Fiscal 2020 Second Quarter
Financial Results
October 31, 2019
Panasonic Corporation

Notes: 1. This is an English translation from the original presentation in Japanese.
2. In this presentation, “Fiscal 2020” or “FY20” refers to the year ending March 31, 2020.

Summary of FY20 2Q Financial Results• 2Q results- Overall sales decreased (increased in real terms,)
adjusted operating profit* increased- Operating profit and net profit** decreased due mainly to costs related
to business structural reform and impact of one-off gains in previous year

• Full-year forecast- Sales are revised downward(mainly by revising assumed exchange rates)- Adjusted operating profit, operating profit and net profit
remain unchanged* Adjusted operating profit (Adjusted OP) = Sales - Cost of sales - SG&A
Disclosed from FY20 2Q as profit generated from business** Net profit attributable to Panasonic Corporation stockholders
Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

1

Fiscal 2020 2Q Financial Results
Fiscal 2020 Full-Year Financial Forecast
Progress of Mid-term Strategy

FY20 2Q Results•

Overall sales increased in real terms•

Adjusted operating profit increased, due mainly to sales increases in housing-related andconsumer electronics businesses in Japan, despite the impact of increased development
expenses at Automotive Solutions in Europe and lower sales in China persisting•

Operating profit and net profit decreased due mainly to costs related to business structuralreform and impact of one-off gains in the previous year

(yen: billions)

FY20 2Q
Sales

FY19 2Q

1,953.3

Adjusted operating profit **(Adjusted OPM)

Other income/loss ***vs. FY19 / Difference

1,999.5

94.1

92.2

(4.8%)(4.6%)

-10.2

3.0

-2%
(±0%)*

-46.2

+2%

+1.9

-

-13.2

-12%

-11.3

83.9

95.2

(4.3%)(4.8%)

Non-operating income/loss

-2.2

-0.1

-

-2.1

Profit before income taxes

81.7

95.1

-14%

-13.4

51.1

56.2

-9%

-5.1

1 US dollar

107 yen

111 yen

1 Euro119 yen

130 yen1 Renminbi

15.3 yen

16.4 yen

Operating profit(OPM)

Net profit
attributable to Panasonic Corporation
stockholders
Exchange
rates

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

* In real terms excluding the effect of exchange rates** Adjusted OP = Sales - Cost of sales - SG&A*** Other income/loss = Other income (expenses) +Share of profit of investments accounted for using
the equity method

3

Sales and Profit Analysis by Segment

Sales / Adjusted OPAPLS(yen: billions)

Sales & profit increased:
Stable sales of consumer electronics inJapan and overseas air-conditioning,
despite continuing sluggish overseas
sales of TVs

2,039.7 -36.9

1,999.5

IS

LS

CNS

AP*

-49.5

1,953.3
Effect ofexchangerates

In real terms excluding special factors:+40.2 (+2%)

-46.2

FY19
2Q

Sales & profit decreased:

Eliminations&
AM
adjustments,
etc*(Production & sales
consolidated)

Sales & profit increased:
Following 1Q, favorable sales of housingrelated businesses in Japan and electricalconstruction materials

IS
Following 1Q, weakening demand for
CNS capital investments in China continued

AM

Special factors(Impact of revised presentation incertain transactions)

Sales

Major increase/decrease factors

FY20
2Q

(In real terms excluding effect of exchange rates: +3.3)* Difference between “AP (Production & sales consolidated)” and“Segment information” is adjusted by “Eliminations & adjustments, etc.”

Sales increased:
Sales expanded in Automotive BatteriesProfit decreased:
Increased costs related to R&D expenses
in existing issues in Europe at Automotive
Solutions despite profit increase at
Automotive Batteries

Operating profit(yen: billions)
-4.2

IS

95.2
LS

AP*

Costs related to business structural

Effect ofexchange
rates

AM

Improved
head officeincome/expenses,
etc.

(Production& salesconsolidated)

Other
reform, impact of one-off gains in theincome/loss previous year, etc.

