Annual Report
2019
Report on Financial Results and ESG
for the year ended March 31, 2019
This PDF contains all contents from the online
Annual Report 2019, merged into a single PDF file
for convenience.
Contents / Editorial Policy
About Panasonic
Management Messages
Strengthening
Management Foundations
Through ESG
Financial and Corporate
Information
03
05
10
15
17
22
24
26
29
34
39
42
46
47
49
50
58
Management Philosophy and Our Corporate History
Megatrends
Message from the CEO
(cid:127) Performance review
(cid:127) Points for the new Mid-term strategy
(cid:127) ESG policy
Message from the CFO
(cid:127) Capital allocation policy
(cid:127) Strengthening our financial base
(cid:127) Approach toward the return of profits to shareholders
Message from the CTO / Technology Introduction
(cid:127) R&D and innovation strategies
(cid:127) Technology introduction
ESG Highlights
Message from the Chairman of the Board
Messages from Outside Directors
Directors, Audit & Supervisory Board Members and Executive Officers
Corporate Governance Structure and Initiatives
Message from the CHRO / Human Resources Initiatives
Message from the Environmental Compliance Administrator /
Initiatives towards the Environment
Examples of Initiatives Aimed at Addressing Social Issues
(Relationship with SDGs)
Financial Highlights
10-Year Financial Summary
Financial Review
Corporate Data
Links to Presentations of Panasonic IR Day 2019
Basic Approach to Mid-term Strategy and
Progress with Ongoing Initiatives
(cid:127) Presentation by CEO
Fiscal 2020 Second-half and Medium-term
Initiatives
(cid:127) Appliances
(cid:127) Life Solutions
(cid:127) Connected Solutions
(cid:127) Automotive
(cid:127) Industrial Solutions
Strategic Region Session
(cid:127) China & Northeast Asia
Links to Sustainability Data Book
(cid:127) Risk Management
(cid:127) Fair Operating Practices
(cid:127) System for the Promotion of CSR Activities
(cid:127) Human Resources Development and
Promoting Diversity
(cid:127) Respect for Human Rights
(cid:127) Raising Quality Levels and Ensuring Product Safety
(cid:127) Environment: Policy
Contents / Editorial Policy
Panasonic Annual Report 2019
01
Editorial Policy
Thank you for reading Panasonic’s Annual Report 2019. Panasonic positions its Annual Report as an integrated report
incorporating management strategies for medium- to long-term growth; environmental, social and governance (ESG)
systems and initiatives that provide a foundation for sustained growth; and operating results, financial position and other
information. It is published primarily for investors.
The Annual Report 2019 features messages from management. The message from the CEO introduces the Company’s view on
portfolio management, a key factor in the new Mid-term strategy started in fiscal 2020 (year ending March 2020), which was
formulated with the aim of breaking away from the current low-profitability situation and returning to profit growth. The Company’s
ESG policy, the foundation for sustainable growth, is also included in this section. The message from the CFO describes the
Company’s capital allocation policy to promote business portfolio reform, in addition to initiatives to improve profitability and
strengthen the financial base, as well as the Company’s approach toward the return of profits to shareholders. The message from
the CTO presents the Company’s technological and manufacturing capabilities it has developed over the past 100 years, and
initiatives towards creating innovation and speedy commercialization.
As explanations of initiatives for strengthening management foundation through ESG, the message from the Chairman of the
Board presents the Company’s approach to address social issues through its business activities while taking into account the
SDGs and other ESG targets. The messages from the outside directors cover initiatives towards strengthening governance and
frank opinions regarding the management issues the Company faces. In addition, messages from the heads of each department
are included, discussing specific initiatives for human resources development and environmental activities. The Company hopes
that these will provide an understanding of what Panasonic is doing in regards to improving corporate value and actively engaging
in ESG, the Company’s management base.
Aiming for sustained growth and increased corporate value, Panasonic will actively conduct dialogues with investors and
invite opinions to be considered regarding the Company’s management. Thank you for your further understanding and support for
the Company.
Disclaimer Regarding Forward-Looking Statements
This Annual Report includes forward-looking statements about Panasonic and its Group companies (the Panasonic Group). To the extent that
statements in this Annual Report 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 Annual Report. 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.
Such risks, uncertainties and other factors 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.
Contents / Editorial Policy
Panasonic Annual Report 2019
02
Management Philosophy and Our Corporate History
Management Philosophy
Helping bring about
A Better Life, A Better World
based on our management philosophy
“We will devote ourselves to the progress and
The Sustainable Development Goals (SDGs)
development of society and the well-being of people
were adopted by the United Nations in 2015, and
through our business activities, thereby enhancing
expectations in the international community have
the quality of life throughout the world.” This Basic
mounted with respect to the role of corporations in
Management Objective embodies our mission and
solving social issues.
devotion, and as the heart of our management philosophy,
Based on its management philosophy, Panasonic will
it has served as the foundation for all our management
continue to help solve social issues and contribute to
activities. In overseas business development as well,
further development in order to bring about a bright new
the first principle has been to assist in each country’s
future. We also intend to achieve sustained growth and
development in a manner that is truly appreciated.
continue to enhance corporate value.
Panasonic’s Management Philosophy Structure
Guidance in putting
the management
philosophy into
practice:
Evolution in response
to changes in social
conditions, etc.
Panasonic Code of Conduct
(Revised and updated; current as of 2019)
https://www.panasonic.com/global/corporate/
management/code-of-conduct/list.html
Management Philosophy
Foundation of
activities of
management:
Immutable
Basic Management Objective
Recognizing our responsibilities as industrialists, we will
devote ourselves to the progress and development of society
and the well-being of people through our business activities,
thereby enhancing the quality of life throughout the world.
Company Creed
Progress and development can be realized only through the
combined efforts and cooperation of each employee of our company.
United in spirit, we pledge to perform our corporate duties with
dedication, diligence and integrity.
Seven Principles
Contribution to Society, Fairness and Honesty, Cooperation and Team Spirit,
Untiring Effort for Improvement, Courtesy and Humility, Adaptability, Gratitude
Management Philosophy and
Our Corporate History
Panasonic Annual Report 2019
03
Founder Konosuke Matsushita
Our Corporate History
1918
1927
1931
1932
1950s
1961
1965
1987
1988
2008
2010
2014
2018
Matsushita Electric Housewares Manufacturing Works (today’s
Panasonic) established. Two new products, an attachment plug and, a
two-way socket, launched on the market.
Square bicycle lamp launched under the name “National Lamp,” reflecting
the hope that it would become indispensable to the nation’s citizens.
The product became popular throughout Japan as a safe light source.
Sales of radios commenced. This radio that “wouldn’t break down” delighted
consumers and it brought news and culture into people’s homes.
Trade department established and export business commenced.
Washing machines, black and white TVs, refrigerators and other products
launched that reduced the burden of housework and made life easier.
Panasonic’s first overseas manufacturing facility, National Thai
Manufacturing Company, established. Manufacturing facilities were
subsequently established in countries with difficulty importing household
appliances due to foreign exchange shortages.
Five-day work week introduced ahead of other companies. With a
slogan of “One day of study, and one day of rest,” the change played a
major role in raising employee productivity and motivation.
Joint venture to produce picture tubes (CRTs) for color TVs established
in Beijing with a view to China’s modernization. It was the first joint
venture in China for Panasonic.
Promoting world peace through sport. In accord with this philosophy of
the Olympic Games, Panasonic has, since the Olympic Winter Games
Calgary 1988, supported the Movement over 30 years as the highest
ranking sponsor in “The Olympic Partner (TOP)” program.
To make the Company a truly global corporation, the company name
was changed to “Panasonic Corporation,” and its corporate brands were
unified as “Panasonic” worldwide.
Mass production of lithium-ion batteries for hybrid EV automobiles
commenced, helping to popularize eco-cars.
Fujisawa Sustainable Smart Town established for eco-conscious and
comfortable lifestyles while ensuring safety and security.
Marking the 100th anniversary of its founding, Panasonic introduced
“Lifestyle Updates*” as its future direction to take.
* Please refer to “Achieving Lifestyle Updates” in the section “Message from the CEO.”
Management Philosophy and
Our Corporate History
Panasonic Annual Report 2019
04
Megatrends
For sustainable growth, face the megatrends
As we approach 2030, and the various social changes
that are expected to occur, from the perspective of the
degree of certainty, the social impact, and the effects on
Panasonic’s business, the Company is particularly
focusing on the three megatrends of demographics,
urbanization, and consumption change. Another,
technology innovation, is also a focus as it forms the
basis for these social changes.
Panasonic’s Core growth business is an area where
sustained growth will be possible by actively concentrating
resources as businesses that confronts various issues.
In addition, the Co-creation and Revitalization
businesses will take on these megatrends, promoting
strategies according to business conditions and its
characteristics, and working to improve competitiveness.
By facing these megatrends, the Company will move
ahead with reforms such as to its business portfolio and
business model from the medium- to long-term perspective,
aiming to improve its medium- to long-term corporate
value and achieve sustainable growth.
* Please refer to the “Points for the New Mid-term
Strategy” in the CEO’s message for details of the Core
growth, Co-creation, and Revitalization businesses.
A range of changes as we reach 2030
A range of changes as we reach 2030
Focus perspectives
Degree of certainty
Social impact
Effects on the Company
otabl
Particularly notable megatrends
1. Demographics
2. Urbanization
3. Consumption
Change
4. Technology Innovation
Core growth business:
The business area where resources are actively concentrated to face
the various issues that become more serious as the megatrends develop.
Gemba
Process
Spatial
Solutions
Industrial
Solutions
Megatrends
Panasonic Annual Report 2019
05
1. Demographics
Megatrend
The global population is steadily increasing, especially in
newly emerging nations, and China and India, with their
massive internal demand, will drive consumption.
However, China and the current advanced nations will
all increasingly face declining birthrates and aging
populations, and while the potential for growth in
housing, consumer electronics, and so on slows,
automation will become increasingly important to cope
with labor shortages, beginning with labor-intensive
industries such as the service industry.
Panasonic’s initiatives
As Panasonic works to expand its businesses in nations
and regions where growth is expected in the medium to
long term, the Company aims to break away from the
conventional style of selling individual products, and
establish new business models such as a service business
by deepening connections with other companies.
Panasonic will actively obtain new growth opportunities
by making industry “smart” (both in manufacturing as well
as services such as logistics) and engaging in process
innovation in the supply chain through drawing on the
manufacturing know-how the Company has accumulated
over its history.
World Population
(Billions)
10
8
6
4
2
0
1950
8.5 billion
7.7 billion
1960
1970
1980
1990
2000
2010
2020
2030
Europe
North America
Japan
China
India
Asian nations
Africa
Others
Source: Prepared by Panasonic based on United Nations’ predictions
Wealthy and upper middle class households by country
Aging rate by country
(%)
100
80
60
40
20
0
2000
Americas/
Europe
Approx. 52%
China/India
Approx. 16%
2030
Americas/
Europe
Approx. 31%
China/India
Approx. 37%
(%)
35
30
25
20
15
10
5
0
31% in 2030
(Japan)
17% in 2030
(China)
2000
2010
2020
2030
1950
1970
1990
2010
2030
China
India
Japan
Australasia
Americas
EU
Others
UK
Germany
US
Japan
China
India
* Excluding the Middle East and part of Africa
Source: Prepared by Panasonic based on United Nations’ predictions
Source: Prepared by Panasonic based on Euromonitor International’s
predictions
Megatrends
Panasonic Annual Report 2019
06
2. Urbanization
Megatrend
As the world’s population becomes increasingly urbanized,
infrastructure development and renewal will be unable to
keep up, and major social issues such as housing shortages,
traffic paralysis, and air pollution will only worsen. In newly
emerging nations, environmental awareness will increase
as the economy grows, and investments into environmental
measures will proceed at the national and the global levels.
Already in the mobility field, the next-generation wave,
known as CASE*1, has arrived, and EV, autonomous
driving, and MaaS*2 will become much more widespread,
significantly affecting the automobile industry.
Panasonic’s initiatives
Panasonic is focusing on creating spaces for offices,
commercial facilities, and housing that uses air-conditioning
and air quality technology that can provide both environment
friendliness as well as safety, peace of mind, and comfort.
Panasonic considers the evolution of transport services
as a vital part of supporting optimal lifestyles for people,
and is moving ahead with initiatives such as a range of
devices for the autonomous driving, next-generation ITS,
and EVs that are behind the expansion of MaaS.
The Company aims to create towns that utilize
electronic technologies from the dual aspects of lifestyles
and mobility.
*1 An acronym for Connected, Autonomous, Shared, Electric
*2 An acronym for Mobility as a Service
Urban growth rates and populations 2018 2030
Growth rate
Urban Population in 2018
< 1%
1–3%
3–5%
5%+
0.5–0.75 million
0.75–1 million
1–5 million
5–10 million
More than 10 million
Source: United Nations
World urban populations and urbanization rates
Global air pollutant emissions
(Millions)
6,000
5,000
4,000
3,000
2,000
1,000
0
+1.1
billion
people
(%)
70
60
50
40
30
20
10
0
(%)
200
150
100
50
0
100%
(Compared with 2010)
2000
2015
2030
2010
2020
2030
2040
2050
2060
Industrialized countries
Emerging Countries
Urbanization rate
Source: Prepared by Panasonic based on United Nations predictions
BC (Black Carbon)
NOx (Nitrogen Oxides)
VOCs (Volatile Organic Compounds)
CO (Carbon Monoxide)
OC (Organic Carbon)
NH3 (Ammonia)
SO2 (Sulphur Dioxide)
Source: Prepared by Panasonic based on OECD predictions
Megatrends
Panasonic Annual Report 2019
07
3. Consumption Change
Megatrend
By 2030, Millennials and Generation Z, the so-called “digital
natives,” will be more than 70% of the global population,
and be the main consumers. The characteristics, unique
economic rationality and social awareness that are the
values of these generations will spread globally via the
internet, accelerating sharing and personalization.
In line with this, companies will also need to transform
their business models to keep pace with the shift to the
“as a service” business model.
Panasonic’s initiatives
Panasonic will propose solutions that fit lifestyle changes
by making use of the understanding of consumers and the
digital technologies it has accumulated over its history.
Specifically, along with further deepening understanding
of the lifestyles and health of users using sensing technology,
Panasonic aims to provide value optimized for each person’s
individual needs by using AI and IoT.
Changes in global population by generation
Scale of the global sharing economy market
2015
2030
Other
42%
Millennials
and younger
58%
Other
27%
Millennials
and younger
73%
7.38
billion people
8.55
billion people
(Billions of U.S. dollars)
1,500
1,200
900
600
300
0
Source: Prepared by Panasonic based on United Nations predictions
Source: Prepared by Panasonic based on PwC predictions
2013
2015
2030
Scale of the global e-commerce market
(Trillions of U.S. dollars)
6
5
4
3
2
1
0
2016
2017
2018
2019
2020
2021
EC sales (retail)
Ratio of retail
Source: Prepared by Panasonic based on eMarketer’s
“Retail Ecommerce Sales Worldwide, 2016–2021”
(%)
20
15
10
5
0
Megatrends
Panasonic Annual Report 2019
08
4. Technology Innovation (Digitalization)
Megatrend
With the spread of 5G, network speeds will become
even faster, and semi-conductors, software, AI, sensors
and other computing technology will evolve as well. These
two changes will bring about the IoT society, where
everything is interconnected.
Massive amounts of data obtained from a range of
situations will not only pose a threat to existing industries,
but contain the possibility of bringing about new value
creation. In the manufacturing industry, dramatic
improvements in R&D and the production process through
simulations are expected.
Panasonic’s initiatives
Panasonic is working to innovate its existing processes
based on data, such as the development of consumer
electronics and devices based around virtual reality
simulations, or searching for new materials by utilizing AI.
The Company is tackling the challenge of breakthroughs
in lead times, costs, and functionality.
Panasonic is also working on constructing a new business
model that will provide solutions and/or services, including
things like IoT platforms that respond to business
characteristics (B2C/B2B). In addition, the Company is
strengthening its initiatives for providing devices and
solutions that underpin these technology innovations.
Technological development of AI based on deep learning
Mobile phone transmission speeds
Large-scale
knowledge
comprehension
Language
understanding
Autonomous
behavior
that is robust with regard
to environmental changes
(autonomous driving, etc.)
2014
Image
recognition
2020
Robotics
2025
2030
Symbol
grounding
Multimodal
recognition
Interaction
Knowledge
acquisition
10G
1G
100M
10M
1M
100k
1G
(analogue)
2G
(digital)
3G
(IMT-2000)
Video
4G
5G
10Gbps-
LEE-
Advanced
Browsing
LTE
1Gbps
100Mbps
HSDPA
14.4Mbps
Still images (camera)
HSUPA
CDMA2000
xEV-DO
2.4Mbps
E-mail
W-CEMA
384Kbps
Packet
transmission cdmaOne
PDC
28.8Kbps
Voice
64Kbps
10k
Analogue
method
9.6Kbps
Source: Prepared by Panasonic based on Yutaka Matsuo
(“The Future of Artificial Intelligence,” Ministry of Internal Affairs
and Communications)
1980
1985
1990
1995
2000
2005
2010
2015
2020
Source: “White Paper 2015 on Information and Communications in Japan,”
Ministry of Internal Affairs and Communications
Increases in data transmission amounts
Die shrinkage for semiconductor processes
(Exabytes/Month)
(NM)
CAGR 47%
30
25
20
15
10
5
0
8
6
4
2
0
2017
2018
2019
2020
2021
2022
2018
2020
2022
2025
2028
Source: Prepared by Panasonic based on Cisco VNI’s
“Predictions and Trends 2017–2022”
Source: Prepared by Panasonic based on IEEE International Roadmap
for Devices and Systems (IRDS™) 2018 Edition
Megatrends
Panasonic Annual Report 2019
09
Message from the CEO
Kazuhiro Tsuga
Representative Director
President
CEO
Ongoing endeavors to transform,
and return to profit growth
During the three years since fiscal 2017, Panasonic has
taken a variety of initiatives to create a profit structure that
can achieve continuous “profit growth through sales
expansion.” In fiscal 2019, we achieved increases in both
operating profit and net profit. However, profit excluding
one-time effects, which reflects the Company’s true ability
to generate profits, was far below our initial forecast. This
unsatisfactory result was due to profit struggling to rise in
growth-expected businesses, such as automotive-related
businesses, and deterioration in the profitability of existing
businesses that we had expected to generate stable profits.
To ensure the sustainable development of our Company,
we must quickly break away from this low-profitability
situation and return to a profit-growth track.
Under the new Mid-term strategy, which started in
fiscal 2020, we are determined to carry out portfolio reforms
setting three new portfolio classifications transcending the
boundaries of the Company and organizations: “Core growth
business,” “Co-creation business,” and “Revitalization
business.” We aim to achieve both profit growth and
profitability improvement by strengthening our
competitiveness through promoting strategies according
to each business’s characteristics and situations, while
addressing changes in the social environment.
In light of the recent advances in information and
communication technologies, as well as increasingly
diverse individual preferences and values, manufacturers
are facing ever greater changes in the management
environment. It is now difficult to continuously generate
profits with the conventional business model of
mass-producing industrial products. Sensing the urgency of
this situation, Panasonic has set a new direction to take:
becoming a company that will achieve “Lifestyle Updates”
by 2030. Toward achieving sustainable growth, we will shift
our business model based on a long-term perspective and
strive to transform our profit structure.
We are fully determined to keep working toward higher
corporate value, including the promotion of ESG initiatives,
which are the foundations for growth. The opinions of
investors, which management will take into consideration,
are always welcome. I would like to ask for your continued
support of our endeavors.
Message from the CEO
Panasonic Annual Report 2019
10
Performance Review
Please refer to Financial Review (PDF) and Fiscal 2019 Full-year Financial
Results Presentation Materials (PDF)
control investments and improve free cash flows by
thoroughly generating cash flow from operating activities
such as reducing inventory.
Financial results for fiscal 2019
(year ended March 2019)
Overall operating profit increased due to one-time
gains despite deteriorated profitability in the automotive,
industrial, and consumer electronics businesses
Sales for fiscal 2019 were 8,002.7 billion yen, the same as
the previous year’s level.
