OSAKA, Japan. - Tuesday, February 3rd 2015 [ME NewsWire]
- Sales Decreased in Real Terms, Profitability in Challenging Businesses Steadily Improved -
(BUSINESS
WIRE) Panasonic Corporation (Panasonic [TOKYO:6752]) today reported its
consolidated financial results for the third quarter and nine months
ended December 31, 2014, of the current fiscal year ending March 31,
2015 (fiscal 2015).
Consolidated Third-quarter Results
Consolidated
group sales for the third quarter increased by 1% to 1,996.4 billion
yen from 1,973.5 billion yen for the third quarter of the year ended
March 31, 2014 (fiscal 2014). Sales of solar panels for homes continued
to be stable in Japan, and demand of automotive-related business
steadily increased in its global market. Yen depreciation also
contributed the overseas sales increase. Of the consolidated group
total, domestic sales decreased by 4% to 927.7 billion yen from 970.3
billion yen a year ago. Overseas sales increased by 7% to 1,068.7
billion yen from 1,003.2 billion yen a year ago.
During the third
quarter under review, the economy slowed down in China and some ASEAN
countries and was stagnated in most European countries. Meantime, U.S.
employment statistics and consumer spending were stable and the signs of
improvement from recent weak economy were seen in Japan. Under such
business circumstances, in fiscal 2015, the second year of the mid-term
management plan “Cross-Value Innovation 2015 (CV2015),” Panasonic has
been promoting the initiatives to consolidate a foundation to achieve
CV2015 and to set growth strategy for a ‘New Panasonic’ in fiscal 2019.
As one of the initiatives, regarding the automotive battery business,
the company established Panasonic Energy Corporation of North America, a
new manufacturing company of cylindrical lithium-ion battery cells at
the Tesla Gigafactory of Tesla Motors (U.S.). Regarding the consumer
electronics business, the company launched ‘J Concept’ series products
in late October 2014, which have been received well. These products are
specifically developed emphasizing on functions and design to propose
high-quality living in harmony with the Japanese lifestyle, targeting at
people in their 50’s and 60’s in Japan.
Operating profit*
decreased by 3% to 113.3 billion yen from 116.6 billion yen a year ago
due to sales decrease in real terms, excluding the effect of foreign
exchange. Pre-tax income and net income attributable to Panasonic
Corporation decreased from a year ago to 86.2 billion yen from 99.6
billion yen and to 59.5 billion yen from 73.7 billion yen respectively
mainly due to some one-time capital gains recorded a year ago, and the
expense to prevent further accident of residential water heating systems
included in other deductions this year.
* For information about
operating profit, see Note 2 of the Notes to consolidated financial
statements attached PDF:
http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-7.pdf
Consolidated Nine-month Results
Consolidated
group sales for nine months ended December 31, 2014 increased by 1% to
5,719.3 billion yen from 5,679.8 billion yen in the same period of
fiscal 2014. Demand in Japan overall decreased in housing-related and
consumer electronic businesses following the surge before the
consumption tax hike in April 2014. Meantime, this negative effect was
offset due to some effect of demand surge before the tax hike carried
over in the first quarter. Sales of solar panels for homes continued to
be stable in Japan, and demand of automotive-related business steadily
increased in its global market. Yen depreciation also contributed the
overseas sales increase. Domestic sales amounted to 2,677.6 billion yen
down by 3% from 2,757.6 billion yen a year ago, while overseas sales
increased by 4% to 3,041.7 billion yen from 2,922.2 billion yen a year
ago.
The company’s operating profit for the nine months increased
by 10% to 290.3 billion yen, from 263.2 billion yen a year ago, due to
fixed cost reduction including the business restructuring effect despite
sales decrease in real terms, which exclude the effect of foreign
exchange. Pre-tax income and net income attributable to Panasonic
Corporation decreased to 208.1 billion yen from 307.0 billion yen, and
to 140.4 billion yen from 243.0 billion yen respectively due mainly to
one-off gain from pension scheme change and some one-time capital gains
in other income a year ago, and the expense relating to prevent further
accident of residential water heating systems included in other
deductions in the nine months ended December 31, 2014.
