Panasonic Corporation Business Report FY ended Mar. 2019
Financial Overview |
(US GAAP, in millions of JPY) |
FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | Rate of change (%) |
Remarks | |
Overall | ||||
Sales | 8,002,733 | 7,982,164 | 0.3 | -Profit grew as a result of revising the pension system and gaining extraordinary profits from selling off assets. Nevertheless, income and profits worsened at the Automotive, Industrial, and Home-appliance businesses; and higher expenses were posted for restructuring-improvement initiatives. |
Operating income | 411,498 | 380,539 | 8.1 | |
Income before income taxes | 416,456 | 378,590 | 10.0 | - |
Current net income attributable to the Company's stockholders | 284,149 | 236,040 | 20.4 | - |
Automotive & Industrial Systems
-Sales at this business increased 6% year-over-year to JPY 2,983 billion. Even though sales at the Industrial business fell as a result of the worsening economic situation in China, income increased at the Automotive and Energy businesses. Operating profit was JPY 56.4 billion, compared to last year’s loss of JPY 37.0 billion, which resulted from a loss on the Automotive business’ development assets.
Organizational restructuring
-Announced on February 28 that it will change its organizational structure on April 1. Automotive & Industrial Systems Company, Panasonic’s in-house company, will be reorganized into two in-house companies: Automotive Company, and Industrial Solutions Company. Panasonic will establish two new in-house companies, China & Northeast Asia Company, and US Company, in addition to Appliances Company, Life Solutions Company, Connected Solutions Company, Automotive Company, and Industrial Solutions Company. The Automotive Infotainment Systems Business Division, HMI Systems Business Division, Automotive Systems Business Division, Ficosa International S.A., and Sanyo Electric Co., Ltd.’s (Sanyo Electric’s) Automotive Energy Business Division, will be reorganized and come under the management of Automotive Company. Industrial Solutions Company will manage Electromechanical Control Business Division, Industrial Device Business Division, Sanyo Electric’s Energy Solutions Business Division, Device Solutions Business Division, Energy Device Business Division, Electronic Materials Business Division, and Panasonic Semiconductor Solutions Co., Ltd. Panasonic Liquid Crystal Display Co., Ltd. will not be classified as a business division. (From an article in the Nikkan Jidosha Shimbun on March 2, 2019)
Business venture with Toyota
-On January 22 Toyota Motor Corporation (Toyota) and Panasonic Corporation (Panasonic) announced that they have agreed to establish a joint venture related to the automotive prismatic battery business. The two companies will establish a new joint venture by the end of 2020. The ratio of equity participation in the joint venture will be 51 percent for Toyota and 49 percent for Panasonic. The joint venture's operations will encompass research, development, procurement, manufacturing, and order receipt related to prismatic lithium-ion batteries, solid-state batteries, and next-generation batteries. Toyota will transfer all of its battery related operations to the joint venture. Panasonic will transfer its operations to the joint venture with the exception of its cylindrical battery business, which is used for the supply of products to Tesla Inc., and element technology development. The joint venture aims to become the global leader in battery development and manufacturing capabilities by integrating management resources for automotive batteries from both companies. Products from the joint venture will be sold to various automakers through Panasonic. The joint venture will have 3,500 employees who will be transferred from both companies. The operations transferred by Panasonic will include three plants in Japan and one plant in China that manufacture prismatic batteries. The production capacity and the investment amount for the joint venture are under discussion. The joint venture will be Toyota's subsidiary. Primearth EV Energy Co., Ltd. (PEVE), a subsidiary of Toyota, will continue to manufacture batteries primarily for hybrid vehicles. (From an article in the Nikkan Jidosha Shimbun on January 23, 2019)
Recent Business Developments
ーAnnounced that Panasonic Automotive Energy Dalian Co., Ltd., an automotive battery joint venture of Panasonic Automotive & Industrial Systems Company, has started volume shipment at its new automotive lithium-ion battery (LiB) plant in Dalian, Liaoning Province, China. Panasonic has established an automotive LiB production system covering Japan, the U.S., and China, and will meet the needs of electrified vehicle makers. The new automotive LiB plant produces high-capacity, high-safety square batteries. It will supply the products to China and North America, where demand for use in electric, hybrid, and plug-in hybrid vehicles is expected to grow due to tightening environmental standards. (From an article in the Nikkan Jidosha Shimbun on March 14, 2018)
Business Partnership
-Cinemo announced support for the Gerda (C/Cdash/C2 System-On-a-Chip series) from Panasonic Semiconductor Solutions Co., Ltd. With Gerda based infotainment units, Cinemo becomes the centre of media activity fashioning a technology hub with the head unit and offering an intelligent way to access your individual content and services. High-performance and synchronized playback, ultra-fast indexing and content sharing, all deliver a spectacle in application autonomy, whilst BYOD (Bring Your Own Device), provides the prospect of RSE screens (Rear Seat Entertainment), as well as projection mode functionality including CarPlay and Android Auto. (From a press release on January 2, 2019)
Recent Development in Japan
-In October 2017, the Company announced that its subsidiary, Panasonic Liquid Crystal Display Co., Ltd., will start production of automotive square lithium-ion batteries (LiBs) at its Himeji Plant. Electrification of vehicles is accelerating as environmental regulations are getting more stringent worldwide. Panasonic group will enhance its capacity to respond to increasing demand for automotive LiBs. The Himeji Plant will introduce a battery cell production line from component processes to assembling to start production from the fiscal year that ends in March 2020.