Operating profit increased by 31.0 billion yen, to 411.5
billion yen, due mainly to one-time gains including the
partial revision of the pension scheme and disposal of
assets. However, profit excluding these one-time effects
was far below our initial forecast, due to deteriorated
profitability in the automotive, industrial, and consumer
electronics businesses, along with the recording of
restructuring charges.
During the three years since fiscal 2017, Panasonic
has promoted its growth strategy and profitability
improvements toward a structure that can achieve
continuous “profit growth through sales expansion.”
However, the Company was unable to accomplish its
initial aim.
Net profit attributable to Panasonic Corporation
stockholders increased by 48.1 billion yen to 284.1
billion yen due to improvements in income taxes and
others. As a result, ROE improved by 1.3 percentage
points to 15.7% from the previous year.
Free cash flow was an inflow of 10.3 billion yen,
improved by 45.9 billion yen from the previous year.
Going forward, the Company will continue to strictly
Fiscal 2019 Results and Fiscal 2020 Forecast
(Billions of yen)
Sales
FY2020
forecast
FY2019
vs. FY2019/
Difference
7,900.0
8,002.7
99%
(99%)*
-102.7
Operating profit
300.0
411.5
73%
-111.5
Other income/loss**
0.0
84.5
—
-84.5
Profit before income taxes
290.0
416.5
70%
-126.5
Net profit attributable to Panasonic
Corporation stockholders
200.0
284.1
70%
-84.1
ROE
10.1%
15.7%
Free cash flow
—
10.3
—
—
-5.6%
—
* In real terms excluding the effect of exchange rates
** Other income/loss = Other income (expenses) +
Share of profit investments accounted for using the equity method
Forecast for fiscal 2020 (year ending March 2020)
Operating profit is expected to decrease due to
factored-in business risks and restructuring charges
The Company will carry out reform of its business
portfolio in fiscal 2020, the first year of the new
Mid-term strategy.
Sales are expected to decrease by 102.7 billion yen
from the previous year to 7.9 trillion yen, due mainly to a
sales decrease in Industrial Solutions reflecting
uncertainties in the macro environment, including the
situation in the Chinese market, in addition to the impact
of the establishment of a joint venture related to the
“town development” business.
Operating profit is expected to decrease by 111.5 billion
yen from the previous year to 300.0 billion yen, due to factoring
in business risks in addition to business restructuring
charges. Net profit attributable to Panasonic Corporation
stockholders is expected to decrease by 84.1 billion yen
from the previous year to 200.0 billion yen. As a result,
ROE is expected to be 10.1%.
Points for the New Mid-term Strategy
Please refer to the new Mid-term strategy presentation material (PDF) for
details of the new Mid-term strategy that started in fiscal 2020.
Executing portfolio management
Achieve both profit growth and improved profitability
by transcending the boundaries of the Company and
organizations
The Company recognizes that profit improvement is
essential to ensure sustainable growth. Accordingly,
under the new Mid-term strategy we will pursue a variety
of initiatives aimed at raising profitability and returning to
the profit-growth track.
Specifically, we are determined to steadily conduct
portfolio management with new classifications: “Core
growth business,” “Co-creation business,” and
“Revitalization business.” Corresponding to each
business’s characteristics and situations, we will
implement initiatives that transcend the boundaries of
the Company and organizations to enhance the
competitiveness of individual businesses. In this way,
we aim to achieve profit growth and improve profitability.
Message from the CEO
Panasonic Annual Report 2019
11
Core growth business:
Focus resources to drive medium- to long-term profit
growth
Core growth business comprises Spatial Solutions,
Gemba (operational frontlines) Process, and Industrial
Solutions. In fiscal 2020, we expect these businesses to
generate EBITDA* of approximately 390.0 billion yen,
accounting for about 70% of the Company total. For the
past three years, EBITDA margins for these businesses
have transitioned at around the 10% level. We regard
them as businesses that are highly competitive within the
Panasonic Group. By proactively shifting resources into
these areas, we aim to add about 100.0 billion yen of
EBITDA by fiscal 2022, aiming to lead Company-wide
profit growth over the medium to long term.
We view the Core growth business as an area that will
enable sustainable value creation and business growth by
addressing increasingly severe social issues. In recent
years, drastic changes in the social environment, such as
labor shortages, energy issues, and a surge in the amount
of information being communicated, have prompted a
variety of problems. We will strive to make an even larger
contribution toward addressing these social issues by
concentrating on the solutions and recurring-type businesses,
while endeavoring to transform our business model.
* EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization
Co-creation business:
Enhance competitiveness through regional and
business collaboration
Panasonic’s consumer electronics and housing businesses
are positioned within the Co-creation business, which
aims to enhance competitiveness through regional and
business collaboration.
In the consumer electronics business, the Company
will address the Chinese market, where it anticipates
major growth over the medium to long term. To step up
our focus, we established the China & Northeast Asia
Company in April 2019, headed by Tetsuro Homma,
representative director and senior managing executive
officer. The speed and cost-competitiveness derived
from the China operations will be combined with our
trustworthiness and high technological expertise
developed in Japan, leading to enhanced competitiveness.
Looking to the future, the strengths refined from the
China and Japan businesses can be leveraged in other
Asian businesses.
In the housing business, the Company will establish a
joint venture with Toyota Motor Corporation related to the
town development business. The Company aims to create
“new value for the entire town as a whole” by integrating
Toyota’s initiatives toward mobility services and Panasonic’s
initiatives toward “Lifestyle Updates.”
Co-creation business plays the important role of serving
as points of contact with our B2C customers. We will
continue to enhance competitiveness in these businesses,
to further refine the “Panasonic” brand.
New Mid-term portfolio business classification
Core growth business
Spatial Solutions
Expand solution-type businesses
Labor shortage Rapid urbanization Energy issues Communication traffic surge and security
Social Issues
Core growth
business
Increase
profit
Co-creation
business
Enhance
competitiveness
Revitalization
business
Improve
profitability
Gemba Process
Industrial
Solutions
Consumer
Electronics
Housing
Automotive
Solutions
Automotive
Batteries
FY2020
Operating
Profit*
280.0
billion yen
EBITDA*
390.0
billion yen
Sales
4.2
trillion yen
Enhance competitiveness
through regional
and business collaboration
Focus on areas where the
Company has an advantage
Gemba Process
Spatial
Solutions
Industrial
Solutions
EBITDA structure
Transition in EBITDA (Core growth business total)
Core growth
Approx. 70%
Revitalization
Revitalization
Revitalization
Co-creation
Co-creation
Co-creation
Spatial
Spatial
Solutions
Solutions
Gemba
Gemba
Process
Process
(Billions of yen)
500.0
9.3%
400.0
10.7%
EBITDA margin
10.0%
Industrial Solutions
0
2017
2018
2019
2020
2021
2022
(FY)
* Excluding other income/loss
The ratio is the proportion of all three business classifications.
Message from the CEO
Panasonic Annual Report 2019
12
Revitalization business:
Enhance competitiveness into the future while
prioritizing profit improvement
Automotive Solutions and Automotive Batteries businesses,
in which we have made investments expected to serve
as growth drivers, are defined as Revitalization business.
Although we are currently facing struggles, these are our
significant businesses where we can expect future growth
as the automotive industry continues to extensively evolve
and change.
Our priority is to improve profits and recover investments,
as well as to enhance competitiveness by focusing on areas
where we have advantages to rebuild our business base.
In the Automotive Solutions business, Panasonic is
prioritizing profit improvement. We will optimize development
resources by region and by product to thoroughly control
development expenses. In the automotive cylindrical
batteries business, the Company will thoroughly improve
productivity to gain return on investment. In the automotive
prismatic batteries business, the Company will establish a
joint venture with Toyota Motor Corporation and strengthen
competitiveness by integrating the strengths of both
companies to achieve a stable supply of batteries to
various automakers.
Enhancing management structure
Reduce fixed costs, aiming at 100.0 billion yen of
profit contribution
Panasonic will work on reducing fixed costs such as taking
radical measures with loss-making businesses and improving
efficiency in indirect operations. In three years, the Company
aims for a 100.0 billion yen Company-wide contribution.
For all businesses, the Company will accelerate selection
and concentration. The profitability forecast and other
indicators will be continuously monitored, and swift action
will be taken if a certain business should withdraw, or if a
certain business is likely to achieve better growth outside
the scope of Panasonic.
Management KPIs
Expand profit amounts in the Core growth business
to improve corporate value
For fiscal 2022, the final year of the new Mid-term strategy,
and onward, Panasonic will aim toward Company-wide
management that can stably achieve the following targets:
for the Core growth business, the goals are an EBITDA
growth rate of 5–10% and an EBITDA margin of 10% or more,
as well as a Company-wide ROE target of 10% or more.
Management KPIs
FY2022 onward
EBITDA growth rate
5–10%
EBITDA margin
10% or more
ROE
10% or more
Core growth
business
Company-
wide
Capital allocation policy
Allocate capital for the new Mid-term strategy with
cash flow generated from businesses
The basic policy of capital allocation is allotting the
necessary capital to achieve the new Mid-term strategy
that will come from cash flow generated from business
(operating cash flows, divestiture), while being aware of
financial discipline.
The Company will respond flexibly when investment
opportunities arise before sufficient cash flow can be
generated from business operations.
Achieving “Lifestyle Updates”
Offering the most suitable products and services for
each customer
In light of the dramatically changing business environment
with the recent advances in information and communications
technology, as well as diversifying preferences and values
of individual customers, Panasonic is ready to take on the
new challenge of pursuing products and services most
suitable for each customer. This will be conducted by
leveraging various types of data, state-of-the-art AI and IoT
technology, to continue updating products and services
after sales, going beyond the conventional method of
creating a new model with added technology and features.
This is the basic idea of “Lifestyle Updates.”
To achieve the most suitable lifestyles, advancements
in social conditions such as information networks and
transportation services are indispensable. These are also
areas where the Company can make further contributions
with its B2B businesses. Through these initiatives,
Panasonic will transform its business model and aim for
sustainable growth.
Message from the CEO
Panasonic Annual Report 2019
13
Environmental, Social, and Governance (ESG) Policy
products, technologies and solutions relating to creation,
storage and energy efficiency, and energy management.
Global human resources strategy to support our
management strategies
To create new business and achieve growth by being
closer to customers in markets with growth potential, the
Company has been reorganizing its working environments
and systems that enable each employee to play an active
role as well as developing and promoting optimum talents,
regardless of nationality or length of service. More
specifically, Panasonic has been taking steps to develop
managerial talent possessing diverse experience and
aptitude for such roles, while also promoting its talent
management committees led by local top managements
in each region. This has enabled Panasonic to move at a
more rapid pace making employee assignments and
developing careers that extend across companies and
nations. Also, Panasonic is implementing mechanisms
including a global talent database system that makes it
possible to monitor skills, experience and other attributes
of individual employees, as well as a performance
management system that gauges results of employees
and hastens the process of talent development on the
basis of global common policy.
Promoting effective corporate governance
The Company believes it is important to enhance corporate
value by fulfilling accountability through dialogue with
various stakeholders such as shareholders and customers,
making an effort to execute transparent business activities,
and swiftly conducting business activities with fairness
and honesty, based on its basic philosophy of “a company
is a public entity of society.” The Company recognizes that
corporate governance is the important basic structure for
the aforementioned purpose and is working to enhance its
effectiveness.
The Company has worked to strengthen its corporate
governance structure based on a structure that includes a
Board of Directors, Audit & Supervisory Board members
(A&SB Members), and an Audit & Supervisory Board. In
fiscal 2016, we voluntarily established the Nomination and
Compensation Advisory Committee and put in place the
Outside Directors and Outside A&SB Members Committee,
and we also began evaluating the Board of Directors’
effectiveness. In fiscal 2018, we revised the Board of
Directors, to raise the minimum ratio of outside directors
to one third, in the aim of improving the Board of Directors’
flexibility, transparency, and objectiveness. The Company’s
Board of Directors welcomes enriched communication
from outside directors, incorporating external viewpoints
into its exchanges of opinions and discussions when
conducting deliberations and making decisions.
Going forward, we will continue to utilize the Nomination
and Compensation Advisory Committee and leverage our
framework for evaluating the Board of Directors’ effectiveness
to promotive effective corporate governance.
Initiatives for realizing “A Better Life” and
“A Sustainable Global Environment”
Based on the Paris Agreement and the Sustainable
Development Goals (SDGs), Panasonic has been conducting
various activities in the fields of social issues where we
can contribute to for solutions.
In particular, environment and energy are key global
issues. Rising environmental awareness all over the world
has begun to affect our business activities in terms of both
business risks and opportunities.
In addition to ongoing activities to contribute to the
environment through our business, we will exercise our
corporate social responsibility through responding to
demands for environmental consideration from society
and our business partners. Based on the Panasonic
Environmental Vision 2050, which was formulated with
the aim to realize both “a better life” and “a sustainable
global environment” at the same time, Panasonic will work
towards creation and more efficient utilization of energy
that exceeds the amount of energy used, by developing
Message from the CEO
Panasonic Annual Report 2019
14
Message from the CFO
Hirokazu Umeda
Director
Managing Executive
Officer / CFO
Initiatives to improve profitability and
revise our business portfolio while
strengthening our financial base
Capital policy and fiscal 2019 financial position
When conducting business, we place emphasis on return
on invested capital as well as improving financial stability.
With regard to return on invested capital, we are conscious
of capital cost, aiming to continuously secure an ROE of
10% or more, thus exceeding the capital market
expectations. In terms of financial stability, we are
working to increase Panasonic Corporation stockholders’
equity through the accumulation of net profit, to establish
a strong financial base capable of supporting business
structural reform and investment in growth.
Under this policy, we attained an ROE of 15.7% in
fiscal 2019, maintaining a level of more than 10%, as in
the previous fiscal year. We also succeeded in increasing
Panasonic Corporation stockholders’ equity, reaching
1,913.5 billion yen at the end of fiscal 2019. The ratio of
Panasonic Corporation stockholders’ equity was 31.8%.
ROE / Panasonic Corporation Stockholders’ Equity to
Total Assets Ratio
(%)
40.0
30.0
20.0
10.0
0
26.3
26.3
11.1
9.9
27.1
14.4
31.8
15.7
’16/3
’17/3
’18/3
’19/3
ROE
Panasonic Corporation Stockholders’ Equity to Total Assets Ratio
Message from the CFO
Panasonic Annual Report 2019
15
Strengthening our financial base
In preparation for any contingencies caused by factors
such as deterioration in financial and economic
environments, we issued senior notes denominated in
U.S. dollars in July 2019 to diversify our funding sources
and strengthen our funding base by gaining access to
markets outside Japan, which encompass a broad range
of investors. This was our first issuance in overseas
markets in 27 years.
Under the new Mid-term strategy, we will strictly
adhere to our capital allocation policy and push forward
with efforts to improve profitability and strengthen our
financial base, which will promote our efforts to revise our
business portfolio from a financial perspective.
Approach toward the return of profits to shareholders
Since its foundation, Panasonic has managed its business,
recognizing that returning profits to shareholders is one of
its most important policies. The Company, in principle,
distributes profits to shareholders based on its business
performance and strives for stable and continuous dividend
payments. We target a dividend payout ratio of approximately
30% with respect to consolidated net profit attributable to
Panasonic Corporation stockholders.
In view of this policy, the Company’s annual dividend
came in at 30 yen per share in fiscal 2019. This was the
same amount as the previous fiscal year. Moving forward,
we will continue to work to improve net income and generate
free cash flows while implementing initiatives aimed at
achieving sustainable growth in corporate value and
shareholder return.
Environment recognition upon formulating the new
Mid-term strategy
Upon formulating our new Mid-term strategy, I gave
particular consideration as CFO to two points: our position
from a capital market perspective, and the increasingly
uncertain financial and economic environments.
Regarding the capital market perspective, with our
growth in profits generated from businesses leveling off,
we are behind other competitors in terms of profitability
indicators such as operating profit ratio, and the gaps
are widening. This means that we must further improve
profitability by revising our business portfolio to meet
capital market expectations.
As for the financial and economic environments,
predicting changes in financial flow and other factors is
currently difficult due to trade friction, Brexit and
adjustments to monetary policy in major countries. We
must strengthen our financial base to prepare for risks
arising from these external environments.
Capital allocation policy for the new Mid-term
strategy
Under the new Mid-term strategy, we organized our
businesses into portfolio classifications of “Core growth,”
“Co-creation” and “Revitalization.” In addition, we will
decisively revise our portfolio and aim for higher profitability
by promoting the strategic shift of management resources
according to each business’s characteristics and initiatives
that transcend boundaries of the Company and organizations.
Regarding the necessary capital to implement our new
Mid-term strategy, we will be conscious in ensuring
financial discipline, based on the policy of allocating
capital with cash flow generated from business (operating
cash flow, divestiture). However, we will respond flexibly
when investment opportunities arise before sufficient cash
flow is generated from business.
Improving profitability
To generate funds and allocate them strategically, we
apply the return on invested capital (ROIC) and weighted
average cost of capital (WACC) for each Business Division
when making decisions regarding portfolio management
or investment. In our Business Divisions, we will aim for
ROIC improvements, such as inventory reduction and
working capital improvement, as well as profitability
improvements through fixed-cost reduction and others.
At the same time, we will thoroughly monitor and follow
up on the recovery of the 1-trillion-yen strategic investments
which started in fiscal 2016.
Through these initiatives, we aim to maintain ROE of
10% or more on a Group-wide basis.
Message from the CFO
Panasonic Annual Report 2019
16
Message from the CTO
Yoshiyuki Miyabe
Senior Managing Executive Officer
CTO
Supporting sustainable growth through
innovation and speedy commercialization
in a super-smart society
R&D and innovation strategies
The major direction indicated by Panasonic’s brand
slogan, “A Better Life, A Better World,” also extends
unchanged to technological development. To continue
contributing to “A Better Life” and “A Better World” and
creating technologies that support “Lifestyle Updates,”
the Innovation Promotion Sector under the head office
formulated what it calls its R&D Vision as a guiding
principle for future research and development (R&D).
We are now promoting a variety of Group-wide
cross-sectional projects in two fields: the IoT/Robotics
field and the Energy field. With regard to our development
system, we are promoting R&D more closely with our
customers, by for example allocating more engineers to
Divisional Companies that are responsible for the
commercialization of services and products. Through
these initiatives, we aim to achieve more flexible,
cross-sectional, speedy management.
Established in April 2017 for the purpose of
accelerating the innovation that is indispensable for the
sustainable growth of Panasonic into the future, the
Business Innovation Division is also one example of a
flexible, cross-sectional initiative. This Division serves to
accelerate commercialization by developing technologies
and seeing them through until they are launched as new
businesses.
Message from the CTO / Technology Introduction
Panasonic Annual Report 2019
17
Technological capabilities and manufacturing
capabilities accumulated in consumer electronics
Having diversified from the manufacture of wiring
equipment in 1918, Panasonic has been expanding its
business scope mainly in consumer electronics. The
variety of technological capabilities and range of
expertise accumulated and refined in the course of
manufacturing that shows a close affinity for the
customer are our great strengths.
From visual/imaging, audio/voice to mechatronics
(mechanisms), materials/devices, and energy, Panasonic
has created a number of products that make society better
and more convenient by skillfully combining and amalgamating
advanced technologies in a wide variety of fields.
We cannot, however, produce superior products
through technological capabilities alone. Advanced
manufacturing capabilities are indispensable in the
utilization of technology for improving performance,
quality and usability. The advanced manufacturing
capabilities include coating, molding, measurement,
mounting, machine processing, control, CAE (simulation)
and quality control, as well as the adjustment and
integration of technologies that interlink these
processes. These manufacturing capabilities are
another major strength that Panasonic has cultivated,
and their importance will not change even in the era of
IoT and robots.
We will promote innovation based on the two strengths
of our technological capabilities, which span a wide range
of fields, and manufacturing capabilities, which enable us to
make products reliably. In this way, we will continue to create
new businesses so that we can offer products and services
that are “most suitable” for each individual customer.
Social changes and innovation
The future image of society to which Japan should aspire,
as advocated in the Science and Technology Basic Plan
drafted by the Cabinet Office of Japan, is termed “Society
5.0.” This concept incorporates IoT, robots, artificial
intelligence (AI) and other cutting-edge technologies to
provide goods and services that precisely address a
diverse range of needs, thereby aiming to realize a society
that balances economic development with the solutions
to the issues it faces. Today we are in an era that is
undergoing a rapid transition from the industrial society
followed by the information society, to the super-smart
society advocated by Society 5.0, and amid this, a
transformation to digital and IoT is taking place across a
range of fields. To survive when faced with dramatic
change, we must transform the overall business process
in a way that the times demand.
