Panasonic Holdings Corporation · TSE:6752
Panasonic — Q3 2024 Earnings Presentation
46 slides from Panasonic's earnings presentation, Feb 2, 2024
Slide 1: Fiscal 2024 Third Quarter Financial Results
Fiscal 2024 Third Quarter Financial Results February 2, 2024 Panasonic Holdings Corporation Notes: 1. This is an English translation from the original presentation in Japanese. 2. In this presentation, “Fiscal 2024” or “FY3/24” refers to the year ending March 31, 2024.
Slide 2: Summary of FY3/24 3Q Financial Results
Summary of FY3/24 3Q Financial Results US Inflation Reduction Act (IRA) ‧ Assumed amount equivalent to tax credit and to be effectively used with customers recorded on P/L (same as 1Q & 2Q) ‧ Proposed rules for section 45X released in December 2023: Only partial contents were added; No major chang
Slide 3: Impact of US IRA Tax Credit on Financial Results & Forecast
Impact of US IRA Tax Credit on Financial Results & Forecast (Same as 1Q & 2Q) Among monetization methods “Deductible tax credit” “Refundable tax credit (direct pay)” & “Transferable tax credit,” assuming to elect “Refundable” for FY3/24 Half of total tax credit amount recorded in adjusted OP, as
Slide 4: Fiscal 2024 Third Quarter Financial Results
Fiscal 2024 Third Quarter Financial Results Fiscal 2024 Full-Year Financial Forecast
Slide 5: FY3/24 3Q Financial Results
FY3/24 3Q Financial Results (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures FY3/24 3Q FY3/23 3Q YoY (year-on-year) Excl. IRA impact Excl. IRA impact 101% +20.3 102% +46.1 Sales 2,180.9 2,206.7 2,160.6 （98%)*3 （-40.2)*3 （99%)*3 （-14.4)*3 Adjuste
Slide 6: FY3/24 3Q Results by Segment
FY3/24 3Q Results by Segment (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures Adjusted Other YoY income/ OP EBITDA*1 Sales OP YoY YoY YoY YoY (excl. FX) (% to sales) (% to sales) (% to sales) loss Lifestyle *4 99% 37.7 35.9 63.9 897.7 (97%) +6.6
Slide 7: FY3/24 3Q Sales Analysis by Segment
FY3/24 3Q Sales Analysis by Segment Overall sales increased: Increased sales (Automotive) and currency translation, despite decreased sales (Lifestyle, Industry) • Sales decrease (yen: billions) in real terms: -10.4 Other/Eliminations & adjustments + 42.1 +1.5 -33.9 • IRA impact: -25.8 + 60.5 2,180.
Slide 8: FY3/24 3Q Operating Profit Analysis by Segment
FY3/24 3Q Operating Profit Analysis by Segment Adjusted OP increased: Increased in Lifestyle, Automotive and Energy, despite decreased in Connect and Industry (yen: billions) IRA impact: +22.0 + 3.9 + 2.9 127.5 + 25.0 + 5.0 Other + 10.6 -5.3 -5.6 Other/ income/loss + 6.6 Industrial / 84.4 Connect Co
Slide 9: Lifestyle Segment: FY3/24 3Q Results by Divisional Company
Lifestyle Segment: FY3/24 3Q Results by Divisional Company (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures Adjusted Other YoY OP EBITDA*2 Sales (Excl. FX) OP YoY income/ YoY (% to sales) YoY (% to sales) YoY (% to sales) loss Living Appliances
Slide 10: FY3/24 3Q Operating Profit Analysis (by Factor)
FY3/24 3Q Operating Profit Analysis (by Factor) Adjusted OP increased: Progress in price revisions and rationalization, amount equivalent to IRA tax credit recorded as profit, etc. Other Effect of income/loss IRA impact Blue Yonder (BY) exchange rates (yen: billions) Price revisions, +22.0 -6.8 +4.3
Slide 11: FY3/24 Nine-Month Cash Flows and Cash Positions
FY3/24 Nine-Month (Apr. - Dec.) Cash Flows and Cash Positions Operating CF increased significantly year-on-year due mainly to reduced inventories Aim to further generate operating CF through profitability improvement and inventory reduction, etc. Cash Flow Gross cash & interest-bearing debt / Ne
Slide 12: Fiscal 2024 Full-Year Financial Forecast
Fiscal 2024 Third Quarter Financial Results Fiscal 2024 Full-Year Financial Forecast
Slide 13: FY3/24 Full-Year Forecast (Unchanged from Oct. 30)