-13.2

CNS

83.9
Other
income/loss

Adjusted OP: +1.9

Note: Names of each Segment are as follows;
AP: Appliances
LS: Life Solutions
IS: Industrial Solutions CNS: Connected Solutions
AM: Automotive

FY19
2Q

FY20
2Q

OP: -11.3

4

Fiscal 2020 Second Quarter Financial Results

FY20 2Q Results by Segment••

Sales and profit increase: Appliances, Life Solutions
Profit decrease: Connected Solutions, Automotive, Industrial Solutions(yen: billions)

Sales

vs.
FY19

In real terms
excl. effect of
exchange rates

Adjusted
OP

vs.
FY19

Other
income/loss

vs.
FY19

vs.
FY19

OP

Appliances

686.8

±0%

+2%

23.1

+1.2

-0.2

-0.8

22.9

+0.4

Life Solutions

531.1

+5%

+5%

33.4

+11.0

-5.0

-5.5

28.4

+5.5

Connected
Solutions

263.4

-4%

-1%

22.6

-5.2

0.0

-1.6

22.6

-6.8

Automotive

369.8

±0%

+3%

-12.6

-5.5

-0.1

-0.1

-12.7

-5.6

Industrial
Solutions

330.8

-8%

-5%

14.3

-6.7

-3.1

-2.8

11.2

-9.5

Other

57.1

+24%

-

1.5

+0.5

-0.5

-1.0

1.0

-0.5

Eliminations andadjustments-285.7

-

-

11.8

+6.6

-1.3

-1.4

10.5

+5.2

Total

1,953.3

-2%

±0%

94.1

+1.9

-10.2

-13.2

83.9

-11.3

696.7

±0%

+3%

21.0

+1.3

-0.2

-0.8

20.8

+0.5

Appliances(Production and sales
consolidated)

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

5

Appliances

Segment Information(Production and sales consolidated)

Overview

Sales analysis(yen: billions)(yen: billons)vs. FY19/
Difference

FY20 2Q
Sales

696.7

±0％
(+3%)*

Adjusted
operating profit

21.0(3.0%)+1.3

Other
income/loss

-0.2

-0.8

Operating profit

20.8(3.0%)+0.5

Heating andCooling
Solutions

Others**Commercial
Refrigeration &Food Equipment

696.7
Effect ofexchange
rates

FY19
2Q

Major increase/decrease factors

Sales / Adjusted OP

Home
Appliances

695.3* In real terms excluding the effect of exchange rates

Heating andCooling
Solutions• Sales and profit increased due to stable growth inroom air-conditioners in Asia and Europe, as well aslarge-sized air-conditioners mainly in Japan

Home
Appliances• Sales and profit increased due to favorable sales inwashing machines, refrigerators and personal-care
products, etc. in Japan, in addition to stable growth
in refrigerators in Asia

Smart Life
Network• Sales and profit decreased due to sluggish sales of
TVs and digital cameras mainly in Europe, despite
stable sales of TVs and other products in Japan

Commercial
Refrigeration& FoodEquipment• Profit decreased due to sluggish sales for largescale stores and showcases in Japan, despite
stable sales growth in North America

Other
income/loss

Smart Life
Network

FY20
2Q

Operating profit analysis(yen: billons)

Smart Life
Network

Heating andCooling
Solutions

Others**Home
Appliances

20.3

Commercial
Refrigeration &Food Equipment

20.8

Effect ofexchange Other
rates income/loss

Adjusted OP: +1.3

• Impact of gains from reversal of provision in previous year
and costs related to restructuring in TV business, etc.

FY20
2Q

FY19
OP: +0.5
2Q ** Refrigeration and Air-Conditioning Devices BD, sales of other
Divisional Company products, headquarter-related, eliminations, etc.

