing), which are currently spread
across the Company, and establish platforms for sharing Rendering of Audio Analysis
technologies that leverage our accumulated organizational
knowledge on a Companywide basis. In this way, we will be
able to promote more sophisticated and efficient R&D activi-
ties through the combination of technologies and sensibili-
ties, which has become implicit knowledge within Yamaha.
Material Development that Leverages Our Databases as Platforms
Material database
Developing Elemental Technologies That Extensively

FRP
Provide New Value to Customers on a Continuous Basis
Foaming agent We will focus our efforts on developing elemental technolo-
Resin gies that support the diverse ways of enjoying sound,
Timber music, and musical instruments.
For example, by providing performance support through
Field of AI AI to allow even beginners to enjoy playing a musical instru-
By integrating our long-cultivated technologies and sensibili- ment in a simplified manner, we are able to lower the hurdle
ties with AI technologies, we will pursue the development for people to begin learning a musical instrument. In addition,
of products and services that are uniquely Yamaha. through musical notation technologies, we can make it possi-
For example, we are working to apply the following ble for people to enjoy the music they like at a level suited to
improvement functions to a wide range of products and individual playing skills. Going forward, we will refine our
services: unique, cutting-edge sensibility evaluation technologies so
• Personalization of musical accompaniment and lessons that we can form close ties with all customers in a manner
• Automated / assisted PA operation that caters to their age, experience, nationality, culture, and
• Synthesized singing voice technologies, production of other characteristics.
musical instrument sounds
Examples of Apps That Support Performing Artists
Examples of Leveraging AI Technologies
VOCALOID: AI™ faithfully reproduces the singing of legendary Japanese vocalist Hibari Misora to live
perform a new song
Chord Tracker Smart Pianist
VOCALOID: AITM
Recordings of
Hibari Misora
Deep AI that studies
during her lifetime
learning Hibari Misora’s
(singing voice and
singing voice and NHK Special: Bringing Hibari
way of speaking)
way of speaking Misora Back with AI (Broadcast
in Japan on September 29, 2019)


Approach to Sustainable Materials from Two Perspectives
Yamaha’s vision for sustainable materials
Replace exhaustible and endangered resources Expand material sources scientifically

with renewable ones toward new renewable resources
■ stablishing sustainable supply chains in cooperation with local communi-
E ■ eveloping materials that look appealing, produce quality sound,
D
ties in resource-producing areas and are sustainable (Replacing materials to exceed the quality of
➝ Promoting conservation activities for African Blackwood in the Republic scarce timber)
of Tanzania ➝ Systemizing materials technologies and establishing platforms
➝ Promoting preservation activities for Japanese spruce in Hokkaido ➝ Expanding the use of plant-based materials
■
Pursuing collaborative research with academia (Kyoto University, etc.) ➝ Controlling conjugation and higher-order structures
➝ Cultivating forest resources and improving usage efficiency
Roles of R&D
■ Developing and enhancing materials technologies (analysis technologies, processing technologies, etc.)
■ Collaborating with research institutions and other companies
Efforts to Promote Sustainability within Our R&D Timber is essentially a sustainable resource. In the future,
Activities rather than refraining from and moving beyond the use of
In tandem with the aforementioned strategies pertaining to timber, it is essential that we use timber in an appropriate
cutting-edge technologies, we are also actively engaging in manner to ensure that it remains sustainable. As a com-
efforts to promote sustainability. Cultural value is something pany with a base of materials technologies, we believe that
that is encapsulated in human nature. We therefore believe we can play a major role in establishing supply chains that
it is our job to ensure the sustainability of music culture. allow for the creation of musical instruments with quality
Music culture is a valuable asset of humankind, and it is our sound. Researching what type of timber to use and the
hope that future generations are able to enjoy music culture ideal ways to use it is a means for us to discover new solu-
in the form of musical instruments and audio equipment. tions. We have already concluded a comprehensive
We believe that R&D will play a significant role amid our research agreement with Kyoto University, and we
earnest quest to determine how we can make music cul- will pursue further collaboration with outside research
ture sustainable. institutions and companies over the medium to long term
as we move forward with the development of new sustain-
able materials and other endeavors.
TOPICS
Yamaha’s Innovation Center—A Base for Creating New Innovations
To further refine our core technologies and spur new innovations, we established the Innovation
Center, an R&D base with state-of-the-art research and testing equipment, at our headquarters.
The Innovation Center gathers together the approximately 2,500 engineers and engineers of our
Research & Development Division, thereby accelerating the development of products and tech-
nologies in a manner that goes beyond the boundaries of our business domains.
Corporate Museum Innovation Road

On the ground floor of the new R&D building, we established the
corporate museum Innovation Road, which displays the history of
Yamaha’s product creation. In addition to audio and visual guides
explaining products and services that embody Yamaha’s unique nature,
Innovation Road enables visitors to experience—through sight, sound,
and touch—the path Yamaha has followed in pursuing challenges from
the past to the present as well as into the future.
Laboratories
The laboratories in the Innovation Center have been installed with the latest equipment for perform-
ing technological evaluations of prototypes as well as sensory evaluations. These laboratories also
include a variety of studios, rooms for testing out musical instruments, an anechoic chamber, a rever-
beration chamber, and a vibration laboratory.
(Left) Anechoic chamber: A special measurement room in which sound absorption wedges have been
installed on the surface of walls and echoes within the room have been reduced as much as possible.
(Right) Reverberation chamber: A room used to measure the absorption coefficient of building interior
finishing materials as well as sound source audio power levels.

Developing Products and Technologies with Distinctive Individuality
Musical Instruments
TransAcoustic™ Piano TransAcoustic™ Guitar Casual Wind Instrument Venova™
By having a transducer convert digital sounds into An actuator installed in the TransAcoustic™ Guitar The casual wind instrument Venova™ is a brand-new
vibrations and transmit those vibrations to the makes it possible to generate authentic reverb and kind of wind instrument in a compact size that lever-
soundboard, the TransAcoustic™ Piano’s sound- chorus sounds from inside the guitar body without ages innovative technologies to produce the colorful
board takes on the role of a speaker to produce having to connect to an external amp or speaker. tones of a saxophone.
Management Strategy
distinctly rich sounds. Picture: TransAcoustic™ Guitar CG-TA Picture: Alto Venova™ YVS-120 and Venova™ YVS-100
Picture: TransAcoustic™ Piano C3X-TA2
Audio Equipment
RIVAGE™ Digital Mixing System Virtual Circuitry Modeling Technology Hi-Fi Speaker Diaphragms Realizing
Consistent Tones at All Bandwidths
NS-5000 speaker that makes

use of newly conceived technol-
ogies and materials
RIVAGE™ is a next-generation flagship digital mixing In order to reproduce the deep sounds of analog We have gathered together next-generation speaker
console with thoroughly enhanced features such as devices using our DSP (digital sound field processor) technologies. With a passion for recreating pleasant
state-of-the-art sound quality, operability, functional- technology, we developed virtual circuitry modeling audio sensations and precise sounds, we have
ity, reliability, and configurability. (VCM) technology that accurately models element installed newly developed diaphragm materials,
levels in analog circuits at a world-class level. This which realize sound speeds that rival beryllium, in all
VCM technology has been installed in such products of our speaker units, thereby realizing consistent
as our PA equipment, digital musical instruments, tones at all bandwidths.
and guitar amps.
TOPICS D-1 Electronic Organ (Electone™)

An electronic organ that became the starting point for digital
Yamaha Instruments Registered as Japan’s Leading Historical musical instrument technology and music education in Japan
Technologies by the National Museum of Nature and Science First appearance: 1959
Year of production: 1959
In September 2019, the National Museum of Nature and Science, an independent
administrative institution, registered Yamaha’s D-1 electronic organ, DX-7 digital syn- DX-7 Digital Synthesizer
A digital synthesizer installed with FM sound generators
thesizer, and YM3526 and YMU757 FM sound generator LSIs as Japan’s Leading that produced rich, expressive sounds that changed the
Historical Technologies (nickname: Technological Heritage). In addition to being the first music scene at the time
First appearance: 1983
time Yamaha’s technologies were registered as Technological Heritage, this also
marked the first time that musical instruments and LSIs achieved registration.
YM3526 and YMU757 FM Sound Generator LSIs
FM sound generator chips that brought high-quality melodic
sounds to multimedia devices and cellular phones
(YM3526)
(YMU757)
D-1 DX7 YM3526 YMU757


Intellectual Property
We are advancing a global intellectual property strategy and working to create, protect, manage, and utilize intellectual
property. In these ways, we are taking steps to maintain and enhance corporate value and brand value.
Yamaha founder Torakusu Yamaha himself made many inventions and acquired patents for these inventions. Since the
Company’s founding, in coordination with our business activities, we have taken steps to create, protect, manage, and utilize
intellectual property. Over many years of R&D and business activities, the Company has accumulated a range of intellectual
property, such as ideas, designs, trademarks, and copyright-protected works. Through the use of patents, design rights, trade-
mark rights, copyrights, etc., we will continue to appropriately protect, manage, and utilize this intellectual property, thereby
contributing to the Company’s business operations. Moreover, to maintain and enhance brand value, we are taking steps to
acquire intellectual property rights in a variety of fields in countries around the world. We are also aggressively implementing
countermeasures to counterfeit products.
Patents Trademark Rights
To differentiate itself from its competitors, gain a business advantage, In 1986, Yamaha formulated management regulations for the Yamaha
ensure greater business flexibility, and enable licensing to third parties, brand, and we have established Companywide management commit-
Yamaha has formulated patent strategies tailored to its operations in tees. We are working to sustain and enhance brand value by taking
specific business segments. Every year, we conduct evaluations per- steps to realize the proper use of trademarks. As one part of those
taining to such factors as our current patent utilization status and the efforts, Yamaha has widely trademarked its brand in almost every
future potential of patent utilization with the aim of rigorously distin- part of the world. Furthermore, for product and service brands, which
guishing and organizing intellectual properties that contribute to our are positioned as sub-brands, the Company works to appropriately
product development and enhance our competitiveness. By optimizing conduct preliminary investigations into product and service names
the number of patents we hold and the content of these patents, we and to acquire trademarks.
are working to leverage our intellectual properties in a logical manner.
As of March 31, 2019, the Group possessed approximately 2,600
patents in Japan and roughly 3,500 patents overseas, centered on the
United States, Europe, and China.
Designs Copyrights
Yamaha views design as a critical element in setting its products apart In addition to industrial property rights, such as patents, designs,
from other offerings in the market, and consequently the Company and trademarks, the Yamaha Group produces numerous copyright-
makes every effort to properly safeguard and utilize these assets. protected works, primarily in the fields of sound and music. Music-
As one part of those initiatives, Yamaha has strengthened its efforts related copyrights are of particular importance to Yamaha in terms of
to acquire design rights in countries and regions where there are its overall intellectual property policy. The Company takes steps to
frequent issues with counterfeit products. As of March 31, 2019, ensure their proper management and use, including undertaking legal
the Yamaha Group held a total of approximately 1,260 design rights, action when necessary.
roughly 460 in Japan and 800 overseas.
Patents Trademark Rights

Inventions related to structures, functions, Marks such as characters, figures, etc., used in
methods, etc. products and services
Intellectual Property
Related to Products
Designs Copyrights
Designs of items; shapes, patterns, etc. Sheet music, etc., that is included with products
(including internal software, etc., for electronic devices)
Anti-Counterfeiting Measures
In recent years, the number of cases of unauthorized third parties man- administrative and legal routes. At the same time, we are also focusing
ufacturing and selling products under the Yamaha brand or reproducing on countermeasures to prevent counterfeit product sales through the
counterfeit Yamaha product designs has been increasing. In response, Internet and social media. Going forward, Yamaha will implement
we are taking steps to eliminate economic disadvantages and secure aggressive legal measures, including lawsuits, to protect the
safety for consumers, and in turn to maintain trust in the Yamaha Company’s brands, consumer trust in the Yamaha brand, and the
brand. To that end, we continue to monitor the use of intellectual prop- Company’s businesses.
erty rights and implement aggressive countermeasures through

■ BRANDING
In January 2019, we established the brand promise of Make Waves, and have
since been communicating this promise on a global basis. With the new
medium-term management plan, we will promote the value of the Yamaha
brand through our brand promise and develop customer interfaces with a
focus on digital marketing. In these ways, we will move forward with efforts
aimed at improving our brand value.
Hiroko Ohmura
Operating Officer, Senior General Manager of Marketing Division,
Brand Development Unit
Vision of the Brand Development Unit

To realize our management vision of “becoming an indispensable, brilliantly individual company,” we will
create higher quality customer experiences and establish an ideal brand image that can be communicated
consistently on a global scale.
Promoting the Value of Our Brand through Our
Management Strategy
Brand Promise
Promise to Customers to Make Yamaha an Indispensable
Company
The starting point of our full-scale brand strategy was the previous
medium-term management plan, under which we adopted the
goal of increasing our brand power. With the establishment of our
new brand promise Make Waves in January 2019, we made a “I’m a HERO Program”—An initiative to
support the resolution of social issues
promise to encourage our customers’ passions and help them take
through music in Colombia
a step forward to express their individuality, emotion, and creativ-
ity. Going forward, we will work to strengthen our proposal-making
capabilities so that we can create experiences for customers to
Creating Frameworks to Form Ties with Customers
feel enthusiastic excitement.
Improving Lifetime Value (LTV)
Today, with the overabundance of information available to custom-
Fostering a Brand Image by Strengthening Contact Points
ers, it is becoming more difficult to communicate a brand mes-
Despite being a brand that is widely well-known and has received
sage. At the same time, there is a greater demand for high-quality
a certain level of praise from existing customers, we have not
services that suit customer needs. In light of this situation, we are
been able to sufficiently promote the value our brand offers to
working to build a customer data platform to analyze the important
potential customers. To address this brand-related issue, we will
information and behavioral history of registered members in our
increase the number of opportunities for more customers to come
database. This in turn will allow us to offer proposals optimized for
in contact with our brand from both a digital and physical perspec-
each customer. Going forward, we will aim to realize even more
tive. We will offer our customers an easy-to-understand brand
effective communication with a view to improving our LTV. At the
story that communicates how our products and services can
same time, we will promote the value that our brand offers in a
enrich and invigorate people’s lifestyles. Through these efforts,
manner that caters to the individual life stages of our customers.
we will take steps to foster a consistent brand image.
Contribute to Enhanced Lifetime Value

Internal Branding
To create a robust brand, the active participation of our employees is
essential. To that end, we are holding global workshops to discuss Infancy
Child-raising years
how we can convey the value of our brand to customers, centered
on our brand promise. We are also hosting international conferences
where we present the accomplishments of brand-related activities Retirement
in each country. Through these means, we are creating opportunities Student years
for our employees to consider the ideal image for our brand on their Lifetime Value
own and act accordingly. This process has helped to significantly
improve employee awareness and morale. After-sales services
Hobby / interest
Purchase Communicate value proposal
matched to individual life stage
Customer Journey

■ DESIGN
Yamaha has always placed emphasis on design. In 1963, we established an in-
house organization dedicated to design, which has since helped us build the
Yamaha brand. In recent years, we have expanded the area of operation for
this in-house organization, working to design various contact points with cus-
tomers with the aim of enhancing our brand value.
Manabu Kawada
General Manager of Design Laboratory,
Brand Development Unit
The Five Elements of Our Design Philosophy (Formulated in 1987)
SOCIAL
INTEGRITY INNOVATIVE AESTHETIC UNOBTRUSIVE RESPONSIBILITY
Design that respects the
Creative design Beautiful design Restrained design Design that meets the
essence of the object
needs of today’s society
Taking on Challenges at Milan Design Week 2019

A Training Ground Where Brilliantly Individual
Designers Voice Their Opinions and Deepen Their
Thought Processes
Yamaha held an exhibition at Milan Design Week 2019, one of the world’s larg-
est design-related events, which was held in Milan, Italy from April 9 to April 14,
2019. We have participated in the event four times in the past from 2005 to
2008, presenting pieces created through our unique design ideas. Our most
recent exhibition marked the first time we have participated in Milan Design
Week in 11 years. Titled “pulse,” our exhibit featured four sound-related pieces
and also included presentations by our designers regarding their investigations
on how design can make waves in people’s hearts.
By taking on challenges that differ from our day-to-day product design activ
ities, the purpose behind holding this exhibition was to have our designers com-
municate Yamaha’s unique worldview as well as the value systems that they
themselves cherish. We also held this exhibit so that our designers could wit-
ness firsthand reactions from industry specialists and visitors from around the
world when viewing Yamaha’s designs. In these ways, the exhibit helped our
designers deepen their personal understanding on design philosophy and better
define their own identity.
Above: Entrance to the Yamaha exhibit hall

Below and left: Yamaha’s exhibition pieces.
The piece on the left is titled “Pianissimo
Fortissimo,” a wall-mounted piece that can
be touched and played and uses grand
pianos as its motif.

CSP Series Clavinova™ Digital Piano

By eliminating electronic buttons from the instrument, the CSP
Series Clavinova™ digital piano achieves the appearance and
playability of an upright piano. The music stand of the CSP Series
Clavinova™ has been placed at the player’s fingertips for improved
visibility during performance and ease of set-up so to be better used
with a connected tablet or other smart device. The music stand’s
height, angle, and distance have been designed in a way that mini-
mizes interference during performance.
Red Dot Award: Product Design 2019 (Germany)
VKB-100 VOCALOID™ Keyboard

The VKB-100 VOCALOID™ keyboard is a lightweight, slim, over-the-shoulder keyboard
that was designed so that people can play the instrument while standing and moving
with it close to their bodies. This design was chosen in consideration of the various
scenarios in which people could use this instrument, such as when singing Karaoke.
The grip section has purposely been set at an angle to the playing surface so that the
player’s fingers are guided naturally to the home position, and the area that the fingers
strike when sliding has been flattened for improved playability. The elimination of any
unnecessary decorations and functionalities has produced a pure shape that acts as a
canvas upon which VOCALOID characters can be projected, a perfect match for the
product concept.
Management Strategy
2018 Good Design Award’s GOOD DESIGN BEST 100
YAMAHA’S DESIGN
Supporting Yamaha’s
Growth by Working to
Enhance Our Brand Value
from the Perspective of
Design
STORIA™ Acoustic Guitar
The STORIA™ acoustic guitar was created for millennials, who value connections and
empathy with other people based on their own unique style. The design makes it easy
WXC-50 Wireless Streaming Amplifiers
to pick up and play, thereby making guitars a closer part of people’s lives. To that end,
The WXC-50 wireless streaming amplifiers utilize a promi- the guitar pursues a beautiful, charming appearance and a shape that makes it easy to
nent physical volume knob to represent both a new take play. With its inner colors, uniform metal parts, and other features, the STORIA™
on network audio and the ubiquitous identity of an audio acoustic guitar was crafted with attention to detail.
products. Based on the product concept of simple and
flexible, the WXC-50 pursues a retro-modern appearance,
with the brushed surfaces of everything but the knob GOOD DESIGN AWARD 2019
giving it a form that is familiar, yet subtle.
German Design Award 2019 Winner (Germany)
YVC-200 Portable Speakerphone

From the initial stage of making sketches for
the design of the YVC-200 unified communica-
tion speakerphone, Yamaha designers made
proposals for a detailed design that achieves
a balance between a compact size and high
sound quality. Paying particular attention to
such aspects as the way the buttons light
up and the quality of sounds produced when
operating the device, Yamaha placed emphasis
on creating a charming shape that expresses
the loveliness of sound. By doing so, the
YVC-200 realizes a subtle design that enables
it to naturally blend in to the atmosphere of
a room.

III. Foundation for Growth
Human Resources 64
Sustainability 66
Special Feature
Contributing to Societies
through Our Business Activities 70
Corporate Governance 74

HUMAN RESOURCES
We are working to create an environment that enables employees with unique

personalities and diverse backgrounds to fully demonstrate their sensibilities
and creativity. At the same time, by building and promoting a global human
resources management structure, which includes cultivating and developing
personnel, we are contributing to sustainable corporate value improvement.
Masato Takai
Operating Officer, Executive General Manager of
Human Resources and General Administration Unit
Basic Policy the capabilities of our human resources by finding the best organiza-
tion for each employee to belong to and improving individual motiva-
Yamaha’s human resources are the source of corporate value tion and fulfillment
creation and the driving force behind sustainable growth.
ive consideration to sustainability globally in the human resources
G
Accordingly, we are promoting human resources devel- domain, including respect for human rights, communication between
opment programs that enable all our diverse employees to employees and management, and workplace safety. Ensure that all
fully leverage their talents and express themselves freely, employees dedicate themselves to creating value while working with
peace of mind
regardless of race, nationality, gender, and other character-
istics. These programs also help our human resources
achieve growth as professionals. In addition, to ensure that Results under the Previous Medium-Term
life events such as giving birth, raising children, or providing Management Plan NEXT STAGE 12 and Initiatives
nursing care do not impede on the career development of Going Forward
our employees, we are providing support to help our Global Human Resources Management and Development
employees achieve a work–life balance. In these ways, we Up until now, we have been operating human resource
are creating an environment where employees can work systems, including human resources management and
with a high level of enthusiasm. development, on an individual Group company basis.
Human resources are the most important resource for a However, for core personnel positions, we plan on devel
company. Accordingly, we in the Human Resources Division oping managers and key human resources for the next
recognize our responsibility and duty to create a corporate generation through global human resources management
culture that boosts the motivation of our employees and and the promotion of succession plans.
allows them to demonstrate their talents to the greatest We also aim to leverage the potential of each employee
extent possible. to the greatest extent possible by allocating and developing
personnel based on information pertaining to global human
Our Vision resources.
llocate the right personnel in the right location on a global basis,
A
regardless of race, nationality, gender, or age. Work to fully leverage

HUMAN RESOURCES
Under the concept of supporting highly motivated supporting major life events of our employees and respect-
employees who wish to fulfill their responsibilities and aim ing their private lives.
to make constant progress, we are working to create an Additionally, to establish win-win relationships between
education and training system that is equally focused on the Company and its employees, or in other words, to
skill improvement and career development as the basis for improve employee fulfillment and mutual productivity, we
nurturing human resources that can succeed globally. At are moving forward with workstyle reforms. For example,
the same time, each training program implemented is we have implemented teleworking aimed at increasing
tailored to a specific objective and group of employees. employee fulfillment in their work and ensuring that
employees with work-hour restrictions are able to maximize
Promotion of Diversity and Inclusion their abilities. We have also adopted a flextime system that
We believe that the diversity of people who differ in age, allows employees to work shorter hours. Furthermore, we
gender, sexual orientation, gender identity, disability, nation- are conducting leadership skills training with a view to
ality, race, culture, values, lifestyle, and career background improving communication between employees and their
is the source of new value creation. Yamaha also seeks to supervisors. In this manner, we are making earnest efforts
further strengthen, grow, and develop its corporate compet- to reform our work styles.
itiveness by respecting and utilizing each individuality.
In particular, we are striving to create an environment in
which women can excel and establish various systems that
helps support a work–life balance. As of the end of fiscal
2019, the average number of years of continuous employ-
ment for both male and female employees was nearly
equal, at approximately 20 years (19.3 years for male
employees and 19.9 years for female employees) (see page Platinum Kurumin certification mark based Yamaha Corporation included in
on Act on Advancement of Measures to the Certified Health & Productivity
15). Furthermore, in 2017, we appointed our first female Support Raising Next-Generation Children Management Outstanding Organizations
director (outside), and in 2019, we appointed our first Recognition Program for the third
consecutive year
female operating officer. Going forward, by increasing the
number of opportunities for skills development, including
through the female managerial candidate selection and Establishment of In-House Childcare Facility
development program, we will actively promote efforts to In August 2019,
Yamaha Corporation
expand the career scope for our female employees.
established an in-
house childcare facil-
Promotion of a Work–Life Balance ity (Oto no Ie, which
We are pursuing work–life balance initiatives through such literally translates to
means as establishing the Work–Life Balance Promotion House of Sound). At

Committee, which is jointly run by labor and management, Yamaha, nearly all
female employees
shortening overall working hours, and creating and enhanc- who have given birth have taken childcare leave, with a total
ing work–life balance support systems. As part of our of 95 male employees making use of this leave as well (as of
efforts to reduce overall working hours, we established March 31, 2019). By establishing this in-house childcare facil-
guidelines for overtime in order to prevent long working ity, we have made it easier for our employees on childcare
hours and excessive work. In addition to annual paid leave leave to return to work and are p roviding these employees
with peace of mind knowing that their children are nearby.
days, we developed a system for assorted types of leave, In these ways, this facility helps realize a work environment
including special holidays given every time an employee that allows employees to better focus on their job.
has worked for five consecutive years, with the aim of
Basic Approach to Diversity and Inclusion
Gender
Sexual orientation and

Experience
gender identity
Nationality and race Diversity and Inclusion Age

We respect diversity and are leveraging it to create
new value and enhance our competitiveness.
Disability Lifestyle
Culture and values

SUSTAINABILITY
The Yamaha Group is guided by its corporate philosophy: “With our unique expertise and sensibilities, gained from our
devotion to sound and music, we are committed to creating excitement and cultural inspiration together with people
around the world.” To put this philosophy into practice, Yamaha is working to understand the impact of its business
activities on the environment and society and to pursue dialogue with stakeholders, while solving challenges to help
create a sustainable society.
Yamaha Group Sustainability Policy Promotion of Sustainability Priorities

