Annual Report
2020
Report on Financial Results and ESG
for the year ended March 31, 2020
This PDF contains all contents from the online
Annual Report 2020, merged into a single PDF file
for convenience.
01
Contents / Editorial Policy
About Panasonic
Management Philosophy
Our Corporate History
Message from the CEO (September 2020)
Message from the CEO —Transition to a Holding Company System—
(January 2021)
Changes in People’s Lives and Society Triggered by COVID-19
Initiatives for SDGs
Strategies of each Divisional Company are available at presentations of Panasonic IR Day 2019, held on
November 22, 2019.
Appliances
Life Solutions
Connected Solutions
Automotive
Industrial Solutions
China & Northeast Asia
Strategies of Functions to
Support Our Business
Message from the CFO
For Profit Growth and Profitability Improvement
Message from the CTO/CMO, and Technology Introduction
Message from the CHRO
03
05
07
13
19
21
23
27
29
35
Editorial Policy
Thank you for reading Panasonic’s Annual Report 2020. Panasonic positions its Annual Report as an integrated report incorporating manage-
ment strategies for medium- to long-term growth; environmental, social and governance (ESG) systems and initiatives; operating results and
financial position for the fiscal year under review; and other information. It is published primarily for investors.
This report discusses progress on the Mid-term strategy, which aims to have the Company overcome low-profit structure, our medium- to
long-term management approach beyond COVID-19, and the aims of transitioning to a holding company system to further enhance business
competitiveness. We also provide an overview of our new structure and its future direction. Also, we consider ESG to be one of our manage-
ment foundations that underpin the Company’s business activities, and therefore present information about specific policies and initiatives from
the viewpoints of business opportunities and social responsibilities.
Since the Company’s foundation, Panasonic has endeavored to contribute to the progress and development of society and the well-being of
people through its business activities based on the thinking that a company is a public entity of society. Moving forward, we will aim to achieve
sustainable growth and enhance corporate value by putting into practice our management philosophy.
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.
Panasonic Annual Report 2020
02
ESG as Our Management
Foundation
ESG Initiatives (Opportunities and Social Responsibilities)
ESG Highlights/External Recognition
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 Environmental Compliance Administrator/
Initiatives towards the Environment
Human Resources Initiatives
CSR Procurement
37
39
41
43
47
49
55
59
61
Links to Sustainability Data Book
Risk Management
Fair Operating Practices
System for the Promotion of CSR Activities
Human Resources Development and Promotion of Diversity
Respect for Human Rights
Raising Product Quality Levels and Ensuring Product Safety
Environment: Policy
Responsible Supply Chain
Financial and Corporate
Information
Financial Highlights
At a Glance
10-Year Financial Summary
Financial Review
Corporate Data
63
65
69
71
75
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-look-
ing 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 for-
ward-looking statements after the date of this Annual Report. Investors are advised to consult any further disclosures by Panasonic in its subse-
quent 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 ver-
sion of Panasonic’s securities reports under the FIEA and any other documents which are disclosed on its website.
Panasonic Annual Report 2020
03
About Panasonic
Management Philosophy
“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.” This Basic Management Objective
embodies our mission and devotion, and as the heart of our management philosophy, it has served as the founda-
tion for all our management activities.
Based on our management philosophy, Panasonic will continue to help solve social issues and contribute to fur-
ther development in order to bring about a bright new future. We also intend to achieve sustained growth and con-
tinue to enhance corporate value.
Our Vision
A Better Life, A Better World
Foundation of activities of
management:
Immutable
Management Philosophy
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
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
Panasonic Annual Report 2020 About Panasonic
04
A company is a public entity of society.
We must be fully aware of the responsibilities
entrusted to us as a public institution.
Corporate social responsibilities
as envisaged by our founder
1. To contribute to the development
of society and people’s happiness
through our core business
activities.
2. To generate fair profits from our
business activities and return
those profits to nation and its
people in various ways.
3. To make every process of its
corporate activities support the
goal of a healthy society.
Founder
Konosuke Matsushita
Panasonic Annual Report 2020 05 About Panasonic
Our Corporate History
Matsushita Electric Housewares Manufacturing
Works (todayʼs Panasonic) established. Two new
products, an attachment plug and, a two-way
socket, launched on the market.
Sales of radios commenced. This radio
that “wouldn’t break down” delighted
consumers and it brought news and cul-
ture into peopleʼs homes.
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.
Washing machines, black and white TVs,
refrigerators and other products launched
that reduced the burden of housework
and made life easier.
1918
1927
1931
1932
1950s
1961
1965
Panasonicʼs first overseas man-
ufacturing facility, National Thai
Manufacturing Company, estab-
lished. Manufacturing facilities
were subsequently established
in countries with difficulty import-
ing household appliances due to
foreign exchange shortages.
Trade department established and
export business commenced.
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 through-
out Japan as a safe light source.
Panasonic Annual Report 2020 About Panasonic
06
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.
Fujisawa Sustainable Smart Town established for
eco-conscious and comfortable lifestyles while
ensuring safety and security.
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.
1987
1988
2008
2010
2014
2018
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.
Marking the 100th anniversary of
its founding, Panasonic introduced
“Lifestyle Updates” as its future
direction to take.
Mass production of lithium-ion batteries
for hybrid EV automobiles commenced,
helping to popularize eco-cars.
Panasonic Annual Report 2020 07 About Panasonic
Message from the CEO
Steady progress with Mid-term strategy
to break away from low-profitability structure
Take up the challenge to create new
contributions as “a public entity of society,”
with a view beyond COVID-19
Kazuhiro Tsuga
Representative Director
President
CEO
Panasonic Annual Report 2020 About Panasonic
08
At present, the impact from the spread of novel coro-
navirus disease (COVID-19 impact) is expanding world-
the initial forecast, as well as the spread of COVID-19 infec-
tions. Adjusted operating profit decreased with decreased
wide, in various ways including economic and geopolitical
effects. While Panasonic is making its best efforts to pre-
sales, while our efforts to reduce fixed costs showed
steady progress. Operating profit and net profit attributable
vent the further spread of COVID-19, as well as ensuring
business continuity to fulfil its social responsibility as a
to Panasonic Corporation stockholders decreased due to
factors including the recording of restructuring expenses.
corporation, an adverse effect on its operating results for
the short term is unavoidable. For the fiscal year ending
March 2021 (fiscal 2021), sales and profit are expected to
decrease largely due to the significant impact of COVID-
19, as well as deconsolidation effects from our business
portfolio reform.
Under these circumstances, we are making steady
progress with the Mid-term strategy announced last year,
specifically through our initiatives to enhance manage-
ment structure, such as reducing fixed costs and taking
measures to businesses that have loss-making structures,
and our execution of portfolio management, such as shift-
ing resources and replacing businesses. Moving forward,
we will continue to accelerate our progress toward break-
ing away from a low-profitability structure. In addition, we
are trying to approach the current situation as an opportu-
nity to transform ourselves. We will carefully monitor the
continuously changing situation of the COVID-19 impact,
clarify and execute countermeasures for the short term,
and prepare future measures that respond to the trends
of long-term changes.
Changes in the business environment are becoming more
intense year by year, and we believe the current COVID-
19 situation will make our business conditions even more
intense. At Panasonic, we will respond to these changes
appropriately, based on the philosophy we have inherited
and practiced since our founding: “A company is a public
entity of society.” Through this effort, we aim to be a com-
pany that can offer true contributions to peopleʼs lives
and to society. And we will continue to strive to make the
“Panasonic” brand even better known as a valuable com-
pany, always needed by society, and to achieve sustain-
able growth and raise corporate value for the medium- to
long-term future.
Current business performance
For fiscal 2020, overall sales decreased due to the impact
of business portfolio reform and weak capital investment
Our initial target of 300.0 billion yen of adjusted operat-
ing profit (profit generated from our businesses) was not
reached. This is due mainly to the impact of COVID-19
affecting our production, including procurement of parts
and components, as well as temporary suspensions of fac-
tory operations during the fourth quarter.
For fiscal 2021, sales and profit are expected to decrease
from the previous year, due to the severe business envi-
ronment caused by COVID-19 and the effect of busi-
ness portfolio reform, despite progress in efforts to
reduce costs, mainly fixed costs. Regarding the COVID-
19 impact, signs of recovery were seen starting in June
2020, with lifted restrictions on movement and resump-
tion of economic activity. Gradual improvements are
expected from the second quarter and beyond. Most of
the production-related issues have been solved. However,
for the demand-related issues, the pandemicʼs impact is
expected to remain in the second half on businesses for
aviation, housing-related, and automotive industries.
The uncertainties related to the COVID-19 impact sug-
gest a variety of scenarios. At Panasonic, we will make
efforts to generate new kinds of value propositions, not
only supporting the short-term countermeasures but also
responding to changes from a long-term perspective.
Progress with Mid-term strategy
Under the current Mid-term strategy, which started in fis-
cal 2020, we aim to break away from our low-profitability
structure. As management KPIs for fiscal 2022, the final
year of the Mid-term strategy, and onward, Panasonic
aims toward Company-wide management that can sta-
bly achieve the following targets: for the Core growth
business, which include Spatial Solutions, Gemba (oper-
ational frontlines) Process, and Industrial Solutions, an
EBITDA growth rate of 5–10% and an EBITDA margin of
10% or more, and for Company-wide operations, a ROE
target of 10% or more. Initiatives to enhance our manage-
ment structure and to execute portfolio management are
demand in China, both of which were already factored in
making steady progress.
Panasonic Annual Report 2020 09 About Panasonic
Message from the CEO
completed in September 2020. For the LCD panel busi-
ness, the decision was made to end production by 2021.
We are currently communicating with customers and
accelerating production in preparation for the termina-
tion of this business. For the solar business, production
ceased at the Buffalo factory in the U.S. in June 2020,
scheduled to exit the facility at the end of September
2020. Regarding the partnership agreed in May 2019 with
GS-Solar, a Chinese photovoltaic module manufacturer,
the Company resolved in July 2020 not to proceed with
the agreement. The Company will aim to restore profit-
ability in fiscal 2023 by looking into every possible mea-
sure, including new business collaboration. For the TV
business, the Company is carrying out structural reform,
including termination of production at the Mexico factory.
The Company will proceed with further initiatives, aiming
to restore profitability in fiscal 2022. Through such reform
measures, in fiscal 2021, we expect a total loss-reduction
effect of 15 billion yen from businesses with loss-making
structures.
In terms of achieving 100 billion yen of profit contributions
in fiscal 2022, we expect to surpass the goal through
greater efforts in fixed-cost reduction, despite the impact
of cancelling the partnership related to the solar business.
