SANYO Group Mid-term Management Plan for FY2008 to FY2010
- Proactive investments lead to shift in path to growth -
Tokyo, May 22, 2008 - SANYO Electric Co., Ltd. (SANYO) announced its new 'Mid-term Management Plan' for next three years, fiscal years (FY) 2008 through 2010, for the SANYO Group based on the 'Mid-term Business Strategy', or 'Master Plan', announced last November.
Recap of Previous Mid-term Management Plan (FY 2005 to FY 2007)
These past three years, starting from FY 2005 and ending with FY 2007, SANYO has worked on transforming the business portfolio, revitalizing its revenue base through implementing new measures improving management effectiveness by making it a more lateral organization, and ensuring the health of its financial structure. In FY 2007, SANYO was able to accomplish its operating profit goals, ensuring a return to a balance in the black, while largely reducing interest bearing debt
Outline of the SANYO Electric Group New Mid-term Management Plan (FY 2008 to FY 2010)
1. Mid-term Management Policies
Aiming towards becoming a 'Leading provider of Environment- and Energy-related products', SANYO will adapt and transform, establishing the foundation for ensuring highly profitable businesses in the future.
2. Mid-term Management Goals
(1) Achieve the FY 2010 consolidated Group operating profit goal of 100 billion yen or more. (must achieve goal: 90 billion yen)
(2) Make all businesses profitable after 1,000 days (3 years)
3. Primary financial data projections for the Mid-term Management Plan
|
FY 2008 |
FY 2009 |
FY 2010 |
Total Sales |
20,200 |
21,500 |
23,800 |
Operating Profit |
500 |
700 |
900 |
Other |
- Facility investment total of 360 billion yen over three years (up 130 billion yen from the previous three year term) |
||
4. Points of the Mid-tern Management Plan
The SANYO Group will shift its focus in 2008 from restructuring management to the creation of a growth path, establish in the new three year period a strong foundation for high profitability, and challenge the group to reach previous record profit levels. The points of the Mid-term Management Plan are as follows.
(1) Implement strategic investments to accomplish the plan for FY 2010
In order to realize the shift in the new Mid-term Management Plan to focus on creating a path of growth, SANYO will implement the largest facilities investment ever.
The investments will be strategic, mainly focusing approximately 70% of the total investments on the Components Business Group's main three businesses: rechargeable batteries, solar, and electronic devices.
*The Importance of FY 2008 financial results In order for SANYO to accomplish the goal of 100 billion yen in operating profit at the end of FY 2010, FY 2008 will be used as a year of investment to prepare to meet this challenge, meaning that the plan includes an increase in depreciation expenses and fixed costs for the year and a temporary reduction in profit.
(2) In approximately 1000 days (or three years), all continuing businesses will become profitable
Activities to strengthen the overseas Finished Goods Business Group and measures to improve operating efficiency will be implemented. Also, measures will be taken to focus and select primary areas of expertise to reinforce and further strengthen the Semiconductor Business' profitability.
(3) Measures for mid- and long-term competitiveness will be implemented
In order to fortify mid- and long-term competitiveness, each company will work laterally across the SANYO Group for strengthening technological development, product development and marketing functions within each business domain.
(4) Maintain a sound financial structure through thorough cash flow management
The SANYO Group will work together to implement cost reductions, properly adjust working capital levels, and create measures for reform on a global base of the business management system for thorough cash flow management.
