appliances company business strategy
TRANSCRIPT
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Panasonic IR Day 2012
Appliances CompanyBusiness Strategy
Panasonic CorporationAppliances Company
President Kazunori Takami
May 23, 2012
Notes: 1. This is an English translation from the original presentation in Japanese.
2. In this presentation, “fiscal 2012” or “FY 2012” refers to the yearended March 31, 2012. In addition, “fiscal 2013” or “FY 2013”refers to the year ending March 31, 2013.
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1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
ContentsContents 1
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
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1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
ContentsContents 2
Appliances C
ompany
Panasonic Former Home Appliances Company
Former Panasonic Electric Works Co. Ltd.Beauty/Grooming/
Health Care Products Dept.
SANYO Electric Co., Ltd.Commercial Heating/Refrigeration
Equipment Dept. Large air-conditionersand cold-chains, etc.
Beauty/Health Care
Foundation of the Appliances CompanyFoundation of the Appliances Company
Air conditioners/Home appliances Kitchen appliances/Heating/
Water heating systems/Vending machines/Devices/Energy
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Brazil (2)
Mexico (1)
U.S. (2)
56 sites(Japan 9 / Overseas 47)
U.K. Japan9 sites
Europe1 site North America
2 sites
Latin America3 sites
Malaysia (5)
Singapore (1)
India (2)
Thailand (6)
Vietnam (2)
Xiamen (1)
Philippines (1)
Indonesia (1)
Wuxi (2)
Zhuhai (1)
Hangzhou(6)
Shanghai (2)
Suzhou (1)
China/Northeast Asia
23 sites
Asia18 sites
Dalian (3)Beijing (1)
* Includes a new factory in Brazil
* Includes new factories in India and Vietnam
*
* *
*Japan: Number of locationsOverseas : Number of sites for consolidated
companies of the Appliances Company(As of April 2012 )
Taiwan (1)
Global SitesGlobal Sites 4
Hong Kong (1)
Guangzhou (4)
Manufacturing and Sales ItemsManufacturing and Sales Items
Heated toilet seats
with warm water shower
Electric heating appliances
Hot water heating
Refrigerators
Microwaves
Rice cookers/ Small cooking appliances
IH Cooking Heaters
Commercial food equipment
Dishwashers
Washer-dryers
Irons
Vacuum Cleaners
Home air-conditioners
Healthcare appliances
Water purifiers
Large air-conditioners
Grooming/Beauty products
Heating
Kitchen Appliances
BeautyHealthcare
Home Appliances
Air-conditioning
Household
fuel cells
Electronic water heaters
CO2 heat pump water heaters
Compressors
Motors
Magnetrons
PTC heaters
Heat Insulating devices
Low-power wireless modules
Gas meter devices
Vending machines
Showcases
Retail equipment
Commercial cooking equipment
Devices
Cold Chain
Water Heating Systems
Energy
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Sales breakdown by ProductSales breakdown by Product
* FY 12
BtoC Business: 59%BtoB Business: 41%
Appliances Company
All-electric systems4%
Cold chains7%
Air-conditioning compressors
7%
Large Air-conditioners
5%
Others in BtoB18%
Air-conditioners18%
Washing machines10%
Refrigerators9%
Beauty/Healthcare9%
Others in BtoC13%
■ BtoC business including air-conditioners, washing machines and refrigerators account for 59%
■ BtoB Business including cold chains, large air-conditioners and devices account for 41%
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FY 2012 AchievementsFY 2012 Achievements
FY2011 FY2012 FY2011 FY2012
1,104.21,114.6
59.261.3
[ Sales ] Achieved revenue growth in spite of The Great East JapanEarthquake and the flooding in Thailand
[ Operating Profit ] Acquired profit growth in spite of the impact of the rise in raw material costs
Note: The figures of FY2011 and FY2012 has been adjusted to conform to the new AP company founded in FY2012.
+1%+2.1
Sales Operating Profit
(yen: billions)
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
8ContentsContents
1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
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Global Demand for AppliancesGlobal Demand for Appliances
■ Demand in FY 2013 : global +1%, Asia: +4% (y-o-y), Asia is driving growth ■ High growth in emerging countries (BRICs + V): +5% (y-o-y)
15.2 15.7 15.8
FY11 FY12 FY13
Europe
Asia
Latin America
JapanNorth
America
+4%
+1%
+2%
±0%
+1%
-7%
(FY12 vs. FY13)
Others
Source: Estimates by Panasonic based on statistics from GfK, Euromonitor, JEMA, CMM, Bsria, and JRAIA.
FY13 vs.FY12
China 3.2 +4%
Brazil 0.6 +4%
India 0.5 +15%
Russia 0.4 +3%
Vietnam 0.1 +5%
Total 4.8 +5%
<Of which emerging countries (BRICs + V>
(yen: trillion)【Global Demand for Appliances】
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
World Demand & Panasonic Market Share by Flagship ProductsWorld Demand & Panasonic Market Share by Flagship Products
■ Globally promote dynamic business growth
Air-conditioners
59 mil.
