Jvckenwood Corporation · TSE:6632
Jvckenwood — Investor Presentation (November 2012)
41 slides from Jvckenwood's investor presentation, Nov 30, 2012
Slide 1: Management Strategy Briefing
Translation for Reference Only JVCKENWOOD Management Strategy Briefing JVC KENWOOD Corporation Shoichiro Eguchi President and CEO November 30, 2012 Copyright © 2012 JVC KENWOOD Corporation. All rights reserved.
Slide 2: Abbreviations
Abbreviations CE: Car Electronics (Business) PS: Professional Systems (Business) COM: Communications Equipment (Business) BS: Business Solution (Business) HM: Home & Mobile Electronics (Business) SE: Entertainment (Business) 1
Slide 3: New Mid-term Business Plan
JVC KENWOOD creates excitement & peace of mind New Mid-term Business Plan
Slide 4: Business Portfolio Trends
Business Portfolio Trends ■ Though structural reforms and growth strategy, sales composition for CE & PS increased, while that for HM decreased >> Profits improved. ■ Business portfolio mid-term targets: CE + PS: 63% to 70% Mid-term Business Mid-term Business Plan Growth strategy Creation of integra
Slide 5: Mid-term Management Targets
Mid-term Management Targets Net sales: JPY400B, Operating profit: JPY20B (margin: 5%), Ordinary income: JPY17B, Net income: JPY13.5B Compared with the current Mid-term Plan, operating profit is unchanged, and ordinary income and net income are raised due to decrease of financial expenses. (Billi
Slide 6: Mid-term Management Targets by Segment
Mid-term Management Targets by Segment CE operating margin Good Balance of Business Portfolio PS operating margin 7% * Several Segments Strong 7% 6% * All Segments Profitable 6% 5.9% 5.8% (HM turned black in 3/’12) 5% 5% 5.7% 5.6% 5.0% 4% 4% 3% 3% 3.3% 2% After 2% market COM 1% 1% 0% FYE3/’12 FYE3/’
Slide 7: Growth Driver
Growth Driver ■ Enhancing and expanding B to B (CE OEM and PS), where we can continuously leverage our strengths. ■ Expansion of businesses in emerging markets (Latin America, Russia, India, China, the Middle East, Africa and ASEAN), where we have large room to grow. Sales Sales composition composit
Slide 8: Mid-term Key Strategies
Mid-term Key Strategies 1. Challenge toward becoming a company that creates new values 2. Expanding businesses in emerging countries 3. Establishment of a lean corporate structure 4. Establishment of the JVCKENWOOD brand 7
Slide 9: Mid-term Key Strategies
Mid-term Key Strategies 1. Challenge toward becoming a company that creates new values 2. Expanding businesses in emerging countries 3. Establishment of a lean corporate structure 4. Establishment of the JVCKENWOOD brand 8
Slide 10: 1. Challenge toward becoming a company that creates new values
1. Challenge toward becoming a company that creates new values Keep away from bargain sale of AV systems Creation of values in smart AV field and the smart safety field Creation of JVCKENWOOD’s new value domains Next-generation Head-up display in collaboration Systems that combine radio with “Sa
Slide 11: Mid-term Key Strategies
Mid-term Key Strategies 1. Challenge toward becoming a company that creates new values 2. Expanding businesses in emerging countries 3. Establishment of a lean corporate structure 4. Establishment of the JVCKENWOOD brand 10
Slide 12: 2. Expanding businesses in emerging countries
2. Expanding businesses in emerging countries Realizing “manufacturing innovations from emerging countries” under the Emerging Market Planning Division, directly controlled by CEO that was launched on Sep. 1 (Billion yen) New idea of manufacturing: “Bottom Up” Sales in emerging countries 150 Value-a
Slide 13: 2. Expanding businesses in emerging countries
2. Expanding businesses in emerging countries ■ Delivering products dedicated to emerging countries * Enhancing car audio for digital media, and strengthening completed products with mechanisms of Shinwa * Analog radio systems, community-based radio systems, security cameras, and professional video
Slide 14: Mid-term Key Strategies
Mid-term Key Strategies 1. Challenge toward becoming a company that creates new values 2. Expanding businesses in emerging countries 3. Establishment of a lean corporate structure 4. Establishment of the JVCKENWOOD brand 13
Slide 15: 3. Establishment of a lean corporate structure
3. Establishment of a lean corporate structure ■ Reorganization of the head office on Nov. 1; shifting human resources to business divisions The roles and definition of head office were reviewed, and human resources were shifted to business divisions and the professional business support division. ■
Slide 16: Innovation of consolidated value chain (CVC)
Innovation of consolidated value chain (CVC) ■ Innovating the CVC as well as incorporating the correspondence of the emergency by the four business groups and a company-wide task force. * Target days required for correspondence of the emergency : 1 month or less End customers Products Production, sa
Slide 17: Mid-term Key Strategies
Mid-term Key Strategies 1. Challenge toward becoming a company that creates new values 2. Expanding businesses in emerging countries 3. Establishment of a lean corporate structure 4. Establishment of the JVCKENWOOD brand 16
Slide 18: 4. Establishment of the JVCKENWOOD brand
4. Establishment of the JVCKENWOOD brand Aiming the top brand in the world by brand strategy investments in addition to brand promotions while supplying products and services Sponsorship activities Linking “new customers”, “new markets” and “new businesses” through sponsorship activities to create
Slide 19: Strategies by business segment
Strategies by business segment 1. Car Electronics business 2. Professional Systems business 3. Home & Mobile Electronics business 4. Entertainment business 18
Slide 20: Strategies by business segment
Strategies by business segment 1. Car Electronics business 2. Professional Systems business 3. Home & Mobile Electronics business 4. Entertainment business 19
Slide 21: Car Electronics Business