5. Primary policies and Mid-term Plans for each business
(1)Energy Business Area
1. Rechargeable Batteries Business
-Increase production capacity in response to demand for lithium-ion batteries
-Strengthen strategic partnerships for the HEV business
-Establish new manufacturing locations for increased production
2. Solar Business
-Promote overseas sales expansion by increasing the production capacity of HIT solar cells
Expand scope of overseas sales to more than 100 billion yen, focusing primarily on Europe and North America for FY 2010
(2)Electronics Business Area
1. Electronics Device Business
-Expand sales through increased production of capacitors and optical pickups to approximately 50 billion yen (3 year goal)
(Respond to expanding client market demand by establishing a number of manufacturing locations in Asia)
2. Semiconductor Business
-Improve competitiveness through focusing management resources on primary divisions
-Integration and consolidation of distribution locations, implement effective manufacturing practices
-Expand sales through improved procurement efficiency within the group, strengthen technical development capacity
3. Digital Business
Digital Cameras
-Expand orders and improve development through strengthened relationships with OEM partners
-Implement plans for expanding the movie business
(Reinforce the global expansion of the Xacti line-up, start supplying OEM)
Projectors
-Maintain a top share in large/commercial projectors through introducing new models
TV
-Strengthen position in North American markets and secure stable profits for emerging markets
Automotive devices
-Strengthen customer relations, expand sales through reinforcing continued sales of portable navigation
(3)Ecology Business Area
1. Commercial Business
-Business expansion using environmental products as an axel
Increase sales in the 3 HVAC areas (Commercial-use air conditioners, cold-chain, compressors)
for a total of 70 billion yen (3 year goal)
a. Strengthen development of the types of natural refrigerant (CO2) cassettes co-developed
with Coca-Cola Company for beverage coolers
b. Intensify expansion of commercial-use air purification systems
-Further intensify overseas expansion focusing on Europe and China
-Strengthen service functions (Increase sales through replacing commercial-use equipment)
2. White Goods/Home Electronics Business
-Increased expansion of co-developed private brand products with the Aeon Group
-Further improve the high functionality of the AQUA washer/dryer machines
-Implement plans to improve management effectiveness through SANYO Consumer Electronics Co., Ltd.
(newly established)
(4)Increase sales for Overseas Finished Goods Business
-Place Chief Regional Officers (already in place) in the five regions:
Americas, Europe, China, Asia Pacific, and the Middle East/India/Africa
Expand overseas sales of finished goods based on individual region sales strategies
5. Primary policies and Mid-term Plans for each business
For Reference: Overcoming environment and energy obstacles on the way to 2020
-The SANYO Group will continue to develop technology and products in its future aim of becoming a 'Leading provider of Environment- and Energy-related products' as it contributes its technological prowess and know-how to tackling environment and energy problems on a global scale.
-With SANYO's proprietary technology and businesses related the solar, HEV battery, and after-market Nickel-metal Hydride battery (eneloop) businesses, we will contribute an approximate 20 million ton CO2 reduction (yearly), and aim to increase the business scope to approximately 1000 billion yen in 2020.
-Also, the SANYO of 2020 aims to contribute more to the reduction of CO2 emissions through environmental products such as solar, HEV batteries and energy saving home appliances, outweighing the amount of CO2 emissions output from business activities by setting an internal goal for 'Becoming Carbon Minus'.
-In order to set the stage for this future, SANYO has an internal goal for 'Becoming Carbon Neutral' and will make every effort to balance the CO2 emissions put out through its business activities with the amount of CO2 reduced by the environmental products produced.
*Becoming Minus Carbon: When SANYO's products CO2 emissions reductions outweigh the CO2 emitted during business activities
*Becoming Carbon Neutral: When the amount of CO2 emissions emitted during business activities is offset by the amount reduced through company products.
Press Contact (English Only)
- SANYO Electric Co., Ltd.
Global Communications Department
Tel: +81-3-6414-8621
Fax: +81-3-6414-8720
E-mail: i_press@sanyo.com
Note regarding future forecasts, numbers and projections:
Descriptions provided in this presentation other than past facts are business forecast estimates based on SANYO Electric's current plans, prospects, and strategies. Our company has made business judgment regarding these based on the information obtainable at this point. Therefore, accuracy and reliability of acquired information are not guaranteed. Undue reliance should not be placed on such information.
Business forecast may be affected by a number of variable factors, including various risks and uncertainties. The major variable factors include the following: 1) Environment changes for our company's businesses, such as a large fluctuation in economic conditions and capital markets and changes in consumer spending; 2) Fluctuation of yen exchange rates for U.S. dollar and other currencies that will influence international business expansion; 3) Various trade restrictions in the markets in different countries; and 4) Our company's ability to offer new technologies, products, and services in response to rapid engineering innovation, market competition, and price competition. In addition to these, there will be other factors that can impact our business performance. Please assume all underlying risks and uncertainties.
