IR Day ES - Panasonic · PDF fileaiming top market share ... 20 10% 13% Overseas sales ratio...

1Copyright (C) 2012 Panasonic Corporation All Rights Reserved.

May 23, 2012

Panasonic CorporationEco Solutions Company

President Shusaku Nagae

Eco Solutions Company Business Strategy

Panasonic IR Day 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.

2ContentsContents

１．Outline of Businesses

２．Focuses in FY2013

３．Summary


3ContentsContents



３．Summary

4Outline of Business Domain Company (1)Outline of Business Domain Company (1)

Company NameEco Solutions Company

(Abbreviation: ES Company)

President Shusaku Nagae

Business Lineup

R&D, manufacture, sale of electrical construction materials, housing materials and equipment, ventilation equipment and systems, and related installation engineering and maintenance services

Business VisionWe provide our living environments that are eco-friendly and comfortable

Headquarters 1048, Kadoma, Osaka, Japan

Principal OperatingSites

Japan: Osaka, Tokyo, Niigata, Mie, Aichi, etc.

Overseas: China, India, other Asian countries,

Europe and Americas etc.


5

Panasonic Corporation・Lighting Company

Panasonic Ecology Systems Co., Ltd.

Panasonic Electric Works Co., Ltd.・Lighting Mfg. Business Unit・Information Equipment & Wiring Products Mfg. Business Unit

・Building Products Mfg. Business Unit・Panasonic Electric Works

Power Tools Co., Ltd ・Electrical Construction Materials

Marketing Business Unit・Building Products

Marketing Business Unit

SANYO Commercial Equipment Systems Co., Ltd.

Panasonic Food Appliances Co., Ltd.

SANYO Solar Energy System Co., Ltd

*Overseas Sales Divisionof SANYO’s Solar Products

Eco Solutions CompanyPromote group-wide

comprehensive solutions business

〔Main divisions〕

*Started in FY2013

Outline of Business Domain Company (2)Outline of Business Domain Company (2)

6OrganizationOrganization

Corporate Division forComprehensive Solutions Business

Panasonic Ecology Systems

Co., Ltd.

Engineering Division/Manufacturing Innovation Division

Back office function under head office

Eco Solutions Company

Housing Systems Business Group

Energy Systems Business Group

Lighting Business Group

Manufacturing Bases

Marketing Division

Global Marketing Division

Company Profile(FY2012 Consolidated Basis)

Sales： 1,525.8 billion yenNumber of Employees： 45,700

OsakaNiigataChinaOther Asian CountriesEuropeThe Americas, etc.

Manufacturing Bases

Manufacturing Bases

Manufacturing Bases

Sales Bases Sales Bases

MieAichiIbarakiChinaIndia, etc.

ShigaTochigiKagawaChina, etc.

AichiChinaHong KongThailand, etc.

Shiodome (Tokyo), etc.Electrical Construction Materials &Housing Products: 130 basesShowroom: 61 locations

Overseas5 sales Department22 sales bases


7Our Business (1)Our Business (1)

Lighting Energy Systems

Housing Systems Panasonic Ecology Systems Co., Ltd.

Sales: Approx. 300 billion yenNumber of employees: Approx. 10,000Principal business:・ Residential lighting・ Institutional and commercial lighting・ Lighting source & devices

(Sales & number of full-time employees are based on FY2012 consolidated basis)

Sales: Approx. 220 billion yenNumber of employees: Approx. 13,300Principal business:・ Power components・ System components・ Power tools

Sales: Approx. 270 billion yenNumber of employees: Approx. 3,300Principal businesses:・ Kitchen furniture, bathroom

and sanitary fittings・ Interior furnishing & systems・ Exterior products & systems

Sales: Approx. 120 billion yenNumber of employees: Approx. 5,100Principal businesses:・ Indoor air quality appliances・ Ventilation equipment・ Air, water and soil purification systems

