PANASONIC GROUP FY2013 BUSINESS POLICY: PANASONIC CORPORATION FUMIO OHTSUBO docx

Copyright (C) 2012 Panasonic Corporation All Rights Reserved. Panasonic Group FY2013 Business Policy May 11, 2012 Panasonic Corporation Fumio Ohtsubo 󲆊 Contents Contents 1. Achievement 2. FY2013 business policy Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆋 3 Vision toward 100th anniversary in 2018 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’ in Electronics Industry Integrate contribution to both environmental protection and business growth Our Vision 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 downsized business Restructuring (1) Restructuring (1) Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆍 5 Flat-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) Restructuring (2) 󲆎 6 FY2012 Financial Result FY2012 Financial Result (vs FY11) 43.7 bil. yen Operating profit (%) Operating profit (%) -261.6 bil. yen 7,846.2 bil. yen Sales Sales -10% -339.9 bil. yen Free cash flow Free cash flow -606.1 bil. yen -34.4% ROE ROE - 40.37 mil. tons (vs FY06) +5.19 mil. tons ( 0.6%) -772.2 bil. yen -846.2 bil. yen (-9.8%) Net income / loss(%) Net income / loss(%) <attributable to Panasonic Corp.> <attributable to Panasonic Corp.> CO CO 2 2 emission emission reduction reduction Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆏 Contents Contents 1. Achievement 2. FY2013 business policy 󲆐 8 FY2013 Overview 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 Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆑 FY2013 Financial Forecast FY2013 Financial Forecast Operating profit (%) Operating profit (%) Sales Sales Free cash flow Free cash flow ROE ROE Net income (%) Net income (%) <attributable to Panasonic Corp.> <attributable to Panasonic Corp.> (vs FY12) 260.0 bil. yen +216.3 bil. yen 8,100.0 bil. yen +3 % 100.0 bil. yen +439.9 bil. yen 41.00 mil. tons (vs FY06) +0.63 mil. tons (3.2%) 50.0 bil. yen +822.2 bil. yen (0.6%) 2.6% - CO CO 2 2 emission emission reduction reduction 󲆉󲆈 [Sales growth %] [Operating profit margin %] 10 Sales and Operating Profit by Segment (1) Sales and Operating Profit by Segment (1) 20 10 0 -10 -20 -10 01020 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 Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆉󲆉 11 Sales and Operating Profit by Segment (2) 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 (tri. yen) (bil. yen) Notes: Numbers are sums of all single segments HCC and MS are business domain company consolidated basis 󲆉󲆊 Business Policy 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 Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆉󲆋 13 0 Sales (yen) Operating Profit (%) 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 FY12 Operating profit by product Improve Profitability Improve Profitability 1 3 2 󲆉󲆌 1414 Rebuild unprofitable business TV Business (1) TV Business (1) 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 Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆉󲆍 Price decline -50.0 1515 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 unprofitable business TV Business (2) TV Business (2) 󲆉󲆎 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 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 Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆉󲆏 17 Lithium-Ion Battery Business 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 Consumer Automotive 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) 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 EUChinaAsia >+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 Copyright (C) 2012 Panasonic Corporation All Rights Reserved. 󲆉󲆑 19 Accelerate 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) 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. 󲆊󲆈 2020 Create competitive B to B business Solution Business Model Solution Business Model Avionics (aircraft AV system) business Speedy business expansion M&A and outsourcing Locally-oriented idea close to customers Based in North America Customer service Product Direct contact with customers Sustainable value growth O f f e r o u r v a l u e O f f e r o u r v a l u e Software and application upgrade In-flight communication system In-flight entertainment system Repair and maintenance [...]... 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. .. 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. .. to Panasonic Corporation 24 Toward No.1 ‘Green Innovation Company’ 2018 No.1 ‘Green Innovation Company’ in electronics industry to d n n io s a t bu ue tri iss 2015 n co al h e ent owt t ra m r eg iron ss g t In nv ne Improve profitability toward e u si b ‘Green Innovation Company’ 2012 Establish foundation: integrate 3 companies and restructure group- wide business Copyright (C) 2012 Panasonic Corporation. .. 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;... 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... 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... profit-making business model ‘100 Arrows’ Project Competitive product + Combination and Link + Maintenance and Service Shift from past business model of single product sales Promote group- wide comprehensive business model [FY13] In start-up phase 25 arrows In progress Energy management related: 5 arrows Healthcare/nursing care related: 4 arrows etc 25 arrows Create from both energy management and business. .. from both energy management and business overseas Sales >170 bil yen 22 Strengthen business structure Improve Business Structure Sales Break-even point +7% -7% -0.6% Marginal profit ratio +0.2% -168 bil yen -96.3 bil yen Fixed cost FY11 FY12 FY13(e) Improve key metrics back to level of FY11 Copyright (C) 2012 Panasonic Corporation All Rights Reserved Sales and Operating Profit Sales (bil yen) 8,692.7... 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... 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