In the past, with mass production and large sales
volumes, products became independent of their
manufacturers as soon as they were shipped from the
factory. However, in the era of IoT, where all kinds of
things are connected to the Internet, we can now
continue providing usefulness by maintaining the links
between manufacturers and customers through products
and services even after shipping. It will be not enough
that the level of satisfaction is at the highest level for a
broad range of customers at the timing when products
and services are delivered. We must therefore offer ways
to update these products and services during use so that
they become the “most suitable” for each customer. In a
sense, this is an attempt to rebuild the traditional “bond
between the neighborhood store and its community” in a
way that today’s times demand. By moving quickly to
expand those “hardware-fusion-type businesses based
on software utilization” that are unique to the
manufacturing industry, Panasonic is connecting our
wide-ranging accumulation of technological and
manufacturing capabilities to the creation of value for
our customers.
For this reason, the very way we bring about
technological development will itself need to change.
Technology in the age of mass production for “unspecified
and large numbers” of customers was expected to be
perfect. However, in the age of IoT, where it is possible
to target a “specified and large number” of customers,
the most important aspect will be “innovating the processes
for realizing customer value.” Demanding perfection from
the engineers right from the start, as in the past, is
something that will actually impede innovation. To
promote innovation, it will be essential to nurture a culture
in which “imperfection” will be purposefully allowed. To
put this approach into practice, Panasonic β was set up
in Silicon Valley. This site serves to deploy initiatives that
work across Business Divisions, and thereby expand
throughout the Group how we think and act in ways that
are suited to this new era.
Message from the CTO / Technology Introduction
Panasonic Annual Report 2019
18
Examples of products that have improved Panasonic’s
technological capabilities and manufacturing capabilities
Diverse technological capabilities
1927
Launches National
Lamp
1950
Launches Company’s
first car radio
1952
Company’s first black
te TV
& white TV
1958
Launches Company’s
first household tape
corder
recorder
1961
Launches first
Matsushita home
1963
Launches “National
Hi-Top,” world’s
longest-lasting
dry cell battery
Visual/
Imaging
Heat
(Thermal
Control)
Audio/Voice
Light
Connectivity/
Communica-
tions
Energy
Mechatronics
(Mechanisms)
Materials/
Devices
IoT, Usability
1968
Develops first “Panasert”
automated resistor
mounting machine
1978
Launches Panasonic’s
first compact office
computer (PC)
1988
Launches Panasonic’s
first electronic still
camera
Manufacturing capabilities that give shape to technologies
1996
Launches industry’s
first digital mobile
phone weighing less
than 100 grams
2010
Begins mass production
of HEV lithium-ion
atteries
batteries
2017
Develops facial
recognition gate, put
into operation at Tokyo
International Airport
Coating
Molding
Measurement
Mounting
Machine
Processing
Control
CAE
(Simulation)
Quality
Aiming to realize “Gemba Process Innovation*” by leveraging
technologies in the welding and mounting businesses
Panasonic has operated its welding business for over 60 years, providing welding equipment/robots
to such industries as automobiles, construction machinery, and shipbuilding. Over our long history,
we have cultivated robotics technology to reproduce a high level of welding craftsmanship and an
ability to provide solutions to customers to meet their needs. In the mounting business, we offer
to various industries a multitude of product lineups as well as support that extends from production
line start-up and process proposals through to the entire lifecycle of solutions. We link together
equipment and systems in an effort to transform the overall production cite into a “smart factory.”
The Gemba (operational frontlines) conditions at manufacturing, logistics and other service
providers currently suffer from labor shortages while operational processes have become increasingly
complex in order to meet the diversifying needs of consumers. Panasonic will take on the challenge
of improving customer productivity and solve social issues by leveraging its expertise in continuous
improvement (kaizen) developed in the welding and mounting businesses as well as utilizing a
wide variety of distinctive devices and robotics technologies.
Arc welding robot
* Improving productivity and continuously generating value on operational frontlines
Modular placement machine
Message from the CTO / Technology Introduction
Panasonic Annual Report 2019
19
Technology Introduction 1
Contributing to greater safety, security, and
efficiency through solutions based on the world’s
highest level of facial recognition accuracy
Facial recognition technology judges whether the individuals
in two facial images are the same. Conventionally, there
were problems where facial recognition fails when there
was an angle over 45 degrees to the left or right of the face,
when the face was partially hidden by sunglasses or face
masks, or when there were large differences in lighting such
as in outdoor environments. Panasonic began researching
facial recognition technology at the start of the 1990s. In
targeting security applications that rely on surveillance
cameras, we utilized airports, retail outlets, and other on-site
locations to improve our backlight compensation, noise
reduction, and other image processing technologies, and
to enhance the effectiveness of our image analysis
technology to recognize faces at various angles and
degrees of concealment. Moreover, by combining these
technologies with deep learning, which has undergone
dramatic advancements, we have overcome the problems
of these recognition failures. In April 2017 our technology
was acknowledged as having the world’s highest level of
performance at the National Institute of Standards and
Technology (NIST) competition in the United States.
Facial recognition technology is a two-step process that
first applies a feature extraction algorithm to extract useful
recognition features from a facial image and then applies a
similarity calculation algorithm to compare facial features
in two facial images. In the first step, we also enabled
the extraction of features required to judge similarity in
images of the side of the face or of a partially hidden
face by improving the network structure of the machine
learning method called deep learning. Furthermore, in the
second step, we succeeded in dramatically improving the
precision of facial recognition by integrating technologies
Features of Panasonic’s Facial Recognition Technology
that optimize the facial match similarity calculation to the
lighting and other aspects of the photography environment.
The judgment precision of our facial recognition
technology already exceeds that of the human eye. As a result,
we can now apply our technology to different applications.
For example, the Ministry of Justice of Japan installed
facial recognition automated gates that use this technology
to verify identity during the departure and return procedures
for Japanese nationals and the departure procedures for
foreign nationals at Japan’s airports. Without the need for
prior registration of biometric data, the system compares
photographic data of the traveler's face embedded in the IC
chip of the person’s passport with a photo taken at the
facial recognition automated gate to verify the identity.
These gates have also been well-received because they
can be used without frustration by first-time users and the
elderly. In this case, we applied our ability to develop
products from the perspective of ordinary customers, one
of our strengths acquired through our B2C businesses.
In 2018, we also delivered a facial recognition entry and
ticket-less boarding system to the Fuji-Q Highland amusement
park, thereby helping to strengthen park security and
improve convenience for visitors. We are also working with
the FamilyMart convenience store chain to study the use of
automated payments based on facial recognition at a store
that serves as a demonstration project. This project aims to
help resolve labor shortages and other problems.
We will continue to improve recognition performance
and ease of use, expanding the usage to areas such as
entry control and visitor reception at condominiums, offices,
events and more, thus contributing to safety, security, and
efficiency in all fields.
Step 1: Feature Extraction Process
Combining multiple deep learning structures enables quantification
of features that can also be recognized from the side of the face
Step 2: Similarity Calculation Process
Making a similarity calculation calibrated
to the photography environment enables
high-precision identity judgments
Registered image
Feature quantities
(Registered image)
Similarity
calculation
Identity
judgment
Matching image
Feature quantification using deep learning
Feature quantities
(Matching image)
Message from the CTO / Technology Introduction
Panasonic Annual Report 2019
20
Technology Introduction 2
Enhancing industry-leading Cybersecurity
technical capabilities and helping to realize a safer,
more secure society in the IoT era
In the Internet of Things (IoT) era, where countless devices
are networked together, Cybersecurity is rapidly gaining
importance as a means of defending the safety of devices
such as personal computers and IT systems. For example,
the conversion to smart factories as exemplified by Industry
4.0 and the progression of building automation are seeing
broader use of network-based control. These developments
are increasing the risk of exposure to cyber-attacks. In the
automotive field, although connected cars equipped with
networking capability, and the greater use of automated
driver assistance systems exemplified by ADAS, offer the
advantage of fewer traffic accidents, reports have indicated
their vulnerability to unauthorized remote operation.
Likewise, these types of cars require security measures
because such vulnerabilities can lead to vehicle recalls.
Panasonic has been involved in security technologies for
more than 30 years as part of our development of audio
visual (AV) equipment and home appliances. Over this time,
we have acquired encryption, authentication, hacking
countermeasures, and other tamper resistance technologies.
In response to the demands of the times, we have more
recently placed our focus on developing technologies for
the Cybersecurity field in relation to factories, buildings,
automotive, homes, and other forms of IoT. In particular,
we are going beyond known forms of attacks and are
enhancing our ability to monitor communications data
over networks and employ AI to judge whether deviations
from normal conditions are cyber-attacks, in other words,
“technologies to detect unknown attacks.” As part of our
steady march towards commercializing these technologies,
we are conducting proof-of-concepts that analyze and
Panasonic’s initiatives in Cybersecurity Solutions
Accomplishments in security technologies
HEMS
ICT devices
AV products
detect abnormalities among massive amounts of
communication logs from Panasonic’s factories and
buildings, as well as those of other companies. Our
technologies have also been recognized by world-leading
conferences in automotive security (escar, etc.) and the
world’s largest conference in the field of ICS security (S4).
We made technical presentations at these events in 2015,
2017, and 2019 as one of the leaders in the industry.
Panasonic continues to evolve our products and services
even after sale in aims of realizing “Lifestyle Updates” that
offer the “most suitable” option for each customer.
Cybersecurity technology serves as a foundation for
“Lifestyle Updates” in factories, buildings, automobiles,
homes, and many other areas, and is now positioned as a
core technology. Likewise, we will continue to refine these
strengths into the future. In addition to leveraging these
technologies in our own products and services, based on
our strengths in a wide range of business fields, we also
aim to provide these technologies to our customers. We
will contribute to the realization of a safer, more secure
society in the IoT era through security consulting, security
monitoring services, attack detection software, and other
total Cybersecurity solutions.
Continuously updated
IoT Cybersecurity Solutions
• Security consulting
• Security monitoring services
• Attack detection software
Encryption, authentication, tamper resistance technology
Security technologies being enhanced
in anticipation of the IoT era
Technologies
for detecting
known attacks
Technologies
for detecting
unknown attacks
Artificial intelligence (AI)
Monitor
Factories
Update
Automobiles
Buildings
Homes
Protect
Message from the CTO / Technology Introduction
Panasonic Annual Report 2019
21
ESG Highlights
Size of Contribution in Reducing CO2 Emissions through
Products and Services
(Million tons)
80
60
40
20
0
69.13
21.70
47.43
3/’15
3/’16
3/’17
3/’18
3/’19
Size of direct contribution in reducing CO2 emissions
Size of indirect contribution in reducing CO2 emissions
CO2 Emissions in Production Activities and CO2 Emissions
per Basic Unit
(Million tons)
5
4
3
2
1
0
86.0%
2.23
3/’15
3/’16
3/’17
3/’18
3/’19
CO2 emissions (left scale)
CO2 emissions per basic unit (compared to the fiscal year ended March 2014) (right scale)
Number of Women in Managerial Positions / Percentage of
Women in Positions of Responsibility
(Persons)
600
7.6%
534
400
200
0
(%)
100
75
50
25
0
(%)
7.5
5.0
2.5
0
4/’15
4/’16
4/’17
4/’18
4/’19
Number of women in managerial positions (left scale)
Percentage of women in positions of responsibility (right scale)
(As of April 30 of each year)
Note: Managerial position is defined as section leader or higher. Positions of responsibility include positions such as chief or
assistant chief. Total of Panasonic Corporation and its key domestic Group companies.
A target of at least 55 million tons
in fiscal 2019 has been set, and
Panasonic worked to maximize
contributions to CO2 emission
reductions through improving the
energy-saving performance of products
and services. Progress in conversion
of lighting to use LEDs, for example,
increased CO2 reduction contributions
for fiscal 2019 to 69.13 million tons,
allowing Panasonic to achieve its target.
For details:
https://www.panasonic.com/global/corporate/
sustainability/eco/co2.html
Panasonic set the reduction target
for CO2 emissions volume per basic
unit for fiscal 2019 at 5% or more
compared to fiscal 2014. At its
factories and other facilities,
Panasonic promotes energy-saving
activities, the utilization of renewable
energies, and other initiatives. As a
result, there was a 14% reduction
per basic unit for this fiscal year,
greatly exceeding the target figure.
For details:
https://www.panasonic.com/global/corporate/
sustainability/eco/co2/site.html
Promoting diversity is an important
management initiative, and in Japan
in particular, the appointment of more
women to senior management or
other positions with decision-making
authority is recognized as necessary.
Panasonic continues every year to
increase the number of women in
managerial positions and the
percentage of women in positions of
responsibility through various initiatives.
For details:
https://www.panasonic.com/global/corporate/
sustainability/pdf/sdb2019e-07.pdf
Number of Board Members / Outside Director Ratio
(Persons)
20
36.4%
15
10
5
0
6/’15
6/’16
6/’17
6/’18
6/’19
4
7
(%)
40
30
20
10
0
The composition of the Board of
Directors was changed substantially
in fiscal 2017 to further strengthen
corporate governance. As of June
30, 2019, the number of directors is
set at 11 and the outside director
ratio at 36.4%.
For details:
Please refer to “Corporate Governance Structure
and Initiatives.”
Outside directors (left scale)
Inside directors (left scale)
Ratio of Outside Directors (right scale)
(As of June 30 of each year)
ESG Highlights
Panasonic Annual Report 2019
22
Recognition from Outside the Company (Fiscal Year Ended March 2019)
Panasonic has been selected as a component of the FTSE4Good Index Series, the global socially responsible
investment index, for the 19th consecutive year. Furthermore, it has been selected as part of the MSCI ESG
Leaders Indexes (formerly the MSCI Global Sustainability Indexes), the global ESG investment index, for the 9th
consecutive year. Panasonic has also received an A- in the CDP 2018 rankings. The second-highest level of an
eight-tier ranking system, this CDP ranking is a measure of the initiatives and comprehensiveness of information
disclosed related to climate change. In addition, since 2014, Panasonic has been selected as a component of the
new stock index, “JPX-Nikkei Index 400,” which is composed of companies with high appeal for investors. And
Panasonic has been included in the FTSE Blossom Japan Index and MSCI Japan ESG Select Leaders Index,
both of which were created in July 2017.
THE INCLUSION OF PANASONIC Corporation IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT
OR PROMOTION OF PANASONIC Corporation BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS
OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
ESG Highlights
Panasonic Annual Report 2019
23
Message from the Chairman of the Board
Shusaku Nagae
Director,
Chairman of the Board
Addressing ESG initiatives as
the foundation of management—
toward sustained growth and
enhanced corporate value
Working to solve social issues through
business activities
Since our founding, we have been engaged in a range of
business activities based on the philosophy that “a
company is a public entity of society.” Through these
activities, we have been taking initiatives toward solving
issues related to people’s lives and society, such as labor
saving and efficiency improvement in everyday life or at
work places.
In 2015, the United Nations adopted the Sustainable
Development Goals (SDGs), and corporations have
become intensely aware of their responsibility to work
toward solving social issues through their business
activities. Furthermore, non-financial information on
environmental, social, and governance (ESG) issues is
also receiving greater attention as one of the indicators
used to assess corporate value.
At Panasonic, with the aims of achieving sustained
growth and enhancing corporate value, we are actively
promoting initiatives such as the following: carrying out
reforms to increase the Board of Directors’ effectiveness,
implementing cultural reform of our organizations, and
offering solutions to global environmental issues.
Continuous governance reform toward
increased effectiveness
In serving as Chairman of the Board, I have set various
themes each year to promote governance reform. Efforts
made to increase the Board’s agility and transparency, as
well as the degree of its objectivity, include concrete
measures: (1) establishing the Nomination and Compensation
Advisory Committee, (2) introducing a system to evaluate
the Board of Directors’ effectiveness, (3) reducing the
number of directors, and (4) raising the minimum ratio of
Message from the Chairman of the Board
Panasonic Annual Report 2019
24
Creating business opportunities through
environmental initiatives
By addressing such issues as energy, climate change,
and resources, we endeavor to fulfill the social
responsibility of a company as “a public entity of society.”
At the same time, addressing these issues is also
essential for continuing to do business in the medium- to
long-term future.
Furthermore, we have formulated the Panasonic
Environment Vision 2050, and we are striving to make
energy created exceed energy used by the year 2050.
Among our business operations, energy used mostly
comes from manufacturing products and offering
services, significantly impacting CO2 emissions. To reduce
energy used, we will continue to be conscious of how our
customers use energy and emit CO2. Accordingly, we will
keep aware of this at all stages of our operations, from
product design to manufacturing of our products and
provision of our services. To increase the amount of energy
created, we will expand our energy-related businesses
such as by using hydrogen as a new energy source.
Panasonic assesses climate change risks and
opportunities and then conducts an analysis of the
resulting impact. While each specific natural disaster
cannot be proven to have a correlation to climate change,
it is known that the risks of natural disasters will increase.
Recently, more natural disasters are occurring inside and
outside Japan, with unprecedented magnitude that
causes serious damage. We believe we have an important
role to play in disaster prevention and mitigation, as well as
making contributions in the restoration and reconstruction
work that inevitably follows natural disasters.
Along with these disaster-related initiatives and our
environmental activities, we aim to make contributions,
through our solutions and systems businesses, toward a
society and a daily life that provide an enhanced sense of
safety and security.
Supporting initiatives for profit growth and
profitability improvement
Panasonic is currently making efforts toward profit growth
and profitability improvement through the reform of its
business portfolio described in the Mid-term strategy.
To gain a better understanding from investors, the Board
of Directors will further clarify the Company’s future aim
and strategy, as well as support activities to promote ESG
initiatives as the foundation of corporate management.
I would like to ask for your continued support of the
efforts we are making in our journey to transformation.
outside directors to one-third of the total. I have also
worked to energize the Board of Directors meeting such
as by newly allotting time to discuss medium- to long-term
strategies after reflecting upon the opinions of outside
directors, as expressed in their evaluation of the Board of
Directors’ effectiveness.
From fiscal 2017, outside directors and outside Audit
& Supervisory Board members (A&SB members) began
making visits to our business sites. Dialogues with
employees working at the frontlines enable executives to
better understand our business and manufacturing
operations. This interaction also leads to more active
discussion and deliberations at the Board of Directors
meeting. With regard to issues such as M&A, it is
important to share information at an early stage and
report progress for in-depth discussions. Hence, I intend
to take another step forward in providing information to
outside directors to further increase the effectiveness of
the Board’s supervisory function and corporate strategy
decision-making function.
Promoting diversity and building a culture to fully
deploy one’s talents
To promote business model reform and pursue sustained
growth, it is essential that we have an organizational
culture in which all employees can take on new challenges
and fully deploy their talents. In the past, we were
considered ahead of the time in Japan in introducing new
workstyle rules and systems, such as the five-day work
week. Going forward, we will continue to be actively
engaged in creating working environments that facilitate
productive and satisfying work, in accordance with the
changing times.
Human resources are the key to value creation. While
top management and employees are expected to refine
their own skills, they are also expected to interact with
others having diverse perspectives and knowledge, which
should strengthen our organizational capability and lead
to new value creation.
Changes in society bring about changes in our
business and specific working conditions. We will
increasingly welcome new employees who already have
a certain expertise needed for particular types of
business. Envisioning such enriched diversity, our
current employees are expected to meet the level of
professionalism held by the newly hired “expert”
employees.
We are also facing changes in our business models
to integration-based and solution-proposal types.
Consequently, it becomes difficult for a corporation to
comprehensively conduct a certain business on its own.
In our Mid-term strategy, we have set the three new
portfolio classifications of “Core growth,” “Co-creation,”
and “Revitalization,” aiming to achieve both profit growth
and profitability improvement. Should it become
necessary to bolster our existing functions or resources
to achieve our mission or aim, we intend to make swift
management decisions, including alliances with other
corporations and M&A.
Message from the Chairman of the Board
Panasonic Annual Report 2019
25
Messages from Outside Directors
Supporting innovation achievements
that expedite solutions to social issues
Kunio Noji
Outside Director
Senior Advisor, Komatsu Ltd.
