Filing under Rule 425 under the U.S. Securities Act of 1933
Filing by: Panasonic Corporation
Subject Company: Panasonic Electric Works, Co., Ltd. (SEC File No. 132-02715)
Subject Company: SANYO Electric Co., Ltd. (SEC File No. 132-02716)
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Transformation Project
October 29, 2010 Panasonic Corporation Fumio Ohtsubo
| • | I would like to present how we are going to proceed our Transformation Project. |
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Our Vision
Leading up to 100th anniversary in FY2019
No.1 Green Innovation Company in Electronics Industry
GT12
Panasonic Group filled with significant growth potential
- Paradigm shift for growth
- Lay foundation to be Green Innovation Company
Reorganize our business with PEW and SANYO
Promote and maximize synergy
Panasonic group in FY2011
| • | Our vision, Leading up to our 100th anniversary in FY2019, is to become the ‘No.1 Green Innovation Company in the Electronics Industry’. As a part of achieving our vision, we have started to proceed our midterm management plan ‘Green Transformation 2012 (GT12)’ this year. |
| • | Panasonic announced on July 29, 2010 that we would make Panasonic Electric Works Co., Ltd. (PEW) and SANYO Electric Co., Ltd. (SANYO) fully owned subsidiaries of Panasonic, since we would like to take a reasonable step to assure ‘GT12’ in such a severe competition. |
| • | Both PEW and SANYO are already our subsidiaries and we would like to complete our acquisition to thoroughly reorganize Panasonic group business to promote and maximize the synergy. |
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Steps toward New Panasonic Group 3
GT12
FY2011
FY2012
FY2013-
Jul 29 Oct 29 Apr 1 1st Half Jan 1
Announced the plan to make PEW and SANYO our wholly-owned subsidiaries
Announced framework of reorganization plan
Complete procedures to make PEW and SANYO our wholly-owned subsidiaries
Announce new business structure and strategy
Start with new business structure
Develop growth strategy (Transformation Project)
Reorganize business operations
Promote growth strategy
| • | Those are our steps to complete Transformation Project. |
| • | Through ‘Transformation Project’ which was established just after the announcement of the acquisition of all shares of PEW and SANYO on July 29, 2010, we are in the process of finalizing our growth strategy by the end of FY2011. |
| • | Today, we would like to explain what we have done since then. We also plan to announce more detail on our new business structure and strategy some time in the first half of FY2012. |
| • | We will promote some of our reorganization earlier than originally planned after April 1, 2011 when the acquisition is completed. |
| • | We will further accelerate our growth strategy as our new business structure from January 2012. |
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New Business Structure
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Maximize value creation by strengthening connection with customers Establish speedy and lean management structure Promote business growth by shifting resources
Digital AVC
Networks
Home Appliances
PEW and PanaHome
Components
& Devises
Consumer
Components
& Devices
with Eco
Panasonic
Solutions
SANYO
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business segments by technology platform |
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brand names and 3 head offices |
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business sectors by business model 1 brand name* and |
| 1 |
head *with office some exceptions |
| • | This is a basic concept of our reorganization announced on July 29, 2010. |
| • | We will reorganize our current structure with 5 business segments by technology platform to 3 business sectors by business model from customers’ perspective. |
| • | We will unify our head offices of Panasonic, PEW and SANYO to one group head office, and also unify our two brand names into one, Panasonic. |
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Transformation Project 5
Establish growths strategy to compete in world market
Growth Strategy Working Group
AVC Networks SWG
Heating/Refrigeration/Air Conditioning & Home Appliances SWG
Security & Communications Solutions SWG Environment & Energy Solutions SWG Healthcare & Medical Solutions SWG Factory Solutions SWG
Automotive Systems SWG Components & Devices SWG Energy Devices SWG Consumer Sales SWG Devices Marketing SWG Head Office Innovation SWG
Management SWG (Study systems and structure)
Business Process, Risk Management, Accounting WG
Personnel, General Affairs, Facilities WG
| • | In this project, we are in the process of finalizing strategies along the aforementioned vision to compete against other companies in world market. |
| • | In Growth Strategy Working Group, the members from heads to front-line employees of each business including PEW and SANYO have had a heated debate. |
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Reorganization of Domain Companies 6
From 16 domain companies to 3 business sectors & 9 domain companies
【Digital AVC Networks Home Appliances Components & Devices Other
Networks AVC Co
.
