Fiscal 2010 Operating Results

May 10, 2011

Funai Electric Co., Ltd.
Security code ６８３９0

I. Future Basic Policy
1.
2.
3.
4.
5.

Summary of Fiscal 2010 (April 2010 to March 2011)
Forecast of Fiscal 2011 (April 2011 to March 2012)
Business Environment
Key Issues
Basic Measures(1) Re-strengthening the Management Base
(2) Driving Force for Growth Strategy

11. Summary of FY2010 (April 2010 to March 2011)(100 million yen)

Original Forecast

3,500

Net Sales

Revised Forecast(January 31, 2011)

2,950

Results

2,959

Operating Income130

107(Margin)(3.7%)(0.3%)(0.3%)

Average USD-JPY
Exchange Rate

90.00

85.38

85.21

Summary

Significant down from original forecast
mainly due to slump of TV business22. Forecast of FY2011 (April 2011 to March 2012)(100 million yen)

FY2009FY2010FY2011Results

Results

Forecast

3,149

2,959

3,100

Operating Income

111

780

(Margin)(3.5%)(0.3%)(2.6%)

Average USD-JPY
Exchange Rate

92.60

85.21

83.00

Net Sales33. Business Environment
Economic Trend (U.S. Market)●Personal consumption inched up thanks for policy supports or stock
market rise by Fed’s quantitative easing●Long slump of housing market, high jobless rate, steep rise of gas price⇒ Consumption ongoing forward has been unclear left

Industry Trend●Progress of AV equipment into IT and networking enabled⇒ Shortened of product life cycle ･ rapid sales price down
●Rise of EMS/ODM●Enlarging demand in BRICs and other emerging market

Speedy response to rapidly changing
business environment

4

4. Key Issues in FY 2011

The Company’s
50th anniversary

The one-year turnaround a footholdin the new 50

The most focusing key issue

Re turnaround of TV businessThoroughly put to boost the survival of the business
5（Change of sales of LCD TV in unit）(million units)

7.0
5.5

2.1

2.5

5.9

3.5

0.5
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011（Target）
6

5. Basic Measures

1.
1. Promotion
Promotion ofof viableviable products
products bolsteredbolstered bybyspeedy
speedy management
management2.
2. Thoroughly
Thoroughly pursue
pursue forfor cost
cost competitivenesscompetitivenessRe-strengthening
the management base
(Back to the basic of core competency)

Running organization reforms
aimed at strengthening
and streamlining businessDriving force for
growth strategy

Execution of measures toimprove sales/profitability
for mid to long term growth75.(1) Re-strengthening the Management BaseStrongly promote competitiveness with all-out effort
R&D

Procurement

ProductionSales
MarketingServiceSPEED
In-depth
Thorough pursue Promote strategic ThoroughmarketingpursueforFPS
procurement
for cost down
Globaldevelopment

Structural reform Further improve Reinforce
quality
OEM/ODM
business
Make key devices

Reduction ofexpenses

Thorough PSI management/Optimized SCM
Cost down with the company wide level via work processes restructuringDevelopment of human resources and appointment to responsible position
85.(2) Driving Force for Growth Strategy
Promote global manufacturing・sales structure
Manufacturing

Sales

Optimized diversification

Expansion of overseas market

Input resources in Thai Plant

Reinforce Europe

Establish new overseas base

Entry into emerging market(M/South America・Mid East etc.)

Further necessity measures for new business plan
●Networking・telecom areas●Cable TV related●Devices・components●New technology for next generation

Proactive stance on strategic alliance / M&A9Ⅱ．Outline of Operating Results
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Summary of 4th Quarter (Jan. to March, 2011)
Summary of Fiscal 2010 ending March 2011
Breakdown of Sales by Equipment
Sales of DVD related Equipment
Sales of Television related Equipment
Geographical Breakdown of Sales
Factor of Changes of Operating Income
Financial Conditions
Inventories
Capital Expenditures, Depreciation and R&D
Forecast of Fiscal 2011 ending March 201212.

Forecast of Sales by Equipment in Fiscal 2011
ending March 201210

１．Summary of 4th Quarter (Jan. to March 2011)(100 mil. yen)

FY 2009

FY 2010

Y/YS a l e s669

659

Operating Income△3△32( m a r g i n )(△0.6%)(△5.0%)

Ordinary Income△3△27( m a r g i n )(△0.5%)(△4.2%)Net Income after tax

11△33( m a r g i n )(1.8%)(△5.1%)

90.74

82.33

N e t

Average USD- JPY
Exchange Rate△10(△1.4%)△29＋5 (※1)△24
△6 (※2)（※1） forex gain +5（※3） forex gain +5（※4） decrease of extraordinary loss +8、increase of income taxes △28

09/12

10/3

10/12

11/3

1004

49

83.15

92.

93.

81.