FY3/24 Full-Year Forecast (Unchanged from Oct. 30) YoY % figures represent the year-on-year change relative to the previous year's figures (yen: billions) FY3/24 (e) Excl. IRA impact FY3/23 Excl. IRA impact YoY Excl. IRA impact Sales 8,400.0 8,499.0 8,378.9 8,378.9 100% +21.1 101% +120.1 Adjusted op
Slide 14: FY3/24 Full-Year Forecast Revision by Segment
FY3/24 Full-Year Forecast Revision by Segment YoY % figures represent the year-on-year change relative to the previous year's figures Difference Adjusted Difference Other Difference Difference Difference OP (yen: billions) from from from from EBITDA*1 from Sales YoY forecast OP YoY forecast income/
Slide 15: FY3/24 Full-year Forecast Revision Factors (by Segment)
FY3/24 Full-year Forecast Revision Factors (by Segment) Major factors for revision (vs. forecast as of October 30) Sales Both sales & profit revised downward (yen: billions) • Sales: Deteriorating market conditions for overseas consumer electronics + 5.0 -46.0 + 21.0 business and worsening business
Slide 16: Lifestyle Segment: Forecast Revision by Divisional Company
Lifestyle Segment: FY3/24 Full-Year Forecast Revision by Divisional Company (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures Difference Adjusted Difference Other Difference Difference Difference from from from OP from EBITDA*2 from Sales YoY for
Slide 17: Lifestyle Segment: Forecast Revision Factors by Divisional Company
Lifestyle Segment: FY3/24 Full-Year Forecast Revision Factors by Divisional Company Major factors for revision (vs. forecast as of October 30) Sales (yen: billions) Both sales & profit revised downward • Sales: Decreasing overseas: “Double eleven” sale in China not favorable, 3,500.0 -16.0 Living Ap
Slide 18: Lifestyle: Heating & Ventilation A/C Company - HVAC Business Situation in Europe
Lifestyle: Heating & Ventilation A/C Company - HVAC Business Situation in Europe ■HVAC business FY3/23 Overall sales FY3/24 164% (YoY) A2W in Europe (yen: billions) 1Q 2Q 3Q 9M A2W is main factor for 130.1 bil. Overall sales 37.6 30.3 25.1 93.0 Others slow down for growth at yen YoY 114% 103% 70% 95
Slide 19: Initiatives in Growth Areas
Initiatives in Growth Areas Underlined: Changes/progress from October 2023 (Automotive Battery, Supply Chain Management Software, Air Quality & Air-conditioning) Achieve profit growth, focusing on North America market where we can leverage advantages (high-capacity cells) with strong business founda
Slide 20: Panasonic Group
Panasonic Group
Slide 21: Disclaimer Regarding Forward-Looking Statements
Disclaimer Regarding Forward-Looking Statements This presentation includes forward-looking statements about Panasonic Holdings Corporation (Panasonic HD) and its Group companies (the Panasonic Group). To the extent that statements in this presentation do not relate to historical or current facts, th
Slide 22: Reference: Our Advantages with Regards to US IRA
Reference: Our Advantages with Regards to US IRA Stable mass-production capability at Nevada Factory (New Kansas factory under construction) Our Advantages Strong customer base built in North America Panasonic’s battery components are FEOC*-compliant *FEOC: Foreign Entity of Concern If a clean
Slide 23: Reference: Overview of US Inflation Reduction Act (IRA)
Reference: Overview of US Inflation Reduction Act (IRA) IRA: Enacted in August 2022, aimed to reduce excessive inflation and promote energy policies Panasonic Energy’s business expected to be eligible for “battery cell ($35/kWh)” in section 45X Proposed rules for section 45X released in Decemb
Slide 24: Reference: Proposed Rules of US IRA Section 45X
Reference: Proposed Rules of US IRA Section 45X Proposed rules released in December 2023: only partial contents were added; No major changes Contents of section 45X expected to be finalized after receiving public comments and public hearing Main additions Excerpts sourced from “proposed rule“ by
Slide 25: Reference: Summary of Foreign Entity of Concern (FEOC)