Our aim is “Sharing Passion & Performance” The Yamaha Group has established and is promoting efforts
Based on the Corporate Philosophy, Yamaha conducts its to address sustainability priorities for the medium to long
sustainability activities according to the following guide- term, which are based on the impact of its business activi-
lines, seeking to contribute to the sustainable development ties on the environment and society, as well as on stake-
of society and to further strengthen the bond of trust with holder expectations and social demands (see page 68).
its stakeholders through sound, transparent management When determining these sustainability priorities, we took
methods, and corporate activities that balance social and into consideration the feedback and requests we have
environmental concerns. received from each stakeholder as well as advice from out-
side experts. In addition, the importance of issues identified
1. B
y creating new values through products and services focused on through this feedback and advice were evaluated based on
social and environmental issues, Yamaha contributes to the sustain- our management vision and medium- to long-term policies,
able development of society.
and the sustainability priorities were determined after dis-
2. Through business development and social contributions based in cussion by our upper management. Under the medium-
each region of the globe, Yamaha contributes to the promotion and
term management plan, each relevant division and the
popularization of music, and to the development of communities.
Sustainability Division have determined KPIs and action
3. By understanding the significance of protecting the natural environ-
ment and maintaining biodiversity, and by promoting the reduction plans that evaluate targets and levels of progress toward
of environmental burden through measures such as sustainable the sustainability priorities we identified, and these KPIs
procurement of timber and lowering greenhouse gas emissions, and action plans have been approved by our upper manage-
Yamaha works to maintain a healthy global environment. ment. Through progress monitoring by the Sustainability
4.Yamaha observes laws, ordinances, and social norms, and more- Division and annual reviews by the Managing Council,
over, conducts business in a fair and impartial manner throughout which is chaired by the president, we are promoting efforts
the entire value chain, including activities such as socially responsi-
to address our sustainability priorities.
ble procurement carried out in cooperation with business partners.
5. Yamaha endeavors to prevent abuses of human rights, responding
appropriately to the effect of its business activities as well as to any
Efforts toward the Sustainable Development Goals
attendant risks to human rights, with the goal of achieving a society The Yamaha Group intends to contribute to the attainment
that safeguards the dignity of all. of the Sustainable Development Goals (SDGs), which were
6. Yamaha works to create an atmosphere that holds in high regard adopted as a set of shared goals for global society, through
the employee diversity that is a source of the new values created its business.
within the company, and which allows each person to fully demon- In addition to our efforts to contribute to Goal 4 through
strate their sensibilities and creativity through training and use,
our initiatives to spread music, we are also working on Goal
without regard to race, nationality, gender, or age.
Formulated in February 2010 and revised in July 2018

SUSTAINABILITY
12 and Goal 15 through efforts to procure sustainable Efforts toward Sustainable Timber Procurement
sources for timber. We are currently developing products The Yamaha Group has established a due diligence system
and services with an awareness of the goals and targets to prevent procuring timber from illegal sources and is pro-
of each SDG, and endeavoring to improve our business moting a strict confirmation process for timber procure-
processes. ment legality through site visits and surveys of documents
for procurement sources. We conducted a documentary
Participation in Initiatives investigation targeting all business partners from which
With a commitment to cooperating timber was purchased in fiscal 2018, assessing the place of
and forming ties with global society as origin, the legality of harvesting, and the sustainability of
we work toward building a sustainable relevant resources. Based on these results, we conducted
society, Yamaha signed the UN Global stricter verification of legality for timber deemed to present
Compact in June 2011, and is working a high risk. We also confirmed that 94% (volume ratio) of
to adhere to the 10 Principles in the procured timber was low risk. We conduct this survey
four areas of human rights, labor, environment, and anti- annually with the cooperation of suppliers under the aim of
corruption. As a member of the Global Compact Network realizing a 100% rate of low-risk timber procurement.
Japan, we also actively participate in subcommittees. Furthermore, we are increasing our use of certified
timber produced from sustainable forests. Under the new
Examples of Specific Initiatives medium-term management plan, we have set the objective
Efforts to Combat Climate Change of achieving 50% certified timber use through the three
We have been pursuing a broad range of efforts to reduce years leading up to fiscal 2022, and we are actively pro-
our greenhouse gas (GHG) emissions. These have included ceeding with the procurement of such timber. Additionally,
optimizing production methods and equipment configura- if we convert our forecast for timber purchases during fiscal
tion, thoroughly controlling energy use, building energy- 2020, we expect that certified timber will account for at
efficient equipment and co-generation systems, and least 29% (volume ratio) of timber purchases for the year.
introducing fuel-changing initiatives and renewable energy. In fiscal 2016, we began efforts to conserve seeds and
In addition, we have established medium- to long-term realize sustainable procurement of African Blackwood, a
targets for fiscal 2031 of reducing scope 1 + 2*1 emissions type of wood for which the resource volume has been
by 32% and reducing scope 3*2 emissions by 30% com- decreasing. These efforts are being promoted in collabora-
pared with fiscal 2018 levels. In June 2019, these targets tion with the United Republic of Tanzania, which is where
were verified and approved by the Science Based Targets we procure African Blackwood from. With the aim of con-
(SBT) Initiative,*3 an international environmental organiza- structing a business model that can sustainably use this
tion. Furthermore, we have created an additional target for wood variety as a material for musical instruments, we are
fiscal 2051 of reducing scope 1 + 2 emissions by 83%. promoting on-the-ground surveys as a BOP (Base of
Also in June 2019, we expressed our support for the Task

Pyramid) cooperation business with the Japan International
Force on Climate-related Financial Disclosures (TCFD).*4 Cooperation Agency (JICA), an independent administrative
We control emission volumes in accordance with the institution. Also, from fiscal 2018, we have been cooperat-
GHG Protocol, a standard for the calculation and reporting ing with local NGOs and local community members to
of GHG. Additionally, scope 1, 2, and 3 emissions have begin tree planting activities for African Blackwood with the
been receiving third-party verification since fiscal 2017. goal of securing a resource volume for the future.
*1. D
irect emissions from fuel use, etc., at Company facilities; Scope 2: Indirect emis-
sions from the generation of purchased energy, such as electric, steam, etc.
*2. All indirect emissions that occur in the value chain of the Company (not included
in scope 1 and scope 2), including both upstream and downstream emissions (e.g.
raw materials, parts procurement, transportation, product usage, etc.)
*3. The SBT Initiative promotes the setting of science-based targets for reducing
greenhouse gas emissions in order to achieve the targets of the Paris Agreement, On-site investigation of supplier
and also assesses and approves such targets.
*4. The TCFD was established by the Financial Stability Board (FSB), whose members
consist of central bank governors and finance ministers of major countries. By
assessing and disclosing information about the financial impact of risks and oppor-
tunities related to climate change, the TCFD provides advice with the aim of encour-
aging appropriate investment decision-making by investors.

SUSTAINABILITY
Sustainability Priorities and Progress

Classification under the
Sustainability
Major initiatives new medium-term manage- Fiscal 2019 progress and results
priorities
ment plan, Make Waves 1.0
Music Culture and Education

• Released new digital materials to support music education (chorus and recorder lessons)
Universal Design
• Released new multilingual simultaneous interpretation guide feature for SoundUD™, and
Response to launched a subtitle support project for those with visual or hearing impairment
Culture / Society
societal issues Health / Safety Solutions
Development of • Began supplying market with in-vehicle communication modules for emergency call systems
products and services Workplace
with a focus on social / • Launched trial shared office project utilizing soundproof rooms and conference systems
environmental issues
• Certified 53 models of Yamaha Eco-Products (379 models total, 18% of sales)
• Developed a thermoelectric power generation module which can utilize waste heat, and built a
Response to production system for it
environmental Environment
issues
• Provided a total of 260,000 students from 1,300 schools in five countries in Southeast Asia and
elsewhere with the opportunity to play musical instruments
Spread instrumental
• Provided approximately 5,100 students from 63 schools in six countries in Africa and the Middle
music education to
East with the opportunity to play musical instruments
schools
• Donated musical instruments and provided education support to five migrant worker schools in
Development of regional five cities in China (total of 55 schools)
community-based
Culture / Society • Held musical instrument maintenance seminars for seven organizations in three countries in
business and social
Support for youth Latin America (total of 29 organizations in five countries)
contribution activities
development • Established training program for repair technicians and held seminars in three countries in Latin
orchestra / band America; produced a total of 19 certified repair technicians
• Worked with the Reconstruction Agency as part of a project to build communities through music
Community support
(Oto-Machi)
• Established reduction targets (SBTs) based on scientific knowledge
Reduction of • Implemented energy reduction measures, such as actively introducing energy-saving equipment
greenhouse gas and improving facility operations
Lowering of emissions during • Conducted third-party greenhouse gas emission verification
greenhouse gas business activities Environment
emissions
Response to • Formulated BCP in preparation for natural disasters, etc.

climate change
Avoid use of illegally • Improved timber due diligence (DD) system
lumbered timber; • Conducted DD (including on-site inspections) on all timber purchased and judged 94% of
promote use of purchases as low risk
Sustainable certified timber • Improved ratio of certified timber (29% of all purchased timber)
procurement Promote the procure- Environment • Conducted surveys to produce high-quality timber from African blackwood in Tanzania, and
of timber ment of timber with launched a tree-planting pilot project
an awareness of • Entered into an agreement to conduct comprehensive joint research with academia (Kyoto
cycle-based forest University)
conservation
• Implemented returnable packaging materials and reduced size of materials
Packing and
packaging material
Promotion of 3R
Environment
in products • Promoted the reuse of products (piano renewal business)
Products • Introduced system for replacing electric organ units (to upgrade to more advanced / newer models)
• Implemented recycling of electric organs that were traded in (some models)
• Added human rights management items to Yamaha Group Policies and Rules and related
Develop system / guidelines
structure • Held compliance seminars themed on preventing harassment
Systematic initiatives
for the respect of Society
human rights • Enhanced supplier CSR assessment system
Promotion of supply • Conducted assessments when beginning transactions (104 companies)
chain management • Held seminars for procurement personnel and suppliers
Global human resources • Established Yamaha Group standards on grading and development, and conducted trials
management
• Expanded work-life balance support system (established measures to provide more flexible
Promotion of the active
working conditions, etc.)
role of female workers,
Promotion of diversity • Promoted the female manager development program
response to diverse
and human resources Society • Increased ratio of female managers within Yamaha Group to 14.9% (worldwide total)
workstyles
development
• Implemented internal study sessions for HR personnel, etc. (two sessions with a total of 90
LGBT awareness and
participants)
efforts to promote
respect and support

SUSTAINABILITY
Future issues and targets Related SDGs
Music Culture and Education

• Propose comprehensive music education solutions
• Expand range of electronic musical instruments equipped with functions required by local music cultures
Universal Design
• Expand range of electronic musical instruments equipped with voice readout functionality
Health and Safety Solutions
• Expand sales and use of in-vehicle communication modules
Workplace
• Propose acoustic environment solutions for workplaces (make use of speech privacy systems to keep
information private during conversations)
• Yamaha Eco-Products certification: 40 models / year
• Introduce waste heat power generation module into the automotive market
• Develop non-organic solvent coating technology
• Develop sustainable materials capable of replacing rare timber
• Provide opportunities to play musical instruments to a total of 1 million students from 3,000 schools in
seven countries in Southeast Asia and other locations
• Provide opportunities to study musical instruments to approximately 8,300 students from 75 schools in
seven countries in Africa and the Middle East
• Donate musical instruments to migrant worker schools in China (support 18 schools in three years)
• Continue to provide musical instrument maintenance seminars and repair technician training in five
countries in Latin America, and expand efforts to new areas and organizations
• Provide support to additional countries in Latin America (two countries in three years)
• Support the spread of wind instrument bands and orchestras best suited to each country and region
around the world
• Provide additional types of support within the Oto-Machi project (ten new projects in three years)
• Promote reduction efforts toward achieving targets*certified by SBT

*Scope 1, 2: fiscal 2031 –32% (fiscal 2051 –83%)
Scope 3: fiscal 2031 –30%
(all figures compared with fiscal 2018)
• Gradually expand the ratio of renewable energy used (fiscal 2022 target 3%)
• Continue to conduct third-party greenhouse gas emission verification
• Analyze and disclose financial effect of climate change according to proposal by TCFD
• Improve DD (improve inspection accuracy) and accomplish 100% of purchases as low risk
• Expand ratio of certified timber (fiscal 2022 target 50%)
• Develop musical instruments that use timber with a lower risk (such as for the cabinet material

of pianos)
• Provide technical support to produce high-quality timber from African blackwood, promote the tree-
planting project, and begin procurement
• Promote joint research with academia (such as Kyoto University) to develop forest resources and opti-
mize usage efficiency
• Promote streamlining of packaging (introduce packaging / cushioning material with a low environmental
burden, and step up efforts to reduce size)
• Implement measures for shopping bags and other single-use packing materials (stop using plastic, etc.)
• Formulate long-term vision and promotion plan for product 3R

• Enhance services to allow customers to continue to use the musical instruments they cherish (piano
retrofitting, etc.)
• Establish human rights monitoring systems

• Conduct internal training and promote awareness of human rights
• Conduct simultaneous surveys on supplier CSR assessments (every three years)

• Conduct assessments when beginning transactions
• Hold seminars for procurement personnel and suppliers
• Promote HR management based on the Yamaha Group standards grading and development system
• Expand work-life balance support system (open on-site childcare facility, establish measures such as
telecommuting to provide more flexible working conditions, etc.)
• Consider measures to develop female employees for the Yamaha Group, and implement program to
support staff taking temporary childcare leave
• Improve ratio of female managers, target of 17% throughout Yamaha Group at fiscal 2022
• Establish internal systems (establish help desk, improve systems, etc.)
• Hold internal lectures to promote understanding / hold study sessions in industry organizations
• Promote understanding in workplaces through such means as distributing Yamaha LGBT Ally logo
stickers and creating an LGBT handbook

SPECIAL FEATURE
School Project
Spreading the joy of playing

musical instruments
to children around the world
AMIGO Project
Pictures provided by SINEM
Supporting the activities

of orchestras and bands
to encourage youth development
Contributing to Societies through

Our Business Activities
Under its new medium-term management plan, the Yamaha Group has established the basic strat-
egy of “develop closer ties with customers and society, and boost value creation capabilities.”
In addition, the Group has adopted “contribute to society through our businesses” as one of the
new medium-term management plan’s key strategies. In each of our businesses and with each of
our corporate functions, we are implementing initiatives that lead to social value creation. Through
these initiatives, we are working to improve corporate value over the medium to long term.
In this special feature, we introduce specific examples of activities that contribute to the
sustainable development of music culture and society as a whole.
01 Contribute to Sustainability of Music Culture
02 Resolve Social Issues through Products and Services

SPECIAL FEATURE
01 Contribute to Sustainability of Music Culture

School Project
Spreading the Joy of Playing Musical Instruments to Children

around the World
Relevant SDGs
Support for Music Education at Schools Structure of the Music Time Program
Since 2015, we have been promoting the School Project, Collaboration
Ministries of education
which aims to introduce and support music education
within school activities, based on our desire to allow as Dispatched
Implementation
many children as possible to experience the joy of musical instructors
Provision of
instruments. musical
instruments and Training for school teachers
Music education programs teaching children how to educational
materials
play instruments have been adopted on a large scale in
Participation
schools worldwide in light of their educational effective-
ness. However, due to a lack of equipment and instructors,
as well as curriculum issues, musical instrument education Public elementary schools
is not provided, or is of insufficient quality, in music classes

in some countries. To address this situation, we are con- Instruction
ducting activities to spread musical instrument education in School teacher Children
schools primarily in emerging countries with the aim of pro-
viding the opportunity to play musical instruments to an
even greater number of children and communicating to instrument education. School teachers who have gone

them the joy of music and musical instruments. through Yamaha training teach classes using instruments
The School Project centers on the Music Time Program, and class materials specially developed for the Music Time
which provides musical instruments, educational materials, Program. Through this program, we provide opportunities for
and instructional know-how to primary schools in a packaged children to gain firsthand experiences with musical instru-
format. The Music Time Program helps support the creation ments, such as portable keyboards, guitars, and recorders
of environments where children can experience musical among others, in their music classes at school.
Recorder lesson at a Vietnamese school Keyboard lesson at a Malaysian school

SPECIAL FEATURE
Aiming to Contribute to the Spread of Musical Track Record in Promoting the School Project (As of March 31, 2019)
Instrument Lessons and the Development of
Music Education Russia
Currently, we are promoting the School Project in Indonesia,
Malaysia, Vietnam, India, and Russia, providing opportuni-
ties to experience musical instrument education to approxi-
mately 260,000 children (as of March 31, 2019).
In addition, in developing the School Project and its Music India 1,300 schools
Five countries:
Time Program, we engaged in joint collaboration with the Vietnam Total of 260,000 children
Faculty of Education at Yokohama National University, academ-
ically verifying the educational value of musical instrument
education and the impact it has on children. Through this Malaysia
research, we have been working to promote even higher qual-
Indonesia
ity music education programs in countries around the world.
In these ways, we are promoting the joy of music to chil-
dren around the world through musical instrument education.
Target under the new medium-term management plan (by March 31, 2022)
Not only does this effort help support the growth of children,
it also contributes to the development of music education and Seven countries: 3,000 schools / 1 million children
music culture in each country. We believe that such an effort (cumulative total)
represents our mission as a musical instruments manufacturer.
02 Resolve Social Issues through Products and Services

AMIGO Project
Supporting the Activities of Orchestras and Bands to

Encourage Youth Development
Relevant SDGs
Providing Support through Music in a Way That Is Following the development in orchestra and band activi-
Unique to Yamaha ties that encourage youth development, there has been an
In the countries of Latin America, crime, poverty, and social influx of musical instruments from manufacturers around the
inequality have become serious social problems. Children world, leading to rapid growth in musical instrument markets.
raised in these environments are often dragged into the However, daily maintenance is often not performed on
world of crime, delinquency, and violence. In order to pre- these instruments due to lack of proper maintenance knowl-
vent this from happening and foster a healthy mental atti- edge and a shortage of repair technicians. This has brought
tude among youth, the governments of these countries are about a situation where instruments cannot be repaired when
promoting free music education activities, with public and they break, resulting in an increase of instruments in poor
private institutions forming orchestras and bands in various condition within youth orchestras and bands. In some in-
regions. The Yamaha Group endorses these kinds of activi- stances, the activities of these organizations have come to
ties and has been providing support for them over many a halt because of the dwindling number of usable instruments.
years. In fiscal 2015, we commenced the AMIGO* Project To ensure that musical instruments can be used in good
in an effort to continue to provide unique support through condition for many years, there is a need to train technicians
music education that helps a greater number of children that perform daily maintenance on musical instruments and
lead healthy lives. repair them when they break. By holding maintenance work-
* AMIGO is an acronym for Apoyo (support), Music, Institute/Government, and Orchestra shops and seminars for training technicians, we are focus-
ing our efforts on spreading proper maintenance knowledge
and cultivating technicians who can perform repairs.

SPECIAL FEATURE
Youth orchestra and band organization Technician cultivation seminar Maintenance workshop Pictures provided by SINEM
AMIGO Project Maintenance Workshops
Customer issues Yamaha

Instruments break easily / No one nearby who can repair broken instruments
Yamaha’s local Utilization Maintenance
subsidiaries and dealers guidebook
Spread of maintenance
Cultivation of technicians Proposal of dramatic Activities of youth orchestras and bands
who can handle broken measures to resolve
knowledge
instruments issues
Workshops for instructors
Development of new
Implementation of Holding of technician musical instruments
maintenance workshops seminars (Extremely durable with
long lifespans)
Support for activities
Transmission of maintenance methods from instructors to children
Youth orchestras
and bands
basis helps extend the lifespan of their instruments and

Expanding music-playing population fosters a mindset of treating these instruments with care.
Supporting the Cultivation of Repair Technicians

Countries where Support is Offered (As of March 31, 2019)
In Latin American countries, there is a shortage of technicians
who have proper knowledge on musical instrument mainte-
nance and can perform repairs. We therefore have been work-

Mexico
Costa Rica
Panama ing to establish a system in Latin America for the cultivation
Colombia
of technicians to ensure that children can enjoy music in an
AMIGO Project offered in even better environment and to improve music culture in
five Latin American countries Brazil
the region.
For the training of repair technicians, we gather together
employees selected from our local subsidiaries and dealers
who will become key repair technicians in their respective
countries. These future technicians then participate in semi-
Targets of the New Medium-Term Management Plan (For March 31, 2022)
nars where they gain repair know-how and learn repair tech-
niques. These key technicians then use manuals explaining
Expand the scale of the program in countries where it is
already offered and increase the number of countries where the knowledge, techniques, and repair methods that they
we provide support to seven
countries have learned through these seminars in order to train other
local technician candidates in their respective countries.
Through this cultivation system, not only do we train highly
Holding Maintenance Workshops skilled repair technicians, we also create local employment
Our staff members from local subsidiaries and dealers hold opportunities.
workshops for instructors of youth orchestra and band orga- Meanwhile, as a more dramatic measure to address the
nizations. At the workshops, these staff members use issue of technician shortages, we are actively pursuing the
maintenance guidebooks created by Yamaha to teach local development of musical instruments that are extremely
instructors methods for instrument maintenance. These durable and easy to maintain.
instructors then pass on these methods to the children they Going forward, we will continue to support youth devel-
teach. Having instructors teach these methods enables us opment, thereby conveying the joy of music to an even
to efficiently pass on instrument maintenance know-how to greater number of people and contributing to the develop-
an even larger number of children. For children, learning ment of music culture in the region.
how to handle and maintain musical instruments on a daily

CORPORATE GOVERNANCE
Directors (As of June 25, 2019)
Takuya Nakata Masatoshi Ito Yoshihiro Hidaka

Director, President and Representative Independent Outside Director Independent Outside Director
Executive Officer No. of shares owned: 0 No. of shares owned: 500
No. of shares owned: 45,500
1971 Joined Ajinomoto Co., Inc. 1987 Joined Yamaha Motor Co., Ltd.
1981 Joined the Company 1999 Member of the Board, Ajinomoto Co., Inc. 2010 Vice President of Yamaha Motor Corporation,
2005 General Manager of Pro Audio & Digital 2003 Representative Director, President, U.S.A.
Musical Instruments Division Ajinomoto Frozen Foods Co., Inc. 2013 Executive General Manager of 3rd Business
2006 Executive Officer 2006 Representative Director, Member of the Unit, MC Business Operations of
2009 Director and Executive Officer Board & Corporate Senior Vice President Yamaha Motor Co., Ltd.
2010 President and Director of President, Food Products Company, 2014 Executive Officer of Yamaha Motor Co., Ltd.
Yamaha Corporation of America Ajinomoto Co., Inc. 2015 Executive General Manager of 2nd Business
Senior Executive Officer of the Company 2009 Representative Director, President & Chief Unit, MC Business Operations of
2013 President and Representative Director Executive Officer, Ajinomoto Co., Inc. Yamaha Motor Co., Ltd.
2014 Director of Yamaha Motor Co., Ltd. 2015 Representative Director & Chairman of the 2016 Executive General Manager of 1st Business
(Outside Director) (to the present) Board, Ajinomoto Co., Inc. Unit, MC Business Operations, and
2015 President of Yamaha Music Foundation 2016 Outside Director of Yamaha Corporation General Manager of ASEAN Sales Division,
(to the present) (to the present) 1st Business Unit, MC Business
2017 Director, President and Representative Outside Director of Japan Airlines Co., Ltd. Operations of Yamaha Motor Co., Ltd.
Executive Officer (to the present) (to the present) 2017 Executive General Manager of Corporate
2019 Outside Director of NEC Corporation Planning & Finance Center of
(to the present) Yamaha Motor Co., Ltd.
Chairman of the Board of Ajinomoto Co., Inc. Senior Executive Officer and Director of
(to the present) Yamaha Motor Co., Ltd.
Satoshi Yamahata 2018 President, Chief Executive Officer, and
Director and Managing Executive Officer Representative Director of
No. of shares owned: 16,400 Yamaha Motor Co., Ltd. (to the present)
Outside Director of Yamaha Corporation
1988 Joined the Company Yoshimi Nakajima (to the present)
2009 General Manager of Accounting and Independent Outside Director
Finance Division No. of shares owned: 0
2013 Executive Officer and General Manager of
Corporate Planning Division 1980 Joined The Yasuda Trust and Banking Co., Ltd.
(currently Mizuho Trust & Banking Co., Ltd.) Mikio Fujitsuka
2015 Executive General Manager of Operations Unit
(to the present) 1982 Joined AVON Products Co., Ltd. Independent Outside Director
Director and Senior Executive Officer 1997 Joined Citibank N.A. as Vice President No. of shares owned: 0
2016 Executive General Manager of Corporate 2000 Joined Societe Generale Securities Japan
Limited as Senior General Manager 1977 Joined Komatsu Ltd.
Management Unit (to the present)
2002 Joined American Express International, Inc. 2001 General Manager, Corporate Controlling
2017 Director and Managing Executive Officer
as Vice President and Head of Global Travelers Department, Komatsu Ltd.
(to the present)
Cheques and Prepaid Services, Japan 2005 Executive Officer
2011 Country Manager, Singapore (President), 2008 President of Global Retail Finance Business
American Express International, Inc. Division
2014 President and Representative Director of 2009 General Manager, Corporate Planning Division
American Express Japan Co., Ltd. and President of Global Retail Finance
(retired in December 2016) Business Division
2017 Outside Director of Yamaha Corporation 2010 Senior Executive Officer
(to the present) 2011 CFO, Director and Senior Executive Officer
Outside Director of AEON Financial Service 2013 Director and Senior Executive Officer
Co., Ltd. (to the present) 2016 Executive Vice President and
2018 Outside Director of Japan Freight Railway Representative Director
Company (to the present) 2019 Director (retired in June 2019)
Outside Director of ULVAC, Inc. Outside Director of Yamaha Corporation
(to the present) (to the present)
Outside Corporate Auditor of
Mitsui Chemicals, Inc. (to the present)
Taku Fukui
Independent Outside Director
No. of shares owned: 0 Paul Candland
1987 Registered as an attorney Independent Outside Director
Joined Kashiwagi Sogo Law Offices No. of shares owned: 0
2004 Professor of Keio University Law School 1985 Joined Owens Corning
(to the present)
1987 Joined PepsiCo, Inc.
2005 Outside Audit & Supervisory Board Member of
1994 President of Okinawa Pepsi-Cola, Inc.
Shin-Etsu Chemical Co., Ltd. (to the present)
1998 Representative of Japan Branch,
2009 Managing Partner of Kashiwagi Sogo Law
PepsiCo International Ltd.
Offices (to the present)
Representative Director and General Manager
2017 Outside Director of Yamaha Corporation
of The Disney Store Japan, Inc.
(to the present)
2002 Managing Director, Walt Disney
Television International Japan of
The Walt Disney Company (Japan) Ltd.
2007 Representative Director and President,
The Walt Disney Company (Japan) Ltd.
(retired in December 2017)
2014 President of The Walt Disney Company, Asia
(retired in December 2017)
2018 Managing Director of PMC Partners Co., Ltd.
(to the present)
2019 Outside Director of Yamaha Corporation
(to the present)
コーポレートガバナンス
From the left: Mikio Fujitsuka, Yoshihiro Hidaka, Satoshi Yamahata, Taku Fukui, Yoshimi Nakajima, Paul Candland, Takuya Nakata, Masatoshi Ito

