| [April 28, 2006] |
 |
Matsushita Reports Annual Net Profit Increase; Sales and Earnings up for Fourth Consecutive Year
OSAKA, Japan --(Business Wire)-- April 28, 2006 --
(Note: Dollar amounts for the most recent period have been translated for convenience at the rate of U.S.$1.00 = 117 yen.)
Matsushita Electric Industrial Co., Ltd. (Matsushita (NYSE: MC)) today reported its annual financial results for the year ended March 31, 2006 (fiscal 2006).
Consolidated Results
Consolidated group sales for fiscal 2006 increased 2%, to 8,894.3 billion yen (U.S.$76.02 billion), from 8,713.6 billion yen in the previous fiscal year. Explaining fiscal 2006 results, the company cited sales gains in digital audiovisual (AV) products, especially V-products. Of the consolidated group total, domestic sales increased 1% to 4,611.4 billion yen ($39.41 billion), compared with 4,580.5 billion yen a year ago. Overseas sales were up by 4%, to 4,282.9 billion yen ($36.61 billion), from 4,133.1 billion yen in fiscal 2005, ending March 31, 2005.
During the fiscal year under review, the global economy was favorable overall, with strong growth in the United States and China, as well as a moderate economic recovery in Japan. The electronics industry as a whole continued steady growth, with strong demand for IT-related products and rapid market expansion in flat-panel TVs, in addition to an upturn in the components and devices industry. However, a severe business environment continued due mainly to rising raw materials costs and price declines mainly in digital AV products, caused by intensified global competition. Under these circumstances, Matsushita viewed fiscal 2006, the second year of the mid-term management plan Leap Ahead 21 ending March 31, 2007, as a crucial year in establishing growth at each business domain company. To achieve the goals of this management plan, the company implemented growth strategies and strengthened management structures, resulting in a certain degree of success.
Matsushita aggressively launched and promoted a new series of V-products to capture top shares in high-volume markets and make a significant contribution to overall business results. The company also continued its focus on simultaneous global product introductions in digital AV and other product categories to continually expand priority businesses. As part of collaboration activities with Matsushita Electric Works, Ltd. (MEW), in April 2005, Matsushita reorganized overlapping businesses and sales channels in such areas as electrical supplies, building equipment and home appliances. The company also launched Collaboration V-products such as bathroom systems and air purifiers, while utilizing MEW marketing channels to increase sales of air conditioners. Aiming to reinforce its management structures, the company has made all-out efforts to reduce materials costs and other expenses. These activities, including company-wide cost reduction activities, have contributed to enhanced profitability, despite a severe management environment.
Regarding earnings, negative factors such as increased raw materials costs and intensified global price competition were more than offset by sales gains, comprehensive cost reduction efforts and other positive factors. As a result, consolidated operating profit(1) for this fiscal year increased 34%, to 414.3 billion yen ($3.54 billion), compared with 308.5 billion yen in the previous year. In other income (deductions), the company incurred 37.0 billion yen in expenses associated with the implementation of early retirement programs, 85.3 billion yen as impairment losses associated with such businesses as CRT TV and 24.9 billion yen as expenses associated with a recall of certain kerosene fan heaters, which the company manufactured and sold in Japan between 1985 and 1992. Meanwhile, the company recorded a 78.9 billion yen gain on sale of marketable securities and 22.5 billion yen related to the liquidation of a consolidated subsidiary, MEI Holding Inc. (MHI)(2). These factors, as well as increased operating profit, led to a consolidated pre-tax income of 371.3 billion yen ($3.17 billion), up 50% from 246.9 billion yen a year ago. Net income for the fiscal year, despite the adverse effects of equity in losses of CRT TV-related associated companies, totaled 154.4 billion yen ($1.32 billion), an increase of 164% from 58.5 billion yen in the previous year. Net income per common share for the fiscal year was 69.48 yen ($0.59) on a diluted basis, versus a net income per common share of 25.49 yen a year ago.
Consolidated Sales Breakdown by Product Category(3)
The company's annual consolidated sales by product category, as compared with prior year amounts, are summarized as follows:
AVC Networks
AVC Networks sales increased 4% to 3,688.3 billion yen ($31.52 billion), compared with 3,558.8 billion yen in the same period of the previous year. Sales of video and audio equipment increased 6% from the previous year, due mainly to strong sales of digital AV products, such as plasma TVs and digital cameras.
Sales of information and communications equipment increased 2%, mainly a result of sales gains in PCs and automotive electronics, which were more than sufficient to offset decreased sales in cellular phones.
Home Appliances
Sales of Home Appliances increased 2% to 1,183.1 billion yen ($10.11 billion), compared with 1,156.5 billion yen in the previous year. Within Home Appliances, sales gains were recorded in air conditioners and microwave ovens, which were sufficient to offset decreased sales in vacuum cleaners and other household equipment, resulting in overall increased sales.
Components and Devices
Sales of Components and Devices decreased 2% to 1,086.6 billion yen ($9.29 billion), compared with 1,112.5 billion yen in the previous year. Sluggish sales in semiconductors for the fiscal year, despite increased sales in electronic components and devices, led to overall lower sales in this category.
MEW and PanaHome
Sales of MEW and PanaHome increased 1% to 1,570.8 billion yen ($13.43 billion) from 1,559.0 billion yen a year ago. Sales at MEW and its subsidiaries were mostly unchanged from the previous year, with favorable sales in electrical construction materials and automation controls. At PanaHome Corporation, sales gains were recorded in detached housing, contributing to increased sales.
JVC
Sales for JVC (Victor Company of Japan, Ltd. and its subsidiaries) totaled 699.0 billion yen ($5.97 billion), down 3% from 717.8 billion yen a year ago. Despite favorable sales in software and media, sales downturns in AV equipment and devices led to overall decreased sales compared with a year ago.
Other
Sales for Other increased 9% to 666.5 billion yen ($5.70 billion), from 609.0 billion yen a year ago. Strong sales were recorded in factory automation (FA) equipment, resulting in overall increased sales in this category.
Non-Consolidated (Parent Company Alone) Results
Parent-alone sales increased 8% to 4,472.6 billion yen, from 4,145.7 billion yen in the previous year. Strong sales of AVC Networks, particularly in digital AV products, contributed to overall sales gains.