For the other businesses that are loss-making or low-prof-
itable, we will carry out continuous monitoring and take
necessary measures at an early stage to avoid further
deterioration of profitability. For such businesses, we will
set the direction to take by fiscal 2022.
Execution of portfolio management
With the Mid-term strategy, we are executing portfolio
management according to the portfolio classifications
of “Core growth business,” “Co-creation business,” and
“Revitalization business.” Our initiatives will be conducted
by transcending the boundaries of the Company and orga-
nizations, including flexible capital policies without limit-
ing our options to utilizing internal resources, and more
flexible brand policies. In these ways, we aim to enhance
the competitiveness of each business.
First, Spatial Solutions, Gemba Process, and Industrial
Solutions are positioned as Core growth business. These
businesses are highly profitable, where we can exert our
accumulated strengths in technological and manufacturing
Enhancing management structure
Toward fiscal 2022, the Company is aiming at 100 bil-
lion yen of Company-wide profit contribution through
fixed-cost reduction, such as reducing personnel costs
and indirect work, as well as site integration. In addi-
tion, efforts are being made to reduce the amount of
loss through countermeasures taken for businesses with
loss-making structures: semiconductor, LCD panel, solar,
and TV businesses.
Fixed-cost reduction is making steady progress through
setting up internal projects and listing specific measures
and targets for each segment. Toward the target of 60
billion yen over three years (an average of 20 billion yen
for each year), in fiscal 2020 we achieved a cost-reduc-
tion effect of 20 billion yen. In fiscal 2021, we expect to
achieve 30 billion yen. Monitoring the COVID-19 impact,
we will execute additional measures as necessary. We
can now aim even higher than the initial 60 billion-yen tar-
get for profit contribution.
Regarding the need to take measures to businesses hav-
ing loss-making structures, we are executing such mea-
sures in a top-down manner to eliminate businesses with
loss-making structures and achieve 40 billion yen of profit
contribution (i.e. reduction of losses) by fiscal 2022. For
the semiconductor business, a decision was made in
November 2019 to transfer the business, and this was
Panasonic Annual Report 2020
About Panasonic
10
capabilities. By focusing our resources on this classification,
such businesses are expected to become our future prof-
it-growth drivers. The basic approach is to make a transition
to solution-type business models from individual hardware
sales, taking a medium- to long-term perspective.
For example, with Gemba Process, in July 2020, the
Company extended the strategic partnership with a 20%
strategic equity investment in Blue Yonder, a leading
end-to-end supply chain software provider. The Gemba
Process business aims to offer operational process inno-
vations for the supply chain, since supply chain problems
have become management issues for our corporate cus-
Regarding the housing business, Prime Life Technologies
Corporation, a joint venture with Toyota Motor Corporation
in the field of town development, was established on
January 7, 2020, integrating the housing businesses of the
two corporations. Combining the mobility services pro-
moted by Toyota and “Lifestyle Updates” promoted by
Panasonic, we aim to create new value for the entire town
as a whole. With the declining birth rate and aging popu-
lation, along with the changes in peopleʼs lives and work-
ing styles resulting from COVID-19, the requirements for
houses and town development will change even further.
By giving thoughts to the demands of society and custom-
tomers who face such challenges as labor shortages
and diverse consumer needs. Blue Yonder possesses
ers, we will take up the challenge of offering new value in
not only hardware but also integrated services developed
strengths in software and AI, and its customer base is on
a global scale. Combining Panasonicʼs strengths in hard-
ware, robotics and sensing technologies, we believe we
can generate new value in this market, where continuous
growth can be expected. Triggered by this investment,
we will further accelerate our business model transforma-
tion. I strongly believe this will be a vital step to becoming
a Company that provides solutions directly linked to our
customersʼ management issues.
Next, with the Co-creation business, we strive to enhance
competitiveness through collaboration across regions and
other companies. In particular, for the consumer electron-
ics business, China & Northeast Asia Company, a region-
based Divisional Company, was established in April 2019
with the aim of addressing the China market, where sig-
nificant growth is expected for the medium to long term.
Through collaboration between this Divisional Company
and organizations based in Japan, we are promoting
co-creation among different regions. An example is the
utilization of reasonably priced industry-standard parts
and components of rapidly developed Chinese suppliers
by leveraging Panasonicʼs technological capability. This
enables us to increase the cost-competitiveness of our
consumer electronics business overall. The China market
is showing recovery from COVID-19 at a relatively early
stage, and our expectations of significant market growth
for the medium- to long-term period remain the same.
We will further strengthen our business in China, which is
a starting point for taking up new challenges, and we will
build new strengths by collaborating with existing organi-
through co-creation with various corporations.
Finally, we must consider the automotive-related busi-
ness, which is positioned as a Revitalization business,
where profitability improvement is the top priority. On the
back of drastic changes and evolution in the electrification
and computerization of the automobile industry, we have
been taking up the various challenges aggressively and
globally in the two businesses of Automotive Solutions,
where we apply image-processing, communication, and
optical technologies, and Automotive Batteries, which
includes our cylindrical battery business for Tesla. While
we have achieved sales expansion, we have struggled
to achieve a corresponding increase in profit. Recently,
however, our efforts to improve profitability are showing
steady progress.
Automotive Solutions faced heavy burdens due to
development expenses, mainly with the challenging proj-
ects ordered from Europe during fiscal 2020. With our
continuous efforts to improve efficiency, we expect devel-
opment expenses to be reduced in fiscal 2021 onward. In
addition to this, on the back of rising demands, including
those for enhanced comfort in the mobility space, fewer
accidents, and lower environmental burden, we will focus
our management resources on the areas where we have
strengths, namely IVI, HUD, and ADAS, to refine product
competitiveness and improve profitability.
In Automotive Batteries, let us first consider the cylin-
drical battery business. We faced struggles with the
unprecedentedly rapid ramp-up of the North America fac-
tory. By carrying out thorough productivity improvement
zations in Japan. Furthermore, we intend to expand this
business model globally.
initiatives, we managed to turn profitable in the second
half of fiscal 2020. For the first quarter of fiscal 2021, we
Panasonic Annual Report 2020
11 About Panasonic
faced the temporary impact of factory suspension due to
offerings by making full use of this ongoing evolution.
COVID-19. However, under our strong partnership with
Tesla, we will continue efforts to improve productivity, as
well as lead the industry in technological development of
batteries with high energy density, thus improving profit-
ability. For the prismatic battery business, Prime Planet
Energy & Solutions, Inc., a joint venture with Toyota
Motor Corporation specializing in automotive prismatic
batteries, was established on April 1, 2020. The aim is
to accelerate the development of highly competitive bat-
teries that lead the industry and to achieve a stable sup-
ply. As equal partners, the two corporations will integrate
their management resources to accelerate technological
development and further expand production, enabling us
to meet societyʼs demands for expanded use of EVs.
Since its founding, Panasonic has generated con-
tributions by always staying close to peopleʼs lives and
addressing a number of social issues. In these two ways,
we want to generate new, unprecedented types of contri-
butions utilizing digital technologies such as software, AI,
and IoT, among others. A specific example is our “Lifestyle
Updates” initiatives centered on B2C business. We will be
taking up a new challenge, based on the idea of helping
people to attain a healthy mind and body, by thoroughly
staying close to peopleʼs lives and offering the most suit-
able values to each of our customers. Another example is
our contribution to solving various social issues, centered
on our B2B business. These value offerings will be given
an even higher priority in the current Mid-term strategy.
Changes in society brought by COVID-19
and management approach for the medium
to long term
The recent spread of COVID-19 has definitely had a signif-
icant impact on the entire world. However, the important
thing is that we do not simply wait for the waves to pass
but anticipate the changes awaiting in the post-COVID-19
world and take the needed preemptive moves.
Toward achieving “Lifestyle Updates”
“Lifestyle Updates” aims to offer the “most suitable” to
individual customers, utilizing various data and the latest
technologies of AI and IoT to design products and ser-
vices that continue to evolve, even after they are sold.
Panasonic has placed importance on bringing affluence to
peopleʼs lives through offering better consumer electron-
ics products. However, there is a limit to what we can do if
we only pursue evolution of the product itself. Leveraging
We have experienced economic recessions on a
what we have accumulated in our conventional consumer
worldwide scale in the past, such as the financial crisis in
2008. What makes the COVID-19 impact different is how
peopleʼs movements and activities have been restricted
in each country over a long term. Such restrictions have
electronics business, we will take not only the stance of
improving product functions but also the customerʼs per-
spective on the kind of problems they are facing, always
remaining connected with the customers through digital
been mitigated by advances in digital technology and
developments in logistics networks. Rather than people
moving to accomplish something, products or services
have come to the people. This is what we were forced to
experience. If this had happened 20 years ago, when the
environment was not yet ready, there would have been
a much greater impact. We can say that the COVID-19
impact has made clear that the evolution of digital tech-
nology brings changes to real society.
So how will Panasonic address such changes? Panasonic
has been engaged in bringing affluence to real society
and peopleʼs lives through real products, mainly con-
sumer electronics. However, as real society becomes
deeply impacted by the evolution of digital technology,
we need to transform our business models and value
technology. In this way, we aim to provide contributions
that bring better health to the mind and body.
To accelerate this initiative, in October 2019 we brought
aboard Yoky Matsuoka, who possesses world-leading
technical expertise in AI and robotics. In July 2020, the
Lifestyle Business Strategy Division was established to
create new value and business models.
Toward contributions to solving social issues
As for solving social issues, we are promoting various ini-
tiatives that leverage digital technologies. For example, the
Gemba Process, as mentioned earlier, symbolizes such
initiatives. Surging logistic traffic resulting from phenom-
ena such as e-commerce expansion has become a heavy
burden on the total supply chain, causing serious issues
Panasonic Annual Report 2020
About Panasonic
12
of labor shortages and workstyles. With the COVID-19
impact, this trend can be expected to accelerate at a faster
pace. Here, we are trying to propose new solutions utiliz-
ing our digital, sensing, and robotics technologies. Going
forward, through changes in society, the digital network
itself will become even more important as the basis of
everyday living. When that time arrives, stable high-speed
and high-volume communication, as well as technology to
protect important data, will become even more important.
We can also expand our contributions in these areas with
our advanced technologies and devices.
Being a public entity of society
Since its foundation, Panasonic has been engaged in
management based on the philosophy that “A company
is a public entity of society.” Utilizing the various manage-
ment resources entrusted by society, we must respond
to social needs through business activities, contribute to
the solution of social issues and the development of soci-
ety, and achieve sustainable growth. When the Company
was founded, the overall society of Japan was facing
poverty and a shortage of goods. Panasonic has devel-
oped by responding to the needs of society, which was
viewed as the desire to make life more affluent, through
offering good-quality products, mainly home appliances,
at affordable prices.
