Acquisition of Blue Yonder

Panasonic Corporation, CEOYuki Kusumi

Become a global leader of solutions for
supply chain innovation
Management reform forenterprise customers

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Realization of asustainable societyGemba Process Business
Optimization
Standardization
Visualization

Autonomous frontline optimization
through data utilization

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Panasonic’s Solutions for Supply Chain Transformation

End-to-end visibility andoptimization of the supply chain

Autonomous frontline optimization
through data utilization

Autonomous enhancement of the whole supply chain

Panasonic’s Solutions for Supply Chain Transformation

End-to-end visibility andoptimization of the supply chain

Autonomous frontline optimization
through data utilization

Autonomous enhancement of the whole supply chain

Transforming the Panasonic Group’s operations as well

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Acquisition of Blue Yonder

Panasonic Corporation, Representative Director
Connected Solutions Company, CEO

Yasuyuki Higuchi

Overview
Acquisition of remaining 80% of shares of Blue Yonder,
adding to the 20% Panasonic already holds
TargetBlue Yonder Holding, Inc.
Acquire remaining 80% of shares, combined with 20% acquired in July 2020
Comprehensive evaluation under the DCF method and similar listed company method
based on profitability: US$8.5 billion

Valuation(EV / Adjusted EBITDA Multiple: Blue Yonder 2021 33 times, 2022 29 times)
Ref: Average of other companies in the same industry 44 times in 2021 and 41 times in 2022

Required funds for purchase of remaining 80%: US$7.1 billion(80% of shares: $5.6bn + Existing debt replayments: $1.5bn)

Deal is planned to close FY2022Q3* and is subject to receipt of customary regulatory
Schedule

approvals such as antitrust procedures and CFIUS examinations*Fiscal year ending March 2022, Q3 = Oct-Dec period

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Blue Yonder is the World’s Largest Supply Chain Software Company

76

3,000Countries

48

of Top/100

Manufacturers

Global customers

9of Top/10

65

of Top/100

3rd party globalRetailers

logistic companies

Customer examples

Blue Yonder is the World’s Largest Supply Chain Software Company
CAGR (FY20-25)

NameBlue Yonder Holding, Inc.

HQ

Scottsdale, Arizona, U.S.A.

Sales$1,013m1985% of recurring
revenue

67%Est.

CEOGirish Rishi

Employees

5,545

Business

Provision of supply chain software utilizing
AI and machine learning for major
manufacturing, retail, and logistics
companies

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

13%+

2020

2025

CAGR (FY20-25)

13%+ αAdjusted EBITDA $246m

2020

2025

Blue Yonder’s Competitive Advantage
Highly competitive as a solutions provider specializing in
end-to-end supply chain optimization

3,000 ＋

400 ＋

Global customers

Deep knowledge gained fromtrack record with top
companies in each industry

Gartner

3SCM Magic
Quadrant
categories

100 ＋Patents

AI / ML engineers

No.1 intellectual
property holdings inthe industry

Data scientists & AI / ML experts

600 +Only recognized leader

Marketing associates

End-to-end product lineup

Global network familiar witheach industry

1,600 +

Partner companies

Well established partner
ecosystem

History of Partnership with Blue Yonder
Conviction of realizing the Autonomous Supply Chain based on strength of partnership

Acquisition
20% Investment
Establishment
of Joint Venture

Expansion of strategic partnership,
Joint go-to-market activities in Japan,
Development of joint solutions

Collaboration on integrated solutions

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Expansion of Autonomous SupplyChain globally

Evolution of Gemba Process Innovation
DIGITAL

Supply Chain Management Software

Collect, Accumulate, Analyze & Utilize Data

PHYSICALMANUFACTURE

LOGISTICSRETAIL

Solving customers' challenges by acquiring Blue Yonder’s software platform,
integrating it with Panasonic’ industrial engineering, edge devices, and IoT
to connect the digital and physical layers

Toward an Autonomous Supply Chain

Real time, End-to-end visibility
Factory
operational status

Parts / Stockstatus

Productionstatus

Production
line status

Prescriptive analysis / Decisional support

Productioninstruction

Warehouse /deliverystatus

Production
instruction(based on sales)

