IR Day SNC - Panasonic · solution business Expand Integrated network system in B2B market Expand...

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Copyright (C) 2012 Panasonic Corporation All Rights Reserved.

May 23, 2012

Panasonic CorporationSystems & Communications CompanySystems & Communications Company

President Takashi Toyama

Systems & Communications CompanySystems & Communications CompanyBusiness Strategy

Panasonic IR Day 2012

Notes: 1. This is an English translation from the original presentation in Japanese.

2. In this presentation, “fiscal 2012” or “FY 2012” refers to the yearended March 31, 2012. In addition, “fiscal 2013” or “FY 2013”refers to the year ending March 31, 2013.

1ContentsContents

Summary - FY2012 Overview

FY2013 Business Policy

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2Domain SummaryDomain Summary

［Overseas］Sales ： 4 （USA, Germany, China, Singapore）

Development/Manufacturing ：9（China, Malaysia, Vietnam etc.）

Major Locations

Number of Employees

Development/manufacturing/sales of communication and security equipment, and service/engineering sales including domains’ related products

Business

Activities

Approx. 27,000（Japan:13,000, Overseas:14,000）(*as of end of March, 2012)

[Japan]Sales： 12（Major cities throughout Japan）

Development/Manufacturing ：10（Tokyo, Yokohama, Shizuoka, Fukuoka, Saga）

2-3-8, Shimomeguro, Meguro-ku, Tokyo, JapanHeadquarter

Location

Toyama TakashiPresident

Systems & Communications CompanyCompany

Name

3Products 1 : Communication/SecurityProducts 1 : Communication/Security

CommunicationCommunication

SecuritySecurity

Smartphone Feature phone Fixed-line phone Business IP phone etcHome FAX

Network SecurityPayment Terminal Infrastructure Systems

Sales: Approx. 230.0 billion yen

Sales: Approx. 130.0 billion yen

Mobile phone sales：Approx. 130.0 billion yen

*Sales: based on FY2012 sales

Regional monitoring

Disaster prevention system etc

Security camera/recorder

Intercom

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4Products 2 : Panasonic Group ProductProducts 2 : Panasonic Group Product

ＡＶＣＡＶＣ ProductsProducts （ＡＶＣ（ＡＶＣ Networks Company productsNetworks Company products））

Environmental Products Environmental Products （（Energy Company products etcEnergy Company products etc））

Business display Notebook PC Broadcasting AV Projector

LED LightingSolar Panel Storage battery

Sales:Approx. 210.0 billion yen

Sales:Approx. 3.0 billion yen

*Sales: based on FY2012 sales

EV charging stand

Solar LED for road lighting

(All-in-one lithium-ion battery)

CATV

5Business ModelBusiness Model

Proposal

ＳＩInstall

Maintenance

Service

Japan

Consumer (Retailer etc.)

Public Office/infra.(Postal, Road,

Police etc.)

Enterprise(Logistic, Transport,

Finance etc.)

Mobile Carrier

SI vendor、Dealer、Distributor

Overseas

Public Office/infra.(Gov., Police etc.)

SI vendor, DealerDistributor

Enterprise(Food-service, Finance etc.)

Customer

SI/Install/Maintenance/Service

Solution (Distribution)Product/System

SN

C P

roductsS

NC

Products

Com

munication

Se

curity

Group P

roducts

ＡＶＣ

En

viron

me

nt e

tc

4


6

Panasonic Group Products (AVC/Environment etc.)

Business Features 1 : Strengths & IssuesBusiness Features 1 : Strengths & Issues

Communication

Security

Solution

StrengthsStrengths

StrengthsStrengths

StrengthsStrengths

IssuesIssues

・Fixed-line phone:

No.1 (31%)

・Home FAX in Japan:

No.1 (59%)

・Security Camera: No.1

(NW : 16%, Analog : 8%)

・Solutions for local governments

including regional surveillance,

disaster prevention system

・One stop solutionsystem design ~construction/service

・Long-term relationship with customers

・New sales channels/market development of industries

・Overseas promotion*Shares: FY2012 forecasts (source: Panasonic)

ＧＣＭＳ

StrengthsStrengths

・Consumer channels・Linking products

Market share S

trengthen p

roduct compe

titiveness/C

reate new

services

IssuesIssues

Expand Solution Business with Communication/Security & Group proExpand Solution Business with Communication/Security & Group productsducts

