Appliances Company
Business Strategy
December 1, 2014
Panasonic Corporation
Appliances Company
Kazunori Takami

2Contents

1. Progress in 2014
2. Aim to achieve 2 trillion yen
in consumer electronics
3. Strengthen BtoB Solution
4. Conclusion

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

3

FY2015 Financial Forecast【 Sales 】

Despite decrease in sales due to backlash fromincrease in consumption tax and PDP exit, secure
increase in sales by growth of air-conditioners etc.
【Operating Profit】 Increase in profit by improvement of air-conditioners
and devices (motor) etc.

Operating Profit

Sales（¥ billion）

1,777.4

100% 1,779.0

FY14

FY15

29.5 127%(+8.0)

37.5

FY14

FY15

*on a Company shipment basis (FY14 is recalculated based on FY15 organization)

4

Progress in each business
FY15 key initiatives

Progress in the first half of FY15

Consumer
AirCold Chain
Electronics Conditioners

Expand white goods sales
in overseas by centering on Asiaand improve profitability of
AV business・Increased sales in Asia in refrigerators andbeauty care products
・Profitability improved vs last year in AV business・AP Asia in progress, established task force

Rebuild China business forroom air-conditioner andstrengthen large scale
air-conditioner business・Significant improvement of profit due torebuilding China business for room airconditioner and streamlining promotion・Highly efficient VRF launched in the US

Expand CO2 Refrigerant products
and propose products
by integration of manufacturing
and sales

・Expanded CO2 Refrigerant products forconvenience stores and supermarkets in Asia

Devices

Shift towards high profit field
and accelerate development of
new devices

・Motor business shifted to high profit filed andplayed a leading role for profit improvement

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

5Roadmap toward sales expansion accompanied with profit■ Smooth start to achieve 5% operation profit early<CV2015>
Raise profit level of consumer electronics
Establish BtoB foundation<New Mid-term Plan>
Establish base of 2 trillion yen
in consumer electronics
Expand oversea BtoB business

Operation profit (%)

・Expand businessscale (accelerate
overseas promotion)
・Strengthen overseas
sales networks<Production and sales consolidated>(yen: billions)41.1

・Build specializedbusiness structure
・Cultivate sales routes
・Expand lineups

Cold
Chain
Air-

・Expand business in Conditioners
Strategic Regions
by locally selfsustainable structure
・Expand products
ConsumerElectronics
focusing on
customers'
emotion(1.8%) ・High value-added
marketing indeveloped countries
・Strengthen structure
in strategic regions

FY14

Devices

FY15

FY16

FY19

6

Contents

1. Progress in 2014
2. Aim to achieve 2 trillion yen
in consumer electronics
3. Strengthen BtoB Solution
4. Conclusion

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

7

Global Appliances Demand■ Europe is a large market which accounts for a quarter of global demand■ Asia still has the highest growth rate and is expected to grow further(yen: trillions)

32.3

32.0

31.4

Latin
America

FY16 FY1416
composition CAGR
ratio

10.3%

2.6%

North
America

18.1%

1.4%

Europe24.2% -0.1%

Asia(part of
Strategic
Regions)

Strategic
Regions*
Japan

FY14

FY16

FY15

7.8%

6.3%

30.4%

3.0%

*Asia, China,
Middle East and Africa

9.2%

-3.2%

(Source: Company’s estimation)

8

Composition ratio of sales by region (Company’s consumer electronics)<Japan>Europe13%Strategic
Regions
29%

8

Latin America ％

Japan
45%

North America ％

FY12

5

<Strategic Regions>・Especially focus in Asia as it haslarge sales volume and businessbases in each country■ Promote “Aspiration Marketing”

Asia(part of theStrategic Regions)

11%
37%

32%

％
％

FY15

・Still has the highest composition
despite decrease in TV sales■ Create new demand throughproducts focusing on
customers' emotion

9 6

12% 17%<Europe>・AV products such as TVs havelarge portion, and large room
for white goods sales increase■ Strengthen profitability by“Premium appliances”

Create domestic demand and strengthen Asia and Europe

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

9

Japan

10

Create new demand by products focusing on customers' emotion■ Increase the brand value by offering customers delightful surprises【Current savings and debt by head of household】

Debt

Focus on seniors who havestrong interests in consumer
electronics

Savings

30’s

40’s

50’s

Over 60’S(Source: Report of domestic finance research (savings/debts)
2013 average flash report (household more than 2 members)

