Appliances Company
Business policy
May 18, 2016
Panasonic Corporation
Appliances Company
President Tetsuro Homma
Notes: 1. This is an English translation from the original presentation in Japanese.
2. In this presentation, “FY17” refers to the year ending March 31, 2017.
FY16 Results
1
Ａｐｐｌｉａｎｃｅｓ Ｃｏｍｐａｎｙ Ｂｕｓｉｎｅｓｓ Ｐｏｌｉｃｙ
Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
FY16 Financial Results
(-2%)
2,552.5
2,504.8
50.8
(2.7%)
Sales
Operating profit
(Ratio)
67.8
(2.0%)
Exchange rate (1 USD)
FY15
FY16
110 yen
120 yen
Increase
Decrease
Despite increase in white goods,
decreased due mainly to downsizing
business of TVs
Sales
2
＜US GAAP＞
[Consolidation of
manufacturing
and sales]
(yen: billions)
OP
Increased due to profitability improvement
of white goods focusing on premium
strategy and return to profitability in TV
business (+33%)
Ａｐｐｌｉａｎｃｅｓ Ｃｏｍｐａｎｙ Ｂｕｓｉｎｅｓｓ Ｐｏｌｉｃｙ
FY16 Financial Results
Despite strong sales in Japan and Asia, overall sales have negative growth due to slump
in Europe, US, and China
Operating profit increased due to sales increase in Japan and Asia,
＜US GAAP＞
and strengthening premium zone
[Consolidation of
manufacturing
and sales]
(yen: billions)
Sales
2 6,0 00
2,552.5
2,552.5
AC
+5.0
2 5,0 00
Asia
+26.7 Japan China
+63.2 -58.8
Ex-rate
Europe
+4.4
US
-83.2
2,504.8
2 5,5 00
2 4,5 00
Others
+45.9
TV
-98.6
2 4,0 00
2 3,5 00
FY15
-47.7
50.8
AC
+2.4
-47.7
FY16
FY15
1 ,20 0
1 ,00 0
8 00
Operating (2.0%)
Profit
6 00
4 00
2 00
TV
+16.2
Others
-1.7
Ex-rate
-38.2 Stream
3
＋16.9
Strategic Japan China 50.8
Investment Asia -30.3 (2.0%)
-11.1
+19.0
-lining Premium
+61.6 +15.9
0
FY15
Europe
US
67.8
(2.7%)
FY16
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
＋16.9
FY15
FY16 Achievements and Challenges
Consistent achievement of Key Initiatives in FY16
Expanded composition ratio of
premium goods
Returned to black in TV business
(for first time in 8 years)
Achieved operating profit of more than 1 billion yen,
while original target was to eliminate loss (+0.3)
＋１.３
<Operating Profit (yen: billions)>
FY１5
Restructure
ExJP/Asia/Oceania
rate Profitability improvement
100%
80%
44%
60%
Others
-１４.９
<The composition ratio of premium goods
(FY15→FY16)＞
FY16
<Consolidation
of manufacturing
and sales>
(yen: billions)
31%
40%
34%
24%
(Consolidated 3 Asian sales companies and manufacturing companies to AP)
4
21%
20%
Marginal profit
ratio improved
by 1.5%
0%
Japan
Asia
White goods business hugely
contributed overall profitability
・All 11 business divisions achieved positive
profitability
・All 5 white goods-related business
divisions achieved operating profit over 5%
・Improved profitability due to consolidated
management based on manufacturing-sales
collaboration
32%
China
FY16 Challenges
Failed to achieve target due to declining Chinese market
<Consolidation of
manufacturing and sales>
(yen: billions)
AC Compressor
７３.６ (China) (others)
Others
AC
FY16
target
-5.8
６７.８
FY16
result
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Preparation for growth from FY17 onward
Portfolio management by strategic investment
Expand highly growing business
Create new products/businesses
■ Strengthen Commercial Refrigeration
& Food Equipment Business
Acquired 100%
shares of Hussmann
Corp.