Market share

7Business Features 2 : Profit StructureBusiness Features 2 : Profit Structure

Solution sales generate profitSolution sales generate profit

Sales

Sales

structu

restru

cture

JapanJapan

OverseasOverseas

3030%%

1717%%

1010%%

1717%%

2323%%

33%%

Profitability

ProductProduct ProductProduct

Sales of S

ingle product

Sales of G

roup products

SourceSourceofof

ProfitProfit

So

lutio

nS

olu

tion

ProductProduct

SI/InstallSI/Install

Maintenance/ServiceMaintenance/Service

*Sales structure: based on FY2012 sales

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8FY2012 OverviewFY2012 Overview

Sales : 840.8 billion yen

(-10% vs. FY2011)

Sales : Sales : 840840..88 billionbillion yenyen

((--10% vs. FY201110% vs. FY2011)) The results were significantly affected by opportunity losses due to the earthquake in Japan and the flooding in Thailand, curbingor postponing investment in Japan and sales decrease becauseof weak economy in Europe

The results were significantly affected by opportunity losses due to the earthquake in Japan and the flooding in Thailand, curbingor postponing investment in Japan and sales decrease becauseof weak economy in Europe

Operating profit : 17.3 billion yen

(-30.3 billion yen from FY2011)

Operating profit : Operating profit : 1717..33 billion yen billion yen

((--30.3 billion yen from FY201130.3 billion yen from FY2011))

by category by region

(16%)

(30%)

Security

Others

840.8

Group products（AVC/Environment etc.）

(26%)

(63%)840.8

Japan

North America

Latin America

Europe

CISAsia/Oceania

China/North East Asia

Overseas etc.

Overseas(37%)

Middle East/Africa

(28%)

CommunicationDocument, device,affiliates etc.

Mobile phone:15%

Expand by Expand by solution solution businessbusiness

Sales structureSales structureSales structure(yen: billions)

9ContentsContents

Summary - FY2012 Overview

FY2013 Business Policy

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10FY2013 Business PlanFY2013 Business Plan

Sales

FY12 FY13

OverseasOverseas(37%)(37%)

(42%)(42%)

（yen: billions）

Operating Profit（yen: billions）

840.8

900.0

17.3

24.0

■■CommunicationCommunication FY13 sales target: FY13 sales target: 310310.0 billion yen (+.0 billion yen (+33%33% vs. FY12)vs. FY12)

1. Product: Smartphone 2. Solution: Expand integrated network system to B2B market

■■SecuritySecurity FY13 sales target: 150.0FY13 sales target: 150.0 billion yenbillion yen（（++21%21% vs. FY12vs. FY12））1. Products: NW camera (Full HD) etc. 2. Solution: Infrastructure global expand + Cloud

■■Expand sales of Group products with solution businessExpand sales of Group products with solution business

Priority Issue

(58%)(58%)JapanJapan（（63%63%））

Increase both in sales and profit by “strengthen products” & “solution expansion”Increase both in sales and profit by Increase both in sales and profit by ““strengthen productsstrengthen products”” & & ““solution expansionsolution expansion””

FY12 FY13

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Accelerate the shift to growing products

and BtoB markets where expansion of

businesses and profitability can be

expected with solutions business

Market share （FY2012 Forecast）Market Trend

Market SizeMarket Size((FY2012 FY2012 →→ FY2013FY2013))

Existing markets

1,229.2

956.2

(yen: billions)

*Based on our company’s research

Growing markets

1,119.8 1,163.6

Communication Business TrendCommunication Business Trend

・While demand for mobile phones is shrinkingin Japan, demand for smart phones is expanding （vs. FY12:+2%, unit base:+18%）

・Demand for business IP phones is expanding （vs. FY12:+25% ）

Market ConditionsMarket Conditions

・ 30% of the workforce is expected to be mobileworkers by 2015 (mobile worker: workforce who can work outside using ICT )

*Feature phone/Smartphone：on unit basis

vs FY12-22%

vs FY12+4%

Feature phone(Japan)

Fixed-linephone etc.

