Appliances Company
Business Policy
Home Appliances Business
Growth Strategy
May 20, 2015
Panasonic Corporation
Appliances Company
President Tetsuro Homma
Notes: 1. This is an English translation from the original presentation in Japanese.
2. In this presentation, “FY16” refers to the year ending March 31, 2016.
FY15 Actual Results
1
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
FY15 Actual Results
(-1%)
【Former segment basis】
2,324.9
2,308.6
(yen: billions)
41.1
(2.4%)
Sales
[Consolidation of
manufacturing
and sales]
Operating profit
(Ratio)
55.2
[Consolidation of
manufacturing
and sales]
(1.8%)
ＦＣＦ
FY14
FY15
[Company
consolidated]
78.5
1.9
Increase
Decrease
Decreased due mainly to weaker
Sales sales of TVs and the consumption
tax hike impact in Japan etc.
2
OP
Offset negative impact of yen
depreciation by profitability
recovery of air-conditioning etc.
Appliances Company Business Policy / Home Appliances Business Growth Strategy
FY15 Actual Results
Although sales increased in AC*, total sales decreased due to TV restructuring etc.
Operating profit increased as a result of last year’s restructuring effect of AC etc.
*Air-conditioning
Sales
2,324.9
TV
-51.4
[Consolidation of manufacturing and sales] (yen: billions)
TV
sales
2,324.9
decrease
2,308.6
-26.8
Price
Ex-rate
decrease
+30.4
Consumption
Others
-38.0
tax hike
+17.3
Sales
AC
-28.8
increase
+17.8
+46.9
-16.3
FY14
Operating profit
41.1
(1.8%)
FY14
3
TV
+0.3
AC
+15.5
+14.1
FY15
55.2
-16.3
FY14
[Consolidation of manufacturing and sales] (yen: billions)
(2.4%)
Others
-1.7
Ex-rate
-12.4
Stream
-lining
+60.0 Sales
increase Price
+10.3 decrease
-36.0
+14.1
FY15
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
41.1
(1.8%)
Consumption
tax hike
-7.8
FY14
Challenges
Achievements
FY15 Achievements and Challenges
4
Sales plan achieved and share increased
in Japanese market
Profitability improved both in RAC*1 and CAC*2
Development, manufacturing and
sales structure of Cold Chain reformed
Profitability deteriorated due to yen depreciation
Profitability still unstable in TV business
Increased customer-support cost of
heat-pump water heater
*1:Room Air-conditioner *2: Commercial Air-conditioner
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Preparation for FY16 onward
Completed structural reform for sales and profit expansion
5
Preparation for sale growth
Reform for securing profitability
Establishment of
AP China/AP Asia
Integration and closure
of manufacturing bases of
TV business in North America
and China
Integration of
Japan-region Consumer
Marketing Sector
Business assignment of
Sanyo TV business
(North America)
Establishment of
Panasonic Commercial
Equipment Systems
Co., Ltd
Consolidation of
vending machine manufacturing
site in Gunma, Japan
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
FY16 Business Policy
6
Appliances Company Business Policy / Home Appliances Business Growth Strategy
FY16 Management Target
Sales
[Consolidation of
manufacturing
and sales]
(+2%)
2,552.5
2,590.0
50.8
(2.8%)
Operating profit
(Ratio)
(yen: billions)
73.6
[Consolidation of
manufacturing
and sales]
(2.0%)
ＦＣＦ
FY15
FY16(Target)
[Company
consolidated]
0.7
13.0
Increase
Increase
Sales
7
【New structure basis】
Offset decrease of TV by increase
of white goods mainly in strategic
regions
OP
Offset negative impact of yen
depreciation by sales increase,
cost reduction etc.
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
FY16 Management Target
Sales: decrease in TV, increase in white goods such as AC etc.