More than a 100 years after its founding, peopleʼs daily
lives have changed drastically. Today, how should Panasonic
respond to the requirements of global society? We can cer-
tainly say that society has become more affluent in terms
of possessing goods. However, in pursuing affluence, I
believe we are facing various imbalances in society. From
the perspective of people, there are concerns of individ-
ual health, declining birthrates, aging populations, and child
raising, and we cannot necessarily say that peopleʼs minds
and bodies have become healthy. Looking at society as a
whole, many problems have arisen through the process of
pursuing affluence, including environmental and energy
issues as well as the population becoming urbanized. Now
is the time for us to correct this, and to guide the way to a
healthier future in a more appropriate direction.
Through the expansion of COVID-19 infections, we have
gone through the real-life experience of “advances in dig-
ital technology changing real society.” Now, Panasonic
should make further contributions to solving persistent
social imbalances by making full use of the latest technol-
ogies, including digital technology, applying our strength
from being close to our customers over the past 100 years,
and leveraging the strengths of our outside partners. Tak-
ing this direction is also how we can contribute to achiev-
ing Sustainable Development Goals (SDGs), thus building
a sustainable society that the international community is
aiming for. In order to fully respond to these requirements
of society, we will continue to focus on ESG initiatives,
including contribution to the global environment, human
resources development, respect for human rights, fair
business promotion, and enhanced corporate governance.
These are our initiatives toward achieving “A Better Life,
A Better World,” and they embody our efforts to achieve
our basic management philosophy: “A company is a pub-
lic entity of society.” Through these activities, we will con-
tinue to strive to make the “Panasonic” brand even better
known as a valuable company, achieve sustainable growth,
and raise corporate value from a medium- to long-term per-
spective. I ask for your continued support of our endeavors.
Link to Initiatives for SDGs
https://www.panasonic.com/global/corporate/sustainability/sdgs.html
Panasonic Annual Report 2020 13
About Panasonic
Message from the CEO
—Transition to a Holding Company System—
Transition to a holding company system to enhance our
business competitiveness
Aiming to become a group of businesses that are
indispensable to the development of society
Kazuhiro Tsuga
Representative Director
President
CEO
Panasonic has resolved to transition to a holding company system, planned to start April 2022. The aims are
to thoroughly enhance business competitiveness and to ensure Group-wide growth for the long-term future.
Each business, mainly from the businesses classified as “Core growth” in the current Mid-term strategy, will
be incorporated as an operating company. By increasing empowerment in this way, we can execute more
wide-ranging autonomous management and build a structure that enables us to offer new value, with each
business staying close to people’s lives and squarely addressing various social issues. In doing this, Panasonic
will become a group of businesses that are indispensable to the development of society and that can achieve
sustainable growth.
With a determination to achieve this transformation based on a long-range perspective toward the develop-
ment of Panasonic’s future, we announced the change of CEO to Yuki Kusumi*, together with the announce-
ment of our transition to the holding company system. The new CEO will also be involved in quickly shaping
the direction of our company’s transformation.
* Kusumi is currently Managing Executive Officer of Panasonic and CEO of Automotive Company. His appointment as the next CEO is based on
a report by the optional Nomination and Compensation Advisory Committee (chaired by an independent outside director, with the majority of
members also independent outside directors).
Panasonic Annual Report 2020 About Panasonic
14
Background and objective of transition to a
holding company system
Thoroughly enhance business
competitiveness, aim to ensure long-term
Group-wide growth
Under the current Mid-term strategy, Panasonic
engaged in thoroughly enhancing its management struc-
is
ture and business competitiveness through portfolio man-
agement, based on the three Core growth businesses
of “Spatial Solutions,” “Gemba (operational frontlines)
Process” and “Industrial Solutions.” After reaching the half-
way point of this effort, I am now confident about its prog-
ress, including actual figures. Regarding the enhancement
of management structure, we have seen steady progress
in fixed-cost reduction and reforms of businesses having
loss-making structures. The adjusted operating profit mar-
gin for the second quarter of the current fiscal year ending
March 2021 (fiscal 2021) has exceeded 5%, despite the
lingering impact of COVID-19. Consequently, we are see-
ing the completion of a firm base. And in terms of enhanc-
ing business competitiveness, various plans and measures
are already in progress, such as our 20% equity invest-
ment in Blue Yonder, for the Gemba Process business,
and the merging of air-conditioning and indoor air quality
businesses, mainly in China for the Spatial Solutions busi-
ness. The pillars of our growth businesses and the direc-
tion of our strategy are becoming clearer.
To define Panasonic’s development in the medium to
long term, our next steps are to ensure growth potential
as the entire Panasonic Group and to build an organiza-
tional structure that enables us to increase the compet-
itiveness of each business toward achieving sustainable
development. These are extremely important steps, and
we view the transition to a holding company system as a
necessary process in accomplishing them.
By focusing on specific business areas, and leveraging
the best-in-class level of expertise, we will make further
contributions to society and our customers with a sharp-
ened competitive edge that is unmatched by our com-
petitors. In other words, we will become “specialized and
sharpened,” which is essential to increasing our business
competitiveness. Through this structural change, we will
accelerate our efforts to become “specialized and sharp-
ened” in each business, with the operating companies
further empowered to execute more wide-ranging auton-
omous management as we also encourage each business
to transform itself according to its own particular character-
istics and conditions. Furthermore, the holding company
will actively support each business as it strives to become
“specialized and sharpened.” Concretely, it will encourage
the business to swiftly and effectively implement a growth
strategy from the Group-wide perspective, including defin-
ing growth areas and making various investments. In doing
this, we will establish a structure that enables us to build
up the corporate value of the entire Group.
Specific Initiatives toward Sustainable Growth
Transition to holding
company system
(planned, April 2022)
Operating companies
Focus on specific areas and further
contribute to society
Become
“specialized and sharpened”
in each business
Holding company
Support each business and
promote growth strategy from
a Group-wide perspective
Schedule for Transition to Holding Company System
(planned)
From October 2021, virtual reorganization based on the
new structure to be carried out. In April 2022, the new
medium-term strategy to start with the new structure,
in both name and reality, upon transition to a holding
company system.
June 2021
Approval by ordinary meeting of
shareholders for the company split
agreement and the amendments to
the articles of incorporation
October 2021 Termination of current Divisional
April 2022
Company system and reorganization
of business structure
Transition to a holding company system
Change of corporate name and
“Panasonic Corporation” to be used by
a newly established operating company
Panasonic Annual Report 2020
15
About Panasonic
Message from the CEO
—Transition to a Holding Company System—
Groundwork laid to take the next step to
prosper over the coming 100 years
Panasonic was founded by Konosuke Matsushita and has
Through these initiatives, we have realigned the
strengths we have been building and the businesses we
should focus on. Now the groundwork has been laid to
developed by expanding its operations and product lines,
mainly with home appliances. During the times of the soar-
ing market environment in Japan, we strived to aggressively
expand our business, even when this resulted in having
overlapping businesses within the Group. However, in the
2000s, under digitalization and intensifying global compe-
tition, we faced pressing issues imposed by the necessity
to ensure market advantage through generating stronger
businesses and products. Consequently, we acquired affil-
iated companies that were previously highly independent
and launched the “Business Domain system.” We reorga-
nized duplicating businesses and built a structure aimed at
shifting resources and creating synergy within the Group.
In 2013, the year after I became President, the cur-
rent “Divisional Company & Business Division system”
was introduced. The aim was to visualize the details
of management through the “Business Division sys-
tem” and thus overcome unacceptable business perfor-
mance as soon as possible. And with the larger grouping
of Divisional Companies, we attempted to leverage the
strengths of former Matsushita Electric Works and Sanyo
take the next step. I believe this is the perfect opportunity
for Panasonic, a company that has a history of 100 years,
to take the drastic measures needed to prosper over the
next 100 years.
Outline of new structure
“Specialize and sharpen” each business
to make Panasonic a group of competitive
businesses
“Thoroughly enhance business competitiveness” – Based
on this perspective, businesses such as Spatial Solutions,
Gemba Process, and Industrial Solutions, which are
classified as Core growth businesses under the current
Mid-term strategy, will be incorporated as operating com-
panies under the new structure. And the corporate name
of the current “Panasonic Corporation” will be changed
to “Panasonic Holdings Corporation.” Through these
changes, the pillars of businesses that we should grow
will become clear. Moreover, we will be able to establish
a structure that permits wide-ranging autonomous man-
Electric, which had become subsidiaries, as well as gen-
erating synergies beyond organizations to clarify the
agement at each business, leading to swift and effec-
tive decision-making by those at the frontlines who really
new pillars of business. And the positive outcomes have
understand the business conditions. We aim to make
become clear, as mentioned above.
Panasonic a group of competitive operating companies
Group Structure after Transition to a Holding Company System
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* Corporation ** Divisional Company
(Names are tentative for businesses and corporations, except Panasonic Holdings Corporation and Panasonic Corporation)
Panasonic Annual Report 2020
About Panasonic
16
that are “specialized and sharpened.”
First, for the Spatial Solutions business, the newly
established operating company based on the current
Appliances Company and Life Solutions Company, to
be called “Panasonic Corporation,” will play the central
role. We aim to exert a significant synergy effect and
comprehensive strengths across such businesses as
air-conditioning/indoor air quality and electrical equip-
ment, along with white goods and commercial refrig-
eration and distribution. Furthermore, we will take up
challenges in the consumer electronics and residential
production line. And our high expertise in cylindrical bat-
teries will continue to be a great strength in developing
our business for Tesla. Along with the non-automotive
battery business, we will steadily grow this business
as a new pillar.
“Automotive,” “Smart Life Network,” and “Housing
System” businesses are expected to produce synergy with
the new “Panasonic Corporation” from the perspectives
of “living” and “people.” However, it is necessary to priori-
tize the improvement of each business’s competitiveness
and profitability. We aim to refine the competitiveness as
space businesses in China. The reason we will continue
an operating company so that it surpasses the level of our
to use the name “Panasonic Corporation” for these busi-
nesses is because I firmly believe they offer value that is
competitors and, in addition, to improve profitability at the
earliest time.
most unique to Panasonic and they most directly inherit
Panasonic Holdings Corporation and the newly estab-
our DNA. We will pursue value creation that represents
lished company in charge of professional services will be
the key characteristics of Panasonic: bringing better
health to the mind and body by “staying close to people.”
