Panasonic Holdings Corporation · TSE:6752
Panasonic — Q3 2023 Earnings Presentation
42 slides from Panasonic's earnings presentation, Feb 2, 2023
Slide 1: Fiscal 2023 Third Quarter Financial Results
Fiscal 2023 Third Quarter Financial Results February 2, 2023 Panasonic Holdings Corporation Notes: 1. This is an English translation from the original presentation in Japanese. 2. In this presentation, “Fiscal 2023” or “FY23” refers to the year ending March 31, 2023.
Slide 2: Summary of FY23 3Q Financial Results
Summary of FY23 3Q Financial Results FY23 3Q Financial Results ‧ Overall sales increased from FY22 3Q Increased sales (e.g. Automotive, Connect) and currency translation ‧ Adjusted operating profit slightly decreased Despite increased profit in Automotive and Connect, profit largely decreased in E
Slide 3: Fiscal 2023 Third Quarter Financial Results agenda
Fiscal 2023 Third Quarter Financial Results Fiscal 2023 Full-Year Financial Forecast Overview of US Inflation Reduction Act Forecast Revision Initiatives in Growth Areas, etc.
Slide 4: FY23 3Q Financial Results
FY23 3Q Financial Results (yen: billions) FY23 3Q FY22 3Q vs. FY22 / Difference Sales +14% +270.8 (excl. effect of exchange rates) 2,160.6 1,889.8 (+5%)*** (+88.4)*** Adjusted operating profit* (4.0%) (% to sales) 85.9 87.5 (4.6%) -2% -1.6 Other income/loss** -1.5 -14.5 - +13.0 Operating profit (% t
Slide 5: FY23 3Q Results by Segment
FY23 3Q Results by Segment vs. FY22 Adjusted Other FY22 FY22 OP FY22 EBITDA* FY22 (yen: billions) Sales (Excl. effect of OP income/ Difference Difference (% to sales) Difference (% to sales) Difference exchange rates) (% to sales) loss Lifestyle 904.0 +10% 31.1 **** -4.6 -0.6 +1.7 30.5 **** -2.9 56.
Slide 6: FY23 3Q Sales Analysis by Segment
FY23 3Q Sales Analysis by Segment Overall sales increased: Increased sales (e.g. Lifestyle, Automotive, Connect and Energy) and currency translation Head office/ +182.4 2,160.6 Entertainment & Eliminations, Connect Energy (yen: billions) Automotive Industry Communication Housing etc. Lifestyle +33.3
Slide 7: FY23 3Q Operating Profit Analysis by Segment
FY23 3Q Operating Profit Analysis by Segment Adjusted OP slightly decreased: Profit increased in Automotive and Connect, decreased in Lifestyle, Industry and Energy (yen: billions) +20.6 -2.2 -18.7 +10.0 -6.7 +13.0 84.4 73.0 -4.6 Industry Connect Energy Other income/loss Lifestyle Other/ Automotive
Slide 8: Lifestyle Segment: FY23 3Q Results by Divisional Company
Lifestyle Segment: FY23 3Q Results by Divisional Company (yen: billions) vs. FY22 Adjusted Other Sales (Excl. effect of OP FY22 income/ FY22 OP FY22 EBITDA** FY22 Difference Difference (% to sales) Difference (% to sales) Difference exchange rates) (% to sales) loss Living Appliances and Solutions 2
Slide 9: FY23 3Q Operating Profit Analysis (by Factor)
FY23 3Q Operating Profit Analysis (by Factor) Adjusted OP: Slightly decreased due to increased fixed costs and price hikes in raw materials, despite increased sales (yen: billions) Blue Yonder +17.4 -17.0 Price hikes consolidation, Effect of in raw materials Price revisions, temporary exchange +13.0
Slide 10: FY23 Nine-Month (Apr. – Dec.) FCF and Cash
FY23 Nine-Month (Apr. – Dec.) FCF and Cash • Operating CF: Increased from FY22 due mainly to working capital improvement and other factors, despite increased inventories • Inventories: In FY23 3Q, inventories have turned to a decrease in a larger number of businesses; Further efforts to reduce inven
Slide 11: Fiscal 2023 Third Quarter Financial Results agenda
Fiscal 2023 Third Quarter Financial Results Fiscal 2023 Full-Year Financial Forecast Overview of US Inflation Reduction Act Forecast Revision Initiatives in Growth Areas, etc.