One of Japan’s most noted executives, he built Komatsu into a global corporation.
He advocates reform of business management through innovation.
He was appointed as an outside director in June 2019.
for a short time, I get the feeling that we should be able to
create an atmosphere which permits more frank and open
discussions. It is very important to have a corporate culture
that allows the freedom to say what you want to say.
——Could you tell us about what you expect from
Panasonic and the direction the Company should go?
To realize the goal of “Lifestyle Updates” that Mr. Tsuga
put forth, I consider that the issue is how each Divisional
Company can link this to business strategies and business.
In addition, in order to carry out steady management, I
believe it is important to clarify the technological,
manufacturing, sales, and other strategies that we should
continue to protect.
The core of industry globally has moved from the old
manufacturing industries to the new software industries.
But we have arrived at an era where new industries that
combine hardware and software will be required. I believe
that now is the time for the Japanese manufacturing
industry to provide new values through connecting strong
hardware and software, bring about innovations that can
solve social problems. In this sense, too, I expect great
things of Panasonic.
——Please tell us why you accepted the role of outside
director for Panasonic, and about your own role.
The reason I accepted was because I felt I could utilize my
own experience and knowledge from being a president in
the manufacturing industry in strengthening governance.
I see my role in strengthening governance as twofold.
The first is to ensure governance. Panasonic has
already made notable strides in initiatives to strengthen
governance, including establishing the Nomination and
Compensation Advisory Committee, introducing evaluations
of the Board of Directors’ effectiveness, and ensuring a
ratio of outside directors of at least a third. However,
there are other companies that are more advanced than
Panasonic in terms of governance, and I think there are
some points we should strengthen some more. In addition,
while there are a range of themes in governance, such as
quality and compliance, I provide advice on these issues
based on my own experiences.
The second is support for accelerating growth
strategies. Drawing on my experiences as a president in
the manufacturing industry, I will offer suggestions based
on my perspectives and ideas for studying strategies.
——Could you give us your frank opinion of Panasonic?
Since the Company was founded, employees at the
operational frontlines have been thoroughly educated and
nurtured attitudes toward manufacturing, so governance
is at a high level. This leads to the high levels of trust in
Panasonic’s hardware thanks to the quality of the
Company’s products. This gives me a great deal of
reassurance. On the other hand, for new businesses such
as platforms and software, all employees must understand
their aims to the fullest extent.
In addition, while I have only been an outside director
Messages from Outside Directors
Panasonic Annual Report 2019
26
Facing business, compliance, and HRD themes
with strong awareness of the issues
Stock prices generally reflect market expectations toward the future growth of a
corporation. In light of Panasonic’s current situation, to restore market confidence, it is
imperative that we communicate to the market our long-term vision of business portfolio
reform based on profitability, as well as our concrete roadmap toward this vision.
Since its founding, Panasonic’s business areas have expanded vastly. This means
that its organizational structure and allocation of human resources is now complex and
multi-layered.
My approach as an outside director of this sort of company is to be strongly aware of
the following three points:
(1) Business portfolio reform (how each Business Division’s cost structure is visualized
and whether profitability targets are carried through)
(2) Strengthening global compliance structure (how effectiveness is secured at a high
level and how much employees are made aware)
(3) Human resources development (how the corporate culture is reformed and how
management personnel are selected)
Panasonic’s wide array of systems and products enables the Company to contribute
significantly to solving social issues. For example, there is good prospects in enhancing
corporate value from the perspective of the SDGs, as the Company is able to strongly
commit to each of the goals. In addition, the attitude toward addressing social issues on
a global scale can lead to establishing a new type of corporate identity. I would like you
to pay close attention from a long-term perspective as to how Panasonic makes its
strategic preparations for what it wants to achieve.
Working to solve management issues Company-wide and
finding the next promising path of growth
Panasonic is facing a crucial point in its search for its growth pillar. As we approach this
point, there is also a shared sense of crisis within the Company, creating an atmosphere
prepared to attempt innovation through trial and error. However, to narrow down growth
areas and to reach a level of solid profitability, we need to move even faster and create
an open-minded corporate culture that is not afraid of failure.
The Board of Directors meetings have a free atmosphere of discussion, and in-depth,
frank opinions are exchanged at the Nomination and Compensation Advisory Committee
meetings as well. However, being an outside director of a corporation comprising seven
Divisional Companies engaged in a diverse array of businesses, I do find it can be hard
to be fully aware of the management situation. While serious efforts have already been
made to enhance corporate governance, I would like to see the Company do a little bit
more to in providing information to its outside directors.
At this major period of transition in our business restructuring, it is important that we
squarely face reality, fully understand the roots of the structural problems, and share
what needs to be addressed and the direction to be taken with everyone in the Company,
including the outside directors. One of the strengths of Panasonic is that, once an issue
is identified, it will devote all its efforts to tackling it. The Company has a history of taking
innovation seriously. If we can draw on the Company’s long experience in this area, I am
quite confident that we will forge the next promising path of growth.
Yoshinobu Tsutsui
Outside Director
Hiroko Ota
Outside Director
Messages from Outside Directors
Panasonic Annual Report 2019
27
Tenaciously promoting structural reform
focused on the management succession system
With the backdrop of digital transformation, many business areas are forced to innovate,
changing or creating their business models. Amid this business environment, how
sustainable can we make our organizational capabilities and the current structure of the
Company on a global scale? Panasonic’s diversified portfolio of businesses means we
need to be tenacious in executing structural reform. It will be a challenging management
task to do this while responding to geopolitical uncertainties, but if we cannot, there will
be no future for Panasonic.
Choosing the next CEO and CxOs who will take the lead in transforming the
Company should be considered from the long-term perspective, and not just the next
term. Hence, consistent and sustainable reform is necessary for the selection and
development system, as well as the upper management structure and governance
structure where selection takes place.
Our founder established an innovative company structure, management philosophy
and business model. To enhance corporate value, these need to be realized in a modern
way through “deconstruction and creation” within the 21st century business environment.
This is a challenge shared among traditional companies in Japan. I have high expectations
that Panasonic will become a role model in this sort of management innovation.
Kazuhiko Toyama
Outside Director
Messages from Outside Directors
Panasonic Annual Report 2019
28
Directors, Audit & Supervisory Board Members and Executive Officers
(As of Oct. 1, 2019)
Directors
Laurence W. Bates
Director
Hirokazu Umeda
Director
Tetsuro Homma
Representative Director
Yasuyuki Higuchi
Representative Director
Kazuhiro Tsuga
Representative Director,
President
Shusaku Nagae
Director,
Chairman of the Board
Mototsugu Sato
Representative Director
Yoshinobu Tsutsui
Outside Director
Hiroko Ota
Outside Director
Kazuhiko Toyama
Outside Director
Kunio Noji
Outside Director
Directors, Audit & Supervisory Board Members and Executive Officers
Panasonic Annual Report 2019
29
Audit & Supervisory Board Members
Toshihide Tominaga
Senior Audit &
Supervisory Board Member
Yoshio Sato
Outside Audit &
Supervisory Board Member
Mitsuko Miyagawa
Outside Audit &
Supervisory Board Member
Toshio Kinoshita
Outside Audit &
Supervisory Board Member
Mamoru Yoshida
Senior Audit &
Supervisory Board Member
Directors, Audit & Supervisory Board Members and Executive Officers
Panasonic Annual Report 2019
30
Directors
Director, Chairman of the Board
Representative Directors
Apr. 1972 Joined Matsushita Electric Works, Ltd. (MEW)
Dec. 2004 Managing Executive Officer, MEW
June 2007 Managing Director, MEW
June 2010 President, Panasonic Electric Works Co., Ltd.
(former MEW)
Apr. 2011 Senior Managing Executive Officer of the
Company / In charge of Lighting Company
and Panasonic Ecology Systems Co., Ltd.
Jan. 2012 In charge of Solution Business / President,
Eco Solutions Company
June 2012 Executive Vice President of the Company / In
charge of Corporate Division for Promoting
Energy Solution Business
June 2013 Chairman of the Board of Directors (current
position)
Shusaku
Nagae
Representative Director, President
Apr. 1979 Joined the Company
June 2001 Director, Multimedia Development Center
June 2004 Executive Officer of the Company / In charge
of Digital Network & Software Technology
Apr. 2008 Managing Executive Officer of the Company /
President, Panasonic Automotive Systems
Company
Apr. 2011 Senior Managing Executive Officer of the
Company / President, AVC Networks
Company
June 2011 Senior Managing Director of the Company
June 2012 President of the Company
June 2017 Representative Director, President of the
Company (current position) / President of the
Company (current position) / Chief Executive
Officer (CEO) (current position)
Kazuhiro
Tsuga
President / CEO
Representative Director
Apr. 1979 Joined Matsushita Electric Works, Ltd. (MEW)
Apr. 2008 Executive Officer, MEW
Apr. 2011 Senior Executive Officer, Panasonic Electric
Works Co., Ltd. (former MEW)
Oct. 2013 Executive Officer of the Company / In charge
of Planning
June 2014 Director of the Company
Apr. 2015 Managing Director of the Company
Apr. 2016 Senior Managing Director of the Company /
In charge of Human Resources
Mar. 2017 CEO, Panasonic Holding (Netherlands) B.V.
June 2017 Representative Director of the Company
(current position) / Senior Managing Executive
Officer of the Company / Chief Strategy
Officer (CSO) / Chief Human Resources
Officer (CHRO)
Apr. 2019 Executive Vice President of the Company
(current position)
Mototsugu
Sato
Executive Vice President
May 2003 President and Representative Director,
Hewlett-Packard Japan, Ltd.
May 2005 President and Representative Director, The
Daiei, Inc.
Mar. 2007 Representative Executive Officer and COO,
Microsoft Kabushiki Kaisha (now Microsoft
Japan Co., Ltd.)
Apr. 2008 Representative Executive Officer and
President, Microsoft Kabushiki Kaisha (now
Microsoft Japan Co., Ltd.)
July 2015 Representative Executive Officer and
Chairman, Microsoft Japan Co., Ltd.
Apr. 2017 Senior Managing Executive Officer of the
Company / President (now CEO), Connected
Solutions Company (current position)
June 2017 Representative Director of the Company
(current position) / Senior Managing Executive
Officer of the Company (current position)
Apr. 1985 Joined the Company
June 2012 General Manager, Corporate Planning Group
Oct. 2013 Executive Officer of the Company
Apr. 2015 Managing Executive Officer of the Company
President, Appliance Company
June 2015 Managing Director of the Company
Apr. 2016 Senior Managing Director of the Company
June 2017 Senior Managing Executive Officer of the
Company (current position)
Apr. 2019 CEO, China & Northeast Asia Company
(current position)
June 2019 Representative Director of the Company
(current position)
Apr. 1984 Joined the Company
Oct. 2012 General Manager, Corporate Management
Support Group, Corporate Strategy Division
Apr. 2017 Executive Officer of the Company / In charge
of Accounting and Finance
June 2017 Director of the Company (current position) /
Executive Officer of the Company / Chief
Financial Officer (CFO) (current position)
Apr. 2018 Managing Executive Officer of the Company
(current position) / President, Panasonic
Equity Management Japan Co., Ltd. (now
Panasonic Equity Management Japan G.K.)
(current position)
Mar. 1987 Admitted to New York State Bar (current
position)
Sep. 1998 General Counsel-Japan, General Electric
Company, Tokyo
Apr. 2014 Senior Managing Director and Chief Legal
Officer, LIXIL Group Corporation, Tokyo
Apr. 2018 Executive Officer of the Company / General
Counsel (GC) (current position) / Chief Risk
Management Officer (CRO) (current position) /
Chief Compliance Officer (CCO) (current
position)
June 2018 Director of the Company (current position)
Apr. 2019 Managing Executive Officer of the Company
(current position)
Yasuyuki
Higuchi
Senior Managing
Executive Officer /
CEO, Connected
Solutions Company
Tetsuro
Homma
Senior Managing
Executive Officer /
CEO, China & Northeast
Asia Company
Directors
Hirokazu
Umeda
Managing Executive
Officer / CFO
Laurence W.
Bates
Managing Executive
Officer / GC / CRO / CCO
Directors, Audit & Supervisory Board Members and Executive Officers
Panasonic Annual Report 2019
31
Audit & Supervisory Board Members
Outside Directors
Senior Audit & Supervisory Board Members
Apr. 2011 President, Nippon Life Insurance Company
June 2015 Director of the Company (current position)
Apr. 2018 Chairman, Nippon Life Insurance Company
(current position)
Yoshinobu
Tsutsui
(Independent director)
Mamoru
Yoshida
Apr. 1979 Joined the Company
Apr. 2008 Vice President, Panasonic AVC Networks
Company / Director, Network Business
Group
Apr. 2009 Executive Officer of the Company / Senior
Vice President, AVC Networks Company
Apr. 2012 Managing Executive Officer of the Company /
President, AVC Networks Company
June 2012 Managing Director of the Company
Apr. 2013 In charge of Technology, Intellectual Property
and Information Systems
Apr. 2015 Senior Vice President, Appliances Company
June 2015 Managing Executive Officer of the Company
June 2016 Senior Audit & Supervisory Board Member of
the Company (current position)
Apr. 1980 Joined the Company
Jan. 2013 Senior Councilor, Accounting Center,
Industrial Devices Company
June 2016 President, Panasonic Industrial Devices
SUNX Co., Ltd.
June 2018 Corporate Advisor , Panasonic Industrial
Devices SUNX Co., Ltd.
June 2019 Senior Audit & Supervisory Board Member of
the Company (current position)
Toshihide
Tominaga
Outside Audit & Supervisory Board Members
July 2007 President and Director, Chief Executive
Officer (Representative Director) of
Sumitomo Life Insurance Company
July 2011 President and Representative Director, Chief
Executive Officer of Sumitomo Life Insurance
Company
Apr. 2014 Chairman and Representative Director of
Sumitomo Life Insurance Company
June 2014 Audit & Supervisory Board Member of the
Company (current position)
July 2015 Chairman of the Board of Sumitomo Life
Insurance Company (current position)
Yoshio
Sato
(Independent Audit &
Supervisory Board member)
July 1983 Registered as Certified Public Accountant
(Japan) (current position)
June 1994 Senior Partner of Chuo Audit Corporation
July 1998 Managing Partner for Japanese Business
Network of PricewaterhouseCoopers LLP
National Office
July 2007 Chief Executive of The Japanese Institute of
Certified Public Accountants
July 2013 Council Member of The Japanese Institute of
Certified Public Accountants
June 2014 Audit & Supervisory Board Member of the
Company (current position)
Toshio
Kinoshita
(Independent Audit &
Supervisory Board member)
Apr. 1986 Registered as Attorney at Law (Japan)
(current position)
Apr. 1995 Partner, TMI Associates (current position)
June 2016 Audit & Supervisory Board Member of the
Company (current position)
Sep. 2006 Minister of State for Economic and Fiscal
Policy
Aug. 2008 Professor of National Graduate Institute for
Policy Studies
June 2013 Director of the Company (current position)
Apr. 2019 Senior Professor of National Graduate
Institute for Policy Studies (current position)
Apr. 2003 Senior Representative Director (COO),
Industrial Revitalization
Corporation of Japan
Apr. 2007 Representative Director (CEO),
Industrial Growth Platform, Inc. (current
position)
June 2016 Director of the Company (current position)
June 2007 President and Representative Director, and
CEO, Komatsu Ltd.
Apr. 2013 Representative Director and Chairman of the
Board, Komatsu Ltd.
June 2019 Senior Advisor, Komatsu Ltd. (current
position) / Director of the Company (current
position)
Hiroko
Ota
(Independent director)
Kazuhiko
Toyama
(Independent director)
Kunio
Noji
(Independent director)
Mitsuko
Miyagawa
(Independent Audit &
Supervisory Board member)
Directors, Audit & Supervisory Board Members and Executive Officers
Panasonic Annual Report 2019
32
Executive Officers
Eiichi Katayama
Chief Strategy Officer (CSO)
In charge of Business Development
Manish Sharma
President, Panasonic India Pvt. Ltd.
Shigeki Mishima
Chief Human Resources Officer (CHRO)
General Manager, Corporate Human Resources Strategy Department,
Corporate Strategy Division
Executive Officers
President
Kazuhiro Tsuga
Chief Executive Officer (CEO)
Executive Vice President
Mototsugu Sato
Director, Corporate Strategy Division
CEO, US Company
General Affairs and Social Relations
Senior Managing Executive Officers
Yoshiyuki Miyabe
Chief Technology Officer (CTO)
Chief Manufacturing Officer (CMO)
Tetsuro Homma
CEO, China & Northeast Asia Company
Regional Head for China & Northeast Asia
Masahisa Shibata
In charge of Automotive Sales
Yasuyuki Higuchi
CEO, Connected Solutions Company
Shinji Sakamoto
CEO, Industrial Solutions Company
Managing Executive Officers
Takashi Toyama
Representative in Tokyo
In charge of Government and External Relations
Director, Government and External Relations Division
In charge of Tokyo Olympic & Paralympic Business Promotion
Hirokazu Umeda
Chief Financial Officer (CFO)
In charge of Groupwide Cost Busters Project and BPR Project
CEO, Panasonic Holding (Netherlands) B.V.
President, Panasonic Equity Management Japan G. K.
Yuki Kusumi
CEO, Automotive Company
Masahiro Shinada
CEO, Appliances Company
In charge of Consumer Business and FF Customer Support & Management
Laurence W. Bates
General Counsel (GC)
Chief Risk Management Officer (CRO)
Chief Compliance Officer (CCO)
Director, Legal & Compliance Division
Masaharu Michiura
CEO, Life Solutions Company
In charge of Construction Safety Regulations Administration Department
Directors, Audit & Supervisory Board Members and Executive Officers
Panasonic Annual Report 2019
33
Corporate Governance Structure and Initiatives
The Company considers corporate governance to be a
key foundation for increasing its corporate value and will
continue strengthening governance, including enhancing
the discussion of business strategies by the Board of
Directors.
Basic policy
The Company, since its establishment, has operated its
business under its management philosophy, “contributing
to the progress and development of society and the
well-being of people worldwide through its business activities.”
Also, the Company believes it is important to enhance
corporate value by fulfilling accountability through dialogue
with various stakeholders such as shareholders and
customers, making an effort to execute transparent
business activities, and swiftly conducting business
activities with fairness and honesty based on its basic
philosophy of “a company is a public entity of society.”
The Company recognizes that corporate governance is an
important structure for this purpose, and is working to build
and enhance an effective corporate governance structure.
Corporate Governance Structure
Outline of structure (As of June 27, 2019)
The Board of Directors
• The Board of Directors is composed of 11 directors
including four outside directors, of whom one is a
woman (outside director).
• The chairperson of the Board is the chairman (inside
director).
• The Company elects outside directors from among
managers of external entities, who have extensive
managerial experience in various careers and deep
insight, and are expected to provide valuable opinions
as supervisors of decision-making related to business
execution and the execution of directors’ duties.
• All directors are reelected at the annual general meeting
of shareholders.
Main items discussed by the Board of Directors in
fiscal 2019
In addition to discussions on business policy, the Board of
Directors deliberated on and decided matters related to
medium- to long-term strategy, including the establishment
of a joint venture with an external partner and large-scale
capital investment projects, as well as important aspects
of business execution, such as dividend policy and executive
HR issues. In addition, it received business reports from
Divisional Company CEOs and region representatives,
conducted oversight of the execution of duties, and verified
the operational status of the internal control system. The
Board of Directors also discussed business portfolios,
human resources strategies, and financial strategies. In
addition, the significance of possessing strategic
shareholdings was examined by the Board of Directors.
g
n
i
t
e
e
M
s
r
e
d
o
h
e
r
a
h
S
l
Election
Board of Directors
Supervisory Functions
Corporate Strategy
Decision-making Functions
Empowerment & Supervision
Executive Functions
Group Strategy Meeting*2
Audit
Nomination and Compensation
Advisory Committee*1
President
*3
Election
Audit & Supervisory Board
Auditing Functions
Audit
Collaboration
Election
Accounting Auditor
Accounting Audit
Divisional Companies
Business Divisions
Regional Management
Corporate Strategy Head Office
Professional Business
Support Sector
Innovation Promotion Sector
*1 Deliberates on advisory matters and reports to the Board of Directors
*2 Complements Board of Directors’ decision-making
*3 Including affiliated companies (Japan and overseas), etc.