 Automatic laundry
folding machine
（Commercialization
scheduled in Nov. 2017）
 Launch housing space
value creation project
Marketing investment
in strategic regions
■ Strategic investment to AP Asia/
AP China (approx. 7.5 billion yen)
Renew storefront display
in Indonesia
5
Exhibit in AWE
in Shanghai
Established joint venture
for commercialization
Restructure for profit growth
 Withdrew from the vacuum cleaner
business (US)
 Transferred SANYO TV business
(China)
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
Toward FY19
6
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Midterm business policy of Appliances Company
Overall
Shift resources to highly growing business
Further strengthen marketing for customers in
‘premium zone‘
Home
appliances
business
Deploy Japanese winning business model to overseas
Accelerate business growth
in Asia & China + Europe
ＢｔｏＢ
business
7
High profitability by
promoting nonlinear activities and utilizing IoT
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
Business areas and positioning of Appliances Company
Commercial Refrigeration & Food Equipment,
Small/Built-in appliances in favorable competitive positions
Industry average profit ratio
15
Profit ratio and Growth ratio in global market
Relatively
favorable area
10 Need to search for
more profitable area
5
AC
Devices
Comm. Fridge
& Food equip.
Major
The size of circle: market size
AV
… 25 billion USD
0
[%]
-1.0
0.0
3.0
Market growth rate
Growth rate: CAGR of FY16 to FY19
8
Small/Built-in
4.0
5.0
Profit ratio: FY16(both our estimation)
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Business portfolio toward FY19
Newly position “Small/Built-in” as highly growing business
Air
conditioner
Highly
growing
business
Steadily
growing
business
Profitability
improvement
business
9
HA
•Achieve high global growth through
proactive nonlinear investment
•Strengthen products/sales
competitiveness by boldly enhancing
resources
Comm. fridge
& Food equip.
Small/
Built-in
HA
Major
HA
Sales
Profit
(ratio)
Investment
• Pursue stable profitability expansion by growing in China &
Asia + Europe
Profit
InvestSales
(amount)
ment
• Pursue profitability expansion through improving model
portfolio
Profit
InvestSales
(ratio)
ment
Devices/
etc.
・Minimize risks and pursue steady positive profitability
ＡＶ
HA
Sales
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
Profit
(ratio)
Investment
Accelerate investment for highly growing business
Intensively invest human resource and cash
R&D engineers
Company’s strategic Investments
(number of personnel)
(yen: billions)
2,000
25 00
600
Increase
２２
25 0
Intensive
Investment
Area
Comm. Fridge
& Food equip.
69%
76%
AC
Small/
Built-in
0
24%
FY16
FY17(f)
0
FY16
10
31%
FY19(f)
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Goals for FY19
Aim at achieving 2.8 trillion sales in FY19 due through mainly
highly growing business and steadily growing business
2.5 trillion yen
(54.6 billion yen)
2.8 trillion yen
(125 billion yen)
Comm. fridge
Devices AV
& Food equip.
