Presentation of Consolidated Operating Resultsin FY 2008 (Apr.-March) and Future Strategy

May 14, 2009FUNAI ELECTRIC.,LTD.

0Ⅰ Outline of FY 2008 Operating Results(Consolidated)
1. Summary of Operating Results
2. Breakdown of Sales by Equipment
3. Sales of Audio and Visual Equipment
4. Sales of DVD related Equipment
5. Sales of Television related Equipment
6. Geographic Breakdown of Sale
7. Financial Condition
8. Changes of Inventories
9. Capital Expenditures, Depreciation Expense and R&D Expenditures
10.
10. Projection of FY2009 Operating Results

1１

Summary of Operating Results(100 million yen)

FY2007
Results

Previous
Forecast（Released in Feb.）
Feb.）

FY2008ResultsamountamountamountChanges
From
PreviousFY2007

Changes
FromProjection

2,771△243,040
53,02714＋9.2%△0.4%ー+181.8%(△0.9%)(0.2%)(0.5%)△2 (※1)△0△1512Margin(△0.0%)(△0.5%)(0.4%)Net Income afterTax※△53△22△5Margin(△1.9%)(△0.7%)(△0.2%)Net Income after tax△53a△190△173

Margin(△1.9%)(△6.3%)(△5.7%)Net Sales
Operating Income
MarginOrdinary Income

Average USD- JPY
Exchange Rate

113.80100.00ーーーー△185 (※2)

ーー

100.66（※1） Interest receivables +33、 Forex gain △28、Interest expenses△3、 Others △4（※2） Income taxes for prior periods △168、Loss on valuation of investment securities △30、Others+13※ 〔 before deduction of income taxes for 16.8 bill.yen for prior periods 〕

２2Breakdown of Sales by Equipment
AV Equipment
Information Equipment
Others(100 million yen)

3,027

2,771

(100 million yen)Comparison to Previous FY

1,841

650

2,306

AV Equipment： ＋465 （＋25.2％）

Information Equipment： △200（△30.7％）

Others：△Total： ＋256 （＋ 9.2％）

9（△ 3.0％）

450

280

271

FY2007

FY2008
3３

Sales of Audio and Visual Equipment
DVD related Equipment
Television related Equipment(100 million yen)

2,306(100 million yen)

1,841

850

587

1,456

1,254

FY2007Comparison to Previous FY
DVD related Equipment：＋263 （＋44.8％）

Television related Equipment：＋202 （＋16.1％）

Total：＋465 （＋25.2％）

FY20084４

Sales of DVD related Equipment

Video
DVD Player related Equipment
DVD Recorder related Equipment

Blu-ray disc Player
Digital STBDVD Players

DVD Recorders

・Following the track of market contraction after plateauing out.

(100 million yen)

850
20

Blu-ray disc Player ・Going well since launching in a full scale

Digital STBin April.
・Going well quarter by quarter.

(100 million yen)

204

587
45

198

322

202
FY2007122

4（Blu-ray)
14（STB)

306

Comparison to Previous FY
Video：△ 25 （△55.6％）

DVD Player related Equipment：△118 （△36.6％）

DVD Recorder related Equipment ：△4 （△ 2.0％）

BD Player：＋118 （−）

Digital STB：＋292 （−）

Total：＋263 （＋44.8％）

FY2008
5５

Sales of Television related Equipment
CRT TVLCD TVLCD TV expands rapidly.

(100 million yen)

1,254

・Accelerating a downward-trend as

CRT TV

Others

1,456

LCD TV

82

Others256

・Gaining amount due to Philips brandcontribution.
・Withdraw of projectors in 4Q.

Comparison to Previous FY
CRT TＶ： △174 （△68.0％）

LCD TV： ＋445 （＋49.6％）

1,342897

Others： ＋202 （＋16.1％）

Total

10132

FY2007

FY2008： △ 69 （△68.3％）

6６

Geographic Breakdown of Sales
North America

3,027
2,771

・LCD TV, Digital set top box, BD player
more covered than the decline of information equip.

Europe・Suffered from price-war of LCD TV against

Korean or Turkish brand.

2,161
1,811

(71.4%)(65.3%)

456
91
413

364
132
370

FY2007

FY2008Comparison to Previous FY
North America：＋350（＋19.3％）

Europe：△ 92 （△20.2％）

Asia & Others：＋ 41 （＋45.1％）

Japan：△ 43 （△10.3％）

Total： ＋256 （＋ 9.2％）
7

７

Financial Conditions（100 million yen）

Cash / Deposit
Accounts
Receivables

AssetsFixed Assets
and Others

680

840
433

946

Trade Payables

258

Accounts Payables
and Others

403

Net Assets

2,107

268
350

InventoriesLiabilities
andNet Assets

Comparison to 2008/3

2,244

1,583

Assets965419288306

415

439

371

281

432

1,304

（100 million yen）

1,998
・Cash / Deposit＋ 285

・Accounts Receivables＋ 20・Inventories△ 44・Fixed Assets and Others

△ 507

362

Liabilities
1,355

・Trade Payables＋ 23

・Accounts Payables
and Others△ 41Net Assets
2,107

1,998

2008/12

2009/3

2,244
2008/3

・Net Assets△ 228（Shareholders’ Equity Ratio 67.6％）

8８

Changes of Inventories
Finished products
Work in process(100 million yen)419
（100 million yen）

