Message #35 From:
Stock News Bot Date: January 10, 2007 07:24:00 AM
MC News Matsushita Electric Announces Annual Management Policy
OSAKA, Japan--(BUSINESS WIRE)--Matsushita Electric Industrial Co., Ltd. (Matsushita [NYSE
symbol: MC]), best known for its Panasonic
brand, today announced its management policy for fiscal year ending
March 31, 2008 (fiscal 2008). With the Company’s
three-year Leap Ahead 21 business plan ending March 31, 2007, President
Fumio Ohtsubo revealed a new mid-term business plan to make another leap
toward March 2010. Under the plan, Matsushita will enter a new phase for
further growth as follows:
1. Reviewing the Leap Ahead 21 Plan
A. Goals aimed under the Leap Ahead 21 plan
Under the plan, to survive the global competition, Matsushita has
implemented various initiatives since fiscal 2005. Specifically, the
plan aimed to achieve an operating profit to sales ratio of 5% or more
and a positive Capital Cost Management (CCM*) index, on a consolidated
basis. The Company has made steady progress toward these goals.
* CCM is an indicator created by Matsushita to evaluate return on
capital. A positive CCM indicates that the return on invested
capital meets the minimum return expected by capital markets.
B. Achievements under the Leap Ahead 21 plan
A lean and agile management style became firmly in place. For example,
Matsushita reduced its consolidated total assets by 460 billion yen,
from the beginning of the Leap Ahead 21 plan to September 30, 2006, by
reducing factory inventories with the introduction of Next Cell
Production System, as well as accelerating IT innovation. The Company
also implemented Cost Busters Project to reduce costs by about 220
billion yen over the three fiscal years.
To improve its competitiveness, Matsushita endeavored to strengthen
products, especially V-products, as strong business pillars and improved
its market share.
Collaboration with Matsushita Electric Works, Ltd. (MEW), which became a
majority-owned subsidiary in April 2004, created synergies, including
development of Collaboration V-products in home appliances and building
products. This collaboration contributed to a sales increase of more
than 100 billion yen during the two fiscal years.
Under the plan, Matsushita implemented measures to enhance shareholder
value, including the ESV (Enhancement of Shareholder Value) Plan,
repurchases of its own shares and significant increases in dividends.
These measures focused on the interests of shareholders and contributed
to enhancing the market capitalization of the Company by about 1.5
trillion yen in the last three years.
Matsushita drove forward various reforms in organization, corporate
culture and human resource management. The Company established a new Job
Qualification System, the Corporate Diversity Promotion Division and a
Skills Evaluation System.
2. Global Excellence Indicators that
Matsushita aims to achieve
Matsushita aims for a global excellent company by achieving the
following goals:
Sales of 10 trillion yen or more, 60% or more in overseas sales
Operating profit ratio of 10% or more and return on equity (ROE) of
10% or more
Global top share products sales ratio of 30% or more
In addition, it is imperative for the Company to gain a top reputation
in terms of corporate social responsibility (CSR) and trusted brand.
3. The GP3 Plan
The new mid-term business plan sets forth milestones and strategies for
the Company to enter into its next phase for growth. The plan will guide
and challenge the Company so that it becomes the global excellent
company that the Matsushita Group aims to be. The three-year business
plan to be completed by March 2010 is called the GP3 plan. GP3 stands
for (1) Global Progress, evolving through global sales expansion, (2)
Global Profit, enhancing profitability worldwide, (3) Global Panasonic,
building globally trusted brand.
A. Goals of the GP3 plan
Matsushita aims for 10 trillion yen sales and ROE of 10% for fiscal 2010
ending March 31, 2010.
Sales and ROE are two indicators in the GP3 plan to measure the Company’s
steady growth with profitability. The former indicates growth, and the
latter profitability on stockholders’ equity.
B. Priority themes of mid-term growth strategies
(1) Double-digit growth in overseas sales
To aim for double-digit growth in overseas sales of consumer products
and to significantly boost consolidated overseas sales, the Company will
focus on three points: 1) marketing tailored to regional
characteristics; 2) improving product competitiveness through
collaboration between sales and production divisions; and 3)
strengthening its brands based on product competitiveness.
1)Marketing tailored to regional characteristicsNorth American and European markets: Matsushita aims to achieve
a sales increase of 310 billion yen in the three fiscal years.
