Copyright (C) 2014 Panasonic Corporation All Rights Reserved. Appliances Company Business Policy May 21, 2014 Panasonic Corporation Appliances Company President Kazunori Takami Panasonic IR Day 2014 1 Notes: 1. This is an English translation from the original presentation in Japanese. 2. In this presentation, “fiscal year 2015” or “FY15” refers to the year ended March 31, 2015. Contents 1. FY14 Results 2. Company Profile 3. Vision and FY15 Plan 4. Summary 2
Transcript
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
Appliances CompanyBusiness Policy
May 21, 2014
Panasonic CorporationAppliances Company
President Kazunori Takami
Panasonic IR Day 2014
1
Notes: 1. This is an English translation from the original presentation in Japanese.2. In this presentation, “fiscal year 2015” or “FY15” refers to the year ended March 31, 2015.
Contents
1. FY14 Results
2. Company Profile
3. Vision and FY15 Plan
4. Summary
2
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
3
<FY14 Results (vs. FY13)>
◇ Profit worsened for productsmanufactured overseas for salesin Japan due to weak yen
◇ Profit declined by decrease of air-conditioner sales in China
◇ Sales were increased by capturing a demand surgeprior to consumptiontax increase etc.
◇ Overseas sales were increaseddue to weak yen
OP
Sales Increase Operating Profit Decrease
Sales
OperatingProfit(%)
FCF[Company shipment ]
Sales
1,468.1(Yen: billions)
1,618.0 1,510.0
25.2 72.6 28.5
58.5(4.0%)
48.2(3.0%)
63.0(4.2%)
FY13 FY14 FY14(Plan)
Production and sales consolidated
Production and sales consolidated
FY14 Results (based on former AP)
FY14 Achievements and Issues4
Achievements
・FCF improved significantly (vs. BP +44.1 bil. yen [Company shipment])
・Plan achieved for Japan market due to solid performance ofsales and profit
(Successful sales in value-added products.Sales increased due to demand surge prior to consumption tax increase)
・Laid foundation for expansion of Europe business(Started collaboration with Gorenje)
Issuesand
Countermeasures
・Expansion of white goods sales in Asia⇒ Consideration for concept of locally self-sustainable business structure
・Strengthen capability of worsening currency (weak yen)⇒ Considering expansion of production in Japan and export from Japan
・Rebuild business in China for air-conditioner⇒ Completed adjustment of air-conditioner inventory in China
・Strengthen cold chain and large scale air-conditioner business⇒ Accelerate to establish structure according to characteristics of BtoB business
■ FCF improved but expansion of overseas sales andimprovement of profit are issues
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
Contents
1. FY14 Results
2. Company Profile
3. Vision and FY15 Plan
4. Summary
5
FY15 New Business Structure
Panasonic Eco Solutions CommercialEquipment Systems Co., Ltd.
[ Japan ] Approx. 1 2,000[Overseas] Approx. 39,000
(As of April 2014)
〔10 business divisions (BD)〕
Air-C
onditioner BD
Refrigerator B
D
Cold C
hain BD
Refrigeration and A
ir-C
onditioning Devices B
D
Laundry System
s and V
acuum C
leaner BD
Kitchen A
ppliances BD
Beauty and Living B
D
Motor B
D
Sm
art Energy S
ystem B
D
Hom
e Entertainm
ent BD
〔Global sites〕
Japan15 sites
Europe4 sites
China/North east asia
25 sites
Asia23 sites
Latin America4 sites
North America5 sites
BD:business division
8
Market Share of Major Products
TVs
219.00Refrigerators
104.00
Air-conditioners
69.00
Large scaleAir-conditioners
<PAC & VRF>
4.54
Compressorsfor Air-conditioner and Refrigerator
260.00
9.004.1%
6.008.7%
0.184.0%
3.303.2%
29.0011.2%
Washing machines
90.00
5.005.5%
※Notes: Air-conditioners refer to room air-conditioners. Drying machines are excluded from washing machines.※Source: Statistics and reports from GfK, Euromonitor, JEMA, CMM, Bsria, Japan Refrigeration and The Air Conditioning Industry Association.
