FY2014 2nd Half Business Strategy
Representative President and CEO

Tomonori Hayashi
November 5, 2014

FUNAI ELECTRIC CO., LTD.
TSE 683901. Summary of 1st Half FY2014 (Apr.‐Sep.)
2. 2nd Half (Oct.‐Mar.) Macro Outlook
3. Revised Projection of Fiscal 2014 (Full Year)
4. Future Growth Strategy
5. Business Portfolio Restructuring
6. Plant Site Optimization1

1. Summary of 1st Half FY2014 (Apr.‐Sep.)（100 million yen）

S a l e s

FY2013
1st Half
1,205

Forecast
1st Half937

FY2014
1st Half
1,158

Operating Income5513（0.5%）（0.5%）（1.2%）

98.64

100.00103.61N e t(Margi

Average USD‐JPYExchange Raten)

Operating Income increased, but Net Sales declined on YoY.
Summary The shipment of LCD‐TV for the US major distributers was good.
Revenues in ink cartridges increased, but lowered in printers.
22．2nd Half (Oct.‐Mar.) Macro Outlook
Economic Trends■US：A recovery trend. Still a robust and stable situations are seen continuously.
The Yen is weakening against the US dollar. However it is necessary to bevigilant for future risks, as “geopolitical risks” such as Ukraine, China andISIS, will be bad influence on the exchange and the U.S. economy.
■Europe：The market is stagnant, reflecting worsening of the situation in the Ukraine.
■Japan：The economy is sluggish because of factors including a reaction tolast‐minute demand ahead of the consumption tax increase and theimpact of bad weather.
■Emerging Markets：China’s economy slowed due to factors including deterioration in thehousing market.

Industry Trends■ In US, the sales of larger‐screen LCD TVs keep growing although coming up to the surface
that bipolar of TV‐brands segmentation. Thus, 4K TV market remain in wait‐and‐see mode.
■The printer market is mature in advanced countries. Decline in the price of supplies.
In emerging markets, the risk of further price erosion due to spreading of low price products.
3３．Revised Projection of Fiscal 2014 (Full Year)（100 million yen）

Forecast

New Forecast（2014/5/13）（2014/11/4）

Net Change＋30

S a l e s

2,000

2,030

Operating Income

55－（0.3%）（0.2%）－

100.00102.80N e t(Margi

Average USD‐JPYExchange Rate••n)

Revised up for the net sales forecast FY2014, reflecting the performance of thefirst ‐half FY2014.
Remains the previous forecast for operating income. Because the U.S. economy in
the first six months of the year was good, however, retail sales are below the lastyear level in recent measures. So, we now see the outlook for the second‐halfbusiness environment remains uncertain, still need to be carefully watching.
44. Future Growth Strategy
Business portfolio restructuring

Expand into new
business fields

Expand into newmarkets

Strengthen existingbusinesses

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

Expand into the global market
Initial emphasis on the U.S.
Sequential expansion into Asia
and Central America
Existing products + New productsPlant site optimization
New production site inthe Philippines
Abundant labor supply
English‐speaking country

Accelerate receipt of OEM orders in allbusinesses.

Three Elements ofthe Growth Strategy5

5. Business Portfolio Restructuring
Sales by Product■Existing Businesses－Audio Video Equipment
Income improvement by the timing of launch even ingrowth markets , with further cost reduction.
■New Business－Printer Business
To Meet in each market needs, as follows
・Ink cartridges technology into B2B and newly build business.
・Mechatronics products have been good at Japanese makers.
Sales by Region
In U.S. sales, utilize close business relationship with major mass merchandiser.
Sales expansion in Asia and Central and South America is a challenge.
65‐a). Strengthen 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

Strengthen Existing Businesses ：Brand Variety■ More Brand Variety for customers in North America.

Magnavox

Philips

Brand‐alliance of Sanyo’s North American TV Business.
SANYO‐branded TVs will be scheduled for launch around next March.
85‐ｂ） Business Portfolio Restructuring Printer Business■ For Medium and Long‐term revenue,
To Use Inkjet Technologies for Newly Build Businesses.
Expansion of revenue modelby our own technologies

μFluidics
MEMS
InkjetTechnologies

Commercial& Industrial

Healthcare &Biotechnology
DeviceHardware + Supplies
Consumer PrinterHardware +Hardware
Supplies
Self‐developed↑
Hardware onlyHardware
OEMTime, Markets
95‐ｃ）. Expand into New Business Fields■Aim to make each new business a 10 billion yen business in FY2018.
■Enter growth markets by applying our technologies to new‐productdevelopment.

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

In‐Vehicle Displays
Wireless transmission design technologies
Power circuit design technologies
Mechanical design technologies
Software design
Optical disc device technologies

ISO/TS16949(Automotive)
certification acquired（Chugoku Funai Electric, 2009)

Healthcare/MedicalStudying the possibility of entry with partners.
By applying our technologies.
106. Plant Site Optimization
Optimization of plant sites in response to changes in the business environment and labor environment■ China

Concentration into 1 plant(Huang Jiang –consignment plant)

TVs / DVDs / BDs / Printers■ Thailand July 2013 expansion of the No. 3 Plant■ Philippines Cebu Plant … Ink cartridges

Philippines Plant … Printers

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

Huang Jiang Plant( Consignment )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 data11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.

12