△20 (※4)△44（※2） increase of income taxes△6Month End
Exchange Rate＋5 (※3)

11

２．Summary of Fiscal 2010 ending March 2011(100 mil. yen)

Forecast

FY 2009（Jan. 31 2011)）

Y/Y

Y/Y

FY 2010(Actual base)(Forecastbase)

Net Sales

3,149

2,950

2,959

△190+ 9(△6.0%)(100.3%)Operating
Income111

107△104△3( m a r g i n )(3.5%)(0.3%)(0.3%)

Ordinary
Income1161012( m a r g i n )(3.7%)(0.3%)(0.4%)Net Income
after tax

103

△18△11( m a r g i n )(3.3%)(△0.6%)(△0.4%)

Average USD- JPYExchange Rate

92.60（※1） interest receivables +4、forex gain +2、interest expense △1

85.38△104+2△23 (※2)△10 (※4)△114+7＋5 (※5)＋5 (※6)（※3） decrease of interest receivables △3、 （※5） forex gain and loss +5
forex gain and loss +3

10/3

11/3

04

83.15

93.

±0 (※3)85.21（※2） extraordinary gain +3、extraordinary loss △1、 （※4） increase of extraordinary gain +2、income taxes △25
decrease of extraordinary loss +8、increase of income taxes △20

Month End
Exchange Rate＋5 (※1)（※6） decrease of income taxes +512３．Sales by Equipment

3,149(100 mil. yen)

2,959

Y/Y
AV Equipment ： △ 313 （△13.6％）
DVDT VAV
Equipment： △ 43： △270（△ 6.2％）（△16.9％）

2,299

1,986

Information
Equipment： ＋ 18 （＋ 3.3％）

DVD ： 699
T V：1,600

DVD： 656
T V：1,330

Others： ＋105 （＋34.5％）

Total： △190 （△ 6.0％）

564

Information
Equipment

546

Others304

409

FY2009FY2010※From FY2010 antenna set for North America isclassified in 'Others' from 'Others in TV related
equipment on Audio Visual Equipment' which wasclassified in FY2009.The sales amount of antenna set
for North America in FY2009 was 3,600 mil. yen.

13

４．Sales of DVD related Equipment
DVD Player

DVD Recorder・Both DVD player and recorder declined699

Blu-ray disc656

・BRD recorder significantly gained and player dropped
Others

DVD Player

232

144

・Digital set top box ended the life in the U.S. market(100 mil. yen)

125
DVDRecorderBlu-ray disc

Others

Y/Y

154

189

353

124

DVD Player： △ 88 （△37.9％）

DVD Recorder： △ 29 （△18.8％）

Blu-ray disc： ＋164 （＋86.8％）

Others： △ 90 （△72.6％）

Total： △ 43 （△ 6.2％）

34

FY2009FY201014５．Sales of Television related Equipment

1,600
CRT TVLCD TV61,330・Number of units increased and amount declined due toASP down and slump of demand in the U.S. market(100 mil. yen)
LCD TV

1,594

Y/Y

1,330

FY2009CRT TV：△ 6 （―）

LCD TV： △264 （△16.6％）

Total： △270 （△16.9％）

FY201015

６．Geographic Sales

North America
・Both of LCD TV and DVDs including STB
significantly declined.

3,1492,959

Japan・LCD TV, BD recorder and antennas contributed
to gain mainly due from “Eco-point”.

1,558NorthAmerica

2,164(53％)(100 mil. yen)

(69％)

Y/Y
North America ： △606 （△28.0％）

238 (8％)221 (7％)
EuropeAsia & Others
Japan305 (10％)
196 (6％)484942(32％)

Europe： △ 67 （△21.8％）

Asia & Others： ＋ 25 （＋12.8％）

Japan： ＋458 （＋94.7％）

Total： △190 （△ 6.0％）(15％)

FY2009FY201016７．Factors of Changes of Operating Income＊ Add-value=Sales －(cost of sales ＋selling expenses(100 mil. yen)