8

20%

15%24%

15%

18%8%

FY2012Sales by segment

LightingOthers

OtherDomainCompanies

1,525.8 billion yen

1,525.8billion yen

North America2%

Europe 2%

Asia/Oceania2%

China/ North East Asia

3%

India/Middle East 2%

Japan 90％

Our Business (2) Our Business (2)

FY2012Sales by region

Energy Systems

Housing Systems



9

Appliance sector Energy sector

Energy-savingequipment

Industrial air conditioner

Freezing and refrigerationshowcase

PV powergeneration

system

Storagebatterysystem

System networkssector

Door phone

Security camera

Eco Solutions CompanyMarketing DivisionLighting Energy systems

Housing systems Panasonic Ecology Systems Co., Ltd.

Customers

Note: overseas business currently limits in energy sector.

Features of Business (1)Features of Business (1)Sell other domain companies’ products through strong sales channel with our marketing department to lead group-wide growth

10

Strength

・ No.1 market share in Japan・ Synergy in Integrated development

of lamps and lighting fixtures・ Light distribution control and lighting software

technologies

・ Improve cost competitivenessof LED lighting products

・ Expand business globallyLighting

Energy Systems

Housing Systems


・ No.1 market share in Japan ・ Development of electric construction

materials business in Asia・ Cutting-edge energy management technology

・ Accelerate energy solutionbusiness expansion

・ Foundation for group-wide entire home business ・ Development of products integrating

home appliances and housing equipment ・ Plastic molding and wood processing technologies

・ Expand business globally・ Improve cost competitiveness

・ No.1 global market share of ventilation fans・ Overseas manufacturing expansion・ Air quality control environmental technologies

・ Expand environmentalengineering business

Features of Business (2)Features of Business (2)Challenges


11

Strength Challenges

・ Strong sales forces, sales channels and IT systems

・ Proposal for solution by market with wide rangeof products including other domain companies’

・ Installation and support of engineering companies

・ Differentiate from competitors(Create new value for customers)

Marketing Division

Corporate Division for

Comprehensive Solutions Business

・ Utilization of group-wide management resources(technology, product development,product linkage, M&A support, and external affairs)

・ Achieve sales increase promptly・ Support for accelerating

overseas solution businesses

Global Marketing

Division

・ Strong sales channels of electrical constructionmaterials in India, Southeast Asia, South Koreaand Taiwan

・ Reorganization of sales channels with SANYO’senergy-related sales companies in North America and Europe

・ Further expand B2B sales channels

・ Reinforce value chains through M&A

Features of Business (3)Features of Business (3)

12

15,265 15,258

2010年度 2011年度

Sales Operating Profit

Note: Excluding KMEW Co., Ltd. Results

(yen: billions)

579589

2010年度 2011年度

・ Maintained sales at same level as previous year’s with PV power generation systems and LED lighting products offsetting impact from Great East Japan Earthquake and flooding in Thailand

・ Increased operating profit thanks to cost reduction initiatives including streamlining and structural reforms.

FY2011 FY2012

1,526.5 1,525.8

FY2011 FY2012

57.958.9

FY2012 ResultsFY2012 Results

(yen: billions)


13

Increased sales focusing on environmental and energy related business

LED lighting for TOKYO SKYTREE

Solar Cells

Power utilitiesPower utilities

Lighting fixtures for gold color

About the TOKYO SKYTREE ®Business Operators: TOBU RAILWAY CO., LTD. & TOBU TOWER SKYTREE CO., LTD. / Design and Management: Nikken Sekkei LTD. /Lighting Consulting: SIRIUS LIGHTING OFFICE INC (Lighting Design & Simulation) / Construction: OBAYASHI CORPORATION /Installation of Lighting Equipment: Denki Kogyo Company, Limited

(Tokyo SkyTree Lighting Test on April 19, 2012)

® Launched energy management system- Energy creation-storage linked system for home -

PanelboardDistribution

PanelboardDistribution

(for backup)

Power stationLithium-ion battery unit

Equipment Necessaryin Blackouts

Note: Conceptual drawing is for illustrative purposes only.