Regarding parent-alone earnings, the increase in sales and company-wide cost reduction efforts resulted in a parent-alone operating profit of 123.2 billion yen, up 39% from 88.4 billion yen in fiscal 2005. Recurring profit also increased 86% to 216.4 billion yen, compared with 116.3 billion yen in the previous year, mainly a result of an increase in dividend income. The parent company recorded a non-recurring income of 67.1 billion yen related to the sale of securities, while incurring non-recurring losses, including 113.2 billion yen as restructuring expenses including losses related to the closing of overseas CRT TV-related factories, 184.5 billion yen as a loss on valuation of securities associated with the liquidation of MHI and 24.9 billion yen as expenses resulting from the aforementioned recall of kerosene fan heaters. These and other factors resulted in a parent-alone net income of 20.4 billion yen, down 72% from 73.5 billion yen a year ago.
Consolidated Financial Condition
Net cash provided by operating activities in fiscal 2006 amounted to 575.4 billion yen ($4.92 billion), primarily attributable to net income and depreciation. Net cash provided by investing activities amounted to 407.1 billion yen ($3.48 billion). Capital expenditures for tangible fixed assets of 356.8 billion yen ($3.05 billion), mainly related to manufacturing facilities for priority business areas such as plasma display panels (PDPs) and semiconductors, were offset by cash inflows associated with the sale of shares of Matsushita Leasing & Credit Co., Ltd. (MLC)(4) as well as Universal-related shares. Net cash used in financing activities was 524.6 billion yen ($4.48 billion), including a repurchase of the company's common stock and the repayments of long-term debt. All these activities resulted in a balance of cash and cash equivalents of 1,667.4 billion yen ($14.25 billion) at the end of fiscal 2006, whereby the company's cash balance increased 497.6 billion yen.
The company's consolidated total assets as of March 31, 2006 decreased 92.3 billion yen to 7,964.6 billion yen ($68.07 billion), as compared to 8,056.9 billion yen at the end of the last fiscal year (March 31, 2005). Stockholders' equity increased 243.4 billion yen to 3,787.6 billion yen ($32.37 billion). This result was due mainly to an increase in retained earnings and accumulated other comprehensive income, despite an increase in treasury stock on repurchases of the company's own shares.
Proposed Year-end Dividend
Total dividends for fiscal 2006, ended March 31, 2006, including an interim dividend of 10.00 yen per common share paid in November 2005, are expected to be 20.00 yen per common share, as compared with total dividends of 15.00 yen for fiscal 2005.
Outlook for Fiscal 2007
Regarding the business environment for the fiscal 2007, ending March 31, 2007, the company currently expects to encounter severe conditions, such as ever-intensifying price declines and rising crude oil and raw materials prices, as well as concerns about economic conditions in the United States and China. Under these circumstances, in fiscal 2007, the final year of the mid-term management plan Leap Ahead 21, Matsushita is making efforts to achieve the goals of the plan by enhancing product competitiveness and strengthening management structures. The company currently expects fiscal 2007 sales on a consolidated basis to total approximately 8,950 billion yen, an increase of 1% from the previous fiscal year. Consolidated operating profit is forecasted to increase by about 9% to approximately 450 billion yen. Consolidated income before income taxes(5) is anticipated to increase to approximately 400 billion yen, up 8%, with net income expected to improve to about 190 billion yen, an increase of 23% from the previous fiscal year.
Meanwhile, on a parent company alone basis, Matsushita expects sales in fiscal 2007 to total 4,380 billion yen, down 2% from a year ago. Recurring profit is projected to decrease by 35%, to approximately 140 billion yen, and net income is forecasted to sharply increase to approximately 85 billion yen.
Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand products, is one of the world's leading manufacturers of electronic and electric products for consumer, business and industrial use. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, New York, Euronext Amsterdam, and Frankfurt stock exchanges.
For more information, please visit the following web sites:
Matsushita home page URL: http://panasonic.net/
Matsushita IR web site URL: http://ir-site.panasonic.com/
Disclaimer Regarding Forward-Looking Statements
This press release 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 Matsushita and its Group companies (the Matsushita Group). To the extent that statements in this press release 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 Matsushita 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 Matsushita 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. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
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 Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita 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 ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Matsushita Group; the possibility that the Matsushita 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 Matsushita Group has holdings or changes in valuation of long-lived assets and deferred tax assets; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Matsushita Group. The factors listed above are not all-inclusive and further information is contained in Matsushita's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
(1) For information about operating profit, see Note 2 of Notes to consolidated financial statements on page 13.
(2) For more information, see press release issued on February 2, "Matsushita to Divest Stake in Universal."
(3) For restatement of prior year segment disclosure, see Note 8 of Notes to consolidated financial statements on pages 13-14.
(4) For information about the sale of shares of MLC, see Note 3 of Notes to consolidated financial statements on page 13.
(5) Factors affecting the forecast for other income (deductions) of 50 billion yen (the difference between operating profit and income before income taxes) include business restructuring charges of 35 billion yen and other expenses of 15 billion yen.
Matsushita Electric Industrial Co., Ltd.
Consolidated Statement of Income *
-----------------------------------------
(Year ended March 31)
U.S.
Yen Dollars
(millions) (millions)
------------- Percentage ----------
2006 2005 2006/2005 2006
------------- ------------- ---------- ----------
Net sales Yen 8,894,329 Yen 8,713,636 102% $76,020
Cost of sales (6,155,297) (6,176,046) (52,609)
Selling, general and
administrative
expenses (2,324,759) (2,229,096) (19,870)
------------- ------------- ----------
Operating profit 414,273 308,494 134% 3,541
Other income
(deductions):
Interest income 28,216 19,490 241
Dividend income 6,567 5,383 56
Gain from the
transfer of
the substitutional
portion of
Japanese Welfare
Pension Insurance -- 31,509 --
Interest expense (21,686) (22,827) (185)
Expenses associated
with the implementation
of early retirement
programs ** (37,019) (101,136) (316)
Other income (loss),
net (19,039) 6,000 (163)
------------- ------------- ----------
Income before income
taxes 371,312 246,913 150% 3,174
Provision for income
taxes (167,089) (153,334) (1,428)
Minority interests 987 (27,719) 8
Equity in earnings
(losses) of
associated companies (50,800) (7,379) (434)
------------- ------------- ----------
Net income Yen 154,410 Yen 58,481 264% $1,320
============= ============= ==========
Net income, basic
per common share 69.48 yen 25.49 yen $0.59
per ADS 69.48 yen 25.49 yen $0.59
Net income, diluted
per common share 69.48 yen 25.49 yen $0.59
per ADS 69.48 yen 25.49 yen $0.59
(Parentheses indicate expenses, deductions or losses.)