Networks System Co .
PMC
systems Automotive Co. Panasonic Healthcare
Home Appliances Co. Lightening Co.
Panasonic Eco Systems
Semiconductor Co.
AVC Networks
Heating/refrigeration /Air Conditioning & Appliances
Security & Communications Solutions
Environment & Energy Solutions
Healthcare & Medical Solutions
Factory Solutions
Automotive Systems
Components Devices&
Energy Devices
Others
Consumer Solutions Components & Devices
Note: New domain company names are tentative
Panasonic Electronic Devices
Energy Co.
PEW PanaHome
SANYO
Panasonic Factory Solutions Panasonic Welding Systems
Others
Consumer Solutions Components & Devices
Note: New domain company names are tentative
| • | We have almost fixed our group-wide organization plan and its direction. |
| • | We will reorganize our current 16 domain companies to 9 based on our new 3 business sectors. |
| • | PEW and SANYO are counted as one company in current 16 domain companies, and both companies are collective entities. We will fundamentally change all Panasonic Group business including those two companies’ business. |
| • | We will complete the reorganization of domain companies for 9 months from April 2011. |
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Framework for the new organization
Consumer Business Sector (B to C)
Solutions Business Sector (B to B)
Components & Devices Business Sector (B to B)
Sales, Service & Marketing
Development & Manufacture
Global Consumer Marketing
AVC Networks
Heating/Refrigeration /Air Conditioning & Home Appliances
Security & Communications Solutions
Comprehensive Solutions Marketing
Environment & Energy Solutions
Healthcare Medical& Solutions
Factory Solutions
Automotives Systems
Components Devices&
Energy Devices
Others
Group Head office: Group-wide strategy, External Affairs, Branding, R&D and Professional Services
Optimal business model in customers’ perspective
Global, autonomous business management
Comprehensive solutions across domain companies
Note: New domain company names are tentative
| • | This is an outline of our new group-wide organization. |
| • | We will build optimal business model from customers’ perspective in each business sector. All domain companies will be responsible to manage their business autonomously. |
| • | We will also have all domain companies cooperative to maximize utilization of group products and devices. Therefore, we will be able to accelerate establishment of our ‘comprehensive solutions’ business model. |
| • | We will strengthen not only each business in a vertical direction, but also our collaboration as Panasonic Group in horizontal direction. That is why we will be able to maximize our Group’s potential both vertically and horizontally. |
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Consumer Business Sector 8
Goal
-Make sure that our products meet needs of each region, possessing strong marketing capability -Reduce cost and offer products suitable for each region
Mass merchandisers, specialized shops and consumers
Global consumer marketing
AVC Networks
Heating/Refrigeration /Air Conditioning
& Home Appliances
Unify global marketing functions
- Product planning in customers’ perspective
- Shift resources to overseas
Reorganize consumer electronics business into 2 domain companies
Expand overseas business
FY2010 Sales: 2.9 trillion yen ? FY2013 Sales: 3.5 trillion yen level
| • | In Consumer Business Sector, we will strengthen our marketing to offer products suitable for each region. |
| • | We will first unify our consumer marketing function and shift resources to overseas especially. |
| • | Then, we will reorganize our consumer electronics business into 2 domain companies. |
| • | We expect to boost our sales from 2.9 trillion yen in FY2010 to 3.5 trillion yen level in FY2013. |
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Consumer Future vision 9
AVC Networks
Creation of new business with next-generation products
Interactive and network products
Unified concept of business and technology
Profitability through products, services and contents
Heating/Refrigeration /Air Conditioning
& Home Appliances
No.1 Green Innovation Company in home appliances business
No.1 refrigeration/air conditioning business with strong lineup ranging from consumer-use to commercial-use Globally expand business in personal-care & health enhancing products and cooking appliances
Global Consumer Marketing
Marketing and product planning in customers’ perspective
Unify global marketing functions of 3 companies
?Global Product Marketing Division & Individual Regional Marketing Companies
3S management -Speedy, Simple and Strategic-
| • | This is an outline of our future vision in each domain company. |
| • | We will create new business with next-generation products in AVC Networks, and expand our business globally in Heating/Refrigeration/Air Conditioning & Home Appliances business. |
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Consumer Unify Global Marketing Function
Now
Overseas: Regional Divisions
Governance functions