6

Fiscal 2020 Second Quarter Financial Results

Segment Information

Life Solutions

Overview

Sales analysis(yen: billions)
FY20 2Q
Sales

531.1

vs. FY19/
Difference+5％(+5%)*

Adjusted
operating profit(6.3%)

33.4

+11.0

Other
income/loss

-5.0

-5.5

Operating profit(5.4%)

28.4

Others***(yen: billions)

Housing
Systems
EnergySystems

506.7

Lighting

Panasonic
Homes

531.1

Effect ofexchange
rates

Panasonic
Ecology
Systems+5.5* In real terms excluding the effect of exchange rates

Major increase/decrease factors

EnergySystems

Sales and profit decreased slightly due to lower sales in
Europe and U.S. despite favorable sales for India andIndonesia
Sales and profit increased due to growth driven by highfunctional products including home-use distribution panelboards in Japan

Panasonic
Ecology
Systems

Sales and profit increased due to favorable sales in
IAQ** business such as bath room dryer in China and“ziaino” in Japan

Housing
Systems

Sales and profit increased due to stable sales in waterrelated products and building materials in addition todrainpipes and roofing materials

Panasonic
Homes

Sales and profit increased due to sales growth in readybuilt housing and remodelling businesses

OthersSales and profit increased due to favorable sales mainly
in engineering business in Japan and prime contractor
business for buildings

Sales / Adjusted OP

Lighting

Other income/loss•

Costs related to structural reform, etc.

** IAQ (Indoor Air Quality)
Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

FY20
2Q

FY19
2Q

Operating profit analysis(yen: billions)

Others***

Housing
Systems
EnergySystems

22.9
Lighting

Panasonic
Homes

Panasonic
Ecology
Systems

Effect ofexchange
rates

28.4
Other
income/loss

Adjusted OP: +11.0
FY192Q

OP: +5.5

FY20
2Q*** Prime contractor business, bicycle, nursing-care, sales & marketing,eliminations, etc.

7

Segment Information

Connected Solutions

Overview

Sales analysis(yen: billions)vs. FY19/
Difference-4％(-1%)*

FY20 2Q
Sales

263.4

Adjusted
operating profit

22.6(8.6%)-5.2

Otherincome/loss

0.0

-1.6

Operating profit(8.6%)

22.6

Sales and profit decreased due to sales decrease in
IFEC** hardware, resulting from held back investments
by certain airline companies
Sales and profit decreased; in line with weakening
Chinese market conditions, postponed investment inmounting machines, and held-back investment byelectrical component manufactures due to decreased
automobile sales
Sales and profit decreased due to weakening demandfor projectors resulting from economic slowdown inEurope and shrinking demand of production cameras in
China

Sales / Adjusted OP•
Process
Automation

Media
Entertainment
MobileSolutions••

Sales and profit increased due to special demand withend of Windows 7 support leading to sales expansionof PCs for corporate clients in Japan•

Sales and profit increased due to replacement PC
demand with end of Windows 7 support and favorable
sales arising from Olympic-related projects

PSSJ***•

Other income/loss

Media
Entertainment
Avionics

263.4

PSSJ

Process
Automation

Effect ofexchange
rates

MobileSolutions

FY19
2Q

Major increase/decrease factors
•

274.8

-6.8

* In real terms excluding the effect of exchange rates

Avionics

Eliminations &adjustments,
Others(yen: billions)

Impact from gains of insurance in the previous year, etc.

** IFEC (Inflight entertainment + connectivity)*** Panasonic System Solutions Japan Co., Ltd.

FY20
2Q

Operating profit analysis(yen: billions)29.4

Eliminations &adjustments,
OthersMediaEntertainment
Avionics

PSSJ
Process
Automation

MobileSolutions

Effect ofexchange Other
rates income/loss

Adjusted OP: -5.2
FY19
2Q

FY20
2Q

OP: -6.8

8

Fiscal 2020 Second Quarter Financial Results

Segment Information

Automotive

Overview

Sales analysis(yen: billions)

FY20 2Q
Sales

369.8

Adjusted
operating profit

Operating profit

vs. FY19/
Difference±0％(+3%)*-12.6(-3.4%)

-5.5

-0.1

-0.1

-12.7
(-3.4%)-5.6

Other income/loss

22.6(yen: billions)