Lighting fixtures for color of “iki”

Lighting fixtures for color of “miyabi”

®

FY2012 ResultsFY2012 Results

14Today’s ContentsToday’s Contents



３．Summary


15

15,258

16,000

2011年度 2012年度

589 600

2011年度 2012年度

・Increase sales with environmental and energy related products including LED lighting and PV power generation systems

・Increase operating profit with sales growth and streamline, covering price decline of LED lighting and raw material cost increase

2011年度 2012年度 2011年度 2012年度

1,525.81,600.0

58.9 60.0

FY2013 Forecasts FY2013 Forecasts

Sales Operating Profit(yen: billions) (yen: billions)

Note: Excluding KMEW Co., Ltd. Financial Forecasts

2011年度 2012年度 2011年度2011年度 2012年度 2012年度2011年度FY2012 FY2013 FY2013FY2012

16

New housing starts forecast Non-residential construction starts forecast

84.1 85.7

（+1.9%）

4,3084,050

3,486 （+6.4%）

(Unit: Ten thousand dwelling unit)

FY2012 FY2013

ECMHME

100

102.0 102.6

101.6 100.7

Index after adjustment ofdelay in actual sales

Japan

・ Construction market modestly recovering with demand from reconstruction due to earthquake・ Accelerate environmental and energy related business expansion with FIT and government

subsidies

Europe and America■ GDP Growth Forecasts

US: +2.7%, EU： - 0.3%,China: +7.5%, India: +7～7.5%

■ Accelerate introduction of renewable energy

(PV: accelerating demand shift fromEurope to Asia & North America)

Market EnvironmentMarket Environment

Overseas

(Unit: Ten thousand m2) (Unit: %YoY)

FY2012 FY2013 FY2012 FY2013ECM: Electrical Construction MaterialsHME: Housing Materials and Equipment

Tough macro environment AsiaEconomic growth losing steam, still remaining

relatively high


17

Eco Solutions Company Strategy

Environmental andenergy-related

business

Increase sales of environmental and energy related products

Global Business Accelerate Global Sales Growth

ComprehensiveSolutions Business

Strategy for FY2013Strategy for FY2013

Global business

Comprehensivesolutions business

Create comprehensive solutions business to achieve sales increase

18Differentiate from competitors: Provide comfortable living environment, integrating group-wide range of electrical construction materials, housing equipment and materials, home appliances and cutting-edge linking technologies

Preserve comfortable environment,harmonizing with Nature

Heat Insulation /Heat Shielding

Heat Insulation /Heat Insulation /Heat ShieldingHeat Shielding

Light Shielding withnatural light

Light Shielding withLight Shielding withnatural lightnatural light

Natural airNatural airNatural air

Create, store and use electricity

‘Ａｃｔｉｖｅ’ Energy Management

RoofingMaterials

BuildingFrames

ExteriorFinishingMaterials

InteriorFurnishingMaterials

CreateEnergyCreateCreateEnergyEnergy

StoreEnergyStoreStore

EnergyEnergy

SaveEnergySaveSave

EnergyEnergy

ＥＭＳＥＭＳＥＭＳ

LED Lighting

Storage BatterySystems

Smart PowerDistribution

PV PowerGeneration Systems

Sales Targetvs LY:+72%


(Generation Capacity Basis)

Environmental- and-Energy-related

Business

‘Ｐａｓｓｉｖｅ’ Energy Management



Environmental andEnergy related

BusinessEnvironmental and Energy Related Products (1)Environmental and Energy Related Products (1)Environmental and Energy Related Products (1)


19

■ Improve profitability with horizontal development:

・ Streamline of designing・ Reduce costs of related materials and

components

■ PV Power generation systems[Japan]・ Sales target +61% (vs L/Y)

(Generation Capacity Basis)・ Sales target for residential house +34% (vs L/Y)

aiming top market share(Generation Capacity Basis)

・ Utilize Panasonic’ssales channels including electrical construction materials, housing materials andequipment, home appliances, and specialtyshops