Refrigerators
97 mil.
Washing machines
79 mil.
Hair dryers
85 mil.
< FY12: unit basis>
7.2 mil.
12.3%
5.1 mil.
6.4%
3.2 mil.
3.3%
5.4 mil.
6.4%
•Note: Air-conditioners refer to room air-conditioners and packaged air-conditioners. Drying machines are excluded from washing machines•Source: Statistics and reports from GfK, Euromonitor, JEMA, CMM, Bsria and the Japan Refrigeration and The Air Conditioning Industry Association. Estimated by the AP Company
Microwave ovens゙
57mil.
5 mil.
8.8%
10
World demand
Panasonic share
11ContentsContents
1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
1. Appliances Company Profile
2. Market Trends
3. Business Vision and Key Initiatives for FY 2013
11
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Regional company
Into new
regions
Global company
Expand local business in India, Brazil, and Vietnam
Strengthen base in Japan, China, Asia, and Europe
Larg
e Air-co
nd
ition
ing
, h
ot w
ater heatin
g
EV
-related
Into new domain
B
Cto
Fu
el cells
, en
ergy
man
age
men
t
B
Bto C
old
ch
ain
Energy savingEnergy creation
Resource recycling
[2015]Global top 3 in
appliances
[2018]No. 1
Green Innovation Company in Appliances
The No. 1 Green Innovation Company in Appliances by 2018Accelerate global expansion and widen business domain
Business VisionBusiness Vision 12
FY 2013 Key InitiativesFY 2013 Key Initiatives
Expanding the BtoB business (facilities/devices)
Accelerating global expansion in the BtoC business (sets)
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Strengthening manufacturing competitiveness supporting the creation of competitive products
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Expanding the BtoB business (facilities/devices)
Strengthening manufacturing competitiveness supporting the creation of competitive products
FY 2013 Key InitiativesFY 2013 Key Initiatives 14
Accelerating global expansion in the BtoC business (sets)
■ Establish
[Air-conditioners] Jan 2013
[Refrigerators] Jan 2013
●○
[Refrigerators] Aug 2012[Washing machines] May 2013
●○
[Washing machines] April 2013●○
Hanoi
India
Brazil
Vietnam
■ Simultaneously establish manufacturing sites in key focus markets
[New site]Jhajjar
[New site]Extrema
[New site]Hung Yen
■ Establish a manufacturing site for air-conditioners and washing machines to strengthen product and cost competitiveness in rapidly growing market
*Expand refrigerator production capacity at existing site (Hanoi)
Mass productioncommencing
Mass productioncommencing
■ Establish a manufacturing site for refrigerators and washing machines in order to introduce products based on locallifestyle research
■ Establish a manufacturing site for washing machines and R&D center for refrigerators and washing machines forfurther expanding ASEAN business
Mass production commencing
Accelerate Growth in the BtoC, Primarily in Emerging CountriesAccelerate Growth in the BtoC, Primarily in Emerging Countries 15
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Steady Progress in the Establishment of Local Manufacturing SitesSteady Progress in the Establishment of Local Manufacturing Sites
India Brazil
■ Buildings complete■ Installation of refrigerator manufacturing
equipment in progress
(Conceptual drawing)
■ Air conditioner plant: 2 weeks ahead of plan■ Washing machine plant: Progress in line
with plans
Vietnam
Headquartersbuilding
Cafeteria building
Factory building
■ Construction application approved
■ New plant construction commenced in March
Washing machine plant
R&D
Air conditioner plant
Washing machine plant
Air conditioner plant
Washing machine plant Inside the plant
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■ Proposing new energy conserving lifestyles for global consumers
approximately 270 models rolled out in approximately 90 countries
■ Produce new concept products that match customer needs in each country
[Eg.] CUBE split air-conditioner for IndiaMarch 2012 share: 12.1%* (up 6% y-y)
* Source for market share: GfK split air-conditioner market share
■ Expand product lineup quickly by breaking away from the conventional self-sufficiency policy
No. of ODM models(FY2013)
Refrigerators: 8 modelsWashing machines: 8 models
1. Further global expansion of ECONAVI
2. Creation of new high-volume markets through locally-oriented products
3. Active use of ODM with the aim of the rapid launch and roll out of products
Europe IndiaRefrigerators: 8 models
Washing machines: 5 models
3 Main Products (Air-Conditioners, Refrigerators, Washing Machines) Driving Growth
3 Main Products (Air-Conditioners, Refrigerators, Washing Machines) Driving Growth 17
Score a series of innovations in each country
and product
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Beauty & Grooming / Healthcare
■ Expand business in China and Asia by “Panasonic Beauty”
■ Global roll out of European designed Milano Shaver and tap into young customers
Small Cooking Appliances
■ Full-scale entry into EuropeExpansion into Russia, China, and Asia, etc.