Panasonic estimates.
[units: millions (FY14)]
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
Contents
1. FY14 Results
2. Company Profile
3. Vision and FY15 Plan
4. Summary
9
Vision of Appliances Company10
<Direction of transformation>
“Global top-class Appliances Company”FY19 Sales Target 2.8 trillion yen (production and sales consolidated)
Management by 4 businesses based on business-division based management
Management according tobusiness characteristics
Integration of development,manufacturing, sales, and service
Locally self-sustainablemanagement
Improve business speedConfront customer and competitor
Consumer Electronics
Cold Chains Devices
Air-conditioners
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
Business Area11
Hygiene toilet seats Electric heating appliances
Refrigerators
Microwave ovens
Rice cooker-warmers
IH cooking equipment
Gas heat pump air -conditioners
Domestic hot waterCO2 heat pump
CompressorsMotors
Magnetrons
Dishwashers
Washer-dryers
Electric cleaners
Room air-conditioners
Vending machines
Massage chairsWater purifier
Package air-conditioners
ShowcasesProfessional refrigerators
Icemakers
Hair dryers
Audio
BD/DVD recorders
ConsumerElectronicsAir-
Conditioner
Devices
ColdChain
nano-e devices
Meter devices
AV accessories
AV
Cooking
HouseKeeping
Health & Beauty
Shavers
TV
Juicer mixers
Irons
Variable refrigerant flow
Absorption chiller
Dispensers
Fuel Cell cogeneration systems
Roadmap for Expanding Profit12
FY14 FY16(e) FY19(e)
39.7（1.7%）
・Improve TV profit・Value-added marketingin developed countries
・Strengthen structure in strategic region
・Establish specialized structure
・Expand sales channel・Expand product lineup
Expand strategicregion business by
locally self-sustainable management
Expand business scale
Accelerate overseas expansion
ConsumerElectronics
Air-Conditioners
Devices
ColdChains
Capture profit ofBtoB business
Raise profit level ofconsumer electronics
Establish BtoB foundation
Operating profit (%)<Production and sales consolidated>
(Yen: billions)
By raising the profit level of consumer electronics andincreasing BtoB business profit,
target operating profit ratio 5% in early stage
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
13
Visions and Key Initiatives for Each Business
Consum
erE
lectronics
Expand white goods sales inoverseas by centering on Asia
and improve profitability ofAV business
Global top 3 consumer electronics businessSales of 2 trillion yen in all Panasonic. Improve brand value bycreating new concept of consumer electronics
Change to “global customer basedair-conditioner specialized company”
Expand overseas equipment channel business and improveprofitability
Air-
Conditioners
Rebuild China business forroom air conditioner and
strengthen large scaleair-conditioner business
From product business to solution business
Cold
Chains
Expand CO2 refrigerant productsand propose products by
integration ofmanufacturing and sales
High profit device composition ratio 20%
Devices
Shift towards high profit field andaccelerate development of
new devices
FY19 Visions FY15 Key initiatives
FY15 Management Target (based on new AP company)14
■ Increase profit by over 10.0 billion yen in production and sales consolidated
FY14 FY15(e) vs. FY14
Sales 2,298.2 2,280.0 -1%
Operating profit(%)
39.7(1.7%)
52.0(2.3%)
+ 12.3
(Company shipment)
Sales 1,750.7 1,789.0 +2%
Operating profit(%)
28.2(1.6%)
35.0(2.0%)
+ 6.8
(Yen: billions)(Production and sales consolidated)
FY14 FY15(e) FY14-15 in total
FCF 77.4 18.5 95.9
※Mid-term management plan (CV2015) FY14-15 in total FCF: 68.9 bil. yen
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
15
-11.6 +11.139.7
52.0
■ Aim to increase profit by improving profit of challenging businessesand strengthening businesses etc. against risks of exchange rate,decreasing demand after consumption tax increase, andhike of material cost etc.