Consolidated Nine-month Breakdown by Segment
Some
businesses were transferred among segments on April 1, 2014 and July 1,
2014. Accordingly, the figures for segment information in fiscal 2014
have been reclassified to conform to the presentation for July 1, 2014.
The company’s nine-month consolidated sales and profits by segment with previous year comparisons are summarized as follows:
Appliances
Sales
increased by 1% to 1,380.7 billion yen, compared with 1,361.3 billion
yen a year ago due mainly to favorable sales in home appliances, cold
chain equipment and device businesses including motors, despite sales
decrease in TVs. Segment profit increased by 68% to 44.6 billion yen,
compared with 26.6 billion yen a year ago due mainly to improved
profitability by streamlining in air conditioner business and profit
increase in motors.
Eco Solutions
Sales increased by 2% to
1,224.3 billion yen from 1,202.9 billion yen a year ago. In Japan,
sales in housing systems decreased due to weakening demand in housing
market after the consumption tax hike. Meantime, sales in housing solar
panels and LED lighting increased. Overseas sales increased due to
newly-consolidated VIKO, a Turkish company, as well as sales growth in
strategic regions such as India. Segment profit increased by 7% to 75.7
billion yen from 70.7 billion yen a year ago due mainly to sales
increase in solar business and streamlining initiatives.
AVC Networks
Sales
decreased by 1% to 827.8 billion yen from 832.9 billion yen a year ago.
Sales decreased due mainly to exit from unprofitable businesses and
business contraction including plasma display panels and DSCs, though
sales in three month ended December 31, 2014 increased due mainly to
positive effect from yen depreciation. Segment profit significantly
increased by 134% to 21.6 billion yen from 9.2 billion yen a year ago
due mainly to sales increase of stable BtoB business and benefit from
restructuring of challenging business.
Automotive & Industrial Systems
Sales
increased by 2% to 2,079.1 billion yen from 2,039.4 billion yen a year
ago due mainly to favorable sales for automotive-related business in
Automotive Infotainment Systems Business Division and electronic
component mounting equipment offsetting sales decreases by business
termination and transfers. The positive effect from yen depreciation
also contributed to increase in sales. Segment profit increased by 11%
to 80.3 billion yen from 72.4 billion yen a year ago due mainly to
streamlining initiatives and benefit from the restructuring of
challenging businesses.
Other
Sales decreased by 18% to
447.2 billion yen from 548.0 billion yen a year ago due mainly to the
transfer of the healthcare business at the end of fiscal 2014. Segment
profit significantly decreased by 85% to 1.5 billion yen compared with
10.3 billion yen a year ago.
Consolidated Financial Condition
Net
cash provided by operating activities for nine months ended December
31, 2014 amounted to 369.0 billion yen compared with an inflow of 355.2
billion yen a year ago due mainly to an improvement in working capital
including a decrease in trade receivables. Net cash used in investing
activities amounted to 107.6 billion yen compared with an outflow of
77.0 billion yen a year ago due mainly to decrease in proceeds from
disposals of investments in equity and increase in capital expenditures.
Free cash flow (net cash from operating activities plus net cash from
investing activities) amounted to 261.4 billion yen decreased by 16.8
billion yen from a year ago. Net cash used in financing activities
amounted to 122.8 billion yen compared with an outflow of 302.6 billion
yen a year ago due mainly to a decrease in repayment of the interest-
bearing debt despite an increase in dividend payment. Taking into
consideration exchange rate fluctuations, cash and cash equivalents
totaled 815.6 billion yen as of December 31, 2014 increasing 223.1
billion yen compared with the end of the last fiscal year.