Car Electronics Business Sales composition for CE business Growth strategies that leverage the strength for FYE3/16 of JVCKENWOOD and its partners, targeting OEM, the Japanese after market and CE emerging countries. Net sales target of the Group 39% 400 New systems that make entertainment billion ye
Slide 22: Collaboration with Shinwa
Collaboration with Shinwa Formed a capital and business alliance with Shinwa in Apr. and made it an equity-method company (45% stake). Converting into a subsidiary within three years (76% stake). * In-car mechanisms business and optical pickups business * The business of automotive water-based paint
Slide 23: Collaboration with DENSO
Collaboration with DENSO Further strengthening the collaborative relationship with DENSO by additionally acquiring its stake (JVCKENWOOD’s shareholding ratio is 3.0% as of Sep. 30 ’12) * Aiming to expand business by exploiting two companies’ strengths such as JVCKENWOOD’s technology development and
Slide 24: (1) Expanding OEM Business
(1) Expanding OEM Business Winning new orders (Billion yen) Sales of the OEM segment 100 * Winning new orders by leveraging our strength * Developing after-market products into dealer option products. 75 Expanding in-car device business * Strengthening and expanding the CD/DVD 50 drive mechanism
Slide 25: (2) Enhancing Car Multimedia Products for the After-market
(2) Enhancing Car Multimedia Products for the After-market * Increasing Japanese sales through Sales units of multimedia head units in after- strengthening the Saisoku-Navi products (Million units) 2.5 markets (incl. car navigation systems) and sales network. * Boosting sales by making use of the sa
Slide 26: Strategies by business segment
Strategies by business segment 1. Car Electronics business 2. Professional Systems business 3. Home & Mobile Electronics business 4. Entertainment business 25
Slide 27: Professional Systems Business
Professional Systems Business Focusing on digital LMR to make use of the Sales composition for PS business for FYE3/16 global trend of enhancing security and reformation of frequency bands PS Enhancing security cameras lineup and Net sales 31% applying video and imaging technologies to target of the
Slide 28: (1) Expanding Digital LMR Business
(1) Expanding Digital LMR Business * Introducing “NEXEDGE” to large-scale systems (Million units) for the public safety sector 0.6 Sales plan for digital radio systems * Developing and marketing digital LMR for China, Asia and Europe. 0.5 * Expanding sales of digital LMR for the U.S. public 0.4 safe
Slide 29: (2) Expanding BS Business
(2) Expanding BS Business * Expanding IP security cameras lineups (Million units) Sales plan for security cameras and enhancing sales network. 0.5 * Strengthening competitiveness of 0.4 professional video cameras and security cameras with AltaSens, Inc., a new 0.3 subsidiary of CMOS * Expanding the
Slide 30: Strategies by business segment
Strategies by business segment 1. Car Electronics business 2. Professional Systems business 3. Home & Mobile Electronics business 4. Entertainment business 29
Slide 31: Home & Mobile Electronics Business
Home & Mobile Electronics Business Turned black in FYE 3/’12 through culling Sales composition for HM business for FYE3/16 unprofitable products >> more stable profit- HM based business via qualitative sales 19% Contributing to new products and services in Net sales target of the Group other busines
Slide 32: Enhancing Product Lineups ("Smart AV Field")
Enhancing Product Lineups (“Smart AV Field”) * Enhancing the product group of AV accessories and expanding to emerging countries * Strengthening horizontal expansion of product lineups using highly functional products and proposal-based products * Strengthening development of the LCOS product * Deve
Slide 33: Strategies by business segment
Strategies by business segment 1. Car Electronics business 2. Professional Systems business 3. Home & Mobile Electronics business 4. Entertainment business 32
Slide 34: Entertainment Business
Entertainment Business Concentrating on fostering and scouting Sales composition for SE business for FYE3/16 new and middle-standing artists, SE strengthening the overall entertainment 10% business, and reinforcing the music Net sales target distribution business of the Group 400 billion yen Making
Slide 35: New and Middle-Standing Artists
New and Middle-Standing Artists （Billion yen） Leo Ieiri Music Software Market 350 Major-label debut in Feb. ’12 17-year-old singer-songwriter high school girl. 300 Long-awaited first album shot to No.1 in the Oricon daily hit chart on the day of release! 200 Creephyp Major-label debut in Oct. ’12 Fi
Slide 36: Overall Entertainment Business
Overall Entertainment Business Shift the Business from Package Sales to Artist Total Producing ＳＮＳ Overseas Expansion Games Total Producing Live Show TV & CM Online Package Distribution Artists Music Movies Merchandising Animations Dramas High- High-Resolution Music Publication High- High-Quality So
Slide 37: Financial Targets
Financial Targets JVC KENWOOD creates excitement & peace of mind 36
Slide 38: Financial Trends
Financial Trends Shareholders’ equity ratio increased though reduction of total assets, capital increase in FYE 3/’11 and realizing positive net income in FYE 3/’12 Net debt decreased, and net debt D/E ratio improved by loan repayments and bond redemptions Bond redemption (2 billion yen) Capital
Slide 39: Mid-term Financial Targets (Consolidated)
Mid-term Financial Targets (Consolidated) Shareholders’ Equity Ratio: 35%, Net-Debt: Zero and D/E Ratio: 0.7 times ROE: 10% and EPS: 81 yen Dividend Payout Ratio: 25% Shareholders’ Equity Ratio D/E Ratio （Billion yen） Net Debt （％） （times） 30 40 2.0 ● 1.6 times ■ 30 35% 1.5 20 26.9 ● Billion ye
Slide 40: Mid-term Vision
Mid-term Vision Re-design the Lifestyle of World’s People 39
Slide 41: JVC KENWOOD
JVC KENWOOD creates excitement & peace of mind