Major
Small/
Built-in
AC
Highly growing business
(67% of total Sales growth)
FY16
11
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
<IFRS>
[consolidation of
manufacturing
and sales]
Sales
(OP)
FY19(f)
Our strengths and
Market share in home appliance in Japan
Achieved record high market share in past 30 years in whole home appliance goods
Share ranking in amount by product in FY16 (Panasonic estimates)
‘Capability to establish
relationship’ with customers
Residential air-conditioner
1st
AC
Our strength
Link with diverse customers with diverse contact
J concept
4K world
Daily Premium
Dishwasher
Induction Hob
MWO
Small/
Built-in
‘Capability to convey values’
to customers
1st
Rice Cooker
1st
1st
Shaver
2nd
Dryer
1st
1st
‘Manufacturing-sales
consolidated management’
30%
FY16
Record
high
(Estimate by
Panasonic) 15%
1990
12
Refrigerator
Top Load Washer
2nd
2000
Front Load Washer
1st
2nd
TV
AV
<Japan>
Market share 25%
in home
appliances 20%
Major
Consolidated operation by
Recorder
2nd
1st
2010
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Expand Japanese Winning Business Model to
overseas
Expand marketing approach developed in Japan, considering regional characteristics
Asia
China
【Sales target in FY19: 350 bil. yen】
【Sales target in FY19: 13.3 bil. yuan】
Propose new values based on localization
Top wind flow Multi door/Partial freezing
Washing power
/Large opening
‘Healthy, affordable and classy’ + smart
Create “aspiration” with premium goods
Establish Marketing division and Sales BU
to strengthen “Integrated marketing”
”development-manufacturing-sales consolidated management”
4K/Lighting
【April 2015】
Beauty &
health,
cooking
Marke
ting
sales
Small
Kitchen
Appliances
BU
Refrigerator/Washing
machine BU
Transfer overseas sales company to Appliances Company in steps,
to ensure manufacturing-sales consolidated management
13
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
AC
BU
Manufacturing
company
Develo
pment
AC
Marketing Division
Manufacturing
company
Manufa
cturing
Refrige Washing
rator machine
Manufacturing
company
Develo
pment
Marke
ting
Manufacturing
company
Manufa
cturing
Manufacturing
company
Enhance quantity and
quality of promoters
Continuous storefront
demonstrations
Manufacturing
company
Synchronize media &
storefront campaigns
HA Sales
Company
【April 2016～】
Beauty &
health,
cooking
AC
AC company
sales
Refrige Washing
rator machine
Washing machine
company
Premium brand strategy
× Field marketing
Business growth with profitability in home appliances
Growth with “Japan + Asia/China/Europe” and “RAC/Small”
Operating profit ratio
By region
By business domain
FY16
５％
Japan
Asia
China
Europe
FY16
５％
RAC
Small
others
Major
others
Sales
FY19(f)
５％
Japan
Asia
China others
Europe
FY19(f)
RAC
Small
５％
Major
others
*IFRS *Consolidation of manufacturing and sales
*Areas indicate operating profit amounts
14
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FY17 Business Policy
15
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
FY17 Management Target
(+4%)
<IFRS>
[Consolidation of
manufacturing
and sales]
(yen: billions)
2,600.0
2,505.7
Sales
100.0
Operating profit
(Ratio)
Exchange rate (1 USD)
(3.8%)
54.6
(2.2%)
FY16
FY17 (f)
120
115
Increase
Increase
Sales
16
• Newly
consolidated Hussmann Corp.
• Increase in Air-conditioner and Major
Appliances
Operating • Sales increase and
improvement of profitability of AC
Profit
• Develop
and promote premium
products
• Newly consolidated Hussmann Corp.
Ａｐｐｌｉａｎｃｅｓ Ｃｏｍｐａｎｙ Ｂｕｓｉｎｅｓｓ Ｐｏｌｉｃｙ
FY17 Management Target
Increase both sales and profit mainly by highly growth businesses
Highly growing Business
<IFRS>
[consolidation of
manufacturing
and sales]
(yen: billions)
Small/
Built-in Major
+13.8 +21.7
2 8,0 00
2 7,5 00
Sales
2 7,0 00
Risk
Offset etc.
-35.7
SANYO
TV
Exchange
-8.9
-75.2
Device etc.
-4.4
AV
-11.8
2 6,5 00
2 6,0 00
2,505.7
Comm. Fridge
2 5,5 00
2 5,0 00
Food equip.
AC &（incl.
Hussmann）
+51.5
+143.3
2 4,5 00
2 4,0 00
2,600.0
2 3,5 00
FY16
Operating profit
1 20 0
Highly growing Business
1 00 0
8 00
67.8
6 00
4 00
2 00
Based on
Adjusted
OP
54.6
IFRS
AC
+11.5
Small/
Built-in Major
+6.1
+2.0
Comm. Fridge
& Food equip.
（incl. Hussmann）
+15.8
Device etc.