Slide 12: Overview of US Inflation Reduction Act (IRA)
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 Rules not yet announced; additional guidance on Section 30D
Slide 13: Eligible EV Battery Factories for IRA
Eligible EV Battery Factories for IRA Credit effective at: - Nevada Factory (already in operation): from launch of IRA - Kansas Factory (under construction): upon start of production & sales during FY25 (planned) IRA impact not factored into FY23 forecast, since relevant rules (e.g. scheme of mo
Slide 14: Fiscal 2023 Third Quarter Financial Results agenda
Fiscal 2023 Third Quarter Financial Results Fiscal 2023 Full-Year Financial Forecast Overview of US Inflation Reduction Act Forecast Revision Initiatives in Growth Areas, etc.
Slide 15: FY23 Full-Year Forecast Revision
FY23 Full-Year Forecast Revision (yen: billions) FY23 (e) FY23 (e) Difference FY22 vs. FY22 / Difference (as of Feb. 2, ’23) (as of Oct. 31, ’22) Sales 0.0 +11% (excl. effect of exchange rates) 8,200.0 8,200.0 (-80.0) 7,388.8 (-1%) +811.2 Adjusted operating profit * 300.0 (3.7%) 340.0 (4.1%) -40.0 3
Slide 16: FY23 Full-Year Forecast Revision by Segment
FY23 Full-Year Forecast Revision by Segment Difference Difference Difference Difference Difference from Adjusted from Other from from from Sales vs. FY22 OP FY22 income/ FY22 OP FY22 EBITDA* FY22 (yen: billions) (Difference) forecast Difference forecast Difference forecast Difference forecast (% to
Slide 17: Industry Segment: FY23 Adjusted OP Revision Factors
Industry Segment: FY23 Adjusted OP Revision Factors • Sharp slowdown in China market conditions (ICT, FA) and global automobile production; sales (in real terms excluding effect of exchange rates) expected to decrease from forecast as of FY23 2Q ■Change in demand outlook (vs.FY22) <our estimate> ICT
Slide 18: Energy Segment: FY23 Adjusted OP Revision Factors
Energy Segment: FY23 Adjusted OP Revision Factors Industrial / Consumer: Affected by rapidly decreased demand; recovery expected in FY24 2Q onward In-vehicle: Despite strong demand, temporarily affected in short term by continuous price hikes of certain materials; but growth strategy remains unc
Slide 19: FY23 Full-year Forecast Revision Factors by Segment
FY23 Full-year Forecast Revision Factors by Segment Other/ Major factors for revision (vs. forecast as of Oct. 31) Eliminations & Sales (yen: billions) Connect Industry Energy adjustments Sales: Unchanged: Favorable A2W in Europe, electrical construction +12.0 0.0 +1.0 -13.0 materials in overseas, s
Slide 20: Lifestyle Segment: FY23 Full-year Forecast Revision by Divisional Company
Lifestyle Segment: FY23 Full-year Forecast Revision by Divisional Company (yen: billions) Difference Adjusted Difference Difference Difference Difference vs. FY22 from OP FY22 from Other FY22 from OP FY22 from EBITDA** FY22 from Sales (Difference) forecast (% to Difference forecast income/ Differenc
Slide 21: FY23 Full-year Operating Profit Forecast Revision Analysis (by Factor)
FY23 Full-year Operating Profit Forecast Revision Analysis (by Factor) OP: Revised downward due to decreased sales in real terms and impact of raw material price hikes Sales Price hikes Blue Yonder Consolidation Effect of Other increase/ Fixed in raw Rationaliza- (yen: billions) & Exchange Income/ d
Slide 22: Fiscal 2023 Third Quarter Financial Results agenda
Fiscal 2023 Third Quarter Financial Results Fiscal 2023 Full-Year Financial Forecast Overview of US Inflation Reduction Act Forecast Revision Initiatives in Growth Areas, etc.
