ir day ec - panasonic power supply system of solar generation system & li-ion batteries energy...

1Copyright (C) 2012 Panasonic Corporation All Rights Reserved.

May 23, 2012

Panasonic Corporation

Energy Company

President Masato Ito

Energy Company Business 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.

2ContentsContents

1. Domain Outline

2. Business Policy/Growth Strategy

3. Summary

1. Domain Outline


3. Summary

2


3ContentsContents

1. Domain Outline


3. Summary

1. Domain Outline


3. Summary

3

4Energy Company OutlineEnergy Company Outline 4

■Company Name

Energy Company

■ President Masato Ito

■ Incorporated January, 2012

■Business Contents

Development , manufacture and sales of primary and rechargeable batteries, chargers, battery applied products, and photovoltaic system related products

■ Headquarter 1-1, Matsushita-cho, Moriguchi city, Osaka, Japan

■ Sites 50 sites (Japan:19, Overseas:31)

■Number of Employees

Approx. 25,000 (Japan : approx. 9,000)*as of April 1, 2012


5Major BusinessesMajor Businesses

Photovoltaic System

Lithium-ion Batteries

Dry Batteries

OtherProducts

6Competitive AdvantagesCompetitive Advantages

Wide-range product line-up

Black Box technologyof design and manufacturing

・Global manufacture structure ・Supply chain

・Solid customer base・Variety of business・Global sales channel

Integrated business modelby development, manufacture and sales functions

DevelopmentDevelopment

SalesSalesManufactureManufacture


7

Sales Operating profit

FY2012 ResultFY2012 Result

Overall sales declined from last year due mainly in the weak sales of lithium-ion batteries for consumer use on the back of deterioration of the market, strong yen and flooding in Thailand

Operating loss increased due to weak sales and price decline

FY2011 FY2012

614.9 (-3%)

-20.9 (-5.7)

637.0

-15.2

*( ) = vs. FY2011

FY2011 FY2012

(yen: billions)

8ContentsContents

1. Domain Outline


3. Summary

1. Domain Outline


3. Summary

8


9Energy Company Business StrategyEnergy Company Business Strategy

Concentrate management resources on solar & lithium-ion battery businesses (consumer,

automotive, storage) as key businesses

Establish optimum global structure for development, design, procurement,

manufacture and sales

10

Growth Strategy of Solar Business Growth Strategy of Solar Business

10


11Global Market Forecast <Solar Business>Global Market Forecast <Solar Business>

2012 2013 2014 2015 2016 (FY)

*Estimated by Panasonic

GW

27

23

27

33

38

10

20

30

40

0

Average annual growth rate after FY2013: 20%

Large-scale market

Residential market

Commercial market

Japan

North America

EU

Others

12Competitive Advantages of "HIT® Solar Cell"Competitive Advantages of "HIT® Solar Cell"

*1: Based on the Company's survey using the "Annual Predicted Power Generation Calculation Formula" of Solar Power Generation Standard Group in the domestic residential solar power generation system industry

*2: Conversion value by setting the conversion efficiency at 25C to 1

14

16

18

20

22

23

97 99 01 03 05 07

21

15

17

19

09 10 11 12

Temperature vs. efficiencyTemperature vs. efficiencyTemperature vs. efficiency

★

★

1.1

1.0

0.9

0.8

0.7

706050403020

ＨＩＴ

（（100cm100cm22））

Industry's highest level power generation quantity *1

Industry's highest level power generation quantity *1

HIT® maintains high output powereven at high temperatures

HIT® maintains high output powereven at high temperatures

Nor

mal

ized

effi

cien

cy*2

Cel

l con

vers

ion

effic

ienc

y (%

)

Polycrystalline

Temperature (C)(FY)

HIT mass production level

LabLab

Mass Mass productionproduction


13Growth Strategy of Solar Business (1)Growth Strategy of Solar Business (1)

EU Others

FY2016 market scale by region and by application

Residential

Commercial

Focus on deploying HIT in the residential market whichappreciates higher conversion efficiency as added value

Apply HIT and polycrystalline to the commercial market

Features: In Japan, the market expands due to the subsidy policyA high efficiency product is more suitable for a limited roof area

Propose solutions by primarily offering cost competitive polycrystalline products

Features: Market is price sensitive and requires system solution

Cost preference

38GW

Expand HIT sales through improving performance

Efficiency preference

Main battle field of HIT

North America

Polycrystalline

Large-scale


14

Toward No.1 domestic market share in FY2013

Panasonic Group'ssales infrastructureExpand sales drastically

through its broad range of sales channels

Provide energy creation-storage coordination systems

Differentiate from other companies by taking advantage of HIT modules and solution offering

HIT®HIT®

High conversion efficiency and reliability

High conversion efficiency and reliability

Solar battery

Electric power companyElectric power company

Lithium-ion storage

battery unit

Power station

Equipment requiring Equipment requiring operation even during operation even during

a power failurea power failure

Energy creation-storagelinked system (image)

Growth Strategy of Solar Business (2)Growth Strategy of Solar Business (2)

Power distribution Power distribution panelpanel

(For backup purposes)(For backup purposes)

Power Power distribution paneldistribution panel


15

●Enhancement of HIT competitiveness: supply capacity and cost

Start of production: December 2012 Expansion by 1.5 timesCell supply capacity: 600MW (end of FY2012)

900MW (after operation starts at Malaysian factory)

●Further product competitiveness enhancement of HIT Further improvement of conversion efficiency, acceleration of

next-generation HIT products

* Based on the Company's survey using the "Annual Predicted Power Generation Calculation Formula" of Solar Power Generation Standard Group in the domestic residential solar power generation system industry