Gemba Process business and Industrial Solutions busi-
ness will each be incorporated as operating companies,
along with “Energy business,” which is designated to play
a central role in the Group’s development. Regarding our
automotive battery business, we established a joint ven-
ture with Toyota Motor Corporation for prismatic batter-
ies; as for cylindrical batteries, profitability has improved in
our business with Tesla. The direction to take in our next
challenge is becoming clear, such as introducing technol-
ogy for increasing battery capacity and investing in a new
supporting each operating company’s efforts to enhance
competitiveness in its own area. The parent holding com-
pany will support each operating company’s growth strat-
egy to become more “specialized and sharpened” and,
moreover, enhance competitiveness from a functional view-
point. In addition, it will execute the Group-wide growth
strategy to attain higher corporate value from a Group-wide
perspective. The aim of the new company in charge of pro-
fessional services is to become a team of experts who are
highly efficient and capable of providing high added value.
This will be done by visualizing and continuously refining
the value provided by these indirect functions.
Relationship between Business Structure before and after Transition to a Holding Company System
Structure after Transition to a Holding
Company System
(Operating companies and businesses)
Relationship with current structure
Panasonic Corporation
To be established by consolidating businesses (China & Northeast Asia, Home Appliance, Air-conditioning &
Indoor Air Quality, Commercial Refrigeration & Distribution, and Electrical Equipment) under one corporation
China & Northeast Asia business
To be established based on business area of current China & Northeast Asia Company
Home Appliance business
To be established based on white goods business area of current Appliances Company
Air-conditioning & Indoor Air
Quality business
To be established based on air-conditioning and indoor air quality business area of current Appliances
Company and Life Solutions Company
Commercial Refrigeration &
Distribution business
To be established based on commercial refrigeration and distribution business area of current Appliances
Company and US Company
Electrical Equipment business
To be established based on electrical equipment business area of current Appliances Company and Life
Solutions Company
Automotive business
To be established based on business area of current Automotive Company
Smart Life Network business
To be established based on AVC business area of current Appliances Company
Housing System business
To be established based on business area of current Housing Systems Business Division
Gemba Process business
To be established based on business area of current Connected Solutions Company
Device business
To be established based on business area of current Industrial Solutions Company (excluding battery
business)
Energy business
To be established based on battery business area of current Industrial Solutions Company and US Company
Professional Services
To be established based on current Professional Business Support Sector. Expected to support the growth of
each operating company by leveraging its specialized capabilities
* Names for operating companies and businesses are tentative except for Panasonic Corporation.
Businesses under Panasonic Corporation are expected to be Divisional Companies.
Panasonic Annual Report 2020
17
About Panasonic
Message from the CEO
—Transition to a Holding Company System—
Toward sustainable growth
Pursue high profitability with the four business
pillars
Under the new structure, there are three major areas
where Panasonic aims to make contributions. First,
the area where we strive to stay closer to “People,” as
already incorporated in the Company’s DNA. Second, the
area related to supporting what we consider the founda-
tion underpinning the development of society, from the
“Electric/Electronics” perspective. And third, the area
where we tackle the “Issues at the Gemba,” such as man-
ufacturing, logistics and distribution. We consider each of
these areas promising, where we can exert our strengths
and expect significant market growth.
In terms of the area related to “People,” we will take
up the challenge of offering new value, with the new
Panasonic Corporation playing the central role in “Lifestyle
Updates” from the perspective of bringing better health
to the mind and body. We see expanding possibilities
of our contributions in this area, not only in the evolu-
tion of home appliances as tools to support household
chores and everyday living but also in providing comfort-
able spaces created with lighting, sound, air-conditioning
and indoor air quality as the core, as well as smart infra-
structure for living as the base for delivering these values.
Considering the circumstances surrounding COVID-19,
with raised consciousness of health and safety, as well as
the further aging of society, we can expect greater atten-
tion to these issues from our customers and society. We
aim to be unique and unmatched, providing contributions
only Panasonic can offer by fully applying the synergy
between Appliances (from former Matsushita Electric
Industrial) and Life Solutions (from former Matsushita
Electric Works), leveraging the various technologies and
expertise cultivated from the past.
For “Electric/Electronics,” which we consider the
foundation of society’s development, the Energy and
Device businesses will play the central role. Without
Reforms to internal policies toward energizing
each business
Significant reforms will also be made to internal policies
and operations related to corporate governance by devel-
oping new systems and finding ways to increase the effi-
ciency of indirect functions. This is expected to further
energize each business’s operational frontlines and help
make it more competitive.
First, to strongly promote “specializing and sharpening”
of each business, we will increase empowerment in each
business for speedier decision-making. At the same time,
the responsibility for results among those in business man-
agement positions will be clarified, and governance will
be enhanced to improve the quality of decision-making
through clearer accountability.
Furthermore, we will optimize our cost structure by flex-
ibly introducing various systems, including the personnel
system that is most suitable to the particular environment
that each business operates in. In this way, we can achieve
the competitiveness needed to succeed in each industry.
Regarding the multiple layers and overlaps at our indi-
rect functions, we will rationalize these indirect functions
by establishing a separate corporation for professional
services with the transition to the new system. We aim to
achieve further management efficiency and significantly
contribute to the competitiveness of each business.
Reforms under the Holding Company System
Governance
Improve specialization and speed
of decision-making
by increasing empowerment and
clarifying accountability
Develop systems
Thoroughly enhance
competitiveness to address the
needs of each industry
by applying the personnel system suitable
for that industry, etc.
Management structure
Make indirect functions contribute
to competitiveness as a Group
by eliminating overlaps and
improving efficiency
Panasonic Annual Report 2020
About Panasonic
18
evolution in these technologies, communication infra-
structures such as 5G, advances in vehicles, and the
digital/green society cannot come to fruition. We will
capture the ever-expanding business opportunities in
Make Panasonic a brand that shares values
with society
Under the new structure, the Panasonic brand will
become an ever more important asset that connects
this increasingly important area by thoroughly enhancing
our technological and manufacturing capabilities, as well
as more widely establishing our presence.
the entire Group. Conventionally, the Panasonic brand
was used for our products, mainly home appliances. We
have been committed to enhancing its value as a brand
And lastly, the area tackling the issues our custom-
ers face at the Gemba, such as manufacturing, logistics
and distribution. Here, we aim to bring greater innova-
tion to these processes by combining digital technolo-
gies with our strengths in manufacturing expertise. This
is really about getting involved in the Gemba of our corpo-
rate customers, who face a variety of issues, and offering
them solutions. By doing this, we can greatly contribute
to transforming their management. I have a strong feel-
ing that our business opportunities are expanding already,
and we can expect long-term growth.
In the areas of “People” and “Electric/Electronics,”
we will further pursue and refine our strengths as well
as expand new businesses by addressing “Issues at the
Gemba.” This is our approach to making contributions and
achieving growth as the new Panasonic Group. Based
on this direction, we will attain sustainable growth as
a Group in a highly profitable business structure, with
the businesses of the four major operating companies,
namely, Panasonic Corporation, Gemba Process, Device,
and Energy, developing into our future pillars. This will be
done through “specializing and sharpening,” along with
enhancing the competitiveness of each business.
Areas for Panasonic to make contributions
People
Healthy mind
and body
Issues at the
“Gemba”
(operational
frontlines)
Electric/
Electronics
Transform
management
by process
innovation
Foundation
for social
development
that represents what our customers yearn for in their
lifestyles and home appliances. However, due to the
advances in digitalization and changes in business mod-
els, we face an era of creating new kinds of value through
co-creation with society, beyond the concept of corpora-
tions or consumers. In such a situation, we must strive to
make the Panasonic brand even better known as a valu-
able company.
Sharing values with our customers and society, and
taking up the challenge in creating new value together.
In other words, when society adopts new lifestyles and
creates the future, we want Panasonic to be a brand that
people select as a partner. Therefore, we will keep evolv-
ing the Panasonic brand and the Company itself.
The raison d’être for Panasonic has always been to con-
tribute to people’s lives and society through its business
operations, and this will never change. Thus, we view this
reorganization as a necessary process in fulfilling our rai-
son d’être during an era of radical changes and uncertain-
ties. Under autonomous management, we will thoroughly
refine specialization in each business area, as well as stay
close to people’s lives and society while working to make
further contributions. In this way, Panasonic will continue
to develop itself as a group of valuable businesses that
are indispensable to the development of society.
I ask for your continued understanding and support of
Panasonic’s endeavors.
Panasonic Annual Report 2020
19 About Panasonic
Changes in People’s Lives and Society Triggered by COVID-19
The global spread of COVID-19 infections in 2020 has brought significant and irreversible changes to people’s
lives and society. Alongside megatrends*, Panasonic is monitoring the impacts of these changes in terms of their
degree of certainty, social impacts, and the effects on our business. Below we discuss the changes caused by the
spread of COVID-19 infections and the main initiatives we consider to be business opportunities.
*For more details about megatrends, please refer to P5–9 in the Annual Report 2019.
Changes in people’s lives
Panasonic’s initiatives
People’s awareness of hygiene in order to prevent and
stop the spread of COVID-19 infections, as well as
awareness of preventive health, has increased. Infection
countermeasures are required for not only the home, but
also spaces where people gather, such as the workplace,
public transport, and shops.
Furthermore, the effectiveness of working remotely—
an approach hitherto recognized as necessary for improv-
ing productivity—has been acknowledged and gained
further traction because more people refrain from, or are
prevented from, going out in order to prevent infections
and their further spread. This has led to more time spent
at home or with one’s family, which in turn has driven an
increase in the use of e-commerce and online services.
On the other hand, due to the advancement of telework-
ing and the development of online services, facilities in
the city are now required to provide even more value that
only “real” spaces can offer.
Changes in number of people visiting or
hours spent at workplaces, retail &
recreation facilities (compared to pre-COVID-19)
Workplaces
In light of heightened awareness of hygiene and
health, we are stepping up our response to meet
demand for disinfection and ventilation mainly by
expanding, and more vigorously promoting, our
lineup of products equipped with nanoe X technol-
ogy and increasing production capacity of Ziaino, spa-
tial sterilizing/deodorizing equipment using sodium
hypochlorite. We are also promoting the creation of
spaces in which public hygiene is guaranteed mainly
by providing non-contact personal identification sys-
tems and body temperature detection systems.
Furthermore, we intend to focus on developing solu-
tions that merge air-conditioning and indoor air quality
functions in one, taking into account not only health
aspects, but other factors such as comfortability.
To accommodate changes in people’s lives and
the more time people spend at home as a result of
teleworking, we are promoting the creation of living
spaces that bring better health to the mind and body
by providing home appliances and housing equipment
that help people live comfortably. And for spaces such
as offices, retail facilities, and recreation spaces, we
intend to deliver solutions for creating the functional-
ity and appeal that can only be found in “real” spaces.
(%)
0
-10
-20
-30
-40
-50
(%)
0
-10
-20
-30
-40
-50
-60
Retail and recreation facilities
Products equipped with nanoe X
(air conditioners, air purifiers, washing machines,
refrigerators, etc.)
