Vision toward 100th anniversary in 2018 Panasonic Group filled with significant growth potential No.1 ‘Green Innovation Company’ in Electronics Industry No.1 ‘Green Innovation Company’ i
Trang 1Panasonic Group FY2013 Business Policy
May 11, 2012
Panasonic Corporation Fumio Ohtsubo
Contents
1 Achievement
2 FY2013 business policy
Trang 2Vision toward 100th anniversary in 2018
Panasonic Group filled with significant growth potential
No.1 ‘Green Innovation Company’
in Electronics Industry
No.1 ‘Green Innovation Company’
in Electronics Industry
Integrate contribution
to both environmental protection and business growth
Our Vision
Enrich our life with less energy consumption
Green Transformation 2012 (GT12)
Existing business-oriented Japan-oriented
Individual product-oriented
New business such as energy Globally-oriented
Solutions & systems business-oriented
Accelerate transformation with integration of 3 companies and business reorganization
4
Largest-ever transformation
Established business structure enabling
direct contact with customers
Introduced horizontal group-wide business structure
Maximized synergy
in individual businesses
Eliminated overlap and
Restructuring (1)
Trang 3Flat-panel TV: Integrated business sites, impaired fixed assets and
downsized workforce Semiconductor: Switched System LSI business to fabless and
downsized R&D resources
FY2012 Business restructuring expense: 767.1 bil yen
Reduced fixed cost and reformed structure in unprofitable business
Impaired goodwill of SANYO business Downsized whole group-wide business
Economic slowdown, strong yen appreciation and floods in Thailand
Downward swing due to unprofitable business
Restructuring (2)
6 FY2012 Financial Result
(vs FY11)
43.7 bil yen
7,846.2 bil yen
-339.9 bil yen
-34.4%
-40.37 mil tons
(vs FY06)
+5.19 mil tons
( 0.6%)
(-9.8%)
Net income / loss(%)
<attributable to Panasonic Corp.>
reduction
Trang 41 Achievement
2 FY2013 business policy
8 FY2013 Overview
Prove our worth in new business structure
First fiscal year making restructuring effective Final fiscal year of GT12
First fiscal year after group-wide restructuring
Trang 5FY2013 Financial Forecast
Operating profit (%)
Sales
Free cash flow ROE
Net income (%)
<attributable to Panasonic Corp.>
(vs FY12)
41.00 mil tons
(vs FY06)
+0.63 mil tons
(3.2%)
(0.6%)
reduction
[Operating profit margin %]
10 Sales and Operating Profit by Segment (1)
20
10
0
-10
-20
FY13 Forecast
20
10
0
-10
-20
FY12 Result
(%)
(%)
AVC
AP
ES SNC
ID EC
PAS
AP EC
ID
MS HCC
ES
MS HCC
AVC
SNC PAS
AVC: AVC Networks, AP: Appliances
PAS: Automotive Systems, ID: Industrial Devices, EC: Energy
SNC: Systems & Communications, ES: Eco Solutions HCC: Healthcare Company, MS: Manufacturing Solutions Company
*HCC and MS are business domain company consolidated basis
Trang 611 Sales and Operating Profit by Segment (2)
[Sales] [Operating profit]
FY13 Forecast
Consumer 160.0
Solutions 120.0
Components
& Devices 60.0
Consumer 3.4
Solutions 2.8
Components
& Devices 2.8
Notes: Numbers are sums of all single segments HCC and MS are business domain company consolidated basis
Business Policy
•Restructure unprofitable business
•Increase profitability in growing businesses
•Create strong B to B business
•Establish profitable comprehensive business models
•Strengthen business structure
Profitability
Product
Change
•Pursue locally-oriented products
•Both engineering and marketing directly contact with customers
•Be competitive by combining and linking products
•Overcome challenges
•Transform with local leadership
•Reform head office functions
Basic guidelines
Trang 70
Sales (yen)
Operating profit (yen)
Restructure unprofitable business and improve profitability
Strengthen growing business
Increase profitability in growing business
to create strong B to B business Establish comprehensive business model
1
2
3
FY12 Operating profit by product
Improve Profitability
1
3
2
14
Rebuild
TV sets
Move into black
Panels
Improve profitability
Reduce fixed cost by improving cost structure
Reduce unprofitable models and shift to larger size lineup
Globally expand smart TV business
Expand panel usage for non-TV products
Super energy saving
Omnidirectional wide viewing angle
High speed response Electronic whiteboard, digital signage etc
>50%
20” 4K2K
<Non-TV product ratio>
Accurate color reproduction
Medical equipment, tablet PC, game equipment, ultrabook PC etc
>10%
LCD
PDP
Trang 8Price decline
-50.0
15
FY12
OP Cost structure
improvement
Large size lineup expansion
Usage expansion for non-TV product
Others
FY13 OP(e)
Increase approx.130.0
(bil yen)
70.0
20.0
20.0
60.0
10.0
Restructuring benefit
Restructure
16
FY11 FY12 FY13(e)
Sustainable growth with profitability
183
Sales (MW)
280
450
Toward No 1
in Japan Expand business with HIT
+53
+61
Increase profitability
in growing businesses Solar Business in Japan
Increase sales through group-wide sales channel
Commence mass production in Malaysia Create new value cooperating with devices and equipment
‘Energy creation-storage linked system’
(Launched in Mar ‘12)
Solar panel related sales: 110.0 bil yen
Trang 917 Lithium-Ion Battery Business
Expand business in all directions
Increase production capacity
in 6 mass production lines
(improve production speed and product quality)
Multiply sales more than five-fold Improve speed of development and CS
Strengthen business for ultrabook PC, tablet PC and smartphone
Back in black
Promote further order reception
Improve cost structure
- 30% for production in China
- 50% for material procurement
in China and Korea
Add high value and high capacity
Change business structure to enter growing areas