-0.8
ＡＶ
+11.3
Include improvement from
non-operating expenses
(Based on US GAAP)
100.0 109.4
SANYO
TV
-0.5
IFRS
Based on
Adjusted
OP
0
FY16
17
FY17(f)
+94.3
+45.4
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
FY17(f)
HA
Air-Conditioning
ＢｔｏＢ
Comm. AC concentrate on target business area,
RAC aim to further profitability improvement
AC sales
Reestablish RAC in China
<consolidation of manufacturing and sales/yen: billions >
Sales
+12％
700
600
500
460.6 465.6 504.6
FY16
２０％
(Renew storefront, strengthen helpers, etc.)
Mid-High range ratio
400
300
FY15 FY16 FY17 FY18 FY19
Achieve
more than
Commercial AC
5% OP in ＲＡＣ
・Integrate global/local strategy and
expand sales in overseas, mainly in Asia
・Sales of Quick cool/warm AC
do well in Asia, maintaining
No.1 market share
Achievement • Double digit growth in Asia
in FY16
• Expand sales of gas AC in Japan
•Collaborate with gas firms and
Key
deal with energy liberalization
Initiatives
(Launch hybrid AC “Smart Multi”)
EHP GHP
18
•Accelerate shift to mid-high
range product
featuring ”Health”
•Transform
to actual demand
FY17(f)
sales unified with distributors
３２％
•Expand cloud technology with
unified platform and utilize for
spec-in.
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ＨＡ
Major Appliance
Propose “Life with aspiration” with premium goods suitable for
each region
Sales
Key initiatives
<Consolidation of manufacturing and sales/yen: billions>
700
600
500
452.6
491.8
506.4
Thailand
400
300
Japan
FY15 FY16 FY17
Daily Premium
FY18 FY19
JAPAN Quality
Partial/
Glass door
No1
market
share
Large-size French
19
EcoNavi
Inverter
Europe
『Healthy/affordable/classy』
+ smart
Square Front load washer
Asia
Easy wide
opening
Cuble
China
Japan
Regional autonomous
management
(Asia)
Vietnam
・Optimization of
Philippines
product planning
within regions
・Expand product lineup
Indonesia
by complementary
supply within regions
Support
development
Joint development
with Gorenje
Washing Sales increase exceeding industry average rate
Machine with products suitable for each region
【ASEAN6 Top Load Washer】 160%
Sales of washer
(8kg and over):
140%
more than +40% vs. LY
FY15 Sales vs. LY
146%
127%
120%
149% 143%
Panasonic
Entire industry
100%
Premium Flat
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
1Q
（Panasonic estimates）
2Q
3Q
Jan-Feb
ＨＡ
Small/Built-in Appliance
Expand high profitability business proven in Japan to oversea
Sales
Strengths
<Consolidation of manufacturing and sales/yen: billions>
500
400
371.0
404.9
414.9
Built-in
Quality
competitiveness
Create Value
Store front
competitiveness
300
200
Small
Product planning
ability
CS network
Feeling/Experience
FY15 FY16 FY17
FY18 FY19
High entry barrier
needed suitability
for company
Core devices
Nanoe/Shaver blade
Market share in Japan in FY16 (Panasonic estimates)
Induction hob
(200V)
Hair drier
Ｂ
Ｂ
Panasonic
Ａ
Ａ
Panasonic
(No.1)
(No.1)
20
Key Initiatives
• Expand Japanese high-end beauty products
China • Sales increase with lineup improvement of IH
rice cooker
• Launch premium products to shaver/trimmer
Europe “ European design x professional
technology”
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AV Business (TV)
ＨＡ
Enhanced brand presence by launching "Premium 4K TVs"
Sales
Key Initiatives
<Consolidation of manufacturing and sales/yen: billions>
700
（IPS/VA, 4K/FHD, several makers）
600 541.3
500
• Establish global platform and achieve lineups by
country with least investment
476.4
453.6
400
300
• Promote multi-cell which enables attachment of
several makers open-cell (total 8 site)
FY15 FY16 FY17
ＣＺ９５０
Own color reproduction
technology reality oriented
OLED TV
FY18 FY19
• Expand by country product/distribution strategy by
collaboration with manufacturing and sales in 5
regions (Japan/Europe/Latin America/Asia/India)
ＤＸ９００
ＤＸ８５０
Multi-division back light area control
Certificated world’s first
ULTRA HD PREMIUM
High-resolution model
with powerful sound
Deploy know-how of Technics
Limited version in Japan
Available on May 20
21
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Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
ＢｔｏＢ
Comm. fridge & Food equip. Business
Aim at achieving 400 billion yen in FY19 on Panasonic corp.