Smartphone(Japan)

Business IP-phone etc. 159%Home FAX (Japan)

31%

17%

Share

1Fixed-line phone

3Feature phone

(Japan)

Existing m

arkets

RankMain Category

－3%Business IP phone

4% 7Smart phone (Japan)

Gro

wing

markets

(yen: billions)

7


12

0

100

200

300

400

Major Strategy of Communication Business 1Major Strategy of Communication Business 1

Sales target

FY13 smartphone salesApprox. 140.0 billion yen

*”Google Play” and “Google Play logo” are trademarks or registered trademarks of Google Inc.

FY12 FY13

(yen: billions)

Feature phoneFixed-line phone

Business IP-phone etc.

Smartphone

Approx. 310.0

Expand worldwide by biaxial

1.Introduce “ELUGA” series to Japan

(FY13 sales target : 2.6 million units)

2.Enhance differentiation points

3.Full swing expansion to EU

(FY13 sales target : 1.5 million units)

Productstrategy

Priorityapproach

Enhancepersonal function

(AV function)

Enhancebusiness function

Concentrate on smartphone business

13Introduce “ELUGA” series to JapanIntroduce “ELUGA” series to Japan

Enhance differentiation features (PanasonicPanasonic’’s original functions)s original functions)

(1)Thin bezel display(1)Thin bezel displayLarge display but compact size

(2)Improved battery performance(2)Improved battery performanceLonger battery use＆high speed charge,

charge just by placing

(3)Strengthen security (safety)(3)Strengthen security (safety)Protect important information from

unauthorized access

Enhance basic functions Strengths of Panasonic

＋

Linkage improvement between productsLinkage improvement between products

AV products

White appliances

・・・・・・

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14Major Strategy of Communication business 2Major Strategy of Communication business 2

- “Package sales” by

linking to “Let’s note”

- promote collaboration with Internal System

Expansion bysolution business Expand Integrated network system in B2B market

Expand smart phone to corporate

・IP phone/Camerasolution for SOHO

Proposal focusedon business

・Dedicated terminal to versatile terminal

→Expand support to

various business

Professional use tablet

･Utilize internal phone

･Link with groupware

･Confirm camera image

Business IP phone

PTZ camera

DECT

0

2

4

6

FY12 FY13

(yen: billions)Sales target of

business IP phone

0

2

4

6

FY12 FY13

Sales target of professional use tablet

StoreDistribution

Finance･･･

Outside the office

(yen: billions)

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Market share (FY2012 forecast)

Security Business TrendSecurity Business Trend

Market Trend

・Shifting to IP is accelerating in security camera

Analog camera ：vs. FY12 : -5%

NW camera ：vs. FY12 : +21%

・Expansion of Infrastructure system due to revitalization demand in Japan

（vs. FY12 : +26%)

Market Size Market Size ((FY2012 FY2012 →→ FY2013FY2013))

*Based on our company’s research

Existing markets

1,177.2 1,221.1(yen: billions)

Growing markets

829.0968.9

(yen: billions)

Market ConditionsMarket Conditions

vs. FY12+4% vs. FY12

+17%

Analog camera

Payment terminal etc.

NW Security(NW Camera/Intercom etc.)

Infra System(Disaster prevention system)

Create new solutions business and

services focusing on NW camera

and lead the global market

－2%POS

2%

8%

Share

－Payment terminal

2Analog camera

Existin

g ma

rkets

RankMajor category

129%Disaster prevention system (Japan)

16% 2Network cameraGro

win

g m

arke

ts

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16

0

50

100

150

200

Major Strategy of Security Business 1Major Strategy of Security Business 1

NW security

Analog cameraAuthentication,

payment andinfra system etc.

Sales target

FY13 NW Security salesApprox. 40.0 billion yen

FY2011 FY2012

(yen: billions)

Approx. 150.0

Core product lineup for solution

Productstrategy

Multipleexpansions

Expansion of NW Security products

PTZ camera(→Traffic/Retail etc)

NW camera (Full HD)

Vehicle security/Wearable camera(→Police etc.)

Area/building/office use Home use

Access controlsystem

Intercom

17Major Strategy of Security Business 2Major Strategy of Security Business 2

- Image recognition （North America）

- Disaster prevention system（Asia） etc.

Expansion by solution business Global expansion of Infrastructure System & Enhance Cloud

Global expansion of Infra system

- Monitoring

(Building/office/residence)

- Image Analyzing

(Customer flows/human detection etc.)