Corporate Governance Structure and Initiatives
Panasonic Annual Report 2019
34
Audit & Supervisory Board members (A&SB members)
and Audit & Supervisory Board (A&SB)
• The A&SB is composed of five A&SB members including
three outside A&SB members, of whom one is a woman
(outside A&SB member).
• The Company sets A&SB members who are able to exert
their monitoring functions according to their individual
discretionary decision, but not to majority vote decision.
The A&SB members are also able to independently act
upon their own decision in pursuing liabilities of directors.
• The Company sets full-time senior A&SB members who
are well versed about corporate operations and are able
to comprehend actual condition of businesses by
exercising their right to visit and investigate operating
sites. The senior A&SB members are elected from among
those who have experience in positions equivalent to or
higher than managing director
• The Company elects outside A&SB members from among
managers, lawyers, and certified public accountants,
who have extensive expertise with various careers and
deep insight and can be expected to conduct valuable
audits of the execution of business by directors.
Optional Nomination and Compensation Advisory
Committee
• Chaired by an independent outside director
• Majority of members are independent outside directors.
• Deliberates on the results of internal reviews of the
nomination of candidates for director, executive officer,
and audit & supervisory board member and on the
appropriateness of the Company’s director and executive
officer compensation system, and reports on these matters
to the Board of Directors
• Monitors the candidates for the CEO successor and
can propose the replacement timing of CEO
• In fiscal 2019, the committee deliberated on the result
of internal discussion regarding candidates such as
Directors and reported to the Board of Directors.
The Company’s Outside Directors
Yoshinobu Tsutsui
Chairman of the Board, Nippon Life Insurance
Company
He brings extensive experience at the highest level
of management along with expertise in domestic
and international financial developments.
Hiroko Ota
Professor, National Graduate Institute for Policy
Studies
A specialist in public economics and economic
policy, she is involved in national economic policy
as the former Minister of State for Economic and
Fiscal Policy.
Group strategy meeting
• Meetings are held about twice monthly in principle to
discuss and set the direction of the Group’s medium- to
long-term strategy and priority issues.
• Around 10 members of upper management participate,
including the CEO, Divisional Company CEOs, and
non-Japanese executive officers.
• Managers of related business and functional divisions in
positions of responsibility also participate in discussions
depending on the matter considered.
Utilization of outside directors
Policy for nominating independent outside director
candidates and their qualifications
The Company nominates independent outside director
candidates from the standpoint that there be no conflict of
interest between the Company and the outside directors,
and the Company can increase and enhance the effectiveness
of the monitoring of the Board based on an objective and
neutral point of view.
Candidates for independent outside director who
satisfy the following independence standards are elected
from among those who have extensive knowledge and
expertise, such as managers or experts of external entities.
The Board of Directors resolved that the minimum ratio
of outside directors should be one third on and after June
29, 2017. Based on this, we nominate candidates for
outside director and appoint them at the ordinary general
meeting of shareholders, thereby enhancing the objectivity
and neutrality of the Board of Directors and strengthening
the supervisory function.
Kazuhiko Toyama
Representative Director (CEO), Industrial Growth
Platform, Inc.
A leading figure in corporate governance in Japan,
he is involved in numerous corporate revitalization
projects as the former COO of Industrial Revitalization
Corporation of Japan.
Kunio Noji
Senior Advisor, Komatsu Ltd.
One of Japan’s most noted executives, he built
Komatsu into a global corporation. He advocates
reform of business management through innovation.
Corporate Governance Structure and Initiatives
Panasonic Annual Report 2019
35
Independence standards for independent directors /
Audit & Supervisory Board members (A&SB members)
The Company established independence standards for
independent directors/A&SB members based on
independence standards required by financial instruments
exchanges such as the Tokyo Stock Exchange. For example,
the following persons are not considered independent.
• Major business partner of the Company or said
executing person (including those who had fallen under
this category in the past)
• Consultants, accountants or attorneys (or, in the case of
companies, people who belong or belonged to such
companies) who receive a significant amount of money
from the Company
• The aforementioned close relative (a second-degree or
closer relative) or a close relative of an executing person
of the Company or subsidiary
Also, “past” shall mean “within the last three years”
and “major business partner” shall mean the annual
amount of transaction exceeds 2% of either of their annual
consolidated sales. “Significant,” in the case of individuals,
shall be judged as 12 million yen. For a detailed definition
of the Company’s independence standards please refer to
the “Corporate Governance Report.”
Provision of information and assistance to outside
directors
The division in charge provides support to outside directors,
such as prior explanation of agendas of the Board meeting
and provision of information to enable effective discussions
by the Board of Directors. In addition, the Company provides
them with the opportunity to visit major operating sites
and plants.
Implementation and utilization of evaluation of
the Board of Directors effectiveness
Once a year, the Board of Directors administers a
questionnaire to all its members in order to further
enhance the Board’s effectiveness.
Analysis of the responses to the fiscal 2018 questionnaire
showed that the effectiveness of the Board was generally
considered appropriate as it currently is. It also showed
that some opinions and proposals suggested expanding
discussions regarding medium- to long-term strategies
and compliance. Based on this, in fiscal 2019, in addition
to continued discussions on the medium- to long-term
strategy, other discussions such as business reports from
each Divisional Company, compliance, and risk management
were further enhanced.
An effectiveness evaluation in fiscal 2019 showed the
effectiveness of the Board in its current state was generally
considered appropriate, as were the Board’s supervisory
and decision-making functions.
The Company continues to conduct evaluations of the
effectiveness of its Board of Directors and improve the
evaluation methods.
Activities Aimed at Strengthening Governance
Evaluating the effectiveness of the Board of Directors started in fiscal 2016. Governance has been strengthened while incorporating opinions and
proposals from questionnaires.
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
As of June 30, 2019
Board of
Directors
Nomination
and
Compensation
Advisory
Committee
Initiatives
and other
mechanisms
Appointed
a female
director
Began evaluating
the effectiveness
of the Board
of Directors
Increased the
number of outside
directors from
three to four
Reduced the
number of
directors
from 17 to 12
Appointed a
non-Japanese
director
Raised the
minimum ratio of
outside directors
to one third
Established
(Number of outside members/
Total number of members)
1/3
2/4
3/5
Number of board
members
11
Outside director
ratio
36.4%
Introduced
stock-type
compensation SOs*
* Stock options
Established the
Outside Directors
and Outside
A&SB Members
Committee
Outside directors
as well as outside
A&SB members
began visiting
business sites
Reviewed the
conferring of
representation
rights
Reviewed
the corporate
advisor system
Discontinued
the ESV Plan*
Clarified the roles
of directors and
executive officers
* The Policy toward Large-Scale Purchases of Panasonic Shares
Introduced
restricted stock
compensation
Corporate Governance Structure and Initiatives
Panasonic Annual Report 2019
36
Compensation
Illustration of Compensation Structure
Performance-based compensation
The Company implemented performance-based
compensation as a short-term incentive to provide
incentive to boost business performance, and it shall be
determined in conjunction with performance evaluation
for Panasonic as a whole and the specific businesses a
director is in charge of, based on performance indicators,
such as net sales and operating profit, free cash flow.
Restricted stock compensation
The Company implemented stock-type compensation
stock options as a long-term incentive. Starting in fiscal
2020, it will replace the stock-type compensation stock
options with restricted stock compensation. This is to
both provide an incentive to ensure that the Company’s
corporate value continues to rise, and to promote further
value sharing with the Company’s shareholders.
Reflecting on the reasons for introducing the stock-type
compensation stock options and the restricted stock
compensation, the ratio of the incentive option to the
overall compensation package is designed to be higher
the higher up the position of the director or executive
officer receiving it. In addition, the total amount is set
based on overall considerations of matters such as the
duties of each director or executive officer, and the
balance with monetary compensation.
Procedure for determining compensation
Compensations of directors and executive officers are
decided by the representative director and president, who
was given the authority by the Board of Directors, based on
the Company’s director and executive officer compensation
system. In November 2015, the Company has established
an optional Nomination and Compensation Advisory
Committee, majority-staffed and chaired by independent
outside directors. In response to inquiries from the Board,
this committee deliberates and reports on the
appropriateness of the Company’s director and executive
officer compensation system.
Long-term incentive
- Stock-type compensation
stock options
(up to fiscal 2019)
- Restricted stock
compensation
(from fiscal 2020)
Short-term incentive
Performance-based compensation
Basic
compensation
Amount of Compensation for Directors and A&SB Members
for Fiscal 2019 (ended March 2019)
Classification
Number
of
persons
Directors
(other than
outside
directors)
A&SBMs
(other than
outside
A&SBMs)
Outside
directors
Outside
A&SBMs
9
2
4
3
Amount (million yen)
Basic
compensation
Performance-
based
compensation
Stock-type
compensation
stock options
1,085
583
337
165
80
65
39
80
65
39
—
—
—
—
—
—
Note: One director who retired at the conclusion of the 111th Ordinary General Meeting of
Shareholders held on June 28, 2018 is included in the above.
Directors Who Received Compensation over 100 Million Yen
Name
Classification
Shusaku
Nagae
Kazuhiro
Tsuga
Yoshio
Ito
Mototsugu
Sato
Yasuyuki
Higuchi
Director
Director
Director
Director
Director
Amount (million yen)
Basic
compensation
Performance-
based
compensation
Stock-type
compensation
stock options
118
255
161
141
151
100
104
79
69
75
—
84
58
55
57
18
67
24
17
19
Note: Yoshio Ito retired at the conclusion of the 112th Ordinary General Meeting of
Shareholders held on June 27, 2019.
Corporate Governance Structure and Initiatives
Panasonic Annual Report 2019
37
Internal control for financial reporting
The Company has documented the actual status of its
internal control system from the control infrastructure to
actual internal control activities, with integrated control
provided by the Internal Control Promotion Office, in order
to ensure reliability in the financial reporting of the
Panasonic Group including its subsidiaries.
Specifically, the Company has reinforced its internal
controls by implementing self-checks and self-assessment
programs at each of the Divisional Companies and Business
Divisions, etc. Then, internal auditing managers of the
Divisional Companies appointed by the Company at each
of the Divisional Companies, etc. conduct audits. Based
on the audits, the Internal Control Promotion Office
supervises the Group-wide internal control audits in order
to confirm its effectiveness. In fiscal 2019, Panasonic had
a total of 400 personnel assigned to conduct internal
audits in the entire Group.
Constructive dialogue with shareholders and investors
The CFO is responsible for investor relations (IR) activities.
The CEO, CFO, and each CEO of Divisional Companies
mainly engage in dialogue with shareholders and investors.
This includes announcements of financial results and
individual meetings. Also, the IR staff members in the
Corporate Finance & IR Department are in charge of
day-to-day communication with shareholders and investors.
For IR geared toward institutional investors and
securities analysts, the Company conducts presentation
meetings of quarterly financial results announcements,
annual presentations regarding business policy of the
Company and Divisional Companies, and other activities.
Also, for overseas investors, the Company holds
presentation meetings utilizing conferences hosted by
financial institutions.
Views and management issues obtained from
shareholders and investors through IR activities are
appropriately relayed to senior management and the
relevant departments including Divisional Companies in
internal meetings such as the Group Strategy Meeting
and are utilized to improve the quality of management of
the entire Group.
Information disclosure / Dialogue
Information disclosure approach and system
The Company’s basic policy concerning information
disclosure is as follows.
We will provide our various stakeholders, including
customers and shareholders, with fair and accurate
information on corporate financial affairs, our Basic
Business Philosophy, business policies and activities,
as well as environmental, social, and governance
activities in a timely, understandable and appropriate
manner. At the same time, we will listen to our
customers’ requests and comments and reflect them
in our business policies and activities. We will seek to
be an enterprise with high transparency.
(From the Panasonic Code of Conduct)
The Company clearly defines its policy on information
disclosure in the Panasonic Code of Conduct, the guideline
for putting the Group’s Basic Business Philosophy into
practice. The Company also publishes relevant practical
standards, methodologies, internal processes, etc. as its
Disclosure Policy. In accordance with this Policy, the
Company pursues constructive dialogue with all its
shareholders and investors. (For more details, please visit
the Disclosure Policy page on the Company’s website.)
Under this basic policy, we disclose information where
disclosure of this information is required by securities-related
laws and regulations of all relevant countries and regions
as well as other information that is deemed as necessary to
disclose in a fair and timely manner while at the same time
endeavoring to disclose accurately, fairly, and sufficiently.
Moreover, the Company has established disclosure
control procedures and in the preparation and submission
of annual securities reports, quarterly reports, etc., the
Disclosure Committee, which is comprised of general
managers from principal departments that handle relevant
information, confirms the validity of the descriptive
content and the appropriateness of the disclosure
procedures under the supervision of the CEO and chief
financial officer (CFO).
Based on listing regulations, Company information that
requires timely disclosure shall be immediately reported to
the Corporate Finance & IR Department or the Financial &
Accounting Department and disclosed timely and
appropriately.
Corporate Governance Structure and Initiatives
Panasonic Annual Report 2019
38
Message from the CHRO
Creating an environment
where talents who will
drive new growth can
develop autonomously
and flourish
Shigeki Mishima
Executive Officer
Chief Human Resources Officer (CHRO)
For Panasonic to grow sustainably, we need to move
away from existing business models and create an
environment where talents who will drive new business
growth can develop and flourish through their own initiatives.
One of the policies to achieve this is “reform of the
business management structure,” presented on October
1, 2019 (see p. 40, “A new executive officers structure
(reform of the business management structure)”).
Previously, executive officers were required to play two
roles: Group-wide optimization, steering the overall
Group; and individual optimization, for each individual
business. To that end, they need high levels of
management decisiveness and ability for managing one’s
own business area of responsibility on a global scale
while carefully determining the status of the business and
market for each business within the Group and the core
competitiveness and positioning overall priorities. To
respond even better to the expectations of the capital
market, the Panasonic Group has made the decision to
split the management level into the executive officers,
who will consider overall optimization, and the business
execution layer, who will increase revenue in individual
businesses.
To encourage the people who will lead individual
business management as the business execution layer,
Panasonic is revising its appointment and dismissal
system and its evaluation system into ones that are more
transparent and more attractive, and promoting the
assignment of people to challenging yet appropriate
positions. In addition, people who will become responsible
for Group management in the future will be selected from
among these leaders. Four things are expected of people
who will be responsible for Group management: in
addition to “overall optimization,” they are “have a wealth
of individual experience,” “be able to strategically respond
to new business fields they have no experience in,” and
“have the charisma to attract people with ambition.” In
addition, people with knowledge, experiences, or
connections that the Group lacks will continue to be
actively recruited from outside the Company. One person
alone cannot reform Panasonic. But the aspiration is
management as a team through combinations of diverse
talents, where the knowledge of dyed-in-the-wool
management executives is blended with the strengths of
people hired from outside the Company.
In addition to this, Panasonic is promoting a range of
initiatives from the perspectives of employees’ taking on
challenges, learning, and growing. For example, as of
fiscal 2019 the Company has started offering external
working experience and concurrent postings within the
Company which is called “In-company Multitasking”
(see p. 41, “Support for employees taking on challenges,
learning, and growing”). The purpose of these is to break
down the uniform style of talent development, and refine
the diverse perspectives and skills of a diverse range of
people. Through In-company Multitasking, employees
will have the opportunity to be involved in various themes
in a range of departments within Panasonic, and will be
able to help drive new projects even afterwards thanks to
the informal connections they made during their posting.
Employees who apply for external working experience
will be able to come back with the perspectives of venture
corporation managers. In addition to these measures
which are the same throughout the Company, each
Divisional Company within Panasonic is moving ahead
with reforms to its own unique organizational culture,
systems, and ways of doing things.
I believe that at the end of these initiatives there will be
the creation of new businesses and sustained growth for
Panasonic, and will accelerate reforms to talent
management even more as we move into the future.
Message from the CHRO / Human Resources Initiatives
Panasonic Annual Report 2019
39
Human Resources Initiatives
A new executive officers structure
(reform of the business management structure)
Development of management executives /
talent management
Panasonic has defined new portfolio classifications
looking toward profit growth and profitability improvement
beyond the boundaries of the Company and organizations.
Panasonic has worked to reform its business
management structure with the aim of establishing a more
flexible and robust business structure in the drastically
changing business environment. Specifically, in order to
clarify the management roles and responsibilities, the
management structure has been reorganized into a group
of executive officers, who will lead the reform of the
Panasonic Group’s business structure for the Group-wide
optimization, and a business execution layer, which will
lead the transformation of individual businesses for
strengthening respective businesses.
Executive officers will assume responsibility for managing
the Panasonic Group, strengthen the strategic functions
for Group-wide optimization, including the reform of the
Group’s portfolio and bold resource shifts, and set the
direction of and implement the Group-wide business
structural reform toward a new Panasonic. That is, they will
be positioned as members of the same team as the CEO.
The business execution layer, on the other hand,
comprises the Business Division Directors and the heads
of each job function. As the core of Panasonic’s business
management, the employees in this layer will take
responsibility for improving the profitability of their respective
businesses and securing future competitive advantages.
There are about 140 people in this business execution layer.
Personnel required based on future business environments
will be appointed on a timely and flexible basis from the
perspective of the right person for the right place, including
being selected from outside the Company, or from
candidates in the junior generation. In addition, a more
transparent, achievement-oriented evaluation and
compensation system will be adopted to create a corporate
culture that encourages relentlessly taking up challenges.
Reforming the business management structure
For management executives, transforming and creating
businesses is an important mission, up there with the
stable growth of business. However, development of
management executive candidates in the Panasonic Group
up until now has been focused on developing those types
who will upgrade existing businesses, and there has been
no focus on unearthing new business opportunities or
majorly transforming business models themselves.
As the necessity of business transformation becomes
ever more pressing, Panasonic considers the creation of
management executives who have the traits to play a
range of roles a vital issue. So, starting from fiscal 2020,
the overall scheme of the executive development system
has been significantly revised.
Specifically, “identification and acquisition of diverse
development targets” and “diverse job experiences” will
be combined to promote a PDCA cycle for career
development optimized for the individual. Here,
“identification and acquisition of diverse development
targets” refers to a shift to selecting from the junior
generation, bringing in talents from outside the Company,
or acquiring talents globally, regardless of age, years of
service, or nationality, and without being bound by the old
focus on regular recruitment of Japanese employees. In
contrast, “diverse job experiences” refers to granting
people a decision-making role in a position of
responsibility for up to five years, rotating them to
positions throughout the Company or giving them
experiences in other Business Divisions, and is a
departure from the old style of career development within
the same business model. The Company is seeking out
and developing talents with strong abilities to deal flexibly
with and learn from changes in roles and assignments.
By providing a range of job experiences to the diverse
development targets, Panasonic can develop management
executive candidates who have diverse role traits and
Create a flexible and robust business structure in the drastically changing business environment
Work to increase motivation for business transform with management suited to roles
Outside the Company
Executive Officers
Business execution layer
New
Structure
CEO Team
Heads of
Business
(HOB)
Candidates
Development stage
Experiences where existing
knowledge cannot help /
Decision making
( )
Transparency in compensation × The right person in the right job × Selection of junior generation
Previous
Executive Officers
Employees
Message from the CHRO / Human Resources Initiatives
Panasonic Annual Report 2019
40
perspectives, thereby enriching the pooling of talents.
These initiatives are led by the Heads of Business in
the new business execution layer. Panasonic expects
them to develop management executives beyond
themselves who will succeed as management assets for
the next generation.
System for developing management executives
By providing a range of job experiences to the carefully
chosen diverse development targets, Panasonic will create
management executive candidates with diverse role traits
and perspectives.
Assign-
ment
Heads of Business assigned based on the
right-person-in-the-right-job policy will
grow and transform their business
Review
Talent
pool
Create a pool of management
executive candidates with
diverse role traits
Promote career development PDCA cycles
optimized for individuals
Develop-
ment
stage
Identification and
acquisition of
diverse talents
Targets will be
carefully selected
and reviewed
Diverse job
experiences
Change role/
position within
five years
employees could apply for new postings within the
Company themselves and expand their areas of activity.
This system has proven very successful. Other systems
Panasonic has started include external working experience,
in which employees master new skills through working at
other companies, such as venture corporations, which
have completely different corporate cultures and values,
and In-company Multitasking, where employees can
experience new fields within Panasonic while still
remaining assigned to their current departments.