350211306331
2091398897

2008/3

2008/12

2009/32.0months

1.3months

1.5months

Comparison to 2008/3
Finished products△ 2Work in process△42〈Inventories Turnover〉
99Capital Expenditures, Depreciation Expenseand R&D Expenditures
CapitalExpenditures

Depreciation
ExpenseR&DExpenditures＋1△12△ 17(100million yen)150

12090147
13060

30494850

360

FY07 FY08

FY07 FY08

FY07 FY08
1010．Projection of FY2009 Operating Results（100 million yen）

Result of FY 2008

Changes
fromPreviousYear

Forecast of FY 2009

1st Half

2nd Half

Full Year

1st Half

2nd Half

Full Year1,446

1,581

3,027

1,745

1,655

3,400 +12.3%

Operating Income

43△2914411960 +325.7%

Margin

(3.0%)(△1.8%)(0.5%)(2.3%)(1.1%)

Ordinary Income

59△471238

15Margin(4.1%)(△3.0%)(0.4%)(2.2%)(0.9%)(1.6%)△121△52△17330939(△8.4%)(△3.3%)(△5.7%)(1.7%)(0.5%)(1.1%)

106.22

95.09

100.66Net Sales

Net Income after tax
MarginAverage USD-JPY
Exchange Rate

(1.8%)

53 +332.2%
ー95.00（Reference）Sales Breakdown by Equipment
Results ofFY2008

Audio & Visual
InformationOthers
Total（100 million yen）

Forecast ofFY2009

Changes

2,306450
271

2,663
470
267＋357

3,027

3,400＋373＋ 20△411

Ⅱ．Future Business Strategy
・ Management Policy
・ Current Fiscal Year 2009 Outlookand Measures
・ Medium-term Target and Measures

12１．Management Policy ①

Further Efforts to Reach FY2008 Targets（100 million yen）

Sales
Operating Profit
Margin (%)

Fiscal Year 2008
Projection

Fiscal Year 2008
Results

Fiscal Year2009
Projection

3,400

3,027

3,40060

1460

1.8

0.5

1.813

２．Management Policy ②
Focus on promotion of viable products
bolstered by speedy management
ProductPlanning

Speed

Sales

Development

Procurement&Manufacturing

14

３．Fiscal Year 2009 Outlook and Measures ①
Period ofTurbulence

Favorable Opportunity
for Funai to Grow
JUMP!!

HOP
FY 2008

STEP!

FY 2010

FY 2009

Continuing towards
greater expansion

On a path to growth

Leap forward froma strong foundation
15

４．Fiscal Year 2009 Outlook and Measures ②
Market Environment
LCD TV and Blu-ray:
Flagship products
exhibiting growth evenin the midst of recession

Affordably priced homeentertainment products
selling well due to caution
among consumers

Development of Prime Customers

Perfect Opportunity for Funai
16

５．Fiscal Year 2009 Outlook and Measures ③
Strengthen Cost Competitiveness
123

Optimal allocation of management resources(human resources, assets, capital)
Further promotion for Funai Production System (FPS)− Pursue most efficient organization
Speed – Apply to the entire organization/support bypromoting IT infrastructure

Expansion of Sales

Cost Reduction

Thorough Inventory Control

Speedy Management
17６．Fiscal Year 2009 Outlook and Measures ④
Management Issues of FY2008
Ongoing deficit in LCD TV business → Improving, but still only halfway there

Measures for FY 2009
1. Strict observance of smooth flow among development,
production and delivery
2. Establishment of product line-up, brand position, solid
structure of sales subsidiaries
3. Fostering of network-related technology for products
related to LCD TVs and Blu-ray
4. Further gain of market share in North America
18

７． Fiscal Year 2009 Outlook and Measures ⑤
Sales of LCD TV

5.40M

6000
5000

3.47M

4000
3000

2.06M

2.54M

2000
1000

0.54M

0FY2005

FY2006

FY2007

FY2008FY2009（Projection）
19

８．Medium-term Target and Measures ①
Targets for Consolidated Sales and Operating Profit for FY2011(Units: 100 million yen)Sales

5,000

OperatingProfit

250 （5% margin）

Measures to Achieve the Target

Fostering of human resources and appointments to responsible
positions
2 Sales of 10 million units LCD TVs units

13Expansion of Blu-ray and related products line-up
PlayerRecorderHome Theater System

Portable Player

4 Enlargement of mechatronics-related business (e.g., printers)
5 Successful cultivation of new clients and entrance into emerging
markets
20

９．Medium-term Target and Measures ②
Medium-term Sales Target
5,000（100 million yen）
5,000

4,000

3,830
3,421

3,967
3,608

3,400
2,7713,0003,0272,0001,0000FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009（Projection）

FY2011（Target）21

１０．Medium-term Target and Measures ③
Medium-term Operating Profit Target（100 million yen）

400

Margin

10.7%

350

8.7%

300

250

6.5%

250

5.2%
200

3655%

333

150

233

207
1.8%

1000.5%50▲ 0.8%0(50)6014168▲24

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009（Projection）

Ⅲ

FY2011（Target）

22

Supplemental Data ①
Summary of Operating Results (Jan.(Jan.-March)
１.
２.
３.
４.
５.