Reasons for Director Appointment
Appointed
Name Reasons for Appointment / Independence of Outside Directors
Committee
Having served in positions such as General Manager of our Pro Audio & Digital Musical Instruments Division and President and Director
of Yamaha Corporation of America, Mr. Takuya Nakata has a wealth of experience and achievements alongside broad insight in business.
Director, President and Nominating
He has led the Group as President and Representative Director since June 2013, and as Director, President and Representative Executive
Representative Committee
Officer since June 2017 after our transition to a Company with Three Committees (Nominating, Audit, and Compensation). Additionally, he
Executive Officer has been a leader in Corporate Governance reform via initiatives such as the transition to a Company with Three Committees (Nominating,
Compensation
Audit, and Compensation) corporate structure, and has worked to strengthen the oversight function of the Board of Directors. He has
Takuya Nakata Committee
been appointed as a director on the expectation that he will help further strengthen the oversight function of the Board of Directors
through these achievements and insights.
In addition to work experience at an overseas subsidiary, Mr. Satoshi Yamahata has served as General Manager of the Accounting and
Finance Division, General Manager of the Corporate Planning Division, Executive General Manager of the Operations Unit, and Executive
Director and Managing
General Manager of the Corporate Management Unit, and has a wealth of experience and achievements alongside broad insight. He has
Executive Officer — promoted Corporate Governance reform as Director and Senior Executive Officer since June 2015 and as Director and Managing
Executive Officer since June 2017, and has worked to strengthen the oversight function of the Board of Directors. He has been
Satoshi Yamahata appointed as a director on the expectation that he will help further strengthen the oversight function of the Board of Directors
through these achievements and insights.
Having been involved in management as Chief Executive Officer at one of the largest global food manufacturers in Japan, Mr. Masatoshi
Ito has a wealth of experience and achievements alongside broad insight as a corporate manager. Since assuming the position of Outside
Director of the Company in June 2016, he has provided highly effective supervision while supporting the determination of major corporate
Nominating
Independent Outside actions and quick and decisive execution on decision-making, based on his wealth of achievements and insights, etc., as a corporate man-
Committee
Director ager. He has been appointed as a director on the expectation that he will help further strengthen the oversight function of the Board of
Directors through these achievements and insights.
Compensation
Masatoshi Ito Committee
There are no transaction relationships between the Company and Ajinomoto Co., Inc., where Mr. Masatoshi Ito serves as Chairman of
the Board, and neither party is classified as a major shareholder of the other.
The Company files documentation with the Tokyo Stock Exchange to establish that Mr. Masatoshi Ito is an independent director under
the provisions set forth by the Tokyo Stock Exchange.
Having been involved in management as the person responsible for the Asian region and Japanese firm of a global financial institution,
Ms. Yoshimi Nakajima has a wealth of experience and achievements alongside broad insight as a corporate manager. Since assuming the
Independent Outside position of Outside Director of the Company in June 2017, she has provided highly effective supervision while supporting the determina-
Director Audit tion of major corporate actions and quick and decisive execution on decision-making, based on her wealth of achievements and insights,
Committee etc., as a corporate manager. She has been appointed as a director on the expectation that she will help further strengthen the oversight
Yoshimi Nakajima function of the Board of Directors through these achievements and insights.
The Company files documentation with the Tokyo Stock Exchange to establish that Ms. Yoshimi Nakajima is an independent director
under the provisions set forth by the Tokyo Stock Exchange.
With a mastery of corporate law and corporate governance in Japan and overseas as an attorney, Mr. Taku Fukui has a high degree of
expertise, wealth of experience, and achievements alongside broad insight. Since assuming the position of Outside Director of the
Company in June 2017, he has provided highly effective supervision while supporting the determination of major corporate actions and
Independent Outside quick and decisive execution on decision-making, based on his high degree of expertise, wealth of achievements and insights, etc. He has
Director Audit been appointed as a director on the expectation that he will help further strengthen the oversight function of the Board of Directors
Committee through these achievements and insights.
Taku Fukui There are no transaction relationships between the Company and Kashiwagi Sogo Law Offices, where Mr. Taku Fukui serves as
Managing Partner.
The Company files documentation with the Tokyo Stock Exchange to establish that Mr. Taku Fukui is an independent director under the
provisions set forth by the Tokyo Stock Exchange.
Having been involved in management at one of the largest global transportation equipment manufacturers in Japan, Mr. Yoshihiro Hidaka
has a wealth of experience and achievements alongside broad insight as a corporate manager. Additionally, as President and
Representative Director of Yamaha Motor Co., Ltd., a company that shares a common brand with the Company, he is a person with one
of the deepest understandings of the Yamaha brand. Since assuming the position of Outside Director of the Company in June 2018, he
has provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution
on decision-making, based on his wealth of achievements and insights, etc., as a corporate manager. He has been appointed as a director
on the expectation that he will help further strengthen the oversight function of the Board of Directors through these achievements and
insights, etc., and improve the Yamaha brand value.
As the Company and Yamaha Motor Co., Ltd., where Mr. Yoshihiro Hidaka serves as President and Representative Director, share the
Nominating
Independent Outside Yamaha brand, the two companies are in a relationship such that enhancements to the brand value via the Company’s sustainable growth
Committee
Director also provides a positive effect on said company’s corporate value, while damage to the brand due to violations of laws and regulations or
deficient governance, etc., by the Company will have a negative effect on said company’s corporate value. Mr. Yoshihiro Hidaka is a person
Compensation
Yoshihiro Hidaka Committee
with one of the deepest understandings of the Yamaha brand, which is the source of the Company’s brand value, and he shares an inter-
est with ordinary shareholders regarding improvement of the Company’s brand value. Furthermore, not only there are no significant trans-
action relationships* between the Company and Yamaha Motor Co., Ltd., but as the Company is no longer a major shareholder of said
company since 2017, there are no concerns that Mr. Yoshihiro Hidaka will have conflicts of interest with ordinary shareholders, and the
Company believes that he can fulfill his duty for supervision, etc., of management from an independent standpoint in order to maximize
profits for shareholders of the Company.
The Company filed documentation with the Tokyo Stock Exchange to register him as an independent director under the provisions set
forth by the Tokyo Stock Exchange.
* The amount of transactions between the Company and Yamaha Motor Co., Ltd. is less than 0.1% of consolidated net sales of both
companies.
Having been involved in management as CFO at one of the largest global construction machinery manufacturers in Japan, Mr. Mikio
Fujitsuka has a wealth of experience and achievements alongside broad insight as a corporate manager, as well as adequate knowledge
Independent Outside of finance and accounting. He has been appointed as a director on the expectation that he will help strengthen the oversight function of
Director Audit the Board of Directors through these achievements and insights.
Committee There are no transaction relationships between the Company and Komatsu Ltd., where Mr. Mikio Fujitsuka served as Director until June
Mikio Fujitsuka 2019, and neither party is classified as a major shareholder of the other.
Having been involved in management as the person responsible for the Asian region and Japanese firm of a global entertainment com-
pany, Mr. Paul Candland has a wealth of experience and achievements alongside broad insight as a manager. He has been appointed as a
director on the expectation that he will help strengthen the oversight function of the Board of Directors through these achievements and
insights.
Nominating
Independent Outside There are no transaction relationships between the Company and PMC Partners Co., Ltd., where Mr. Paul Candland serves as
Committee
Director Managing Director, and neither party is classified as a major shareholder of the other. Furthermore, there are no significant transaction
relationships* between the Company and The Walt Disney Company (Japan) Ltd., where Mr. Paul Candland served until December 2017,
Compensation
Paul Candland Committee
and neither party is classified as a major shareholder of the other.
* The amount of transactions between the Company and The Walt Disney Company and The Walt Disney Company (Japan) Ltd. is less
than 0.1% of consolidated net sales of any of the companies.

Executive Officers and Operating Officers (As of June 25, 2019)
President and Representative Executive Officer Takashi Dairokuno

Takuya Nakata In charge of internal audits
Executive General Manager of Brand Development Unit
1982 Joined the Company
Please refer to page 74 for career summary 2002 Director and President of Yamaha Electronique Alsace S.A.
2005 General Manager of Planning and Management Department of the Pro
Audio & Digital Musical Instruments Division
2011 General Manager of Human Resources Division
Managing Executive Officers 2012 General Manager of Human Resources & General Administration Division
2014 General Manager of Internal Auditing Division
Shinobu Kawase 2015 Full-Time Corporate Auditor
Executive General Manager of Musical Instruments & Audio Products 2017 Executive Officer* (to the present)
Production Unit
Teruhiko Tsurumi
1983 Joined the Company Executive General Manager of Musical Instruments Business Unit
2004 President of Yamaha Fine Technologies Co., Ltd.
2011 General Manager of Wind, String & Percussion Instruments Division 1981 Joined the Company
2013 General Manager of Acoustic Musical Instruments Production Division, 2007 General Manager of AV Products Business Unit
Musical Instruments & Audio Products Production Unit 2008 Representative Director and President of Yamaha Electronics
2014 Executive Officer Marketing Co., Ltd.
2015 Senior Executive Officer 2010 Director and President of PT. Yamaha Musik Indonesia (Distributor)
Executive General Manager of Musical Instruments & Audio Products 2014 Chairman and President of Yamaha Music & Electronics (China) Co., Ltd.
Production Unit (to the present) Executive Officer of Yamaha Corporation
2016 Managing Executive Officer 2019 Executive Officer* (to the present)
2017 Managing Executive Officer* (to the present) Executive General Manager of Musical Instruments Business Unit
(to the present)
Satoshi Yamahata
Executive General Manager of Corporate Management Unit and
Operations Unit
Please refer to page 74 for career summary Operating Officers

Kimiyasu Ito
Deputy Executive General Manager of Musical Instruments
Executive Officers Business Unit
Shigeki Fujii Masato Takai

Executive General Manager of IMC Business Unit and Technology Unit Executive General Manager of Human Resources and
General Administration Unit
2005 General Manager of Advanced System Division Center Shinichi Takenaga
2009 General Manager of Semiconductor Division President and Director of PT. Yamaha Musik Indonesia (Distributor)
2013 Executive Officer
Executive General Manager of IMC Business Unit (to the present) Masato Oshiki
2015 Senior Executive Officer
President of Yamaha Music Japan Co., Ltd.

2017 Executive Officer* (to the present)
2018 Executive General Manager of Technology Unit (to the present)
Takashi Haga
President of Yamaha Music India Pvt. Ltd.
Akira Iizuka
Executive General Manager of Audio Products Business Unit Koichi Morita
Senior General Manager of Research and Development Division,
2005 General Manager of Pro Audio & Digital Musical Instruments Division Technology Unit
2007 General Manager of INFO-Sound Division
2009 Executive Officer Thomas Sumner
2013 General Manager of Research & Development Division, President of Yamaha Corporation of America
Musical Instruments & Audio Products Development Unit
2015 Executive General Manager of Technology Unit Naoya Tetsumura
2016 Senior Executive Officer
2017 Executive Officer* (to the present) Senior General Manager of Manufacturing Process Division, Musical
2018 Executive General Manager of Audio Products Business Unit Instruments & Audio Products Production Unit
(to the present)
Taro Tokuhiro
Seiichi Yamaguchi Senior General Manager of Corporate Planning Division of Corporate
Executive General Manager of Musical Instruments & Audio Products Management Unit & Senior General Manager of Information Systems
Sales Unit Division, Operations Unit
1985 Joined the Company Hiroko Ohmura

2006 Director and President of Yamaha Scandinavia AB
Senior General Manager of Marketing Division, Brand Development Unit
2010 Chairman and President of Yamaha Music & Electronics (China) Co., Ltd.
2013 Executive Officer
2014 General Manager of Business Planning Division, Musical Instruments &
Audio Products Sales & Marketing Unit
2015 Executive General Manager of Service Business Unit * The role of Executive Officer has changed from June 2017 following the transition
2016 Senior Executive Officer to a Company with Three Committees (Nominating, Audit, and Compensation)
2017 Executive General Manager of Musical Instruments & Audio Products Sales
Unit (to the present)
Executive Officer* (to the present)

Corporate Governance
Basic Policies for Corporate Governance • Ensure that information is disclosed appropriately and that
The Yamaha Group has adopted the Yamaha Philosophy and management is transparent
the Promises to Stakeholders, which apply to shareholders • By separating the oversight and executive functions and
and all other related parties. We are working to secure a high strengthening the oversight function, ensure that the Board
level of profitability based on global competitiveness and of Directors is highly effective while at the same time exe-
increased management efficiency, and we are also striving to cuting decisions appropriately and with a sense of urgency
fulfill our social responsibilities in such areas as compliance, • Proactively engage in dialogue with shareholders
the environment, safety, and social contributions. In these
ways, we are working to realize sustainable growth and to Corporate Governance Structure
improve corporate value over the medium to long term. In June 2017, Yamaha transitioned to a Company with Three
To that end, in accordance with our Basic Policies for Committees (Nominating, Audit, and Compensation) structure
Corporate Governance, we have established institutional for the purpose of further clarifying the separation of man-
designs for management—in addition to an organizational agement oversight and business execution functions, in addi-
structure and systems—and we are implementing a range of tion to strengthening the oversight functions of the Board of
initiatives and appropriate disclosure of information. In these Directors while aiming to accelerate business execution.
ways, we are working to realize transparent, high-quality busi- Regarding the composition of the Board of Directors,
ness management. Yamaha enhances the transparency and objectivity of oversight
functions by having independent outside directors, including
Basic Policies for Corporate Governance managers from other industries who come from various pro-
• From a shareholder’s perspective, ensure the rights and fessional backgrounds, comprise three-fourths of the total (six
equal treatment of shareholders of eight board members). Yamaha has also established the
• Taking into consideration our relationships with all stake- Nominating Committee, on which independent outside direc-
holders, proactively fulfill the Company’s social tors must form a majority, as well as the Audit Committee and
responsibilities the Compensation Committee. The Audit Committee conducts
Corporate Governance Structure (as of June 25, 2019)

General Shareholders’ Meeting
Appointment / dismissal Appointment / dismissal
Board of Directors 8 persons

Outside Directors Inside Directors
6 persons 2 persons
Nominating Committee Compensation Committee Audit Committee Report

4 persons 4 persons 3 persons Accounting
Auditor
Outside Directors Inside Director Outside Directors Inside Director Outside Directors
3 persons 1 person 3 persons 1 person 3 persons • Decision of appointment
proposal
• Judgments of accounting
Accounting audit
audit authenticity
Audit Committee’s Office Audit
Appointment / dismissal / oversight Report Appointment / Instruction Report

Managing Council dismissal / oversight
Request for advice Instruction

Risk Management President, Representative
Executive Officer Internal Auditing Division
Committee
Report 1 person Report
Corporate Committees Executive Officers

8 persons
Internal audit
Operating Officers
10 persons
Individual Business Divisions, Administrative Divisions
Domestic Group Companies Overseas Group Companies
Oversight Function Executive Function Accounting / Internal Audit Function Outside Director Inside Director

Specializations Held by Directors

Corporate Legal and risk Finance and IT and digital Manufacturing, Marketing
Name Global experience
management management accounting technology technology and R&D and sales
Takuya Nakata
Satoshi Yamahata
Masatoshi Ito (Outside)
Yoshimi Nakajima (Outside)
Taku Fukui (Outside)
Yoshihiro Hidaka (Outside)
Mikio Fujitsuka (Outside)
Paul Candland (Outside)
suitability audits and compliance audits while collaborating Yamaha’s Standards for Independence
with the Internal Auditing Division with the objective of In addition to the requirements for independence established
enhancing oversight functions through audits. by the Companies Act and the Tokyo Stock Exchange, the
Yamaha has established the executive officer role as an Company has established its own independence standards.
official function under the Companies Act to bear the direct
For further information about the independence standards, please refer to the
responsibility for shareholders. Executive officers have been Corporate Governance Report.
delegated broad authorities by the Board of Directors to
https://www.yamaha.com/en/ir/governance/pdf/governance_report.pdf
make important decisions pertaining to business execution,
with the aim of accelerating business execution.
Nominating Committee
Oversight Function The Nominating Committee decides on the content of pro-
Directors and Board of Directors posals regarding the appointment and dismissal of directors,
As a general rule, the Board meeting is held monthly. Based which are submitted at the General Shareholders’ Meeting.
on its fiduciary responsibilities, the Board of Directors pro- The committee also determines the content of proposals for
motes the Group’s sustainable growth and corporate value the appointment and dismissal of executive officers and oper-
improvement over the medium to long term. The Board of ating officers, which are submitted to the Board of Directors.
Directors also oversees the performance of the executive The Nominating Committee also implements the succession
officers and directors. At the same time, the Board deter- plan for the representative executive officer and other officers
mines important matters—such as basic management through the development of human resources to serve as
policies—required by laws and ordinances, the articles of directors, executive officers, and operating officers.
incorporation, and the rules of the Board of Directors. In addi-
tion, the Board of Directors supervises the overall manage-

Process and Standards for Selecting Officers, etc.
ment of the Company by overseeing the succession plan Regarding the selection of candidates for director positions, the
for the representative executive officer and other officers; Nominating Committee screens candidates for inside or outside
selecting the members and the chairs of the Nominating director positions based on the basic qualifications desirable for
Committee, Audit Committee, and Compensation the roles, in addition to personnel requirements, taking into
Committee; appointing executive officers and operating offi- account their competencies, experiences, and achievements.
cers; approving transactions with related parties; and super- The Nominating Committee also composes the nomination pro-
vising the structure and operation of internal control systems. posals submitted to the General Shareholders’ Meeting.
In light of its fiduciary responsibilities, the Board of Regarding the selection of members and heads of the
Directors works to realize sustainable growth for the Nominating, Audit, and Compensation committees, the
Company and improve corporate value over the medium to Nominating Committee screens candidates based on person-
long term while giving consideration to relationships with all nel requirements defined by the role of the committee, and it
of the Company’s stakeholders. The directors understand rel- decides the content of nomination proposals submitted to
evant laws and ordinances, the articles of incorporation, etc., the Board of Directors. The Nominating Committee elicits the
and take steps to gather sufficient information. On that basis, opinions of the Audit Committee before selecting candidates
the directors actively exchange opinions and engage in con- for members and the head of the Audit Committee.
structive discussions at meetings of the Board of Directors. The Nominating Committee screens candidates for execu-
In keeping with their independent status, the indepen- tive officer positions based on the basic qualifications desirable
dent outside directors perform a management oversight func- for the role, in addition to personnel requirements, taking into
tion, advisory function, and a conflict of interest oversight account their competencies, experiences, and achievements.
function. These directors also work to appropriately reflect The Nominating Committee also composes the nomination
the views of the stakeholders within the Board of Directors. proposals submitted to the Board of Directors.

Key Activities of Outside Directors (Fiscal 2019)

Name Board of Directors Nominating Committee Audit Committee Compensation Committee
No. of meetings held 12 times 5 times 16 times 4 times
Shigeru Nosaka*1 Number of attendances 12 times 5 times — 4 times
Attendance rate*2 100% 100% — 100%
Masatoshi Ito Number of attendances 10 times 5 times — 4 times
Attendance rate*2 83.33% 100% — 100%
Junya Hakoda*1 Number of attendances 12 times — 16 times —
Attendance rate*2 100% — 100% —
Yoshimi Nakajima Number of attendances 12 times — 16 times —
Taku Fukui Number of attendances 12 times — 16 times —
Yoshihiro Hidaka Number of attendances 10 times 4 times — 3 times
Attendance rate*2 100% 100% — 100%
*1. Retired at the end of their term as of the conclusion of the 195th Ordinary General Shareholders’ Meeting held on June 24, 2019
*2. The denominator for the attendance rate is the total number of meetings held during the period in which each person was in office
The Nominating Committee screens candidates for oper- Office has been established as a full-time organization under
ating officer positions based on personnel requirements the direct jurisdiction of the Audit Committee. The Audit
defined by the role they are expected to perform. The Committee instructs the head of the Audit Committee’s
Nominating Committee also composes the nomination pro- Office to attend important meetings to voice opinions, in
posals submitted to the Board of Directors. addition to gathering and assessing information within the
Company. To ensure the Audit Committee’s Office’s inde
Succession Plans for Representative Executive Officer and pendence from the executive officers and other people
Other Officers responsible for business execution, the approval of the Audit
After defining systems and personnel requirements, the Committee is required for personnel evaluations, personnel
Nominating Committee follows a personnel selection, evalua- reassignments, and disciplinary actions for the Audit
tion, and development process for determining successor Committee’s Office’s personnel.
candidates. When it deems necessary, the Audit Committee enlists
From an early stage, Yamaha ensures there is adequate the help of external experts to perform audits.
time and opportunities to carry out succession plans, by having The President and Representative Executive Officer pro-
the Nominating Committee advise on the screening of succes- motes continuous improvements in the maintenance and
sor candidates and conduct interviews for the appointment operation of internal control systems while periodically
of executive officers and candidates for executive officer exchanging opinions with the Audit Committee.
positions. Meanwhile, at a preliminary stage, the Human
Resources Development Committee maintains career devel Collaboration between the Accounting Auditor and the
opment programs (CDPs) for core personnel and sets ups Internal Auditing Division
venues for candidates to present their ideas to the Board of In regard to items necessary in auditing the conduct of duties
Directors and other entities. by the executive officers and directors, the Audit Committee
has secured a system that facilitates the implementation of
Audit Committee sufficient and appropriate audits, including collaboration and
The Audit Committee, either working in collaboration with the sharing information with the accounting auditor and the
Internal Auditing Division or directly on its own, audits the Internal Auditing Division. The Audit Committee works to
structure and operation of the internal control systems of the improve audit quality and to realize efficient audits. The Audit
Company and other Group companies. Based on the results Committee is allowed to provide instructions regarding audits
of these audits, the Audit Committee conducts audits to of the Internal Auditing Division when necessary. In the event
determine the legality and appropriateness of the conduct of that instructions provided to the Internal Auditing Division by
duties by the executive officers and directors. the Audit Committee conflict with instructions provided by
When deemed necessary, members of the Audit the President and Representative Executive Officer, the
Committee report or express their opinions to the Board of instructions of the Audit Committee will take precedence. In
Directors, or may issue cease and desist orders to executive regard to the general manager reassignment of the Internal
officers and/or directors. In addition, the Audit Committee Auditing Division, the opinions of the Audit Committee will be
may decide on proposals to be considered in the General heard in advance.
Shareholders’ Meeting, including the selection / dismissal of The Internal Auditing Division must report to the Audit
the accounting auditor. Committee when asked, in addition to submitting periodic
and timely reports on the outcomes of their audits to the
Securing the Effectiveness of the Audit Committee Audit Committee.
To assist the committee with its work, the Audit Committee’s

Compensation Committee bonuses, were ¥43,753 million and 11.4%, respectively.

The Compensation Committee has formulated the policy for
determining director, executive officer, and operating officer Compensation in Restricted Stock
compensation and decides on individual compensation Yamaha achieved its targets for operating income ratio of
amounts based on this policy. 12%, ROE at the 10% level, and EPS at the ¥200 level, which
are also indicators for performance-linked compensation,
Compensation System under the medium-term business plan NEXT STAGE 12.
The compensation of directors, excluding outside directors
and members of the Audit Committee, and compensation of Executive Function
executive officers, excluding the executive officer in charge of Representative Executive Officer
the internal audit, consists of (1) fixed compensation, (2) per- The representative executive officer represents the Company
formance-linked bonuses, and (3) compensation in the form as the chief executive for Company matters and is in overall
of restricted stock. The approximate breakdown of total com- charge of business under the basic policies set by the Board
pensation of (1), (2), and (3) is 5:3:2. (2) Performance-linked of Directors.
bonuses vary according to the Company’s consolidated profit
and return on equity (ROE) in the previous fiscal year, and Executive Officers
these bonuses are calculated with consideration for the indi- The executive officers are responsible for the execution of
vidual’s record of performance. The evaluation of individual business. With a Companywide perspective, they make
performance is based on indicators of performance set by important decisions on matters related to the execution of
business and function in each area the individual is responsi- business matters that have been delegated to them by the
ble for. (3) The restricted stock compensation system has Board of Directors, and they implement business execution,
been introduced with the intent of motivating the directors subject to the oversight of the Board of Directors.
and executive officers to enhance corporate value sustainably
and having them share a common interest with shareholders. Managing Council
Compensation based on Company performance has also Yamaha has established the Managing Council, which is com-
been introduced to provide a motivation for reaching perfor- posed of executive officers, as an advisory body to the presi-
mance goals in the medium term, therefore two-thirds of the dent and representative executive officer. In principle, the
total amount is linked to Company performance. Performance Managing Council holds meetings twice a month to engage
criteria gives equal weight to the core operating profit ratio, in debate on important management issues.
earnings per share (EPS), and return on equity (ROE), which
are contained in the medium-term management plan. For the Corporate Committees
purpose of aligning the interests of the corporate officers The Company has established corporate committees that act
with those of the shareholders over a long period after the as advisory bodies to the president and representative execu-

end of the medium-term management plan, restrictions on tive officer. These committees deliberate policies regarding
the transfer of stock cannot be lifted until the corporate offi- essential topics related to examinations and initiatives that
cer retires (i.e., 30 years or until retirement). Furthermore, are continuously carried out on a cross-organizational and
in the event of serious cases of accounting fraud or major management-level basis. The committees report the results
losses during this period, depending on the responsibility of these deliberations to the president and representative
of the officers in charge, a claw-back clause is included that executive officer.
will require the return of all or a portion of restricted shares
transferred to officers on an accumulated basis to date. Risk Management Committee
Outside directors and directors who are members of the Yamaha has established the Risk Management Committee as
Audit Committee as well as the executive officer in charge of an advisory body to the president and representative execu-
the internal audit receive only the fixed compensation. tive officer. It discusses risk management-related matters
from a Companywide perspective and reports the results of
Performance-Linked Bonuses these discussions to the president and representative execu-
In fiscal 2019, consolidated net income and return on equity tive officer.
(ROE), two metrics used for setting performance-linked
Breakdown of Compensation (Fiscal 2019)

Compensation by Type (Millions of yen)
Total Compensation
Classification Performance-linked Compensation in the form Number of People
(Millions of yen) Fixed compensation
bonuses of restricted stock
Directors 86 86 — — 8
(Including outside directors) (52) (52) (—) (—) (7)
Executive Officers 576 253 184 138 7
Notes: 1. The above numbers include one director who retired at the conclusion of the 194th Ordinary General Shareholders’ Meeting held on June 25, 2018.
2. The total amount of compensation, etc., paid to the executive officers concurrently serving as directors is described in the section for executive officers.