Effect ofexchange
Automotive
Batteries Others*** rates

369.8

369.4
Automotive
Solutions Tesla Energy* In real terms excluding the effect of exchange rates

Automotive
Solutions
Automotive
Batteries

Sales / Adjusted OP

Major increase/decrease factors
Sales:• Decreased: expansion of growth-expected products (e.g. IVI**)
could not offset the impact of lower sales from deteriorating
Chinese market situation and product cycle trend
Profit:• Decreased due to significantly increased development expenses- Increased development expenses to onboard charging systems
for orders received in Europe- Impairment loss on capitalized development expenses in
response to deteriorating profitability becoming apparent withonboard charging systems in Europe• Impact from lower sales due to product cycle trend
Sales:• Prismatic: Increased with investment effect for production
expansion at Dalian factory• Cylindrical: Significantly increased with investment effect for
production expansion at North America factory
Profit:• Improved overall with increased sales of prismatic types andcylindrical types in North America factory, offsetting impact of lower
sales of cylindrical types in Japan factory** IVI: In-Vehicle Infotainment

Operating profit analysis(yen: billions)

FY19
2Q

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

FY20
2Q

OP: -5.6
Adjusted OP: -5.5

Automotive
Solutions-7.1

Note: Grouping of Businesses whose sales are disclosed[Automotive Solutions] Automotive Infotainment Systems, HMI Systems, Automotive Systems, Ficosa
Fiscal 2020 Second Quarter Financial Results

FY20 2Q

FY19 2Q

Effect ofOtherexchange income/
loss
rates
Others***Automotive
Batteries

Tesla Energy-12.7***Others: sales of other Divisional
Company products, etc.

[Automotive Batteries] Automotive Energy, Tesla Energy

9Segment Information

Industrial Solutions

Overview

Sales analysis(yen: billions)(yen: billions)vs. FY19/
Difference

FY20 2Q
Sales

330.8

-8％
(-5%)*

Adjusted
operating profit

14.3(4.3%)-6.7

Other
income/loss

-3.1

-2.8

Operating profit

11.2(3.4%)-9.5

360.2
Systems Devices

Sales / Adjusted OP

OthersSales and profit decreased in FA sensors and motors withstruggling business conditions due to weakened investment
demand in China. Strategically reducing portable rechargeable
battery sales for ICT-usage also led to decreased sales.

Operating profit analysis(yen: billions)
20.7

Sales and profit decreased due to decreased sales ofcapacitors and other products due to slower investments in theserver market and China’s weakening automobile market,
despite stable sales of multi-layer printed circuit board
materials for communication infrastructure.
Profit improved due mainly to contract alteration insemiconductor business, despite decreased sales ofsemiconductor and LCD caused by deteriorated market
conditions.

Other income/loss

FY20
2Q

FY19
2Q

Major increase/decrease factors

Devices

330.8
Effect ofexchangerates* In real terms excluding the effect of exchange rates

Systems

Others**Systems
Devices Others** Effect of

exchange
rates

11.2
Other
income/loss

Adjusted OP: -6.7

• Legal expenses, etc.

Note: Grouping of Businesses whose sales are disclosed[Systems] Electromechanical Control, Industrial Device, Energy Solutions[Devices] Device Solutions, Energy Device, Electronic Materials

FY19
2Q

FY20
2Q

OP: -9.5** Includes semiconductor, LCD, sales of other Divisional Company products, eliminations, etc.

10

Fiscal 2020 Second Quarter Financial Results

FCF• During 1H of FY20, FCF improved due mainly to reduction of inventories andreview of investments• For FY20 Full-year, continue our efforts to improve FCF while making investmentsin the prismatic battery business
FCF (FY20 1H / Full-year)(yen: billions)

FY20 1H
Operating
CF

142.6

FY20 Full-year

Investment
CF-124.0Prismatic
batteries

18.6

10.3

-83.7

FY20
1H
(results)

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

FY19
1H(results)

FY20
Full-year(e)

FY19
Full-year(results)

11

Fiscal 2020 2Q Financial Results
Fiscal 2020 Full-Year Financial Forecast
Progress of Mid-term Strategy

FY20 Full-Year Forecast Revision• Sales are revised downward due mainly to revising assumed exchange rates• Adjusted operating profit, operating profit, and net profit remain unchanged(yen: billions)

FY20 (e)FY20 (e)(as of Oct. 31)(as of May 9)

Sales

7,700.0(Reference)

Difference

FY19

vs. FY19

7,900.0-200.08,002.7-302.7

300.0

-

327.0

-27.0

-

84.5
411.5

Adjusted operating profit*

300.0(Adjusted OPM)