* ** See Notes to consolidated financial statements on pages 13-14.
Change in Retained Earnings *
-----------------------------
(Year ended March 31)
U.S.
Yen Dollars
(millions) (millions)
---------- ----------
2006 2005 2006
------------- ------------- ----------
Balance at beginning
of year Yen 2,461,071 Yen 2,442,504 $21,035
Net income 154,410 58,481 1,320
Cash dividends (39,105) (35,251) (334)
Transfer to legal
reserve (438) (4,663) (5)
Transfer to capital
surplus due to
merger of
subsidiaries (48) -- (0)
------------- ------------- ----------
Balance at end of
year Yen 2,575,890 Yen 2,461,071 $22,016
============= ============= ==========
* See Notes to consolidated financial statements on pages 13-14.
Supplementary Information
-------------------------
(Year ended March 31)
U.S.
Yen Dollars
(millions) (millions)
---------- ----------
2006 2005 2006
------------- ------------- ----------
Depreciation
(tangible assets): Yen 275,213 Yen 287,400 $2,352
Capital investment*: Yen 345,819 Yen 374,253 $2,956
R&D expenditures: Yen 564,781 Yen 615,524 $4,827
Number of employees
(Mar. 31) 334,402 334,752
* These figures are calculated on an accrual basis.
Matsushita Electric Industrial Co., Ltd.
Consolidated Balance Sheet *
----------------------------------------
(March 31, 2006)
U.S.
Yen Dollars
(millions) (millions)
--------------------------- ----------
Assets March 31, March 31, March 31,
2006 2005 2006
------------- ------------- ----------
Current assets:
Cash and cash equivalents Yen 1,667,396 Yen 1,169,756 $14,251
Time deposits 11,001 144,781 94
Short-term investments 56,753 11,978 485
Trade receivables (notes and
accounts) 1,146,815 1,251,738 9,802
Inventories 915,262 893,425 7,823
Other current assets 609,326 558,854 5,208
------------- ------------- ----------
Total current assets 4,406,553 4,030,532 37,663
------------- ------------- ----------
Noncurrent receivables -- 246,201 --
Investments and advances 1,100,035 1,146,505 9,402
Property, plant and equipment,
net of accumulated
depreciation 1,632,339 1,658,080 13,952
Other assets 825,713 975,563 7,057
------------- ------------- ----------
Total assets Yen 7,964,640 Yen 8,056,881 $68,074
============= ============= ==========
Liabilities and Stockholders'
Equity
-----------------------------[FEED_CRLF
]Current liabilities:
Short-term borrowings Yen 339,845 Yen 385,474 $2,905
Trade payables (notes and
accounts) 981,279 866,019 8,387
Other current liabilities 1,563,944 1,577,398 13,367
------------- ------------- ----------
Total current liabilities 2,885,068 2,828,891 24,659
------------- ------------- ----------
Long-term debt 264,070 477,143 2,257
Other long-term liabilities 526,290 710,654 4,498
Minority interests 501,591 495,941 4,287
Common stock 258,740 258,740 2,211
Capital surplus 1,234,289 1,230,701 10,550
Legal reserve 87,526 87,838 748
Retained earnings 2,575,890 2,461,071 22,016
Accumulated other comprehensive
income (loss) ** (26,119) (238,377) (223)
Treasury stock (342,705) (255,721) (2,929)
------------- ------------- ----------
Total liabilities and
stockholders' equity Yen 7,964,640 Yen 8,056,881 $68,074
============= ============= ==========
** Accumulated other comprehensive income (loss) breakdown:
U.S.
Yen Dollars
(millions) (millions)
--------------------------- ----------
March 31, March 31, March 31,
2006 2005 2006
------------- ------------- ----------
Cumulative translation
adjustments Yen (162,331) Yen (245,642) $(1,387)
Unrealized holding gains of
available-for-sale securities 145,306 72,608 1,242
Unrealized gains of derivative
instruments 1,326 6,403 11
Minimum pension liability
adjustments (10,420) (71,746) (89)
* See Notes to consolidated financial statements on pages 13-14.
Matsushita Electric Industrial Co., Ltd.
Consolidated Sales Breakdown *
----------------------------
(Year ended March 31)
U.S.
Yen Dollars
(billions) Percentage (millions)
------------- ----------
2006 2005 2006/2005 2006
------------ ------------ ------------- ----------
AVC Networks
------------
Video and audio
equipment Yen 1,576.5 Yen 1,482.6 106% $13,474
Information and
communications
equipment 2,111.8 2,076.2 102% 18,050
------------ ------------ ----------
Subtotal 3,688.3 3,558.8 104% 31,524
------------ ------------ ----------
Home Appliances 1,183.1 1,156.5 102% 10,112
--------------- ------------ ------------ ----------
Components and
Devices 1,086.6 1,112.5 98% 9,287
-------------- ------------ ------------ ----------
MEW and PanaHome 1,570.8 1,559.0 101% 13,426
---------------- ------------ ------------ ----------
JVC 699.0 717.8 97% 5,974
--- ------------ ------------ ----------
Other 666.5 609.0 109% 5,697
----- ------------ ------------ ----------
Total Yen 8,894.3 Yen 8,713.6 102% $76,020
============ ============ ==========
Domestic sales 4,611.4 4,580.5 101% 39,414
Overseas sales 4,282.9 4,133.1 104% 36,606
(Domestic/Overseas Sales Breakdown)
(in yen only)
Domestic sales Overseas sales
Yen Yen
(billions) Percentage (billions) Percentage
------------ -------------
2006 2006/2005 2006 2006/2005
------------ ------------ ------------- ----------
AVC Networks
------------
Video and audio
equipment Yen 476.2 102% Yen 1,100.3 108%
Information and
communications
equipment 1,050.9 100% 1,060.9 103%
------------ -------------
Subtotal 1,527.1 101% 2,161.2 106%
------------ -------------
Home Appliances 682.2 100% 500.9 106%
--------------- ------------ -------------
Components and
Devices 408.0 91% 678.6 102%
-------------- ------------ -------------
MEW and PanaHome 1,351.4 101% 219.4 101%
---------------- ------------ -------------
JVC 204.2 98% 494.8 97%
--- ------------ -------------
Other 438.5 113% 228.0 104%
----- ------------ -------------
Total Yen 4,611.4 101% Yen 4,282.9 104%
============ =============
*See Notes to consolidated financial statements on pages 13-14.