System Marketing
System marketing functions
Consumer Marketing functions
Regional Marketing Companies
Japan: Marketing Division
Digital AVC, Appliances, Wellness
Global Consumer Marketing
Global Product Marketing Division
Regional Marketing Companies
Sales Companies
Domain Company
Overseas
Development Sales Manufacturing Planning
Sales Companies
<Global> <Regional> <Local>
Strengthening consumer research functions
| • | This chart shows our marketing organization. |
| • | We will unify and reorganize all of our marketing divisions in the world including Japan, to Global Consumer Marketing. In this reorganization, we will especially strengthen front-line of overseas sales. |
| • | We will also include Global Consumer Research Center which will be established during this fiscal year, as a part of Global Consumer Marketing to enhance our marketing function from customers’ viewpoint. |
| • | A collaboration with Global Consumer Marketing and 2 domain companies will strengthen products competitiveness to survive ever-intensified competitions. |
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Consumer Unify Consumer Brands
Road map to unify brand names in April 2012
FY2011 FY2012 FY2013
4Q 1Q 2Q 3Q 4Q April
SANYO brand products
SANYO shop (Japan)
Reduce production*
Expand Panasonic brand product lineup
Unify to Panasonic brand
Expand
Panasonic brand products
Transfer to Panasonic shop
*with some exceptions overseas
| • | Basically, we will have a reasonable step to unify our brand names for consumer products to Panasonic in April 2012. |
| • | We will also transfer SANYO specialized shops, ‘Smile NO.1 shop,’ to Panasonic specialized shops in Japan. |
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Components & Devices Business Sector
Goal
Capture potential customers’ needs with marketing and technology Expand each business to outside customers, not relying on in-house needs.
Auto manufacturers
Electronics, auto Manufacturers, etc
Reorganize devices business of 3 companies to 3 domain companies
- Utilize SANYO’s advantages for Energy Devices Unify development, manufacturing and sales Cooperate for strategic customer services and new sales development
- Establish department to have 3 domain companies cooperative
Automotives Devices Energy Devices
Aim to be Global No.1
FY2010: 2.6 trillion yen ? FY2013: 3.4 trillion yen level *
*Figures include internal transaction
| • | In Components & Devices Business Sector, we will capture potential customers’ needs with our strong marketing and technology. |
| • | As part of this, we will reorganize our devices business of 3 companies into 3 domain companies and build structure in unison with development, manufacturing and sales in each domain company. |
| • | Meanwhile, 3 domain companies will cooperate for strategic customer services and new sales development. |
| • | We expect to boost our sales from 2.6 trillion yen in FY2010 to 3.4 trillion yen level in FY2013 to become No.1 in each business. |
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Components & Future Vision 13 Devices
Automotives
Contribute to new motoring society with electronics
Strengthen multimedia systems with display Create new growth business – EV and e-cockpit Establish robust Japanese market share for car navigation systems
Devices
No.1 in components and devices industry
Develop new markets and customers with new products and technologies
- Focus on Environment & energy, healthcare & medical, material & devices, automotives, emerging markets
Have more than 70% of No. 1 market share products
Energy Devices
No.1 in energy devices sector
Establish robust market share in lithium-ion battery
- From high-volume segment to high-end products, for eco-car
Become one of top 3 companies in solar battery with new HIT® in 2015
| • | This is a detail of our future vision in each domain company. |
| • | We target to have double digit growth from FY2011 in Energy Devices, especially strengthening our lithium-ion battery and solar battery businesses. |
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Solutions Business Sector 14
Goal
Offer optimal solution in customers’ perspective Make profit with global supply-chain
Industrial companies, tel. carriers
Facilities, construction companies
Health-care
Manufacturers
Reorganize to 4 domain companies by customers’ industry
- Utilize PEW’s advantages for environment & energy business Unify development, manufacturing and sales functions in each domain company Establish ‘comprehensive solutions marketing’ function in Environment & Energy Solutions domain company
Security & Communication Solutions
Comprehensive solutions marketing
Environment & Energy Solutions
Healthcare Medical& Solutions
Factory Solutions
Establish global business foundation
FY2010: 2.6 trillion yen?FY2013: 3.1 trillion yen level*
*Figures include internal transaction
| • | In Solution Business Sector, we will build our business model to offer optimal solution in customers’ perspective, and to make profit from wide supply-chain. |