Enhance Cloud Service

- System proposal, linking with communication products

For revitalization & For revitalization & disaster preventiondisaster prevention

(ex) Next disaster prevention system

Local Gov.Cloud

wireless sys.＋ smartphone

cloud ＋ one segment broadcasting collaboration

FY13 cloud sales target:

Approx. 10.0 billion yen

Customer’s benefits・No equipment installment・Service support etc.

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18Expand Group Product Sales by Solution BusinessExpand Group Product Sales by Solution Business

Solar power system

Lithium-ion rechargeable battery

Signage＋Operation

Expand JapanExpand Japan’’s s ““comprehensive solutioncomprehensive solution”” examples to overseasexamples to overseas

Next-gen environmental store for

Japan Kentucky Fried Chicken Co., Ltd.

Store systemAudio system

IT/AV

New proposal : signage, New proposal : signage, cloud etc.cloud etc.

Display

Infrastructure Network etc.

New proposal : solar New proposal : solar power generation, power power generation, power storage etc.storage etc.

Cooking. refrigerator etc.

Kitchen equipment

Lighting, conditioning

Building（incl. signboard, audience seat etc.）

Investment

Creatingcomfortable, optimum and safe store

Operationsupport by systemImprove customer service by receivingorders smoothly and speedily

(e.g.) Investment on food-service store

Panasonic’s com

prehensive solution

19Expand Solution Business in OverseasExpand Solution Business in Overseas

Enhance activities in U.S /Europe/Asia/China as priority areaEnhance activities in U.S /Europe/Asia/China as priority area

Propose solutions to BtoB globalcustomers for their local expansion

Global account strategy

Select priority industries, build sales structure and create “packages”

Create new demand by industry

FY13 sales target : 15.0 bil. yen FY13 sales target : 20.0 bil. yen

Police, Government,Education, Medical

Auto, Retail,Transport, Education

Government, Education, Medical, Service, Transport

Government, Corporate, Transport

Select 39 companies in U.S/Europe⇒5 regions including Japan collaborate to support clients

All area（1 company）

Multi area（14 companies）

Limited area（24 companies）

Customer Selection

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20Enhance ProfitabilityEnhance Profitability

Generate and e

xpand

Generate and expand

business for retained customers

business for retained customers

Sales

Sales

structurestructure

JapanJapan

OverseasOverseas

3030%%

1717%%

1010%%

1717%%

2323%%

33%%

Enhance profitabilityEnhance profitability by by expanding solutions business in overseasexpanding solutions business in overseas

ProductsProducts ProductsProducts

Single product sales

Group products sales

SourceSourceofof

ProfitProfit

So

lutio

nS

olu

tion

ProductsProducts

SI/InstallationSI/Installation

Maintenance/ServicesMaintenance/Services

*Sales structure: based on FY2012 sales

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12


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Disclaimer Regarding Forward-Looking StatementsThis presentation includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and

Section 21E of the U.S. Securities Exchange Act of 1934) 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 forward-looking 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 the Panasonic 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 no obligation 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 with the U.S. Securities and Exchange Commission pursuant to the U.S. Securities Exchange Act of 1934 and its other filings.

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 United States, Europe, Japan, China, and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; the ability of the Panasonic Group 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 in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions including the business reorganization after the acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO Electric Co., Ltd.; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; thepossibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; natural disasters including earthquakes, prevalence of infectious diseases throughout the world and other events that may negatively impact business activities of the Panasonic Group；as well as direct or indirect adverse effects of the Great East Japan Earthquake on the Panasonic Group in terms of, among others, component procurement, manufacturing, distribution, economic conditions in Japan including consumer spending and sales activities overseas, and direct or indirect adverse effects of the flooding in Thailand on the Panasonic Group in terms of, among others, component procurement and manufacturing. The factors listed above are not all-inclusive and further information is contained in Panasonic‘s latest annual reports, Form 20-F, and any other reports and documents which are on file with the U.S. Securities and Exchange Commission.

In order to be consistent with generally accepted financial reporting practices in Japan, operating profit (loss) is presented in accordance with generally accepted accounting principles in Japan. The company believes that this is useful to investors in comparing 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 overseascompanies, and impairment losses on long-lived assets are usually included as part of operating profit (loss) in the statement of income.

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