Ziaino
Spatial sterilizing/deodorizing equipment
using sodium hypochlorite
2020
Feb
Mar
Apr May
Jun
Jul
Aug
Sep
Oct
Nov
Japan
US
Germany
Source: Compiled by Panasonic, based on Google data
Google LLC“Google COVID-19 Community Mobility Reports”.
https://www.google.com/covid19/mobility/ Accessed: 2020.12.15
Exhaust
(outside)
Air supply
(outside)
Temperature
control unit
Energy recovery
ventilator (ERV) unit
Air conditioner
Air supply
duct
Air supply
(to each room)
Exhaust duct
Exhaust
(from each room)
Example of solutions that merge air-conditioning and
indoor air quality functions in one
* Centralized temperature, humidity, and air ventilation (air cleanliness) control combining humid-
ity control unit, energy recovery ventilator (ERV) system, and air conditioning. To be launched in
April 2021 in the Chinese housing market.
Panasonic Annual Report 2020 About Panasonic
20
Changes in society
Panasonic’s initiatives
COVID-19 lockdowns and other restrictions have dis-
rupted supply chains and exposed their vulnerabilities.
There is now a greater awareness of the challenges sur-
rounding stable product supply, such as lower factory
operating rates or suspended operations caused by the
situation where employees have contracted the virus.
In addition, demand is rising for information and com-
munication infrastructure owing to higher volumes of data
network traffic as more employees work remotely and
make greater use of online services. The volume of goods
being distributed in society overall is also increasing due
to the accelerated uptake of e-commerce and food deliv-
ery services. The strains on, and labor shortages in, the
overall supply chain, including logistics facilities, are grow-
ing increasingly severe.
Meanwhile, the governments of China, Germany, and
France, among others, are hammering out economic
stimulus packages centering on subsidies for consumers
purchasing electric vehicles (EVs) in an effort to arrest the
slowdown and stagnation of economic activities caused
by COVID-19. These measures are driving demand for
EVs, whilst investment in the electrification of mobility is
also gaining momentum.
For customers dealing with management issues that
occurred at “Gemba” (operational frontlines) of man-
ufacturing, transportation, and selling sites, such as
disruptions to parts supply networks, we intend to pro-
vide solutions aimed at rebuilding their supply chains.
To help ease the burden on manufacturing, transpor-
tation, and selling sites brought about mainly by higher
volumes of distribution from e-commerce growth, we
will look to provide visualization and optimization solu-
tions with the use of sensing, robotics, and edge-de-
vice technologies.
Also, in the area of information and communication
infrastructure, we intend to provide production equip-
ment, materials, and devices that are supportive of
increases in data traffic and the accompanying evo-
lution of computing. Furthermore, we will step up our
offering of solution services that underpin stable data
center operations.
We will aim to make greater strides in developing
and supplying automotive cylindrical batteries to meet
stronger demand for EVs as a measure to combat cli-
mate change and as a measure backed by govern-
ments worldwide in response to COVID-19.
Examples of increased demand for data traffic and services
around the time of COVID-19
Manufacture
Transport
Sell
Digital
Supply Chain Management Software
Collect, Accumulate, Analyze, and Utilize Data
Products/
services
Marketing
information
Gemba
Consumer
Supply chain management solutions
Conductive polymer electrolytic
capacitors
Multi-layer circuit board
materials
9 ISPs*
(Japan)
Fixed broadband
50% increase in total download traffic
AT&T (US) 22% increase in network traffic
Amazon
26% YoY increase in net sales (incl. cloud
business sales)
Netflix
Quarterly increase of 15.77 million paid
subscribers
(increase of 127% vs. previous year’s average
quarterly increase)
Zoom
30 times more meeting participants per day
* Internet service providers that offer fixed broadband services surveyed by
the Ministry of Internal Affairs and Communications
Source: Compiled by Panasonic, based on publicly available information
Examples of incentives for purchasing EVs
China
Extension of time frame on subsidy for NEV
purchases
Targeted ban on sale of fossil fuel vehicles
Germany
Increase in subsidy for EV purchases
Extension of time frame on EV tax relief
France
Increase in subsidy for EV purchases
Increase in subsidy for EV/PHV replacement
purchases
Source: Compiled by Panasonic, based on JETRO data
Automotive cylindrical batteries
Panasonic Annual Report 2020
あらゆる企業活動を通じてSDGs達成に貢献
2. 責任ある事業活動の推進
1. 事業活動による価値提供
3. 会社と社員による社会貢献
事業活動を支え、価値を生み出す
当社のテクノロジーや知見を生かし、人々のくらしや社会、
誰もが活き活きとくらす「共生社会」
プロセスにおいて、企業の社会的責
地球環境のサスティナビリティに貢献するイノベーティブ
の実現に向けて、企業市民活動で
任（CSR）を果たします
な商品やサービス、ソリューションを提供していきます
お役立ちをします
21
About Panasonic
Initiatives for SDGs
ブランドスローガン
ステークホルダーとの協働・共創
経営理念
（企業は社会の公器、事業活動を通じて社会に貢献する）
At Panasonic we are working to solve issues in society through our wide-range of corporate activities. For more details,
please refer to “Initiatives for SDGs” on our website.
Contributing to the achievement of the SDGs
through a wide range of corporate activities
2. Responsible business conduct
1. Providing value through business activities
We will fulfill our corporate social
responsibility (CSR) in the process
of creating value and supporting
business activities.
Utilizing our technologies and knowledge, we will
provide innovative products, services and solutions
that will contribute to the sustainability of people’s
lives, society and the global environment.
3. Social contributions by the
company and employees
We will provide a social impact
through corporate citizenship
activities toward the realization
of an “inclusive society” where
everyone can live an active life.
Brand Slogan
Collaborations and co-creation
with various stakeholders
Management Philosophy
Contributing to society through business activities as a public entity
1. Providing value through business activities
The following are excerpts of the policies and initiatives discussed by the CEO of each Divisional Company introduced
on our website.
Appliances Company
We aim to help customers to attain a healthy mind and body by creating new value with home appliances and associ-
ated services. We bring convenience, comfort, beauty, and enjoyment to people’s lives worldwide mainly in the areas
of housekeeping, cooking, and beauty care. Particularly in the midst of the spread of COVID-19 infections, we are con-
tributing greatly to the creation of clean spaces and improvements in public hygiene centering on our clean air tech-
nologies. Also, in the area of lifestyle infrastructure, we are helping to decarbonize economies and contribute to safer,
more comfortable lifestyles by developing environmentally-conscious equipment that use hydrogen energy and natu-
ral refrigerants, as well as control systems and services powered by IoT and AI.
Life Solutions Company
We aim to provide spatial solutions that support both human well-being and environmental sustainability through the
pursuit of human-centered comfort. More specifically, we employ software to update entire buildings in addition to
physical renovations to lighting, ventilators, wiring devices, and so on. Together with our partner companies, we aim
to harness the electric equipment control technology we have cultivated thus far to keep abreast with the needs of
each building through its entire lifespan and optimize the comfort of the space around each individual according to the
setting, time of day, and other factors.
Connected Solutions Company
We leverage the insight and expertise Panasonic has cultivated through manufacturing, as well as our strength in
edge technologies including image sensing, robotics, AI, and IoT, to create process innovations that streamline man-
ual, ad hoc tasks in the supply chain encompassing manufacturing, logistics, and retail operations. By delivering
“Gemba Process Innovation” at the respective stages where things are made, shipped, or sold, we aim to achieve
operational efficiency for our customers, reduce energy use and losses from waste, and increase worker productivity.
In this way, we hope to solve societal issues and provide sustainable value.
Panasonic Annual Report 2020 About Panasonic
22
Automotive Company
The automotive industry is currently undergoing revolutionary change symbolized by the acronym CASE: Connected,
Autonomous, Shared, and Electric. We do business in a wide array of fields, including in-vehicle infotainment (IVI) sys-
tems, advanced driver assistance systems (ADAS), automotive mirrors, and automotive electrification systems, such
as automotive batteries. We offer devices and solutions that are engineered to enhance safety and comfort during
travel and reduce driver burden and environmental impacts. We contribute to the SDGs through the realization of safe
and environmentally sustainable mobility in partnership with automakers.
Industrial Solutions Company
In the fields of ICT infrastructure, automotive CASE, and smart factories, we aim to help customers overcome
challenges when addressing such megatrends as climate change and a labor force decline. By providing devices
that embrace the development of ICT infrastructure through energy conservation, devices that contribute to bet-
ter energy-saving and safety performance of EVs, and networking devices that reduce factory labor, our goal is
to help customers achieve the SDGs, and by extension, overcome social challenges.
China & Northeast Asia Company
We strive to positively contribute to Chinese society through our business by providing solutions that support healthy,
comfortable living for the region’s aging population. With the aim of helping people in China live longer healthy lives
by utilizing the know-how we accumulated in Japan, we are building a Wellness Smart Town for seniors with a local
partner. Moreover, we have already launched sales of our fresh food cold chain solution, which reduces food losses,
converts those losses into higher income for people in rural and fishing villages, and also improves food quality and
safety. Through this service, we aspire to contribute to healthier and more comfortable living.
US Company
We have two core business segments: (1) supplying lithium-ion batteries to EV maker Tesla, Inc.; and (2) Hussmann
Corporation, a refrigeration systems and display case provider. The former plays a part in popularizing EVs by supply-
ing high-capacity batteries and also tackles the issue of climate change by furthering the uptake of clean energy. The
latter, Hussmann Corporation, aims to help customers achieve reliable cold chain operations and lower their envi-
ronmental footprint primarily by reducing energy and labor costs with IoT and promoting environmentally-conscious
equipment. And as an incubation business, the US Company is looking to help solve social issues in the US by rolling
out an IoT-driven information platform that will deliver safe urban road infrastructure.
2. Responsible business conduct
Messages from the head of each corporate function can be found on our website. Related content is also published in
this Annual Report.
Reference: Related content in Annual Report 2020
Environment
Message from the Environmental
Compliance Administrator
Procurement CSR Procurement
Human
Resources
Message from the CHRO
Legal and
Compliance
Corporate Governance Structure and
Initiatives
3. Social contributions by the Company and employees
Alongside business activities, we also aim to contribute to the SDGs by joining hands with employees to carry out corpo-
rate citizenship activities. Details on these initiatives are available in the message from the Chief Brand Communications
Officer on our website.