(3.9%)（3.8%)

Other income/loss**
Operating profit

0.0
300.0

0.0
300.0

(OPM)

(3.9%)（3.8%)

Non-operating income/loss

-10.0

-10.0

-

5.0

-15.0

Profit before income taxes

290.0

290.0

-

416.5

-126.5

200.0

200.0

-

284.1

-84.1

1 US dollar

107 yen

110 yen-3 yen111 yen-4 yen1 Euro118 yen

125 yen-7 yen128 yen-10 yen1 Renminbi

15.6 yen

16.5 yen-0.9 yen

16.5 yen-0.9 yen

Net profit
attributable to Panasonic
Corporation stockholders

Exchange
rates(4.1%)(5.1%)-84.5-111.5* Adjusted OP = Sales - Cost of sales - SG&A** Other income/loss = Other income (expenses) + Share of profit investments accounted for using the equity method
Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

13

FY20 Segment Forecast Revision• Segment forecast revised reflecting current management conditions and future business environment- Appliances: sales forecast revised downward, profit forecast unchanged- Life Solutions: sales and profit revised upward- Connected Solutions, Automotive, and Industrial Solutions: sales and profit revised downward• Eliminations and adjustments: overall business risks, which were factored into initial forecast, areshown in each segment according to business conditions(yen: billions)Sales

vs. initial
forecast

vs. FY19

Adjusted vs. initial
vs. FY19
forecast
OPvs. initial
vs. FY19
forecast

OP

Appliances

2,690.0

-80.0

-60.6

84.0

-

+0.4

76.5

-

-9.1

Life Solutions

1,960.0

+10.0

-76.1

100.0

+12.5

+10.1

174.5

+12.5

+109.9Connected Solutions

1,110.0

-40.0

-17.7

84.0

-5.0

-15.9

82.0

-5.0

-12.4

Automotive

1,510.0

-67.0

-13.2

-39.5

-29.0

-27.7

-44.0

-29.0

-31.9

Industrial Solutions

1,330.0

-30.0

-92.3

60.0

-19.0

-3.5

51.0

-19.0

-17.6

300.0

-

-6.6

2.0

-

-2.0

0.0

-

-1.7

Eliminations andadjustments-1,200.0

+7.0

-36.2

9.5

+40.5

+11.6

-40.0

+40.5

-148.7Total

7,700.0-200.0-302.7

300.0

-

-27.0

300.0

-

-111.5

Appliances (Production

2,760.0

-90.0

-57.8

84.0

-

+2.8

76.5

-

-6.7

Other

and sales consolidated)

14

Fiscal 2020 Second Quarter Financial Results

Segment Forecast Revision Analysis
Major factors• Sales: revised downward due to lower sales of
TVs & digital cameras, etc. mainly in Europe
AP • Profit: unchanged with recovered sales ofconsumer electronics in Japan and airconditioning overseas

Sales / Adjusted OP• Sales and profit: revised upward mainly with
LS favorable performance of housing-related
business in Japan during 1H

Sales(yen: billions)7,900.0 -90.0
10.0
AP*(Production& salesconsolidated)

-30.0

-40.0

IS

LS

-67.0

CNS

17.0 7,700.0

Eliminations &AM adjustments,
etc.*• Sales and profit: revised downward in line

IS with changing our outlook of Chinese market
CNS from “gradual recovery in FY20 2H” to “samelevel as FY19 2H.”• Sales and profit: revised downward
Automotive Solutions:- Increased development expenses including
impairment loss on onboard charging systembusiness in Europe
AM - Lower sales due to weakening automotive
market conditions mainly in China Automotive
Batteries (cylindrical)- Delayed in improving productivity at North
America factory- Lower sales at Japan factory
Eliminations &adjustments,
etc.

• Sales and profit: business risks factored-in
Company-wide for initial forecast shown in eachsegment, improved head office income/expenses,
etc.

Other income/loss(Unchanged from initial forecast)Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

FY20 (e)FY20 (e)Sales: -200.0(as of May 9)

Operating Profit

Business risks factored-in Company-wide for
initial forecast shown in each segment, etc.