Sorting /Delivery status

SENSING TECHNOLOGIES

Delivery
instruction

Real timesorting

Sales
instruction

Sales status

販売状況

Customer
Demographics

DynamicPricingStore
stock status

NETWORK TECHNOLOGIESACTUATION:EDGE DEVICES

MANUFACTURING

LOGISTICSRETAIL
Copyright ©2020 Panasonic Corporation All Rights Reserved

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Realization Of A Sustainable World, A Better World

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Acquisition of Blue Yonder

Panasonic Corporation, CFO
Hirokazu Umeda

Financing Plan
Utilizing reserved dollar cash and new financing for financial stability

Financingplan Acquisition funds: US$7.1 billion(Acquisition of additional 80% of shares: $5.6bn; repayment of outstanding debt: $1.5bn)
 To be financed with (a) reserved cash (approx. US$3.5bn) and (b) bridge loan
Bridge loan is planned to be refinanced with hybrid financing (e.g., subordinated debt)
that qualifies for equity credit to a certain extent

Capitalallocation
policyResponse to growth opportunities, per the capital allocation policy of the Mid-termstrategy
 Allocate capital for the Mid-term strategy with cash flows generated from business(operating CF, divestiture); however, respond flexibly to seize growth opportunities.
(ʻCapital allocation policyʼ of the Mid-term strategy, announced on May 9, 2019)

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Capital Allocation
Capital allocation (forecast)from FY2020 to FY2021

Financing for Acquisition

By promoting portfolio optimization and sale of assets, on
top of generating operating CF, approx. 1 trillion yen excess
funds are expected after deduction of necessary funds suchas investment.
Sources

Uses

OperatingCF, etc.

(incl. 20% shares ofBY*)

Portfolio
optimization,
sale of assets, etc.

This acquisition is within the framework of the capital
allocation. Complement capital with hybrid financing* andpromote further CF generation.
* Eligible for equity treatment to a certain extent from rating agencies

Investment
Dividend

Restructuring, etc.

Approx.
1 trillion
yenReduction of leaseliabilities byportfolio
optimization

Approx. JPY780bn($7.1bn @110 USD/JPY)BY*Acquisition(acquisition of additional
80% shares +repayment ofoutstanding debt)

Hybridfinancing(equitytreatment)

Promotion offurther CF
generation* BY: Blue Yonder

Impact on Financial Leverage (interest-bearing debt) by the Acquisition
Post-acquisition financial leverage is expected to improve compared to FY2020
as the lease liabilities would be reduced and the profitability would be enhanced.
Beginning of FY2020

Post-acquisition(JPY 1bn)

813.1
Net Debt

Net Debt /EBITDANet Debt /Shareholders Equity

Lease
liabilities
636.3

ImproveLeaseliabilities

1.23
Net Debt / EBITDA: 1.0x0.42(*) Net Debt: Interest-bearing debt – Cash (beginning of FY2020)
Shareholder’s Equity: (beginning of FY2020)
EBITDA: Adjusted operating profit + depreciation (of tangible fixed assets, intangible assets, and right-of-use assets) (FY2020 actual)

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

22

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Reasoning behind the Acquisition
Access to customer base, acquire software capabilities, etc.
Accelerate transformation of business model and profit structure to recurring revenue Access to customer base (over 3,000 globally) Acquire software capability, development expertise (AI / ML, data analysis, data scientists)
 High level software company management team, organizational capability(CEO Girish Rishi and other executives)
 Build Gemba Process business ecosystem (including consulting) Transition to recurring revenue business model, transform profit structure

Evolution of Gemba Process business
23

Impact of Acquisition
Business valuation: US$8.5 billion
Adjusted EBITDA margin: Blue Yonder Year 2021 33 times, Year 2022 29 times
Average EBITDA margins of other companies in the industry: Year 2021 44 times, Year 2022 41 times
Unit: 1 million US$

Additional goodwill, intangible
assets, etc.

Approx.

Blue Yonder assets*1Approx.

*1 Approx. 1,300 goodwill and intangible assets recorded by Blue Yonder

Total value

7,000estimate

1,500
Approx.

8,500
Approx.