Reference: Summary of Foreign Entity of Concern (FEOC) If a clean vehicle contains “Battery Components” or “Critical Minerals” from a FEOC, it will not qualify for section 30D and no tax credit will be granted to EV purchasers ■Definition of FEOC Excerpts sourced from "A Proposed Rule by the Energy
Slide 26: Reference: Eligible EV Battery Factories for US IRA Section 45X
Reference: Eligible EV Battery Factories for US IRA Section 45X Credit effective at: - Nevada Factory (already in operation): from launch of IRA - Kansas Factory (under construction): upon start of production & sales during FY3/25 (planned) <Ref.> Simple calculation: Factories Credit effective fro
Slide 27: Reference: Basic Agreement about a Partnership for Panasonic Automotive Systems' Business
Reference: Basic Agreement about a Partnership for Panasonic Automotive Systems’ Business Continuing discussions with the intention of finalizing the details of agreement by March 31, 2024 No new information since the announcement on November 17, 2023 Overview of announcement Current situation
Slide 28: Reference: FY3/24 Nine-Month Results
Reference: FY3/24 Nine-Month (Apr. - Dec.) Results YoY % figures represent the year-on-year change relative to the previous year's figures (yen: billions) FY3/24 9M Excl. IRA impact FY3/23 9M YoY (year-on-year) Excl. IRA impact 101% +75.8 102% +150.9 Sales 6,300.3 6,375.4 6,224.5 (99%)*3 (-87.2)*3 (
Slide 29: Reference: FY3/24 Financial Results/Forecast (3Q/4Q & 2H)
Reference: FY3/24 Financial Results/Forecast (3Q/4Q & 2H) (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures 3Q Excl. IRA YoY Excl. IRA 4Q (e) Excl. IRA YoY Excl. IRA 2H (e) Excl. IRA YoY Excl. IRA results impact impact impact impact impact impact
Slide 30: Reference: FY3/24 Results/Forecast by Segment (3Q/4Q & 2H)
Reference: FY3/24 Financial Results/Forecast by Segment（3Q/4Q & 2H) (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures 3Q results 4Q (e) 2H (e) Adjusted Adjusted Adjusted Sales YoY OP YoY Sales YoY OP YoY Sales YoY OP YoY (% to sales) (% to sales)
Slide 31: Reference: Lifestyle Results/Forecast by Divisional Company
Reference: Lifestyle Segment: FY3/24 Financial Results/Forecast by Divisional Company (3Q/4Q & 2H) (yen: billions) YoY % figures represent the year-on-year change relative to the previous year's figures 3Q results 4Q (e) 2H (e) Adjusted Adjusted Adjusted Sales YoY OP YoY Sales YoY OP YoY Sales YoY O
Slide 32: FY3/24 3Q Segment Information Lifestyle
Reference: FY3/24 3Q Segment Information Lifestyle Overview Sales: Decreased overall with weakening demand for HVAC business affected by deteriorated market conditions in Europe and decreased sales of consumer (yen: billions) FY3/24 3Q YoY (year-on-year) electronics mainly in Asia and China, deconso
Slide 33: FY3/24 3Q Segment Information Automotive
Reference: FY3/24 3Q Segment Information Automotive Overview Sales: Increased due to recovery in automobile production of our customers (yen: billions) FY3/24 3Q YoY (year-on-year) +16.3 404.7 Sales 404.7 117% (yen: billions) +20.7 (112%) *1 Effect of +9.3 exchange Adjusted operating profit 22.1 +10
Slide 34: FY3/24 3Q Segment Information Connect
Reference: FY3/24 3Q Segment Information Connect Overview Sales: Increased overall due to increased sales of Avionics, Gemba Solutions and (yen: billions) FY3/24 3Q YoY (year-on-year) Blue Yonder, despite decreased sales of Process Automation 104% (yen: billions) Sales 299.1 (101%) *1 Avionics Media
Slide 35: Reference: Blue Yonder's KPIs
Reference: Blue Yonder’s KPIs Connect Revenue / Adjusted OP (stand alone) Recurring / SaaS ratio Sales: Steady growth of both total sales and SaaS Profit: decreased YoY due to strategic investment, etc. Steady sales trend for both recurring and SaaS ratio （M US$） YoY Recurring ratio 307 310 328
Slide 36: Reference: FY3/24 Full-Year Forecast of Blue Yonder