(yen: billions)
300.0 ±0.0
AP*
(Production& salesconsolidated)

12.5

Improved head officeincome/expenses, etc.

-19.0
-5.0

LS

IS

(as of Oct. 31)±0.0 300.0

-29.0

Other
income/
loss

CNS
AM
Eliminations &adjustments, etc.*+40.5

Adjusted OP: ±0.0
FY20 (e)(as of May 9)

Operating profit: ±0.0

FY20 (e)(as of Oct. 31)* Difference between “AP (Production & sales consolidated)” and“Segment information” is adjusted by “Eliminations & adjustments, etc.”

15

Fiscal 2020 2Q Financial Results
Fiscal 2020 Full-Year Financial Forecast
Progress of Mid-term Strategy

Communication on Progress of Mid-term Strategy
May 9
Mid-term Strategy■Mid-term Portfolio Strategy

Jul 31
1Q Results

Revitali-zationbusiness

Nov 22
IR DAY●●●In-depth development of strategies at Core growth, Revitalization and Co-creation
・CEO:

・Relevance of portfolio

Announced policies on new
three business portfolio
classificationsCoregrowthbusiness

Oct 31
2Q Results

classification in Mid-term
Strategy and disclosed segments

Ref.

Co-creation
business・Core growth business results

Mid-term Strategy and its progress(tentative title)

・Company presidents:

Initiatives for medium-term perspective(5 Segments + China & Northeast Asia）

Update every half-year

Ref.

■Specific Initiatives in
Portfolio Reform

Execution of action plan: enhance competitiveness through Co-creation and improve profitability

Announced specific projects
Enhancecompetitiveness throughCo-creation

Improve
profitability

Automotive Prismatic battery(Jan 22)

Town development (May 9)
Discrete semiconductor (Apr 23)

Individual developments to be announced as soon as resolved

Security systems(May 31)

Solar (May 9)
●● ●

・・・

■Enhancement of Management
Structure

Establish project structure, and formulate, execute and follow up action plans

・ Reduce fixed costs aiming at 100.0
billion yen of profit contribution in
FY22・Specific contents and amount■Optimize Senior Management
・Clarify management responsibilities
・Flexible business execution structure

Aug 30
Reform ofManagement
Structure

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

New management structure implemented from Oct 1(Executive Officers and business execution layer）

17

Disclaimer Regarding Forward-Looking Statements
This presentation includes forward-looking statements about Panasonic and its Group companies (the Panasonic Group). To the extent
that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements. These forwardlooking statements are based on the current assumptions and beliefs of the Panasonic Group in light of the information currently available
to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause thePanasonic Group's actual results, performance, achievements or financial position to be materially different from any future results,
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 further
disclosures by Panasonic in its subsequent filings under the Financial Instrument and Exchange Act of Japan (the FIEA) and other publicly
disclosed documents.
The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer
spending and corporate capital expenditures in the Americas, Europe, Japan, China and other Asian countries; volatility in demand forelectronic equipment and components from business and industrial customers, as well as consumers in many product and geographicalmarkets; the possibility that excessive currency rate fluctuations of the U.S. dollar, the euro, the Chinese yuan and other currencies
against the yen may adversely affect costs and prices of Panasonic’s products and services and certain other transactions that are
denominated in these foreign currencies; the possibility of the Panasonic Group incurring additional costs of raising funds, because ofchanges in the fund raising environment; the possibility of the Panasonic Group not being able to respond to rapid technological changes
and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive interms of both price and technology; the possibility of not achieving expected results or incurring unexpected losses in connection with thealliances or mergers and acquisitions; the possibility of not being able to achieve its business objectives through joint ventures and othercollaborative agreements with other companies, including due to the pressure of price reduction exceeding that which can be achieved by
its effort and decrease in demand for products from business partners which Panasonic highly depends on in BtoB business areas; thepossibility of the Panasonic Group not being able to maintain competitive strength in many product and geographical areas; the possibilityof incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Groupmay face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by othercountries over trade, manufacturing, labor and operations; restrictions, costs or legal liability relating to laws and regulations or failures ininternal controls; fluctuations in market prices of securities and other financial assets in which the Panasonic Group has holdings orchanges in valuation of non-financial assets, including property, plant and equipment, goodwill and deferred tax assets; future changes orrevisions to accounting policies or accounting rules; the possibility of incurring expenses resulting from a leakage of customers’ or
confidential information from Panasonic Group systems due to unauthorized access or a detection of vulnerability of network-connected
products of the Panasonic Group; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout theworld, disruption of supply chain and other events that may negatively impact business activities of the Panasonic Group. The factors
listed above are not all-inclusive and further information is contained in the most recent English translated version of Panasonic’s
securities reports under the FIEA and any other documents which are disclosed on its website.