Please refer to the following website for detailed examples of our initiatives on the SDGs.
https://www.panasonic.com/global/corporate/sustainability/sdgs/case-study.html
Panasonic Annual Report 2020 23
Strategies of Functions to Support Our Business
Message from the CFO
Steadily advancing Mid-term
strategy initiatives with emphasis
on return on invested capital and
an awareness of financial discipline
under our capital allocation policy
Capture business opportunities
arising from social changes
brought on by COVID-19
Hirokazu Umeda
Director
Managing Executive Officer /
CFO
Basic approach to capital policy and
Mid-term strategy
Our basic approach to capital policy emphasizes return on
invested capital and financial stability, and we endeavor to
consistently generate returns in excess of the expected
rate of return in the capital market. In addition, we are
working hard to build a robust financial base so that we
can push ahead with our business structural reform and
investment in growth necessary for improving profitability.
In terms of return on invested capital, we are aiming
to stably achieve ROE of at least 10% on a Company-
wide basis in an effort to generate returns that exceed
the cost of stockholders’ equity over the medium to long
term. As for financial stability, alongside the expansion of
Panasonic Corporation stockholdersʼ equity driven by the
accumulation of net profit, we are undertaking initiatives
with a focus on financial discipline in line with our capital
allocation policy. To be more specific, the funds needed
for mainly investments, structural reforms, and dividend
payments will, in principle, come from cash flow (oper-
ating cash flow, divestitures) generated by businesses.
That said, so that we can aptly respond to growth oppor-
tunities, we will respond flexibly to one-off demand for
capital for an M&A deal, for example, whilst taking into
account the balance of funds over the medium term.
Guided by this basic approach to capital policy, as
part of our business portfolio reform—one key pillar in
the Mid-term strategy—in addition to enhancing com-
petitiveness of individual businesses, we are focusing
on the efficiency of our balance sheet and the improve-
ment of cash flow from a financial point of view. To this
end, we apply rate of return on invested capital (ROIC)
as a marker of return on overall invested capital in each
Divisional Company and Business Division when under-
taking comparison with competitors, portfolio manage-
ment, and investment decision-making.
Another key pillar in the Mid-term strategy is the
enhancement of our management structure, thus, with
the objective of realizing a profit contribution of 100 billion
yen in fiscal 2022, we are working to reduce fixed costs by
mainly reducing personnel costs and indirect operations,
as well as integrating sites. We are also rolling out radi-
cal measures to deal with businesses that have loss-mak-
ing structures. Even if these initiatives are impacted by
changes in the operating environment, as CFO, I will
seek to manage their overall progress and steadily work
towards reaping the benefits of improved profitability.
Fiscal 2020 review
Earnings and financial situation
In fiscal 2020, both sales and profit decreased due to
weak capital investment demand in China resulting from
US-China trade friction, as well as lower sales caused
by the spread of novel coronavirus disease (COVID-19
Panasonic Annual Report 2020
Strategies of Functions to Support Our Business
24
impact). Nevertheless, we were able to make progress
on initiatives towards breaking away from a low-profitabil-
ity structure, including business portfolio reform and man-
agement structure enhancement.
In particular, for our business portfolio reform, we
ramped up our co-creation initiatives to enhance our busi-
ness competitiveness. We established two joint ventures
with an external partner—one in the automotive pris-
matic battery business and the other in the town develop-
ment business, and formed a strategic capital alliance in
the security systems business. And to enhance our man-
agement structure, we achieved profitability improve-
ments of approximately 20 billion yen by reducing fixed
costs, and we have firmly set the direction for those busi-
nesses having loss-making structures by mainly deciding
to transfer the semiconductor business and end produc-
tion in the LCD panel business.
ROE, a Company-wide target of return on invested
capital, decreased to 11.5% compared to the previous
fiscal year, but it remains stably above the 10% level by
achieving the average of 12.5% over the past five years.
In terms of financial stability, Panasonic Corporation
stockholdersʼ equity was 1,998.3 billion yen as of end-fis-
cal 2020 through the accumulation of net profit; the ratio
of Panasonic Corporation stockholdersʼ equity rose from
31.8% last fiscal year to 32.1%. Moreover, free cash flow
improved considerably this year, increasing to +224.2 bil-
lion yen year on year compared to +10.3 billion yen last
fiscal year. This owed to profit decrease being offset by
mainly a reduction in working capital due to inventory
reductions, strict control of investments, business port-
folio reform, and sale of assets. The improvement in
our financial position is also evident in net cash, which
improved by 393.6 billion yen year on year to –419.5 billion
ROE
(Years ended March 31)
Panasonic Corporation Stockholders’ Equity to
Total Assets Ratio (Years ended March 31)
15.7
14.4
11.5
11.1
9.9
(%)
20
15
10
5
0
(%)
35
30
25
20
15
10
5
0
26.3
26.3
27.1
31.8
32.1
3/’16
3/’17
3/’18
4/’19
3/’20
3/’16
3/’17
3/’18
3/’19
3/’20
Free Cash Flows
(Years ended March 31)
(Billions of yen)
250
200
150
100
50
0
-50
224.2
125.6
10.3
3/’16
-34.8
3/’17
-35.6
3/’18
3/’19
3/’20
Dividends (Dividends declared per share)
(Years ended March 31)
(Yen)
40
30
20
10
0
30
30
30
25
25
3/’16
3/’17
3/’18
3/’19
3/’20
Panasonic Annual Report 2020
25
Strategies of Functions to Support Our Business
Message from the CFO
yen (–152.6 billion yen excluding lease liabilities*). This is
partly attributable to the decrease in lease liabilities that
resulted from the deconsolidation of Panasonic Homes.
As for returning profits to shareholders, even though
net profit attributable to Panasonic Corporation stockhold-
ers decreased year on year, the Company distributed a
dividend of 30 yen per share (unchanged from last fiscal
year) in accordance with its dividend policy.
*Lease liabilities
Following the application of IFRS 16 beginning in fiscal 2020, leases (as les-
see) previously recorded as expenses are booked on the balance sheet as
either right-of-use assets that represent a right to use an underlying asset
over the lease term or lease liabilities that represent a lease payment obliga-
tion (lease liabilities are recognized as interest-bearing debt).
Measures to strengthen financial base
In fiscal 2020, we made efforts to diversify our fund-
ing sources and strengthen our funding base through
domestic and foreign capital markets; we issued senior
notes denominated in U.S. dollars for the first time in 27
years with the aim of accessing overseas markets which
encompass a broad range of investors, and we also issued
domestic bonds mainly for the partial refinancing of bond
redemptions.
Also, with the aim of facilitating smooth financing,
we have taken steps to better communicate Panasonic’s
credit story. Our initiatives include; organizing IR activities
for bond investors not only at the time of bond issuance,
but also on a regular basis, and deepening our discussions
with credit rating agencies primarily about how we are
improving profitability, our approach to financial discipline,
and our medium- to long-term strategies.
In terms of cash, through to the end of fiscal 2020, the
Company had secured over 1 trillion yen in cash and cash
equivalents in preparation for the risk of potential deterio-
ration in the financial and economic environment brought
on by the gradual spread of COVID-19. On top of this,
Panasonic entered into commitment line agreements
in June 2018. The upper limit for unsecured borrowing
based on the agreements is a total of 700.0 billion yen,
but there have been no borrowing under these agree-
ments, and we have secured sufficient liquidity.
Credit Ratings (as of August 31, 2020)
Ratings agency
Long-term
(Outlook)
Short-term
Rating and Investment
Information
A (Stable)
Standard & Poorʼs
A- (Negative)
Moodyʼs
Baa1(Negative)
a-1
A-2
—
Initiatives in fiscal 2021
Priority initiatives
Sales and profit are expected to decrease in fiscal 2021
due to the impact of COVID-19, as well as deconsolidation
effects from our business portfolio reform. Considering
that sales and profit started to improve in June, we antic-
ipate a moderate improvement from the second quar-
ter onwards. At the same time, we expect the COVID-19
impact will likely remain in the second half and affect our
businesses for the aviation, housing-related, and automo-
tive industries.
Despite this highly uncertain business environment, we
aim to steadily execute the key initiatives in our Mid-term
strategy; namely, business portfolio reform, improvement
of profitability for automotive-related business—which is
positioned as a Revitalization business—and enhance-
ment of management structure. We will also push ahead
with measures to improve profitability and get profit back
on a growth trajectory by stepping up efforts to capture
business opportunities brought on by changes in society
as a result of the COVID-19 pandemic.
To drive forward our business portfolio reform, we
will continue to collaborate with partners on co-cre-
ation initiatives and enter into strategic capital alliances.
Meanwhile, in order to propel the strategic shift of mana-
gerial resources, we will also aim to execute investment
in growth whilst taking into account our capital alloca-
tion policy. As a concrete example, in the Gemba (opera-
tional frontlines) Process business—which we consider
to be a Core growth business—we have made a stra-
tegic equity investment in Blue Yonder, a leading end-
to-end supply chain software provider. To complement
the hardware we already possess in the Gemba Process
business, this investment will enable us to bolster the
functions, such as software and consulting capabilities,
needed by our solutions businesses and drive growth in
recurring business as a platform for stable earnings. We
will also accelerate the transformation of our business
model, and deliver results.
From my standpoint as CFO, I will continue to thor-
oughly manage the progress of initiatives geared towards
improving profitability in automotive-related business and
enhancing our management structure.
Large-scale investments in automotive-related busi-
ness have driven sales growth thus far, but we have
struggled to convert this into profit growth, which is why
a turnaround in profitability is such a pressing issue. In
Automotive Solutions, we took steps to enhance the
management structure ahead of schedule and develop-
ment expenses in particular have started to decline after
peaking in fiscal 2020. We will also ramp up our efforts
Panasonic Annual Report 2020
Strategies of Functions to Support Our Business
26
to reduce fixed costs in an effort to return to profitabil-
ity in this business as soon as possible. In Automotive
Batteries, we aim to achieve sustained profitability by
improving productivity at our North America factory for
cylindrical batteries and aim to further boost profitability
with the introduction of new technology. We have also
decided to invest in the expansion of production capacity
through to fiscal 2022. Up ahead, decisions on investment
will be made after thorough assessment of profitability.
Regarding the enhancement of our management
structure, we will endeavor to further reduce costs with
a focus on fixed costs, and look to reap the benefits of
approximately 30 billion yen, which is more than what we
initially targeted. We will also step up efforts to eliminate
those businesses having loss-making structures and aim
to generate profit improvements of 15 billion yen mainly
in the semiconductor business, notwithstanding the neg-
ative impact of COVID-19. Based on these measures, we
intend to steadily achieve profit contributions by more
than 100 billion yen by the end of fiscal 2022, the final
year of our Mid-term strategy.
In terms of the business opportunities brought on by
changes in society as a result of the COVID-19 pandemic,
we expect to see greater investment in information- and
communication-infrastructure (base stations, servers,
etc.) driven by sharp growth in network demand as peo-
ple refrain from going out and choose to work remotely,
as well as stronger demand for air purifying and air con-
ditioning systems because of heightened interest in pub-
lic health and as more people choose to stay home.