Reference: FY3/24 Full-Year Forecast of Blue Yonder Connect Adjusted OP (stand alone) excluding strategic investment for future growth (product enhancement & synergy creation): In 9M: Increased year-on-year by 3.9 bil. yen to 7.2 bil. yen For full-year: Expecting year-on-year increase Breakdown
Slide 37: FY3/24 3Q Segment Information Industry
Reference: FY3/24 3Q Segment Information Industry Overview Sales: Decreased due mainly to downturn in market conditions (e.g. FA in China, ICT infrastructure) and changes in semiconductor sales channel, despite YoY PID increased sales of capacitors for green vehicles and products for generative (yen
Slide 38: Voluntarily Disclosed Businesses: Electronic Devices
Reference: Situation of Voluntarily Disclosed Businesses (FY3/24 3Q) Industry Electronic Devices Automotive CASE: Growth in capacitors & relays for green vehicles Information & communication infrastructure (ICT): Continued weak market trends in general purpose servers and base stations, as well
Slide 39: Electronic Devices: BB ratio of capacitors
Reference: Situation of Voluntarily Disclosed Businesses (FY3/24 3Q) Industry Electronic Devices: BB ratio* of capacitors *BB ratio: book-to-bill ratio Recovery trend in orders received, despite a less than 1 BB ratio of capacitors for Automotive CASE, Information & Communication infrastructure an
Slide 40: Voluntarily Disclosed Businesses: FA Solutions
Reference: Situation of Voluntarily Disclosed Businesses (FY3/24 3Q) Industry FA Solutions Both sales and profit decreased due to downturn in market conditions as well as intensifying competition mainly in China and other Asia markets. YoY decrease is also expected for the full-year. Currently c
Slide 41: Voluntarily Disclosed Businesses: Electronic Materials
Reference: Situation of Voluntarily Disclosed Businesses (FY3/24 3Q) Industry Electronic Materials Information & communication infrastructure: Favorable sales in multi-layer circuit board materials for generative AI, despite downturn in market conditions for servers and data centers Overall: YoY
Slide 42: FY3/24 3Q Segment Information Energy
Reference: FY3/24 3Q Segment Information Energy Overview Sales: Increased in real terms excluding IRA impact, also with effect of exchange rates; In In-vehicle, decreased due to decreased production and sales in (yen: billions) FY3/24 3Q YoY (year-on-year) Japan, despite favorable sales in North Ame
Slide 43: Automotive Battery: Initiatives at Japan Factory (Suminoe / Kaizuka)
Reference: Automotive Battery: Initiatives at Japan Factory (Suminoe / Kaizuka) Energy In response to decreased demand at Japan factory for FY3/24 2H onward Aim to optimize fixed costs to align with current demand Seize the decrease in demand at the domestic sites as an opportunity, and study th
Slide 44: Reference: FY3/24 3Q Operating Profit & Net Profit
Reference: FY3/24 3Q Operating Profit & Net Profit (yen: billions) YoY FY3/24 3Q FY3/23 3Q (year-on-year) Operating profit 127.5 84.4 +43.1 Non-operating income/loss 17.0 4.4 +12.6 Profit before income taxes 144.5 88.8 +55.7 Income taxes -28.3 -32.2 +3.9 Net profit 116.2 56.6 +59.6 Net profit attrib
Slide 45: Reference: Medium-term Management Indicators: KGI
Reference: Medium-term Management Indicators: KGI (yen: billions） Cumulative Operating CF ROIC (FY3/23-25) (FY3/25) Lifestyle 660 10.0% or more *1 Automotive 200 6.4% Connect 260 4.6% *2 Industry 390 or more 17% or more *3 Energy 330 12.0% Group Total 2,000 ROE 10% or more Note: Above data from pres
Slide 46: Reference: List of Voluntarily Disclosed Businesses in FY3/24
Reference: List of Voluntarily Disclosed Businesses in FY3/24 Businesses with Sales Disclosed Lifestyle Major Business Divisions, etc. (Panasonic Corporation) (Adjusted OP disclosed for underlined businesses) Living Appliances and • Kitchen Appliances : Kitchen Appliances BD Note 1: Sales and profit