・ Further expand sales of ‘HIT240/233’with industry's top-level power generation efficiencies

■ Accelerate product developmentfocusing on highly value addedand affordably priced

[Japan]・ Create comfortable and eco-conscious

lighting products for ‘quality of light’ and ‘control of light’

・ Maintain top market share with wide product lineup with approx. 4,000 items(Doubled vs L/Y)

Environmental andEnergy related

Business Environmental and Energy Related Products (2)Environmental and Energy Related Products (2)Environmental and Energy Related Products (2)

LED Lighting PV Power generation systems/storage battery systems

[Overseas]・ Continuously Launch products

with competitiveness ・ Reinforce brand of Panasonic

in LED lighting market ■ Storage battery systems[Japan]・ Expand sales of ‘energy creation-

storage linked typed’ products with PV powergeneration system, and products forcommercial market including disaster-prevention facilities

・ Utilize government subsidy・Sales target +400% (vs L/Y)

20

10% 13%Overseassales ratio

FY2012 FY2013 (plan)

・ Strengthen product lineup in electrical constructionmaterials, housing materials and equipment businesses

Eco Solutions Domain Sales companies: 14Eco Solutions Sales divisions: 8

Globally expand solutions business,enhancing sales channels

Overseas sales targetapprox. 210 billion yen

+40% (+6%*) vs L/Y*Note: Exclude new consolidation effects

Major Initiatives

Global business Accelerate Global Expansion (1)Accelerate Global Expansion (1)

Global Marketing Division (Newly Established)

China and Northeast Asia Sales Division

Asia and Oceania Sales Division

India and the Middle East Sales Division

Americas Sales Division

Europe and CIS Sales DivisionEurope and CIS Sales Division

・ Reinforce solutions business

・ Further enhance sales channels of electrical construction materials

・ Develop electrical construction materials business in non-residential market,acquiring Firepro Systems Private Limited

・ Solar and LED video signage business

・ Solar and Energy Solutions Business


21

Overseas sales ratio by business group （FY2012 → FY2013）Overseas sales ratio by business group （FY2012 → FY2013）

Toward No.1 market shareof electrical constructionmaterials in Asia

・ Enhance sales inIndia, China, Indonesia, Vietnam

・ Sales Target in Asia +18%

Business developmentby product/region

19％ → 21％

24％ → 25％

+8%

Improve global marketshare of indoor air quality applianceｓ

27％ → 32％

・ Lamp including LED & energysaving bulb type fluorescent lamp:promote global expansion

・ Lighting fixtures: Focus on China and other Asiancountries

・ Lighting devices includingLED modules & circuit boards:Enhance business in Europeand US 3.5％ → 4.2％

Global Business Accelerate Global Expansion (2)Accelerate Global Expansion (2)

Lighting Business Group

Energy Systems Business Group

Housing SystemsBusiness Group


+19%

+8% +14%

Overseas sales Overseas sales

Overseas sales Overseas Sales

Focus on China

・ Expand interior furnishing &systems business

・ Sales target +20%・ Enhance collaboration with

developers

・ Boost sales of air purifiersin China

・ Maintain No.1 global market shareof ventilation fans

・ Expand ceiling fan business

22

MajorInitiatives

1. Create ‘100 arrows’

2. Promote company wide projects

3. Develop strategic products

3paradigm

shifts

Offer customer lifetime value

Offer new additional valueby linking individual equipment

Provide variety of high value-added products

ComprehensiveSolutions Business Comprehensive Solutions BusinessComprehensive Solutions Business

‘Solutions’: to solve customers’ problems with both hardware and software technologies

Combined ValueCombined Value

Linking ValueLinking Value

Continuing ValueContinuing Value

Creating ValueCreating Value

Create new value with customers

1. Individual product oriented → Solutions & systems oriented

2. Japan oriented → Globally oriented

3. Establish sustainably profitablestructure through ‘value chain’business models


23

‘Techno Structure’ providing comfortable and eco-friendly life and provide sense of security to customers with less utility costs