■ Expand business in Japan centered on rice cookers and bread makers
&
- Establish the Panasonic brand in the beauty / healthand small cooking appliances markets through development ofproduct groups -
Toward a pillar of new growth for the BtoC business
FY 2013: more than 15%
growth overseas
Accelerate Global Promotion of Beauty / Health / Small Cooking Appliances as Groups of ProductAccelerate Global Promotion of Beauty / Health / Small Cooking Appliances as Groups of Product 18
FY 2013 Key InitiativesFY 2013 Key Initiatives 19
Expanding the BtoB business (facilities/devices)
Accelerating global expansion in the BtoC business (sets)
Strengthening manufacturing competitiveness supporting the creation of competitive products
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Accelerate Global Development of Large Air-conditioners and Cold ChainsAccelerate Global Development of Large Air-conditioners and Cold Chains
Large Air-conditioners Cold Chains
■ Expand product lineup and strengthen sales structure
■ Launch new products with the industry’s top energy conservation performance and 25% reduction in material costs
■ Differentiation through environmental performance (adopt natural refrigerants, low power consumption, etc.)
■ Expand overseas business, with a focus on China and Asia
Vending machines
Showcase Professional-
use refrigerator
FY12 FY13
+6%[Sales]
■ Toward a BtoB growth engine by merging the strengths of Panasonic and SANYO
FY12 FY13
+20%
Gas heat pump air-conditioners
[Sales]
Air-conditioners for large scale
facility
Office, store, and building
air-conditioners
20
Fu
el cells
EV[Sales] [Sales]
FY12 FY13 FY12 FY13
*excludes withdrawn products
■ Create new demand by proposing products that anticipate changes in the market
*1 Source: Estimated by Panasonic based on Fuel Cell Association statistics and data
Ultrasonic gas meterCharging cable
Electricallydriven
compressor
*2 Source: Top domestic share estimated by Panasonic based on Japan LP Gas Instrument Inspection Association statistics and data and customer interviews
Car d
evices
Gas m
eters
FY12 FY13
[Sales]
+14%
■ Strengthen EV products (e.g. charging cables and electrically driven compressors, etc.)
■ Accelerate global expansion
■ Push forward proposals for ultrasonic meters as the top domestic manufacturer *2
■ Tap into the European smart gas meter market
■ Firmly maintain a top share over 50% of the domestic market*1⇒ Expand unit sales: 1.4 times y-o-y in FY 2013
■ Prepare products for launch in the European market +7%
Expand Business in the Environment and Energy FieldExpand Business in the Environment and Energy Field 21
+11%
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FY 2013 Key InitiativesFY 2013 Key Initiatives 22
Expanding the BtoB business (facilities/devices)
Accelerating global expansion in the BtoC business (sets)
Strengthening manufacturing competitiveness supporting the creation of competitive products
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Energy saving technologies
Beauty / health
technologies
Resource recycling
manufacturing
■ Combine technologies in energy conservation, beauty / health,and resource recycling, etc., to maximize synergy
Improve energy saving performance through significantly improved efficiency
Technology to promote health and beauty based on human research (biological and physiological)
Promote recycling technology and full utilization technology
Glass wool production
Plastic recycling Advanced molding
Heat pump technology
Invertertechnology
Insulationtechnology
Technology to improve hair
and skin condition(Nanoe)
Massage machine
technology(3D Momimeka)
Strengthen Core Technologies to Support Next-generation ProductsStrengthen Core Technologies to Support Next-generation Products
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24Initiatives Aimed at Strengthening Cost CompetitivenessInitiatives Aimed at Strengthening Cost Competitiveness
Steady progress in cost reductions to offset the sharp rise in raw material prices
Promote 30% reduction in man-hours at all 48 global production sites
Value engineering
Cost reductions
■ Build a robust world-class manufacturing structure
Preparatory processes
Assembly processes
Material processes
FY2012 FY2014
30% reductionIn man-hours
(total number ofprocesses)
■ Adopt every possible means to counter risk of sharp increases in raw material prices that squeeze profits
・Promote substitution of raw materials with sharp price increases, such as rare earth elements and copper
・Utilization of recycled materials
・Further utilization of overseas resources
・Expansion of centralized global contracts
(Technology-driven)
(Procurement-driven)
Radical examination and review of all production processes
starting from design(parts reduction, automation, etc.)
FY 2013 Business PlanFY 2013 Business Plan
FY2012 FY2013 FY2012 FY2013
1,114.61,145.0
61.380.0
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[Sales ] 3% increase y-o-y, boosting both BtoC and BtoB businesses
[Operating Profit] 18.7 billion yen increase from FY12 by streamlining materials etc.
+3%+18.7
(yen: billions)
Sales Operating Profit
Note: The presentation of FY2011 and FY2012 figures has been adjusted to conform to the new AP company founded in FY2013.
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Focus meticulously on "products" and grow business through "products"
Strengthen Our Products ,Accelerate Our Growth
- Aiming to be the Eco No. 1 Global Company -
Toward Achievement of the FY 2013 Business PlanToward Achievement of the FY 2013 Business Plan
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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.
Disclaimer Regarding Forward-Looking StatementsThis 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; thepossibility 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 overseascompanies, and impairment losses on long-lived assets are usually included as part of operating profit (loss) in the statement of income.