Presentation of FY2012 Operating Results
May 8, 2013

FUNAI ELECTRIC CO., LTD.
TSE 6839

0

Ⅰ. Message from the President
1.

Business Environment Overview

2.

FY2012 Operating Results

3.

FY2013 Forecast

4.‐1 Growth Strategy ‐ Summary
4.‐2 Growth Strategy ‐ Accelerated Development of M&As and Alliances
4.‐3 Growth Strategy ‐ Accelerated Development of M&As and Alliances
4.‐4 Growth Strategy ‐ Wrap Up

11. Business Environment Overview
Economic Trends●US: Sustained, gradual growth supported by improvements in thehousing and labor markets, as well as a recovery in personal consumption●Europe: Remains sluggish as the European Central Bank’s responses to the debt
crisis have failed to dispel economic concerns●Emerging Markets : Slow growth in emerging markets ‐ especially China; China’s newadministration has shown initial support of economic policies to aid growth●Japan: The economic outlook has brightened since the Abe administration
came into office; the prospect of monetary easing has weakened theyen and bolstered stock prices

Industry Trends●TVs experience continuing commoditization ‐ although the average screen size has increased in the US and China●Rapid growth of the smartphone and tablet markets, accompanied by an accelerated fusion of AV,
home appliance, auto vehicle, and Internet products●Developed countries are mature, but emerging countries are tentatively expected to grow●TV and BD recorder markets in Japan have shrunk drastically year‐over‐year

2

2． FY2012 Operating Results (April 2012 to March 2013)(100 million yen)

Original Forecast

Revised Projection(November 2, 2012)

Results

2,290

2,050

1,920

40(25)(52)

Margin1.7%（1.2%）(2.7%)

Average USD‐JPY
Exchange Rate

80.00

78.48

83.32Net Sales
Operating Income

Minus Factor● FY2012 was a challenging year in terms of sales and profits
Summary
Plus Factor● The preliminary foundation has been laid for a more successful FY2014
and FY2015
3

2．Summary of FY2012 Operating Results (April 2012 to March 2013)
Display Segment (LCD TVs)

Net Sales: Less than projected (90%)

Operating Income: Net loss and profit deterioration

due to lower utilization rates andpanel price increases in the second
half

Digital Media Segment (DVDs, Blu‐ray Discs, Home Theaters)
Net Sales: More than projected (110%)

Operating Income: Approx. break even profit in thesecond half

Office Solutions Segment (Laser/Ink‐Jet Printers)
Net Sales: More than projected (114%)

Operating Income: Net loss due to R&D cost increases

for the original printer development
43． FY2013 Forecast (April 2013 to March 2014)(100 million yen)

FY2011FY2012FY2013Results

Results

Projection

2,461

1,920

2,020

4(52)

2Margin

0.2%(2.7%)

0.1%

Average USD‐JPY
Exchange Rate

78.81

Net Sales
Operating Income

83.32

96.00

●Reinforce existing businesses
StrategicInitiatives● Transfer and manage the acquired PHILIPS and LEXMARKbusinesses● Start production at the Thailand (2nd) and new Philippines factories
54‐1．Growth Strategy ‐ Summary

Boost sales anda. strengthen
existingbusinesses

emerging
b.Entermarkets

GrowthStrategy
3 of Keywords

c. Launch newbusinesses

a. Improve profit ratios and strengthen the competitive power of the existing businesses
b. Deploy newly acquired businessesc. Quickly create business for newly developed products
64‐2． Growth Strategy ‐ Accelerated Development of M&As and Alliances
Creating synergies and growth strategies through businessacquisitions
Boost sales andstrengthen existingbusinesses● Stabilize business●Strengthen earning

performanceperformance●Accelerate globalization
Enter emerging markets①Expand sales channels② Expand manufacturing base

R&D

③ Acquire global human resources

Launch new businesses●Strengthen patent portfolio●Improve marketing, intelligence and design power7

4‐3． Growth Strategy ‐ Accelerated Development of M&As and Alliances
New businesses and assets acquired from PHILIPS and LEXMARKPeripherals for Smartphones, Wireless Audio Products