Panasonic will develop products and services and invest
in expanded production capacity. For example, storage
battery systems and conductive polymer capacitors in
the area of information and communication infrastruc-
ture, as well as spatial sterilizing/deodorizing equipment
using sodium hypochlorite (Ziaino) as an effective way to
reduce airborne bacteria and virus particles and air condi-
tioners in the air-conditioning and air quality field.
Initiatives for generating cash flow
In fiscal 2021, in addition to securing profits, we aim to
keep improving inventory and working capital and be
more discerning with the investments we make. We
will also aim to generate free cash flow in excess of net
profit levels by executing strategic investments within the
scope of revenue generated by business portfolio reform
and the sale of assets.
Going forward, in aiming to steadily advance our Mid-
term strategy, we will engage in financial management in
a well-focused manner whilst securing capital necessary
for growth by generating cash flow.
Putting our management philosophy into
action and aiming to enhance corporate value
Since its foundation, Panasonic has undertaken business
activities based on the philosophy: “A company is a pub-
lic entity of society.” At present, the impact of COVID-
19 remains unpredictable and the future outlook for the
financial and economic environment is still unclear. We
believe, however, that over the medium to long term, it
is our duty to help find solutions to various social issues
through our business activities, including those trig-
gered by societal changes in response to the pandemic,
and that doing so is necessary if we are to enhance sus-
tainable growth and corporate value. We also recognize
that our actions can contribute to the attainment of the
Sustainable Development Goals (SDGs) —an agenda the
international community has its sights set on achieving.
Also, we have long positioned ESG as one platform that
underpins our business activities in the context of aiming
to enhance corporate value in a sustained manner. Until
recently, Europe had been a pioneer of ESG investment,
but now the rest of the world, including Japan, is stress-
ing the importance of ESG as a source of non-financial
information on which investment decisions can be based.
As a result, opportunities for ESG-themed dialogue with
shareholders and investors are on the rise. Up until now,
Panasonic had communicated its views on ESG and mes-
sages from managers of ESG-related departments, but
going forward, so that investors can gain a better under-
standing of how we incorporate ESG into the value cre-
ation process, we intend to disseminate information about
ESG in an integrated manner with updates about our busi-
ness and management activities and actively engage in
dialogue with investors regarding ESG.
The situation of COVID-19 prevents us from communicat-
ing face to face with shareholders and investors at this
time, but for financial announcements and one-on-one
meetings, we are currently switching to virtual methods
(conference calls, online meetings, etc.) in light of effi-
ciency and convenience. We will continue to make every
effort to deepen the understanding of investors about our
initiatives on management reforms and utilize their feed-
back in management operations. I look forward to your
continued support of Panasonicʼs endeavors in the future.
Link to Initiatives for SDGs
https://www.panasonic.com/global/corporate/sustainability/sdgs.html
Panasonic Annual Report 2020
27
Strategies of Functions to Support Our Business
For Profit Growth and Profitability Improvement
Business Portfolio Reform
• In fiscal year ended March 31, 2020 (fiscal 2020), the first year of our new Mid-term strategy, we carried out initiatives for future
profit growth and improved profitability by implementing portfolio management. Specifically, we concentrated resources on Core
growth businesses with market growth potential where we can leverage our strengths. At the same time, in automotive prismatic
batteries, town development, and security systems, we emphasized co-creation with partner companies aimed at enhancing our
competitiveness. Furthermore, we completed the direction of the loss-making businesses of semiconductor and LCD panel.
• In fiscal 2021 and beyond, we will continuously concentrate investments in Core growth businesses while enhancing compet-
itiveness through co-creation, as well as setting the direction of low-profit businesses, with the overall aim of breaking away
from low-profitability structure.
• In July 2020, we made a 20% strategic equity investment in supply chain software company Blue Yonder after reaching an
agreement to expand our strategic partnership with that company. By learning the advanced solutions and business models
that Blue Yonder provides globally, we will strengthen our solutions capabilities and accelerate our business transformation.
Progress of Key Initiatives
Implementing strategies for growth
(medium and long term)
To transform business model and build stable profit
pillars for the future (profit growth)
Security systems
Deploy the knowledge and experience we have gained through
our strategic capital alliance with Polaris, which has strong
investment power, with our technological strength and cus-
tomer base, to create a swift and flexible solutions business
Enhancing competitiveness through
co-creation (medium term)
To create new value with business partners
(profitability improvement)
Nov. 2019
Improving profitability (short term)
To eliminate businesses with loss-making
structures and set the direction for low-profit
businesses (structural reform)
• Announced decision on strategic capital alliance with
Polaris Capital Group Co., Ltd. (May 2019)
• Completed capital alliance process (November 2019)
Semiconductors
Partial transfer of discrete
semiconductor business
TVs
Discontinue production
in Mexico
Apr.
2019
Jul.
2019
• Announced decision on par-
tial transfer of discrete semi-
conductor business to ROHM
Co., Ltd. (April 2019)
• Partial transfer completed
(December 2019)
• Announced decision to end
production in Mexico (July
2019)
• Currently promoting ongoing
structural reforms of entire TV
business
Panasonic Annual Report 2020 Strategies of Functions to Support Our Business
28
Because we cover multiple business fields, we believe achieving sustainable
growth requires self-reforms. This means day-to-day reforms of our business port-
folio. Accordingly, we regularly monitor all of our businesses while sharing and
discussing the status and direction of each business with the Board of Directors
and executive officers. Our top management members are united to promote the
reforms with speed as the top priority.
Eiichi Katayama
Managing Executive Officer
Chief Strategy Officer (CSO)
Jul. 2020
Gemba process
Strengthen software and consulting
capabilities to promote Gemba process
innovation in an integrated manner
• Announced decision on strategic
investment (20%) in supply chain soft-
ware company Blue Yonder (May 2020)
• Made strategic investment (July 2020)
Town development
Create value for the entire town as a whole
by combining the mobility services pro-
moted by Toyota and “Lifestyle Updates”
promoted by Panasonic
Automotive prismatic batteries
Combine the electric vehicle know-how and manu-
facturing capability of Toyota with our high-quality,
high-safety battery technologies, mass production capa-
bilities, and customer base to develop the No.1 auto-
motive prismatic battery in the industry
Jan. 2020
Apr. 2020
• Announced decision on joint venture with
Toyota Motor Corporation to engage in
town development business (May 2019)
• Established Prime Life Technologies
• Announced decision on joint venture with
Toyota Motor Corporation to engage in automo-
tive prismatic battery business (January 2019)
• Established Prime Planet Energy & Solutions,
Corporation (January 2020)
Inc. (April 2020)
Semiconductors
Transfer business to
Taiwanese company
LCD panels
Discontinue in-house
production
Lighting
Transfer shares in European
lighting device company
Solar panels
Wind down U.S.
manufacturing in Buffalo
Nov.
2019
Nov.
2019
Feb.
2020
Feb.
2020
• Announced decision on trans-
fer of semiconductor busi-
ness (November 2019)
• Business transfer completed
(September 2020)
• Announced decision to end
LCD panel production by
2021 (November 2019)
• Announced and completed
• Announced decision to end
transfer of shares in European
lighting device company
(February 2020)
production at plant in Buffalo,
United States (February 2020)
• Production suspended (end
of June 2020); withdrawal of
business scheduled (end of
September 2020)
Panasonic Annual Report 2020 29 Strategies of Functions to Support Our Business
Message from the CTO/CMO, and Technology Introduction
Supporting next-generation
growth through innovation
and rapid commercialization,
and contributing to the
realization of a sustainable
society
Yoshiyuki Miyabe
Senior Managing Executive Officer
Chief Technology Officer (CTO)
Chief Manufacturing Officer (CMO)
R&D and innovation strategies
At Panasonic, we are engaged in R&D and strategies that
create innovation with an eye to the future so that we can
keep contributing to “A Better Life” and “A Better World”
through our business activities.
Looking at the business environment that envelops
the Company, the spread of novel coronavirus disease
(COVID-19) in 2020 had an enormous impact worldwide,
which in turn triggered the rapid adoption of measures
in the virtual world, such as teleworking, online learning,
and remote medical care. The evolution of digital technol-
ogy is currently having a profound effect on the real world
and we continue to carry out our own historic changes
and create innovation with the goal of turning the unprec-
edented challenges brought on by COVID-19 into the cor-
nerstone of our development.
The Science and Technology Basic Plan drafted by the
Cabinet Office of Japan calls for “Society 5.0,” a new future
society that Japan should aspire to. The concept incorporates
IoT, robots, artificial intelligence (AI), and other cutting-edge
technologies to provide goods and services that meticulously
address a diverse range of needs, thereby aiming to realize a
society that balances economic development with solutions
to the issues it faces. Digitalization and the uptake of IoT is
taking place in a multitude of fields as the world we live in
rapidly transitions from an industrial society to an informa-
tion society, and then finally to a super-smart society advo-
cated for by Society 5.0. We expect these changes in society
to gather increased momentum up ahead as a result of the
spread of COVID-19.
To survive when faced with dramatic change, we must
transform our overall business process so that we remain in
step with the times. Previously with mass production, prod-
ucts 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 will be able to continue offering contributions by main-
taining the connection between manufacturer and customer
through products and services even after shipping.
To this end, simply aiming to have most of our customers
feel completely satisfied when providing a product or service
is unlikely to be good enough. We feel that we must offer
ways to update these products and services while they are
still being used so that they become the “most suitable” for
each and every customer. In a sense, this is an attempt to
rebuild the traditional bonds between a neighborhood store
and its community in a way that the current times demand.
By moving quickly to build and expand the software-hard-
ware integrated business model unique to the manufacturing
industry, we will aim to leverage our broad-ranging techno-
logical and manufacturing capabilities accumulated thus far
to create value for our customers.
On top of this, we will also need to drastically change our
approach to product quality so that it aligns with our business
process. If we are to provide updates to products and ser-
vices after they have been sold and delivered to customers,
we will most likely need to continuously meet the after-sales
requests of customers with a level of quality that exceeds
that at the time of original delivery. We intend to steadily work
on building such a system going forward.
In addition, we will be required to change the very way
we engage in technological development. In times when
our target customers were the general public, we were
Panasonic Annual Report 2020
Strategies of Functions to Support Our Business
30
expected to have the technology to mass produce “per-
fect” products. However, in the age of IoT it is possible
to target a “specified and large number” of customers,
so in order to reach out to a certain customer segment
and deliver value, having a framework that is conducive
to speed and co-creation with external partners will be
paramount. In other words, we must reinvent our tech-
nological development and manufacturing processes.
Demanding perfection from engineers from the outset,
as was the case in the past, actually impeded innova-
tion because of the restrictions they had to work under.