Operating Officers Policy and Reasoning Behind Selection of Accounting

With a Companywide perspective, the operating officers con- Auditor
duct the work they are responsible for under the supervision The Company’s Audit Committee has appointed Ernst &
of the executive officers and in accordance with important Young ShinNihon as its accounting auditor, in continuation
decisions regarding business execution made by the Board of from the previous fiscal year, as a result of its examination
Directors and the executive officers. based on the following policy for deciding whether to dismiss
or not reappoint the accounting auditor.
Internal Control System, Internal Audits, • Policy for Deciding Whether to Dismiss or Not Reappoint
Accounting Audits Accounting Auditor
Internal Control System The Company’s Audit Committee will dismiss the accounting
In order to ensure appropriate business operations, the auditor by mutual consent of all members of the committee
Company has established an internal control system, as in the event that one of the items in Article 340 (1) of the
detailed below, pursuant to Japan’s Companies Act and the Companies Act applies to the accounting auditor. The Audit
Enforcement Regulations of the Companies Act. This system Committee determines the content of proposals regarding
aims to improve the efficiency of the Company’s business the dismissal or non-reappointment of the accounting auditor
activities, ensure reporting reliability and thorough compli- submitted to the General Shareholders’ Meeting in the event
ance with laws and regulations, preserve the value of that it is deemed necessary to change the accounting auditor,
Company assets, and strengthen risk management. for reasons such as the accounting auditor being impeded in
For further information about the internal control system, please refer to the Corporate performing its duties based on a comprehensive analysis of
Governance Report. the accounting auditor’s qualifications, specializations, inde-
https://www.yamaha.com/en/ir/governance/pdf/governance_report.pdf pendence from the Company, and other evaluation criteria.
Internal Auditors Evaluation of Accounting Auditor by Audit Committee

Yamaha established the Internal Auditing Division (staffed by The Company’s Audit Committee assesses the accounting
15 people as of June 25, 2019) under the direct control of the auditor.
president and representative executive officer. The Division’s The Audit Committee deliberates and conducts a com
role is to closely examine and evaluate management and prehensive evaluation based on committee members’
operations systems, as well as operational execution, for all assessments of the accounting auditor’s qualifications, spe-
management activities undertaken by the Company and cializations, independence from the Company and other eval-
Group companies, from the standpoint of legality, effective- uation criteria, with due consideration paid to the state of
ness, and efficiency. Based on the results of these examina- direct communications between the Audit Committee and
tions and evaluations, the Division provides information and the accounting auditor, and reports by audited divisions about
offers advice and proposals for improvement. the audits conducted by the accounting auditor.
The Company selects an executive officer to be in overall
charge of internal audits, with the objective of improving Changes in Corporate Governance
internal auditing functions. In addition, based on policies Yamaha views corporate governance as fundamental for
aimed at assuring the effectiveness of the audits of the Audit improving the quality of overall management, and as an
Committee, which are decided on by vote of the Board of essential aspect of sustainable development for a corpora-
Directors, the Internal Auditing Division has in place a struc- tion. Furthermore, the Company is aware of the need to con-
ture for close collaboration with the Audit Committee. At the stantly reform and improve corporate governance systems
same time, the Division keeps in close contact and conducts once they have been put into place.
precise adjustments with the accounting auditor. In these Yamaha has consistently taken steps to strengthen corpo-
ways, the Company works to increase audit efficiency. rate governance, such as introducing an operating officer
system in 2001; appointing an outside director and establish-
Accounting Auditor ing the nominating and compensation committees on a vol-
Yamaha has appointed Ernst & Young ShinNihon LLC as untary basis in 2003; reducing the number of inside directors
its accounting auditor, and certified public accountants and appointing multiple outside directors in 2010; and formu-
Toshikatsu Sekiguchi, Tomoaki Ito, and Toshiyuki Matsuura lating the Corporate Governance Policies in 2015. To further
from Ernst & Young ShinNihon conduct the accounting audits strengthen corporate governance, in June 2017 the Company
of the Company. Ernst & Young ShinNihon has voluntarily transitioned to a Company with Three Committees
adopted a rotating system for its managing partners in order (Nominating, Audit, and Compensation) structure, and in
to ensure that the number of continuous years of auditing 2019, the Company appointed its first foreign national as an
service does not exceed a fixed period of time. A total of 13 independent outside director.
certified public accountants and 33 other staff assist with the
audit work.

Consolidated Operating Income Ratio and Reinforcement of Governance

Yamaha continues to strengthen and improve the effectiveness of its governance system. Backed by strong oversight func-
tions and incentives, the Company intends to increase profitability by executing its medium-term management plans with
a sense of urgency.
Appointed multiple outside
directors Transitioned to a Company with
einforcement of
R
Decreased the number of Increase in outside directors Three Committees (Nominating,
Oversight Functions Audit, and Compensation)
inside directors
Completely linked officer

Performance-Linked Introduced stock purchase Completely revised officer
bonuses to consolidated net
Compensation compensation compensation system
income
Operating Income Ratio 12.8%

11.3%
10.9%
9.3%
7.0%
6.3%
3.5%
2.5%
2.3%
1.6%
10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3
Medium-Term YMP125 YMP2016 NEXT STAGE 12

Management Plan Rebuild business platform Increase profitability Increase brand power
Reinforcement of Oversight Functions

In a bid to accelerate management, the Company has separated functions for business oversight and execution. Yamaha
has reinforced oversight functions by increasing the ratio of independent outside directors. As of June 25, 2019, indepen-
dent outside directors comprised 75% of members on the Board of Directors.

Ratio of Outside Directors
Inside directors: 8 Outside director: 1 Inside directors: 3 Outside directors: 2 Inside directors: 2 Outside directors: 6
(including one independent (including six independent
outside director) outside directors)
2009 2010 2019
Performance-Linked Compensation
In 2017, Yamaha increased the ratio of performance-linked compensation for directors responsible for business execution
and executive officers after completely revising the officer compensation system with the objective of aligning the values
of management with shareholders and providing sound incentives that link the compensation system to enhancements in
corporate value over the medium and long term while sustaining growth.
Example of Compensation for an Officer

Fixed: 80% Link to Fixed: 50% Link to short-term • Consolidated net income
short-term performance: attributable
Performance
performance: 30%
evaluation criteria • ROE
20%
2009 2017 • Individual achievement
Link to medium-term Medium-term

performance: management plan:
20% Performance
• Operating income ratio*
evaluation criteria
• ROE
• EPS
* Core operating profit ratio as of 2019

Yamaha Recognized with Award for Corporate Governance of

the YearTM 2018 (Grand Prize Company)
In February 2019, the Japan Association of Corporate Directors (JACD) recognized
Yamaha as the winner of its Grand Prize Company award for Corporate Governance of
the YearTM 2018*. This award, which began in 2015, recognizes companies that are pur-
suing healthy medium- and long-term growth through corporate governance, and the
award was conceived to encourage improvement in the profitability of Japanese com- Left: Yoshihiko Miyauchi, Chairman of the Japan
Association of Corporate Directors
panies, which is one of the aims of government’s growth strategy. Right: Takuya Nakata, President and Representative
* Corporate Governance of the YearTM is a registered trademark of the Japan Association of Corporate Directors. Executive Officer of Yamaha Corporation
Judgment Criteria for the Award

1. O
f all the 2,000 or so companies listed on the First Section of the Tokyo Stock Exchange, 625 companies passed the screen for having appointed at least three out-
side directors between 2016 and 2018.
2. F or profitability indicators, 106 companies with market capitalizations of at least ¥100 billion (as an indicator of ability to contribute to society) fulfilled the criteria for
having average ROE and ROA of at least 10% and 5%, respectively (non-financial firms), or average ROE and ROA of at least 10% and 2%, respectively (financial
firms), over the past three fiscal years.
3. As indicators for corporate governance systems, a comprehensive evaluation is conducted based on additional criteria that include whether a company has special
major shareholders, open shareholder ratios (less than 30%), separation from execution of chairman of Board of Directors (outside directors, non-executives = exis-
tence of representation rights), independent director ratios, organizational forms, and the establishment of nomination and compensation committees (including
voluntarily), in addition to a performance evaluation based on an analysis of management indicators by Misaki Capital Inc., as well as other criteria including market
capitalization and operating income stability. Three companies are selected as winners.
4. A single Grand Prize Company is selected after CEOs are interviewed by the award committee.
Prepared Critique by Mr. Kunio Ito, Member of Award Committee

Yamaha has simultaneously transformed the form and practice of corporate gover-
nance, creating a unique governance system, having transitioned to a Company
with Three Committees (Nominating, Audit, and Compensation) structure, increas-
ing the appointment of outside directors to two-thirds of the total number, and
introducing a progressive compensation system with a portion based on perfor-
mance evaluations. As a result, Yamaha has carved out a presence as a powerful
player in the global consumer business (B2C business). Mr. Kunio Ito
Head of Hitotsubashi University’s
Since Mr. Takuya Nakata became president, Yamaha’s market capitalization has Hitotsubashi Financial Leadership Program,
expanded from around ¥200 billion to roughly ¥1 trillion, and ROE has improved from Specially Appointed Professor of
Hitotsubashi University’s Graduate School
the 2% range to above the 10% range. Yamaha presents a good example of initia- of Business Administration (Title at the
tives to increase corporate profitability through corporate governance systems. time of photograph)
Effectiveness of the Board of Directors • Oversight of the management team from an independent
Analyzing and Evaluating the Effectiveness of the Board of and objective standpoint is conducted in a highly effective
Directors for Fiscal 2019 manner.
Evaluation Process • Sincere and constructive discussions are being held regard-
Yamaha carried out evaluations, including evaluations by out- ing major management issues.
side specialists, using the following processes. • Regarding awareness of those issues related to effective-
• Implementation of a survey of directors regarding the roles ness in the previous evaluation, steps are being taken
and responsibilities of the Board of Directors, the structure toward improvement. In particular, improvements were
of the Board of Directors, the roles and qualities of direc- noteworthy in the maintenance and reporting of internal
tors, the management of the Board of Directors, and the control and risk management systems, as well as in the
management of each committee operational methodology and deliberations of the Board of
• Evaluation and analyses, including by outside specialists, Directors.
based on survey answers and individual interviews
• Based on the results of these analyses, evaluation of the On the other hand, regarding the further strengthening of
effectiveness of the Board of Directors, deliberation on the oversight functions of the Board of Directors and the
issues, and realization of improvements management of each committee, constructive opinions were
expressed. In view of these results, the Company will con-
Summary of the Evaluation tinue to take initiatives toward further improvement to
• The Board of Directors comprises directors with diverse increase the effectiveness of the Board of Directors.
viewpoints and experience. Both the scale of the Board of
Directors and the ratio of outside directors are evaluated as
appropriate.

Applying Functions as Asset Owner of Corporate Pensions conducted in a reasonable and orderly manner.
Through the Yamaha Corporate Pension Fund, the Company In addition to the respective dialogue with shareholders
manages pension assets based on a policy asset ratio for the and investors, the Company gives presentations on its
longer term, designed to ensure pension benefits for retirees medium-term management plan and quarterly earnings, as
in the future. well as business briefings, facilities tours, and presentations
Decisions regarding asset management are made by the for private investors. Presentation materials for business
Board of Representative Delegates with consideration paid plans, results briefings, and others are always available on
to the deliberations of the Asset Management Committee. the Company website.
The Asset Management Committee and the Board of The results of the dialogue with shareholders and inves-
Representative Delegates are staffed by personnel with tors are reported to the Board of Directors by the director in
appropriate qualifications, such as managers from the charge, executive officers, or operating officers on a timely
Company’s finance and personnel departments. Additionally, basis, and they are appropriately reflected in the manage-
key persons from the labor union, for example, are represen- ment of the Company, leading to the Group’s sustainable
tatives of the beneficiaries. growth and enhancing corporate value over the medium to
The administrative office for the corporate pension fund is long term. Additionally, the voting is analyzed for each resolu-
staffed by personnel selected for their qualifications. tion at the Ordinary General Shareholders’ Meeting, and this
is reported to the Board of Directors.
Initiatives to Engage in Dialogue with Shareholders Regarding measures to control insider information, pursu-
and Investors ant to the Company’s Disclosure Policy, due consideration is
In order to have constructive dialogue with shareholders and given to controlling insider information, and we endeavor to
investors, the Board of Directors appoints a director in charge disclose information in a fair, prompt, and timely manner.
of these initiatives. If necessary, due to a request for dialogue When meeting with shareholders and investors, information
from a shareholder or investor, the director in charge, other is provided after verifying that the information provided does
directors, executive officers, or operating officers will appear not constitute insider information. The time between the day
in person to explain matters such as the capital policy or after the end of each quarter and the date of the earnings
medium-term management plan to shareholders or investors release is a quiet period during which we refrain from dis-
in a clear and easy-to-understand manner. cussing earnings information.
The Legal Division, IR Department, and Corporate
Finance Division cooperate and assist the director in charge Major IR Activities
to ensure that dialogue with shareholders and investors is Major IR activities in fiscal 2019 were as follows.
Major IR Activities (Fiscal 2019)

Target Activity Frequency Content
Financial results briefings 4 Quarterly briefings
Conferences held by securities
For analysts and institutional 2 Interviews with officer in charge
companies
investors
Acceptance of requests for
Approx. 290 IR interviews
interviews / information
Visits by president and representative executive
For domestic and interna-
Management plan / IR briefings 5 officer, officers in charge (Japan, North America,
tional institutional investors
Europe, Asia)
Tokyo (two times), Okayama, Hiroshima,
For private investors Company briefings for private investors 6
Fukuoka, Sendai
Fiscal 2019 results briefing President and Representative Executive Officer Takuya Nakata gives a presentation at
the results briefing

General Shareholders’ Meetings holdings and the risks associated with them cover the cost of
Yamaha endeavors to establish an environment that ensures capital, etc., and based on the results of those verifications
that there is adequate time for shareholders to exercise their the Board works to reduce cross-holdings.
voting rights for a General Shareholders’ Meeting, so that In exercising the voting rights associated with cross-
they can properly exercise their voting rights. In addition to holdings, the decision of how to vote is made comprehen-
sending the notice for the Ordinary General Shareholders’ sively from the standpoint of whether the resolution
Meetings at least three weeks in advance of the meeting enhances the corporate value of the company in question
date, we create an environment in which every shareholder over the medium to long term, whether it is in accordance
can properly exercise his or her voting rights by disclosing the with our basic policy concerning cross-holdings, and whether
content of the notice on our website in both Japanese and it leads to the enhancement of our corporate value over the
English as soon as possible, holding the Ordinary General medium to long term.
Shareholders’ Meeting on a date that avoids the concentra-
tion of shareholders’ meetings, and ensuring that it is conve- Status of Shareholdings
nient to exercise voting rights by using an electronic proxy For specified equity securities, all shareholdings as of March
voting platform. 31, 2019, are presented in the table below. Yamaha does not
have any deemed shareholdings or investments in equity
Items Voted On at the Ordinary General Shareholders’ securities for pure investment purposes.
Meeting
The following items were voted on at the 195th Ordinary
General Shareholders’ Meeting on June 24, 2019. Investments in Equity Securities Held for Purposes Other than
Pure Investment
Cross-Holdings Stock in unlisted
Stock in firms other
than unlisted
Basic Policy companies
companies
It is Yamaha’s basic policy to have cross-holdings only to the Number of companies and
36 companies 15 companies
extent that this is reasonable because it contributes to the amount shown on balance
¥886 million ¥90,907 million
Company’s sustainable growth and the enhancement of cor- sheet
porate value over the medium to long term. Reasonableness, Total amount of stock sold in
from the standpoint of contributing to the Company’s sus- fiscal 2019, pertaining to
2 companies 10 companies
decreases in the number of
tained growth and long-term improvements in corporate ¥117 million ¥2,026 million
companies / shares in which
value, is defined as cross-holdings that help maintain relation- shareholdings were reduced
ships with important partner companies, suppliers, and finan- Total amount of stock
cial institutions, as well as those that enhance the Company’s acquired in fiscal 2019, per-
brand value, support sustained growth, and reinforce its taining to increases in the 6 companies
—
financial foundation. number of companies / ¥1 million
shares in which sharehold-
With regard to the reasonableness of individual cross-
ings were increased
holdings, the Board of Directors regularly and continuously
Note: In fiscal 2019, the increase in the number of companies in which shareholdings
verifies whether the purposes for such shareholdings are were increased reflected share acquisitions for the purpose of gathering informa-
appropriate, whether the benefits accruing from these tion about information provision methods, etc., for shareholders.
Items Voted On at the 195th Ordinary General Shareholders’ Meeting (Held on June 24, 2019)
Number of Number of Number of Approval
Proposal Results
votes for votes against abstained votes percentage
Proposal 1. Appropriation of surplus 1,581,042 192 971 99.3 Approved
Proposal 2. Election of eight directors
Takuya Nakata 1,515,828 65,888 971 95.1 Approved
Satoshi Yamahata 1,574,195 7,529 971 98.8 Approved
Masatoshi Ito 1,503,738 77,986 971 94.4 Approved
Yoshimi Nakajima 1,581,266 458 971 99.2 Approved
Taku Fukui 1,581,231 493 971 99.2 Approved
Yoshihiro Hidaka 1,383,790 197,925 971 86.9 Approved
Mikio Fujitsuka 1,581,427 297 971 99.3 Approved
Paul Candland 1,581,414 310 971 99.3 Approved
Notes: Necessary conditions for the approval of each proposal were as follows:
(1) Proposal 1: Approval by a majority vote of shareholders in attendance
(2) Proposal 2: Attendance of shareholders holding one-third or more of the voting rights of the shareholders who can exercise their voting rights, and approval by a majority vote of
the shareholders in attendance.
Reason for not including some of the number of voting rights of the shareholders in attendance in the number of voting rights: By calculating the total of the number of voting rights
exercised by the date immediately before the date of the meeting and the number of voting rights of some of the shareholders present, whose intentions regarding approval or disap-
proval of each proposal were confirmed, the necessary conditions for the approval of each proposal were satisfied and the resolutions were legally passed pursuant to the Companies
Act. Therefore, among those shareholders in attendance on the day of the meeting, the calculation did not include the number of voting rights for which intentions regarding approval,
disapproval, or abstention were not confirmed.

Number of Shares Held in Each Company for Specified Equity Securities and Amounts Shown on Balance Sheet (Listed Companies)
No. of shares as of March 31, 2018 No. of shares as of March 31, 2019
Yamaha ownership
Security name Amount on balance sheet Amount on balance sheet
of shares
(millions of yen) (millions of yen)
34,642,790 34,642,790
Yamaha Motor Co., Ltd.*1 Yes
110,164 75,209
1,303,723 1,218,623
MS&AD Insurance Group Holdings, Inc.*2 Yes
4,373 4,106
501,300 501,300
Toyota Motor Corporation*2 No
3,421 3,251
6,289,308 6,289,308
Audinate Group Limited*2 No
1,648 2,967
3,486,678 2,808,564
The Shizuoka Bank, Ltd.*3 Yes
3,507 2,367
445,402 356,402
Sumitomo Mitsui Financial Group, Inc.*3 Yes
1,985 1,381
10,123,816 7,086,757
Mizuho Financial Group, Inc.*3 Yes
1,937 1,213
50,000 50,000
DAIICHIKOSHO CO., LTD.*2 No
282 283
226,480 226,480
Mitsubishi UFJ Financial Group, Inc.*3 Yes
157 124
40,900 —
Sumitomo Mitsui Trust Holdings, Inc.*2 Yes
176 —
— 100
Canon Inc.*4 No
— 0
— 100
Shimadzu Corporation*4 No
— 0
— 100
Ebara Corporation*4 No
— 0
— 100
Japan Tobacco Inc.*4 No
— 0
— 100
Showa Shell Sekiyu K.K.*4 No
— 0
— 100
Panasonic Corporation*4 No
— 0
100 —
TDK Corporation*4 No
0 —
100 —
Kao Corporation*4 No

0 —
100 —
Shiseido Company, Limited*4 No
0 —
100 —
AGC Inc.*4 No
0 —
100 —
Kirin Holdings Company, Limited*4 No
0 —
Notes: “—” means no shares in the company are held.
*1. Yamaha Motor Co., Ltd. uses the same Yamaha brand as the Company. Yamaha Motor Co., Ltd. and the Company have established the Joint Brand Committee, Yamaha Brand
Charter, and Joint Brand Regulations. Along with carrying out various initiatives together, initiatives in furtherance of each other’s sustainable growth are monitored appropriately
through shareholdings and the assignment of directors. By building this kind of relationship of monitoring and cooperation, the Company aims to maintain and enhance the value of
the Yamaha brand, thereby contributing to the enhancement of the Company’s corporate value over the medium to long term.
*2. The Company holds the shares for the purpose of maintaining and continuing a smooth transaction relationship.
*3. The Company holds the shares for the purpose of maintaining and continuing a smooth relationship with financial institutions.
*4. The Company holds the shares for the purpose of gathering information about information provision methods, etc., for shareholders.