| • | As part of this, we will reorganize our solution business to 4 domain companies combining development, manufacturing and sales functions in each domain companies. |
| • | We will also establish ‘comprehensive solutions marketing’ function in Environment & Energy Solution domain company. |
| • | We expect to boost our sales from 2.6 trillion yen in FY2010 to 3.1 trillion yen level in FY2013. |
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Solutions Future Vision 15
Security & Communication Solutions
Contribute to customers with comprehensive solutions of AV, communication and IT
Promote global solutions business Pursuit business synergy
- Security and fixed & wireless communications solutions business
Environment & Energy Solutions
Comfortable eco-conscious lifestyle
Unconventional growth by comprehensive solutions & sales Effective growth, collaborating with domain companies Integrated operation of development, manufacturing and sales
- lightening, electrical construction materials, environmental engineering
Healthcare & Medical Solutions
Provide simple and affordable healthcare service
In-hospital work assistance, early diagnosis & treatment and home healthcare
Factory Solutions
Contribute to progress and development of global society with manufacturing solutions
New business in mounting & circuit fabrication + welding, laser technology
| • | This is a detail of our future vision in each domain company. |
| • | In Security & Communication Solutions, we will provide ‘network’ solutions with our comprehensive technologies from fixed to wireless communications including mobile phone. |
| • | We will expand Healthcare & Medical Solutions as a pillar of next generation business, including assisting robot business such as ‘robotic bed.’ |
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Solutions ‘Comprehensive’ Solutions 16
Create new business with package & value chain
<‘Comprehensive throughout value solutions’ chain>
Services
Maintenance
SI engineering
Sales
4 Create business models for
‘comprehensive solutions’
3 Vertical Value chain business
2 Packaged equipment Network
1 Packaged series Whole set
Offer all Panasonic products
Consumer
Solutions
Consumer Electronics Cold chain Air conditioning Soil &Water quality Air quality Construction Security & Lightening Informationcommunication Healthcare
Components
& Devices
Solar, battery
<Packaged solution>
Manage by Environment & Energy Solutions Domain company
| • | I would like to explain our ‘comprehensive solutions’, led by Environment & Energy Solutions. |
| • | We offer our ‘comprehensive solutions’ with 4 steps as follows: |
| 1) | offer packaged series as a whole set to specific space |
| 2) | network packaged equipment |
| 3) | have vertical value chain business to offer coherent value from sales to customer services |
| 4) | create our unique ‘comprehensive solutions’ business model |
| • | Our goal is to create our unique ‘comprehensive solutions’ business model, combining vertical & horizontal value chain from a planning stage through our participation in ‘smart city’ project in the world. |
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Solutions ‘ Comprehensive Solutions’Shop Project 17
Eco-conscious convenience store
- Whole set and networked
- Test demonstration for ‘comprehensive solutions’
Okegawa city, Saitama
MWO Electronic Pot
Open showcase
Rain sprinkler
Indoor A/C
Controller
Heat pump hot water supply system
Outdoor A/C
Ventilatingequipment
Self-cleaning toilet Modular vanity unit
Hand dryer
OLED lighting
EV battery charger
CCTV
LED lighting
Walk-in showcase
Solar panel + Storage Battery
| • | I would like to present one of our case examples. |
| • | We set up an ecology-conscious convenience store in the site of our company in Saitama prefecture as part of our ‘comprehensive solutions’. |
| • | In this store, we have installed our control systems to manage energy consumption, linking all products and equipment in the store. In this test demonstration, we aim to halve total energy consumption in the store. |
| • | You can experience our ‘comprehensive solutions’ in this store as ‘seeing is believing.’ |
| • | Providing our whole set value, we have also started our project in Thailand, the country which has the highest numbers of convenience stores among Southeast Asian countries. |
| • | We would like to expand our ‘comprehensive solutions’ business in customers’ perspective from sales to customer services. |
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New Head Office Function 18
Role
Develop group-wide strategy Establish core competence Support domain companies
<Domain Company>
autonomous management in each business domain
Unify & reorganize 3 head offices and regional management companies
Lean Speedy Global
Head Office
Global Head Office*
President
Global head office* and regional management companies Pursue group strategy & governance and promote global + regional function
Strategy R&D Branding
Personnel & general affairs
Corporate Planning
?R&D?