+12.3
-4.0-8.5
+16.9
Imp
rove
me
nt of
TV
bu
sine
ss
Incre
ase
pro
fit of C
on
sum
er E
lectro
nics, C
old
Ch
ain
s,an
d
Devices, etc.
Hike
of m
ate
rial co
st
Re
turn
of
corp
ora
te-
wid
e m
ea
sure
s
Exch
an
ge ra
tee
ffects
De
crea
sing d
em
and
a
fter
con
sum
ption ta
x in
crease
-5.4
+13.8
Imp
rove
me
nt of
Air-co
nd
itioner b
usin
ess
※ Improvements of Air-conditioner business and TV business excludes return of corporate-wide measures
<Production and sales consolidated>(Yen: billions)
Real O
P
Aim to Achieve 2 trillion Yen in Consumer Electronics16
FY14 FY19(e)
Japan
StrategicRegions
EuropeAmericas
2.01.8
Contribute to BtoB by increasing the brand value
(Asia)
・Growth by locally self-sustainablebusiness structure with establishmentof AP Asia
・Expand product lineup for Asia
・High value-added marketing tailored to each country andchannel (Europe)
・Recover competitiveness by lightoperation (TVs for North America)
・Create new demand and highvalue-added marketing
(Propose product with new concept)
Concentrate investment inAsia for next 3 years
(Yen: trillions)
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
17
Asia: Growth by Locally Self-Sustainable Structure
■ Speed up business operation and strengthen locally-tailored products and marketing by establishing Asia HQ
Refrigerator & washing machineProduct planning and development site [Vietnam]
Air-conditioner & televisionProduct planning and development site [Malaysia]
Product planning & marketing site
AP Asia(Single management)
Gather All Strengths of Consumer Electronics Business18
・・・
New AP
ＡＰ
CE businessof AVC
・Business capability on global basis・Digital/ communications technology
・Being capable of meeting local needsbased on life-style research
・Being capable of optimally combiningmechanical and electrical technology
Lack of innovation
Too much focuson specifications
Japanese-oriented
Current issues
■ Generate new concept product for consumer electronics by combining strength
■ Increase the brand value by offering customers delightful surprises
Globalized
Localized
Customers’ sentiments
Focusing on functions
Disorderly competition Excessive competition
Customer-centric products appealing to their sentiments
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
19
Initiatives for Profitability Improvement in TV Business
■ Turnaround and become profitable towards FY16 growth strategy by locally-oriented strategy
FY14 FY15(e)
[Production and sales consolidated]
(Yen: billions)Operating profit
(%)FY13
-31.5(-4.4%)
-15.3(-3.0%)
Stru
ctura
l refo
rmfo
r distrib
utio
n
Discontinue effe
ctso
f PD
P
-2.2(-0.4%)
-58
+3.6
+11.8
Sa
les o
f loca
lly-orie
nted a
nd
high
va
lue
-ad
ded p
rod
ucts
Pa
ne
l pro
cure
men
t strate
gy※New organization basis which includes SANYO
・Recover price competitiveness by factory direct in US・Improve profit by reducing sales operation cost in each region
Locally-oriented differentiation
(Enhanced sound model)
・Improve brand value by strengthening locally-oriented differentiationproducts
・Enhance product competitive-ness for high value-addedproducts (4K & large LCD)
・Strengthen product and cost competitiveness by optimal panel procurement in each product category
Strengthen locally-oriented and high value-added products (+3.6 bil. yen)
Panel procurement strategy (+3.4 bil. yen)
Structural reform for distribution (+11.8 bil. yen)
+3.4
Rebuild and Growth Initiatives for Air-Conditioner Business20
<Rebuild business in China (+6.1 bil. yen)>◇ Release customer-centric new product・ Strengthen basic functions and
renovate texture・ Renovate stores and
strengthen frontline
<Implementation of new parts andstreamlining on materials (+3.2 bil. yen)>
◇ Strengthen cost competitiveness by streamlining on materials of core parts
◇ Start integrated operation of manufacturing and sales in Japan, Europe, and US
◇ Strengthen equipment sales structure in Malaysia site
◇ Accelerate development and launch of energy saving products
