Cover Story. The one and only comprehensive musical instruments manufacturer

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1 Cover Story The one and only comprehensive musical instruments manufacturer

Blending acoustic craftsmanship with cutting-edge digital technology World s One and Only For more details on the Company s history, please refer to the Our

Shortly thereafter, he successfully completed the first reed organ to be built in Japan.

By doing so, Yamaha established a solid foundation and presence as what can be said to be the world s one and only comprehensive musical instruments

Yamaha positions R&D as one of the most important facets of its operations, and the fruits of its R&D efforts have provided the background for establishing

Over the years, to advance the evolution of traditional instruments, such as acoustic instruments, Yamaha endeavored to refine its technologies from various

In addition, Yamaha worked to develop high-quality products that meld acoustic and digital technologies, and such products are best represented by its

2 Blending acoustic craftsmanship with cutting-edge digital technology World s One and Only For more details on the Company s history, please refer to the Our History section. The origins of Yamaha date back to 1887, when company founder Torakusu Yamaha repaired an imported reed organ at an elementary school. Shortly thereafter, he successfully completed the first reed organ to be built in Japan. Since then, Yamaha has expanded its product domains to include pianos, wind instruments, string and percussion instruments, and digital musical instruments. By doing so, Yamaha established a solid foundation and presence as what can be said to be the world s one and only comprehensive musical instruments manufacturer. Yamaha positions R&D as one of the most important facets of its operations, and the fruits of its R&D efforts have provided the background for establishing the Company s solid foundation. Over the years, to advance the evolution of traditional instruments, such as acoustic instruments, Yamaha endeavored to refine its technologies from various perspectives, from raw materials and manufacturing methods to structural design. In addition, Yamaha worked to develop high-quality products that meld acoustic and digital technologies, and such products are best represented by its player pianos and SILENT series. By taking full advantage of its unique technologies centered on sound and music, Yamaha pursued initiatives to provide new value to musical instruments. In doing so, the Company responded to a wide range of social needs. With the production technologies it possesses, Yamaha has continued to develop a full lineup of musical instruments, spanning from acoustic to digital. These technologies have allowed the Company to create products that exceed customer expectations and have provided the source of Yamaha s competitiveness. Annual Report

Cover Story Overseas and regional production and sales bases 32 Countries For more details on YMP2016, please refer to the Message from the President section.

In 1958, Yamaha established its first overseas subsidiary in Mexico, and since then the Company has steadily advanced the establishment of overseas sales and production bases.

Today, Yamaha has production and sales bases in 32 countries and regions around the world, and it is making efforts to establish a sales network that spans more than 100 countries.

3 Cover Story Overseas and regional production and sales bases 32 Countries For more details on YMP2016, please refer to the Message from the President section. Early on in its history, Yamaha set its sights beyond Japan and took steps to expand its business activities globally. In 1958, Yamaha established its first overseas subsidiary in Mexico, and since then the Company has steadily advanced the establishment of overseas sales and production bases. Further, by consolidating production bases in Japan, China, Indonesia, and Malaysia, Yamaha has built a system that is capable of efficiently manufacturing and supplying products globally. Today, Yamaha has production and sales bases in 32 countries and regions around the world, and it is making efforts to establish a sales network that spans more than 100 countries. As a result of these endeavors, the Yamaha brand is receiving worldwide recognition. The Company is also engaging in initiatives under the Yamaha Management Plan 2016 (YMP2016), which represents the quantum leap phase for the Company. One of the crucial strategies of YMP2016 is to accelerate growth in China and other emerging countries. With growth in Japan, North America, and Europe remaining flat, Yamaha is taking steps to establish an expanded sales network for its musical instruments and audio equipment businesses in China and other emerging countries, as these are markets that possess considerable potential for growth going forward. In this way, Yamaha is advancing efforts to further strengthen its global presence. Priority countries and areas in emerging markets Overseas sales subsidiaries / branches Newly established sales subsidiaries / branches / representative offices 2 Yamaha Corporation

4 An enhanced global presence in the quantum leap phase Annual Report

Cover Story Since establishment More than 125 Years For more details on Yamaha s business domains, please refer to the Our Presence and Our Business sections.

customers of each generation. By drawing on the accumulated technologies, know-how, and sensitivities it has long-cultivated, Yamaha aims to constantly create new value.

In 1954, Yamaha commenced organ classes, which were the predecessor to the Yamaha Music School.

5 Cover Story Since establishment More than 125 Years For more details on Yamaha s business domains, please refer to the Our Presence and Our Business sections. A long history of taking on challenges to respond to a wide range of customer needs Throughout its history, which spans more than 125 years, Yamaha has continued to receive high praise from the customers of each generation. By drawing on the accumulated technologies, know-how, and sensitivities it has long-cultivated, Yamaha aims to constantly create new value. To this end, the Company has taken on challenges to meet a wide range of customer needs, relating to music, education, and culture, and has continued to share passion and performance. In 1954, Yamaha commenced organ classes, which were the predecessor to the Yamaha Music School. Today, in addition to the musical instruments business, the Company also engages in audio equipment, music software, semiconductor, golf products, factory automation (FA) equipment, and resort businesses. Yamaha has organized these various businesses into four business domains acoustic musical instruments, electronics, education and leisure, and industrial parts and machinery and is developing products and services in each of those domains with a focus on sound and music. Moreover, in line with another key strategy of YMP2016, Yamaha is taking on the challenge of expanding its business domains through efforts to develop new businesses, such as engaging in M&A activities. Yamaha will continue to steadily take initiatives under its various strategies for growth to manufacture and sell products as well as provide services related to music, education, and culture. By doing so, the Company hopes to continue to receive high praise from customers over the next 50 to 100 years. 4 Yamaha Corporation

Contents 6 To Our Stakeholders 8 About Yamaha 8 Our History 10 Our Presence 12 Our Business 16 Management Strategy 16 Message from the President

Corporate Social Responsibility (CSR) 30 Corporate Governance 35 Risk Factors 38 Financial Section 90 Main Networks 92 Investor Information 94

regarding Yamaha s future prospects presented in this annual report have been drawn up by the Company s management based on information

Accordingly, our actual performance may differ significantly from our predictions depending on changes in the operating and economic

6 Contents 6 To Our Stakeholders 8 About Yamaha 8 Our History 10 Our Presence 12 Our Business 16 Management Strategy 16 Message from the President 24 Board of Directors, Corporate Auditors, and Executive Officers 26 Growth Foundation 26 R&D and Intellectual Property About Yamaha 28 Corporate Social Responsibility (CSR) 30 Corporate Governance 35 Risk Factors 38 Financial Section 90 Main Networks 92 Investor Information 94 Yamaha Product History Management Strategy Photo by Elizabeth Shrier, Gallant Entertainment Forward-looking statements The plans and strategies regarding Yamaha s future prospects presented in this annual report have been drawn up by the Company s management based on information available at the time of writing and, therefore, are subject to risks and uncertainties. Accordingly, our actual performance may differ significantly from our predictions depending on changes in the operating and economic environments, demand trends, the value of key currencies, such as the U.S. dollar and the euro, technological advancements, and developments in intellectual property litigation. Financial Section Growth Foundation Annual Report

Production. Strategies by Function. Strategies by Function

Production. Strategies by Function. Strategies by Function Production By intricately melding our strengths of craftsmanship and technologies and advancing our industry-leading production capabilities on a global scale, we aim to realize an overwhelmingly dominant