FY2015 Business Strategy
President and CEO

Tomonori Hayashi
May 12, 2015

FUNAI ELECTRIC CO., LTD.
TSE 683901. FY2014 Operating Results
2. FY2015 Forecast
3. Outlook for Business Environment
4. Industry trends
5. Business Strategy
6. Development of New Product7. Strengthening Our Organization

11. FY2014 Operating Results (April 2014 to March 2015)(100 million yen)

Revised Projection

Original Forecast(March 2015)

Results

Net Sales

2,000

2,030

2,170

Operating
Income505(0.3%)(0.0%)(0.3%)(operating margin)

Point■ Thanks to the shift to large-screen models■ Turned to surplus with Audio Visual business（TV, DVD, Blu-ray）■ Had started to ship Funai-developed printers22. FY2015 Forecast(100 million yen)

FY2015FY2014

Y/YNet Sales

2,170

2,200+30

Operating
Income516+110.3%0.7%(operating margin)

Point■ Improving profitability by adding 4K functionality to large‐screen TVs and Blu‐Ray players■ Major sales expansion and commercialization efforts targeting Funai‐developed inkjet printers■ Expansion of inkjet printer line‐up

33. Outlook for Business Environment
Economic Trends■U S: Despite a slowdown early in 2015 caused by labor problems in West Coast ports and a coldsnap, the economy as a whole is on a recovery trend.

■Europe: Economic performance has been impacted by stagnation in Russia and the rekindling of theGreek debt crisis, but Europe is still on a gradual recovery trend led by Germany.

■China : A worsening housing market and other factors are reflected in an economic slowdown.
■Japan : The pace of recovery is slow due to a reactionary downswing following rush demand ahead of
the consumption tax increase, as well as abnormal weather patterns.
(US$/¥)
125(US$)
120

US$/¥ Exchange Rate

WTI105.79

1201001158011060

10594.62

47.22 50.58

401002095090
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Jan Feb Mar Apr May Jun2014

2014

2015

Jul Aug Sep Oct Nov Dec Jan Feb
2015

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4. Industry trends● Major upswing, accelerating brand polarization in North Americanmarket

LCD TVs● Escalating competition from Chinese manufacturers● Accelerating shift to 4K technology for large‐screen TVs

Digital Medias● DVD and Blu‐Ray markets shrinking because of shift to net‐basedtechnology● Market maturation in developed countries also reflected in falling
prices for consumables

Printers● Risk of price declines in emerging markets because of genericconsumables55‐(1). Business Strategy － Building our Business Portfolio
While strengthening existing business segments to improve
competitiveness and secure sales and income, we will also
move into new business areas, such as printers.

Creation of new businesssegments
Expansion of printerbusiness
Improvement ofcompetitiveness ofexisting businesssegments6

5‐(2). Business Strategy － Concentration of Resources
Market development

Development ofNew ProductMarket development
 Brand‐specific sales strategies
 Redevelopment of Latin Americanand European markets
 New OEM orders

Three Pillar of Business
Strategy

Development of New Product Development based onaccumulated technology
 Shift to large‐screen/4K products
 Printer line‐up

Strengthening Our
Organization

Strengthening Our
Organization
 Integration of marketing functions
 Integrated service management
 Integration of logistics andwarehousing

 Printer applications technology7

5‐(3). Business Strategy － Brands

PHILIPSMAGNAVOX■ Full‐scale marketing of SANYO brand■ Extended contract of PHILIPS / MAGNAVOX brands licenses to 2018
■ Organization of brand‐specific marketing strategies86‐(1). Development of New Products － TVs
Development of products to meet market needs
Adding High Value

Response to Networking

Global Response

・ Introduction of super large‐size
TVs 60 inches and up

・Strengthening of the response to
networking content

・Specifications that match thepreferences of sales territories

・ Early development of 4K TVs

・Increased smartphone and tablet
compatibility

・Response to conversion toterrestrial digital broadcasting indeveloping countries＋Cost Competitiveness96‐(2). Development of New Products － Printers■ For Medium and Long‐term revenue,
To Use Inkjet Technologies for Newly Build Businesses.
Expansion of revenue modelby our own technologies

μFluidics
MEMS
InkjetTechnologies
HardwareSelf‐developedHardware
OEMCommercial& Industrial

Healthcare &Biotechnology
3D PrinterHardware + Supplies
Consumer PrinterHardware +Supplies↑Hardware onlyMEMS（Micro Electro Mechanical Systems)

Time, Markets106‐(3). Development of New Products－ Application of Funai technology to new products

Wireless Charging
Participation in A4WPHigh transmission efficiency⇒Freedom of installation
Non‐contact charging

In‐Vehicle Displays
ISO/TS16949 (Automotive)
certification acquired（Chugoku Funai Electric, 2009)

Healthcare/MedicalStudying the possibility of entry with partners,
by applying our technologies.

117. Strengthening Our Organization
ＵＳＡ marketing/service sites

Production sites
Huang Juang(consignment)

TVs・DVDs

Thailand

Pakchong

TVs(main)

Printers

Philippines Cebu

Ink Cartridges

Luzon

Inkjet Printers

Funai Corp.

NJ/LA

Sales

P&F USA

Atlanta

Sales

Funai Service Corp. Ohio

Operation
UnitedChina

Services

Huang Juang (consignment)
FUNAI (THAILAND)
CO.,LTDFUNAI ELECTRIC
PHILIPPINES INC.

FUNAI ELECTRIC
CEBU. INC.

12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.

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