Matsushita Electric Industrial Co., Ltd.
Consolidated Information by Segments *
------------------------------------
(Year ended March 31)
By Business Segment:
--------------------
U.S.
Yen Dollars
(billions) Percentage (millions)
----------------------- ----------
(Sales) 2006 2005 2006/2005 2006
----------- ----------- ----------- ----------
AVC Networks Yen 3,986.1 Yen 3,858.8 103% $34,069
Home Appliances 1,241.2 1,229.8 101% 10,609
Components and Devices 1,368.3 1,469.0 93% 11,695
MEW and PanaHome 1,747.2 1,686.2 104% 14,933
JVC 703.1 730.2 96% 6,009
Other 1,315.3 1,027.1 128% 11,242
----------- ----------- ----------
Subtotal 10,361.2 10,001.1 104% 88,557
Eliminations (1,466.9) (1,287.5) -- (12,537)
----------- ----------- ----------
Consolidated total Yen 8,894.3 Yen 8,713.6 102% $76,020
=========== =========== ==========
(Segment Profit) **
AVC Networks Yen 190.9 Yen 127.4 150% $1,632
Home Appliances 77.2 74.8 103% 660
Components and Devices 81.1 57.8 140% 693
MEW and PanaHome 72.7 66.7 109% 621
JVC (5.8) 9.9 -- (50)
Other 62.2 38.3 162% 532
----------- ----------- ----------
Subtotal 478.3 374.9 128% 4,088
Corporate and
eliminations (64.0) (66.4) -- (547)
----------- ----------- ----------
Consolidated total Yen 414.3 Yen 308.5 134% $3,541
=========== =========== ==========
By Domestic and Overseas Company Location:
------------------------------------------
U.S.
Yen Dollars
(billions) Percentage (millions)
----------------------- ----------
(Sales) 2006 2005 2006/2005 2006
----------- ----------- ----------- ----------
Japan Yen 6,890.3 Yen 6,620.0 104% $58,891
Americas 1,366.5 1,271.6 107% 11,680
Europe 1,087.7 1,072.6 101% 9,297
Asia, China and others 2,716.4 2,445.0 111% 23,217
----------- ----------- ----------
Subtotal 12,060.9 11,409.2 106% 103,085
Eliminations (3,166.6) (2,695.6) -- (27,065)
----------- ----------- ----------
Consolidated total Yen 8,894.3 Yen 8,713.6 102% $76,020
=========== =========== ==========
(Segment Profit)
Japan Yen 374.1 Yen 262.1 143% $3,197
Americas 16.8 20.8 81% 144
Europe 4.5 7.4 61% 38
Asia, China and others 81.4 75.3 108% 696
----------- ----------- ----------
Subtotal 476.8 365.6 130% 4,075
Corporate and
eliminations (62.5) (57.1) -- (534)
----------- ----------- ----------
Consolidated total Yen 414.3 Yen 308.5 134% $3,541
=========== =========== ==========
* **See Notes to consolidated financial statements on pages 13-14.
Matsushita Electric Industrial Co., Ltd.
Consolidated Statement of Cash Flows *
--------------------------------------
(Year ended March 31)
Yen U.S. Dollars
(millions) (millions)
Cash flows from operating ---------- ----------
activities: 2006 2005 2006
------------------------- ------------ ------------ ----------
Net income Yen 154,410 Yen 58,481 $ 1,320
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 309,399 325,465 2,644
Net gain on sale of
investments (47,449) (31,399) (406)
Provision for doubtful
receivables 8,409 4,963 72
Deferred income taxes 70,748 56,805 605
Write-down of investment
securities 35,292 16,186 302
Impairment loss on long-
lived assets 66,378 29,519 567
Minority interests (987) 27,719 (8)
(Increase) decrease in
trade receivables (31,042) 61,207 (265)
(Increase) decrease in
inventories 36,498 84,405 312
(Increase) decrease in
other current assets (57,990) 14,649 (496)
Increase (decrease) in
trade payables 112,340 (74,276) 960
Increase (decrease) in
accrued income taxes 3,872 (3,422) 33
Increase (decrease) in
accrued expenses and
other current liabilities 37,108 (10,736) 317
Increase (decrease) in
retirement and severance
benefits (73,180) (99,499) (625)
Increase (decrease) in
deposits and advances
from customers (13,304) (13,873) (114)
Other (35,084) 18,368 (300)
------------ ------------ ----------
Net cash provided by
operating activities Yen 575,418 Yen 464,562 $ 4,918
============ ============ ==========
Cash flows from investing
activities:
-------------------------
Pr
oceeds from sale of short-
term investments 41,867 6,117 358
Purchase of short-term
investments (54,967) (9,001) (470)
Proceeds from disposition of
investments and advances 849,409 101,374 7,260
Increase in investments and
advances (385,865) (133,636) (3,298)
Capital expenditures (356,751) (352,203) (3,049)
Proceeds from sale of fixed
assets 168,631 78,131 1,441
(Increase) decrease in
finance receivables -- 26,823 --
(Increase) decrease in time
deposits 141,289 27,748 1,208
Inflows due to acquisition
of additional shares of
newly consolidated
subsidiaries, net of cash
paid -- 82,208 --
Proceeds from sale of shares
of subsidiaries 63,083 -- 539
Other (59,605) (5,857) (510)
------------ ------------ ----------
Net cash provided by (used
in) investing activities Yen 407,091 Yen (178,296) $ 3,479
============ ============ ==========
Cash flows from financing
activities:
-------------------------
In
crease (decrease) in
short-term borrowings 15,037 (8,009) 128
Increase (decrease) in
deposits and advances
from employees (104,835) (125,261) (896)
Proceeds from long-term debt 30,653 119,422 262
Repayments of long-term debt (328,243) (251,554) (2,805)
Dividends paid (39,105) (35,251) (334)
Dividends paid to minority
interests (16,281) (14,765) (139)
Repurchase of common stock (87,150) (92,879) (745)
Sale of treasury stock 228 1,324 2
Other 5,128 1,395 44
------------ ------------ ----------
Net cash used in financing
activities Yen (524,568) Yen (405,578) $(4,483)
============ ============ ==========
Effect of exchange rate
changes on cash and cash
equivalents 39,699 14,054 339
------------ ------------ ----------
Net increase (decrease) in
cash and cash equivalents 497,640 (105,258) 4,253
Cash and cash equivalents at
beginning of period 1,169,756 1,275,014 9,998
------------ ------------ ----------
Cash and cash equivalents at
end of period Yen 1,667,396 Yen 1,169,756 $14,251
============ ============ ==========
* See Notes to consolidated financial statements on pages 13-14.