Risk Management
The Yamaha Group is working to establish and enhance risk management promotion systems and frameworks to
improve our capability to respond to risk and to implement sound, highly transparent management.
Basic Policy addition, we shall strive to ensure the stable supply of

The Yamaha Group implements risk management based on products and services, continue business to the greatest
the following policy. extent possible, and contribute to the sustainable develop-
ment of society.
1. We shall establish a structure and framework for risk man- 4. After addressing risks, we shall analyze the reasons they
agement and work to enhance responsiveness to risk and occurred and how they were addressed in order to ensure
maximize corporate value. they do not occur again.
2. We shall identify, evaluate, and reduce risk through risk
management activities during ordinary times, conduct Classification of Risk
awareness-raising activities such as education and training, The Yamaha Group classifies various business risks as shown
and instill a greater awareness of risk, fostering a greater in the diagram below. Yamaha evaluates and analyzes control-
sensitivity to risk. lable levels of risk, as well as the scope and frequency of
3. We shall prioritize people’s safety when risks manifest potential risks. The Company aims to enhance the level of its
themselves as crises, and coordinate with the local com- risk control by advancing measures to reduce risks and desig-
munity to ensure sincere, appropriate, and speedy nating departments responsible for dealing with risks identi-
response as a means to minimize all adverse impact. In fied as important and that should be addressed with priority.
External Environment Risk
1. Changes in the business Strategic Risk Operational Risk (Business activities)

environment
17. Business
9. Business resource 14.
15. Production 16. Sales partner
allocation Procurement
2. Nationwide conflict and 13. Marketing / (Sales side)
disruption Product
development
10. M&A / Restructuring 18. Inventory
3. Accident by external factors
11. Group governance Operational Risk (Support activities)

4. Crime
Humans Goods Capital Information
12. Compliance 23. Quality of

5. Cyberattack 19. Human 28. Information
products and 26. Finance / Tax
resources technology
services
20. Labor 24. Transportation /

6. Legal and regulatory change 27. IR 29. Information leak
management Logistics
7. Foreign exchange and interest 21. Labor relations 25. Environment 30. Public relations
rate fluctuation
31. Intellectual
22. Communication
property
8. Natural disaster
Business strategy risk

Fundamental risk

Risk Management System Working Group for Compliance

Promotion System This working group serves as the organization with primary
Yamaha Corporation has established the Risk Management responsibility over the setting of policy and consideration of
Committee as an advisory body to the president and repre- items concerning compliance. In addition to formulating poli-
sentative executive officer. The committee discusses risk cies for ensuring compliance within the Yamaha Group, this
management-related matters from a Companywide perspec- subcommittee monitors every department and Group com-
tive and reports the results of these discussions to the presi- pany to ensure that business is being done ethically and
dent and representative executive officer. In addition, the according to the law. The working group also implements
Working Group for BCP and Disaster Prevention measures aimed at maintaining sound business activities.
Management, Working Group for Financial Management, These measures include providing training and education to
Working Group for Compliance, Working Group for Export employees, conducting questionnaires, and setting up help
Control, and Working Group for Information Security have lines for internal reporting and consulting.
been established under the Risk Management Committee.
These working groups deliberate on important Companywide Working Group for Export Control
issues. Provisions for national security related trade control have
been established in the Compliance Code of Conduct as rules
Working Group for BCP (Business Continuity Plan) and pertaining to international trading. In addition, the Working
Disaster Prevention Management Group for Export Control has been established, and export
In preparation for large-scale natural disasters, fires, infec- control regulations, regulations for import and export proce-
tious disease outbreaks, and other emergency situations, the dures, etc., have been formulated. We have established a
Yamaha Group has made a number of business continuity work process related to export control. Yamaha conducts
management efforts, including the formulation of a BCP. In export control audits, keeps export control rules and systems
addition, the Group BCP Regulations establish basic policies, up to date at its production bases, and ensures the appropri-
duties and rules to minimize the effect on business when a ateness of Group export controls.
risk event occurs, such as a natural disaster, through the rapid
implementation of appropriate countermeasures. Each base Working Group for Information Security
maintains its own BCP, which is evaluated and improved upon The leakage of personal information and other important
through initial response drills for earthquakes that are con- information held by a company has the potential to not only
ducted twice a year to improve the effectiveness of BCPs. damage third parties but also become a case of gross negli-
gence that can harm the company’s reputation. The Yamaha
Working Group for Financial Management Group perceives information security as a critical aspect of
This working group focuses on global activities related to risk management. The Working Group for Information
internal controls centered on financial management, such as Security has determined a policy on information management

standardizing work processes throughout the entire Group, in and is working to enhance the quality of this management by
addition to monitoring, gathering, and managing information keeping track of the current management system while iden-
about issues, such as internal control checklists. For the entire tifying vulnerabilities and guiding efforts to address them, in
Group, this working group ensures that business operations addition to regular security training for employees.
are in compliance with the Group Management Charter and
various rules.
Risk Management System
President and Representative Executive Officer
Request for Advice Report
Managing Council Risk Management Committee Corporate Committees
Working Group for

Working Group for Working Group for Working Group for Working Group for
BCP and Disaster
Financial Management Compliance Export Control Information Security
Prevention Management

FINANCIAL
C O R P O R AT E
IV. Financial and Corporate
Information
11-Year Summary 92
Financial Review 94
Consolidated Financial Statements and Notes 98
Independent Auditor’s Report 127
Main Networks 128
Stock Information 130
Company Information 131

AND
I N F O R MAT I ON

11-YEAR SUMMARY
Yamaha Corporation and consolidated subsidiaries (J-GAAP)

Years ended March 31 2009/3 2010/3 2011/3 2012/3
For the year:

Net sales ¥459,284 ¥414,811 ¥373,866 ¥356,616
Cost of sales 290,381 268,380 237,313 231,659
Gross profit 168,902 146,431 136,553 124,957
Selling, general and administrative expenses 155,057 139,602 123,387 116,846
Operating income 13,845 6,828 13,165 8,110
Income (loss) before income taxes and
minority interests (12,159) (201) 6,802 6,971
Net income (loss)* 1
(20,615) (4,921) 5,078 (29,381)
Capital expenditures 22,581 14,480 10,439 11,337
Depreciation expenses 17,912 14,139 12,814 11,973
R&D expenses 23,218 21,736 22,416 22,819
Cash flow from operating activities (2,235) 39,870 22,646 10,880
Cash flow from investing activities (25,999) (12,711) (9,740) (9,004)
Free cash flow (28,234) 27,159 12,906 1,875
Cash flows from financing activities (31,041) (9,867) (10,080) (3,247)
At year-end:
Total assets ¥408,974 ¥402,152 ¥390,852 ¥366,610
Total current assets 202,097 193,260 194,717 188,952
Total current liabilities 90,050 75,182 74,836 72,829
Interest-bearing liabilities 19,192 15,017 11,838 11,295
Net assets 251,841 254,591 245,002 206,832
Per share:
Net income (loss) ¥ (103.73) ¥ (24.95) ¥ 25.90 ¥ (151.73)
Net assets 1,262.42 1,276.35 1,250.06 1,052.01
Dividends* 2
42.50 27.50 10.00 10.00
Key indicators:
Operating income ratio 3.0% 1.6% 3.5% 2.3%
ROE (Return on equity) (7.0) (2.0) 2.1 (13.2)
ROA (Return on assets) (4.3) (1.2) 1.3 (7.8)
Equity ratio 60.9 62.6 61.9 55.6
Debt to equity ratio (Times) 0.08 0.06 0.05 0.05
Interest coverage (Times) 26.74 16.88 40.38 31.84
Current ratio 224.4 257.1 260.2 259.4
Dividend payout ratio — — 38.6 —
Note: F rom fiscal 2019, the presentation method has been changed as a result of the adoption of partial revisions to accounting standards for tax benefit accounting. Accordingly,
figures for fiscal 2018 have been retroactively changed to conform with this presentation method.
*1. Net income (loss) has been presented as net income attributable to owners of parent on the consolidated financial statements since the fiscal year ended March 31, 2016
(fiscal 2016).
*2. A special dividend of ¥20 is included in the dividends per share from fiscal 2009 to fiscal 2010.

11-YEAR SUMMARY
Millions of yen
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3
¥366,941 ¥410,304 ¥432,177 ¥435,477 ¥408,248 ¥432,967 ¥437,416

238,261 262,310 270,357 262,406 242,451 258,465 255,291
128,680 147,994 161,820 173,070 165,796 174,501 182,124
119,465 121,999 131,684 132,407 121,493 125,668 126,094
9,215 25,994 30,135 40,663 44,302 48,833 56,030
7,795 25,818 28,526 41,578 42,898 74,471 60,485

4,122 22,898 24,929 32,633 46,719 54,378 43,753
13,844 10,799 13,846 11,220 17,542 24,600 15,956
11,613 12,759 12,597 12,681 11,145 10,777 10,835
22,149 22,561 25,439 24,793 24,415 24,797 24,926
7,755 33,213 31,729 42,399 39,142 47,498 30,234
(12,617) (22,950) (11,700) 591 (9,663) 4,766 (23,092)
(4,862) 10,263 20,029 42,991 29,478 52,264 7,142
(5,536) (4,745) (5,909) (30,349) (12,588) (35,584) (28,479)
¥390,610 ¥438,932 ¥530,034 ¥469,745 ¥522,362 ¥552,309 ¥514,762

197,902 214,487 247,632 255,135 272,720 289,493 281,608
71,550 73,145 80,976 75,459 82,565 101,919 80,495
10,013 8,755 11,868 8,510 11,241 11,173 8,936
229,636 274,843 348,752 303,889 367,437 388,345 382,771
Yen
¥ 21.29 ¥ 118.26 ¥ 128.75 ¥ 168.90 ¥ 249.17 ¥ 291.81 ¥ 240.94

1,171.67 1,403.12 1,787.42 1,601.55 1,948.01 2,125.51 2,124.83
10.00 27.00 36.00 44.00 52.00 56.00 60.00
%
2.5% 6.3% 7.0% 9.3% 10.9% 11.3% 12.8%

1.9 9.2 8.1 10.1 14.0 14.5 11.4
1.1 5.5 5.1 6.5 9.4 10.2 8.2
58.1 61.9 65.3 64.2 69.9 70.0 74.1
0.04 0.03 0.03 0.03 0.03 0.03 0.02
40.64 130.19 130.51 129.41 165.40 149.08 138.90

276.6 293.2 305.8 338.1 330.3 284.0 349.8
47.0 22.8 28.0 26.1 20.9 19.2 24.9

FINANCIAL REVIEW
Fiscal 2019 Performance (J-GAAP)

Analysis of Overall Performance in Fiscal 2019 Turning to “continually reduce costs,” the Company was
Looking back on the economic environment in fiscal 2019, the unable to achieve its goal for lowering costs, failing to offset
global economy continued to expand moderately, but uncertain- rising costs as a result of higher procurement prices for elec-
ties about the future increased on account of U.S.-China trade tronic devices, for example. However, we carried out measures
friction and the Brexit issue. In individual countries and regions, to redesign production processes and improve productivity in
the U.S. economy continued to perform well, but economic administrative work. Construction on our new plant in India pro-
growth lost momentum in Europe. The economy in China con- gressed on schedule, and it began to produce portable key-
tinued to expand, albeit at a slower pace. In Japan, consumer boards for the Indian market.
spending continued to improve at a moderate pace. As for “strengthen global business platforms,” we
Amid such an operating environment, the Yamaha Group upgraded our global personnel management system, estab-
finished its medium-term management plan NEXT STAGE 12. lished a three-region global structure for IT, and optimized our
Guided by this plan, the Group continued to pursue the key global distribution system. The Company advanced preparations
strategies of “develop products with distinctive individuality,” to introduce International Financial Reporting Standards (IFRS),
“enhance customer interaction,” “continually reduce costs,” and adopted IFRS in fiscal 2020.
and “strengthen global business platforms.”
By fiscal 2019, the final year of the medium-term manage- Net Sales, Operating Income, and Net Income Attributable
ment plan NEXT STAGE 12, Yamaha had achieved its manage- to Owners of Parent
ment targets for operating income ratio of 12%, ROE at the Consolidated net sales was up 1.0% year on year, to ¥437.4 bil-
10% level, and EPS at the ¥200 level. lion, thanks to solid performance in the musical instruments
In regard to “develop products with distinctive individuality,” segment ( GRAPH 1 ).
the Company opened the new Innovation Center with the aim By region, net sales was higher than the previous fiscal
of creating new value by fusing together technologies and year in China and North America, contributing to overall growth
bringing together its engineers that had been dispersed across ( GRAPH 2 ).
business lines. As a result, in the musical instruments seg- Operating income expanded 14.7%, to ¥56.0 billion, with
ment, Yamaha released the AvantGrand™ hybrid piano and year-on-year growth in the musical instruments segment.
new models of TransAcoustic™ guitars. In the audio equipment Yamaha posted record-high profits for the seventh consecutive
segment, we unveiled unique products that represent Yamaha, year of growth ( GRAPH 3 ). This profit growth was primarily
such as a networked turntable that leverages the advantages of attributable to higher sales and production, lower costs, and
analog and digital technologies, and a unified communications the impact of foreign exchange rates. These positive factors
speakerphone that enables remote communications in crystal- offset negatives that included higher SG&A expenses and an
clear audio. increase in manufacturing costs, caused in part by higher labor
For “enhance customer interaction,” in the musical instru- costs at overseas production bases ( GRAPH 4 ).
ments business, we upgraded our sales network and our Even though operating income and ordinary income
music schools with a focus on emerging countries in a bid to increased, net income attributable to owners of parent
enhance our interactions with customers. In emerging coun- decreased 19.5%, to ¥43.8 billion, owing to the absence of a
tries, we made steady progress introducing musical instrument gain on sales of investment securities recorded in the previous
education programs through activities that support musical fiscal year (sale of a portion of shares in Yamaha Motor Co., Ltd.:
instrument education, and the cumulative number of students gain of ¥25.8 billion before tax and ¥18.0 billion after tax).
expanded to 260,000 people. In the audio equipment segment,
we enhanced internal personnel systems while working to
develop new customers, sharply increasing the number of PA
equipment business partners.

FINANCIAL REVIEW
GRAPH 1 Net sales (change by business segment)
(Billions of yen) (Billions of yen)
2018/3 2019/3 450

Musical Instruments Audio Equipment Others
Net sales 433.0 437.4 +7.5 (1.1) (2.0)
440
437.4
Musical
Instruments
274.5 282.0 433.0
Audio 430
121.8 120.7
Equipment
Others 36.7 34.7 420
0 18/3 19/3
GRAPH 2 Net sales (change by region)
2018/3 2019/3 450 Asia, Oceania,

Net sales 433.0 437.4 China and other areas
North America Europe +5.0 (0.7) 437.4
440 Japan
Japan 133.7 129.7
433.0 (4.0) +5.1 (0.9)
North America 86.9 92.0
430
Europe 84.8 83.9
China 54.2 59.2 420
Asia, Oceania,
73.3 72.6
and other areas 0 18/3 19/3
GRAPH 3 Operating income (change by business segment)

Musical Instruments Audio Equipment Others
2018/3 2019/3 60 +8.3 (0.1) (1.0) 56.0
Operating income 48.8 56.0
Musical
34.6 42.9
48.8
Instruments 50
Audio
10.7 10.6
Equipment
40
Others 3.5 2.5
0 18/3 19/3
GRAPH 4 Operating income (change by factor)
(Billions of yen) Impact of

Increase in sales and production,
product mix, etc. exchange rates
60
+0.4 56.0
+9.5
Cost
48.8 reductions
50 +1.1
Increase in labor costs
at overseas Increase in
factories SG&A expenses
40 (1.1) (2.7)
0 18/3 19/3

FINANCIAL REVIEW
Results by Segment
Musical Instruments Audio Equipment
Sales in the musical instruments segment rose 2.7%, to Sales in the audio equipment segment decreased 0.9%, to ¥120.7
¥282.0 billion, with operating income increasing 24.0%, to billion, and operating income declined 0.9%, to ¥10.6 billion.
¥42.9 billion. By product, compared with the previous fiscal year, sales
By product, sales in all product categories, including pianos, were up in professional audio equipment, but down for AV
digital musical instruments, wind instruments, and string and products and ICT devices.
percussion instruments, were up over the previous fiscal year. In AV products, sales decreased in North America and else-
In addition to strong growth in entry level pianos, sales of high- where, owing in part to a slow response to changing demand
priced pianos were also brisk. Sales of digital pianos were also on markets. For professional audio equipment, sales were up in
firm, driven by entry-level models. Sales of wind instruments all regions, with brisk sales of CA equipment and audio installa-
were healthy, with growth in sales of mid-range acoustic gui- tions in Japan. In ICT devices, sales of network equipment
tars in China and North America. were strong, but OEM product sales declined, resulting in a
By region, sales in China grew in the double digits in all year-on-year decrease in sales overall.
product categories. Although sales of high-priced pianos decel-
erated, sales of entry level models increased sharply. Sales of Others
mid-range guitars were solid. In North America, sales increased (Industrial Machinery and Components Business, etc.)
in all product categories. Digital pianos and guitars saw double- Sales in the others segment decreased 5.4%, to ¥34.7 billion,
digit growth, while sales of pianos and wind instruments were with operating income down 29.0%, to ¥2.5 billion.
also firm. Sales expanded year on year in emerging markets. In the industrial machinery and components business, elec-
tronic devices saw sales decline year on year on a slowdown
for amusement equipment in China. For factory automation
(FA) equipment, sales grew for precision machines and leak
detectors.
Analysis of Financial Position

Total assets as of March 31, 2019, stood at ¥514.8 billion, Total net assets amounted to ¥382.8 billion, a decrease of
a decrease of ¥37.5 billion (– 6.8%) from the year-earlier ¥552.3 ¥5.6 billion (–1.4%), from ¥388.3 billion at the end of the previ-
billion, owing mainly to a decline in investment securities, while ous fiscal year. This reflected shareholder returns in the form
property, plant and equipment as well as intangible assets of dividend payments totaling ¥10.5 billion and the purchase of
increased as a result of strategic investments in growth treasury stock totaling ¥11.9 billion, along with ¥43.8 billion in
( GRAPH 5 ). net income attributable to owners of parent. Additionally, there
Total liabilities were ¥132.0 billion, down ¥32.0 billion was a decline of ¥24.9 billion for the valuation difference on
(–19.5%) from the previous fiscal year-end figure of ¥164.0 bil- other available-for-sale securities ( GRAPH 6 ).
lion, owing to decreases in income taxes payable and deferred
tax liabilities.
GRAPH 5 Total assets
2018/3 2019/3 560

552.3
Total assets 552.3 514.8
Intangible assets
Current assets 289.5 281.6 Current assets Property, plant +1.1
540 (7.9) and equipment
Property, plant +6.1
115.8 121.9
and equipment
Intangible assets 6.2 7.3 520 514.8

Investments and
Investments and other assets
140.8 103.9 (36.9)
other assets
0 18/3 19/3

FINANCIAL REVIEW
GRAPH 6 Total net assets
2018/3 2019/3 410

Total net assets 388.3 382.8
Shareholders’ 400
315.0 332.7
equity
388.3 Non-controlling interests
Total accumu- 390
Shareholders’ equity (0.7) 382.8
lated other +17.7
71.5 49.0 Total accumulated
comprehensive
income
380 other comprehensive income
(22.5)
Non-controlling
1.8 1.1 0 18/3 19/3
interests
Analysis of Cash Flows

Cash and cash equivalents (hereinafter, cash) at the end of the Net cash used in investment activities amounted to ¥23.1
fiscal year ended March 31, 2019, stood at ¥95.8 billion, a billion, compared with net cash provided by investment activi-
decrease of ¥21.6 billion compared with the end of the previ- ties of ¥4.8 billion in the previous fiscal year, owing primarily to
ous fiscal year (cash was up ¥16.7 billion at the end of previous the acquisition of tangible and intangible fixed assets.
fiscal year). Net cash used in financing activities was ¥28.5 billion, com-
Net cash provided by operating activities in fiscal 2019 was pared with ¥35.6 billion used in the previous fiscal year, owing
¥30.2 billion, compared with net cash of ¥47.5 billion provided in part to expenditures for the purchase of treasury stock and
in the previous fiscal year, owing mainly to the contribution of cash dividends paid ( GRAPH 7 ).
income before income taxes.
GRAPH 7 Cash flows
(Billions of yen)
150
Cash flow from
financing activities
(28.5)
130
117.4 Cash flow from Effect of exchange rate
investing activities change on cash and
Cash flow from
110 (23.1) cash equivalents
operating activities 95.8
+30.2 (0.3)
90
0 18/3 19/3
Forecast for Fiscal 2020

Under its new medium-term management plan Make Waves GRAPH 8
1.0, which was unveiled in April 2019, Yamaha targets net reve-
Growth projections under new medium-term management plan
nue of ¥470.0 billion and core operating profit of ¥65.0 billion
Make Waves 1.0 (IFRS)
by fiscal 2022.
For fiscal 2020, the first fiscal year of the management plan, (Billions of yen) (Billions of yen)
the Company forecasts year-on-year growth in net revenue in all 500 80

business segments. By region, the Company expects double- 470.0

65.0
digit growth to continue for musical instruments in China, on 444.0 55.0
450 434.4 52.7 60
top of continued brisk sales in emerging markets. For the mar-
kets of North America and Europe, we project year-on-year
growth on an underlying basis that excludes the impact from 400 40
changes in accounting standards and foreign exchange rates.

In fiscal 2020, Yamaha forecasts higher core operating profit 0 19/3 20/3 22/3 0
in the musical instruments segment and the audio equipment (Forecast*) (Planned)
segment ( GRAPH 8 ). Net revenue (left) Core operating profit (right)

* Forecast announced in March 2019

CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
CONSOLIDATED BALANCE SHEET
Thousands of
Yamaha Corporation and its consolidated subsidiaries Millions of yen U.S. dollars (Note 4)
As of March 31, 2019 2019 2018 2019
Assets
Current assets:
Cash and deposits (Notes 18 and 20) ¥106,061 ¥122,731 $ 955,591
Notes and accounts receivable—trade (Notes 8 and 20) 55,527 56,499 500,288
Inventories (Note 9) 100,334 94,126 903,991
Other 20,770 17,352 187,134
Allowance for doubtful accounts (1,085) (1,216) (9,776)
Total current assets 281,608 289,493 2,537,238
Property, plant and equipment, net of accumulated

depreciation (Note 5):
Buildings and structures, net 43,121 32,431 388,512
Machinery, vehicles, tools, furniture and fixtures, net 27,544 24,864 248,167
Land (Note 7) 43,402 43,880 391,044
Leased assets, net 225 240 2,027
Construction in progress 7,641 14,400 68,844
Total property, plant and equipment, net of accumulated depreciation 121,934 115,817 1,098,603
Investments and other assets:

Investment securities (Notes 6, 20 and 21) 93,354 130,341 841,103
Long-term loans receivable 96 93 865
Net defined benefit assets (Note 23) 394 276 3,550
Deferred tax assets (Note 24) 4,708 4,699 42,418
Lease and guarantee deposits 3,970 4,087 35,769
Goodwill 136 – 1,225
Other (Note 6) 8,705 7,619 78,430
Allowance for doubtful accounts (147) (120) (1,324)
Total investments and other assets 111,219 146,998 1,002,063
Total assets ¥514,762 ¥552,309 $4,637,913
See Notes to Consolidated Financial Statements.

Thousands of
Millions of yen U.S. dollars (Note 4)
As of March 31, 2019 2019 2018 2019
Liabilities
Current liabilities:
Notes and accounts payable—trade (Notes 8 and 20) ¥ 17,548 ¥ 19,946 $ 158,104
Short-term loans payable (Notes 20 and 27) 8,936 11,131 80,512
Current portion of long-term loans payable (Notes 20 and 27) – 41 –
Accounts payable—other and accrued expenses (Note 20) 42,481 45,527 382,746
Income taxes payable 2,474 16,325 22,290
Provision for product warranties 1,840 1,774 16,578
Other 7,215 7,171 65,006
Total current liabilities 80,495 101,919 725,246
Noncurrent liabilities:
Long-term accounts payable 3,902 5,406 35,156
Deferred tax liabilities (Note 24) 5,152 15,402 46,419
Deferred tax liabilities for land revaluation (Note 7) 9,544 9,587 85,990
Net defined benefit liabilities (Note 23) 22,460 21,098 202,361
Long-term deposits received (Note 20) 8,997 9,090 81,061
Other 1,437 1,457 12,947
Total noncurrent liabilities 51,494 62,043 463,952
Net Assets
Shareholders’ equity:
Capital stock:
Authorized — 700,000,000 shares;
Issued 2019 — 191,555,025 shares 28,534 – 257,086
2018 — 197,255,025 shares – 28,534 –
Capital surplus 21,565 40,165 194,297
Retained earnings 325,141 294,904 2,929,462
Treasury stock (42,533) (48,556) (383,215)
Total shareholders’ equity 332,707 315,048 2,997,630
Accumulated other comprehensive income:
Unrealized holding gain on securities 54,796 79,729 493,702
Unrealized gain from hedging instruments 85 109 766
Revaluation reserve for land (Note 7) 20,379 16,095 183,611
Foreign currency translation adjustments (24,691) (23,862) (222,461)
Remeasurements of defined benefit plans (1,582) (600) (14,254)
Total accumulated other comprehensive income 48,987 71,470 441,364
Non-controlling interests 1,076 1,826 9,695
Total net assets 382,771 388,345 3,448,698
Total liabilities and net assets ¥514,762 ¥552,309 $4,637,913

CONSOLIDATED STATEMENT OF OPERATIONS
Thousands of
Year ended March 31, 2019 2019 2018 2019
Net sales ¥437,416 ¥432,967 $3,941,040

Cost of sales (Notes 9, 10 and 12) 255,291 258,465 2,300,126
Gross profit 182,124 174,501 1,640,905
Selling, general and administrative expenses (Notes 11 and 12) 126,094 125,668 1,136,084
Operating income 56,030 48,833 504,820
Other income (expenses):

Interest and dividend income 4,652 4,694 41,914
Interest expenses (437) (359) (3,937)
Subsidy income 1,296 189 11,677
Sales discounts (3,240) (2,903) (29,192)
(Loss) on sales or disposal of property, plant and (283) (221) (2,550)
equipment, net (Note 13)
Gain on exchange of property, plant and equipment 2,034 – 18,326
Gain on sales of investment securities (Note 14) 821 25,824 7,397
Loss on impairment of fixed assets (295) (27) (2,658)
Business structural reform expenses (214) – (1,928)
Loss due to transition to a defined contribution pension plan – (148) –
Tariff assessment from previous periods, etc. – (174) –
Other, net (Note 15) 121 (1,234) 1,090
4,454 25,638 40,130
Income before income taxes 60,485 74,471 544,959

Income taxes (Note 24):
Current 14,561 21,377 131,192
Deferred 2,105 (1,330) 18,966
16,667 20,046 150,167
Net income for the period 43,817 54,424 394,783

Net income attributable to non-controlling interests 63 46 568
Net income attributable to owners of parent ¥ 43,753 ¥ 54,378 $ 394,207

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Thousands of
Year ended March 31, 2019 2019 2018 2019
Net income for the period ¥ 43,817 ¥54,424 $ 394,783

Other comprehensive income:
Unrealized holding (loss) on securities (24,917) (568) (224,498)
Unrealized gain (loss) from hedging instruments (24) 5 (216)
Revaluation reserve for land 1,315 – 11,848
Foreign currency translation adjustments (863) 458 (7,775)
Remeasurements of defined benefit plans (982) 2,045 (8,848)
Share of other comprehensive income (loss) of affiliates accounted for (14) 15 (126)
using the equity method
Total other comprehensive income (Note 16) (25,487) 1,956 (229,633)
Comprehensive income ¥ 18,330 ¥56,380 $ 165,150
(Composition)
Comprehensive income attributable to owners of parent ¥ 18,300 ¥56,232 $ 164,880
Comprehensive income attributable to non-controlling interests ¥ 29 ¥ 147 $ 261

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
Millions of yen
Shareholders’ equity Accumulated other comprehensive income
Yamaha Corporation and its Capital stock Capital Retained Treasury Total Unrealized Unrealized Revaluation Foreign Remeasurements Total Non-controlling Total net
consolidated subsidiaries (Note 17) surplus earnings stock shareholders’ holding gain gain (loss) reserve currency of defined accumulated interests assets
(Note 17) (Note 17) equity (loss) on from hedging for land translation benefit plans other
Year ended March 31, 2019 (Note 17) securities instruments adjustments comprehensive
income
Balance as of April 1, 2017 ¥28,534 ¥40,054 ¥250,649 ¥(23,731) ¥295,507 ¥ 80,282 ¥103 ¥16,095 ¥(24,219) ¥(2,645) ¥ 69,616 ¥2,314 ¥367,437
Changes of items during the
period:
Dividends from surplus (10,123) (10,123) (10,123)
(Note 17)
Net income attributable to 54,378 54,378 54,378
owners of parent
Reversal of revaluation – –
reserve for land
Purchase of treasury stock (25,012) (25,012) (25,012)
Cancellation of treasury stock – –
Disposal of treasury stock 111 187 298 298
Purchase of shares of – –
consolidated subsidiaries
Net changes of items other (553) 5 0 357 2,045 1,854 (488) 1,366
than shareholders’ equity
Total changes of items during – 111 44,254 (24,824) 19,541 (553) 5 0 357 2,045 1,854 (488) 20,907
the period
Balance as of April 1, 2018 ¥28,534 ¥40,165 ¥294,904 ¥(48,556) ¥315,048 ¥ 79,729 ¥109 ¥16,095 ¥(23,862) ¥ (600) ¥ 71,470 ¥1,826 ¥388,345
period:
(Note 17)
owners of parent
Reversal of revaluation (2,969) (2,969) (2,969)
reserve for land
Cancellation of treasury stock (17,964) 17,964 – –
Purchase of shares of (641) (641) (641)
Net changes of items other (24,932) (24) 4,284 (828) (982) (22,483) (749) (23,233)
Total changes of items during – (18,600) 30,237 6,022 17,659 (24,932) (24) 4,284 (828) (982) (22,483) (749) (5,573)
the period
Balance as of March 31, 2019 ¥28,534 ¥21,565 ¥325,141 ¥(42,533) ¥332,707 ¥ 54,796 ¥ 85 ¥20,379 ¥(24,691) ¥(1,582) ¥ 48,987 ¥1,076 ¥382,771