Will supply to more than 10 models in 5 global majors
Ford Toyota
Tesla
Suzhou factory
Increase profitability
in growing business
18 Appliances Business (1)
Overseas sales +20% (vs FY12)
Seek sales opportunities in all products, all regions
Beauty/Healthcare
Cooking appliance
Washing machine
Refrigerator
Air conditioner
EU China Asia
>+20% +10 +20%
Expand business with stable profitability
+0 +10%
North America
Lighting
Locally oriented products
ECONAVI
Group-wide Small appliances
Increase profitability
in growing business
(New) (New)
Note: Numbers are based on local currencies
CIS Latin America Middle East
Trang 10Accelerate business expansion with B to B business
Refrigerator Washing machine
Brazil (Aug ‘12) (May ‘13)
Air conditioner Washing machine
India (Jan ‘13) (Jan ‘13)
Washing machine Refrigerator
Vietnam (Site expansion) (Apr ‘13)
New
sites
(Mass production commencement date) R&D
Life style research centers R&D centers
Globally expand beauty/grooming/
healthcare product business
Expand ‘Panasonic Beauty’ products
in China and Asia
Appliances Business (2)
Increase profitability
in growing business
Promote large-sized air conditioning business in Europe and U.S.
Improve product quality (energy saving), expand product lineup, strengthen business structure in Europe and U.S
20
Create competitive
Avionics (aircraft AV system) business
Speedy business expansion M&A and outsourcing
Locally-oriented idea close to customers Based in North America
Direct contact with customers Sustainable value growth
Of fer
ou r v alu e
Of fer
ou r v alu e Software and application upgrade
In-flight communication system In-flight entertainment system
Repair and maintenance
Trang 1121 Establish profit-making
business model ‘100 Arrows’ Project
Energy management related:
5 arrows Healthcare/nursing care related:
4 arrows
etc.
Promote group-wide comprehensive business model
Competitive product + Combination and Link + Maintenance and Service
25 arrows
Sales >170 bil yen
[FY13]
Create from both energy management and business overseas
25 arrows
Shift from past business model of single product sales
22
Strengthen
Marginal profit ratio
Fixed cost
Break-even point
FY13(e)
Sales
-7%
+7%
-96.3 bil yen
+0.2%
-0.6%
-168 bil yen
Improve key metrics back to level of FY11
Trang 12Sales and Operating Profit
Sales
Operating profit
74.0
8,692.7
305.3
7,846.2
43.7
-772.2
8,100.0
260.0
50.0
Net income*
(bil yen)
FY13(e)
*Net income attributable to Panasonic Corporation
24
Establish foundation: integrate 3 companies and restructure group-wide business
Improve profitability toward
‘Green Innovation Company’
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2012
No.1 ‘Green Innovation Company’
in electronics industry
2015
2018
Toward No.1 ‘Green Innovation Company’
Trang 13This presentation includes forward-looking statements (within the meaning of Section 27A of the U.S Securities Act of 1933 and Section 21E of the U.S Securities Exchange Act of 1934) about Panasonic and its Group companies (the Panasonic Group) To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements These forward-looking statements are based on the current assumptions and beliefs of the Panasonic Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors Such risks, uncertainties and other factors may cause the Panasonic Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements Panasonic undertakes no obligation to publicly update any forward-looking statements after the date of this
presentation Investors are advised to consult any further disclosures by Panasonic in its subsequent filings with the U.S Securities and Exchange Commission pursuant to the U.S Securities Exchange Act of 1934 and its other filings.
The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China, and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; the ability of the Panasonic Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions including the business reorganization after the acquisition of all shares of Panasonic Electric Works Co., Ltd and SANYO Electric Co., Ltd.; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; natural disasters including earthquakes, prevalence of infectious diseases throughout the world and other events that may negatively impact business activities of the Panasonic Group as well as direct or indirect adverse effects of the Great East Japan Earthquake on the Panasonic Group in terms of, among others, component procurement, manufacturing, distribution, economic conditions in Japan including consumer spending and sales activities overseas, and direct or indirect adverse effects of the flooding in Thailand on the Panasonic Group in terms of, among others, component procurement and manufacturing The factors listed above are not all-inclusive and further information is contained in Panasonic‘s latest annual reports, Form 20-F, and any other reports and documents which are on file with the U.S Securities and Exchange Commission.
In order to be consistent with generally accepted financial reporting practices in Japan, operating profit (loss) is presented in accordance with generally accepted accounting principles in Japan The company believes that this is useful to investors in comparing the company's financial results with those of other Japanese companies Under United States generally accepted accounting principles, expenses associated with the implementation of early retirement programs at certain domestic and overseas companies, and impairment losses on long-lived assets are usually included as part of operating profit (loss) in the statement of income.