FY2014 Business Strategy
President and CEO

Yoshikazu Uemura
May 13, 2014

FUNAI ELECTRIC CO., LTD.
TSE 683901. FY2013 Operating Results
2. FY2014 Forecast
3. Future Growth Strategy

11. FY2013 Operating Results (April 2013 to March 2014)(100 million yen)
Original Forecast

Revised Projection

Net Sales

2,020

2,300

2,340

Operating
Income2-51−54(Operating Margin)(0.1%)(-2.2%)（−2.3%）(March 2014)

Results■Growth in Net Sales

Summary

Growth in net sales mainly attributable to growth in sales of LCD TVs
and the addition of cartridge sales■Operating Loss RecordedAn operating loss was recorded as a result of factors includingsales support expenditures in connection with the disposal of inventoryof Philips brand LCD TVs and audio accessory products in the U.S., Canada,and Mexico, mainly in the second half.
22. FY2014 Forecast(100 million yen)

FY2014FY2013Y/Y

Net Sales

2,340

2,000−340

Operating
Income−54

5+59(−2.3%)

0.25％(Operating Margin)

Strategic Initiatives■Improved profitability for LCD TVs from screen size
increases and higher value added■Early productization of self‐developed inkjet printers■Acceleration of receipt of OEM orders in all businesses■Profitability improvement from selective reduction of the rangeof purchased audio accessory items
32. FY2014 Forecast

Analysis of Profit

FY2013
Original
Operating
Income Forecast

FY2014
Operating
IncomeForecast

25
Other
improvement

P＆F
Mexicana
Operating Loss

TV
P＆F
USA

P＆F
USA

TV

‐54

Accessories
improvement

Accessories

Other

FY2013 Result

P＆F
メキシコ
Mexicana
改善

FY2014 Improvement
Forecast
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3. Future Growth Strategy
1. Strengthen existing
businesses
Three Elements of the Growth Strategy

2. Expand into newmarkets

3. Expand into newbusiness fieldsa) Business portfolio
restructuringb) Expand into theglobal marketc) Plant site
optimization

Recovery of earning powerof existing businesses
Growth potential from expansion
into new businesses

Initial emphasis on the U.S.
Sequential expansion into Asia
and Central America
Existing products + new products

New production site inthe Philippines
Abundant labor supply
English‐speaking country

Accelerate receipt of OEM orders in allbusinesses.

53. ‐ a) Business Portfolio Restructuring
Sales by ProductNew businesses
OthersGrowthpotential

Information
Equipment

Sales by Region
NorthAmerica
Funai Group sales compositionProfitability

・Meeting needs
・Ink cartridges
・Mechatronics
products thatleverage the FPS

Japan

Asia
Central andSouthAmerica
OthersEuropeNominal GDP
composition

AV Equipment

Income improvement due to thetiming of introduction in growthmarkets and cost reduction
Circle size is proportionate to net sales.

NorthAmerica

Japan

EuropeAsia, Central andSouth America,
Others

By-region GDP
composition

25.7%

6.6%

29.0%

36.7%

By-region sales
composition

69.4%

18.7%

3.2%

11.5%

2013

Focus on sales expansion in Asia andCentral and South America
Circle size is proportionate to net sales.

63. ‐a) ‐1 Business Portfolio Restructuring Existing Businesses■Further Enhancement of Televisions
Timely reflection in products of functions required in the market
Adding High Value・ Introduction of super large‐size
TVs 60 inches and up
・ Also consider 4K TVs

Response to Networking

Global Response・Strengthening of the response tonetworking content

・Specifications that match thepreferences of sales territories

・Increased smartphone and tablet
compatibility

・Response to conversion toterrestrial digital broadcasting indeveloping countries

73. ‐a) ‐2 Business Portfolio Restructuring Printer BusinessIJP Contract Hardware Manufacturing Business
Cooperative inkjet printer business with Lexmark
Development cooperation and contract manufacturing for morethan 16 years (since July 1997)
Acquisition of patent rights for printer‐related products,
product development functions and technologies, andmanufacturing functions and technologies

Environmental
Change in thePrinter Business
Expansion in emerging
markets
Expansion of smartphones
and tablets

Realization of aself‐contained structure
through internal resources,
including the manufacturing andsale of ink cartridges

Business growth driver for the Group83. ‐a) ‐3 Business Portfolio RestructuringNew Businesses■ Post‐AV – Aim to make each new business a 10 billion yen business in FY2018.

Expansion into New Areas

Existing Product Lines
TV development

Participation in A4WP
standard
High transmission
efficiency⇒Freedom of nstallation

Power circuit design
technologies

Expansion
into
B2B

Printer development

ISO/TS16949(Automotive)
certification acquired

Mechanical design
technologies

DVD/BD development

Wirelesstransmission design
technologies /Optical disc device
technologies

Non‐contact charging（Chugoku Funai Electric, 2009)

Expansion
intohealthcare

Aim for an earlybusiness start‐up andfocus on sales.

93. ‐c) Plant Site Optimization
Optimization of plant sites in response to changes in the business environment and labor environment■ ChinaConcentration into 2 plants(Huang Jiang, Zhong Shang)TVs / DVD / Printers(From April 2013)■ Thailand

July 3013 expansion of the No. 3 Plant■ Philippines

Cebu Plant … Ink cartridges
Philippines Plant … Printers(From July 2013)

Production site for products
For Asia in the main TV plantA view to production of post‐AV
products at the main printer plant

Consignment Production Plant(Huang Jiang)

Zhong Shan Funai Electron Co.
FUNAI (THAILAND) CO.,LTD

FUNAI ELECTRIC PHILIPPINES INC.
FUNAI ELECTRIC CEBU. INC.
English‐speaking country with anabundant population (Populationof 105.72 million)*“Preliminary figure announced in July 2013 by the U.S. Central
Intelligence Agency based on United States Census Bureau
statistical data

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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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