Notes to consolidated financial statements:
1. The company's consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP).
2. In order to be consistent with generally accepted financial reporting practices in Japan, operating profit is presented as net sales less cost of sales and selling, general and administrative expenses. The company believes that this is useful to investors in comparing the company's financial results with those of other Japanese companies. Please refer to the accompanying consolidated statement of income and Note 5 for U.S. GAAP reconciliation.
3. On April 1, 2005, Matsushita sold approximately 2,707 thousand shares of Matsushita Leasing & Credit Co., Ltd. (MLC) to The Sumitomo Trust & Banking Co., Ltd. (STB) for cash proceeds of 27,756 million yen, and recorded a gain of 10,313 million yen, pursuant to a basic agreement regarding the equity ownership of MLC concluded between the company and STB. As a result of the sale, Matsushita now owns 34% of MLC's total issued shares. MLC (renamed Sumishin Matsushita Financial Services Co., Ltd. on May 1, 2005) was changed from a consolidated subsidiary to an equity method investee of Matsushita as of April 1, 2005.
4. Comprehensive income was reported as a gain of 366,668 million yen ($3,134 million) for fiscal 2006, and a gain of 219,606 million yen for fiscal 2005. Comprehensive income includes net income and increases (decreases) in cumulative translation adjustments, unrealized holding gains of available-for-sale securities, unrealized gains of certain derivative instruments and minimum pension liability adjustments.
5. Under U.S. GAAP, expenses associated with the implementation of early retirement programs at certain domestic and overseas companies are included as part of operating profit in the statement of income.
6. Employees Pension Funds in certain of the company's subsidiaries obtained approvals from Japan's Ministry of Health, Labour and Welfare (the Ministry) for exemption from the past benefit obligation with respect to the portion of the Employees Pension Funds that certain of the company's subsidiaries operated for the Government (the so-called ''substitutional portion''), and transferred the substitutional portion to the Government in fiscal 2005. A gain of 31,509 million yen from the transfer of the substitutional portion of the Japanese Welfare Pension Insurance is reported as other income in the consolidated statement of income for fiscal 2005.
7. Regarding consolidated segment profit, expenses for basic research and administrative expenses at the corporate headquarters level are treated as unallocatable expenses for each business segment, and are included in Corporate and eliminations.
8. The company's business segments are classified according to a business domain-based management system, which focuses on global consolidated management by each business domain, in order to ensure consistency of its internal management structure and disclosure. Under the collaboration with MEW, the company reorganized business and sales channels in such areas as electrical construction materials, building equipment and home appliances. Accordingly, fiscal 2005 sales breakdown and segment information for the Home Appliances and MEW and PanaHome segments have been reclassified.
Principal internal divisional companies or units and subsidiaries operating in respective segments are as follows:
AVC Networks
------------
Panasonic AVC Networks Company, Panasonic Communications Co.,
Ltd.,
Panasonic Mobile Communications Co., Ltd., Panasonic Automotive
Systems Company,
Panasonic System Solutions Company, Panasonic Shikoku Electronics
Co., Ltd.
Home Appliances
---------------
Home Appliances Group, Healthcare Business Company, Lighting
Company, Matsushita Ecology Systems Co., Ltd.
Components and Devices
----------------------
Semiconductor Company, Matsushita Battery Industrial Co., Ltd.,
Panasonic Electronic Devices Co., Ltd., Motor Company
MEW and PanaHome
----------------
Matsushita Electric Works, Ltd., PanaHome Corporation
JVC
---
Victor Company of Japan, Ltd.
Other
-----
Panasonic Factory Solutions Co., Ltd., Matsushita Welding Systems
Co., Ltd.
9. Number of consolidated companies: 638
10. Number of companies reflected by the equity method: 67
11. United States Dollar amounts are translated from yen for convenience at the rate of U.S. $1.00 = 117 yen, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2006.
12. Each American Depositary Share (ADS) represents 1 share of common stock.
Subsequent event:
On April 28, 2006, the Board of Directors approved plans to proactively provide returns to shareholders and continue the policy toward large-scale purchases of Matsushita Electric Industrial Co., Ltd. shares, with the aim of implementing its policy of shareholder-oriented management.
Specifically, Matsushita plans to increase total cash dividends per share for fiscal 2007, ending March 31, 2007, to 30 yen, compared with fiscal 2006 cash dividends of 20 yen per share. Regarding share repurchases, the company plans to repurchase up to 50 million shares of its own stock for a maximum of 100 billion yen.
Under the basic philosophy that shareholders should make final decisions regarding large-scale purchases of Matsushita shares, sufficient information should be provided through the Board of Directors to shareholders if a large-scale purchase is to be conducted. Under the above-mentioned basic philosophy, the Board of Directors decided to continue its policy toward large-scale purchasers who intend to acquire 20% or more of all voting rights of the company. This policy requires that (i) a large-scale purchaser provides sufficient information to the Board of Directors before a large-scale purchase is to be conducted and (ii) after all required information is provided, the Board of Directors should be allowed a sufficient period of time during which it will assess, examine, negotiate, form an opinion and seek alternatives. In the event of non-compliance with such rules by a prospective large-scale purchaser, the Board of Directors may take countermeasures to protect the interest of all shareholders.
For further details, please see the press release, regarding the Enhancement of Shareholder Value (ESV) Plan, issued on April 28, 2006 entitled "Matsushita Announces Continuation of Policy toward Large-scale Purchases of Company's Shares."
Significant Accounting Policies:
1. Basis of Presentation of Consolidated Financial Statements
The company's consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles. See Note 2 of Notes to consolidated financial statements on page 13.
