Jvckenwood Corporation · TSE:6632
Jvckenwood — Investor Presentation (May 2015)
33 slides from Jvckenwood's investor presentation, May 19, 2015
Slide 1: Vision 2020 Mid- to Long-term Business Plan
Translation for Reference Only “Vision 2020” Mid- to Long-term Business Plan - Evolution into a Customer Value Creator - May 19, 2015 JVC KENWOOD Corporation ©2015 JVCKENWOOD Corporation. All rights reserved.
Slide 2: Agenda
1. Background and Issue Recognition 2. Long-term Vision toward FY2020 3. Management Policy toward FY2020 4. Numerical Targets toward FY2017 5. Mid-term Strategy toward FY2017 1
Slide 3: Status of the current mid-term business plan
Status of the current mid-term business plan The current mid-term business plan is underway in spite of a bad start Sales (plan vs. actual) Operating profit (plan vs. actual) Unit: billion yen 400.0 Unit: billion yen 320.0 20.0 316.3 300.0 306.6 (Forecast) 285.0 14.0 9.6 8.0 (Forecast) 6.6 4.4 '13
Slide 4: Major reasons of underachievement of the plan and new growth opportunities
Major reasons of underachievement of the plan and new growth opportunities The trend of technological innovation is an opportunity to generate new market value Changes in external environment JVCKENWOOD • Sharp contraction of the • Delay in response to the sharp rise of product costs Home Electron
Slide 5: Positioning of the Vision 2020
Positioning of the “Vision 2020” The current mid-term business plan has been renovated and a long- term vision toward 2020 and a mid-term strategy targeted at FY2017 were newly set 3/2014 3/2015 3/2016 3/2017 3/2018 3/2019 3/2020 3/2021 2012 Mid-term Business Plan Structural reforms 1. Employment
Slide 6: Background and Issue Recognition
1. Background and Issue Recognition 2. Long-term Vision toward FY2020 3. Management Policy toward FY2020 4. Numerical Targets toward FY2017 5. Mid-term Strategy toward FY2017 5
Slide 7: Evolution into a company capable of creating customer value
Evolution into a company capable of creating customer value From a “manufacturer/distributor” to a “customer value creator” Conventional company Goal Business Manufacturer/ Customer value creator category distributor (maker) (value creator) Sale of products Provision of solutions Means of implemen
Slide 8: Means of implementation (1/3): Sale of products to provision of solutions
Means of implementation (1/3): Sale of products → Provision of solutions Become a partner who can offer a specific solution to customerʼs problem Sale of products Provision of solutions Customer Customer Issue Issue Sales identification resolution Customization Solution development (integration of
Slide 9: Means of implementation (2/3): Product sales company to business operation company
Means of implementation (2/3): Product sales company → Business operation company Expand the roles of regional CEOs and product sales companies and position them as regional business operation companies in response to the increase in direct sales businesses of business units at the headquarters ba
Slide 10: Closed innovation to Open innovation
Means of implementation (3/3): Closed innovation → Open innovation Deepen cooperation/collaboration with outside partners to accelerate solution development Investment Spinout* New Joint Existing Operating Venture business unit company Investment Collaboration Investment Other Investment Transfer
Slide 11: Long-term Vision toward FY2020
1. Background and Issue Recognition 2. Long-term Vision toward FY2020 3. Management Policy toward FY2020 4. Numerical Targets toward FY2017 5. Mid-term Strategy toward FY2017 10
Slide 12: Business policy
Business policy Toward management that focuses on areas of our strengths Conventional approach VISION “2020” Management focused on Business Management focused on sales growth and policy areas of our strengths increasing market share Principal Business scale Capital profitability management (sales,
Slide 13: Management indicator and corporate governance
Management indicator and corporate governance Implement performance evaluation and business portfolio management based on ROE as a publicized indicator as well as ROIC as an internal management indicator Performance evaluation Acquisition and Business portfolio holding of shares management *1 *2 S
Slide 14: Toward achieving higher ROE: Business portfolio
Toward achieving higher ROE 〜Business portfolio〜 Establish a structure in which cash generated by profit- base businesses with high ROIC supports investments in growth-leading businesses so as to achieve higher ROE Selection criteria for business domain Growth-leading businesses Priority allocatio
Slide 15: Reference: Investment record (M&As, etc.)