Create ‘combining value’ & ‘linking value’

V2HV2H

Energy Creation-Storage Linkage

Energy CreationEnergy Creation--Storage LinkageStorage Linkage

OutsideLinkageOutsideOutsideLinkageLinkage

HousingMaterialsHousingHousingMaterialsMaterials

CloudServerCloudServer

Upg

rade

inst

alla

tion

& E

ngin

eerin

g

Cul

tivat

e po

tent

ial d

eman

dC

ultiv

ate

pote

ntia

l dem

and

Expand business into smart town

- Bulk order of high-voltage reception service- Supply and demand adjustment service

Ser

vice

CreateBusiness

Establish new business foundation

New service business

GridLinkage

GridLinkage


Comprehensive Solutions for Entire HomeComprehensive Solutions for Entire Home‘100 Arrows’ project

‘Techno Structure’: Panasonic’s original cutting-edge earthquake resistant construction method

Create ‘continuing value’ & ‘creating value’

Ａｃｔｉｖｅ energy management

Passive energy management

HousingEquipmentHousingHousing

EquipmentEquipment Home Appliance-Linkage

Home ApplianceHome Appliance--LinkageLinkage

Pas

sive

Act

ive

Col

lect

ive

prop

osal

24

・・・CommercialFacility

Entertain- mentFacility

Energy system

STAPLES Center

Regal Cinema

Infineon Raceway

Video picture system

Vid

eo P

ictu

reS

yste

m

Expand product lineup maximizing customers’ valueOn-site promotion structure

Des

ign

ing

& B

uil

din

g S

yste

m

Inst

alla

tio

n &

En

gin

eer

ing

Ser

vic

esLED Signage

Display

POS

SecurityCamera

SportsFacility

Expand business

Establish on-site promotion

Develop markets

Meet demand from entertainmentMeet demand from entertainment facilities and cuttingfacilities and cutting--edge energy solutions edge energy solutions with our LED video signage solutions with our LED video signage solutions


LED Video Signage Business (US)LED Video Signage Business (US)‘100 Arrows’ project

Create ‘combining value’ & ‘linking value’ Create ‘continuing value’ & ‘creating value’

LED Signage

Display

POS

LED Signage

Display

STAPLES Center

SecurityCamera

POS

LED Signage

Display En

erg

y S

yste

m

Up

gra

din

gS

yste

m


25

Skeleton Primary interiordecoration

Air Conditioning

Air Quality

In future

・Total area: 65 km2

・Total building area:1.2 million m2

On-site promotion structure

Joint Venture Companies

Local structure for development,manufacturing and sales

Dalian Best City

Meet demand from Chinese government energyMeet demand from Chinese government energy--saving initiatives saving initiatives to achieve comfortable and healthy lifestylesto achieve comfortable and healthy lifestyles

- Energy- Air conditioning- Air quality

Interior decorated condominium

取扱商材拡充で提供価値を拡大

Comfortable, healthy and air-conscious houses

New condominium market HEMSPower

Measuring


Dalian Best City (China)Dalian Best City (China)Corporate Project

Create ‘combining value’ & ’linking value’ Create ‘continuing value’ & ‘creating value’

Expand product lineup to maximizes customer’s value

Inte

rio

r M

ater

ials

&

Eq

uip

men

t In

stal

led

H

ou

seE

ner

gy

Man

ufa

ctu

rin

g

Des

ign

ing

Inst

alla

tio

n &

En

gin

eeri

ng

Ser

vic

es

Up

gra

din

gS

yste

m

26Today’s ContentsToday’s Contents



３．Summary


27SummarySummary

■ Steadily capture demand for energy solutions in Japan■ Establish foundation for energy solutions business focusing on

electrical construction materials business in Asia and PV power generation system in Europe and US

■ Accelerate comprehensive solutions business to contribute to group-wide sales

Toward our target in FY2013

Expand value chain globally andcomprehensive solutions business

leading group-wide growth

Mid to long-term Goal

28


29

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.

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