2. Inventories
Finished goods and work in process are stated at the lower of cost (average) or market. Raw materials are stated at cost, principally on a first-in, first-out basis, not in excess of current replacement cost.
3. Marketable Securities
The company accounts for debt and equity securities in accordance with Statement of Financial Accounting Standards (SFAS) No.115, "Accounting for Certain Investments in Debt and Equity Securities."
4. Property, Plant and Equipment, and Depreciation
Property, plant and equipment is stated at cost. Depreciation is computed primarily using the declining balance method.
5. Leases
The company accounts for leases in accordance with SFAS No. 13, "Accounting for Leases."
6. Income Taxes
Income taxes are accounted for under the asset and liability method. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the fiscal year that includes the enactment date.
7. Retirement and Severance Benefits
The company and most of its domestic subsidiaries maintain defined benefit pension plans such as point-based benefits system and cash balance pension plans. Several of its domestic subsidiaries have lump-sum payment plans, while several overseas subsidiaries also maintain defined benefit pension plans.
The company accounts for retirement and severance benefits in accordance with SFAS No. 87, "Employer's Accounting for Pensions." The transfer of the substitutional portion of Japanese Welfare Pension Insurance is accounted for in accordance with the Emerging Issues Task Force (EITF) Issue 03-2, "Accounting for the Transfer to the Japanese Government of the Substitutional Portion of Employee Pension Fund Liabilities."
8. Derivative Financial Instruments
The company accounts for derivative financial instruments in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
Matsushita Electric Industrial Co., Ltd.
Consolidated Information of Marketable Securities *
---------------------------------------------------
(March 31, 2006)
Yen
(millions)
----------
March 31, 2006 March 31, 2005
-------------- --------------
Gross Gross
unrealized unrealized
holding holding
Fair gains Fair gains
Cost value (losses) Cost value (losses)
--------- ------- --------- --------- -------- ---------
Current
-------
Equity
securities -- -- -- -- -- --
Bonds 31,528 31,512 (16) 5,035 5,035 --
Other debt
securities 25,241 25,241 -- 6,943 6,943 --
--------- ------- --------- --------- -------- ---------
Sub-total Yen Yen Yen Yen Yen Yen
56,769 56,753 (16) 11,978 11,978 --
--------- ------- --------- --------- -------- ---------
Noncurrent
----------
Equity
securities 230,400 527,705 297,305 228,202 392,903 164,701
Bonds 123,080 122,380 (700) 71,844 72,104 260
Other debt
securities 18,580 18,654 74 18,258 18,282 24
--------- ------- --------- --------- -------- ---------
Sub-total Yen Yen Yen Yen Yen Yen
372,060 668,739 296,679 318,304 483,289 164,985
--------- ------- --------- --------- -------- ---------
Total Yen Yen Yen Yen Yen Yen
428,829 725,492 296,663 330,282 495,267 164,985
========= ======= ========= ========= ======== =========
* The statement of marketable securities represents (presented in yen
only) marketable equity securities other than investments in
associated companies and all debt securities in accordance with SFAS
No.115 "Accounting for Certain Investments in Debt and Equity
Securities."
Matsushita Group
1. Outline of the Matsushita Group
Described below are the Matsushita Group's primary business areas, roles of major Group companies in respective businesses and relations between major Group companies and business segments.
The Matsushita Group, mainly comprising Matsushita Electric Industrial Co., Ltd. and 637 consolidated subsidiaries, is engaged in manufacturing, sales and service activities in a broad range of electric/electronic and related business areas, maintaining close ties among Group companies both in Japan and abroad. Matsushita supplies a full spectrum of electric/electronic equipment and related products, which has been categorized into the following six segments: AVC Networks, Home Appliances, Components and Devices, MEW and PanaHome, JVC, and Other.
* For major product lines in each segment, please refer to "Details of Product Categories" on page 19.
2. Business Domain Chart
(GRAPHIC OMITTED)
Details of Product Categories
AVC Networks
Plasma, LCD and CRT TVs, DVD recorders/players, VCRs, camcorders, digital cameras, compact disc (CD), Mini Disc (MD) and SD players, other personal and home audio equipment, SD Memory Cards and other recordable media, optical pickup and other electro-optic devices, PCs, optical disc drives, copiers, printers, telephones, cellular phones, facsimile equipment, broadcast- and business-use AV equipment, communications network-related equipment, traffic-related systems, car AVC equipment, etc.
Home Appliances
Refrigerators, room air conditioners, washing machines, clothes dryers, vacuum cleaners, electric irons, microwave ovens, rice cookers, other cooking appliances, dish washer/dryers, electric fans, air purifiers, electric and gas heating equipment, electric and gas hot water supply equipment, sanitary equipment, healthcare equipment, electric lamps, ventilation and air-conditioning equipment, car air conditioners, compressors, vending machines, medical equipment, etc.
Components and Devices
Semiconductors, general components (capacitors, modules, circuit boards, power supply and inductive products, circuit components, electromechanical components, speakers, etc.), electric motors, batteries, etc.
MEW and PanaHome
Lighting fixtures, wiring devices, distribution panelboards, personal-care products, health enhancing products, water-related products, modular kitchen systems, interior furnishing materials, exterior finishing materials, electronic and plastic materials, automation controls, detached housing, rental apartment housing, medical and nursing care facilities, home remodeling, housing-related services (residential real estate), etc.
JVC
LCD, rear projection, plasma and CRT TVs, VCRs, camcorders, DVD recorders/players, CD/DVD/MD audio systems and other audio equipment, car AV equipment, business-use AV systems, motors and other components for precision equipment, recordable media, AV software for DVD, CD and video tapes, AV furniture, etc.
Other
Electronic-components-mounting machines, industrial robots, welding equipment, bicycles, imported materials and components, etc.
Please Note: The following are financial statements on a parent company alone basis (provided in yen only), which are in conformity with Japanese generally accepted accounting principles, and should not be confused with the aforementioned consolidated results.
Matsushita Electric Industrial Co., Ltd.