Summary of Operating Results
Breakdown of Sales by Equipment
Sales of Audio and Visual Equipment
Sales of DVD related Equipment
Sales of Television related Equipment

23１ Summary of Operating Results (Jan.-Mar.)
Changes fromPrevious 4Q

FY2007 4Q

FY2008 4Q

Net Sales513627+22.2%

Operating Income

△36

△ 18ー

Margin(△7.0%)(△3.0%)+7 (※)

Ordinary Income

△58

△ 11ー

Margin(△11.3%)(△1.9%)△23△13(△4.5%)(△2.1%)Net Income after tax
MarginAverage USD- JPY
Exchange Rate

103.79ー95.19（※） Interest receivables +3、 Forex gain +6、Others △224２

Breakdown of Sales by EquipmentAV Equipment
Information Equipment
Others(100 million yen)

627
513

340

Comparison to Previous 4Q

490

AV Equipment： ＋150 （＋44.1％）

Information Equipment： △ 19 （△22.4％）

Others85
88
FY2007,4Q(Jan.-Mar.)Total： △ 17 （△19.3％）： ＋114（＋22.2％）

66
71
FY2008,4Q(Jan.-Mar.)

25

３

Sales of Audio and Visual Equipment
DVD related Equipment
Television related Equipment(100million yen)

490
161

340
120

Comparison to Previous 4Q
DVD related Equipment： ＋ 41（＋34.2％）

Television related Equipment：＋109（＋49.5％）

Total：＋150（＋44.1％）

329
220

FY2007,4Q

FY2008,4Q(Jan.-Mar.)(Jan.-Mar.)

26４

Sales of DVD related Equipment

Video
DVD Player related Equipment
DVD Recorder related Equipment

Blu-ray disc Player
Digital STB(100 million yen)

161
427

120
831(Jan.-Mar.)： △ 4 （△50.0％）

DVD Player related Equipment： △32 （△54.2％）

DVD Recorder related Equipment ： △ 5 （△13.9％）

BD Player： ＋11 （＋366.7％）

Digital STB： ＋71 （＋507.1％）

Total： ＋41（＋34.2％）85

36

FY2007,4Q

Video

1459

14

Comparison to Previous 4Q

3（Blu-ray)
FY2008,4Q(Jan.-Mar.)

27５Sales of Television related Equipment
CRT TVLCD TV
Others329(100million yen)

6Comparison to Previous 4Q

220

CRT TV： △ 39 （△86.7％）

45

LCD TV： ＋142 （＋83.0％）

Others：＋313
171

Total

410

FY2007,4Q

FY2008,4Q(Jan.-Mar.)(Jan.-Mar.)

6 （＋150.0％）： ＋109 （＋49.5％）

28

Ⅳ Supplemental Data ②
Quarterly Comparison of FY 2007 and FY 2008
1. Operating Summary
２. Sales Amount by Equipment29

１Quarterly Operating Summary of FY 2007, 2008（100 million yen）

FY 2007

FY 2008

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Net Sales773790695513594852954627

Operating Income

119△7△ 36933△ 10△ 18(1.5%)(1.1%)(△1.1%)(△7.0%)(1.7%)(3.9%)

4467△ 58

44

15(5.8%)(0.8%)(1.1%) (△11.3%)(7.5%)(1.8%)

13

△ 56

12

△ 23 △13716(1.7%)(△7.1%)(1.8%)(△4.5%) (△23.2%)(2.0%)

MarginOrdinary Income
MarginNet Income After Tax
Margin(△1.1%) (△3.0 %)△ 35△ 11(△3.8%) (△1.9 %)△ 39△ 13(△4.1%) (△2.1 %)30

Quarterly Changes of Sales Amount by Equipment

2DVD related Equipment

Television related Equipment

OthersInformation Equipment（billion yen）

954

1,000

800

773

790

166

153

200

0221

695
148

600

400

852

323

339

594

72

120

161

188

558
340
329

220

229

113

85

107

170

107

62

88

70

62

68

240
58

627

513

372
212

280

66
71

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

(07/6)(07/9)(07/12)(08/3)(08/6)(08/9)(08/12)(09/3)
31

Disclaimer•This document contains forward-looking statements and projections regarding
business performance which are not historical facts. Please note that thesestatements are based on information relating to factors that may impact futurebusiness performance that was available for analysis at the time this document
was printed. These factors include industry trends relating to the businessareas of Funai Electric Co., Ltd. or the Funai Group, such as audio-visualdevices and information communication equipment, the economic conditions ofboth domestic and international markets, and fluctuations in currency exchange
rates. Actual performance may greatly differ from projections included in thisdocument because of the impacts of uncertainty in such areas as thecompetitive conditions of the electronics industry, market trends, currency
exchange rate, introduction and success of new products, and various otherglobal conditions that may affect the tax system and other systems.

32