Acquired theLifestyleEntertainmentbusinessTraditional Audio Products, Other

Inkjet Printers （Mid‐range）

Inkjet‐relatedtechnology andassets

Plus

Inkjet Printers （High‐End）

Ink Cartridges

84‐4． Growth Strategy ‐ Wrap Up
Expanding business with diversity,
through active growth strategies
onansipxEsSale[M yen]
LED LIGHTINGWorldwide

Philips LE
Worldwide

R&Dof New
Products

Inkjet/Laser
PrinterWorldwide

9

Ⅱ．Outline of Operating Results
1. Summary of 4th Quarter (Jan.‐Mar.)
2. Summary of Fiscal 2012 ending March 2013
3. Breakdown of Sales by Equipment
4. Sales of DVD related Equipment
5. Sales of Television related Equipment
6. Geographic Breakdown of Sales
7. Factor of Changes of Operating Income
8. Financial Conditions
9. Changes of Inventories
10. Projection of Fiscal 2013 ending March 2014
11. Projection of Sales by Equipment in Fiscal 2013 ending March 201412. Projection of Sales by Geography in Fiscal 2013 ending March 2014
13. Capital Expenditures, Depreciation Expense and R&D Expenditures10

1．Summary of 4th Quarter (Jan.‐Mar.)（100 million yen）

FY 2011

FY 2012

Y/Y+23Net Sales

427

450(+5.4%)

Operating Income‐24‐34‐10(‐5.8%)(‐7.6%)+30 (※1)‐12‐4+8(‐2.9%)(‐1.1%)‐58 (※2)‐10‐62‐52(‐2.4%)(‐13.9%)(Margin)

Ordinary Income(Margin)

Net Income after tax(Margin)

Average USD‐JPYExchange Rate

79.75（※3） forex gain and loss ＋17、other ＋1（※2） extraordinary loss ‐8、income taxes ‐50（※4） increase of extraordinary loss ‐5、increase of income taxes ‐55（USD/JPY）

11/12

12/3

12/12

13/3

74

1958

94.05

77.

82.

‐ 60 (※4)

92.56（※1） interest received ＋1、forex gain ＋29

Month End Exchange Rate+18 (※3)

86.

11

2．Summary of Fiscal 2012 ending March 2013（100 million yen）

Net SalesProjectionFY2012

2,461

2,050

1,920

4‐25‐52‐56

Operating Income(Actual base)(Projectionbase)‐541‐130(‐22.0%)(93.7%))(0.2%)(‐1.2%)(‐2.7%)+49 (※1)

Ordinary Income

1‐41‐3‐4)(0.1%)(‐2.0%)(‐0.2%)‐82 (※2)

Net Income after tax‐46‐58‐85‐39(‐1.9%)(‐2.8%)(‐4.5%)

78.48

83.32

(((MM

Maaarrrgggiiinnn)

Average USD‐JPY
Exchange Rate

78.81（※1） interest received＋3、interest expense ‐1、forex gain＋47（※3） increase of interest received＋1、
forex gain and loss＋51

12/3

13/3

（USD/JPY）

82.19

94.05

‐27+52 (※3)

+65 (※5)＋38‐35 (※4)‐65 (※6)‐27（※5） increase of interest received＋1、
fores gain and loss＋64（※2） extraordinary gain＋4、extraordinary loss ‐26、 （※4） increase of extraordinary gain＋4、increase of extraordinary loss ‐19
income taxes ‐51、increase of income taxes ‐20
income taxes for prior periods ‐9Month End Exchange Rate

Y/Y

Y/Y

FY2011（※6） increase of extraordinary gain＋4、increase of extraordinary loss ‐8、increase of income taxes ‐52、increase of income taxes for prior periods ‐9123．Breakdown of Sales by Equipment（100 million yen）
（100 million yen）

2,461

Y / Y (Actual base)2,050

AVEquipment

1,835
DVD： 626
T V ：1,209

1,647
DVD： 324
T V ：1,323

Information
Equipment
Others

1,920

1,557
DVD： 358
T V ：1,199

300
326
FY2011104119299

244

Projection

FY2012

AV Equipment： ‐278 （‐15.2％）

DVD Equip.
T V Equip.