Profit: Increase due to TV restructure effect
[Consolidation of manufacturing and sales] (yen: billions)
Sales
2,590.0
2,552.5
Japan
+31.2
Others
+73.3
TV
-88.5
AC
+52.7
＋37.5
FY15
73.6
(2.0%)
TV
+15.2
FY15
8
2,552.5
Others
-1.2
+37.5
FY16(f)
Operating Profit
50.8
Strategic Europe
Regions
US
+63.5 -56.0
FY15
[Consolidation of manufacturing and sales] (yen: billions)
(2.8%)
AC
+3.9
Others
+3.7
50.8
Japan
+8.3
(2.0%)
Strategic
Regions Europe
US
+14.1
+0.6
＋22.8
Others
-0.2
+22.8
FY16(f)
FY15
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Portfolio of Appliances Company
Control risk and expand business in growing area
Steadily
growing
business
(composition ratio)
70%
White goods
Refrigerator Washing
Machine
RAC
安定成長事業
Kitchen
Beauty/Health
(Market CAGR*)
3.6%
Highly
growing
business
10%
BtoB Solution
Cold Chain
CAC
高成長事業
5.1%
Profitability
improvement
business
20%
ＡＶ
TV
課題事業
▲6.1%
9
Fuel Cells
Accelerate growth in
China/Asia and expand
stable profit
Sales
increase
Profit
Increase
(amount)
Investment
flat
Achieve high global growth
through proactive investment
Sales
Profit
Drastic
increase
Increase
(ratio)
Investment
increase
Minimize risk and return to
black
Sales
Profit
Investment
decrease
Black
Slight
decrease
＊CAGR of FY16 to FY19 (our estimation)
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
What Appliances Company aims for
Secure growth of steadily growing business in strategic regions,
accelerate highly growing business and achieve ¥3 trillion in FY19
[Consolidation of manufacturing and sales] (yen: billions)
Sales/Operating profit ratio
CAGR
（FY16FY19）
2,552.5
（2.0%）
2,590.0
（2.8%）
Profitability
improvement
business
3,000.0
（5.0%）
+0%
+10～15%
Highly
growing
business
Europe/US
Steadily
growing
business
Strategic
regions
+3～5%
Japan
FY15
10
FY16(f)
FY19(f)
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Initiative in TV business
Return to break-even through fixed cost structure appropriate to sales scale
Operating profit (ratio)
FY15
-14.9
[Consolidation of
manufacturing
and sales]
(yen: billions)
FY16(f)
0.3
Target region: Japan/Europe/Asia/Latin America
Maximize profit through consolidated
management based on
manufacturing-sales collaboration
(0.1%)
(-3.3%)
Restructure effect 【+4.1】
+4.1
11
+6.7
Streamlining etc.
Fixed cost
decrease
+5.2
Development
resources shift
-9.7
Restructure
Ex-rate
+8.9
Reap a benefit from restructuring such as
integration and closure of manufacturing
bases in FY15 etc.
Development resources shift 【+5.2】
Expand and utilize technology/know-how
of TV to Appliances/group-wide business
Promotion of streamlining etc. 【+8.9】
Improve marginal profit by streamlining of
panel procurement
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
Initiative in AC business
Recovered profitability in FY15, move to growth track in FY16
Operating profit (ratio)
[Consolidation of
manufacturing
and sales]
(yen: billions)
Ex-rate
-8.5
FY15
12
Sales increase in RAC 【+6.3】
+6.1
+2.0
+6.3
-2.0
Establish business structure against
AC specialized competitors
Invest cash earned by RAC to CAC
(3.8%)
Streamlining etc.