Manufacturing Innovation
Branding
Regional Management Company A
Representative
External affairs
Professional service
management Risk ?
Regional Management Company B
Corporate Management for Japan
Responsible to govern each region
| * |
tentative name |
| • | In the end of my presentation today, we would like to talk about our new head office concept. |
| • | As I mentioned, 9 domain companies will be responsible to manage their business autonomously. And our new head office will focus on 3 functions: |
| 1) | develop group-wide growth strategy |
| 2) | establish group core competence |
| 3) | offer services beyond domain companies’ capabilities |
| • | As part of this, we unify head offices of Panasonic, PEW and SANYO, for lean, speedy and global management. |
| • | In our new head office, we will have Global Head Office to govern Panasonic Group based on each functional classification and regional management companies based on each region. |
| • | Organizing our head office focusing on indispensable functions, we believe that we will be able to create new local business and solve any local issues. |
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Synergy
60 billion yen in FY2013
*Operating Profit Base
Sales increase Cost reduction Structural reform
20 billion yen 20 billion yen 20 billion yen
Achieve targets of GT12 or more
| • | We expect to have synergy of 60 billion yen of operating profit in FY2013, completing our acquisition and reorganization. |
| • | Breakdowns are: |
20 billion yen from sales increase
20 billion yen from cost reduction
20 billion yen from structural reform
| • | We will pursue to achieve targets of GT12 or more, even in more intensified business condition than expected such as yen appreciation. |
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Panasonic
ideas for life
| • | In conclusion, today I talked about our transformation project as much as I can, although I am not able to go into detail yet. |
| • | We will keep you posted and plan to present more in detail some time in the first half of FY2012. |
| • | We will pursue our growth strategy as new Panasonic Group. Thank you for your understanding and your support. |
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Disclaimer Regarding Forward-Looking Statements
This presentation 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 Panasonic and its Group companies (the Panasonic Group). To the extent that statements in this presentation 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 presentation. Investors are advised to consult any further disclosures by Panasonic in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the U.S. Securities Exchange Act of 1934 and its other filings.
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 Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; the ability of the Panasonic 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 possibility of not achieving expected results on the alliances or mergers and acquisitions including the acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO Electric Co., Ltd. through tender offers and share exchanges; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic 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 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 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 Panasonic’s latest annual reports, on Form 20-F, and any other reports and documents which are 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, and impairment losses on long-lived assets are usually included as part of operating profit (loss) in the statement of income.
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Panasonic has filed a registration statement on Form F-4 (“Form F-4”) with the SEC in connection with each of the proposed share exchange between Panasonic and SANYO (the “SANYO Share Exchange”) and between Panasonic and PEW (the “PEW Share Exchange”). The Form F-4 for each of the SANYO Share Exchange and the PEW Share Exchange contains a prospectus and other documents. If each Form F-4 is declared effective, the prospectus contained in the Form F-4 will be mailed to U.S. shareholders of the subject company (SANYO or PEW) prior to the shareholders’ meeting at which the relevant proposed share exchange will be voted upon. The Form F-4 and prospectus contains important information about the subject company and Panasonic, the relevant share exchange and related matters. U.S. shareholders of the subject company are urged to read the Form F-4, the prospectus and other documents that have been and may be filed with the SEC in connection with the relevant share exchange carefully before they make any decision at the shareholders’ meeting with respect to the share exchange. Any documents filed with the SEC in connection with the proposed share exchange will be made available when filed, free of charge, on the SEC’s web site at www.sec.gov. In addition, upon request, the documents can be distributed for free of charge. To make a request, please refer to the following contact information.
1006, Oaza Kadoma, Kadoma City, Osaka 571-8501, Japan
Panasonic Corporation
Corporate Finance & IR Group
Masahito Yamamura
Telephone: 81-6-6908-1121
irinfo@gg.jp.panasonic.com
http://panasonic.net/