To realize the goal, the Company will continue to focus on the
flat-panel TV business as a basis to significantly boost the
sales of digital audiovisual (AV) products. It will strengthen
its ties with influential local mass retailers and expand its
"XCS (Extreme Customer Satisfaction) Program" implemented in
North America. For the Eastern European market, Matsushita will
reinforce its marketing structure to increase sales.
China and other Asian countries: A sales increase of 340
billion yen is targeted in the next three fiscal years.
Matsushita will actively promote its flat-panel TVs and digital
cameras. The region is considered an important market for the
white goods and beauty and health-related home appliances.
Emerging markets: Matsushita aims to increase sales of consumer
products by 200 billion yen in the next three fiscal years,
focusing on priority countries such as BRICs and Vietnam. In
Russia, management resources will be concentrated on flat-panel
TVs and digital cameras. In Brazil, the Company plans to expand
sales of digital AV products with expansion of local
production. In India, the Company will mainly focus on
flat-panel TVs and air conditioners. In Vietnam, Matsushita
will promote marketing tailored to regional characteristics,
focused on six major cities.
2) Improving product competitiveness through collaboration between sales and production divisions
To expand its business in the Chinese market, Matsushita will
introduce V-products focusing on the daily lives with locally
created added value in fiscal 2008. The Company will promote
collaboration between sales and production divisions to further
reinforce its competitive edge on a global scale.
3) Strengthening brands based on product competitiveness
Matsushita will implement the Global Plasma Caravan, carrying
its plasma TVs to 175 major cities in accumulated total in the
Americas, Europe and China for the next three fiscal years. The
Global Plasma Caravan will provide opportunities for the people
to directly experience the high picture quality of plasma TVs.
(2) Four strategic businesses
Matsushita has selected four strategic businesses for its sales growth:
digital AV business, automotive electronics business, businesses
providing comfortable living, and semiconductors and other devices
businesses.
1) Digital AV business
Matsushita considers five product categories as driving force
for growth including flat panel TVs, such as plasma TVs and LCD
TVs, digital cameras, Blu-ray Disc recorders/drives and
high-definition (HD) digital camcorders. The Company plans to
increase sales, mainly overseas, by 700 billion yen in the next
three fiscal years. The Company has the following targets of
global market share of each product category for fiscal 2010:
Flat-panel TVs - target of 25% in the 37-inch or larger:
Matsushita will enhance the basic performance of its TVs and
expand its plasma TVs of 1080p HD lineups with a 42-inch
1080p HD model scheduled to be launched this spring. The
Company will also realize an outstanding cost-competitiveness
by utilizing its unrivaled efficiency in investment and
production.
Digital cameras - target of 15%: Matsushita will enhance its
lineups including single-lens reflex models (SLR). It will
also strengthen in-house manufacturing of relevant key
devices.
HD camcorders - target of 40%: Matsushita will utilize the
strength of SD Card camcorders at its core with their
light-weight, compactness, sturdiness and excellent picture
quality.
Blu-ray Disc recorders/drives - target of 35% or more:
Matsushita will reinforce its advanced technologies,
including H.264 video compression technology, as well as
enhancing cost-competitiveness.
2) Automotive electronics business
Matsushita will launch a Group-wide project targeting in excess
of 1 trillion yen sales in this area in fiscal 2011. Under the
GP3 plan, the Company aims to achieve sales of 950 billion yen
in fiscal 2010. With a vision of contributing to the creation
of a car society filled with dreams, peace of mind and
inspiration, the Company will focus on three areas including
comfortable car interior space, environment, and safety and
peace of mind.
3) Businesses providing comfortable living
Matsushita plans to achieve sales of 3 trillion yen in this
area in fiscal 2010. The Company will establish a project
providing comfortable living to implement group-wide strategies
by further promoting collaboration with MEW. By maximizing the
strength of its products and the synergies created by the
combination of these products, Matsushita will offer total
solutions for homes and buildings.
4) Semiconductors and other devices businesses
In the next three fiscal years, Matsushita aims to increase
sales of 240 billion yen with 120 billion yen in semiconductors
business and 120 billion yen in other devices businesses. The
Company will strengthen outside sales of devices by expanding
its global customer base and further enhancing its capacity in
proposing solutions. For the entire device business, Matsushita
aims to increase the percentage of globally leading devices to
50%.