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

(Reference) Relevance of Portfolio Classification in Mid-term Strategy andDisclosed Segments
Portfolio
Classification

Core growthbusiness

Business areas

Appliances

Life
Solutions

SpatialSolutions

Heating andCooling Solutions,
Commercial
Refrigeration &Food Equipment

Lighting,
Energy Systems*,
Panasonic
Ecology Systems

Connected
Solutions

Automotive

Media
Entertainment

Avionics, Process
Automation,
Mobile Solutions,
PSSJ

Gemba
Process

Industrial
Solutions

Revitalization
business

Co-creation
business

Systems,
Devices

Automotive
Solutions

Automotive
Solutions

Automotive
Batteries

Automotive
Batteries

ConsumerElectronics

Industrial
SolutionsHome Appliances,
Smart Life
Network
Housing Systems,
Panasonic Homes

Housing* Does not include Solar business

20

Fiscal 2020 Second Quarter Financial Results(Reference) Core Growth Business: FY20 1H Results
Spatial Solutions: profit increased due to stable growth in air-conditioning in Japan and overseas, as well as inelectrical construction materials
Gemba Process & Industrial Solutions: profit decreased due to impact from weakening demand for capital investment
in China(yen: billions)
Business area

FY20 1H
Sales

SpatialSolutions

Gemba
Process

Industrial
SolutionsCore growthbusiness
Total

981.3

Adjusted OP

58.7(Adjusted OPM)

(6.0%)EBITDA

77.7(EBITDA margin)(7.9%)

Sales

438.3

Adjusted OP

31.9(Adjusted OPM)

(7.3%)EBITDA

41.7(EBITDA margin)(9.5%)

Sales

594.4

Adjusted OP

34.9(Adjusted OPM)

(5.9%)EBITDA

59.3(EBITDA margin)(10.0%)

Sales

2,014.0

Adjusted OP

125.5(Adjusted OPM）

(6.2%)EBITDA

178.8(EBITDA margin)(8.9%)

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

vs. FY19 1H
+21.0
+6.5
+3.9
-25.5
-11.2
-13.8
-60.1
-15.6
-18.5
-64.6
-20.3
-28.4

21

(Reference) Business Portfolio Reform Progress (2019)
Agreement with Toyota Motor Corporation to establish a joint venture related toautomotive prismatic battery business (Announced on January 22)• Competition law review complete: in preparation aiming for business commencement in spring 2020

Improvecompetitivenessthrough
Co-creation

Agreement with Toyota Motor Corporation to establish a joint venture related totown development (Announced on May 9)• JV scheduled to be established in January 2020 (subject to approval from relevant authorities)

Strategic co-investment of security systems business (Announced on May 31)• Reorganization scheduled for November 2019 (subject to approval from relevant authorities)

Transfer part of discrete semiconductor business (Announced on April 23)• Completion scheduled for end of November 2019

Optimize development & production capability of solar business
Improve
profitability(Announced on May 9)• Reorganization scheduled for December 2019 (subject to approval from relevant authorities)

Radical measures for low-profitable and unprofitable businesses• Narrowing down regions and businesses for consumer electronics:
structural reform of TV in progress (terminated TV production in Mexico at the end of July 2019)• Strengthening profit structure for semiconductor (e.g. contract alteration)
●●●

●●●

Note: underlined parts indicate
updates from 1Q announcement

Further promotion of business portfolio reform
22

Fiscal 2020 Second Quarter Financial Results(Reference) FY20 2Q Operating Profit Analysis(yen: billions)

+9.3

-3.1

-6.7

+6.6

-4.2

95.2
Fixed cost
Sales
(Automotive
increase
Batteries)
in real terms

Fixed cost Fixed cost
(Automotive (Others)
Solutions)Price declines/ Effect ofrationalization/ exchange
product mix,
rates
etc.