15.9
(3.5%)
Strengthen
structure
Sales increase
in RAC
Sales increase
in CAC
19.8
Establish Air-conditioning Company
FY16(f)
Achieve OP 5% through integration of
global + local strategy
Strengthen product competitiveness
through “Comfort”
“Health” “Design”
Sales increase in CAC 【+2.0】
Strengthen sales network
and product range
for sales increase in
overseas
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Home Appliances Business
Growth Strategy
13
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
Home Appliances strategy toward FY19
Sales expansion in white goods
(steadily growing business)
Strengthen premium zone
Accelerate business growth in
China/Asia
Resources shift to growing area
14
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Toward HA ¥2.3 trillion in FY19
Expand steadily growing business (white goods)
and business in Strategic regions
Sales by product categories
[Consolidation of manufacturing and sales]
(yen: billions)
Steadily
growing
business ＡＶ
2,300
non-ＡＰ
+120
Sales by regions
[Consolidation of manufacturing and sales]
(yen: billions)
2,300
Europe
US
+14
Japan
+30
Key areas
+2
White
goods
+180
Strategic
regions
+140
2,000
FY16(f)
15
non-ＡＰ
+120
2,000
FY19(f)
FY16(f)
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
FY19(f)
Business enhancement for the premium value
Aim for differentiation by increasing the sensitivity
value appropriate for a product/region
Innovation
esign
Aspire to more
To the lifestyle we all desire
Space
From single to package product
"Space" creation
ustomer contact point
innovation
Customer Value(CV)= Functional Value (FV)+ Emotional Value(EV)
16
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Approach for Strengthening Business
Propose the lifestyle we all desire by best approach by 4 concept
Design
Japan Design
Europe Design
Living space
value creation
Built-in
proposal
E-commerce
Space
17
Kitchen
Studio
Customer
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
contact point
Growth strategy in China/Asia
(1)Differentiate by integration of
core devices and manufacturing
technology
(2)Establish local-/customeroriented management and
leverage the utilization of
local resources
(3)Develop “Aspiration” Marketing
Premium
zone
(creating aspiration for premium life style)
Leader
model
(4)Leverage the utilization of ODM
⇒ Accelerate through AP China/AP Asia
18
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Stable growth in premium market
<China>
<Asia*>
・+30 mil. households in the decade ahead
・Growth slowed but maintain relatively high
growth rate
【Image of target customers】
【Image of target customers】
Household disposable income
Household disposable income
Over US$53,000
DEWKS
Parents + Employed
Sons/Daughters
【Size of target customers】
13%
10%
30% up
8%
43% up
35 mil.
households
2015(e)
(ref. Euromonitor)
19
50 mil.
Over US$ 45,000
US$20,000-45,000
DEWKS
Parents + Employed
Sons/Daughters
【Size of target customers】
12%
9%
7%
65 mil.
40% up
32% up
households
10 mil.
households
2020(e)
・Double in the decade ahead
・Growth potential as high as China
2025(e)
14 mil.
households
households
2015(e)
2020(e)
19 mil.
households
2025(e)
*Malaysia, Singapore, Indonesia, Vietnam, Thailand, Philippines
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
Differentiate by integration of core devices
and manufacturing technology
Accelerate development of differentiating products by local development and design division
Develop in local site
Premium Products
Integration of design/development
Core Devices
Heat-pump
Suspension
Magnetron
Inverter
Cultivate
in Japan
Compressor
Heat exchanger
20
Heat insulator
Compressor
Manufacturing technology
Know-how
Control
technology
System
technology Mechanical
design
etc.
Four Core Technologies
Environmental Core Technology
Material/Devices Technology
Bioscience Technology
Digital AV/Cloud Technology
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Example of differentiated products (China)
High functional products developed locally
with core devices and manufacturing
technology/know-how
Only with 1 cooling device
Quick start-up compressor
“Quick cooling/heating AC”
“More than 3 different
temperature compartment”
Integration of
design/development
Integration of
design/development
Quick starting control
Air-flow design
Inverter compressor
Ice house：－２０℃
20
(Hz) 0
Alternative
temperature :-3～4℃
compartment
Frequency
【High-speed start-up compressor】 【Outlet air temperature】
▲60%
83
Conventional
New
70
1 min. after
New
cooling １４．８℃ ２３．２℃
start
Conventional
21
50
100
Time（sec）
150
5 min. after
heating ５０．１℃
start
４５．３℃
Duct design
Thin-wall design
Precise temperature control
Chiller：４℃
Freezer：－２０℃
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
Cooling
Device
Inverter compressor
Heat exchanger etc.