As a global initiative, Panasonic is promoting “A Better
Dialogue” to improve employee and manager relationship
in terms of both quality and quantity. The purpose is to
provide a working environment that enables ongoing
growth of the employee, by laying out specifically what
the employee aims to become and what the employee
wants to do. In addition, there is a system of global core
common knowledge that is targeted at all employees of
the Panasonic Group, in which learning opportunities are
provided for the 23 global common knowledge categories
that should be mastered.
System to create growth opportunities connected with
the outside
In-company
Multitasking
Environment that creates
new value with partners
External working
experience
Other
depart-
ments
Workplace
Employee
Other
companies
Self-growth
Self-growth
Support for employees taking on challenges,
learning, and growing
Preparing a platform for global talents
Today, as environmental changes become increasingly
severe, the Panasonic Group sees each employee, with
their own individualities, thinking and acting on their own
as the driving force that will, along with management
executives, propel the Company’s transformation and
growth. Panasonic will provide a better environment for
employees to develop themselves autonomously, while
the employees will grow by being able to choose better
working styles, giving them more job satisfaction. By
repeating this cycle, the aim is to achieve both development
of the individual and growth of the Company. This is the
“A Better Workstyle” the Panasonic Group advocates.
One part of this initiative is “connect with outside and
create opportunities for growth.” This is the idea that each
employee forms more connections with the world, and
grows by becoming aware of more things, by learning
together, and then creates opportunities to generate new
businesses, new innovations. The Panasonic Group
already has the “e-Challenge System,” a system whereby
Panasonic is constructing a global talent platform as a
way to strengthen the development of people who can
play global roles, regardless of years of service or
nationality. Specifically, the Company is constructing an IT
system, systems, and approaches for talent management
shared globally, by, for example, constructing a global
talent database, a talent management system that allow
talent management information to be made visible and to
be utilized. This will allow postings and appointments
beyond the boundaries of nations, regions, or Group
companies, developing careers and skills. By standardizing
at a high level talent management globally, Panasonic
aims to improve its organizational abilities.
Message from the CHRO / Human Resources Initiatives
Panasonic Annual Report 2019
41
Message from the Environmental Compliance Administrator
Focusing efforts on
preventing global warming
and resource recycling
Hirotoshi Uehara
Director, Quality & Environment Division
The focus on the Sustainable Development Goals (SDGs)
set by the United Nations and the Paris Agreement,
through which a number of countries have allied together
to work towards global warming prevention, indicates the
seriousness of issues surrounding the environment and
energy worldwide. In addition, Panasonic considers the
declaration by the Task Force on Climate-related
Financial Disclosures (TCFD), set up by the Financial
Stability Board (FSB) in response to a request by the G20
Finance Ministers and Central Bank Governors. By
carrying out scenario analysis and being aware of the
effects of identifying risks and opportunities on climate
change, Panasonic has confirmed the resilience of the
Group’s strategy.
Since its founding, the Panasonic Group has had as
its corporate philosophy the idea of contributing to the
development of peoples’ lives and society, and has been
actively addressing global environmental issues. In 2017
the Company formulated the Panasonic Environment
Vision 2050, a goal that requires the Company to work
towards the creation and more efficient utilization of
energy that exceeds the amount of “energy used” in order
to balance the demands for better lifestyles with the need
to ensure a sustainable global environment. In addition,
the Company formulated the Green Plan 2021 with focus
on “energy” and “resources,” which are material to
realize Environment Vision 2050. Panasonic will accelerate
the development of products, technologies, and solutions
related to the four viewpoints of energy creation, energy
saving, energy storage, and energy management.
First, in the initiative for reducing “energy used,”
Panasonic has made “the size of contribution toward
energy savings” a goal within its main products, and is
working on energy-saving designs. In production activities,
the Company is working to achieve zero-CO2 factories on
a global basis. In fiscal 2019, plants in Japan, Belgium,
and Brazil achieved zero-CO2 factory status. Panasonic
intends to build zero-CO2 factories in other regions that
will serve as models for those regions.
Next, in the initiative for expanding “energy created,”
the Company is developing fuel cell technologies that use
hydrogen as their energy source. At HARUMI FLAG, a new
residential compound that will be built on the site of the
Olympic Village for the Tokyo 2020 Games, pure hydrogen
fuel cells will supply power for the street lighting, information
infrastructure and security systems. In addition, city gas
will be refined to create hydrogen that will be used to
power household fuel cells in each residential unit
(approx. 4,000).
On the other hand, for “resources,” as customers
lifestyles change from “own” to “use,” the Panasonic
Group is aiming to create circular economy businesses
such as a sharing service whereby a single product is
shared by multiple persons, and a repair/maintenance,
refurbishing, and remanufacturing business that makes
the maximum use of the functions, values, and lifespans
of both products themselves and the parts used in them
by recycling and reusing them.
Through initiatives like these, Panasonic is aiming to
achieve Environment Vision 2050 by expanding and
accelerating its initiatives related to energy and resources.
Message from the Environmental Compliance Administrator / Initiatives towards the Environment
Panasonic Annual Report 2019
42
Initiatives towards the Environment
Environmental sustainability management
Vision and action plan
In the Panasonic Environment Vision 2050 formulated
by the Panasonic Group, Panasonic will endeavor to
make “energy created” exceed “energy used” toward
the year 2050.
“Energy used” refers to the energy used in our operation,
and energy used when products are used by our customers.
“Energy created” refers to clean energy that is created
and/or made available by Panasonic products and services,
such as photovoltaic power generation systems, storage
batteries, and energy solutions.
The Green Plan 2021, an environmental action plan
formulated towards realizing Panasonic Environment
Vision 2050, lays out clearly the targets that need to be
achieved within the three years until 2021 and the action
plan for all employees.
Panasonic Environment Vision 2050
To achieve “a better life” and “a sustainable global environment,”
Panasonic will work towards
creation and more efficient utilization of energy
which exceeds the amount of energy used,
aiming for a society with clean energy and
a more comfortable lifestyle.
Energy used < Energy created
Environmental Action Plan “Green Plan 2021” (Extract)
Category
2021 targets (fiscal 2022)
Increase the ratio of total energy created to
total energy used
Total energy created: total energy used =1: 8.5
Increase amount of energy created
Amount of energy created: 30,000 GWh or more
Products
&
Services
Increase the size of contribution
toward energy savings through
products and services
Expand energy creation businesses
Size of contribution toward energy savings through
products and services:
Direct: 25,000 GWh or more
Indirect: 2,000 GWh or more
s
e
u
s
s
i
l
a
i
r
e
t
a
M
Energy
Expand energy efficient products and service business, focusing on products and service utilizing IoT/AI
Promote zero-CO2 model factories
• Establish model factory using advanced hydrogen technology
• Establish at least one zero-CO2 model factory in each region
Factories
Increase the use of renewable energy through
the generation of renewable energy on-site and
procurement of renewable energy
Renewable energy generated on our sites:
40,000 MWh or more
Promote energy efficiency in production
• Reduce energy loss through IoT
• Improve productivity through manufacturing innovation
Create circular economy business models
Analysis of the development of circular economy options
for existing businesses: 100%
Resources
Reduce resource consumption and increase
the use of sustainable materials
Recycled resin usage: 42,000 tons or more (2019 to 2021 total)
Achieve Zero Waste Emissions from factories globally
Factory waste recycling rate: 99% or more
Initiatives
In August 2019, Panasonic Corporation has joined RE100,
the Climate Group’s global initiative bringing together the
world’s most influential businesses committed to 100%
renewable power. By 2050, Panasonic will switch the
electricity used globally in its operations to 100% renewable
energy, and aim for manufacturing that does not emit CO2.
Moreover, Panasonic is also participating in other
initiatives. Based on the Recommendation by TCFD,
Panasonic has identified climate change risks and
opportunities, including for businesses that it judges are
vulnerable to the effects of climate change, and analyzed
our business based on the scenarios. The details are
included in the Sustainability Data Book 2019.
Message from the Environmental Compliance Administrator / Initiatives towards the Environment
Panasonic Annual Report 2019
43
Energy-related initiatives
Zero-CO2 factories
In fiscal 2019, three manufacturing sites achieved zero-CO2
factory status. By making these factories leading models
and by gradually expanding the number of zero-CO2
factories around the world, Panasonic will steadily promote
manufacturing that does not emit CO2.
Europe
Japan
South America
Panasonic Energy Belgium
Panasonic Energy Belgium installed wind
power generation systems in its factory, and
has been utilizing electricity derived from
renewable energy. It has also replaced
purchased electricity with the electricity
derived from renewable energy.
Panasonic Eco Technology Center
Panasonic Eco Technology Center has realized
all operations using 100% electricity derived
from renewable energy. The Panasonic Eco
Technology Center also offsets the remaining
CO2 emissions derived from fossil fuel with
carbon credits. Accordingly, Panasonic Eco
Technology Center has become a zero-CO2
factory.
Panasonic Brazil
Panasonic Brazil’s three factories in San
Jose, Manaus, and Extrema have realized
all manufacturing operations using 100%
electricity derived from renewable energy,
making them the first such for Panasonic.
Hydrogen energy
The Panasonic Group is using hydrogen as a new energy source as a way to bring about the carbon-free society the
Japanese government has called for. To achieve a carbon-free society, Panasonic is contributing to creating a society that
enjoys peace of mind because it uses clean energy.
HARUMI FLAG
The infrastructure of the urban area that will be built on the site of the
Tokyo Olympic Village will be supplied with power from pure hydrogen
fuel cells. Each future household will have its own fuel cell to generate
power using hydrogen formed from city gas. Panasonic’s hydrogen
energy technology will bring about a sustainable urban lifestyle.
Kusatsu Farm (Hydrogen station)
The hydrogen station in the grounds of the Kusatsu Factory produces
hydrogen using electrolysis powered by renewable energy, then
compresses and stores it. By supplying fuel-cell-powered forklifts, it
contributes to making site logistics carbon-free.
Message from the Environmental Compliance Administrator / Initiatives towards the Environment
Panasonic Annual Report 2019
44
Resource-related initiatives
Cellulose fibers
As an initiative to reduce resin consumption, a compound
resin that includes plant-derived cellulose fibers has been
developed and commercialized.
An example of use in products is its use in the main
body of the cordless stick vacuum cleaner that was
launched in August 2018. By adding cellulose, it is
possible to reduce the amount of resin used while
maintaining both lightness and strength.
As an example of technical development, molding
materials which contain a high 55% concentration of
cellulose fibers have been developed. They can be easily
made into different colors, and can be given a wood feel
through the molding process. Panasonic is developing
eco-friendly reusable cups in collaboration with Asahi
Breweries, Ltd.
“POWER CORDLESS”
stick vacuum cleaner
High-density cellulose fiber
molding material
High degree of freedom of coloring
This allows the overall retail chain to both increase its
energy efficiency and effectively use resources.
Showcases for supermarkets
Circular economy
While evolving recycling-oriented manufacturing,
Panasonic is engaged in creating circular-economy
businesses.
The creation of circular-economy businesses, which
aim for sustainable economic growth without having to
rely on resource consumption, and initiatives to evolve
recycling-oriented manufacturing through utilizing the
latest in digital technology and new materials, are being
promoted based on the concept of eco-design that
maximizes value when used by customers. This will allow
Panasonic to achieve both a better life and a sustainable
global environment that are part of its Environment Vision 2050.
Concept of activities for a circular economy
Creation of
circular economy business
Achieving “a better life” and
“a sustainable global environment”
Sharing
platform
Product as
a service
Repair/maintenance
Use
Refurbish
Remanufacturing
Produc-
tion
Low environmental impact beer cups “Tumbler in the forest”
Zero waste emission
Refurbishing business
Panasonic Commercial Equipment Systems Co., Ltd. is
constructing a refurbish scheme for refrigerators and
freezers (showcases) installed in retail chains. Relatively
new equipment that is discarded when a prosperous store
is remodeled is refurbished and provided to aging stores
within the same retail chain that still have older equipment.
Procure-
ment
Design
Recycling
Utilization of sustainable materials
Reducing total resources used
Evolution of
recycle-oriented
manufacturing
Ecodesign
Message from the Environmental Compliance Administrator / Initiatives towards the Environment
Panasonic Annual Report 2019
45
Examples of Initiatives Aimed at Addressing Social Issues (Relationship with SDGs)
Based on its management philosophy, Panasonic is committed to resolving social issues through its business activities.
Engaged in a wide range of businesses worldwide, the Company is also working to help achieve the Sustainable Development Goals (SDGs) adopted by the United Nations.
Example Initiatives
Main Activities
SDGs to Which We Contribute
Detailed Information
Contributions to Creation of Clean Energy Society
While reducing the amount of energy that we use, we are promoting the
creation and utilization of clean energy and aiming to realize a society with
clean energy and a more comfortable lifestyle. Looking ahead to 2050,
Panasonic works toward the creation of energy which exceeds the
amount of energy used.
Reduction of energy used: Provision of products featuring high
energy-saving performance and energy management systems,
promotion of energy saving at our factories and offices
Expansion of energy created (increase in opportunities to utilize clean
energy): Provision of battery systems for eco-cars, photovoltaic
systems and fuel cells
Providing A Better Life in Entire Towns
To resolve social issues and improve the value of entire communities,
we are promoting the creation of towns that continue to develop through
co-creation with partner companies, public organizations, universities and
residents.
Contributions to Creation of
Safe Transportation Societies
We develop and provide solutions that make driving safer and more
secure by combining highly developed technologies, for example in
sensing, image recognition and communications, and conveying easily
understood information to users
Having established Sustainable Smart Towns (SSTs) in the cities of
Fujisawa and Yokohama (Tsunashima) in Japan, we provide solutions
that contribute to energy, security, mobility, wellness and community
We are now deploying the knowhow gained from having established
the SSTs on a global basis, including in Europe and the Americas
(for example in Denver in the United States), China, India and
Southeast Asia
Provision of Advanced Driver Assistance System (ADAS), for which
we utilize camera/sensing technologies and image processing
technology
Further safety improvements through the development of
communications technology that focuses on connectivity, whereby
cars and networks are interlinked
Provision of ITS solutions that support safety
Improving the Productivity of
Corporate Customers
Drawing on the know-how amassed in the manufacturing industry as well
as robotics technologies, we are working to innovate the production,
transportation, and selling processes of customers, who confront such
wide-ranging challenges as increasingly diverse and sophisticated
consumer needs and a shortage of labor. At the same time, we are
endeavoring to improve productivity on the operational frontlines and
continuously create value.
Manufacturing: Improving productivity by visualizing real-time
production frontline operating status and other data to secure
improvements in a timely manner
Logistics: Working to increase efficiency and save labor in the fields of
onsite warehousing, transportation, and delivery in the logistics
industry, which is experiencing a sharp increase in items handled
Distribution: Co-developing new business models and services in the
distribution industry based mainly on systems solutions that are
supported by advanced products and ICT
Contributions to Creation of
Recycling-Oriented Society
As the duty of a manufacturer who uses a large volume of resources, we are
promoting the reduction of the total resources used, product recycling,
expanding the amount of recycled resources used in our products with
the aim of contributing to the sustainable use of resources.
To minimize total resources used, we promote reductions in the size
and weight of our products
Globally promoting the recycling of home appliances that are no
longer used
Providing products whose resources (including plastic and iron) are
recovered from used products under the concept “Product to Product”
Reduction in amount of waste generated at factory, improvement of
recycling rate
Contributions to Creation of
Societies That Respect Human Rights
As a corporate group that conducts business on a global basis, we are
promoting initiatives aimed at respecting human rights and decent
work that take entire supply chains into consideration.
Initiatives to prevent forced labor, child labor
Protecting rights of workers, including foreign migrant workers
Occupational health and safety management
Contributions to Creating Societies in Which Diverse
People Actively Participate
While respecting people’s diversity, we are working to become a corporate
group where people who have diverse characters and abilities get together
and actively participate through a variety of systems and efforts geared
toward inclusion.
Promotion of women’s participation in management (including the
holding of study groups for female employees, career advancement
seminars for female managers)
Creation of workplaces that facilitate work regardless of employees’
sexual orientation/gender identity
Creation of workplaces that enable employees with disabilities to
actively participate
Being of Service through Corporate
Citizenship Activities
By donating our own products and by providing management expertise to
organizations working on solving social issues, we aim to eliminate poverty
and increase educational opportunities in emerging and developing
countries, while we are helping to build a sustainable society in which
each of the individuals can become independent.
100 Thousand Solar Lanterns Project / Off-grid Solutions Project /
Bringing Light to People (helping to solve social problems in
developing countries by solar power generation)
Panasonic NPO/NGO Support Fund for SDGs (support for
strengthening the organizational capacity of NPOs and NGOs aiming
to eliminate poverty)
Sustainable Seafood (protection of fisheries resources by the
utilization of certified marine products)
Examples of Initiatives Aimed at Addressing Social Issues (Relationship with SDGs)
Panasonic Annual Report 2019
46
Annual Report 2019
Message from the Environmental Compliance
Administrator / Initiatives towards the Environment
Website
Panasonic Environment Vision 2050
CO2 Reduction
Website
Fujisawa SST
Tsunashima SST
CityNOW Project
Website
Bringing Personal Safety to Our Driving Society
Website
Business Solutions (Japanese Version Only)
Annual Report 2019
Message from the Environmental Compliance
Administrator / Initiatives towards the Environment
Website
Resources Recycling
Website
Respect for Human Rights
Responsible Supply Chain
Annual Report 2019
Message from the CHRO / Human Resources
Initiatives
Website
Human Resources Development and Promoting
Diversity
Inclusion & Diversity (Japanese Version Only)
Website
100 Thousand Solar Lanterns Project
Off-grid Solutions Project
Bringing Light to People
Panasonic NPO/NGO Support Fund for SDGs
(Japanese Version Only)
Sustainable Seafood (Japanese Version Only)
Financial Highlights
Panasonic Corporation and subsidiaries, years ended March 31
Panasonic began applying International Financial Reporting Standards (IFRS) on a voluntary basis in the fiscal year ended March 2017.
Financial figures for the fiscal year ended March 2016 are also presented in accordance with IFRS in addition to conventional U.S. GAAP standards.
Net Sales
(Trillions of yen)
9
6
3
0
8.0
3.7
4.3
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16
3/’17 3/’18
3/’19
U.S. GAAP
IFRS
Domestic
Overseas
Operating Profit and Ratio to Sales
(Billions of yen)
500
400
300
200
100
0
411.5
5.1%
(%)
10.0
8.0
6.0
4.0
2.0
0
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16
3/’17 3/’18
3/’19
U.S. GAAP
IFRS
Operating Profit (left scale)
Operating Profit/Sales Ratio (right scale)
Net Profit Attributable to Panasonic Corporation Stockholders and ROE
(Billions of yen)
300
0
-300
-600
-900
15.7%
(%)
16.0
284.1
0
-16.0
-32.0
-48.0
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16 3/’17 3/’18
3/’19
U.S. GAAP
IFRS
Net Profit Attributable to Panasonic Corporation Stockholders (left scale)
ROE (right scale)
R&D Expenditures and Ratio to Sales
(Billions of yen)
600
400
200
0
(%)
7.5
488.8
6.1%
5.0
2.5
0
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16
3/’17 3/’18
3/’19
U.S. GAAP
IFRS
R&D Expenditures (left scale)
R&D Expenditures/Sales Ratio (right scale)
Financial Highlights
Panasonic Annual Report 2019
47
Overseas sales increased due to
continuing favorable sales of the
automotive-related business as well
as Commercial Refrigeration & Food
Equipment in North America, and the
mounting equipment business of
Process Automation. Overall sales
were the same level as last year due
mainly to a sales decrease for
consumer products in Appliances in
Japan.
Sales increases in businesses
including Automotive and Energy,
and one-time gains including
disposal of assets and the revision
of the pension scheme offset the
negative impacts from raw material
cost hikes, increased fixed-costs
due to upfront investments and
recording the restructuring charges.
Operating profit increased, and
income tax improved due mainly to
a one-off effect resulting from the
reorganization of subsidiaries.
Accordingly, net profit attributable to
Panasonic Corporation stockholders
showed an increase. As a result, ROE
was 15.7%, an improvement of 1.3
percentage points over the previous
year.