-13.2
83.9
Other
income/loss

Restructuring,legal expenses,
etc

Adjusted OP: +1.9
FY19 2Q

OP: -11.3

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

FY20 2Q

23

(Reference) FY20 2Q Operating Profit & Net Profit(yen: billions)

FY20 2Q

FY19 2Q

vs FY19 2Q

Operating profit

83.9

95.2

-11.3

Non-operating income/loss

-2.2

-0.1

-2.1

Profit before income taxes

81.7

95.1

-13.4

Income taxes

-26.3

-34.9

+8.6

Net profit

55.4

60.2

-4.8

Net profit attributable to Panasonic
Corporation stockholders

51.1

56.2

-5.1

Net profit attributable to non-controllinginterests

4.3

4.0

+0.3
24

Fiscal 2020 Second Quarter Financial Results(Reference) FY20 Six-Month (Apr. – Sep.) Results(yen: billions)

FY20 6M

FY19 6M

vs. FY19 / Difference

Sales

3,844.4

4,008.2-4%(-2%)*-163.8Adjusted operating profit**

156.5(4.1%)

173.8(4.3%)

-10%

-17.3

-16.2

21.4

ー

-37.6

140.3
(3.6%)

195.2(4.9%)

-28%

-54.9

Non-operating income/loss

-2.4

2.1

ー

-4.5

Profit before income taxes

137.9

197.3

-30%

-59.4

100.9

113.6

-11%

-12.7

109 yen

110 yen(Adjusted OPM)

Other income/loss***
Operating profit(OPM)

Net profit
attributable to Panasonic Corporation
stockholders

1 US dollar
Exchange
Rates

1 Euro121 yen

130 yen1 Renminbi

15.7 yen

16.8 yen

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

*

In real terms excluding the effect of exchange rates** Adjusted operating profit (Adjusted OP) =sales - cost of sales - SG&A*** Other income/loss = other income (expenses) +Share of profit of investments accounted for using
the equity method.

25

(Reference) List of Businesses whose sales are disclosed in FY20
Businesses

Appliances(AP)• Heating and Cooling Solutions• Home Appliances• Smart Life Network• Commercial Refrigeration &Food Equipment

Major Business Divisions: Heating and Cooling Solutions BD: Kitchen Appliances BD, Laundry Systems and Vacuum Cleaner BD,
Beauty and Personal Care BD: Smart Life Network BD: Cold Chain BD, Hussmann Corporation

Life Solutions
(LS)

•
•
•
•
•

Lighting
Energy Systems
Panasonic Ecology Systems
Housing Systems
Panasonic Homes: Lighting BD: Energy Systems BD: Panasonic Ecology Systems Co., Ltd.
: Housing Systems BD: Panasonic Homes Co., Ltd.

Connected
Solutions
(CNS)

•
•
•
•
•

Avionics
Process Automation
Media Entertainment
Mobile Solutions
PSSJ: Panasonic Avionics Corporation, Avionics BU: Process Automation BD: Media Entertainment BD: Mobile Solutions BD: Panasonic System Solutions Japan Co., Ltd.

Automotive(AM)• Automotive Solutions: Automotive Infotainment Systems BD, HMI Systems BD,
Automotive Systems BD, Ficosa International, S.A.

• Automotive Batteries: Automotive Energy BD, Tesla Energy BD

Industrial
Solutions(IS)• Systems: Electromechanical Control BD, Industrial Device BD,
Energy Solutions BD• Devices: Device Solutions BD, Energy Device BD, Electronic Materials BD

Note: Sales and profit of China & Northeast Asia Company are mainly included in AP and LS segments. Sales and profit of US Company are mainly included in AP and AM segments.

Fiscal 2020 Second Quarter Financial Results

Copyright (C) 2019 Panasonic Corporation All Rights Reserved.

26