AVC Networks Company Business Policy

Transcription

1 Panasonic IR Day 2014 AVC Networks Company Business Policy May 21, 2014 Panasonic Corporation AVC Networks Company President Yoshiyuki Miyabe 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, Contents 1. Results 2. FY15 Business Plan 3. Toward FY19 4. Summary

2 Contents 1. Results 2. FY15 Business Plan 3. Toward FY19 4. Summary Annual Results (AVC Networks Company basis) Sales OP (%) 1, (0.5%) FY13 1, (1.4%) 1, (1.8%) plan FCF / 27 < Result> Sales Slightly decreased due to termination of unprofitable businesses despite stable growth in BtoB business and positive impact of exchange rates. Operating Profit Increased restructuring of unprofitable businesses and positive impact of exchange rates contributed to profit improvement.

3 Annual Results (Sales & production consolidated basis) 4/ 27 Sales OP (%) 1, (-1.7%) 1, , (0.5%) 24.0 (1.3%) FY13 plan < Result> Sales Slightly decreased due to termination of unprofitable businesses. Operating Profit Increased improved by 40.4 billion yen through consolidated sales and manufacturing management style. Changes in Organization (from 1 st April, 2014) 5 / 27 Transfer consumer businesses into Appliances Company Former organization New organization AVC Networks Segment Sales/Operating profit Sales : 1,573.4 OP : 21.5 Sales : 1,219.3 OP : 20.4 Businesses transferred TV Set business Audio/Video/ AV accessory business

4 Contents 1. Results 2. FY15 Business Plan 3. Toward FY19 4. Summary Organization of AVC Networks Company (As of April 1, 2014) 7/ 27 Management President Yoshiyuki Miyabe Employees: approx.36,000 people ([Domestic]:approx.19,000 [Overseas]:approx.17,000) R&D Division Division affiliated with Panasonic System Networks Co., Ltd. BD= Business Divisions Business Development Center SVP Toshiyuki Takagi System Products Business President, Panasonic System Networks Co., Ltd. Vice President Takuya Sugita SVP Yasuji Enokido System Solutions Business SVP Paul Margis Vice President Tatsuo Katakura Avionics Business AVC Networks Company Imaging Network BD Security Systems BD Visual Systems BD IT Products BD Storage BD Office Products BD Communication Products BD Panasonic Mobile Communications Co., Ltd. Infrastructure Systems BD Avionics BD Imaging Network Business System Solutions Company (Japan) System Solutions Company (Japan) Panasonic Liquid Crystal Display Co., Ltd.

5 4 Core Businesses 8/ 27 BtoB Customers Sales /SI 1 Japan & Overseas system engineering or sales companies Core Businesses Visual & Imaging Business Business Divisions Imaging Network Security Systems Visual Systems Mobility Business Business Divisions IT Products Storage Communication Business Business Divisions Office Products Communication Products Vertical Solution Business Business Divisions Infrastructure Systems Avionics Sales (Proportion %) bn yen 25% 216.0bn yen 18% 145.0bn yen 12% 305.0bn yen 25% 1 SI= System Integration 2 FY15 Business Plan(New Organization base) FY15 Management Targets 9/ 27 (Results) FY15 (Business Plan) vs. Sales 1, , % Operating profit (%) 20.4 (1.7%) 43.0 (3.5%) FCF Double OP in FY15 vs.

6 FY15 Sales Compositions 10 / 27 Offset negative impact of termination of unprofitable businesses by growth in core businesses, and turnaround toward growth direction Sales Core Businesses Growth % Visual & Imaging business +8% 1, , % (Ceased PDP, & stopped BtoC Smartphone R&D etc) Mobility business +12% Core Businesses Communication business -1% Vertical Solution business +13% 13FY FY FY Business Plan FY15 Operating Profit Analysis 11 / Termination of group special countermeasure (actual) Positive impact through restructuring underperforming business Sales decrease due to reforming unprofitable businesses etc Sales growth of core businesses 43.0 FY15 (Business Plan)

