2nd Quarter(Apr‐Sep) for FY2015
Business Strategy
Representative Director
President and CEO

Tomonori Hayashi
November 10, 2015

FUNAI ELECTRIC CO., LTD.
TSE 6839
0 Overview 2nd Quarter (Apr.‐Sep.) for FY2015 andRevised financial forecasts for FY2015 (Full Year) Outlook for business environment Business strategy
 Strengthen our organization1 Overview of 2nd Quarter(Apr.‐Sep.) for FY2015（100 million yen）

2Q FY2014
Actual2Q FY2015
Forecast

2Q FY2015
ActualS a l e s

1,158911868

Operating Income13‐14‐54（1.2%）（‐1.5%）（‐6.3%）

103.61118.00121.72N e t(Margi

Average USD‐JPY
Exchange Raten)

 Sanyo products(LCD TVs, Blu‐ray disc and Sounder) was strong.
 Launched in‐house development IJP (Kodak‐brand) in North
America and Europe.
Summary Deteriorated profitability due to the depreciation of Mexican peso.
 Increased inventories for the 3rd quarter due to the change salesterms.
2 Revised financial forecasts for FY2015 (Full year)（100 million yen）

PreviousForecast

RevisedForecast（May 11,2015）（Nov 9,2015）

S a l e s

2,200

1,879‐321Operating Income

16‐60‐76（0.7%）（‐3.2%）

118.00119.86N e t(Margi

Average USD‐JPY
Exchange Raten)

Previous vsRevised
Net Change－ As reflecting the financial results of the first half for FY2015, the forecasts forFY2015(Full year ) has been revised downward.
 The U.S. economy is expected to remain strong, but the demand for LCD TVs isestimated to go further downward due to the influence in emerging countries, andbusiness situation will be uncertain. We estimated the forecasts for FY2015(Fullyear) conservatively.
3 Outlook for business environment
Economic Trends■U.S.

Economic conditions are expected to continue on an expansionary track
until the end of 2016. Competitors will expand their business in North
America due to the impact of strong dollar and deterioration of theChinese economy. The price competition is expected to be intensified.
Due to the issues of refugees and Volkswagen, in addition to geopoliticalrisk. There is a possibility about economic depression.
The economic expansion was slowing down, and the recovery needs
time. During the anniversary of founding, the sales of LCD TVs became oneof the worst‐ever results.
The economy is good for second to U.S. The recovery is sluggish due toconsumption tax hike and irregular weather. But the pace ofimprovement is expected to strengthen because of TPP and Tokyo Olympic.

■Europe■China■Japan2014

2015

2014

2015

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 Business Strategy － Building our Business Portfolio
While strengthening existing business segments to improve
competitiveness and secure sales and income, we will also moveinto new business areas, such as printers.
Applied ink jet printertechnology
Healthcare/Medical

Creation of new businesssegments
Expansion of printerbusiness
Improvement ofcompetitiveness ofexisting businesssegments

5 Launch Printers in‐house development

InkjetPrinter
KODAK Ink jet printer

BLI’s summer 2015 pick awards(Personal printer category)

All‐in‐one Ink jet printerLaunch from November 2015
Laser
PrinterSingle‐function
monochrome laser printerAll‐in‐one
monochrome laser printer6 Business Strategy － Concentration of Resources
Expand Market

New Product

Expand Market
 Sales strategies bybrand Redevelopment ofLatin American andEuropean markets

Three Pillars of Business
StrategyNew ProductStrengthenorganization

Strong organization

 4K and Smart LCD TVs

 Integration of marketing
functions 4K Blu ray‐disc player
 Printer line‐up Integration of servicemanagement

 Printer appliedtechnology

 Integration of logistics
and warehousing
7 Business Strategy － Priority issue
 Strengthen sales planning ⇒ planning strong products
SalesPlanning Smooth Integration of sales subsidiaries
 Global expansion in Printers and μFluidics business

Cost
Competitiv
eness Reduce costs by efficient design Reduce purchasing costs (strategic tie‐up with vender) Increase productivity by FPS

GoodQuality

 Increase design quality and components quality
 Increase production quality
 Reduce returned goods rate

Supply stronger products8 Business Strategy － Establish US holdings company
FUNAI ELECTRIC CO.,LTD100%

 Established inOctober 1,2015
100%

Funai Corp.

USA Holdings company
Funai North America, Inc.
100%

P&F USAWe aim to improve productivity and reduce costs by integration oflogistics, warehouse and after‐sales service
9 Business Strategy － Brands

PHILIPSMAGNAVOX Full‐scale expansion of SANYO brand Extended contract of PHILIPS / MAGNAVOX brands licenses to 201810 Business strategy – Printer technological development■ Aim to increase revenue in mid‐term by inkjet technologies
Expansion of revenue modelby our own technologies

Appliedtechnologies

Inkjettechnologies

Commercial& Industrial

Healthcare &Biotechnology
3D PrinterHardware + Supplies
Consumer PrinterHardware +Hardware
Supplies
self‐developed↑
Hardware only

Hardware
OEMTime, Markets11 Business strategy – New products
Take advantage of our strong points

Select the most effective strategy in accordancewith synergies with existing business

Launch new productsand business12 Business strategy‐Development of new products
Applied ink jet printer technology
 We plan to apply μFludics to various fields, for example beauty,
chemical and medicine.
 Joint developments with the global companies are now in progress.

Healthcare/Medical
 We have already been successful to develop thephotoacoustic imaging technology using LEDarray light.
 We start to develop Dental CT diagnostic
equipment13 Strengthen our organization
ＵＳＡ marketing/service sites

Production sites
ChinaHuang Juang(consignment)

TVs・DVDs

ThailandPakchongTVs(main)

Philippines CebuLuzon

FUNAI (THAILAND)
CO.,LTD

Printers

Funai Corp.
P&F USA

NJ/LA
Atlanta

Sales

Integrate

Funai ServiceCorp.

Ohaio

ServiceStrengthen

Sales

Branding

Ink Cartridges
Inkjet Printers

P&F Mexicana

Huang Juang(consignment)
FUNAI ELECTRIC
PHILIPPINES INC.

FUNAI ELECTRIC
CEBU. INC.

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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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