ーThe Company announced that it will form a business and capital alliance with Azapa Co. Ltd., which engages in development support using model based development (MBD) virtual simulations. Both companies will expand the areas of their cooperation to include cockpit and advanced driving assistance system fields in addition to electric powertrain development for compact electric vehicles using MBD techniques. (From an article in the Nikkan Jidosha Shimbun on April 11, 2018)
Contracts
-Panasonic Automotive Systems Company of America announced that its all-new ELS STUDIO 3D premium audio system will be available in the 2019 Acura RDX. The ELS Studio 3D premium audio system includes four overhead speakers and 16 speakers total with amplifier power of 710 watts. Equipped with Highline overhead speakers, the ELS Studio 3D premium audio system adds a vertical characteristic that produces an immersive three-dimensional sound image. The ELS Studio 3D premium audio system will launch in the 2019 Acura RDX in mid-2018. (From multiple sources on May 21, 2018)
R&D Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
Overall | 488,800 | 448,900 | 436,100 |
-Automotive & Industrial Systems | 225,900 | 190,000 | 189,600 |
R&D Activity
Developed halogen-free, ultra-low transmission loss, multi-layer circuit board material for fifth-generation (5G) mobile communication systems
-Announced that it has commercialized halogen-free, ultra-low transmission loss, multi-layer circuit board material, called Halogen-free MEGTRON6, suited for communications infrastructure equipment such as fifth-generation (5G) mobile communication systems. Production will begin in April 2019. With the upcoming launch of 5G mobile communication system services, greater-capacity and faster data transmission speeds will be needed. Multi-layer circuit board material used as a key component in equipment such as servers and routers that support core systems for communications networks will require halogen-free material from the viewpoint of environmental protection, not to mention high-capacity and high-speed data transmission. The Company has commercialized this multi-layer circuit board material that is ideal for communications infrastructure equipment by achieving a halogen-free material that shows low transmission loss, high heat resistance, and high reliability, based on the Company's proprietary resin design technology and compounding technology. (From a press release on January 21, 2019)
Developed the "SPYDR 2.0" next-generation cockpit system
-Has developed the "SPYDR 2.0" next-generation cockpit system and exhibited the product in its private space for selected customers at CES 2019. SPYDR 2.0 enables part of a system on a chip (SoC) to control multiple displays and cameras. SPYDR 2.0 improvements from 1.0 include the adoption of Google’s Android P and integration of a driver monitoring system (DMS). A demo device showed functions such as a traffic information and road condition acquisition service, playback of satellite radio and 4K video programs, and a surround view monitoring function created by synthesizing images captured with four cameras mounted on a vehicle. In addition, a new HUD system that combines an in-vehicle infrared camera and a head-up display was also exhibited. The new HUD system constantly enables optimum positioning of projected information by adjusting it in accordance with the stature and eyes of the driver. (From an article in the Nikkan Jidosha Shimbun on January 16, 2019)
Developed new innovative technologies that support mobility services
-Announced that it will show new digital platforms powered by human insight technologies at CES 2019. The Company will demonstrate innovative technologies that support a wide range of mobility and mobility services, including the conceptual model, "SPACe_C" (for Sharing Panasonic Autonomous Connected e-Mobility) which is comprised of a powertrain base and a detachable cabin on top. The "48v ePowertrain Platform" that the Company introduced in CES 2018 has evolved. With the same volume, the new powertrain boasts double the output and will help make compact EVs more lightweight, maximize cabin space, and extend travel distance. "SPACe_C," which is comprised of the "48v ePowertrain Platform (drive unit)" that can be combined with a variety of cabins (interior unit), provides a solution that expands possibilities for mobility by reducing costs and responding to multiple purposes. It will also introduce the V2X platform, "CIRRUS by Panasonic" which will realize a connected mobility world. In addition, the Company will show security system that can significantly reduce costs of identifying and fixing vulnerabilities. (From a press release on January 8, 2019)
Developed the ZS series conductive polymer hybrid aluminum electrolytic capacitors for electric and hybrid vehicles