Intangible asset amortization*2200/year* 2 Including amortization of intangible assets at Blue Yonder

24

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Supply Chain Market Trends
COVID-19 accelerated structural changes in the supply chain
Conventional Supply Chain
ManualOnsite orOnline

Modern Supply Chain

Cross borderOmnichannel

AI / ML

Last 1 mile

COVID-19
Rise in e-commerce

HQ

DeliveryRebuild global supplychains
Factory

Warehouse

Retail store

Increase in remote work

Factory
Consumer

StoreWarehouse

25

Expanded TAM by Integrating Panasonic and Blue Yonder
In addition to the high growth potential of supply chain software, further
market expansion can be expected by combining IoT technologies
Supply Chain Management (SCM)
2020-2024 CAGR: +12%

IoT + SCM
TAM Expansion: $$42BN

$18

$28

$28

BNBN

2020

2024

2024

14BN

BNSource: Allied Market Research (Supply Chain Management Software Market) for the market size forecast of SCM;
See Frost & Sullivan (Growth Opportunities in the Internet of Things-enabled Supply Chain Management Market) for IoT + SCM market size forecasts

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

2020-2024
CAGR: +34%

26

Blue Yonder Financial Indicators
Top Level KPIs for Software Company
Succeeded in solving problems and creating value for customers under the leadership of CEO Girish Rishi
Smooth transition from on-premise to SaaS model to meet customer needs

$1BN+

67%

54%

Total RevenueRecurring Revenue Ratio

YoY SaaS ARR GrowthWorldʼs leading SCM
specialized software company

High recurring rate

Smooth transition to SaaS

120%+24%

SaaS Dollar Net Retention

Adjusted EBITDA Margin

Excellent SaaS KPIHigh profitability

Note: For FY2020

27

Synergy with Blue Yonder
Expect to develop synergies across CNS and whole Panasonic Group
Development /expansion of joint
solutions

Expand Gemba
Process businessglobally by accessing
Blue Yonder’scustomer baseAccelerate
expansion intoJapan market
starting with
manufacturingindustry

Reap benefits ofimplementing
Blue Yonder
solutions within
PanasonicGroup28

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Synergistic Effects Seen through Joint Efforts after 20% Acquisition
Convinced that the need for supply chain reform will increase after seeing
competitive advantage of business combining Gemba Process and Blue Yonder
Manufacture

Logisitics

Retail

Production planning / supply planning

Ordering plan / inventory plan

Forecasting

Operation
improvement andmanagement reformby reducing productnumbers (breaking
down vertical division
between departments)

Supply and demandplanning andinventory
optimization

Productivity
improvement andlabor shortage
elimination byreviewing operations
using image andflowline analysis

Plan the optimalwork plans

Eliminating productshelf shortages andreducing backyard
inventory byintroducing new
operation standards
and IT tools

Automate inventory
management andproductreplenishment

29

Go-To-Market Activities in Japan
Using the case study of Blue Yonder solutions in our own PC business, we have made great
progress with external sales development targeting top domestic manufacturers

Electronics

AutomotiveMachinery

Supply Chain Management Challenges- Centralization of global SCM plan
- Improve ability to respond to fluctuations
in demand and accuracy- Global production / procurement
restructuring- Improved visibility of the entire supply chain- Centralized global SCM plan
- Highly accurate demand forecastingand planning- Manage complex parts hierarchy- Effective use of packaged software- Automation of manual work andadjustment- Visualization and management ofperformance evaluation indicators

System Needs- Automate optimal PSI and supplyplanning- Speeding up delivery and reducing work
load
Target Customers- Semiconductor / parts manufacturers- Home appliances, precision equipment,
office equipment- Car manufacturers- Tier 1 and Tier 2 parts manufacturers- Control equipment manufacturer- Construction machinery / agricultural
machinery manufacturer
30

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.

Realizing the Autonomous Supply Chain™
Sensors

AI electronic
price tags

Productionequip.
CamerasParts / Stock status

Production instruction

Product sales info

Production status
Robotics

Dynamic pricing

AI / Machine
Learning

Robotics

Store stock status

Production line status

Handheld devices

Real time analysis /actionFacial recognition
devices

Sorting status

Customer demographics

Delivery status
CamerasCamerasShipment status

Sorting control

Robotics

31

Copyright (C) 2021 Panasonic Corporation All Rights Reserved.