Thousands of U.S. dollars (Note 4)

Shareholders’ equity Accumulated other comprehensive income
Yamaha Corporation and its Capital stock Capital Retained Treasury Total Unrealized Unrealized Revaluation Foreign Remeasurements Total Non-controlling Total net
consolidated subsidiaries (Note 17) surplus earnings stock shareholders’ holding gain gain (loss) reserve currency of defined accumulated interests assets
(Note 17) (Note 17) equity (loss) on from hedging for land translation benefit plans other
Year ended March 31, 2019 (Note 17) securities instruments adjustments comprehensive
income
Balance as of April 1, 2018 $257,086 $ 361,879 $2,657,032 $(437,481) $2,838,526 $ 718,344 $ 982 $145,013 $(214,992) $ (5,406) $ 643,932 $ 16,452 $3,498,919
period:
(Note 17)
owners of parent
Reversal of revaluation (26,750) (26,750) (26,750)
reserve for land
Cancellation of treasury stock (161,852) 161,852 – –
Purchase of shares of (5,775) (5,775) (5,775)
Net changes of items other (224,633) (216) 38,598 (7,460) (8,848) (202,568) (6,748) (209,325)
Total changes of items during – (167,583) 272,430 54,257 159,104 (224,633) (216) 38,598 (7,460) (8,848) (202,568) (6,748) (50,212)
the period
Balance as of March 31, 2019 $257,086 $ 194,297 $2,929,462 $(383,215) $2,997,630 $ 493,702 $ 766 $183,611 $(222,461) $(14,254) $ 441,364 $ 9,695 $3,448,698

CONSOLIDATED STATEMENT OF CASH FLOWS
Thousands of
Year ended March 31, 2019 2019 2018 2019
Operating activities:
Income before income taxes ¥ 60,485 ¥ 74,471 $ 544,959
Depreciation and amortization 10,835 10,777 97,621
Loss on impairment of fixed assets 295 27 2,658
Amortization of goodwill 24 61 216
(Decrease) in allowance for doubtful accounts (90) (38) (811)
Loss on valuation of investment securities – 11 –
(Gain) on sales of investment securities (820) (25,821) (7,388)
(Decrease) increase in net defined benefit liabilities (182) 1,129 (1,640)
Interest and dividend income (4,652) (4,694) (41,914)
Interest expenses 437 359 3,937
Foreign exchange (gains) losses (322) 259 (2,901)
Equity in (gains) losses of affiliates (12) 8 (108)
Loss on sales or disposal of property, plant and equipment, net 283 221 2,550
(Gain) on exchange of property, plant and equipment (2,034) – (18,326)
Decrease (increase) in notes and accounts receivable—trade 1,180 (5,756) 10,632
(Increase) in inventories (6,511) (312) (58,663)
(Decrease) increase in notes and accounts payable—trade (2,456) 2,053 (22,128)
(Decrease) in accounts payable due to transition to a defined (1,558) (1,235) (14,037)
contribution pension plan
Other, net 442 1,527 3,982
Subtotal 55,342 53,049 498,621
Interest and dividend income received 4,654 4,672 41,932
Interest expenses paid (442) (274) (3,982)
Payment of business structural reform expenses – (348) –
Income taxes paid (29,319) (9,599) (264,159)
Net cash provided by operating activities 30,234 47,498 272,403
Investing activities:
Net (increase) in time deposits (4,955) (189) (44,644)
Payments for purchase of property, plant and equipment (20,192) (22,962) (181,926)
Proceeds from sales of property, plant and equipment 600 379 5,406
Payments for purchase of investment securities (1) (2) (9)
Proceeds from sales and redemption of investment securities 2,380 27,535 21,443
Payments of loans receivable (53) (29) (478)
Collection of loans receivable 48 52 432
Payments for acquisition of business (981) – (8,839)
Other, net 63 (15) 568
Net cash provided by (used in) investing activities (23,092) 4,766 (208,055)
Financing activities:
Net increase (decrease) in short-term loans payable (2,613) 515 (23,543)
Repayments of long-term loans payable (41) (29) (369)
Proceeds from deposits received from membership 125 125 1,126
Repayments for deposits received from membership (238) (365) (2,144)
(Increase) in cash segregated as deposits for purchasing of treasury stock (1,765) – (15,902)
Purchase of shares of subsidiaries that are not accompanied by a change (1,329) – (11,974)
of the scope of consolidation
Cash dividends paid (10,547) (10,123) (95,027)
Cash dividends paid to non-controlling interests (90) (636) (811)
Other, net (29) (58) (261)
Net cash used in financing activities (28,479) (35,584) (256,591)
Effect of exchange rate change on cash and cash equivalents (250) 53 (2,252)
Net (decrease) increase in cash and cash equivalents (21,587) 16,733 (194,495)
Cash and cash equivalents at the beginning of period 117,403 100,669 1,057,780
Cash and cash equivalents at end of period (Note 18) ¥ 95,815 ¥117,403 $ 863,276

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 Summary of Significant Accounting Policies

(a) Basis of presentation carried at cost. If the market value of marketable securities classified
Yamaha Corporation (the Company) and its domestic subsidiaries as available-for-sale securities declines significantly, such securities
maintain their accounting records and prepare their financial state- are written down to their respective fair value, thus establishing a
ments in accordance with accounting principles generally accepted in new cost basis. The amount of each write-down is charged to income
Japan, and its overseas subsidiaries maintain their books of account as a loss on valuation of investment securities unless the fair value is
in conformity with those of their respective countries of domicile. deemed recoverable. The Company has established a policy for the
However, in accordance with “Practical Solution on Unification of recognition of loss on valuation of investment securities if the market
Accounting Policies Applied to Foreign Subsidiaries for Consolidated value at the year-end has declined significantly and a recovery to fair
Financial Statements” (Practical Issues Task Force (PITF) No.18), the value is not anticipated. Cost of securities sold is determined by the
accompanying consolidated financial statements have been prepared weighted-average method.
by using the accounts of overseas consolidated subsidiaries prepared
in accordance with either International Financial Reporting Standards (d) Inventories
(IFRS) or accounting principles generally accepted in the United Inventories of the Company and its domestic consolidated subsidiar-
States as adjusted for certain items. The Company and all consoli- ies are stated principally at the cost method (a method of reducing
dated subsidiaries are referred to herein after as the “Yamaha book value when the profitability of the inventories declines), cost
Group.” being determined by the periodic average method. Inventories of the
The consolidated financial statements are prepared on the basis Company’s overseas consolidated subsidiaries are stated principally
of accounting principles generally accepted in Japan, which are differ- at the lower of cost or market, cost being determined by the moving
ent in certain respects as to the application and disclosure require- average method.
ments of IFRS, and are compiled from the consolidated financial
statements prepared by the Company as required by the Financial (e) Depreciation
Instruments and Exchange Law of Japan. Certain reclassifications Depreciation of property, plant and equipment (excluding leased
have been made to present the accompanying consolidated financial assets) is calculated by the straight-line method, at rates based on
statements in a format that is familiar to readers outside Japan. As the estimated useful lives of the respective assets.
permitted, amounts of less than one million yen have been omitted. Estimated useful lives:
As a result, the totals shown in the accompanying consolidated finan- Buildings: 31–50 years (accompanying facilities: 15 years)
cial statements (both in yen and U.S. dollars) do not necessarily agree Structures: 10–30 years
with the sums of the individual amounts. Machinery and equipment: 4–12 years
Tools, furniture and fixtures: 5–6 years
(b) B
asis of consolidation and accounting for investments in Depreciation of leased assets under finance leases, other than
unconsolidated subsidiaries and affiliates those for which the ownership transfers to the lessee, is calculated
The accompanying consolidated financial statements include the by the straight-line method over the lease period with the residual
accounts of the parent company and all subsidiaries over which it value at zero.
exerts substantial control either through majority ownership of voting
stock and/or by other means. As of March 31, 2019, the numbers of (f) Allowance for doubtful accounts
consolidated subsidiaries and affiliates accounted for by the equity To properly evaluate accounts receivable, the allowance for doubtful
method were 59 and 2 (59 and 2 in 2018). accounts is provided at an amount sufficient to cover possible losses
Investments in affiliates (other than subsidiaries as defined on the collection of receivables. The amount of the provision is based
above) whose decision-making and control over their operations are on the historical experience with write-offs for normal receivables and
significantly affected in various ways by the Yamaha Group are individual estimation of the collectability of receivables due from spe-
accounted for by the equity method. Investments in two affiliates cific companies in financial difficulties.
were accounted for by the equity method for the year ended March
31, 2019 (two in 2018). Investments in unconsolidated affiliates not (g) Provision for product warranties
accounted for by the equity method are carried at cost. Provision for product warranties is provided to cover the cost of cus-
Ten overseas subsidiaries have a financial closing date as of tomers’ claims relating to after-sales service and repairs. The amount
December 31, which differs from the financial closing date of the of this provision is based on a percentage of the amount or volume of
Company; however, financial statements as of March 31 are prepared sales after considering the historical experience with repairs of prod-
and reported by these overseas subsidiaries for consolidation ucts under warranty or individual estimation.
purposes.
(h) Retirement benefits
(c) Securities In calculating retirement benefit obligations, the benefit formula is pri-
Securities owned by the Yamaha Group have been classified into two marily used as the method for allocating projected retirement bene-
categories, held-to-maturity and available-for-sale, in accordance with fits to periods of service up to March 31, 2019.
the accounting standards for financial instruments. Under these stan- Prior service cost is amortized as incurred by the straight-line
dards, held-to-maturity debt securities are either amortized or accu- method over a period (10 years) that is shorter than the average
mulated to face value by the straight-line method. Marketable remaining years of service of the employees participating in the plans.
securities classified as available-for-sale securities are carried at fair Actuarial gain or loss is amortized in the following year in which
value with any changes in unrealized holding gain or loss, net of the the gain or loss is recognized, primarily by the straight-line method,
applicable income taxes, included directly in net assets. over a period (10 years) that is shorter than the average remaining
Nonmarketable securities classified as available-for-sale securities are years of service of the employees participating in the plans.

(i) Construction contracts subsidiaries arrange their forward foreign exchange contracts and
For construction work in progress, if the outcome of the construction currency options, within amounts necessary, in accordance with
activity during the course of the construction is deemed certain, the internal rules of each company.
percentage of completion method is applied. Hedging instruments are forward foreign exchange contracts and
When the above condition is not met, the completed-contract purchased foreign currency put options. Hedged items consist of
method is applied. forecast transactions, and recognized receivables and payables
The method for estimating the amount recognized by the per- denominated in foreign currencies. Forecast transactions denomi-
centage of completion method is based on the ratio of costs incurred nated in foreign currencies designated as hedged items are
to the estimated total cost. accounted for by the benchmark method.
Where hedge effectiveness is not reassessed given that the
(j) Criteria for presentation of finance leases (as lessor) anticipated cash flows have been fixed by hedging activities and the
Finance lease transactions where the Company or a consolidated risk of changes in cash flows is completely avoided, forward foreign
subsidiary is the lessor of the leased assets, in which ownership is exchange contracts related to receivables and payables denominated
not transferred to the lessee, are recorded as lease investment in foreign currencies are accounted for by the allocation method
assets which are included in “Other” under “Current assets.” whereby translation differences are allocated into the hedged items.
Sales and cost of sales related to these finance lease transactions See Note 22.
are recognized at the time the lease fees are received.
(m) Amortization method and amortization period for
(k) Foreign currency translation goodwill
Monetary assets and liabilities of the Company and its domestic con- Amortization of goodwill is carried out separately for each goodwill
solidated subsidiaries denominated in foreign currencies are trans- item over a reasonable amount of years using the straight-line
lated at the exchange rates in effect at each balance sheet date. method.
The resulting exchange gain or loss is recognized as other income or
expense. Assets and liabilities of overseas consolidated subsidiaries (n) Cash and cash equivalents
are translated at the exchange rates in effect at each balance sheet Cash on hand and in banks and short-term investments with a matu-
date. The components of net assets excluding translation adjustment rity of three months or less when purchased can easily be converted
and non-controlling interests are translated at their historical exchange to cash and are subject to little risk of change in value.
rates. Revenue and expense accounts are translated at the average
rates of exchange in effect during the year. Differences arising (o) Income taxes
from translation are presented as translation adjustments and non- Deferred income taxes are recognized by the asset and liability
controlling interests in the accompanying Consolidated Balance Sheet. method. Under this method, deferred tax assets and liabilities are
determined based on the differences between financial reporting and
(l) Derivative financial instruments the tax bases of the assets and liabilities and are measured using the
The Company has entered into various derivative transactions in order enacted tax rates and laws which will be in effect when the differ-
to manage certain risk arising from adverse fluctuations in foreign ences are expected to reverse.
currency exchange rates. Derivative financial instruments are carried The Company and certain of its domestic subsidiaries have
at fair value with changes in unrealized gain or loss charged or cred- adopted the consolidated taxation system.
ited to operations, except for those which meet the criteria for defer-
ral hedge accounting under which unrealized gain or loss is deferred (p) Consumption tax
as a component of net assets. National and local consumption taxes are excluded from transaction
(Hedge accounting) amounts. Non-deductible national and local consumption taxes on
To manage the fluctuation of foreign exchange risk in normal export assets are treated as expenses.
and import transactions, the Company and its consolidated
2 New Accounting Standards Not Yet Adopted

(a) Revenue Recognition Step 1: Identify the contract(s) with the customer.
• “Accounting Standard for Revenue Recognition” (ASBJ Statement Step 2: Identify the performance obligations in the contract.
No. 29, March 30, 2018) Step 3: Determine the transaction price.
• “Implementation Guidance on Accounting Standard for Revenue Step 4: Allocate the transaction price to the performance obligation in
Recognition” (ASBJ Guidance No. 30, March 30, 2018) the contract.
Step 5: Recognize revenue when/as a performance obligation is
(1) Overview satisfied.
This is a comprehensive accounting standard for revenue recognition.
Specifically the accounting standard establishes the following five- (2) Scheduled date of adoption
step model that will apply to revenue from customers. The Company expects to adopt the accounting standard and imple-
mentation guidance from the beginning of the fiscal year ending
March 31, 2020.

(3) Impact of the adoption of accounting standard and (1) Overview

implementation guidance. IFRS 16 requires lessees to recognize assets and liabilities for all
The Company is currently evaluating the effect of the adoption of this leases as a general rule.
accounting standard and implementation guidance on its consolidated
financial statements. (2) Scheduled date of adoption
The Company expects to adopt IFRS 16 from the beginning of the
(b) Leases fiscal year ending March 31, 2020.
• “Leases” (IFRS 16, January 13, 2016)
(3) Impact of the adoption of IFRS 16
The Company is currently evaluating the effect of the adoption of
IFRS 16 on its consolidated financial statements.
3 Changes in the Method of Presentation

Notes Regarding Consolidated Balance Sheet Accounting. However, the description concerning the previous fiscal
“Partial Amendments to Accounting Standard for Tax Effect year are omitted in accordance with the transitional treatment as pro-
Accounting” (Accounting Standards Board of Japan (ASBJ) Statement vided in paragraph 7 of Partial Amendments to Accounting Standard
No. 28, February 16, 2018) have been applied from the fiscal year for Tax Effect Accounting.
ended March 31, 2019. As a result, on the Consolidated Balance
Sheet for the previous fiscal year, “Deferred tax assets” under Notes Regarding Consolidated Statement of Operations
current assets was reduced ¥10,279 million, “Deferred tax liabilities” In the consolidated financial statements for the previous fiscal year,
under current liabilities was reduced ¥33 million, and “Deferred tax “Subsidy income” was included in “Other, net” under other income
liabilities” under noncurrent liabilities was reduced ¥7,841 million, (expenses). However, since the amount of this item has become mate-
respectively. Also, “Deferred tax assets” under investments and rial, it has been presented as an independent item from the fiscal year
other assets was increased ¥2,404 million. ended March 31, 2019. Due to this change in presentation, the consoli-
In addition, the notes to the consolidated financial statements on dated financial statements for the previous fiscal year have been reclassi-
tax effect accounting includes matters described in Note 8 (excluding fied. As a result, in the Consolidated Statement of Operations for the
the total amount of valuation allowance) and Note 9 of Accounting previous fiscal year, the “Other, net” under other income (expenses),
Standard for Tax Effect Accounting, which are provided in paragraphs which was reported as ¥(1,045) million, has been restated as ¥189
3 to 5 of Partial Amendments to Accounting Standard for Tax Effect million of “Subsidy income” and ¥(1,234) million of “Other, net.”
4 U.S. Dollar Amounts

Solely for the convenience of the reader, the accompanying consolidated financial statements for the year ended March 31, 2019 have been pre-
sented in U.S. dollars by translating all yen amounts at ¥110.99 = U.S.$1.00, the exchange rate prevailing on March 31, 2019. This translation
should not be construed as a representation that yen have been, could have been, or could in the future be converted into U.S. dollars at the
above or any other rate.
5 Accumulated Depreciation
Accumulated depreciation of property, plant and equipment at March 31, 2019 and 2018 amounted to ¥188,646 million ($1,699,667 thousand) and
¥185,212 million, respectively.
6 Investment Securities
Investment securities at March 31, 2019 and 2018 were as follows:
Thousands of
2019 2018 2019
Investment securities in unconsolidated subsidiaries and affiliates ¥907 ¥917 $8,172

Investments in capital in unconsolidated subsidiaries and affiliates 30 31 270

7 Land Revaluation
For the year ended March 31, 2019, the Company has carried over land tax list as specified in No. 10 or No. 11 of Article 341 of the Local
the revaluation of their landholdings at the date of revaluation in Tax Law governed by Item 3 of Article 2 of the Enforcement Order
accordance with the “Law Concerning the Revaluation of Land” for the “Law Concerning the Revaluation of Land” (Cabinet Order
(Law No. 34 published on March 31, 1998). The date of revaluation No. 119 published on March 31, 1998).
was March 31, 2002. The excess of the revalued carrying amount of such land
The Company determined the value of its land based on the over its market value at March 31, 2019 and 2018 is summarized
respective value registered in the land tax list or the supplementary as follows:
Thousands of
2019 2018 2019
Excess of revalued carrying amount of land over market value ¥(840) ¥(7,347) $(7,568)
8 Notes Receivable and Payable Maturing on the Balance Sheet Date

Notes receivable and payable are settled on the date of clearance. As March 31, 2019 and 2018 were bank holidays, notes receivable and payable
maturing on those dates could not be settled and were settled on the following business day and included in the ending balances of notes and
accounts receivable—trade, and notes and accounts payable—trade as follows:
Thousands of
2019 2018 2019
Notes receivable ¥ 5 ¥ 5 $ 45

Notes payable ¥13 ¥13 $117
9 Inventories
Inventories at March 31, 2019 and 2018 were as follows:
Thousands of
2019 2018 2019
Merchandise and finished goods ¥ 67,983 ¥65,064 $612,515

Work in process 13,771 13,339 124,074
Raw materials and supplies 18,580 15,721 167,402
Total ¥100,334 ¥94,126 $903,991
Write-downs of inventories for the years ended March 31, 2019 and 2018 were recognized in the following account:
Thousands of
2019 2018 2019
Cost of sales ¥(134) ¥177 $(1,207)

Note: Figure shown in parentheses is a profit item.
10 Provision for Loss on Construction Contracts

Provision for loss on construction contracts was included in the following account for the years ended March 31, 2019 and 2018:
Thousands of
2019 2018 2019
Cost of sales ¥3 ¥(11) $27


11 Selling, General and Administrative Expenses

Principal items of selling, general and administrative expenses for the years ended March 31, 2019 and 2018 were as follows:
Thousands of
2019 2018 2019
Sales commissions ¥ 1,192 ¥ 1,186 $ 10,740

Transport expenses 13,093 12,878 117,966
Advertising expenses and sales promotion expenses 19,241 19,416 173,358
Allowance for doubtful accounts 124 103 1,117
Provision for product warranties 785 612 7,073
Retirement benefit expenses 2,933 3,696 26,426
Salaries and benefits 52,654 52,957 474,403
Rent 3,093 3,410 27,867
Depreciation and amortization 2,482 2,104 22,362
12 R&D Expenses
R&D expenses, included in selling, general and administrative expenses and cost of sales for the years ended March 31, 2019 and 2018,
amounted to ¥24,926 million ($224,579 thousand) and ¥24,797 million, respectively.
13 Sales or Disposal of Property, Plant and Equipment

For the year ended March 31, 2019 For the year ended March 31, 2018
Gain on sales of property, plant and equipment principally resulted from Gain on sales of property, plant and equipment principally resulted
sales of machinery, and buildings and structures. Loss on disposal of from sales of land, and tools, furniture and fixtures. Loss on disposal
property, plant and equipment principally resulted from disposal of of property, plant and equipment principally resulted from disposal of
buildings and structures, tools, furniture and fixtures, and machinery. buildings, and machinery, tools, furniture and fixtures.
14 Sales of Investment Securities

For the year ended March 31, 2018
Gain on sales of investment securities principally resulted from sales of a portion of the Company’s holdings of Yamaha Motor Co., Ltd. shares of
¥25,823 million for the fiscal year.
15 Other Income (Expenses)

The components of “Other, net” in “Other income (expenses)” for the years ended March 31, 2019 and 2018 were as follows:
Thousands of

2019 2018 2019
Foreign exchange losses ¥(141) ¥(1,301) $(1,270)

Loss on valuation of investment securities – (11) –
Others 263 78 2,370
Other, net ¥ 121 ¥(1,234) $ 1,090

16 Information on Consolidated Statement of Comprehensive Income

Reclassification adjustments and tax effects related to each component of other comprehensive income for the years ended March 31, 2019 and
2018 were as follows:
Thousands of
2019 2018 2019
Other comprehensive income

Unrealized holding (loss) on securities
Amount arising during the year ¥(34,789) ¥ 25,019 $(313,443)
Reclassification adjustments for gains and losses recognized in (738) (25,824) (6,649)
the Consolidated Statement of Operations
Amount before tax effect adjustment (35,528) (804) (320,101)
Tax effect 10,610 235 95,594
Total (24,917) (568) (224,498)
Unrealized gain (loss) from hedging instruments
Amount arising during the year (34) 7 (306)
Tax effect 10 (1) 90
Total (24) 5 (216)
Revaluation reserve for land
Tax effect 1,315 – 11,848
Foreign currency translation adjustments
Amount arising during the year (863) 458 (7,775)
Remeasurements of defined benefit plans
Amount arising during the year (2,683) 227 (24,173)
Reclassification adjustments for gains and losses recognized in 1,284 2,672 11,569
the Consolidated Statement of Operations
Amount before tax effect adjustment (1,399) 2,899 (12,605)
Tax effect 416 (854) 3,748
Total (982) 2,045 (8,848)
Share of other comprehensive income (loss) of affiliates accounted
for using equity method
Amount arising during the year (14) 15 (126)
Total ¥(25,487) ¥ 1,956 $(229,633)
17 Information on Consolidated Statement of Changes in Net Assets

The following tables present information related to the accompanying Consolidated Statement of Changes in Net Assets for the years ended
March 31, 2019 and 2018:
(a) Common stock

Number of shares 2019 2018
Beginning of the year 197,255,025 197,255,025

Increase – –
Decrease 5,700,000*1 –
End of the year 191,555,025 197,255,025
*1 Decrease owing to cancellation of treasury stock based on the resolution of the Board of Directors: 5,700,000 shares
(b) Treasury stock

Number of shares 2019 2018
Beginning of the year 15,406,885 9,820,691

Increase 2,214,483*1 5,663,794*3
Decrease 5,702,000*2 77,600*4
End of the year 11,919,368 15,406,885
*1 Increase owing to purchase of treasury stock based on the resolution of the Board of Directors: 2,209,500 shares
Increase owing to return of restricted stock compensation without payment before completion of the restricted period: 2,000 shares
Increase owing to purchase of outstanding fractional shares of less than one trading unit: 2,983 shares
*2 Decrease owing to cancellation of treasury stock based on the resolution of the Board of Directors: 5,700,000 shares
Decrease owing to disposal of treasury stock as restricted stock compensation: 2,000 shares
*3 Increase owing to purchase of treasury stock based on the resolution of the Board of Directors: 5,660,700 shares
Increase owing to purchase of outstanding fractional shares of less than one trading unit: 3,094 shares
*4 Decrease owing to disposal of treasury stock as restricted stock compensation: 77,600 shares