Profitability improvement for room air-conditioner
Representative model HE series
Strengthen business foundation forlarge scale air-conditioners
※New organization basisFY14 FY15(e)
+6.1 -1.1
+3.2
0.4(0.1%)
11.0(2.3%)
Rebuild business
in China
Drop after consum
ption tax increase
Expand sales of
large-scale V
RF
+0.8
Implem
entation of new parts and
streamlining
on materials
+1.6
Sales of locally-oriented
room air-conditioner
[Production and sales consolidated]
(Yen: billions)Operating profit
(%)
■ Recover profitability for room air-conditioner and accelerate activities for growth
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
ESAP
21
Strengthen Cold Chain Business■ Become customer confronting business by
integrated operation of manufacturing and sales<Separation between manufacturing and sales (FY14)>
DomesticSales
OverseasSales
<Integrated operation of manufacturing and sales (FY15)>
Manufacturing
APDomestic
SalesOverseas
SalesManufacturing
■ Create market by various products and technologies which leads the market
Strengthen capability to respond and establish reliability from global accounts
◇ Increase sales of energy saving non-freon showcase rapidly
◇ Expand remote monitoring system in Asia by utilizing “cloud”
Take offensive by CO2 refrigerant product whichour company developed in advance
Increase value offering by systems which are introduced in advance in China and Japan
CO2
refrigerantrefrigeratorcase
All LED& lighting control
In-storesignage
In-storecooking
◇ Propose contribution to convenience stores
22
Measures for Accelerating Business Growth
■ Load resources toward developing new products and businesses
Accelerate expansion byintegrated strengths
of AP
and AV
C
３～１０年先の商品開発
Develop products for the elderly
Global life-styleresearch
Develop next 3-10 year product
Premium design products developed and prepared for 2 years
Strengthen product development by managing each of 14 themes as a project
Create new businesses
Research food, clothing, and shelter by regions at 11 life-style research sites
Create new businesses based ontechnology axis and markets axis
■ Expand business scale by obtaining outer resource
■ Concentrate resources to growing fields
Considering non-continuous growth by obtaining BtoB sales channel etc.
Optimal allocation of human, financial and technological resources according to shift of business structure
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
Contents
1. FY14 Results
2. Company Profile
3. Vision and FY15 Plan
4. Summary
23
Summary24
Take all of necessary actions in FY15 forachieving mid-term management plan
FY14 FY15(e) vs. FY14
Sales 2,298.2 2,280.0 -1%
Operating profit(%)
39.7(1.7%)
52.0(2.3%)
+ 12.3
(Company shipment)
Sales 1,750.7 1,789.0 +2%
Operating profit(%)
28.2(1.6%)
35.0(2.0%)
+ 6.8
(Yen: billions)(Production and sales consolidated)
FY14 FY15(e) FY14-15 in total
FCF 77.4 18.5 95.9
※Mid-term management plan(CV2015) FY14-15 in total FCF: 68.9 bil. yen
Copyright (C) 2014 Panasonic Corporation All Rights Reserved.
Disclaimer Regarding Forward-Looking StatementsThis presentation includes forward-looking statements (that include those within the meaning of 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-lookingstatements. 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 under the Financial Instrument and Exchange Act of Japan (the FIEA) and other publicly disclosed documents. .
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 inproducts 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; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world, disruption of supply chain and otherevents that may negatively impact business activities of the Panasonic Group. The factors listed above are not all-inclusive andfurther information is contained in the most recent English translated version of Panasonic’s securities reports under the FIEA and any other documents which are disclosed on its website.
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.