7 Rebuild LCD Panel Business 12 / 27 Accelerating transformation to businesses where we can differentiate from our competitors. Proportion of LCD Panel Sales Shifting portion from IT to business category Feature of Biz area and our strengths Higher profitability can be expected in BtoB 100% 0% For TVs 20% For ITs [LCD Panel sales proportion%] 60% Non-TVs Proportion 70% For Biz FY FY FY (Forecast) Market Condition Requirement or Spec Profitability For TVs Commodity For ITs (Tablets, note PCs) Toward commodity For Biz (Medical, Broadcast,Cars ets) Niche & Custom A wide use Normal Special, High Low Middle High Fullfil BtoB customers needs such as large screen and low power consumption etc through our advantage with consolidated engineering and productions operation in Himeji, Japan. Improve Operating Profit in LCD Panel Business 13 / 27 Improve profitability in FY15 with positive impact of restructuring and increase panel sales for non-tv applications Cut deficit more than 90% vs. FY12 FY12 FY13 FY15 (Business Plan) Operating Profit Positive impact of restructuring and reduction of fixed costs Cut deficit more than 90% vs. FY12 Increasing panel sales for Non-TVs

8 Rebuild DSC Business 14 / 27 Strengthening business structure and focusing on the business field, utilizing our advancement Market Demand for Digital Still Cameras Compact (Leader) Compact (High-end) Mirror-less DSLR 6.8% % 4.9% % DSC demand in units 4.9% % 9.1% 9.6% 10.8% 10.3% 10.5% FY13 FY15(E) : Panasonic share 1.3% FY13 ->FY15(E) -69% -12% Initiative in FY15 Strengthening business structure Create synergy by combining BtoB & BtoC video camera business -optimize the structure by unifying R&D and sharing main device Reduce total fixed cost by approx.20% by cutting development models in half Shifting to higher profitable models Focus on compact (high-end) / mirror-less Shifting to new business areas by utilizing technical advance 4K videos -pick up high quality still picture from 4K video External device sales -expand external sales for cars, security cameras and mobile terminals with black-box technology such as optical design ability and molding method of nonspherical lens black-box technology is a unique technology Panasonic owned that is hard for others to copy Improve Operating Profit of DSC Business 15 / 27 Aiming to return to the black in FY15 through fixed-cost reduction, shifting to high-end of models and external device sales increases etc FY15 (Business Plan) Operating Profit Fixed cost in R&D and production sites Positive impact of exchange rates and restructuring Shifting to high-end of models External device sales (New business) Reduce fixed cost Improving marginal profit FY15 return to the black

9 Contents 1. Results 2. FY15 Business Plan 3. Toward FY19 4. Summary Future of AVC Networks Company 17 / 27 Offering solutions to B2B customers directly by combining AV and ICT - contributing to smart society in cloud era - FY2019 consolidated AVとICT company の融合で顧客直結の企業 法人向け sales target in BtoB Solutions: Solutionを提供 2.5 trillion yen. ~Of クラウド時代におけるスマート社会の実現に貢献 which AVC target: 1.5 trillion yen. ~ System Solution Product Solution Box (Hardware) Others (Display panels etc) 1, ,231.0 FY15 Make level of Solution up with competitive products 1,600.0 FY19 BtoB customers sles 1.5 trillion yen Panasonic total target in BtoB solution 2.5 trillion yen

10 Core Business Direction Visual & Imaging Evolving big data & intelligence in videos Photographing & viewing Security & disaster prevention Identification & sharing Analysis Smart Intelligence Prediction & forecast Offer optimum business Mark -eting Crime Action Mobility 18 / 27 ICT-oriented field will expand due to wireless evolution Back-office Front office Adapting environment to hardware Field Adapting hardware to environment WiGig Communication LTE-Advanced DECT Cognitive wire-less Strengthen solutions with High speed, Wide range and Wire-less Vertical Solution Strengthen direct solutions to customers based on competitive hardware Visual & Imaging Enhance Solutions with Competitive Products (Integrated security) 19 / 27 Accelerate evolution of Visual & Imaging by combining technology, knowhow and sales asset, Offer solutions to various customers based on wade-rage of product line-up IP (previous SNC) IP technology R&D Procurement System know-how (previous AVC) for Police File evidence Search image previous System & Communications Company/previous AVC Networks Company united in 1 st April, 2013 Module (previous Sanyo) Technology/ sales asset Design Customer-touch-point Image Analysis (previous SNC) Image analysis Quality image Face recognition Realize wade-rage of products through combining technologies and assets through organization reform entry & exit management Outdoor Value model 360 degree wide rage Outdoor Outdoor Full HD camera module Indoor Entry model Dome type Wire-less Entry camera IMS Research 2013 Network camera : global share 10% (No.2) Server for face recognition In Car Video