Panasonic concentrated on
development of new technologies
and new products to underpin the
future based on the growth strategies
for the major business fields. In
addition, the Company developed
technologies such as IoT, artificial
intelligence, and big data, and also
actively worked to create new
businesses that make use of such
technologies. As a result, R&D
expenditures totaled 488.8 billion yen.
Capital Investment and Depreciation
(Billions of yen)
500
400
300
200
100
0
300.5
226.8
Panasonic makes capital investment
based on a policy of steady
investments primarily in key
businesses for future growth. The
major capital investment for fiscal
2019 was for production facilities
(U.S. and China) for automotive
lithium-ion batteries.
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16 3/’17 3/’18
3/’19
U.S. GAAP
IFRS
Capital Investment
Depreciation
Free Cash Flows
(Billions of yen)
600
400
200
0
-200
-400
-600
203.7
95.8
10.3
-193.4
3/’19
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16 3/’17 3/’18
U.S. GAAP
IFRS
Cash Flow from Operating Activities
Free Cash Flow
Free Cash Flow Excluding Strategic Investments
Cash Flow from Investing Activities
Interest-Bearing Debt and Cash and Cash Equivalents
(Billions of yen)
1,600
1,200
800
400
0
998.7
772.3
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16 3/’17 3/’18
3/’19
U.S. GAAP
IFRS
Interest-Bearing Debt
Cash and Cash Equivalents
Dividends Declared per Share and Consolidated Payout Ratio
(Yen)
40.0
30.0
20.0
10.0
0
(%)
40.0
30.0
30.0
24.6%
20.0
10.0
0
3/’10 3/’11 3/’12 3/’13 3/’14 3/’15 3/’16
3/’16 3/’17 3/’18
3/’19
U.S. GAAP
IFRS
Dividends Declared per Share (left scale)
Consolidated Payout Ratio (right scale)
Financial Highlights
Panasonic Annual Report 2019
48
Free cash flow was an inflow of
10.3 billion yen, improved by 45.9
billion yen from the previous year.
Free cash flow excluding strategic
investments was 95.8 billion yen.
Note: Collection of lease receivables that comes
under lease accounting for the lessor (167.3
billion yen in FY2019, 19.3 billion yen in
FY2018) is included in cash flows from
investment activities.
Interest-bearing debt decreased due
to repayments of straight bonds
and other factors. Cash and cash
equivalents decreased due to a
decreased balance of short-term
straight bonds and other factors.
Panasonic works to provide a stable,
sustained dividend based on a target
consolidated payout ratio of
approximately 30%. According to
this policy and its current financial
position, the annual dividend per
share for fiscal 2019 was set at 30
yen per share, the same as the
previous year.
Note: The dividend payout ratio is not calculated
in fiscal years when net income attributable
to Panasonic Corporation is negative.
10-Year Financial Summary
Panasonic Corporation and Subsidiaries, Years ended March 31
Panasonic began applying International Financial Reporting Standards (IFRS) on a voluntary basis in the fiscal year ended March 2017.
Financial figures for the fiscal year ended March 2016 are also presented in accordance with IFRS in addition to conventional U.S. GAAP standards.
U.S. GAAP
For the Year (Millions of yen)
Net sales
Operating profit
Income (loss) before income taxes
Net income (loss) attributable to
Panasonic Corporation
Capital investment
Depreciation
R&D expenditures
Free cash flow
At Year-End (Millions of yen)
Interest-bearing debt
Cash and cash equivalents
Total assets
Panasonic Corporation shareholders’ equity
Total equity
Per Share Data (Yen)
Net income (loss) attributable to Panasonic
Corporation per common share:
Basic
Diluted
Dividends declared per share
Panasonic Corporation shareholders’ equity per share
Financial Indicators
Operating profit/sales (%)
Income (loss) before income taxes/sales (%)
ROE (%)
Net income (loss) attributable to
Panasonic Corporation/sales (%)
Total asset turnover ratio (Times)
Financial leverage (Times)
Interest-bearing debt/total assets (%)
Panasonic Corporation
shareholders’ equity/total assets (%)
Payout ratio (%)
Exchange Rate (Yen)
1 USD
1 EUR
1 RMB
Note to U.S. GAAP
3/2010
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
7,417,980
190,453
8,692,672
305,254
7,846,216
43,725
7,303,045
160,936
7,736,541
305,114
7,715,037
381,913
7,553,717
415,709
(29,315)
178,807
(812,844)
(398,386)
206,225
(103,465)
74,017
(772,172)
(754,250)
120,442
385,489
251,839
476,903
198,674
403,778
284,244
527,798
266,250
333,695
295,808
520,217
(339,893)
310,866
277,582
502,223
355,156
217,033
278,792
478,817
594,078
182,456
179,485
226,680
242,149
457,250
353,455
217,048
193,256
248,794
235,033
449,828
124,406
1,327,992
1,109,912
8,358,057
2,792,488
3,679,773
1,595,269
974,826
7,822,870
2,558,992
2,946,335
1,575,615
574,411
6,601,055
1,929,786
1,977,566
1,143,395
496,283
5,397,812
1,264,032
1,304,273
642,112
592,467
5,212,994
1,548,152
1,586,438
972,916
1,280,408
5,956,947
1,823,293
1,992,552
725,919
1,014,264
5,596,982
1,705,056
1,854,314
(49.97)
–
10.00
1,348.63
35.75
–
10.00
1,236.05
(333.96)
–
10.00
834.79
(326.28)
–
0.00
546.81
52.10
–
13.00
669.74
77.65
77.64
18.00
788.87
83.40
83.39
25.00
734.62
2.6
(0.4)
(3.7)
(1.4)
1.0
2.6
15.9
33.4
–
93
131
–
3.5
2.1
2.8
0.9
1.1
3.0
20.4
32.7
28.0
86
113
–
0.6
(10.4)
(34.4)
(9.8)
1.1
3.2
23.9
29.2
–
79
109
–
2.2
(5.5)
(47.2)
(10.3)
1.2
3.8
21.2
23.4
–
83
107
13.3
3.9
2.7
8.6
1.6
1.5
3.8
12.3
29.7
25.0
100
134
16.4
5.0
2.4
10.6
2.3
1.4
3.3
16.3
30.6
23.2
110
139
17.7
5.5
2.9
11.0
2.6
1.3
3.3
13.0
30.5
30.0
120
133
18.9
IFRS
For the Year (Millions of yen)
Net sales
Adjusted operating profit
Operating profit
Profit before income taxes
Net profit attributable to
Panasonic Corporation stockholders
Capital investment
Depreciation
R&D expenditures
Free cash flow
At Year-End (Millions of yen)
Interest-bearing debt
Cash and cash equivalents
Total assets
Panasonic Corporation stockholders’ equity
Total equity
Per Share Data (Yen)
Earnings per share attributable to Panasonic
Corporation stockholders:
Basic
Diluted
Dividends declared per share
Panasonic Corporation stockholders’ equity per share
Financial Indicators
Operating profit/sales (%)
Profit before income taxes/sales (%)
ROE (%)
Net profit attributable to
Panasonic Corporation stockholders/sales (%)
Total asset turnover ratio (Times)
Financial leverage (Times)
Interest-bearing debt/total assets (%)
Panasonic Corporation
stockholders’ equity/total assets (%)
Payout ratio (%)
Exchange Rate (Yen)
1 USD
1 EUR
1 RMB
Note to IFRS
3/2016
3/2017
3/2018
3/2019
7,626,306
413,246
230,299
227,529
165,212
252,905
238,214
438,851
125,551
724,841
1,012,666
5,488,024
1,444,442
1,647,233
7,343,707
343,616
276,784
275,066
7,982,164
401,202
380,539
378,590
149,360
236,040
311,641
224,405
436,130
(34,746)
392,234
226,576
448,879
(35,646)
1,124,004
1,270,787
5,982,961
1,571,889
1,759,935
1,239,444
1,089,585
6,291,148
1,707,551
1,882,285
8,002,733
327,032
411,498
416,456
284,149
300,450
226,788
488,757
10,290
998,721
772,264
6,013,931
1,913,513
2,084,615
71.30
71.29
25.00
622.34
64.33
64.31
25.00
673.93
101.20
101.15
30.00
732.12
121.83
121.75
30.00
820.41
3.0
3.0
11.1
2.2
1.3
3.8
13.2
26.3
35.1
120
133
18.9
3.8
3.7
9.9
2.0
1.3
3.8
18.8
26.3
38.9
108
119
16.1
4.8
4.7
14.4
3.0
1.3
3.7
19.7
27.1
29.6
111
130
16.8
5.1
5.2
15.7
3.6
1.3
3.4
16.6
31.8
24.6
111
128
16.5
1. The Company’s financial statements were prepared in conformity with U.S. generally accepted accounting
9. Effective from the beginning of fiscal 2013, investments and depreciation expenses in molding dies are included
1. The Company’s consolidated financial statements are prepared in conformity with International Financial Reporting Standards (IFRS).
principles (U.S. GAAP) until the fiscal year ended March 2016.
2. In order to be consistent with generally accepted financial reporting practices in Japan, operating profit, a
non-GAAP measure, is presented as net sales less cost of sales and selling, general and administrative expenses.
The Company believes that this is useful to investors in comparing the company’s financial results with those of
other Japanese companies. See the Company’s annual securities report and financial announcements for the
details.
3. The Company defines capital investment as purchases of property, plant and equipment based on an accrual
basis which reflects the effects of timing differences between acquisition date and payment date.
4. Capital investment and depreciation do not include intangibles.
5. Dividends per share reflect those declared by Panasonic in each fiscal year and consist of interim dividends paid
during the fiscal year and year-end dividends paid after the fiscal year-end.
6. Exchange rate is the average rate for the fiscal year.
7. SANYO Electric Co., Ltd. (SANYO) and its subsidiaries became consolidated subsidiaries of Panasonic in
December 2009. The operating results of SANYO and its subsidiaries prior to December 2009 are thus not
included in Panasonic’s consolidated financial statements.
8. “Diluted net income (loss) attributable to Panasonic Corporation common shareholders per share” from fiscal
2010 to fiscal 2014 has been omitted because the Company did not have potential common shares that were
outstanding for the period.
in “Capital investment” and “Depreciation (tangible assets),” respectively. Accordingly, the amounts of
“Depreciation (tangible assets)” and “Capital investment” for fiscal 2012 are changed.
10. Payout ratios have not been presented for those fiscal years in which the Company incurred a net loss
attributable to Panasonic Corporation.
11. Interest-bearing debt is equal to the sum of short-term debt, including current portion of long-term debt, and
long-term debt.
12. Formulas for financial ratios are as follows:
Operating profit ratio = Operating profit / Net sales
ROE (Return on equity) = Net income (loss) attributable to Panasonic Corporation / Average Panasonic Corporation
shareholders’ equity at the beginning and the end of each fiscal year
Total assets turnover = Net Sales / Average total assets at the beginning and the end of each fiscal year
Financial leverage = Average total assets at the beginning and the end of each fiscal year / Average Panasonic Corporation
shareholders’ equity at the beginning and the end of each fiscal year
Payout ratio = Dividends declared per share/Basic net income attributable to Panasonic Corporation common shareholders
per share
2. Adjusted operating profit = Net sales - Cost of sales - SG&A
3. The Company defines capital investment as purchases of property, plant and equipment based on an accrual basis which reflects the effects of timing differences between
acquisition date and payment date.
4. Capital investment and depreciation do not include intangibles.
5. Dividends per share reflect those declared by Panasonic in each fiscal year and consist of interim dividends paid during the fiscal year and year-end dividends paid after the
fiscal year-end.
6. Exchange rate is the average rate for the fiscal year.
7. Interest-bearing debt is equal to the sum of short-term debt, including current portion of long-term debt, and long-term debt.
8. Formulas for financial ratios are as follows:
Operating profit ratio = Operating profit / Net sales
ROE (Return on equity) = Net profit attributable to Panasonic Corporation stockholders / Average Panasonic Corporation stockholders’ equity at the beginning and the end of each fiscal year
Total assets turnover = Net Sales / Average total assets at the beginning and the end of each fiscal year
Financial leverage = Average total asset at the beginning and the end of each fiscal year / Average Panasonic Corporation shareholders’ equity at the beginning and the end of each fiscal year
Payout ratio = Dividends declared per share/Basic earnings per share attributable to Panasonic Corporation stockholders
10-Year Financial Summary
Panasonic Annual Report 2019
49
Financial Review
Operating Results
Business overview
During the year ended March 31, 2019 (fiscal 2019),
the global economy continued to perform steadily,
supported mainly by spending in the U.S. and a
favorable employment environment in Japan. On the
other hand, the Chinese economy saw a slowdown in
spending and investment. Furthermore, imports and
exports from/to various countries saw signs of economic
slowdown in the second half of the fiscal year.
Under such business conditions, Panasonic
promoted its strategies for sustainable growth. In
particular, for the automotive battery business,
which involves key devices for the electrification of
automobiles, the Company came to an agreement with
Toyota Motor Corporation to establish a joint venture,
with the aim of achieving high-capacity and high-output
automotive prismatic batteries that lead the industry in
terms of both performance and cost.
In its annual business policy for fiscal 2017,
Panasonic had set Company-wide targets of operating
profit and net profit attributable to Panasonic
Corporation stockholders for fiscal 2019. While the
Company did not achieve this operating profit
target due to deteriorated profitability, mainly in
automotive-related businesses which were expected to
drive growth, profit increased from the previous year
due mainly to one-time gains including the partial
revision of the pension scheme and disposal of assets.
The fiscal 2019 target of net profit attributable to
Panasonic Corporation stockholders was achieved due
mainly to the reduction of income taxes.
Net sales
Sales for fiscal 2019 were 8,002.7 billion yen, the same
as the previous year’s level. Domestic sales were the
same level as last year due mainly to favorable sales of
automotive-related products and Panasonic Homes
Co., Ltd., despite a sales decrease for consumer
products in Appliances. Overseas sales increased
due mainly to continuing favorable sales of the
automotive-related businesses including Energy
and Automotive, as well as Commercial Refrigeration
& Food Equipment in North America, and the
electronic-component-mounting-equipment business of
Process Automation.
(Billions of yen)
vs. 3/2018 %/amount
100%
108%
110%
120%
+20.5
+31.0
+37.9
+48.1
—
+1.3%
Financial Results
Net sales
Operating profit
Profit before income taxes
Net profit attributable to
Panasonic Corporation stockholders
ROE
Exchange
rates
1 USD
1 EUR
1 RMB
3/ 2018
7,982.2
380.5
378.6
236.0
14.4%
111 yen
130 yen
16.8 yen
3/2019
8,002.7
411.5
416.5
284.1
15.7%
111 yen
128 yen
16.5 yen
Financial Review
Panasonic Annual Report 2019
50
Sales (Years ended March 31)
Operating Profit
Operating Profit/Sales Ratio
(Years ended March 31)
Profit before Income Taxes
(Years ended March 31)
Net Profit Attributable to
Panasonic Corporation
Stockholders (Years ended March 31)
(Trillions of yen)
9
8.0
8.0
(Billions of yen)
500
(%)
6.0
(Billions of yen)
500
378.6
416.5
(Billions of yen)
300
236.0
284.1
4.8
5.1
380.5
411.5
250
0
3.0
250
0
0
200
100
0
6
3
0
3/’18
3/’19
3/’18
3/’19
3/’18
3/’19
3/’18
3/’19
Operating Profit (left scale)
Operating Profit/Sales Ratio (right scale)
Overview by geographic region
By geographic region, overall sales in Japan were 3,716.6
billion yen, generally the same as the previous fiscal year’s
3,724.1 billion yen. Sales overseas increased by 1% to
4,286.1 billion yen, from 4,258.1 billion yen a year ago. In
real terms, excluding the impact of exchange rates, sales
increased by 2% year on year. In North and South
America, sales totaled 1,529.8 billion yen, a year-on-year
increase of 12% in real terms. In Europe, sales in real
terms remained generally the same as the previous fiscal
year, at 807.3 billion yen. In Asia, sales were 1,015.0
billion yen, a 5% decrease in real terms, and China, sales
were 934.0 billion yen, a 4% decrease in real terms.
Sales by Region
Japan
Americas
Europe
Asia
China
Total
3/2018
3/2019
3,724.1
1,368.3
821.0
1,087.1
981.7
7,982.2
3,716.6
1,529.8
807.3
1,015.0
934.0
8,002.7
(Billions of yen)
Local currency
basis
vs. 3/2018
100%
112%
100%
95%
96%
101%
method increased from 10.1 billion yen a year ago to
10.9 billion yen. Other income (expenses), net,
amounted to a gain of 73.6 billion yen, compared to
a loss of 30.7 billion yen the previous fiscal year, due
mainly to one-time gains including the partial revision of
the pension scheme and disposal of assets.
As a result, operating profit totaled 411.5 billion yen,
an increase from 380.5 billion yen the previous fiscal
year. Sales increases in businesses including Automotive
and Energy, and the one-time gains mentioned above
offset the negative impacts from raw material cost hikes,
increased fixed costs due to upfront investments and
recording the restructuring charges. The operating profit
ratio also improved to 5.1%, from 4.8% a year ago.
Profit before income taxes
Finance income increased from 22.8 billion yen the
previous fiscal year to 25.6 billion yen. Finance expenses
decreased from 24.7 billion yen to 20.6 billion yen.
As a result, profit before income taxes was 416.5 billion
yen, compared to 378.6 billion yen the previous fiscal year.
Operating profit
Cost of sales increased from 5,643.0 billion yen a year
ago to 5,736.2 billion yen. Selling, general and
administrative expenses totaled 1,939.5 billion yen, an
increase from 1,938.0 billion yen a year ago. Share of
profit of investments accounted for using the equity
Net profit attributable to Panasonic Corporation
stockholders
Income taxes were 113.7 billion yen, compared to 126.6
billion yen a year ago. As a result, net profit attributable to
Panasonic Corporation stockholders totaled 284.1 billion yen,
compared to 236.0 billion yen a year ago. Also, net profit
attributable to Panasonic Corporation stockholders per share
was 121.83 yen, against 101.20 yen the previous fiscal year.
Financial Review
Panasonic Annual Report 2019
51
Segment Information
Fiscal 2019 Net Sales Composition Ratio
Appliances
31%
Appliances (AP)
Automotive &
Industrial Systems
33%
Consolidated
Net Sales
¥8,002.7
billion
Connected Solutions
13%
Eco Solutions
23%
Breakdown by Segment
Appliances
Eco Solutions
Connected Solutions
Automotive &
Industrial Systems
Reportable segments total
Other
(Billions of yen)
Net Sales
Operating Profit
2,750.6
2,036.1
1,127.7
2,983.1
8,897.5
309.5
85.9
64.6
94.4
56.4
301.3
1.4
108.8
411.5
Eliminations and adjustments
(1,204.3)
Consolidated total
8,002.7
Note: Net sales composition ratio is calculated by dividing the sales of each reportable
segment by the total of reportable segment sales (sales in the “Reportable segments
total” column).
Sales (Years ended March 31)
Operating Profit
(Years ended March 31)
(Billions of yen)
3,000
2,784.2
2,750.6
(Billions of yen)
120
107.8
Profit/sales ratio
(%)
6.0
2,000
1,000
0
80
40
0
85.9
3.9
3.1
4.0
2.0
0
3/’18
3/’19
3/’18
3/’19
Sales decreased overall by 1% to 2,750.6 billion yen
from a year ago, due mainly to lower sales amid
downturns in the TV business and the Imaging Network
Business resulting from price competition.
Looking at the main Business Divisions (BDs) of
this segment, the Air-Conditioner Company saw sales
remain at the same level as a year ago, with brisk sales
of both room air-conditioners and large air-conditioners
in Japan, despite sluggish sales of room
air-conditioners in Asia and the Middle East.
In the Laundry Systems and Vacuum Cleaner BD,
sales increased due to brisk sales of washing machines
in Japan and China, and also due to steady sales in
China of warm-water bidet toilet seats.
In the TV BD, sales decreased due to price
competition, particularly in Asia and India.
In the Beauty and Living BD, sales remained at the
same level as a year ago due to brisk sales of beauty
appliances, particularly in China, despite a downturn in
inbound tourism demand in Japan.
In the Imaging Network BD, sales decreased due
to price competition, particularly in Europe.