(c) Subscription rights to shares

None
(d) Cash dividends

(1) Amount of dividend payments
2019
Total dividends Dividends
(Thousands of per share
Total dividends U.S. dollars) Dividends per (U.S. dollars)
Date of approval Type of shares (Millions of yen) (Note 4) share (Yen) (Note 4) Record date Effective date
Jun. 25, 2018 Common ¥5,091 $45,869 ¥28.00 $0.25 Mar. 31, 2018 Jun. 26, 2018
(Annual General Meeting stock
of Shareholders)
Nov. 1, 2018 Common ¥5,455 $49,149 ¥30.00 $0.27 Sept. 30, 2018 Dec. 6, 2018
(Board of Directors) stock
Notes: D
ividends per share of ¥28.00 ($0.25) approved on June 25, 2018 consisted of regular dividends of ¥28.00 ($0.25).
Dividends per share of ¥30.00 ($0.27) approved on November 1, 2018 consisted of regular dividends of ¥30.00 ($0.27).
2018
Total dividends Dividends per
Date of approval Type of shares (Millions of yen) share (Yen) Record date Effective date
Jun. 22, 2017 Common ¥4,873 ¥26.00 Mar. 31, 2017 Jun. 23, 2017
(Annual General Meeting stock
of Shareholders)
Nov. 1, 2017 Common ¥5,250 ¥28.00 Sept. 30, 2017 Dec. 7, 2017
(Board of Directors) stock
Notes: Dividends per share of ¥26.00 approved on June 22, 2017 consisted of regular dividends of ¥26.00.
Dividends per share of ¥28.00 approved on November 1, 2017 consisted of regular dividends of ¥28.00.
(2) Dividends whose effective date is in the year subsequent to that in which the record date falls
2019
Total dividends Dividends
(Thousands of per share
Source of Total dividends U.S. dollars) Dividends per (U.S. dollars)
Date of approval Type of shares dividends (Millions of yen) (Note 4) share (Yen) (Note 4) Record date Effective date
Jun. 24, 2019 Common Retained ¥5,389 $48,554 ¥30.00 $0.27 Mar. 31, 2019 Jun. 25, 2019
(Annual General Meeting stock earnings
of Shareholders)
Note: Dividends per share of ¥30.00 ($0.27) approved on June 24, 2019 consisted of regular dividends of ¥30.00 ($0.27).
2018
Source of Total dividends Dividends per
Date of approval Type of shares dividends (Millions of yen) share (Yen) Record date Effective date
Jun. 25, 2018 Common Retained ¥5,091 ¥28.00 Mar. 31, 2018 Jun. 26, 2018
(Annual General Meeting stock earnings
of Shareholders)
Note: Dividends per share of ¥28.00 approved on June 25, 2018 consisted of regular dividends of ¥28.00.
18 Supplementary Cash Flow Information

The following table represents a reconciliation of “Cash and deposits” and “Cash and cash equivalents” at March 31, 2019 and 2018:
Thousands of

2019 2018 2019
Cash and deposits ¥106,061 ¥122,731 $955,591

Time deposits with a maturity of more than three months (10,246) (5,327) (92,315)
Cash and cash equivalents ¥ 95,815 ¥117,403 $863,276

19 Leases
2019
Lessees’ accounting
Operating lease transactions
Future minimum lease payments subsequent to March 31, 2019 on noncancellable leases are as follows:
Thousands of
Years ending March 31 Millions of yen U.S. dollars (Note 4)
2020 ¥ 606 $ 5,460

2021 and thereafter 1,828 16,470
Total ¥2,434 $21,930
Finance lease transactions in which ownership is not transferred to the lessee commencing on or before March 31, 2008
(a) Amounts related to leased assets corresponding to the acquisition cost, accumulated depreciation and net book value at the
end of the year
Millions of yen Thousands of U.S. dollars (Note 4)
Accumulated Accumulated
As of March 31, 2019 Acquisition costs depreciation Net book value Acquisition costs depreciation Net book value
Buildings and structures ¥768 ¥543 ¥225 $6,920 $4,892 $2,027

Other – – – – – –
Total ¥768 ¥543 ¥225 $6,920 $4,892 $2,027
Amounts corresponding to the acquisition costs include interest expense since the balance of future minimum lease payments accounts for
only a small percentage of property, plant and equipment as of the balance sheet date.
(b) Amounts corresponding to the future minimum lease payments subsequent to March 31, 2019
Thousands of
2020 ¥ 42 $ 378

2021 and thereafter 183 1,649
Total ¥225 $2,027
Amounts corresponding to the future minimum lease payments include interest expense since the balance of future minimum lease pay-
ments accounts for only a small percentage of property, plant and equipment as of the balance sheet date.
(c) Amounts corresponding to the lease payments and depreciation

Thousands of
Year ended March 31, 2019 Millions of yen U.S. dollars (Note 4)
Lease payments ¥42 $378

Depreciation 42 378
(d) Method of calculating the amount of the depreciation of leased assets

Depreciation of leased assets is calculated by straight-line method over the lease period with their residual value at zero.
Lessors’ accounting
Future minimum lease amounts receivable subsequent to March 31, 2019 on noncancellable leases are as follows:
Thousands of
2020 ¥256 $2,307

2021 and thereafter 291 2,622
Total ¥547 $4,928

2018
Lessees’ accounting
Future minimum lease payments subsequent to March 31, 2018 on noncancellable leases are as follows:
Years ended / ending March 31 Millions of yen
2019 ¥ 637
2020 and thereafter 2,056
Total ¥2,693
Finance lease transactions in which ownership is not transferred to the lessee commencing on or before March 31, 2008
(a) Amounts related to leased assets corresponding to the acquisition cost, accumulated depreciation and net book value at the
end of the year
Millions of yen
Accumulated
As of March 31, 2018 Acquisition costs depreciation Net book value
Buildings and structures ¥799 ¥500 ¥298

Other – – –
Total ¥799 ¥500 ¥298
Amounts corresponding to the acquisition costs include interest expense since the balance of future minimum lease payments accounts for
only a small percentage of property, plant and equipment as of the balance sheet date.
(b) Amounts corresponding to the future minimum lease payments subsequent to March 31, 2018
2019 ¥ 47
2020 and thereafter 250
Total ¥298
Amounts corresponding to the future minimum lease payments include interest expense since the balance of future minimum lease pay-
ments accounts for only a small percentage of property, plant and equipment as of the balance sheet date.
(c) Amounts corresponding to the lease payments and depreciation

Year ended March 31, 2018 Millions of yen
Lease payments ¥47

Depreciation 47
(d) Method of calculating the amount of the depreciation of leased assets

Depreciation of leased assets is calculated by straight-line method over the lease period with their residual value at zero.
Lessors’ accounting
Future minimum lease amounts receivable subsequent to March 31, 2018 on noncancellable leases are as follows:
2019 ¥354
2020 and thereafter 303
Total ¥657

20 Financial Instruments
(a) Overview
(1) Policy for financial instruments
The Yamaha Group, in principle, limits its cash management to deposits for which principals are guaranteed and interest rates are fixed. In addi-
tion, the Yamaha Group raises funds mainly through bank borrowings. Further, Yamaha and its owned domestic subsidiaries practice group
finance. The Yamaha Group uses derivatives for the purpose of reducing risk, and limits derivative transactions to actual exposure. The Yamaha
Group does not enter into derivative transactions for speculative purposes.
(2) Types of financial instruments and related risk

Trade notes and accounts receivable are exposed to the credit risk of its customers. In addition, the Yamaha Group is exposed to foreign currency
exchange risk arising from receivables denominated in foreign currencies.
Short-term investment securities and investment securities are exposed to market risk. Those securities are composed of mainly the stock of
Yamaha Motor Co., Ltd., a former affiliated company which shares the Yamaha brand, and shares of common stock of other companies with
which it has business relationships. Trade notes and accounts payable, other accounts payable, and accrued expenses have payment due dates
within one year. In addition, trade accounts payable that are denominated in foreign currencies are exposed to foreign currency exchange risk.
Short-term loans payable are raised mainly in connection with business activities. Long-term deposits received are membership deposits received
from customers in the Yamaha Group’s resort business. The Yamaha Group is exposed to liquidity risk from its trade notes and accounts payable,
other accounts payable, accrued expenses, short-term loans payable, and long-term deposits received.
Regarding derivatives, the Yamaha Group enters into forward foreign exchange contracts with netting arrangements and currency options
(foreign currency put options) to reduce foreign currency exchange risk arising from the receivables and payables denominated in foreign curren-
cies in normal export and import transactions. Furthermore, the Yamaha Group has no record of currency option transactions (foreign currency put
options and yen call options).
Forward foreign exchange contracts are exposed to foreign currency exchange risk. For currency options, since the Yamaha Group only uses
purchased foreign currency put options, the risk of loss is limited to the option premium.
Derivative transactions are accounted for by hedge accounting. The method of hedge accounting, hedging instruments and hedged items,
hedging policy, and the assessment of the effectiveness of hedging activities are described in Note 1 (l) Derivative financial instruments (Hedge
accounting).
(b) Risk management for financial instruments

The Yamaha Group has established a Group financial management policy, and the Company and its consolidated subsidiaries have prepared rules
based on this policy for the following risk:
(1) Credit risk (the risk that customers may default)

The Yamaha Group has prepared a policy for managing its credit exposure and trade receivables. In accordance with the rules, the Yamaha Group
monitors the credit exposure limits of each customer and organizes all trade receivables by customer, and confirms the outstanding b alances with
customers regularly. For receivables that become past due, rules require taking steps to understand the causes and preparing a schedule for the
recovery of this exposure.
To minimize the credit risk of the counterparty in derivative transactions, the Yamaha Group enters into transactions only with financial institu-
tions that have a sound credit profile.
(2) Market risk (the risks arising from fluctuations in exchange rates, interest rates, and other indicators)
For trade receivables denominated in foreign currencies, the Yamaha Group minimizes the foreign exchange risk arising from the receivables by
entering into forward foreign exchange contracts and arranging for currency options, after netting by the payables denominated in foreign curren-
cies, within the limits of actual transactions. Also, the trade accounts payable denominated in foreign currencies are maintained within the amount
of accounts receivable denominated in foreign currencies at all times.
For short-term investment securities and long-term investment securities, the Yamaha Group periodically reviews the market value and the
financial position of the issuer with which the Yamaha Group has a business relationship.
In conducting derivative transactions, based on the policy stated in (1) above, the Company and its consolidated subsidiaries hold discussions,
establish internal rules for the management of derivatives, and then conduct and manage such transactions in accordance with the rules.
Derivative transactions of the Company and its subsidiaries are concentrated in each accounting and finance department of these companies.
Internal rules set forth the roles of each accounting and finance department, reports to be submitted to top management, communications to be
sent to related departments, and maximum upper limit on position.
Monthly reports including the outstanding balance of derivative transactions and quantitative information such as market trends of foreign
exchange rates are submitted to top management.
(3) Liquidity risk (the risk that the Group may not be able to meet its obligations on the scheduled dates)
The Yamaha Group manages liquidity risk based on the cash flow plans of the Company and its consolidated subsidiaries and through the practice
of group finance at the Company and its wholly owned subsidiaries in Japan.

(4) Supplementary explanation of the estimated fair value of financial instruments

The estimated fair value of financial instruments is their quoted market price if available. When there is no quoted market price available, fair value
is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could
result in different fair value.
In addition, the notional amounts of derivatives in Note 22 are not indicative of the actual market risk involved in derivative transactions.
(c) Estimated fair value of financial instruments

Carrying value on the Consolidated Balance Sheet as of March 31, 2019 and 2018, and difference between carrying value and estimated fair value,
are shown in the following table. The following table does not include financial instruments for which it is extremely difficult to determine the fair
value. See Note (ii) below:
Estimated fair Estimated fair
As of March 31, 2019 Carrying value* 1
value*1 Difference Carrying value*1 value*1 Difference
Cash and deposits ¥106,061 ¥106,061 ¥ – $955,591 $955,591 $ –

Notes and accounts receivable—trade 55,527 55,527 – 500,288 500,288 –
Investment securities
Subsidiaries and affiliates securities 711 336 (374) 6,406 3,027 (3,370)
Available-for-sale securities 90,907 90,907 – 819,056 819,056 –
Notes and accounts payable—trade (17,548) (17,548) – (158,104) (158,104) –
Accounts payable— (42,481) (42,481) – (382,746) (382,746) –
other and accrued expenses
Derivatives*2 121 121 – 1,090 1,090 –
Millions of yen
Estimated fair
As of March 31, 2018 Carrying value*1 value*1 Difference
Cash and deposits ¥122,731 ¥122,731 ¥ –

Notes and accounts receivable—trade 56,499 56,499 –
Subsidiaries and affiliates securities 721 352 (369)
Available-for-sale securities 127,658 127,658 –
Notes and accounts payable—trade (19,946) (19,946) –
Accounts payable— (45,527) (45,527) –
other and accrued expenses
Derivatives*2 155 155 –
*1 Figures shown in parentheses are liability items.
*2 The value of assets and liabilities arising from derivatives is shown at net value, with net liability position shown in parentheses.
Notes:
(i) Methods for computing the estimated fair value of financial instruments, securities and derivative transactions
Cash and deposits and notes and accounts receivable—trade
Since these items are settled in a short period of time, the carrying value approximates fair value.
The fair value of stocks is based on quoted market prices. The fair value of debt securities is based on either the quoted market price or prices
provided by the financial institutions making markets in these securities.
Information on securities classified by holding purpose is contained in Note 21.
Notes and accounts payable—trade and accounts payable—other and accrued expenses
Since these items are settled in a short period of time, the carrying value approximates fair value.
Derivatives Transactions
See Note 22.
(ii) Financial instruments for which it is extremely difficult to determine the fair value
Thousands of
2019 2018 2019
Carrying value
Unlisted stocks ¥1,735 ¥1,962 $15,632
Long-term deposits received 8,997 9,090 81,061
Because no quoted market price is available and estimating their future cash flows is deemed to be prohibitively expensive, the estimated fair
value of these financial instruments was extremely difficult to determine, and has not been disclosed.

(iii) The redemption schedule for receivables and securities with maturities as of March 31, 2019 and 2018
Within Between one Between five Within Between one Between five
As of March 31, 2019 one year and five years and ten years Over ten years one year and five years and ten years Over ten years
Cash and deposits ¥106,061 ¥– ¥– ¥– $ 955,591 $– $– $–

Notes and accounts 55,527 – – – 500,288 – – –
receivable—trade
Total ¥161,589 ¥– ¥– ¥– $1,455,888 $– $– $–
Millions of yen
Within Between one Between five
As of March 31, 2018 one year and five years and ten years Over ten years
Cash and deposits ¥122,731 ¥– ¥– ¥–

Notes and accounts 56,499 – – –
receivable—trade
Total ¥179,230 ¥– ¥– ¥–
(iv) The redemption schedule for long-term debt with maturities as of March 31, 2019 and 2018
Millions of yen
Between one Between two Between three Between four
As of March 31, 2019 Within one year and two years and three years and four years and five years Over five years
Short-term loans payable ¥8,936 ¥ – ¥ – ¥ – ¥ – ¥ –

Long-term loans payable – – – – – –
Lease obligations 69 38 19 18 17 54
Other interest-bearing debt – – – – – –
Total ¥9,005 ¥38 ¥19 ¥18 ¥17 ¥54

Short-term loans payable $80,512 $ – $ – $ – $ – $ –

Long-term loans payable – – – – – –
Total $81,133 $342 $171 $162 $153 $487
Millions of yen
Short-term loans payable ¥11,131 ¥ – ¥ – ¥ – ¥ – ¥ –

Long-term loans payable 41 – – – – –
Total ¥11,227 ¥53 ¥33 ¥17 ¥16 ¥70

21 Securities
(a) Available-for-sale securities with fair market value
As of March 31, 2019 Carrying value Acquisition costs Unrealized gain Carrying value Acquisition costs Unrealized gain
Securities whose carrying value

exceeds their acquisition costs:
Stock ¥88,538 ¥11,143 ¥77,394 $797,712 $100,396 $697,306
Other – – – – – –
Subtotal ¥88,538 ¥11,143 ¥77,394 $797,712 $100,396 $697,306
Securities whose carrying value does
not exceed their acquisition costs:
Stock ¥ 2,369 ¥ 2,447 ¥ (78) $ 21,344 $ 22,047 $ (703)
Other – – – – – –
Subtotal 2,369 2,447 (78) 21,344 22,047 (703)
Total ¥90,907 ¥13,591 ¥77,316 $819,056 $122,452 $696,603
Millions of yen
As of March 31, 2018 Carrying value Acquisition costs Unrealized gain
Securities whose carrying value

exceeds their acquisition costs:
Stock ¥127,658 ¥14,874 ¥112,783
Other – – –
Subtotal ¥127,658 ¥14,874 ¥112,783
Securities whose carrying value does
not exceed their acquisition costs:
Stock ¥ – ¥ – ¥ –
Other – – –
Subtotal – – –
Total ¥127,658 ¥14,874 ¥112,783
(b) Available-for-sale securities sold during the years ended March 31, 2019 and 2018
Thousands of
2019 2018 2019
Sales of available-for-sale securities ¥2,142 ¥27,245 $19,299

Gain on sales 821 25,824 7,397
Loss on sales 0 3 0

22 Derivatives and Hedging Activities

As of March 31, 2019 and 2018, there were no derivative transactions outstanding for which hedge accounting has not been applied. The notional
amounts, the estimated fair value of the notional amount, and the estimated fair value of the derivative instruments outstanding as of March 31,
2019 and 2018, for which hedge accounting has been applied, are summarized as follows:
Millions of yen
Notional amount Estimated fair value Estimated fair value
of notional amount of derivative
As of March 31, 2019 Hedged items Total Over one year instruments Calculation of fair value
Forward foreign exchange contracts Prices provided by

accounted for by benchmark method: financial institution
Sell: Accounts receivable
Euros ¥10,486 ¥– ¥10,365 ¥121
Forward foreign exchange contracts Market Price
accounted for by allocation method:
Euros 2,010 – –* –*
Total ¥12,496 ¥– ¥ – ¥ –
* The estimated fair value is included in the fair value of accounts receivable, since the forward foreign exchange contracts are accounted for as part of accounts receivable under the
allocation method in hedge accounting.


Euros $ 94,477 $– $ 93,387 $1,090
Euros 18,110 – –* –*
Total $112,587 $– $ – $ –
Millions of yen

Euros ¥12,996 ¥– ¥12,840 ¥155
Euros 1,861 – –* –*
Total ¥14,858 ¥– ¥ – ¥ –

23 Retirement Benefits
(a) Outline of the Company’s retirement benefit system
To provide employee retirement benefits, the Company and its consolidated subsidiaries have funded and unfunded defined benefit
pension plans and defined contribution pension plans.
The defined benefit pension plan (funded and unfunded plans) pays a lump-sum or an annual pension based on the employee
compensation point system.
In certain cases, the Company pays employees who are retiring, etc., additional retirement benefits that are not considered to
be retirement benefit obligations as calculated under actuarial methods based on retirement benefit accounting principles.
Certain consolidated subsidiaries that have defined benefit pension plans calculate net defined benefit liabilities and retirement
benefit expenses using the simplified method.
(b) Defined benefit pension plans

(1) Changes in the retirement benefit obligations for the years ended March 31, 2019 and 2018 (excluding plans that apply the simplified method)
Thousands of
2019 2018 2019
Retirement benefit obligations at the beginning of year ¥105,502 ¥106,920 $950,554

Service cost 3,909 4,040 35,219
Interest cost 703 720 6,334
Actuarial gain or loss 2,024 1,692 18,236
Retirement benefits paid (8,383) (7,633) (75,529)
Other 37 (238) 333
Retirement benefit obligations at end of year ¥103,794 ¥105,502 $935,165
(2) Changes in the plan assets for the years ended March 31, 2019 and 2018 (excluding plans that apply the simplified method)
Thousands of
2019 2018 2019
Plan assets at the beginning of year ¥85,947 ¥85,563 $774,367

Expected return on plan assets 1,712 1,693 15,425
Actuarial gain or loss (619) 1,886 (5,577)
Contribution by the Yamaha Group 2,578 2,941 23,227
Retirement benefits paid (6,579) (6,127) (59,276)
Other (13) (9) (117)
Plan assets at end of year ¥83,026 ¥85,947 $748,049
(3) Changes in net defined benefit liabilities for plans that apply the simplified method for the years ended March 31, 2019 and 2018
Thousands of
2019 2018 2019
Net defined benefit liabilities at the beginning of year ¥1,266 ¥1,428 $11,406
Retirement benefit expenses 191 176 1,721
Retirement benefits paid (119) (138) (1,072)
Contribution to plan (24) (27) (216)
Decrease due to transition to a defined contribution pension plan – (204) –
Other (15) 32 (135)
Net defined benefit liabilities at end of year ¥1,299 ¥1,266 $11,704
(4) Reconciliation between the funded status of the plans (retirement benefit obligations and plan assets) and the amounts recognized in the
Consolidated Balance Sheet (net defined benefit liabilities and net defined benefit assets) as of March 31, 2019 and 2018
Thousands of
2019 2018 2019
Retirement benefit obligations of funded plans ¥ 84,973 ¥ 87,073 $ 765,591

Plan assets (83,520) (86,451) (752,500)
1,452 622 13,082
Retirement benefit obligations of unfunded plans 20,613 20,199 185,719
Net assets and liabilities recorded in the Consolidated Balance Sheet 22,066 20,821 198,811
Net defined benefit liabilities 22,460 21,098 202,361
Net defined benefit assets (394) (276) (3,550)
Net assets and liabilities recorded in the Consolidated Balance Sheet ¥ 22,066 ¥ 20,821 $ 198,811
Note: Including plans that apply the simplified method.

(5) Components of retirement benefit expenses

Thousands of
2019 2018 2019
Service cost ¥ 3,909 ¥ 4,040 $ 35,219

Interest cost 703 720 6,334
Expected return on plan assets (1,712) (1,693) (15,425)
Amortization of actuarial gain or loss 1,518 2,904 13,677
Amortization of prior service cost (234) (188) (2,108)
Retirement benefit expenses calculated by simplified method 191 176 1,721
Other 15 4 135
Retirement benefit expenses for defined benefit pension plans 4,392 5,964 39,571
Loss due to transition to a defined contribution pension plan ¥
– ¥ 148 $ –
(6) Remeasurements of defined benefit plans

Components of remeasurements of defined benefit plans (before taxes)
Thousands of
2019 2018 2019
Prior service cost ¥ (234) ¥ (234) $ (2,108)

Actuarial gain or loss (1,164) 3,134 (10,487)
Total ¥(1,399) ¥2,899 $(12,605)
(7) Accumulated remeasurements of defined benefit plans

Components of accumulated remeasurements of defined benefit plans (before taxes)
Thousands of
2019 2018 2019
Unrecognized prior service cost ¥(1,815) ¥(2,050) $(16,353)

Unrecognized actuarial gain or loss 3,991 2,826 35,958
Total ¥ 2,175 ¥ 776 $ 19,596
(8) Items for plan assets

(i) Components of plan assets
Ratio of primary components of total plan assets
2019 2018
Life insurance company general accounts 56% 57%

Stocks 24% 23%
Bonds 13% 13%
Cash and deposits 1% 1%
Other 6% 6%
Total 100% 100%
(ii) Determining expected long-term rate of return

In determining the expected long-term rate of return of plan assets, the Company considers the current and projected asset allocations,
as well as the current and expected long-term investment returns from the various assets that constitute the plan assets.
(9) Items related to the basis of actuarial calculation

Items that form the primary basis for actuarial calculations as of March 31, 2019 and 2018
2019 2018
Discount rate 0.2% 0.4%

Expected long-term rate of return 2.0% 2.0%
(c) Defined contribution pension plans

Required contributions to defined contribution pension plans of consolidated subsidiaries totaled ¥1,342 million ($12,091 thousand) and ¥1,376
million in the years ended March 31, 2019 and 2018, respectively. In addition, aside from the above required contributions, the Company also
posted ¥205 million ($1,847 thousand) of additional retirement benefit expenses in the year ended March 31, 2019.