-The Company's in-house company, Panasonic Automotive & Industrial Systems Company (Panasonic AIS), announced that it has commercialized the ZS series conductive polymer hybrid aluminum electrolytic capacitors, which is optimal for hybrid electric vehicles (HVs) and electric vehicles (EVs). Mass production of the ZS series will start soon. By adopting a unique new structure and a polymer impregnation method, the new products, with a size of 10 mm in diameter and 16.5 mm in height, lower the capacitor's internal resistance value, achieving a current 2.5 times larger than the company's conventional products. The new products have achieved a capacity 1.8 times larger than the company's conventional products by increasing the electrode foil area through the adoption of a unique electrode foil material technology and a new structure design. This will decrease the quantity of capacitors used and required board space. (From an article in the Nikkan Jidosha Shimbun on September 22, 2018)
Developed the CV5794, a temperature resistant secondary underfill
-The Company announced that it has commercialized temperature resistant secondary underfill series CV5794 for automotive electronic applications. Mass production is scheduled to start in October 2018. Heat Resistant Underfill CV5794 provides excellent heat resistance for improved reliability of assembled circuit boards and high flow rate for underfilling large semiconductor packages. The new product, which can be stored in refrigerator, will contribute to reduce shipping, storage and process costs. Its target applications: for reinforcement of surface mounted semiconductor packages and other electronic components; for example, automotive camera modules, communication modules (millimeter-wave radar modules), ECU (electronic control unit), and next-generation cockpits/IVI (next-generation vehicle communication systems). (From a press release on September 3, 2018)
Developed a glass composite circuit board material for automotive devices
-Automotive & Industrial Systems Company (Automotive & Industrial Systems), an in-house company of Panasonic Corporation, announced that it has developed a glass composite circuit board material that is suitable for automotive equipment, and will start mass production in June 2018. The company achieved a thermal expansion coefficient of 15 ppm to 17 ppm per degree Celsius (the lowest coefficient in the industry) with a board thickness of 0.8 mm, by utilizing its unique resin design and production methods. The new glass composite circuit board material has the industry's highest tracking resistance grade, and board thickness accuracy that is higher than that of general glass epoxy circuit board material. The material will enable stable operation of electronic circuit boards, and improve circuit board manufacturing yields. Automotive & Industrial Systems expects the new material to be used for automotive instrument panels, as well as power supply and device module circuit boards. (From an article in the Nikkan Jidosha Shimbun on June 12, 2018)
Developed a high vibration acceleration-resistant power choke coil
-The Company announced that it has commercialized a high vibration acceleration-resistant (50 G or higher), surface-mounted type power choke coil (10 mm square size) suitable for power circuits in automotive electronic control units (ECUs) employed in hybrid electric vehicles, electric vehicles, and gasoline-powered vehicles. The company will launch the new product by the end of April, 2018. Choke coils with high resistance to vibration and heat as well as support for large current are essential for removing noise and smoothing the power supply of power circuits that constitute automotive ECUs. Panasonic's new power choke coil contributes to more ECUs being placed within the engine itself and integration of mechanical and electronic in-vehicle components. (From a press release on April 17, 2018)
Developed a Time of Flight (TOF) long-distance image sensor
ーDeveloped a time-of-flight, long-distance image sensor that can detect objects 250 meters ahead in the dark, when visibility is impaired. Greatly reduced the surface of avalanche photodiode (APD) pixels based on APD pixelated technology, while still maintaining twice the performance. Developed long-distance-measurement pixelated technology, which .makes high-density long-distance imaging possible. The Company is delivering these. These latest technologies achieve high-resolution imaging over long distances. As a result, this achievement is anticipated to develop wide-range visibility by measuring distances and making night-time driving easer in the dark.
Capital Expenditure |
(in millions of JPY) |
FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
Overall | 300,500 | 392,200 | 311,600 |
-Automotive & Industrial Systems | 172,200 | 226,000 | 195,000 |
Planned Capital Investment
(As of Mar. 31, 2019)
Planned investment amount (in millions of JPY) |
Main purpose | |
Overall | 365,000 | - |
-Automotive & Industrial Systems | 160,000 | -Increase production of auxiliary-batteries, automotive, and entertainment products; and produce new products and increase production of electronic parts |
New mid-term strategy
-Improve profitability of the automotive and onboard businesses by categorizing the high-growth business, stable-growth business, and profit-improvement business into the core business, re-challenge business, and co-creation business. In FY 2018 established a joint-venture company with Toyota in the square car-battery business. The target after three years is to contribute JPY 100 billion yen to the Group.