Manufacturing
technology
Know-how
Core Device
Cooling
Device
Manufacturing
technology
Know-how
Core Device
Establish locally-/customer-oriented management
Create best products for potential customers by countries
Promote local manufacture/consumption by utilizing existing resources
Major development/manufacturing sites
Leverage utilization of local resources
Shift development/manufacturing
capability of China/Asia from
Japan
China (Wuxi)
Refrigerator
China (Hangzhou)
Washing Machine
China (Guangzhou)
Air-conditioner
Concentrate own development in premium products
Vietnam
Refrigerator
Washing Machine
Thailand
Refrigerators
Washing Machine
Malaysia
Air-conditioner
TV
*Highlighted boxes indicate recent target sites
22
Hold down additional investment
by utilizing existing resources
Complement product lineup with ODM
Side-by-side
refrigerator
Small drum
washing machine
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Expand “Aspiration” Marketing
Create aspiration through continuous/accelerative initiatives
Best mix of Made in Japan/Asia products
O2O Experience Salon
Provide “aspiring” experience to customers
Strengthen Made in Japan products
by promotion with renewed product displays (Offline)and lead to actual purchasing (Online)
＜Vietnam＞
＜Singapore＞
Create premium value by CS enhancement
Secure loyal customers by
enhancing CS
＜Philippines＞
23
＜Singapore＞
＜China＞
Enhance customer contact point
Cooking/Beauty
product roadshow
FY15：1,000→
FY16(f)：1,350
＜Malaysia＞
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
Tie-up with local
cooking TV program
FY15：138→
FY16(f)：400
＜Thailand＞
Sales results in Asia/China
Increase premium product sales ratio
Asia
China (refrigerator)
Multi door
Beauty
Washing
Machine
ＳＢＳ
Refrigerator
Indirect
cooling
Air
conditioner
Direct
cooling
FY15/3Q
Sales Composition
ratio*
FY15/4Q FY16/1Q(f)
24% (2014 annual)
31%
＊Sum of sales value of TV/Air-conditioner/refrigerator/washing machine
24
FY14
FY15
9%
15%
FY16(f)
23%
＊Sales volume composition ratio of refrigerator
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Resources shift to growing business area
Strengthen company strategic function,
promote resources/business portfolio management
Resources move to frontline of strategic regions
Establish locally-self-sufficient
business structure with integration of
development, manufacturing and sales
Development/design personnel of
Toward 2018
AC/refrigerator/washing machine
Scale of
(cumulative)
hundreds
Utilization of AC resources for white goods
Expand Japanese marketing know-how
Expand technology know-how and
global expansion capability cultivated in
AV business to Appliances Company
Expand leading edge marketing and
sales promotion activities of Japan to
China/Asia
Human resources shift
from digital AV business
25
Toward 2018
Scale of
hundreds
Toward 2018
Personnel rotation between
Japan/China, Japan/Asia Scale of dozens
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
(Ref.)New Appliances Company
Vice
President
Yuki Kusumi
Joe Imai
Panasonic Appliances Asia Pacific Pte. Ltd.
Panasonic Appliances Company (China)
Japan-region Consumer Marketing Sector
Panasonic Commercial Equipment Systems Co., Ltd
54,000
(Japan: 18,000)
Sites
74 (in Japan: 16)
As of April 1, 2015
Appliances Company Business Policy / Home Appliances Business Growth Strategy
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.
etc.
Smart Energy
System
Cold Chain
Panasonic Cycle
Technology
Homma P
Beauty and Living
Kitchen Appliances
Laundry Systems
and Vacuum Cleaner
Refrigerator
Kusumi VP
Home
Entertainment
Television
Air-conditioning
Yoshida SVP
Employ
-ees
27
Tetsuro Homma
Mamoru Yoshida
Yukio Nakashima
Refrigeration and
Air-Conditioning
Devices
President
Senior Vice
President
Business/Sales
Platform
Business Divisions
Executives
New structure started in April 1 with 11 business divisions
Disclaimer Regarding Forward-Looking Statements
This presentation includes forward-looking statements (that include those within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934), as amended 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 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 Americas, 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; the possibility that excessive currency rate fluctuations of the U.S. dollar, the euro,
the Chinese yuan and other currencies against the yen may adversely affect costs and prices of Panasonic’s products and
services and certain other transactions that are denominated in these foreign currencies; the possibility of the Panasonic Group
incurring additional costs of raising funds, because of changes in the fund raising environment; the possibility of the Panasonic
Group not being able to respond to rapid technological changes and changing consumer preferences with timely and costeffective 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; the possibility of not being able to
achieve its business objectives through joint ventures and other collaborative agreements with other companies, including due
to the pressure of price reduction exceeding that which can be achieved by its effort and decrease in demand for products from
business partners which Panasonic highly depends on in BtoB business areas; the possibility of the Panasonic Group not being
able 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;
as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world, disruption of supply
chain and other events that may negatively impact business activities of the Panasonic Group. The factors listed above are not
all-inclusive and further 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.
Copyright (C) 2015 Panasonic Corporation All Rights Reserved.