through creating synergy with Hussmann
Sales(AP company)
Key initiatives of Hussmann
<Consolidation of mtg. and sales/yen: billions>
400
synergy
285.6
300
200
136.1 144.0
・Focus on customers who recognize our
value e.g. supermarket, convenience store
& drug store etc.
・Strengthen original/customized products
with high profitability
Opened
display cases
100
0
FY15 FY16 FY17
FY18 FY19
Learn from Hussmann
Hussmann Corp.
• Sales forecast in 2016 Q1 is expected to exceed plan at due
diligence
• Achieved No.1 market share in showcase in North America in FY16
Share of display cases
<Sales (million USD)>
1,500
in US (FY16)
1,213
1,112 1,128
1,000
Hussmann
500
0
22
Customized
display cases
A
FY15 FY16 FY17 FY18 FY19
Oligopoly with two
companies
• Dispatch assigned employees to learn each other
management method appropriate for BtoB
solution business
Beverage Business
・Vending machine market shrinks due to rise of
convenience store
・Site consolidation in FY15 (Kusatsu→Gunma)
・OP is expected to increase by strengthening
dispenser business
Ａｐｐｌｉａｎｃｅｓ Ｃｏｍｐａｎｙ Ｂｕｓｉｎｅｓｓ Ｐｏｌｉｃｙ
Copyright (C) 2016 Panasonic Corporation All Rights Reserved.
(Appendix) Products in each business area
Business Area
Air
conditioner
Room Air-conditioners (RAC), Commercial Airconditioners (CAC), Water heaters
Comm. fridge
& Food equip.
Showcases, Kitchen facilities, Vending machines,
Dispensers
Small/
Built-in
Microwave ovens, Rice cookers, IH cooking hobs,
Dishwashers, Beauty products, Health products,
Cooking appliances, Irons, Nano-e devices, Pump
Major
Refrigerators, Washing machines, Vacuum cleaners,
Toilet seat with shower
ＡＶ
Devices/
Etc.
24
Main products
TV, Recorders, Audio
Compressors, Condensing units, Vacuum insulation
panels, Fuel cells, Meter devices, Electric power
assist bicycles
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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). Panasonic discloses its consolidated financial forecasts for fiscal 2017 based on Internatio nal Financial
Reporting Standards (IFRS). 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 de mand for
electronic equipment and components from business and industrial customers, as well as consumers in many product and geograph ical
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 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 or incurring unexpected losses in conne ction with the
alliances or mergers and acquisitions; the possibility of not being able to achieve its business objectives through joint ven tures and other
collaborative agreements with other companies, including due to the pressure of price reduction exceeding that which can be a chieved 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; th e 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 wh ich 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; the possibility of incurring
expenses resulting from a leakage of customers’ or confidential information from Panasonic’s systems due to unauthorized access or a
detection of vulnerability of network-connected products of the Panasonic Group; 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 presen ted in accordance
with generally accepted accounting principles in Japan. The company believes that this is useful to investors in comparing th e company's
financial results with those of other Japanese companies. Under United States generally accepted accounting principles, expen ses
associated with the implementation of early retirement programs at certain domestic and overseas companies, and impairment lo sses on
long-lived assets are usually included as part of operating profit (loss) in the statement of income.
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