： ‐ 268 （‐ 42.8％）： ‐ 10 （‐ 0.8％）

Information Equipment： ‐181 （‐60.1％）

Others： ‐ 82 （‐25.3％）

Total： ‐ 541 （‐22.0％）

Y / Y (Projection base)
AV Equipment： ‐ 90 （ 94.5％）

DVD Equip.
T V Equip.

： + 34 （ 110.5％）： ‐ 124 （ 90.6％）

Information Equipment： + 15 （114.4％）

Others： ‐ 55 （ 81.6％）

Total： ‐ 130 （ 93.7％）

13

4．Sales of DVD related Equipment（100 million yen）

DVD Players

DVD Recorders

・Blu‐ray Disc(BD) Players sales increased, but BD
Recorders sales significant decreased due to slow
demand in Japan11010932473
Blu‐ray disc380

67
150

OthersY / Y (Actual base)（100 million yen）

626358DVD Players： ‐ 27 （‐24.5％）

DVD Recorders
Blu‐ray disc

： ‐ 8 （‐ 7.3％）： ‐239 （‐62.9％）

Others： + 6 （+22.2％）

Total： ‐268 （‐42.8％）

83
Y / Y (Projection base)1011412734

33

FY2011

Projection

FY2012・Favorable sales for DVD players and recorders

DVD Players： + 10 （113.7％）

DVD Recorders： + 34 （150.7％）

Blu‐ray disc

： ‐ 9 （ 94.0％）

Others： ‐ 1 （ 97.1％）

Total： + 34 （110.5％）
14

5．Sales of Television related Equipment（100 million yen）

1,323
1,209

1,199

（100 million yen）

Y / Y (Actual base)・Totally increased despite Japan decreased,but increased sales on Mexico
・Flat on North America

LCD TVLCD TV1,209： ‐ 10 （‐ 0.8%）

1,323
1,199

Y / Y (Projection base)・Less than projected for North America

LCD TVFY2011

Projection： ‐ 124 （ 90.6%）

FY201215

6．Geographic Breakdown of Sales（100 million yen）

Y / Y (Actual base)（100 million yen）

2,461
2,050
NorthAmerica

North America
・PHILIPS Accessory sales contributed, but fell
both of DVD /Office Information related products

Japan

1,920

・BD Recorders, LCD TVs, Antenna and Related
Devices were all decreased(55%)

1,463(72%)

Europe1,333(69%)

126 (5%)Asia & Others 181 (7%)

JapanEurope： ‐ 8 （‐ 0.6%）： ‐ 64 （‐50.8%）

Asia & Others： ‐ 15 （‐ 8.3%）

Japan： ‐454 （‐55.9%）

Total： ‐541 （‐22.0%）

North America

1,341

Y / Y (Projection base)813

46 (2%)
169 (8%)62 (3%)
166 (9%)372359(33%)

FY2011

(18%)

(19%)

Projection

FY2012

North America
・Less than projected on LCD TVs

North America： ‐130 （ 91.1%）： + 16Europe（134.8%）

Asia & Others： ‐ 3 （ 98.2%）

Japan： ‐ 13 （ 96.5%）

Total： ‐130 （ 93.7%）

16

7．Factor of Changes of Operating Income＊ Add‐value=Sales – (Cost of sales + selling expenses)（100 million yen）

《Comparison to Projection》《Comparison to FY2011》
Sales decrease

Operating
IncomeOperating
Income4

Operating
Income-43-25-52-11

Decreased
add‐value*-28

Decrease ofgeneralexpenses-52

Decreased
add‐value*-29

Decrease ofgeneralexpenses+13+15FY2011

Operating
IncomeSales decrease

FY2012

Projection

FY201217

8．Financial Conditions（100 million yen）

1,796

1,766
Cash / Deposit

678351331339438

556

Fixed Assets
and Others

379

392

380

Trade Payables

296

292

391

Accounts Payables
and Others

232

273

AssetsLiabilities
AndNet Assets

615

726

1,945

Accounts
Receivables

322

Inventories

Net Assets

1,238

1,231

1,766

1,796

2012/3

2012/12

341

1,213

1,945

Comparison to 2012/3
Assets+179

・Cash / Deposit‐ 48

・Accounts Receivables+・Inventories+ 217

・Fixed Assets andOthers+

91

Liabilities+204

・Trade Payables+ 95

・Accounts Payables
and Others+ 109

Net Assets‐ 25（Equity Ratio61.8%）

2013/318

9．Changes of Inventories
556
438339345（100 million yen）

341
Finished productsComparison to 2012/3223

211
Work in process

116

97

2012/3

2012/122013/3

2.3 months

3.7 months

2.4 months

Finished products： +122Work in process： + 95<Inventories Turnover>
19

10．Projection of Fiscal 2013 ending March 2014（100 million yen）

FY 2013

FY 2012

Y/Y(Projection)