Salesdecrease△21Add-value
deteriorated111△97OperatingIncomeFY2009

営業利益

Decrease ofgeneral
expenses

Operating
Income147

FY201017

８. Financial Conditions（100 mil. yen）

2,040

Cash/Deposit

AssetsLiabilities
andNet Assets

860

2,036
623
423

Accounts
Receivables

351

Inventories

384

549

700
363
438

Fixed Assets
and others

445

441

438

A/P

313

328

289

Other Payable

300

379

338

Net Assets

1,427

1,329

Y/Y

1,939

1,312

Assets△ 101

・Cash/Deposit△ 160

・Accounts Receivables+ 12・Inventories+ 54

・Fixed Assets and Others△Liabilities＋ 14・A/P△ 24

・Other Payable＋ 38Net Assets△115（Shareholders’ equity ration

2,040

2,036

1,939

2010/3

2010/122011/3767.1％）

18

９．Inventories

549
438384(100 mil. yen)350

Y/Y235
Finished products

Work in process

Turnover

208

176

199

203

2010/3

2010/122011/3

1.7 months

2.2 months

2.0 months

Finishedproducts： ＋ 27Work inprocess： ＋ 2719

10．Capital Expenditures, Depreciation and R&D （Y/Y)（100 mil. yen）

CapitalExpenditures

Depreciation
Expense

R&D
Expenditures＋17＋5△5134

60484343
FY2009 FY2010

129FY2009 FY2010

FY2009 FY2010
20

11．Forecast of Fiscal 2011 ending March 2012（100 mil. yen）FY 2010

FY 2011
Y/Y

1H

2H

12 months

1H2H

12 months＋141

Net Sales

1,540

1,419

2,959

1,568

1,532

3,100

Operating
Income45△387344680(margin)(3.0%)(△2.7%)(0.3%)(2.2%)(3.0%)(2.6%)

Ordinary
Income47△3412344680(margin)(3.1%)(△2.5%)(0.4%)(2.2%)(3.0%)(2.6%)Net Income
after tax

38

△50

△11124052( m a r g i n )(2.5%)(△3.6%)(△0.4%)(0.8%)(2.6%)(1.7%)

82.27

85.21

Average USD/JPY
exchange rate

88.15(＋4.8%)＋73＋68＋6383.00
21

12．Forecast of Sales by Equipment in Fiscal 2011
ending March 2012

2,959

3,100(100 mil. yen)

Y/Y
AV Equipment ： ＋ 389 （＋19.6％）
AV
Equipment

1,986
DVD： 656
T V ：1,330

2,375
DVD： 725
T V ：1,650

Information
Equipment

564

Others409

305

FY2010FY2011DVDT V：：＋ 69＋320（＋10.5％）（＋24.1％）

Information
Equipment： △ 144 （△25.5％）

Others： △ 104 （△25.4％）

Total： ＋ 141 （＋ 4.8％）

420

22

Ⅲ． Supplemental Data①
Summary of Operating Results (Jan. to March 2011）

1. Sales by Equipment
2. Sales of AV Equipment
3. Geographic Sales

23

１．Sales by Equipment

669

659
(100 mil. yen)

Y/Y
AV Equipment ： ＋ 14 （＋ 3.0％）
AV
Equipment

DVD：112
T V ：348：：＋ 62△ 48（＋ 55.4％）（△ 13.8％）

474

DVDT V

DVD：174
T V ：300

Information
Equipment： △ 43 （△35.2％）

Others： ＋ 19 （＋21.8％）

Total： △ 10 （△ 1.4％）

460

Information
Equipment

12279

Others87106

FY2009FY2010※ Sales amount of antenna for North America in
the previous corresponding quarter was 800 mil. yen

24

２．Ales of AV Equipment
DVDTV(100 mil. yen)(100 mil. yen)

348
300

17436112
DVD Player

28
LCD TV

27DVD
Recorder28

Blu-ray disc

54348
300

107

33Others

FY2009FY2010FY2009FY201025３．Geographic Sales

669659(100 mil. yen)

NorthAmerica

Europe363(54％)

Asia & Others

66 (10％)61 (9％)

Japan

179

318(48％)40 (7％)
42 (6％)
259(27％)

FY2009(39％)

Y/Y
North America ： △45 （△12.4％）
Europe： △26 （△39.4％）

Asia & Others： △19 （△31.1％）

Japan： ＋80 （＋44.7％）

Total： △10 （△ 1.4％）

FY201026Ⅳ．Supplemental Data ②
1. Quarterly Operating Summary of FY 2009/2010
2. Quarterly Changes of Sales Amount by Equipment

27

１．Quarterly Operating Summary of FY 2009/2010（100 mil. yen）

FY 2009

FY 2010

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Net Sales

776

894

810

669

749

791760659

Operating
Income376314△32520△5△32(margin)(4.8%)(7.1%)(1.8%)(△0.6%)(3.4%)(2.6%)(△0.7%)(△5.0%)

Ordinary
Income4055

24△31234△7△27(margin)(5.3%)(6.2%)(3.0%)(△0.5%)(1.7%)(4.4%)(△0.9%)(△4.2%)

N e t I n c o meafter tax

31

41

18

11434

△16△33(margin)(4.1%)(4.6%)(2.3%)(1.8%)(0.6%)(4.4%)(△2.2%)(△5.1%)

28

２．Quarterly Changes of Sales Amount by Equipment
DVD Equipment（100 mil yen）

Others

894
810

776

749

213
125

669

791

456

174
362

388
280

348

346

659
229

112

450

760

123
130

249

300

171

189

125

87

86

91

126

106

3Q

4Q

1Q

2Q

3Q

4Q

(09/12)(10/3)(10/6)(10/9)(10/12)(11/3)

156

159

122

72

75

70

1Q

2Q

(09/6)(09/9)

109

Information Equipment

TV Equipment

7929

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-visual
devices 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.

30