Household over 60’s increases by
4% over 2012 to 2018
(Source: Euromonitor)■ Focus on both function
and design■ Top priority is userfriendliness■ Prefer simple function
than multi-function

Aim to increase the brandvalue by expanding premium
products
Launch high quality“J concept series” from Japan(Source: Company’s net research, GF Ltd)

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

11Great response to J concept series■ High reputation for user-friendliness and design■ Expand to other products and aim to 50 billion yen sales in FY17

35 degree C
wind to floor

Vegetablesin the middle
compartment,
focusing on
freshness

World’slightest*※As of September 17, 2014, of body weight (2.0kg) of domestic canister vacuum cleaners

12

Asia

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

13

Expand in significantly growing Asia
■ Capture middle and high-end zone by “Aspiration Marketing”【Appliances demand】(yen: trillions)

2.9

2.3

Most important area forachieving 2 trillion yen yen
in consumer electronics

1.5

FY11

FY15

FY19

Source: Company estimate【Demand composition of households by income】(2014)
Next Rich
High
24%
3%
end
Middle23%class
28% Middle
end

Composition ofhouseholdComposition ofdemandExpand “Aspiration
Marketing” targeting toaffluent class
Establish locally selfsustainable structure, fromlifestyle research to sales(Company’s estimation)(Source: composition of household is from Euromonitor, sum of Indonesia, Vietnam, Philippines, Singapore, Malaysia and Thailand.
Middle class: household income over US$10,000, Next Rich: over US$45,000. Composition of demand is estimated from GfK)

14

Marketing to inspire consumers’ yearning■ Inspire customers’ yearning and enhance brand image■ Create and lock in loyal customers in affluent class
Japanese hospitality

Collaboration with developers■ Establish presence in high-end
zone by “Made in Japan” products■ Exhibit premium products in urban
high-class condominiums

Start loyal customer creation campaign

Hold events at exhibit galleries

Caravan car/ Roadshow

Tie up with TV program■ Thorough product appeal andexperience

Panasonic Cooking Caravans (66 sites)

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

■ Strengthen PR in cooking programetc.

PR in “Asian Food Channel”

15

Growth and improve profitability by strengthening middle/high-end zone
■ Utilize ODM and shift own development resource to middle/high-end zone
■ Launch premium products made in Japan and expand lineup
Now

Budget-end

Budget-end

High-end

Inverter

35
models35

DrumMade inJapanmodels30
modelsVertical automatic

25

ODM

Core
zone Leader models

MiddlecapacityLargecapacity
Extra-large
capacitymodelsODM

TV

Washeronly

Washing
machine

High
-end

13
modelsMade inJapan

Washer/dryer

ODM

Drum Vertical automatic

Made inJapan

Middlecapacity

500L<

400L<

600L<

Refrigerator

13
modelsConstant speed

ODM

High-end

From autumn 2014 onward

Constant speed
Made inJapan

Airconditioner

Inverter

8

11modelsIncrease composition of middle/high-end zone
and improve profitability by increasing average price16

Establish AP Asia and shift to locally self-sustainable structure■ As “The second AP HQ”, move to the frontline of Asia region■ From product planning/development to marketing, speed up operation
Business scale: approx. 2,500 bn. yen

AP Asia

Number of company: 13 companies(10 production bases,
3 development bases)

Marketing(including lifestyle research)

Number of employees: approx. 8,700

ODM(R&D approx. 400)

DesignEstablish in April 2015
Asia Business Unit

Airconditioner

Refrigerator

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

Washing
machineTelevision

17

Europe18

Expand premium appliances in Europe■ Strengthen business in Europe where premium products receive
market acceptance【Average price of white goods by regions】

Accelerate white goods
business expansion basedon foundation of AV
business

Global average

Asia

China

Middle eastand Africa

North
America

WesternEurope(Source: Euromonitor)【Demand composition of Built-in】

EuropeLatin
America
North
AmericaJapan

Strategic
Regions

Europe accounts approx. 40%of global demand(Source: Euromonitor)

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

Early expansion of productlineup and channel bystrengthening collaboration
with local company
Full-scale entry to built-in
market (utilize OEM)

19

Promotion in Europe (IFA 2014 presentation)■ Send new value through newest products and services■ Aim to establish position as a premium brandWashing machine