(Parent Alone)
Statement of Income
-------------------
(Year ended March 31)
Yen (millions)
-------------- Percentage
2006 2005 2006/2005
---- ---- ---------
Net sales Yen 4,472,579 Yen 4,145,654 108%
Cost of sales (3,603,401) (3,368,926)
Selling, general and
administrative expenses (745,960) (688,335)
--------- ---------
Operating profit 123,218 88,393 139%
--------- ---------
Interest income 1,226 2,529
Dividend income 127,066 63,593
Other income 27,935 38,914
Interest expense (6,029) (8,499)
Other expenses (56,991) (68,650)
--------- ---------
Recurring profit 216,425 116,280 186%
--------- ---------
Non-recurring profit 106,944 28,970
Non-recurring loss (326,036) (38,052)
--------- ---------
Income (loss) before
income taxes (2,667) 107,198 --
Provision for income taxes
Current 9,283 7,857
Deferred (32,395) 25,888
--------- ---------
Net income Yen 20,445 Yen 73,453 28%
========== ==========
Unappropriated retained
earnings at beginning
of period 43,786 41,012
Interim dividend (22,168) (17,284)
Unappropriated retained
earnings at end of period 42,063 97,181
Notes to parent-alone financial statements:
-------------------------------------------
1. Amounts less than 1 million yen have been rounded to the nearest
whole million yen amount in the accompanying parent-alone
financial statement.
2. Similarly, in the descriptions on pages 4, 5 and 22 regarding
parent-alone results and parent-alone sales breakdown, amounts
less than one-tenth of a billion yen are rounded to the nearest
whole billion yen amount.
3. Non-recurring profit for fiscal 2006 includes 67,114 million yen
related to the sale of securities, 21,047 million yen related to
the sale of securities of certain subsidiaries, and 14,604 million
yen as a result of the sale of certain fixed assets. Non-recurring
loss for fiscal 2006 includes 184,532 million yen as a loss on
valuation of securities associated with the liquidation of a
subsidiary, MHI, 113,194 million yen as restructuring expenses
such as losses associated with the closing of CRT TV-related
overseas operations, and 24,905 million yen related to a recall of
certain kerosene fan heaters, which the company manufactured and
sold in Japan between 1985 and 1992.
4. Net income per common share: 2006 2005
---- ----
Basic 9.08 yen 31.90 yen
Diluted 9.08 yen --
Net income per common share (diluted) for fiscal 2005 is omitted
because the company does not hold any dilutive securities.
Matsushita Electric Industrial Co., Ltd.
(Parent Alone)
Balance Sheet *
---------------
(March 31, 2006)
Yen (millions)
--------------
Assets March 31, 2006 March 31, 2005
------ -------------- --------------
Current assets:
Cash and deposits Yen 865,431 Yen 449,124
Trade receivables (notes and accounts) 558,103 512,017
Inventories 164,375 164,053
Other current assets 548,496 516,436
----------- -----------
Total current assets 2,136,405 1,641,630
----------- -----------
Fixed assets:
Tangible fixed assets 356,616 391,514
Intangibles 30,609 27,577
Investments and advances 2,467,631 2,859,819
----------- -----------
Total fixed assets 2,854,856 3,278,910
----------- -----------
Total assets Yen 4,991,261 Yen 4,920,540
============= =============
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Trade payables (notes and accounts) Yen 478,577 Yen 435,491
Accrued income taxes 1,528 3,427
Other current liabilities 1,411,341 1,246,183
----------- -----------
Total current liabilities 1,891,446 1,685,101
----------- -----------
Long-term debt and employee
retirement and severance benefits 361,402 455,690
----------- -----------
Total liabilities 2,252,848 2,140,791
----------- -----------
Shareholders' equity:
Capital 258,740 258,740
Capital surplus 569,927 571,848
Retained earnings 2,102,869 2,121,787
Unrealized holding gains of
available-for-sale securities 150,475 83,817
Treasury stock (343,598) (256,443)
----------- -----------
Total shareholders' equity 2,738,413 2,779,749
----------- -----------
Total liabilities and
shareholders' equity Yen 4,991,261 Yen 4,920,540
============= =============
* See Notes to parent-alone financial statements on page 20.
Matsushita Electric Industrial Co., Ltd.
(Parent Alone)
Proposed Allocation of Income *
-------------------------------
(Year ended March 31)
Yen (millions)
--------------
2006 2005
---- ----
Unappropriated retained earnings
at end of year Yen 42,063 Yen 97,181
To be allocated as follows:
Year-end dividends 22,095 16,938
(per common share) (10.00 yen) (7.50 yen)
Directors' bonuses 240 240
Corporate auditors' bonuses 18 18
Reserve for advanced depreciation 4,927 199
Contingency reserve - 36,000
---------- ----------
Unappropriated retained earnings
carried forward to next period Yen 14,783 Yen 43,786
========== ==========
*See Notes to parent-alone financial statements on page 20.
Matsushita Electric Industrial Co., Ltd.
(Parent Alone)
Sales Breakdown *
-----------------
(Year ended March 31)
Yen (billions)
-------------- Percentage
2006 2005 2006/2005
---- ---- ----------
AVC Networks
------------
Video and audio equipment Yen 848.2 Yen 802.4 106%
Information and communications
equipment 1,038.6 977.0 106%
--------- ---------
Subtotal 1,886.8 1,779.4 106%
--------- ---------
Home Appliances 747.3 768.9 97%
--------------- --------- ---------
Components and Devices 779.1 849.2 92%
---------------------- --------- ---------
MEW Products 177.4 41.2 431%
------------ --------- ---------
Other 882.0 707.0 125%
----- --------- ---------
Total Yen 4,472.6 Yen 4,145.7 108%
=========== ===========
Domestic sales 2,561.4 2,447.5 105%
Exports 1,911.2 1,698.2 113%
* See Notes to parent-alone financial statements on page 20.
Management Policy
(1) Basic Policy for Corporate Management
Since its establishment, Matsushita has operated its businesses under its basic management philosophy, which sets forth that the mission of a business enterprise is contributing to the progress and development of society and the well-being of people through its business activities, thereby enhancing the quality of life throughout the world. Matsushita, as a public entity, is committed to its relationships with all stakeholders.
(2) Basic Policy for Providing Return to Shareholders
Since the company's founding, Matsushita has managed its businesses in a manner reflecting the company's belief in the importance of profit return to shareholders. In fiscal 2005, ended March 2005, along with the implementation of a new mid-term growth strategy, Matsushita implements a policy regarding returns to shareholders which takes into consideration its consolidated business performance.
Specifically, Matsushita will provide return to shareholders through dividend payments and own share repurchases, upon careful consideration of consolidated cash flows.