Slide 23: Funding Investment for EV Battery Factory in Kansas, US
Funding Investment for EV Battery Factory in Kansas, US (current assumptions) Expecting 500-600 billion yen investment in new Kansas Factory during FY23-25 Of this amount, funding by the Group (beyond operating company’s own investment capacity) expected to be below 400 billion yen Funding will
Slide 24: Initiatives in Growth Areas
Initiatives in Growth Areas (Automotive Battery, Supply Chain Software, Air Quality & Air-conditioning) Underlined: Changes from Oct. ’22 Focus on North America market where we can leverage advantages (high capacity) with established strong business foundation; Achieve profit growth by expanding s
Slide 25: Announcements related to IR information
Announcements related to IR information Announcements on initiatives based on medium- to long-term strategy after the launch of new structure Apr. 1 Group Strategy Briefing by Group CEO (Medium-term Group KGIs) Commenced preparations for potential stock exchange listing of supply chain management bu
Slide 26: Panasonic Group
Panasonic Group
Slide 27: 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 28: (Reference) FY23 Nine-Month (Apr. - Dec.) Results
(Reference) FY23 Nine-Month (Apr. - Dec.) Results (yen: billions) FY23 9 months FY22 9 months vs. FY22 / Difference Sales +15% (excl. effect of exchange rates) 6,224.5 5,423.4 (+5%) +801.1 Adjusted Operating Profit* (3.7%) (% to sales) 231.8 287.3 (5.3%) -19% -55.5 Other income/loss** 2.4 -13.1 - +1
Slide 29: (Reference) FY23 Financial Forecast (4Q & 2H)
(Reference) FY23 Financial Forecast (4Q & 2H) vs. FY22/ vs. FY22/ vs. FY22/ (yen: billions) 3Q 4Q (e) 2H (e) Difference Difference Difference Sales 2,160.6 +14% +270.8 1,975.5 +1% +10.1 4,136.1 +7% +280.9 Adjusted operating profit* 85.9 -2% -1.6 68.2 -3% -2.2 154.1 -2% -3.8 (% to sales) (4.0%) (3.5%
Slide 30: (Reference) FY23 Financial Forecast by Segment (4Q & 2H)
(Reference) FY23 Financial Forecast by Segment (4Q & 2H) (yen: billions) 3Q 4Q (e) 2H (e) Adjusted Adjusted Adjusted Sales vs. FY22 OP Difference Sales vs. FY22 OP Difference Sales vs. FY22 OP Difference (% to sales) (% to sales) (% to sales) Lifestyle 904.0 +10% 31.1 * -4.6 782.5 -5% 25.6 +6.2 1,68
Slide 31: (Reference) Lifestyle Segment Forecast by Divisional Company (4Q & 2H)
(Reference) Lifestyle Segment: FY23 Financial Forecast by Divisional Company (4Q & 2H) (yen: billions) 3Q 4Q (e) 2H (e) Adjusted Adjusted Adjusted Sales vs. FY22 OP Difference Sales vs. FY22 OP Difference Sales vs. FY22 OP Difference (% to sales) (% to sales) (% to sales) Living Appliances and Solut
Slide 32: (Reference) Impact from Changes in Business Environment
(Reference) Impact from Changes in Business Environment (vs. FY22) Positive: (vs. FY22) Negative (vs. FY22) Semiconductor, parts & materials Changes in demand Price hikes in raw materials & logistics shortages • Continued to be strong: A2W in Europe • Favorable: electrical construction materials in
Slide 33: FY23 3Q Segment Information: Lifestyle
(Reference) FY23 3Q Segment Information Lifestyle Overview Sales increased: Growth businesses (e.g. A2W in Europe, overseas electrical construction materials) and stable profitability businesses (e.g. electrical construction vs. FY22 3Q/ materials in Japan, showcases in North America), despite decre