Launch the products with 23% or higher conversion efficiency in FY2014

Growth Strategy of Solar Business (3)Growth Strategy of Solar Business (3)

Integrate production process from wafers to cells, modules in the new Malaysian factory

Continue the "industry's highest level power generation quantity"*

16

Growth Strategy of Lithium-ion Batteries Business

Growth Strategy of Lithium-ion Batteries Business

16


17Global Market Forecast ＜Lithium-ion batteries＞Global Market Forecast ＜Lithium-ion batteries＞

FY2012 FY2016

21

31

1

11

1.5

24 26 29

35

9 0.8

0.40.20.05

FY2012 FY2016 FY2012 FY2016

Consumer：Focus on profitability

900billion yen

1.5trillion yen

Automotive：Expand sales in all directionsAutomotive：Expand sales in all directions

Storage:Enter the market at the time of its creationStorage:Enter the market at the time of its creation

FY2016FY2012

Consumer Automotive Storage

●GWh base

●Amount base＜strategies by Energy Company＞


Market annual growth 10%

FY2016 marketexpands about30 times（VS FY2012）

FY2016 market expands about 11 times（VS FY2012）


18

Technology

Cost

SCM

Competitive Advantages of Lithium-ion Battery BusinessCompetitive Advantages of Lithium-ion Battery Business

Wide Range of Customers

General consumers

PC manufacturers

Automotive manufacturers

Electric appliancemanufacturers

PT manufactures

Education institutions

Governments

・・・Global optimal manufacture

・Speedy model development

・High efficiency production・Low cost design・Low cost materialsBased upon black box technology & competitiveness of manufacturing

・High reliability ・High durability・High capacity ・High powerBased upon black box technology &competitiveness of manufacturing

Build closerrelationship

Faster and deeper

communication with customers

Inte

grat

ion

of d

evel

opm

ent,

man

ufac

turi

ng a

nd s

ales

func

tions


19Growth Strategy of Lithium-ion Battery Business (Consumer)(1)Growth Strategy of Lithium-ion Battery Business (Consumer)(1)

●Change business structure and enhance cost competitivenessEnhance cost competitiveness through integrated production of battery plates, cells and packs

Suzhou new factory (as of May）Mass production starts：1st half in FY2013

20%(FY2012) 50%(FY2013)

20%(FY2012) 30%(FY2013) 50%(FY2014)

Suzhou

Beijing

Wuxi

Material procurementin China & Korea

Material procurementin China & Korea

Production in ChinaProduction in China

20Growth Strategy of Lithium-ion Battery Business (Consumer)(2)Growth Strategy of Lithium-ion Battery Business (Consumer)(2)

Note PC (conventional)

Smartphone

Slim Line Note PCUltrabook PCTablet PC

ProductsTarget markets

(Low) Cost (high)

Note PC(conventional) Slim Line Note PC

Ultrabook PC

Cylindrical cell(18650)

Cylindrical cell(small diameter)

Prismaticcell

Prismatic cell(large area) Pouch cell

Th

ickn

ess

ofb

atte

ry p

ack

●Respond to market change speedily & expand business by supplying optimal batteries

Tabllet PC

Motor, Storage

Prismatic cellPrismatic cell

(Th

in)

(Thi

ck)

Cylindrical cell

Cylindrical cell

Cylindrical cell

Prismatic cell(large area)

Prismatic cell(large area)

Pouch cell

Pouch cell

Cell line-ups for Note PC & examples


21Growth Strategy of Lithium-ion Battery Business (Automotive)Growth Strategy of Lithium-ion Battery Business (Automotive)

●Secure sales volume■Secure sales volume with sales strategy of all directions

Firm orders from global major car manufacturers (more than 10 models in 5 car makers)

Expand Business in All Directions

FY2016 sales for automotive 130.0 billion yen

●Increase production capacity■Increase production capacity in 6 mass production lines

from FY2013

Audi (Germany)「Q5」

Ford (US)「Fusion, C-Max」

Toyota「Prius PHV」

Tesla (US)「Model S」

22

Li-ion batterystorage unit

Growth Strategy of Lithium-ion Battery Business (Storage)Growth Strategy of Lithium-ion Battery Business (Storage)

Examples of lithium-ion batteries for storage application

Battery storage system for public & industrial use

Battery storage system for industrial & residential use

Energy creation-storagelinked system for housing use

15kWh 1.6/3.2 kWh

4.65 kWh

Hybrid car carrier equipped with hybrid power supply system of solar generation system & Li-ion batteries

Energy creation-storagelinked system at fast-foodshop

Applications for storage are expanding in various fields

Environmentally-conscious station（JR Yotsuya station）

PV System

Power station


23ContentsContents

1. Domain Outline


3. Summary

1. Domain Outline


3. Summary

23

24

Sales Operating profit

FY2013 ForecastFY2013 Forecast

FY2012 FY2013 FY2012 FY2013

Strong sales mainly in solar, lithium-ion batteries for consumer and car use

Return to profitability due mainly to sales increase and cost reduction

660.0 (+7%)

3.0(+23.9)

614.9

- 20.9

(yen: billions)


25

MissionLead and contribute to making Panasonic as No.1 Green Innovation Companyin the electronics industry

Energy Company Mission & FY2016 TargetEnergy Company Mission & FY2016 Target

Sales: More than 1 trillion yenOperating profit: double digit

FY2016Target

FY2012 FY2016

26


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.

ir day ec - panasonic power supply system of solar generation system & li-ion batteries energy...

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