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| Progress update of the ‘SANYO
EVOLUTION PROJECT’ |
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Note: This is a Summary of the Japanese original
Tokyo, May 18, 2006 ----SANYO Electric Co., Ltd. (SANYO), today announced
the progress of its three year structural reform plan, the ‘SANYO
EVOLUTION PROJECT’ - launched on July 5, 2005, and the ‘Mid-Term
Business Plan’ – announced on Nov 11, 2005 as well as
fiscal year 2006 management policies. |
| (1) FY 2005 Results (progress made
in streamlining) |
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| 1. Strengthening of Financial Condition |
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In regards to the liquidation of fixed assets as announced
on Nov. 18, 2005, SANYO achieved cash inflows of 42 billion
yen, (target of 37 billion yen) for real estate sales and 87.2
billion yen, (target of 50 billion yen) of equity shares sold.
SANYO achieved a reduction of approximately 420 billion yen
of interest bearing debt, at the end of March 2005. With these
results, SANYO significantly exceeded its original plan. As
the result of the 300 billion yen capital increase, shareholder’s
equity recovered from 6.6% from the end of Sept. to 18.7%. |
| 2. Personnel Reduction |
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SANYO achieved its three year employment reduction target,
by reducing approximately 14,000 employees by the end of March
2006. Regarding the breakdown, there is a reduction of about
6,500 employees in Japan, and 7,500 employees overseas. |
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(Results Produced from Streamlining)
| Item |
Result |
Remarks |
| Liquidation of fixed assets |
Cash inflow of 129.2
billion yen |
Original target of 87 billion
yen |
| Reduced interest bearing debt |
Reduced 421.7 billion yen of interest bearing debt |
End of March 2005, goal was to reduce 600 billion yen of interest
bearing debt in three years |
| Reduce total assets |
Decreased 445.8 billion yen |
From end of March 2005 |
| Stockholder’s equity ratio |
Improved to 18.7% |
6.6% end of Sept. 2005 |
| Employee reduction |
Reduced approximately 14,000 employees |
Achieved three year employment reduction target in one year
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| Debt-Equity Ratio |
Improved to 1.97 |
7.56 end of Sept. 2005 |
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| 3. Main business structural reforms-(including
core businesses) |
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-Partial stock transfer of SANYO Electric Credit Co., Ltd.
to the Goldman Sachs Group
-Principal agreement to establish a joint venture company for
flat panel TVs with Quanta Computer Inc.
- Establish an independent semiconductor business on July 1,
2006
-Preliminary agreement to form a global CDMA mobile phone business
with Nokia Corporation |
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| (2) FY 2006 Management Policy (Rebuilding
Phase) |
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| 1. Reinforce Governance |
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SANYO established from April 1, the Management Planning Headquarters
which is
in charge of corporate strategy planning and as a check function
for management
progress. In addition, SANYO will establish a new management
meeting with
officers and directors including outside directors, in order
to quicken
decision-making and allow for flexibility in business operations.
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| 2. Strengthen Global Development |
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As half of SANYO’s net sales come
from overseas, SANYO is moving forward to establish area strategy
planning and administrative functions, as well as strengthening
business development globally. |
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| 3. Strengthen Cross Functioning-(strengthen
every function of the Corporate DNA Evolution Plan) |
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SANYO started a corporate effort aiming
to strengthen cross functioning for
purchasing, production technology, quality, customer service,
IT etc., in every
overseeing unit and headquarters and SANYO will set detailed
goals for each
headquarters and overseeing unit. Moreover, SANYO established
an international
procurement center in Shenzhen, China with the objective of
improving the strategy
and efficiency of material purchasing from a corporate level.
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| 4. Focus on Core Businesses |
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SANYO will continue in FY 2006 to focus
management resources on core
businesses. Now with a solid financial foundation, SANYO will
invest more than
100 billion yen in property, plant and equipment. The majority
of the investment is
planned for SANYO’s core businesses particularly the
battery business plan to
double the amount of investment from last year. SANYO will
shift engineer
personnel and focus research development investments to core
businesses. |
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| 5. Businesses to be restructured-(will finish
structural reforms in FY 2006) |
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SANYO will finish structural reforms in
FY 2006 which will assure that the
Mid-Term Business Plan will be achieved. |
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| For Press Contact:(English
Only) |
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SANYO Electric Co., Ltd.
Media Relations Unit
Tel: +81-3-3837-6206 / Fax: +81-3-3837-6381
E-mail: Tokyo-pr@svnet.sannet.ne.jp |
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