Premium design

BeautyKitchen

Refrigerator

Strengthen built-in kitchen

Audio

Television AV

Promote new category

Expand lineup by collaboration

4K World

Revival of Technics

20

Strengthen profitability and growth of white goods business■ Expand business by strengthening collaboration andfull-scale entry to built-in kitchen
Improve profitability bycollaboration with Gorenje■ Expand products lineup by codeveloping products which fit to lifestylein Europe

Built-in kitchen business development■ Enter to built-in kitchen business andaim to expand further profitable business■ Decrease fixed cost by gaining
production platform in eastern Europe■ Improve profitability by reducing
transportation cost by local production

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

■ Increase sales of value-added productsby expanding lineup of kitchen
appliances

21

Establish premium brand with Technics■ Technics brand to lead brand value improvement in Europe■ Aspire for ripple effect in BtoB business such as
automotive and home and living environment[Awareness of Technics brand](Company research as of November 2013)

64
%
【UK】

47
%
【Germany】

Maintained highawareness after
discontinuation in 2010

Start market introduction from December

22

Contents

1. Progress in 2014
2. Aim to achieve 2 trillion yen
in consumer electronics
3. Strengthen BtoB Solution
4. Conclusion

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

23

Strengthen BtoB solution business structure■ Accelerate global expansion by integrated operationof manufacturing and sales<China>Improve product lineup tostrengthen solution business by
integrating manufacturing and sales<Asia>
Build network of sales companies
Start air-conditioning facility
specialized company<Japan>Build integrated structure ofsales companies by business category
Expand resource to overseas

24

Large-scale air-conditioners■ Have distinctive strengths in wide range of products lineup ofabsorption chiller, GHP etc.
■ Strengthen sales/service structure for acceleration of global expansion

Installed in various facilities

Accelerate global expansion

Absorption Chiller(Natural Chiller)■ Strengthen sales/service structure
specialized in air-conditioning business,
mainly in China/Asia■ Introduce industry top-class efficient VRF,
highly-functional controller etc.

Osaka Station City

Educational facilities
GHP(Schools etc.) (Gas Heat-pump air-conditioner)

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

VRF=Variable Refrigerant Flow

25

Cold Chains■ Expand global business with our advanced CO2 refrigerant system,
remote surveillance system etc.

Wide range of products
CO2 refrigerantsystem for stores

Convenience stores
Supermarkets

Logistics industry

Expand global business■ Expand CO2 refrigerant systeminstallation at once

■ Globally expand remote surveillancesystem utilizing cloud■ Propose contribution to convenience
stores and supermarkets with all
Panasonic

Logistics
Refrigerator

Restaurant industry

Commercial
refrigerators

26

Contents

1. Progress in 2014
2. Aim to achieve 2 trillion yen
in consumer electronics
3. Strengthen BtoB Solution
4. Conclusion

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

27

Toward FY2019<CV2015>
Raise profit level ofconsumer electronics
Establish BtoB foundation

BtoB

ExpandBtoB business

BtoC〔２０１４〕New Appliances
Company<New Mid-term Plan>
Establish base of 2 trillion yen
in consumer electronics
Expand oversea BtoB business〔２０１８〕
Global top-class
Appliances Company

Contribute to“Comfort Living” and “Comfort Society”
by wider business area world wide

Regional Company

Copyright (C) 2014 Panasonic Corporation All Rights Reserved.

Expand businessfocusing on
Strategic Region

Global Company

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This presentation includes forward-looking statements (that include those within the meaning of Section 21E of the U.S. Securities
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performance, achievements or financial position expressed or implied by these forward-looking statements. Panasonic undertakes noobligation to publicly update any forward-looking statements after the date of this presentation. Investors are advised to consult any
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throughout the world, disruption of supply chain and other events that may negatively impact business activities of the PanasonicGroup. The factors listed above are not all-inclusive and further information is contained in the most recent English translated version
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In order to be consistent with generally accepted financial reporting practices in Japan, operating profit (loss) is presented inaccordance with generally accepted accounting principles in Japan. The company believes that this is useful to investors incomparing the company's financial results with those of other Japanese companies. Under United States generally accepted
accounting principles, expenses associated with the implementation of early retirement programs at certain domestic and overseas
companies, and impairment losses on long-lived assets are usually included as part of operating profit (loss) in the statement ofincome.

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