1H

2H

12 months

890

1,029

1,920

Operating Income‐14‐38‐52022( m a r g i n )(‐1.6%)(‐3.7%)(‐2.7%)(0.0%)(0.2%)(0.1%)

Ordinary Income

‐3027

‐3325

( m a r g i n )(‐3.4%)(2.6%)(‐0.2%)(0.3%)(0.2%)(0.2%)Net Income aftertax‐29‐55‐85011( m a r g i n )(‐3.4%)(‐5.4%)(‐4.5%)(0.0%)(0.1%)(0.0%)

Average USD‐JPY
Exchange Rate

78.96

87.67

83.32

Net

Sales

1H2H

12 months

1H2,020+ 70+31+100（+7.9％）（＋3.0％）（＋5.2％）+ 14+ 40+ 54+33‐ 25+8+29+ 56+ 86960 1,060

2H

12 months

96.00
20

11．Projection of Sales by Equipment in Fiscal 2013 ending March 2014【13.3 vs 14.3】‐ 8.9％

626358（ 100 million yen ）TV related Equipment

DVD related Equipment【Minus Factor】
・DVD players, andrecorders

326

1,209

1,199

1,261

【13.3 vs 14.3】
+5.2％

2,461

【Plus Factor】
・especially, Mexico

626

2,020
1,920
3263582012.32013.32012.32014.32013.3（ Projection ）2014.3（ Projection ）OthersInformation Equipment

1,209
1,261
1,199

【13.3 vs 14.3】+19.3％【13.3 vs 14.3】+19.3％

326

300

119142【Plus Factor】
・Laser Beam Printers2012.3 2013.3 2014.3（ Projection ）

291
244

2012.32013.32014.3（ Projection ）300【Plus Factor】
・ AV Accessories (NA)

119326244

2012.32013.3142291
2014.3（ Projection ）21

12．Projection of Sales by Geography in Fiscal 2013 ending March 2014
（ 100 million yen ）EuropeNorth America【13.3 vs 14.3】+45.2％【13.3 vs 14.3】
+2.6％
1,341

1,368

1,333

【Plus Factor】【Plus Factor】
・Laser Beam Printers
・LCD TVs

126

・AV Accessories

2,461

90
62

2,020

1,920
1,341

2012.32013.32012.32014.32013.32014.3（Projection）（Projection）

1,368

Japan

Asia & Others

1,333

246181【Plus Factor】
・LCD TVs

126【13.3 vs 14.3】‐ 12.0％【13.3 vs 14.3】+48.2％

181【Minus Factor】
・DVD relatedproducts・ Antenna andRelated devices

813

166
359

316

2013.32014.3813

2012.32012.32013.32014.32012.3

90

62
166

246

3593162013.32014.3（ Projection ）22（ Projection ）（ Projection ）13．Capital Expenditures, Depreciation Expense and R&D Expenditures（ 100 million yen ）Capital Expenditures

Depreciation Expense

R&D Expenditures【13.3 vs 14.3】+5.7％【 13.3 vs 14.3 】+52.5％【 13.3 vs 14.3 】+10.8％

10593

5356402012.32013.32014.3（Projection）49

2012.3103

6140

2013.32014.3（Projection）

2012.32013.32014.3（Projection）

23

Ⅲ．Appendix ①< Summary of Operating Results (2013 Jan. – Mar.) >
1.
2.
3.

Sales by Equipment
Sales of AV Equipment
Sales by Geography

24

1．Sales by Equipment（ 100 million yen ）

427

450

（ 100 million yen ）AV
Equipment346
324
DVD：105
T V ： 219

DVD： 81
T V ： 265

Information
Equipment

4944

Others

5460

FY2011(Jan.‐Mar.)FY2012(Jan.‐Mar.)Y/Y
AV Equipment： + 22 （+ 6.8%）

DVD Equip.
TV Equip.