(3) Continuous selection and concentration
Matsushita plans to make a capital investment of 1.5 trillion yen and an
R&D investment of 1.8 trillion yen over the next three fiscal years. The
investments will be focused on the growing businesses such as flat-panel
TVs, the advanced priority themes, and the key devices such as
semiconductors.
The Company plans to build the fifth PDP plant in Japan, boasting the
world’s largest production capacity, with a
total investment of 280 billion yen. The plant will have a monthly
output capacity of 1 million units (calculated based on 42-inch panels)
and is scheduled to commence production in 2009. (See the press release “Panasonic
and Toray to Build the World’s Largest Plasma
TV Plant with a Capacity of One Million Units per Month”
announced today.)
Toward realization of a
manufacturing-oriented company
Manufacturing relates to an entire process of integrated flow from
development through marketing and services.
The concept of a manufacturing-oriented company is to combine this
process of manufacturing and all activities of the staff that support
the process, toward the launch of products to contribute to the creation
of customer value.
Manufacturing Innovation Division (planned to be established on April 1, 2007)
The new division will consist of four working groups of
manufacturing, V-products, global marketing and management, aiming
to realize overall optimization for the Company with its products
at the core.
Introduction of a new performance
evaluation
For the acceleration of “steady growth with
profitability,” CCM and free cash flow, the
former indicators, will be integrated into CCM, and the sales will be
newly added as an indicator of growth. Accordingly, CCM and the sales
will be the new indicators of growth.
Aiming at vitalizing the Company
(1) As a public entity
Matsushita’s unwavering management philosophy
of contributing to society as a public entity has guided its business
activities. The Company considers implementing this management
philosophy the essence of CSR, which includes promoting environmental
management, enforcement of compliance, and strengthening information
security, while enhancing transparency of the business, whereby
contributing to the society as a whole.
(2) Nurturing corporate culture with diversity
Matsushita will implement the following measures to nurture a corporate
culture where employees respect the personality of each individual and
develop abilities through competition for excellence. The Company
believes that such a culture will encourage employees to activate their
potentials to the fullest extent while they work together toward its
growth worldwide:
1) Further promoting employees based on skills and capabilities,
regardless of gender, age or nationality
2) Encouraging personnel exchanges beyond the border between
countries or business domains
3) Building a structure to promote communication worldwide
4) Accelerating implementation of Flat & Web, skill evaluation,
and e-Work or teleworking system
Elimination of product quality problems
Matsushita has been making every effort to fully recover its trust by
solving problems regarding kerosene fan heaters in Japan. The lessons
learned from incidents over the past years have renewed its strong
commitment to safety and quality. The Company reaffirms that safety and
quality always come first.
4. Management slogan for 2007
GP3 Plan - Global Progress, Global Profit, Global Panasonic
Rise to the Challenge!
About Matsushita
Best known for its Panasonic brand name, Matsushita Electric Industrial
Co., Ltd. is a worldwide leader in the development and manufacture of
electronic products for a wide range of consumer, business, and
industrial needs. Based in Osaka, Japan, the Company recorded
consolidated net sales of US$76.02 billion for the year ended March 31,
2006. The Company’s shares are listed on the
Tokyo, Osaka, Nagoya and New York (NYSE:MC) stock exchanges. For more
information on the Company and the Panasonic brand, visit the Company’s
website at http://panasonic.net/.
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, including property, plant
and equipment and goodwill, 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.
In order to be consistent with generally accepted financial reporting
practices in Japan, operating profit (loss) is presented in accordance
with generally accepted accounting principles in Japan. The company
believes that this is useful to investors in comparing the company's
financial results with those of other Japanese companies. Under United
States generally accepted accounting principles, expenses associated
with the implementation of early retirement programs at certain domestic
and overseas companies are usually included as part of operating profit
(loss) in the statement of income.
The targets of new mid-term business plan are based on the current
business organization and business segments, and the assumptions of
management environment are as follows:
- Economic forecast Japan: gradual recovery trend U.S.: a slight slowdown but steady Europe: quite favorable Asia: High growth in China and the Asian economy is steady overall- Raw materials prices (including oil, metals and plastic materials): No significant change