Reference: Investment record (M&As, etc.) Impact on sales: Businesses acquired (approx. 60 billion yen), businesses sold (approx. 30 billion yen) Previous Date Purpose segment Zetron became a subsidiary 5/’07 Strengthen communications total system business PS AltaSens became a subsidiary 8/’12 Brin
Slide 16: New shape of the Company: Reorganization
New “shape of the Company” 〜Reorganization〜 Promote integration of holding technologies by separating the organization by customer industry sectors Conventional The new “shape of the Company” (organization by product businesses) (organization by customer industry sectors) Automotive sector Growth-
Slide 17: Basic strategy by customer industry sectors
Basic strategy by customer industry sectors Cash flows generated by profit-base businesses to support the growth investments in Automotive sector Customer Level of Input Output Revenue Basic strategy Ratio Value industry sector opportunity Invest Sales of profit of profit stability Focus on No.1 s
Slide 18: Composition of revenue by customer industry sectors
Composition of revenue by customer industry sectors The stable cash flows generated by Public Services and Media Services sectors will serve as support until the Automotive sector achieves about 1/2 of the total revenue 売上構成⽐の推移 Trend in sales composition 営業利益額構成⽐の推移 Trend in operating profit comp
Slide 19: Numerical Targets toward FY2017
1. Background and Issue Recognition 2. Long-term Vision toward FY2020 3. Management Policy toward FY2020 4. Numerical Targets toward FY2017 5. Mid-term Strategy toward FY2017 18
Slide 20: Mid-term management numerical targets
Mid-term management numerical targets To achieve operating profit of 14.0 billion yen and targeted ROE at 10% by FY2017 Sales (left axis, billion yen) Operating profit (right axis, billion yen) 300.0 316.3 285.0 (Forecast) 300 30 14.0 200 20 (Target) 8.0 100 6.6 (Forecast) 10 4.4 0 0 FY2013 FY2014
Slide 21: Framework for achieving the mid-term management numerical targets
Framework for achieving the mid-term management numerical targets Aim at operating profit of 14.0 billion by turning businesses necessary to improve their profitability into profitable and commercializing next-generation businesses, in addition to the stable profit generated by profit-base busines
Slide 22: Mid-term investment plan
Mid-term investment plan Overweighted investment to growth-leading, Automotive sector 2013/3 2016/3 〜2015/3 〜2018/3 Total Total Composition of capital 39% Over expenditure*1 of 50% Automotive sector Composition of depreciation*2 of 39% Over Automotive sector 50% *1 Includes investment in intangibl
Slide 23: Mid-term financial plan
Mid-term financial plan Cash planning framework Approach toward dividend Pursue optimal capital Target for consolidated structure to improve capital dividend payout ratio of profitability 30% -Stable shareholder return Balance between reduction of net interest-bearing debts Balance between a
Slide 24: Mid-term Strategy toward FY2017
1. Background and Issue Recognition 2. Long-term Vision toward FY2020 3. Management Policy toward FY2020 4. Numerical Targets toward FY2017 5. Mid-term Strategy toward FY2017 23
Slide 25: Market strategy: Basic policy, Refocus on developed countries
Market strategy: Basic policy 〜Refocus on developed countries〜 Pursue an aggressive growth path as there is a big possibility for creating new customer value in both developed and emerging countries Approach toward Approach toward developed markets emerging markets • Maturity〜Decline • Growth acco
Slide 26: Business strategy: Basic policy, Integration of strengths
Business strategy: Basic policy 〜Integration of “strengths”〜 Exert our presence in the next-generation business sectors by integrating our “strengths” Automotive Public services/Media services No.1 in consumer market share and brand power Second in market share for radio equipment Good customers i
Slide 27: Profit-base business: Develop solutions for professional communications
Profit-base business: Develop solutions for professional communications Constant increase in profit can be expected from the professional communications, which is the biggest source of our operating profit, without large-scale investment • New business development in the Public Safety sector • Uti
Slide 28: Growth-leading business: Progress in optical technology
Growth-leading business: Develop solutions for automotives 1) From “analog & wired” to “digital & wireless”; 2) From locally available specifications to global platforms; and 3) An opportunity for the “third leap forward” with the progress in optical technology, following the car audio and car nav
Slide 29: Reference: Digital Cockpit
Reference: Digital Cockpit Demo of Digital Cockpit Introduced and displayed at “CES2015” “McLaren 650S Spider” featuring model 28
Slide 30: Reference: Systemization of our strengths in the CAROPTRONICS
Reference: Systemization of our strengths in the CAROPTRONICS The more the collaboration/integration among respective component domain is promoted, the greater added-value is generated from our strengths as a company that holds a wide range of both products and technologies Product CAROPTRONICS De
Slide 31: Steps of business development of three sectors
Business strategy: Steps of business development of three sectors Short- to mid-term Mid- to long-term • Increase share in consumer business • Full-scale entry to the factory-installed • Accelerate cultivation of dealer-installed option business Automotive option business -Divert consumer model plat
Slide 32: Creating excitement and peace of mind for the people of the world
RENCE DAEADKAN Creating excitement and peace of mind for the people of the world
Slide 33: JVC KENWOOD creates excitement & peace of mind
JVC KENWOOD creates excitement & peace of mind