11 Mobility Enhance Solution with Competitive Products (TOUGHBOOK+TOUGHPAD) 20 / 27 Strengthen ICT use for outside tough environment with communication, rugged, business know-how Resolve customers problems based on competitive hardware that others cannot imitate previous Panasonic Mobile Communications Co., Ltd.(applying wireless-communication related to BtoC smartphone to TOUGHBOOK+TOUGHPAD) previous System & Communications Company/previous AVC Networks Company united in 1 st April, 2013 Mobile wireless communication Rugged & long time battery (former PMC) (former AVC) Business know-how (former SNC) 3G/LTE Super small antenna Light sizing Slim sizing Close-to-customer Sales capability Increase product line-ups in TOUGHBOOK+TOUGHPAD(5-20 ) to strengthen ICT-use in outside Global share 60%(No.1) Rugged tablet 4K tablet Global share 39%(No.1) VDC Research 2013 Q4 5inch 7 inch 10 inch 13 inch 20 inch Vertical Expanding Solution Business 21 / 27 Create direct solution business to customers in the industries that our advance could be utilized Build the success model with partners, developing global expansion by N times Enhance solution with competitive products Improve customers value collaborating with industry partners Products from other Companies Solar cells CO2 refrigerant Lighting control Air conditioning/ Ventilation control e.g.: test/demonstration with convenience store Integrated Security Image analysis Security camera Products from other Companies Massage chair Beauty appliance Ion water conditioner LED lighting Superdirectional Speakers, etc In-shop Signage Today s your coffee Display panel Cloud service N times expansion of success models N:Number of shops etc

12 Structural improvements overseas solution sections 22 / 27 Deploy engineering functions in each regions to establish solution cycle Current Reinforce Marketing System Sales Company System Sales Company Product planning Design R&D Solution Cycle Procurement production Business Division Business Division System integration System engineering Maintenance, operation & service SI companies / Dealers ~ Establish engineering function Strengthen or newly establish engineering sections in global 8 regions Europe Russia India Asia China Taiwan Japan SSJC USA Brazil Function enhancement Newly establishment Toward 2020 Tokyo Olympics 23 / 27 Since 1988, we have contributed to Olympic operation in technology as a Olympic Partner Established record of introduction of new technologies and business creation. Strengthen further toward Tokyo Olympics in Relationship between Olympic & Us Start The Olympic Partner 1988 Seoul (TOP) From analog to digital 1992 Barcelona Launch D3 cameras In main stadium 1996 Atlanta Display large equipment Launch P2 card 2004 Athens Record video in semiconductor DVCPRO HD 2008 Beijing Realize Full HD broadcasting HD video communication 2010 Vancouver HD-link at different locations Realize 3D broadcasting & 2012 London Ultra-high luminance projector 2016 Rio de Janeiro 2018 Pyeongchang 2020 Tokyo Further technology evolution & create new businesses e.g.) Solution for a better Olympic operation Stadium Infrastructure e.g.) Smart Stadium Security Monitoring Detect Lost Child Detection System Ex) Smart Olympic Lane Traffic Control System for Olympic special lane Main products Large Screen Large Speaker Broadcasting system Security system etc Main products Security system Broadcasting system Payment solution etc Contribute to Panasonic Group total target sales:150 JPYbn

13 Main Areas to Strengthening Solution Business 24 / 27 Plan to invest accumulated 100 billion yen including M&A by FY19 Main areas to focus Specific action to take Enhance Business Platform Establishment of overseas engineering organization Expansion of Solution Area Acquire know-how in main core business for the specific industries Cloud and Wide-range wireless Construct MVNO and collaboration with IT BtoB partners etc Sales Growth by business & region ( FY19) 25 / 27 By business : Based on the core businesses, expand solution sales across each business divisions By region : Expand sales especially outside Japan to reinforce or newly build the engineering sections 1, Vertical By business Visual & Imaging Mobility Communication ,600.0 Others 1, Japan By region Developed Countries Overseas Strategic Regions Others 1,600.0 FY19 FY19

14 Contents 1. Results 2. FY15 Business Plan 3. Toward FY19 4. Summary Summary 27 / 27 (Results) FY15 (Business Plan) Sales 1, ,231.0 Operating profit (%) 20.4 (1.7%) 43.0 (3.5%) FCF Toward FY19: 1,600 billion yen by shifting to growth strategy

15 Disclaimer Regarding Forward-Looking Statements This 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-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 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 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.