1) Dividends:
From the perspective of return on the capital investment
made by shareholders, Matsushita will, in principle,
distribute profits to shareholders based on its
consolidated business performance. Matsushita also aims
for promoting stable and continuous growth of return to
shareholders, while at the same time taking into
consideration various factors including mid-term business
performance, capital expenditure requirements and the
company's financial condition.
2) Own share repurchases:
Matsushita will provide return to shareholders by
enhancing shareholder value per share through a reduction,
in effect, of the number of outstanding shares. This will
be accomplished by repurchasing the company's own shares
with surplus cash flows.
In line with the policy described above, for fiscal 2006 Matsushita distributed an interim cash dividend of 10 yen per common share, and also plans to pay 10 yen per common share as the year-end cash dividend, subject to approval at the company's ordinary general meeting of shareholders to be held in June 2006. If implemented, total cash dividends for fiscal 2006 will be 20 yen per common share.
For details about annual dividends and own share repurchases for fiscal 2007, ending March 2007, see separate press releases issued today, "Matsushita Announces Plans to Increase Dividends for Fiscal 2007" and "Matsushita to Execute Own Share Repurchase."
(3) Company's Policy on Reduction of the Share Trading Unit Size
Matsushita has given careful consideration as to whether or not it should avail itself to reduce the number of shares per unit for trading ("share trading unit") on stock markets in Japan, but as of today, the company believes it is too early to do so. Recognizing the importance of increased participation in capital markets by individual investors, Matsushita, over the years, has implemented various measures with individual shareholders in mind. Some of these include renewal of the company's investor relations website, more detailed business reports to shareholders and improved general shareholder meeting arrangements. Since Matsushita is aware that a reduction in the share trading unit size is an effective method for broadening its individual shareholder base, the company will continue to discuss and evaluate possible benefits resulting from a reduction in the share trading unit size.
(4) Corporate Management Strategies and Challenges
The Matsushita Group aims to achieve, through cutting-edge technologies, global excellence in 2010 by pursuing the two visions of contributing to the realization of a ubiquitous networking society and coexistence with the global environment. The global economic outlook for fiscal 2007, ending March 31, 2007, remains uncertain, due mainly to various factors such as rising crude oil and raw materials prices. In the electronics industry, Matsushita expects ever-intensified competition to continue. In fiscal 2007, the final year of the mid-term management plan Leap Ahead 21, Matsushita will further accelerate growth strategies and strengthen management structures.
Major Activities Undertaken in Fiscal 2006
Matsushita viewed fiscal 2006, the second year of the 3-year management plan ending March 31, 2007, as a crucial year in establishing growth at each business domain company. To achieve the goals of this management plan, the company implemented growth strategies and strengthened management structures, as described below.
-- Matsushita aggressively launched and promoted a new series of V-products to capture top shares in high-volume markets and make a significant contribution to overall business results. Sales of these products increased not only in plasma TVs, digital cameras and other digital AV equipment, but also in home appliances, led by revolutionary refrigerators, featuring top-unit compressors to increase internal capacity, tilted-drum washing machines with efficient heat-pump dryers and air conditioners with automatic filter cleaning and dust removal functions.
-- The company also continued its focus on simultaneous global product introductions in digital AV and other product categories to continually expand priority businesses. A good example of success through this strategy is the plasma TV business. Matsushita has captured high market shares in Japan, the United States and Europe through the simultaneous introduction of plasma TVs in these regions. To further establish the company's position as the industry leader, Matsushita announced the world's largest plasma display. At 103 inches, this product demonstrates Matsushita's unparalleled technologies in the plasma TV field.
-- Regarding capital expenditures, the company maintained its policy of concentrating investments into strategic areas. In fiscal 2006, these included a new PDP factory in Amagasaki, which commenced operations in September 2005, Matsushita Hangzhou Industrial Park in China, and a new factory for state-of-the-art system LSIs in Uozu, Japan.
-- Through collaboration with MEW, Matsushita launched Collaboration V-products such as bathroom systems, modular kitchen systems and air purifiers, while utilizing MEW marketing channels to increase sales of air conditioners.
-- Aiming to reinforce its management structures, the company has made all-out efforts to reduce materials costs and other expenses. These activities, including company-wide cost reduction activities, have contributed to enhanced profitability, despite a severe management environment. Matsushita also carried out selection and concentration of management resources, restructuring at various locations and other reforms within each business domain company.
Principal Initiatives for Fiscal 2007
1. V-Products
Matsushita will place particular emphasis on V-products, which feature black-box technologies, and are essential to the company's growth strategy. In fiscal 2007, the company expects sales of 1.8 trillion yen in a total of 82 product categories. To achieve this, Matsushita will carry out intensive marketing campaigns that focus on product functions and features. Furthermore, Matsushita will expand the scope of simultaneous global introductions in terms of both products and regions. Through these and other initiatives, Matsushita aims to increase market share and solidify its competitive position in global markets.
2. Investment Strategy
Regarding capital expenditures, Matsushita will continue to focus investment into strategic businesses. In PDPs, the company announced the construction of a fourth domestic factory in Amagasaki, Japan, where operations are scheduled to commence in fiscal 2008. Including the new factory, Matsushita will increase annual production capacity of PDPs to 11.5 million units by fiscal 2009, enabling the company to meet rapidly expanding global demand.
3. Overseas Strategy
Matsushita will also strengthen overseas operations, which serve as a "growth engine" for the entire Matsushita Group. The company will select products and sales channels according to specific strategies in each region or country, and concentrate management resources accordingly. In the growing market such as China and Russia, as well as Europe and the United States, the company will strive to strengthen sales initiatives, aiming at expanding sales.
4. Strengthened Management Structure
In order to further strengthen management structures, Matsushita implemented the Next Cell Production Project, which will facilitate a more flexible manufacturing structure. In fiscal 2007, the company intends to further take advantage of information technology (IT) in promoting large-scale inventory reduction activities. Meanwhile, through the Corporate Cost Busters Project, the company will eliminate redundancies throughout all areas of business, to enhance profitability.
5. Collaboration with MEW
Matsushita strives to achieve further success through collaboration with MEW, by integrating the components and devices and black-box technologies of both companies, in addition to comprehensive utilization of sales channels and augmented overseas businesses.
(5) Matters concerning the parent company
Matsushita has no parent company.
[ Back To TMCnet.com's Homepage ]
|
TMCnet LOGIN
Webinars