Operating profit decreased by 21.9 billion yen
to 85.9 billion yen from a year ago, as rationalization
initiatives did not make up for the decline in profitability
due to price competition among home appliances such
as refrigerators, and losses on lower TV sales.
Financial Review
Panasonic Annual Report 2019
52
Eco Solutions (ES)
Connected Solutions (CNS)
Sales (Years ended March 31)
Operating Profit
(Years ended March 31)
Sales (Years ended March 31)
Operating Profit
(Years ended March 31)
(Billions of yen)
2,500
(Billions of yen)
100
Profit/sales ratio
(%)
6.0
(Billions of yen)
1,200
1,110.4
1,127.7
1,957.4
2,036.1
1,250
0
81.2
4.1
64.6
3.2
3.0
800
400
0
0
50
0
(Billions of yen)
150
9.3
100
103.6
50
0
Profit/sales ratio
(%)
12.0
8,4
94.4
8.0
4.0
0
3/’18
3/’19
3/’18
3/’19
3/’18
3/’19
3/’18
3/’19
Sales increased overall by 4% to 2,036.1 billion yen
from a year ago, due mainly to developments in Japan
that include growth of the new construction orders
business along with an upturn in orders and sales of
large projects in the environmental engineering
business, in addition to developments overseas that
include brisk sales in the electrical construction
materials business, particularly in India and China.
Looking at the main BDs of this segment, Panasonic
Homes Co., Ltd. saw an increase in sales due mainly
to the favorable new construction orders business
and strong sales in the ready-built housing business.
At Panasonic Ecology Systems Co., Ltd., sales
rose due mainly to orders and sales of large projects in
the environmental engineering business.
In the Energy Systems BD, sales increased due to brisk
sales overseas mainly in the electrical construction materials
business, along with strong sales in Japan.
In the Housing Systems BD, sales increased due to
brisk sales of new products for water-related equipment
and building materials, along with higher sales of roofing
materials and rain gutters associated with
reconstruction demand following natural disasters.
Operating profit decreased by 16.6 billion yen to
64.6 billion yen from a year ago. Increased sales mainly
in the electrical construction materials business and
engineering business, along with rationalization efforts
such as cost improvements, absorbed the negative
effects of a downturn in sales prices and raw material
cost hikes. However, the impact of impairment loss on
fixed assets significantly reduced operating profit.
Sales increased overall by 2% to 1,127.7 billion yen
from a year ago, due mainly to brisk sales in the
Process Automation Business and the Mobile Solutions
Business, despite sluggish sales in the Avionics
Business and the Media Entertainment Business.
Looking at the main BDs of this segment, at Panasonic
Avionics Corporation, sales decreased overall due to
a downturn in aircraft in-flight entertainment and
communications systems amid diminished demand
for large aircraft, despite solid performance from
communications and maintenance services.
In the Mobile Solutions BD, sales increased mainly
due to growth in sales of notebook PCs and rugged
mobile terminals, despite a downturn in sales of
payment terminals as a consequence of brisk sales
in the previous fiscal year.
In the Process Automation BD, sales increased due
to brisk sales of mounting equipment for the automotive
and device-related industries, as well as welding
equipment for the automotive industry.
In the Media Entertainment BD, sales decreased due
to a downturn in sales of production cameras, despite
solid performance from high-brightness projectors.
Operating profit decreased by 9.2 billion yen to
94.4 billion yen from a year ago, due mainly to losses on
lower sales in the Avionics Business and the Media
Entertainment Business, and also due to having
recorded a gain on reversal of the reserve for legal costs
in the previous fiscal year.
Financial Review
Panasonic Annual Report 2019
53
Automotive & Industrial Systems (AIS)
Sales (Years ended March 31)
Operating Profit
(Years ended March 31)
Profit/sales ratio
(Billions of yen)
3,000
2,803.9
2,983.1
(Billions of yen)
120
2,000
1,000
0
93.4
3.3
56.4
1.9
80
40
0
(%)
6.0
4.0
2.0
0
3/’18
3/’19
3/’18
3/’19
Sales increased overall by 6% to 2,983.1 billion yen
from a year ago, due mainly to brisk sales related
to electrification and automation in the automotive
field involving lithium-ion batteries for eco-cars,
automotive infotainment systems, advanced driver
assistance systems (ADAS), and on-board charging
systems, despite a downturn in sales of motors and
other devices due to deteriorating market conditions
in China.
Looking at the main businesses of this segment,
the Automotive Business saw sales increase due to
brisk sales of infotainment systems in Japan and the
U.S., as well as strong sales of cameras, sonars and
other ADAS products, and automation-related products
such as on-board charging systems.
In the Energy Business, sales increased as a
result of escalating demand for eco-cars spurring
substantial growth of automotive cylindrical lithium-ion
batteries amid increasing production of new-model
cars by an electric vehicle manufacturer in the U.S.,
with prismatic batteries for Japanese automakers also
achieving growth.
In the Industrial Business, sales decreased due to
a downturn in the sales of motors and other products
amid slowing capital investment in China, despite
growth achieved particularly in capacitors for data
centers and base stations, and automotive coils.
Operating profit declined by 37.0 billion yen to
56.4 billion yen from a year ago, due mainly to loss
on lower sales of motors and other products, as
well as impairment loss recognized on capitalized
development expenses for the automotive-related
business in Europe, despite an increase in sales
centered on the automotive-related business, such
as infotainment systems, ADAS and automotive
lithium-ion batteries.
Reportable Segment Changes
In fiscal 2020, the reportable segments have
been changed as follows:
(1) Eco Solutions has been renamed
Life Solutions.
(2) Automotive & Industrial Systems has been
reorganized into two segments: Automotive,
catering to vehicle manufacturers, and
Industrial Solutions, centered on competitive
devices.
Fiscal 2019
Appliances
Fiscal 2020
Appliances
Eco Solutions
Name
change
Life Solutions
Connected Solutions
Connected Solutions
Automotive &
Industrial Systems
Organization
change
Automotive
Industrial Solutions
Financial Review
Panasonic Annual Report 2019
54
Business Division Information for Fiscal 2019 (Sales)
1st quarter
(Apr.–June)
2nd quarter
(July–Sep.)
3rd quarter
(Oct.–Dec.)
4th quarter
(Jan.–Mar.)
(Billions of yen)
Full year (Apr.–Mar.)
Percentage
2019/2018
Air-Conditioner Business
158.3
117.3
102.5
116.9
495.0
101%
Small & Built-in Appliance Business
102.9
98.4
113.8
89.5
404.6
99%
AP*1
Major Appliance Business
127.9
138.7
132.6
116.3
515.5
101%
AVC Business
Commercial Refrigeration &
Food Equipment Business
Lighting BD
Energy Systems BD
ES
Housing Systems BD
Panasonic Ecology Systems Co., Ltd.
Panasonic Homes Co., Ltd.
Avionics Business
Process Automation BD
CNS*2
Media Entertainment BD
Mobile Solutions BD
PSSJ
Automotive Business
167.1
154.1
202.4
130.0
653.6
94%
71.2
70.8
81.6
82.6
41.7
69.6
63.2
58.8
30.5
62.3
64.4
70.8
76.0
88.1
85.8
42.6
101.0
66.2
53.8
32.8
54.5
67.5
78.3
88.1
92.4
96.8
45.2
81.9
63.0
47.7
30.2
55.3
70.5
72.5
78.7
93.9
89.0
48.3
292.8
106%
313.6
99%
356.0
102%
354.2
102%
177.9
107%
122.5
375.0
105%
68.5
44.0
30.6
68.8
260.9
96%
204.3
111%
124.2
93%
240.9
104%
119.1
321.5
106%
243.3
236.6
247.1
262.5
989.5
107%
AIS*3
Energy Business
154.5
177.7
190.1
174.3
696.5
124%
Industrial Business
240.2
230.6
231.4
213.6
915.8
97%
*1 Each business in Appliances consists of the following BDs. The figures of BDs are production and sales consolidated basis.
· Air-Conditioner Business:
· Small & Built-in Appliance Business:
· Major Appliance Business:
· AVC Business:
· Commercial Refrigeration & Food Equipment Business:
Air-Conditioner Company
Kitchen Appliances BD, Beauty and Living BD
Refrigerator BD, Laundry Systems and Vacuum Cleaner BD
TV BD, Imaging Network BD, Home Entertainment BD, Communication Products BD
Cold Chain BD, Hussmann Corporation
*2 Each business in Connected Solutions consists of the following BDs.
· Avionics Business:
· Process Automation BD
· Media Entertainment BD
· Mobile Solutions BD
· PSSJ:
Panasonic Avionics Corporation, Avionics BU
Panasonic System Solutions Japan Co., Ltd.
*3 Each business in Automotive & Industrial Systems consists of the following BDs.
· Automotive Business:
· Energy Business:
· Industrial Business:
Automotive Infotainment Systems BD, Automotive Electronics Systems BD, Ficosa International, S.A.
Energy Device BD, Energy Solutions BD, Tesla Energy BD, Automotive Energy BD
Electromechanical Control BD, Panasonic Semiconductor Solutions Co., Ltd., Device Solutions BD,
Electronic Materials BD, Panasonic Liquid Crystal Display Co., Ltd.
Financial Review
Panasonic Annual Report 2019
55
Financial Conditions and Liquidity
Liquidity and capital resources
Cash flows
The Panasonic Group has a basic policy of generating
funds needed for business activities from internal
sources. Funds generated are efficiently utilized through
intra-Group financing. Based on this, when funds are
needed for working capital or business investment,
external financing is obtained through appropriate
means based on financial strength and financial market
conditions.
Cash and cash equivalents as of March 31, 2019
were 772.3 billion yen, decreased from 1,089.6 billion
yen at the end of the previous fiscal year.
Interest-bearing debt decreased to 998.7 billion
yen as of March 31, 2019 from 1,239.4 billion yen at the
end of the previous fiscal year due to repayments of
straight bonds and other factors. Panasonic entered
into three-year commitment line agreements* with
several banks in June 2018, in order to prepare for
contingencies such as potential deterioration of the
financial and economic environment. The upper limit for
unsecured borrowing based on the agreements is a
total of 700.0 billion yen, but there is no borrowing
under these agreements.
* Commitment line agreements: Contracts made with financial institutions to secure
financing subject to pre-agreed limits on the time period and commitment line.
Cash and Cash Equivalents
(Years ended March 31)
Interest-Bearing Debt
(Years ended March 31)
(Billions of yen)
1,500
1,270.8
1,000
500
0
(Billions of yen)
1,500
1,239.4
1,124.0
998.7
1,089.6
772.3
1,000
500
0
3/’17
3/’18
3/’19
3/’17
3/’18
3/’19
The Company recognizes the importance of increasing
free cash flow by strengthening business profitability and
developing businesses over the medium to long term.
The Company also works simultaneously to create cash
flows through continuous reductions of working capital,
revisions of asset holdings and other measures.
Net cash provided by operating activities for fiscal
2019 was 203.7 billion yen and net cash used in
investing activities was 193.4 billion yen. Free cash flow,
the total of the two, was an inflow of 10.3 billion yen.
The free cash flow for fiscal 2019 improved by 45.9
billion yen from the previous year. This was due mainly
to improved working capital, decreased capital
expenditures, and proceeds from the sale of land, in
spite of the payment of one-off legal costs.
Free Cash Flows
(Years ended March 31)
(Billions of yen)
50
25
0
–25
–50
10.3
–34.7
–35.6
3/’17
3/’18
3/’19
Financial Review
Panasonic Annual Report 2019
56
Capital investment and depreciation
Assets, liabilities and equity
The Panasonic Group makes capital investment based
on a policy of steady investments primarily in key
businesses for future growth.
Capital investment in fiscal 2019 (tangible assets
only) decreased to 300.5 billion yen from 392.2 billion
yen a year ago. Major capital investments were made at
production facilities (U.S. and China) for automotive
lithium-ion batteries.
Depreciation (tangible assets only) was 226.8 billion
yen, the same level as the previous year.
Fiscal 2019 Capital Investment by Segment
(Tangible Assets Only)
Other
¥18.3 billion
AIS
¥172.2 billion
¥300.5
billion
AP
¥45.2 billion
ES
¥42.2 billion
CNS
¥22.6 billion
The Company’ s consolidated total assets as of March
31, 2019 were 6,013.9 billion yen, a decrease of 277.2
billion yen from March 31, 2018. This was due mainly to
a decrease in cash and cash equivalents, in spite of
increases in trade receivables in line with B2B business
expansion.
The Company’s consolidated total liabilities were
3,929.3 billion yen, a decrease of 479.5 billion yen from
March 31, 2018. This decrease was due mainly to the
repayments of straight bonds.
Panasonic Corporation stockholders’ equity
increased by 206.0 billion yen compared to March 31,
2018 to 1,913.5 billion yen due to recording of net profit
and other factors. As a result, the ratio of Panasonic
Corporation stockholders’ equity was 31.8%, increasing
from 27.1% on March 31, 2018. With noncontrolling
interests added to Panasonic Corporation stockholders’
equity, total equity was 2,084.6 billion yen.
Total Assets
(Years ended March 31)
(Billions of yen)
8,000
Panasonic Corporation
Stockholders’ Equity
(Years ended March 31)
(Billions of yen)
2,000
1,913.5
5,983.0
6,291.1
6,013.9
1,707.6
1,571.9
4,000
0
1,000
0
3/’17
3/’18
3/’19
3/’17
3/’18
3/’19
For details regarding consolidated financial statements, please refer to
the Company’s Annual Securities Report (Yukashoken Hokokusho)
• Consolidated Statements of Financial Position
• Consolidated Statements of Profit or Loss and Consolidated
Statements of Comprehensive Income
• Consolidated Statement of Changes in Equity
• Consolidated Statements of Cash Flows
Financial Review
Panasonic Annual Report 2019
57
Corporate Data (As of March 31, 2019)
Panasonic Corporation and Subsidiaries
Years ended March 31
Corporate Data
Company Name: Panasonic Corporation
(TSE Securities Code: 6752)
Founded: March 1918 (Incorporated in December 1935)
Stated Capital: 258,740 million yen
Consolidated Companies (including parent company):
582 companies
Head Office Location:
1006, Oaza Kadoma, Kadoma-shi, Osaka
571-8501, Japan
Associated Companies under the Equity Method:
87 companies
Number of Employees: 271,869 persons
Share Data
Number of Shares Issued: 2,453,053,497 shares
(Including 120,663,025 shares held by Panasonic)
Number of Shareholders: 505,402
TSE Securities Code: 6752
Unit of Stock: 100
Stock Exchange Listings: Tokyo, Nagoya
Transfer Agent for Common Stock:
Sumitomo Mitsui Trust Bank, Limited
5-33, Kitahama, 4-chome, Chuo-ku, Osaka-shi,
Osaka 540-8639, Japan
Phone: +81-3-3323-7111
Depositary for American Depositary Receipts (ADRs)
Stock Exchange: U.S. Over-the-Counter (OTC) Market
ADR Ratio: 1 ADR = 1 Share
Symbol: PCRFY
Stock Transfer Handling Office
J.P. Morgan Chase Bank, N.A.
P.O. Box 64504
St. Paul, MN 55164-0504, U.S.A.
Phone: +1-800-990-1135 (U.S.: toll free)
+1-651-453-2128 (International)
Number of Shares
Issued (in thousands of shares)
Number of Shareholders
3/2010
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
3/2017
3/2018
2,453,053
2,453,053
2,453,053
2,453,053
2,453,053
2,453,053
2,453,053
2,453,053
2,453,053
316,182
364,618
557,102
577,756
499,728
469,295
514,129
486,489
485,053
Distribution by Type of Shareholders (%)
30.8
25.3
7.1
21.2
15.6
30.9
22.7
7.1
23.7
15.6
34.2
21.9
8.4
29.7
5.8
28.3
25.3
8.3
32.3
5.8
27.2
33.2
7.4
26.4
5.8
30.1
32.9
7.1
24.1
5.8
30.6
31.2
6.9
25.9
5.4
30.8
32.6
7.0
24.7
4.9
31.9
33.4
6.8
23.0
4.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
3/2019
2,453,053
505,402
34.8
28.9
6.8
24.6
4.9
100.0
Japanese Financial
Institutions, etc.
Overseas Investors, etc.
Other Corporations
Individuals and Others
Treasury Stock
Total
Major Shareholders
Name
Share ownership
(in thousands of shares)
Percentage of
total issued shares (%)
Japan Trustee Services Bank, Ltd. (trust account)
The Master Trust Bank of Japan, Ltd. (trust account)
NIPPON LIFE INSURANCE COMPANY
Japan Trustee Services Bank, Ltd. (trust account 5)
JP MORGAN CHASE BANK 385151
Panasonic Corporation Employee Shareholding Association
SUMITOMO LIFE INSURANCE COMPANY
STATE STREET BANK WEST CLIENT - TREATY 505234
Japan Trustee Services Bank, Ltd. (trust account 7)
JP MORGAN CHASE BANK 385632
182,669
161,292
69,056
44,829
42,488
41,344
37,465
34,671
34,218
33,435
7.83
6.91
2.96
1.92
1.82
1.77
1.60
1.48
1.46
1.43
Notes: 1. The figures in share ownership are rounded down to the nearest thousand shares.
2. Shareholding ratio is calculated by deducting the Company’s treasury stock (120,663,025) and rounded down to two decimal places.
3. The English names of foreign shareholders above are based on the General Shareholders Notification notified by Japan Securities Depository Center, Inc.
Corporate Data
Panasonic Annual Report 2019
58
Company Stock Price and Trading Volume (Years ended March 31) Tokyo Stock Exchange monthly basis
Stock Price (Yen)
3,000
2,000
1,000
0
3/2010
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
3/2017
3/2018
3/2019
Trading Volume (Millions of shares)
1,500
1,000
500
0
3/2010
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
3/2017
3/2018
3/2019
High (Yen)
Low (Yen)
Period-End (Yen)
3/2010
1,585
1,062
1,430
3/2011
1,480
826
1,058
3/2012
1,070
582
761
3/2013
781
376
654
3/2014
1,408
594
1,173
3/2015
1,614.0
1,030.0
1,577.0
3/2016
1,853.5
799.0
1,033.5
3/2017
1,309.5
831.4
1,258.0
3/2018
1,800.0
1,207.5
1,521.0
3/2019
1,647.0
917.7
954.2
Corporate Bonds
(As of July 31, 2019)
Unsecured Straight Bonds in Japan
Series
12th
13th
14th
15th
16th
17th
Years
5
7
10
5
7
10
USD-Denominated Senior Notes
Due 2022
Due 2024
Due 2029
Years
3
5
10
Investor Relations Offices
Coupon rate
(per annum)
0.387%
0.568%
0.934%
0.190%
0.300%
0.470%
Coupon rate
(per annum)
2.536%
2.679%
3.113%
Aggregate principal
amount of issue
220 billion yen
80 billion yen
100 billion yen
200 billion yen
70 billion yen
130 billion yen
Aggregate principal
amount of issue
US$ 1 billion
US$ 1 billion
US$ 500 million
Maturity date
March 19, 2020
March 18, 2022
March 19, 2025
Sept. 17, 2021
Sept. 20, 2023
Sept. 18, 2026
Maturity date
July 19, 2022
July 19, 2024
July 19, 2029
Osaka
Europe
Investor Relations
Panasonic Business Support Europe GmBH
(UK branch)
Maxis 2, Western Road,
Bracknell, Berkshire, RG12 1RT, United Kingdom
Phone: +44-1344-853135
Investor Relations
Corporate Finance & Investor Relations Department
Panasonic Corporation
1006, Oaza Kadoma, Kadoma-shi, Osaka
571-8501, Japan
Phone: +81-6-6908-1121
Tokyo
Investor Relations
Corporate Finance & Investor Relations Department
Panasonic Corporation
TOKYO MIDTOWN HIBIYA 14F,
1-1-2 Yuraku-cho, Chiyoda-ku, Tokyo
100-0006, Japan
Phone: +81-3-3437-1121
IR and Sustainability Websites
IR
Please refer to Panasonic’s IR site for information on the Company including financial results and presentation materials.
https://www.panasonic.com/global/corporate/ir.html
Sustainability
Please refer to the “Sustainability” section of the Company’s website for more information regarding environmental and social initiatives.
https://www.panasonic.com/global/corporate/sustainability.html
Corporate Data
Panasonic Annual Report 2019
59
https://www.panasonic.com/global