The
company’s consolidated total assets as of December 31, 2014 increased by
404.5 billion yen to 5,617.5 billion yen from the end of fiscal 2014
due mainly to an increase in cash and cash equivalents and inventories
as well as yen depreciation. The company’s consolidated total
liabilities as of December 31, 2014 increased by 45.4 billion yen to
3,671.9 billion yen from the end of fiscal 2014. In real terms excluding
the effect of foreign exchanges, the company’s consolidated total
liabilities decreased due mainly to repayments of unsecured straight
bonds. Panasonic Corporation shareholders’ equity increased by 226.9
billion yen to 1,775.0 billion yen from March 31, 2014 due mainly to
recording net income attributable to Panasonic Corporation and an
improvement in accumulated other comprehensive income (loss) by yen
depreciation, despite a decrease in capital surplus accompanied by the
acquisition of additional interests of its subsidiaries. Adding
noncontrolling interests to Panasonic Corporation shareholders’ equity,
total equity was 1,945.6 billion yen.
Forecast for Fiscal 2015
The business performance forecast for fiscal 2015 remains unchanged from the forecast announced on October 31, 2014.
Panasonic
Corporation is one of the world's leading manufacturers of electronic
and electric products for consumer, business and industrial use.
Panasonic’s shares are listed on the Tokyo and Nagoya stock exchanges.
For
more information, please visit the following web sites: Panasonic home
page URL: http://panasonic.net/ Panasonic IR web site URL:
http://panasonic.com/global/corporate/ir
Disclaimer Regarding Forward-Looking Statements
This
press release includes forward-looking statements (that include those
within the meaning of Section 21E of the U.S. Securities Exchange Act of
1934) about Panasonic and its Group companies (the Panasonic 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 Panasonic 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 Panasonic 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. Panasonic 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 Panasonic in its subsequent filings under the Financial Instrument
and Exchange Act of Japan (the FIEA) and other publicly disclosed
documents. 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 Americas,
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; the possibility that excessive currency rate fluctuations of
the U.S. dollar, the euro, the Chinese yuan and other currencies against
the yen may adversely affect costs and prices of Panasonic’s products
and services and certain other transactions that are denominated in
these foreign currencies; the possibility of the Panasonic Group
incurring additional costs of raising funds, because of changes in the
fund raising environment; the possibility of the Panasonic Group not
being able 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 possibility of not achieving expected results on the
alliances or mergers and acquisitions; the possibility of not being
able to achieve its business objectives through joint ventures and other
collaborative agreements with other companies, including due to the
pressure of price reduction exceeding that which can be achieved by its
effort and decrease in demand for products from business partners which
Panasonic highly depends on in BtoB business areas; the possibility of
the Panasonic Group not being able 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
Panasonic Group; the possibility that the Panasonic 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 Panasonic Group has
holdings or changes in valuation of long-lived assets, including
property, plant and equipment and goodwill, deferred tax assets and
uncertain tax positions; future changes or revisions to accounting
policies or accounting rules; as well as natural disasters including
earthquakes, prevalence of infectious diseases throughout the world,
disruption of supply chain and other events that may negatively impact
business activities of the Panasonic Group. The factors listed above are
not all-inclusive and further information is contained in the most
recent English translated version of Panasonic’s securities reports
under the FIEA and any other documents which are disclosed on its
website.
Financial Tables and Additional Information
Statements
of Income and Statements of Comprehensive Income for 3rd Quarter [PDF:
11KB]
http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-2.pdf
Statements
of Income and Statements of Comprehensive Income for Nine Months [PDF:
12KB]
http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-3.pdf
Balance Sheets [PDF: 11KB] http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-4.pdf
Information by Segment [PDF: 10KB] http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-5.pdf
Statements of Cash Flows [PDF: 11KB] http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-6.pdf
Notes
to consolidated financial statements [PDF: 16KB]
http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-7.pdf
Supplemental Financial Data [PDF: 62KB] http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-8.pdf
Download all [PDF: 120KB] http://news.panasonic.com/press/news/data/2015/02/en150203-4/en150203-4-9.pdf
Related Links:
Panasonic Financial Statements: http://panasonic.net/ir/release/index.html
Headquarters News: http://news.panasonic.com/press/global/news_m.html
Panasonic News Portal: http://news.panasonic.net
Contacts
Panasonic Corporation
Global Communication Group
Public Relations Office
+81-3-3574-5729
presscontact@ml.jp.panasonic.com
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