： ‐ 24 （‐ 22.9%）： + 46 （+21.0%）

Information Equipment： ‐ 5 （‐10.2%）

Others： + 6 （+11.1%）

Total： + 23 （+ 5.4%）

25

2．Sales of AV Equipment
DVD related Equipment

TV related Equipment（ 100 million yen ）105
DVD Players

265

18219

81
DVD
Recorders（ 100 million yen ）

16
19265

22
LCD TVs

Bru‐ray disc219

66
34Others

56

FY2011(Jan.‐Mar.)FY2012(Jan.‐Mar)FY2011(Jan.‐Mar.)FY2012(Jan.‐Mar.)
26

3．Sales by Geography（ 100 million yen ）

427

450

（ 100 million yen ）NorthAmericaEurope
Asia & Others

Japan

Y/Y

268
238(56%)18 (4%)
43 (10%)128(30%)FY2011(Jan.‐Mar.)(60%)

16 (3%)
73 (16%)93

North America： + 30 （+12.6%）

Europe： ‐ 2 （‐11.1%）

Asia & Others： + 30 （+69.8%）

Japan： ‐ 35 （‐27.3%）

Total： + 23 （+ 5.4%）(21%)

FY2012(Jan.‐Mar.)27

Ⅳ．Appendix②
1. Quarterly Operating Summary of FY 2011 / 2012
2. Quarterly Changes of Sales Amount by Equipment
3. Quarterly Changes of Sales Amount by Geography

28

1．Quarterly Operating Summary of FY 2011 / 2012

（ 100 million yen ）FY2011FY2012

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Sales656

750628427400490580

450

OperatingIncome

3178-24-9-5-3-34( margin )（0.5％）（2.4％）（1.3％）(-5.8%)(-2.4%)(-1.0%)（-0.7％)(-7.6%)O rdinary
Income048-12-20-1032-4( margin )（0.1％）（0.6％）（1.4％）(-2.9%)(-5.1%)(-2.0%)（5.5％)(-1.1%)Net Income
after tax

-23-6-5-10-18-116-62( m a r g i n )（-3.6％）（-0.9％）（-1.0％）(-2.4%)（-4.6％）（-2.3％）（1.2％)(-13.9%)Net29

2．Quarterly Changes of Sales Amount by Equipment
DVD Equipment

TV EquipmentInformation Equipment

Others（ 100 million yen ）

750
656
171
184

628
166

379
277

580
490
427
105

400

95

108

105

69
59

450
81

81

334

87

126

70

219

240

49
54

26
53

354

340
265
34
80

1551

44
60

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

(11/6)(11/9)(11/12)(12/3)(12/6)(12/9)(12/12)(13/3)
30

3．Quarterly Changes of Sales Amount by Geography
North America（ 100 million yen ）EuropeAsia & Others

Japan

750

656

628
580
415

298

490

(55%)

(45%)

427
390

400
421

(62%)

30 (5%)
51 (8%)

39 (5%)
48 (7%)

277248(42%)(33%)

238(56%)39 (6%)
39 (6%)
160(26%)450269375(73%)

(77%)

(67%)

18 (4%)
43 (10%)128(30%)15 (4%)
26 (7%)
90(22%)

12 (2%)
29 (6%)
74(15%)

268(60%)19 (3%)
38 (6%)
102(18%)16 (3%)
73(16%)
93
(21%)

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

(11/6)(11/9)(11/12)(12/3)(12/6)(12/9)(12/12)(13/3)
31

Disclaimer

This document contains forward‐looking statements and projections regarding
business performance which are not historical facts. Please note that these statements
are based on information relating to factors that may impact future businessperformance that was available for analysis at the time this document was printed.
These factors include industry trends relating to the business areas of Funai Electric Co.,
Ltd. or the Funai Group, such as audio‐visual devices and information communicationequipment, the economic conditions of both domestic and international markets, andfluctuations in currency exchange rates. Actual performance may greatly differ fromprojections included in this document because of the impacts of uncertainty in suchareas as the competitive conditions of the electronics industry, market trends, currency
exchange rate, introduction and success of new products, and various other global
conditions that may affect the tax system and other systems.

32