Slide 34: FY23 3Q Segment Information: Automotive
(Reference) FY23 3Q Segment Information Automotive Overview Sales increased: Recovery in automobile production of customers and effect of exchange rates (yen: billions) vs. FY22 3Q/ FY23 3Q Difference (yen: billions) Automotive +30.1 346.3 Others** Automotive Electronics +27％ Cockpit Systems +17.0 S
Slide 35: FY23 3Q Segment Information: Connect
(Reference) FY23 3Q Segment Information Connect Sales increased: Growth in rugged mobile terminals for overseas markets, Avionics Overview (market recovery in aviation industry) and increased sales of Blue Yonder, etc., vs. FY22 3Q/ (yen: billions) FY23 3Q Difference despite decreased sales of Proce
Slide 36: (Reference) Blue Yonder's KPIs
(Reference) Blue Yonder’s KPIs Connect Revenue / Adjusted OP (stand alone) Recurring / SaaS ratio Sales: Steady growth of SaaS / Profit: Recovery in FY23 3Q, Recurring ratio almost unchanged, but SaaS ratio despite decreased profit in FY23 2Q due to temporary expenses achieved steady growth （M U
Slide 37: FY23 3Q Segment Information: Industry
(Reference) FY23 3Q Segment Information Industry Overview Sales increased: Increased sales of capacitors for green vehicles, relays for industrial- use and currency translation, despite decreased sales of products for ICT terminals, vs. FY22 3Q/ PID automotive-use (excluding green vehicles) and Chin
Slide 38: FY23 3Q Segment Information: Energy
(Reference) FY23 3Q Segment Information Energy Overview Sales increased excluding effect of exchange rates: Increased EV battery production & sales and price revisions, despite decreased sales of consumer-use vs. FY22 3Q/ Li-ion batteries and storage systems for data centers affected by weakening (y
Slide 39: Automotive Batteries: Progress in Future Growth Initiatives
(Reference) Automotive Batteries: Progress in Future Growth Initiatives Energy 2170 cells: In November 2022, land leveling work began for the new factory in Kansas. Production is scheduled to begin during FY25. Outline of new facility in Kansas Production capacity expansion target • Aim to enhance
Slide 40: (Reference) FY23 3Q Operating Profit & Net Profit
(Reference) FY23 3Q Operating Profit & Net Profit (yen: billions） FY23 3Q FY22 3Q Difference Operating profit 84.4 73.0 +11.4 Non-operating income/loss 4.4 0.6 +3.8 Profit before income taxes 88.8 73.6 +15.2 Income taxes -32.2 -30.5 -1.7 Net profit 56.6 43.1 +13.5 Net profit attributable to Panasoni
Slide 41: (Reference) Medium-term Management Indicators: KGI
(Reference) Medium-term Management Indicators: KGI (yen: billions） Cumulative Operating CF ROIC (FY23-25) (FY25) Lifestyle 660 10.0% or more Automotive 200 8.5% Connect 260 4.6% Industry 390 or more 20.0% Energy 330 12.0% Group Total 2,000 ROE 10% or more Note: Above data from presentation materials
Slide 42: (Reference) List of Voluntarily Disclosed Businesses in FY23
(Reference) List of Voluntarily Disclosed Businesses in FY23 Lifestyle Businesses with Sales Disclosed Major Business Divisions, etc. (Panasonic Corporation) Living Appliances and • Kitchen Appliances : Kitchen Appliances BD Note 1: Sales and profit of CNA (except Cold Chain (China) and Refrigeratio