24 Income Taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries comprised corporation tax, inhabitants’ taxes, and
enterprise tax which, in the aggregate, resulted in effective statutory tax rates of approximately 30.0% and 30.2% for the years ended March 31,
2019 and 2018, respectively. Income taxes of the overseas consolidated subsidiaries are, in general, based on the tax rates applicable in their
respective countries of incorporation.
The major components of deferred tax assets and liabilities as of March 31, 2019 and 2018 are summarized as follows:
Thousands of
2019 2018 2019
Deferred tax assets:

Write-downs of inventories ¥ 1,872 ¥ 1,686 $ 16,866
Unrealized gain on inventories and property, plant and equipment 3,482 3,822 31,372
Allowance for doubtful accounts 275 280 2,478
Depreciation 6,654 6,962 59,951
Loss on impairment of fixed assets 3,530 3,534 31,805
Loss on valuation of investment securities 1,881 1,963 16,947
Accrued employees’ bonuses 2,345 2,298 21,128
Provision for product warranties 319 304 2,874
Long-term accounts payable 1,334 1,816 12,019
Net defined benefit liabilities 6,316 5,934 56,906
Tax loss carryforwards* 3,879 5,085 34,949
Other 6,113 6,179 55,077
Gross deferred tax assets 38,000 39,867 342,373
Valuation allowance related to tax loss carryforwards* (3,855) – (34,733)
Valuation allowance related to total deductible temporary differences (8,128) – (73,232)
Valuation allowance (11,983) (12,922) (107,965)
Total deferred tax assets ¥ 26,017 ¥ 26,944 $ 234,409
Deferred tax liabilities:

Reserve for deferred gain on property, plant and equipment ¥ (2,869) ¥ (793) $ (25,849)
Reserve for special account for acquisition of replacement property – (2,204) –
Reserve for special depreciation (1) (2) (9)
Unrealized holding gain on securities (22,639) (33,250) (203,973)
Other (952) (1,396) (8,577)
Total deferred tax liabilities (26,461) (37,647) (238,409)
Net deferred tax liabilities ¥ (444) ¥(10,702) $ (4,000)
* Tax loss carryforwards and other deferred tax assets expire as follows:
Millions of yen
2019 Within one year and two years and three years and four years and five years Over five years Total
Tax loss carried forward† ¥ 659 ¥ 194 ¥ 138 ¥ 147 ¥ 73 ¥ 2,667 ¥ 3,879
Valuation allowance (659) (194) (138) (147) (49) (2,667) (3,855)
Deferred tax assets – – – – 23 – 23
† Tax loss carryforwards is measured using the statutory effective tax rate

2019 Within one year and two years and three years and four years and five years Over five years Total
Tax loss carried forward† $ 5,937 $ 1,748 $ 1,243 $ 1,324 $ 658 $ 24,029 $ 34,949
Valuation allowance (5,937) (1,748) (1,243) (1,324) (441) (24,029) (34,733)

Deferred tax assets – – – – 207 – 207
† Tax loss carryforwards is measured using the statutory effective tax rate

A reconciliation between the effective statutory tax rate and the effective tax rate for the years ended March 31, 2019 and 2018 is
as follows:
2019 2018
Effective statutory tax rate 30.0% 30.2%

Adjustments:
Differences in tax rates of overseas consolidated subsidiaries (2.1) (1.2)
Non-temporary differences not deductible for tax purposes (0.2) (0.6)
Per capita inhabitants’ taxes 0.3 0.2
Foreign withholding tax 0.7 1.1
Allowances for changes in valuation (1.9) (2.2)
Special deduction for R&D expenses (2.2) (1.6)
Income tax for prior years at Indonesian subsidiaries 2.1 0.3
Other 0.9 0.7
Effective tax rate after adjustments for tax-effect accounting 27.6% 26.9%
(Change in the Method of Presentation)

In the previous fiscal year, “Income tax for prior years at Indonesian subsidiaries” was included in “Other” in the above table. However, since the
amount of this item has become material, it has been presented as an independent item from the fiscal year ended March 31, 2019. Also, in the
previous fiscal year, “Amortization of goodwill” was presented independently in the above table. However, since the amount of this item is no
longer material, it has been included in “Other.” To reflect this change in presentation, the corresponding figures for the previous fiscal year have
been reclassified.
As a result, “Other,” which was reported as 1.0% in the table for the previous fiscal year, has been restated in the table above as “Income tax
for prior years at Indonesian subsidiaries” of 0.3% and “Other” of 0.7%.
25 Segment Information
For the years ended March 31, 2019 and 2018
(a) Summary of reportable segments
Reportable segments are composed of business units that provide separate financial information, and are regularly reviewed by the Board of
Directors of the Company for the purpose of business performance evaluation and management resource allocation decisions.
The Company’s business segments, based on its economic features and similarity of products and services, comprise its two principal report-
able segments, which are Musical instruments and Audio equipment. Other businesses have been grouped together in the “Others” segment.
The Musical instruments business segment includes the manufacture and sales of pianos; digital musical instruments; wind, string, and per-
cussion instruments; and other music-related activities. The Audio equipment business segment includes the manufacture and sales of audio
products, professional audio equipment, information and telecommunication equipment, and certain other products. The “Others” segment
includes the electronic devices business, automobile interior wood components, factory automation (FA) equipment, golf products, resort, and
certain other lines of business.
(b) Method for calculating the sales, income (loss), assets, liabilities, and other items for reportable segments
The accounting treatment for reportable segments is carried out through principles and procedures that are the same as those used for preparing
the consolidated financial statements.
Figures for income in reportable segments are on an operating income basis.
Intersegment sales and transfers are based on prevailing market prices.

(c) Information on the amounts of sales, income (loss), assets, liabilities, and other items for reportable segments
Millions of yen
Reportable segment
Musical Audio Adjustments and
As of March 31, 2019 instruments equipment Total Others Total elimination Consolidated
Sales:
Sales to external customers ¥281,993 ¥120,710 ¥402,703 ¥ 34,713 ¥437,416 ¥ – ¥437,416
Intersegment sales or transfers – – – 334 334 (334) –
Total 281,993 120,710 402,703 35,047 437,751 (334) 437,416
Segment income ¥ 42,945 ¥ 10,618 ¥ 53,563 ¥ 2,466 ¥ 56,030 ¥ – ¥ 56,030
Segment assets ¥309,022 ¥ 81,933 ¥390,955 ¥123,806 ¥514,762 ¥ – ¥514,762
Other items:
Depreciation and amortization ¥ 7,019 ¥ 2,980 ¥ 9,999 ¥ 835 ¥ 10,835 ¥ – ¥ 10,835
Loss on impairment of fixed assets ¥ 264 ¥ 66 ¥ 331 ¥ 8 ¥ 339 ¥ – ¥ 339
Increase in property, plant and ¥ 12,635 ¥ 2,984 ¥ 15,620 ¥ 1,387 ¥ 17,008 ¥ – ¥ 17,008
equipment and intangible assets
Reportable segment
Sales:
Sales to external customers $2,540,706 $1,087,575 $3,628,282 $ 312,758 $3,941,040 $ – $3,941,040
Intersegment sales or transfers – – – 3,009 3,009 (3,009) –
Total 2,540,706 1,087,575 3,628,282 315,767 3,944,058 (3,009) 3,941,040
Segment income $ 386,927 $ 95,666 $ 482,593 $ 22,218 $ 504,820 $ – $ 504,820
Segment assets $2,784,233 $ 738,202 $3,522,434 $1,115,470 $4,637,913 $ – $4,637,913
Other items:
Depreciation and amortization $ 63,240 $ 26,849 $ 90,089 $ 7,523 $ 97,621 $ – $ 97,621
Loss on impairment of fixed assets $ 2,379 $ 595 $ 2,982 $ 72 $ 3,054 $ – $ 3,054
Increase in property, plant and $ 113,839 $ 26,885 $ 140,733 $ 12,497 $ 153,239 $ – $ 153,239
Notes: 1. T
he item “Adjustments and elimination” for the year ended March 31, 2019 contains the following:
The sales adjustment item of ¥(334) million ($(3,009) thousand) comprises eliminations of transactions among the Company’s business segments.
2. “Segment income” for the year ended March 31, 2019 means the operating income of the segment as presented in the Consolidated Statement of Operations.
3. A
mong the assets of the Others segment, the amounts of investment securities related to Yamaha Motor Co., Ltd. (the market value reported on the accompanying
Consolidated Balance Sheet) were ¥75,209 million ($677,620 thousand).
Millions of yen
Reportable segment
Sales:
Sales to external customers ¥274,486 ¥121,788 ¥396,275 ¥ 36,692 ¥432,967 ¥ – ¥432,967
Intersegment sales or transfers – – – 342 342 (342) –
Total 274,486 121,788 396,275 37,035 433,310 (342) 432,967
Segment income ¥ 34,644 ¥ 10,715 ¥ 45,359 ¥ 3,473 ¥ 48,833 ¥ – ¥ 48,833
Segment assets ¥315,893 ¥ 76,466 ¥392,359 ¥159,949 ¥552,309 ¥ – ¥552,309
Other items:
Depreciation and amortization ¥ 7,335 ¥ 2,701 ¥ 10,036 ¥ 740 ¥ 10,777 ¥ – ¥ 10,777
Loss on impairment of fixed assets ¥ 27 ¥ – ¥ 27 ¥ – ¥ 27 ¥ – ¥ 27
Increase in property, plant and ¥ 18,440 ¥ 4,207 ¥ 22,647 ¥ 2,085 ¥ 24,732 ¥ – ¥ 24,732
Notes: 1. T
he item “Adjustments and elimination” for the year ended March 31, 2018 contains the following:
The sales adjustment item of ¥(342) million comprises eliminations of transactions among the Company’s business segments.
2. “Segment income” for the year ended March 31, 2018 means the operating income of the segment as presented in the Consolidated Statement of Operations.
3. A
mong the assets of the Others segment, the amounts of investment securities related to Yamaha Motor Co., Ltd. (the market value reported on the accompanying
Consolidated Balance Sheet) were ¥110,164 million.
4. E
ffective from the fiscal year ended March 31, 2019, the Company has changed the method of presentation following the application of “Partial Amendments to Accounting
Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018). Figures for segment assets in the fiscal year ended
March 31, 2018 have been restated retroactively applying the revised method of presentation.

(d) Information by geographical segment

(i) Sales information based on the geographical location of the customers
Millions of yen
Overseas
North America Asia, Oceania,
Year ended March 31, 2019 Japan (U.S.A.) Europe China and other areas Total Consolidated
Net sales ¥129,693 ¥92,048 ¥83,858 ¥59,240 ¥72,575 ¥307,722 ¥437,416

(80,551)
Sales as a percentage of 29.6% 21.0% 19.2% 13.5% 16.7% 70.4% 100.0%
consolidated net sales (18.4%)

Overseas
Net sales $1,168,511 $829,336 $755,546 $533,742 $653,888 $2,772,520 $3,941,040

(725,750)
Notes: 1. Sales information is based on the geographical location of customers, and is classified by country or region.
2. Main country and regional divisions other than Japan:
(a) North America: U.S.A. and Canada
(b) Europe: Germany, France, and the U.K.
(c) Asia, Oceania, and other areas: Republic of Korea and Australia
Millions of yen
Overseas
Net sales ¥133,726 ¥86,888 ¥84,815 ¥54,188 ¥73,348 ¥299,240 ¥432,967

(76,249)
Notes: 1. Sales information is based on the geographical location of customers, and is classified by country or region.
2. Main country and regional divisions other than Japan:
(a) North America: U.S.A. and Canada
(b) Europe: Germany, France, and the U.K.
(c) Asia, Oceania, and other areas: Republic of Korea and Australia
(ii) Property, plant and equipment information based on Group locations

Millions of yen
Asia, Oceania, Adjustments and
Year ended March 31, 2019 Japan North America Europe China and other areas Total elimination Consolidated
Property, plant and ¥86,964 ¥1,687 ¥3,350 ¥12,105 ¥17,828 ¥121,934 ¥– ¥121,934
equipment

Property, plant and $783,530 $15,200 $30,183 $109,064 $160,627 $1,098,603 $– $1,098,603
equipment
Note: M
ain country and regional divisions other than Japan:
This classification is the same as “Sales information based on the geographical location of the customers.”
Millions of yen
Property, plant and ¥84,502 ¥1,635 ¥3,585 ¥11,547 ¥14,547 ¥115,817 ¥– ¥115,817
equipment
Note: M
ain country and regional divisions other than Japan:
This classification is the same as “Sales information based on the geographical location of the customers.”

(e) Information related to the amount of amortization of goodwill and the unamortized amount of goodwill by reportable segment
Millions of yen
Musical instruments Audio equipment Others Total
Amounts amortized ¥ 24 ¥– ¥– ¥ 24

Balance as of March 31, 2019 ¥ 136 ¥– ¥– ¥136

Amounts amortized $ 216 $ – $– $ 216

Balance as of March 31, 2019 $1,225 $ – $– $1,225

Millions of yen
Amounts amortized ¥57 ¥3 ¥– ¥61

Balance as of March 31, 2018 ¥ – ¥– ¥– ¥ –
(f) Information on gain on negative goodwill by reportable segment

None
26 Amounts per Share

Yen U.S. dollars (Note 4)
Years ended March 31 2019 2018 2019
Net income per share:

Basic ¥240.94 ¥291.81 $2.17
Yen U.S. dollars (Note 4)

As of March 31 2019 2018 2019
Net assets per share ¥2,124.83 ¥2,125.51 $19.14
Basic net income per share is computed based on the net income and the weighted-average number of shares of common stock outstanding
during each year. Diluted net income per share for the years ended March 31, 2019 and 2018 has not been presented because there were no
potentially dilutive securities at March 31, 2019 and 2018.
Net assets per share are based on the number of shares of common stock outstanding at each balance sheet date.
The basic net income per share is calculated as follows:

Thousands of
Years ended March 31 2019 2018 2019
Basic net income per share:

Net income attributable to owners of parent ¥43,753 ¥54,378 $394,207
Amounts not attributable to shareholders of common stock – – –
Net income attributable to shareholders of common stock 43,753 54,378 394,207
Weighted-average number of shares outstanding (shares) 181,598,344 186,347,105 –

27 Short-Term Loans Payable and Long-Term Debt

Short-term and long-term loans payable, lease obligations, and guarantee deposits as of March 31, 2019 and 2018 were as follows:
Thousands of
2019 2018 2019
Short-term loans payable ¥8,936 ¥11,131 $80,512

Current portion of long-term loans payable – 41 –
Current portion of lease obligations 69 54 622
Long-term loans payable (excluding those to be repaid within one year) – – –
Lease obligations (excluding those to be repaid within one year) 149 190 1,342
Other interest-bearing debt
Guarantee deposits 39 40 351
Total ¥9,194 ¥11,459 $82,836
The annual weighted-average interest rates applicable to above short-term loans payable and long-term debt at March 31, 2019 were as
follows:
2019
Short-term loans payable 2.6%

Current portion of long-term loans payable –%
Long-term loans payable (excluding those to be repaid within one year) –%
Other interest-bearing debt
Guarantee deposits 1.3%
Note: 1. The weighted-average interest rates shown above are calculated by using the balance of such obligations outstanding at the end of the fiscal year. For lease obligations, no
average interest rate is shown because the amounts in the Consolidated Balance Sheet include the amounts corresponding to interest paid from total lease payments.
2. Lease obligations and other interest-bearing debt (excluding those to be repaid within one year) scheduled to be repaid within five years from the balance sheet date as of
March 31, 2019 are as follows.
Millions of yen
and two years and three years and four years and five years
Lease obligations ¥38 ¥19 ¥18 ¥17

Other interest-bearing debt – – – –

and two years and three years and four years and five years
Lease obligations $342 $171 $162 $153

Other interest-bearing debt – – – –
28 Related Party Transactions

None
29 Subsequent Events
None

INDEPENDENT AUDITOR’S REPORT

MAIN NETWORKS
(As of September 1, 2019)
The Yamaha Group is currently expanding its business on a global basis, with locations in over 30 countries and regions
across the world.
Overseas Network
Yamaha Music & Electronics (China) Co., Ltd.

Yamaha Music Europe GmbH
Yamaha Music Technical (Shanghai) Co., Ltd.
Branch in France Branch in Switzerland
Yamaha Trading (Shanghai) Co., Ltd.
Branch in Italy Branch in Austria
Branch in Ibérica Branch in Benelux
Branch in the U.K. Branch in Poland
Branch in Scandinavia Branch in Turkey
Steinberg Media Technologies GmbH
Branch in Scandinavia
Yamaha Music (Russia) LLC.
Branch in Poland
Branch in the U.K. Branch in Benelux
Branch in Austria
Branch in Switzerland
L. Bösendorfer Klavierfabrik GmbH
Branch in Italy
Tianjin Yamaha Electronic Musical Instruments, Inc.
Branch in France
Branch in Ibérica Branch in Turkey
Nexo S.A.
Yamaha Music Korea Ltd.
Yamaha Electronics (Suzhou) Co., Ltd.
Yamaha Music Gulf FZE

Yamaha Music & Electronics Taiwan Co., Ltd.
Yamaha Music India Pvt. Ltd. Shenzhen Yamaha Music & Electronics Trading Co., Ltd.*1
Siam Music Yamaha Co., Ltd.*1
Yamaha Music Vietnam Company Limited
Yamaha Music (Malaysia) Sdn. Bhd.

Yamaha Electronics Manufacturing (M) Sdn. Bhd.
Yamaha Music Australia Pty. Ltd.

Sales companies, etc.
Sales and services (branch offices)
PT. Yamaha Musical Products Indonesia
Manufacturing / production companies, etc. PT. Yamaha Electronics Manufacturing Indonesia
Music entertainment business companies

PT. Yamaha Indonesia
PT. Yamaha Music Manufacturing Indonesia
PT. Yamaha Musik Indonesia (Distributor)
PT. Yamaha Music Manufacturing Asia
PT. Yamaha Musical Products Asia
Yamaha Music (Asia) Private Limited
Xiaoshan Yamaha Musical Instruments Co., Ltd.

Hangzhou Yamaha Musical Instruments Co., Ltd.

MAIN NETWORKS
Yamaha Unified Communications, Inc.
Yamaha Canada Music Ltd.

Yamaha Artist Services, Inc.
Kitami Mokuzai Co., Ltd.
Yamaha de México, S.A. de C.V.
Yamaha Music Latin America, S.A.

Branch in Argentina
Yamaha Corporation of America

Yamaha Guitar Group, Inc.
Yamaha Musical do Brasil Ltda.
Branch in Argentina Sakuraba Mokuzai Co., Ltd.
Domestic Network Yamaha Music Japan Co., Ltd.

Yamaha Music Retailing Co., Ltd.
Yamaha Sound Systems Inc.
Yamaha Music Entertainment
Yamaha Music Manufacturing Japan Corporation Holdings, Inc.
Yamaha Hi-Tech Design Corporation Yamaha Music Communications
Co., Ltd.
Jeugia Corporation*2
Yamaha Resort Inc.
Yamaha Corporation (headquarters)

• Retail shops Yamaha Piano Service Co., Ltd.
(Yamaha Music Retailing Yamaha Business Support Corporation
Co., Ltd.) Yamaha Ai Works Co., Ltd.*1
Yamaha Fine Technologies Co., Ltd.
*1. Non-consolidated subsidiaries and affiliates Yamaha Travel Service Co., Ltd.
*2. Equity-method affiliates

STOCK INFORMATION
(As of March 31, 2019)
Dividends Year-end: To the shareholders of record on Shareholder Composition

March 31 Number of Ratio of number of
shareholders shares to total (%)
Interim: To the shareholders of record on
Individuals 17,169 12.8
September 30
Financial institutions 59 55.5
Number of Shares Issued: 191,555,025 (includes treasury stock Japanese corporations 179 6.3
of Common Stock of 11,919,368) Foreign investors 612 22.8
Securities companies 34 2.6
Stock Exchange Tokyo
Total 18,053 100.0
Listing First Section, Code No. 7951
Note: The figure for individuals includes treasury stock.
Administrator of The Sumitomo Mitsui Trust Bank, Limited
Shareholders’ Stock Transfer Agency Department 3-15-33,
Registry Sakae, Naka-ku, Nagoya, Aichi 460-8685, Major Shareholders
Japan Shareholding
Number of shareholders
ratio (%)
Public Notices Shall be issued electronically at the following
The Master Trust Bank of Japan, Ltd. (trust a/c) 16.3
URL, except when an accident or other
Japan Trustee Services Bank, Ltd. (trust a/c) 9.0
unavoidable occurrence prevents this, in
Yamaha Motor Co., Ltd. 5.7
which case they shall be released in the
The Shizuoka Bank, Ltd. 4.2
Nihon Keizai Shimbun business daily
Mitsui Sumitomo Insurance Co., Ltd. 4.2
released in Tokyo.
Sumitomo Life Insurance Company 4.1
https://www.yamaha.com/ja/about/public_
notices/ (only in Japanese) Mizuho Bank, Ltd. 3.3
Nippon Life Insurance Company 2.8
Ordinary General June
Shareholders’ Trust & Custody Services Bank, Ltd.
(securities investment trust a/c) 2.0
Meeting
Japan Trustee Service Bank, Ltd. (trust a/c No. 7) 1.5
Number of 18,053
Note: Yamaha Corporation holds 11,919,368 shares of treasury stocks which have been
Shareholders excluded from the above Major Shareholders. The shareholding ratio is calculated
by excluding treasury stock from total outstanding shares.
Common Stock Price Range and Trading Volume TOPIX Common stock price range Trading volume (right)
(Yen) (Thousands of shares)
7,000
6,000
5,000
4,000
3,000
2,000 60,000
1,000 30,000
0 14/4 15/4 16/4 17/4 18/4 19/3 0
Fiscal year ended 2015/3 2016/3 2017/3 2018/3 2019/3

Share price at the end of fiscal year (Yen) 2,104 3,390 3,065 4,675 5,530
Share price—high (Yen) 2,355 3,575 3,820 4,960 6,080
Share price—low (Yen) 1,267 2,083 2,588 2,955 4,355
Trading volume (Million shares) 268 276 288 255 209
Fiscal year ended 2015/3 2016/3 2017/3 2018/3 2019/3

Dividend yield (%) 1.71 1.30 1.70 1.20 1.08
Price to earnings ratio (Times) 16.3 20.1 12.3 16.0 23.0
Price to book value ratio (Times) 1.18 2.12 1.57 2.20 2.60
Number of shares issued (Thousand shares) 197,255 197,255 197,255 197,255 191,555
Market capitalization at the end of fiscal year (Millions of yen) 415,025 668,695 604,587 922,167 1,059,299
Percentage of shares owned by foreign investors (%) 31.4 25.2 24.4 24.3 22.8

COMPANY INFORMATION
(As of March 31, 2019)
Corporate Profile
Company Name Yamaha Corporation Number of 20,375 (Excluding average number of

Employees temporary employees: 7,733)
Headquarters 10-1, Nakazawa-cho, Naka-ku, (Consolidated)
Hamamatsu, Shizuoka 430-8650, Japan
Number of 63 (of which 59 are consolidated
Year of Foundation 1887 Subsidiary companies)
Companies
Date of October 12, 1897
Incorporation Account March 31
Settlement Date
Paid-in Capital 28,534 million yen
Accounting Ernst & Young ShinNihon LLC
Auditor
Major External Evaluations and Incorporation in Indices (As of September 30, 2019)
Yamaha Corporation is included in socially responsible investment (SRI) indexes*1 and SRI funds, which give consideration to environmental and
social factors, both in Japan and overseas. Yamaha is also included in the four ESG indices in Japan that are selected by the GPIF*2.
• Nikkei Stock Average (Nikkei 225) • 2018 Internet IR Award

• JPX-Nikkei Index 400
• TOPIX Mid 400 / TOPIX 500 / TOPIX 1000

• MSCI ESG Leaders Indexes*3
In addition, as an indicator of long-term financial soundness,
• MSCI Japan ESG Select Leaders Index*3, 4 Yamaha asks credit rating agencies to provide a long-term debt
• MSCI Japan Empowering Women Index (WIN) *3, 4 rating every year and has received the following evaluations.
• FTSE4Good
Credit Ratings (As of March 31, 2019)
• FTSE Blossom Japan*4
Rating and Investment Information, Inc. (R&I) A+
• S&P / JPX Carbon Efficient Index *4
Japan Credit Rating Agency, Ltd. (JCR) AA–
• S&P Japan 500 ESG
• ECPI Global Developed ESG Best-in-Class Equity Index
*1. SRI indexes: Indexes that group together companies that demonstrate an outstand-
• ECPI World ESG Equity Index ing performance in terms of both profitability and sustainability and indicate trends
in the stock prices of such companies.
*2. GPIF: Government Pension Investment Fund
*3. The inclusion of Yamaha Corporation in any MSCI index, and the use of MSCI logos,
trademarks, service marks or index names herein, do not constitute a sponsorship,
endorsement or promotion of Yamaha Corporation by MSCI or any of its affiliates.
The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index
names and logos are trademarks or service marks of MSCI or its affiliates.
*4. Four indices selected by GPIF
Inquiries YAMAHA CORPORATION https://www.yamaha.com/en/

Investor Relations Group, Corporate Planning Division, Corporate Management Group
2-17-11, Takanawa, Minato-ku, Tokyo 108-8568, Japan Tel: +81-3-5488-6602
Sustainability Promotion Group, General Administration Division, Human Resources and General Administration Unit
10-1, Nakazawa-cho, Naka-ku, Hamamatsu, Shizuoka 430-8650, Japan Tel: +81-53-460-2834

https://www.yamaha.com/en/

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Annual Report 2019

Diagram of the Yamaha Philosophy

Yamaha Group Annual Report 2019 01

When creating Annual Report 2019, we referenced the International Integrated

02 Yamaha Group Annual Report 2019

I. Our Vision and Value Creation 04 III. Foundation for Growth  62

Becoming an Indispensable, Human Resources  64

Our Vision and Value Creation

Foundation for Growth

Disclosure Structure Overall Corporate Activities

Information for Investors Sustainability Information Integrating

Corporate Governance Reports Environmental and Social Data

Yamaha Group Annual Report 2019 03

04 Yamaha Group Annual Report 2019

Yamaha Group Annual Report 2019 07

1887 1900 1950 1960 1970

Major Shifts in Global Expansion

1969 Taiwan 1975 Indonesia (pianos)

08 Yamaha Group Annual Report 2019

Evolution of Technologies New Value Provision through the Integration of

Yamaha Group Annual Report 2019 09

¥120.7 billion (27.6%)

Musical Instruments Business

Sales Composition by Region

Digital Musical Instruments Wind, String, and Percussion Instruments

Digital pianos Electone™ electronic organ

Guitars Music Schools Music-Related Software and Content

10 Yamaha Group Annual Report 2019

¥59.2 billion (13.5%) / Number of employees:

5,407 employees 20,375

¥83.9 billion (19.2%) / ¥92.0 billion (21.0%) /

Audio Equipment Business

Sales Composition by Region

AV Products Voice Communication Equipment Network Devices

Others (Industrial Machinery and Components Business, etc.)

Yamaha Group Annual Report 2019 11

Value Creation Story

Enhance Corporate Value and Realize Vision by Creating Social Value

Yamaha value creation

Fin­ance Brand Technology Value creation process

Value Creation Process

Yamaha Philosophy and Brand Promise

Research and Development Production Sales and Marketing

Corporate Governance P.74 / Global Business Management Foundation

12 Yamaha Group Annual Report 2019

Our Vision and Value Creation

Finance Brand Technology

Culture, Society, and

Products and Services

Products and Services Centered

Core operating profit ratio: 13.8%

Investment and shareholder returns

Total return ratio: 50%

Social Value Creation

Yamaha Group Annual Report 2019 13

800 J-GAAP IFRS 100 80 J-GAAP IFRS 20

70.4 70.1 56.0 52.7*

(Billions of yen) (Billions of yen) (%)

40 J-GAAP IFRS 40 J-GAAP IFRS 10.0

I. Our Vision and Value Creation 04 III. Foundation for Growth 62

Becoming an Indispensable, Human Resources 64

Finance Brand Technology Value creation process

(Billions of yen) (Billions of yen) (%)

ROE / EPS Dividends per Share / Dividend Payout Ratio

GHG Emissions (Scope 1 + 2) Production Area of Wood Resources*

Number of Music Education Initiatives Brand Ranking

Review of NEXT STAGE 12 27

* Core operating profit is equivalent to operating income under the Japanese