To foster a culture that is always innovative, we must be
ready to purposefully allow “imperfection” going forward.
For example, if we quickly release a trial product to our
customers, we could then go about further improving it
together with customers.
In 2017 we established a Business Innovation Division
and since then we have pushed ahead on creating a culture
of innovation by setting up flexible and cross-sectional orga-
nizational units. Then in 2020 we set up a Lifestyle Business
Strategy Division under the direct control of Panasonic
Headquarters with the aim of creating a forward-thinking,
user-oriented services businesses. Possessing business
strategy and corporate management know-how, as well as
Company-wide, cross-sectional collaboration functions for
technologies and products, this Division has in place a struc-
ture capable of pursuing the launch of new businesses.
Under the umbrella of the Innovation Promotion Sector
we established a Technology Division. This Division brings
together the departments each tasked with technologi-
cal development of software as well as devices and other
hardware. Also, the Division will aim to deliver ongoing
updates in conjunction with our Lifestyle Foundational
Technology Center, which is responsible for develop-
ing the technological frameworks and systems geared
towards improving software. To go into more detail, the
Division will continue to focus mainly on AI-driven inno-
vation in digital technology, and innovation in materials
development, the sharpening of the competitive edge of
devices, and the development of sensing technologies,
robotics, and software, which meet customer needs. In
this way, it will support, from a technological standpoint,
our Gemba (operational frontlines) process and other ini-
tiatives to expand the contributions of our products and
services. Furthermore, we have newly established an
Energy Business Development Office to take charge of
creating new businesses centering on sources of energy
that contribute to the attainment of sustainable growth.
This office will look to undertake projects on a Company-
wide and cross-sectional basis.
We will advance our initiatives for technological develop-
ment and manufacturing to the next phase—namely, giving
shape to “Lifestyle Updates” and stregthening our software
business, and support the growth of next generation busi-
nesses through innovation and rapid commercialization.
R&D Outlook
Our brand slogan, “A Better Life, A Better World,” rep-
resents what we think to be our mission in society;
namely, creating a better life and contributing to the hap-
piness of people around the world, to the development
Bring “Updates” to Individual’s Lifestyle and Society
Autonomous Driving/Solutions
Energy Optimizations
Bringing inspiration to everyday life
Next-Generation Stores
and Facilities
Spending everyday life
Spending everyday life
actively and freely
actively and freely
Everyday life starts here
Integrating external
Integrating external
services into everyday life
services into everyday life
Improving Plant and
Logistics Efficiency
Please refer to “Technology & Design” on our website. https://www.panasonic.com/global/corporate/technology-design/vision.html
Panasonic Annual Report 2020
31 Strategies of Functions to Support Our Business
Message from the CTO/CMO, and Technology Introduction
Technological and manufacturing
capabilities accumulated in consumer
electronics
Since its establishment as a manufacturer of wiring
equipment in 1918, Panasonic has continued to expand
the scope of its business operations, mainly in the area
of consumer electronics. Our major strengths are the
wide-ranging technological capabilities and know-how
accumulated and refined through manufacturing that is
always conscious of our customers.
We have produced a multitude of products that make
society better and more convenient by skillfully combin-
ing and amalgamating advanced technologies in a wide
variety of fields, from visual/imaging and audio/voice to
mechatronics (mechanisms), materials/devices, and even
energy.
We cannot, however, produce superior products
through technological capabilities alone. Cutting-edge
manufacturing capabilities are indispensable in the utili-
zation of technology for improving performance, quality
and usability. For instance, know-how relating to coating,
molding, measurement, mounting, machine processing,
control, CAE (simulation) and quality control, as well as
the adjustment and integration of technologies that inter-
connect these processes. These manufacturing capa-
bilities are another major strength that Panasonic has
cultivated, and their importance will remain unchanged
even in the era of AI, IoT, and robots.
At Panasonic we have two key strengths: technolog-
ical capabilities and manufacturing capabilities. The for-
mer spans a wide range of fields, while the latter enables
us to make products in a reliable fashion. By leveraging
these capabilities, we intend to promote innovation and
create new businesses that offer the “most suitable”
products and services to each and every customer.
of society, and to the future of the globe. This thinking is
also consistent with our approach to the development of
technology, which is why we are formulating a course of
action for R&D that is focused on future businesses so
we can contribute to a better life and better world and
continually create technology that brings “Updates” to
individual’s lifestyle and society.
We have identified the following three key areas in
which we will rise to the challenge of continuing to pro-
vide contributions, or in other words, bringing “Updates”
to individual’s lifestyle and society, by further evolving
the technologies we have honed thus far and combining
them with AI and other digital technologies: (1) home—
the foundation of all lifestyles; (2) mobility—concerning
the movement of people and goods; and (3) business—
stores, facilities, plants, etc. which support people’s
lifestyles.
Contributing to the realization of
sustainable society
The industrial societies that developed as a result of the
industrial revolution provided the world with material
wealth and dramatically improved people’s livelihoods,
but at the same time they seriously affected the global
environment. We believe it is also our mission, in terms
of technological development, to use technology to find
solutions to the detrimental effects that technology has
brought on the environment. Not only do we adopt mea-
sures to conserve energy in our own operations, but we
have been engaged in the business of mainly fuel cells
and storage batteries, which contribute greatly to the
electrification of vehicles. Up ahead, we will work towards
realizing the Panasonic Environment Vision 2050 (Please
refer to “Message from the Environmental Compliance
Administrator.”), which mainly outlines our response to
climate change, by designing energy-saving products in
order to reduce the amount of energy used, by refining
battery technology and developing hydrogen energy tech-
nology, to further increase the energy created and its effi-
cient usage.
We are establishing global partnerships with each
supplier around the world. We will aim to establish fair,
impartial, and sustainable supply chains by sharing with
suppliers our values pertaining to not just economic
aspect, but also the environment, CSR, and relationship
with society. (Please refer to “CSR Procurement.”)
Panasonic Annual Report 2020 Strategies of Functions to Support Our Business
32
Examples of products that have
improved Panasonic’s technological
capabilities and manufacturing capabilities
Various technological capabilities we have hitherto
honed and developed in mainly visual, audio,
and optical fields
1927
Launches National Lamp
1950
Launches Company’s first
car radio
Visual/Imaging
Audio/Voice
Light
1952
Company’s first black &
white TV
1958
Launches Company’s first
household tape recorder
Connectivity/
Communications
Heat
(Thermal
Control)
Energy
1961
Launches first Matsushita
home
1963
Launches “National Hi-Top,”
world’s longest-lasting dry
cell battery
Mechatronics
(Mechanisms)
Materials/
Devices
IoT, AI, Usability
1968
Develops first “Panasert”
automated resistor mounting
machine
1978
Launches Panasonic’s first
compact office computer (PC)
Manufacturing capabilities in mainly coating, molding,
measurement, and mounting processes that
produce reliable and safe products
1988
Launches Panasonic’s
first electronic still camera
1996
Launches industry’s first
digital mobile phone
weighing less than 100 grams
2010
Begins mass production of
HEV lithium-ion batteries
2017
Develops facial recognition
gate, put into operation at
Tokyo International Airport
Coating
Molding
Measurement
Mounting
Machine
Processing
Control
CAE
(Simulation)
Quality
Panasonic Annual Report 2020 33 Strategies of Functions to Support Our Business
Message from the CTO/CMO, and Technology Introduction
Technology Introduction
Achieving a safe and secure society in the IoT era by
enhancing industry-leading Cybersecurity technology
Panasonic has led many aspects of security technology
for more than 30 years, including encryption, authentica-
tion, and tamper resistance to prevent hacking of audio
visual products and connected appliances.
In the era of the Internet of Things (IoT), Cybersecurity
has rapidly grown in importance as a way of safeguarding
PC and IT systems. We are evolving our security technol-
ogy further in the IoT Cybersecurity field for application in
factories, buildings, automotive solutions, and homes.
Growing threat of cyber-attacks
The number of observed cyber-attacks are increasing
and half of such attacks targeted IoT devices in 2019
(see figure below). The World Economic Forum pub-
lished its “The Global Risks Report 2019,” highlighting
cyber-attacks against key infrastructure and data fraud/
theft as “global risks” likely to cause serious damage
throughout the world in the next decade.
Under such circumstances, we are also anticipating
a greater Cybersecurity risk in our business area. For
example, in the smart factory and smart building area,
network-based operations heighten Cybersecurity risk.
In the automotive area, connected vehicles and driving
assistance systems, including ADAS functionality, con-
tribute to fewer traffic accidents, however, their vulner-
abilities allow unauthorized remote operations, which
can lead to recalls. These types of cars require security
countermeasures in our business area.
Panasonic Cybersecurity initiatives
For more than 30 years, Panasonic has led many aspects
of security technology, including encryption, authentica-
tion, and tamper resistance to prevent hacking of audio
visual products and connected appliances.
Recently, Panasonic has focused more on IoT
Cybersecurity technology such as connected factories,
buildings, automotive solutions, and homes. This technol-
ogy monitors data flow over networks to judge abnormal
behavior as a cyber-attack by utilizing cutting-edge AI, and
prevents not only known attacks, but also unknown attacks.
Number of observed cyber-attacks by
NICTER’s darknet sensor*
Breakdown of observed cyber-attacks by
NICTER’s darknet sensor
327.9
Other
(other than the top 30 ports)
37.4%
Attacks targeting IoT
equipment (web cameras,
routers, etc.)
48.8%
212.1
150.4
128.1
2019
Packets (billions)
350
300
250
200
150
100
50
0
54.5
25.7
2014
2015
2016
2017
2018
2019
* NICTER (Network Incident analysis Center for Tactical Emergency Response) is
a network for monitoring cyber-attacks, operated by the National Institute of Information
and Communications Technology (NICT)
Source: Cybersecurity 2019, Cybersecurity Strategic Headquarters of the Japanese government
Attacks targeting
databases
1%, and others
Attacks targeting
encrypted assets
2%
Attacks targeting
Windows OS
9%
Panasonic Annual Report 2020
Strategies of Functions to Support Our Business
34
We are currently conducting proof of concept (PoC) on
multiple fronts to analyze huge data logs and to detect
abnormalities. Our incident response team demonstrates
the capability to discover security holes before attacks
occur and minimize damages even if an incident has
occurred in the PoC.
We are moving towards the commercialization of
IoT Cybersecurity technology by improving capabilities
through these PoCs with Mori Building Co., Ltd. and
Tokyo Tatemono Co., Ltd. in smart buildings and remote
automotive monitoring field trials with mobility partners.
Highly recognized security technology
Panasonic Cybersecurity technology has been highly
recognized in the industry. We presented our research
achievements at the world leading automotive security
conference “escar” and the ICS security conference “S4”
in 2015, 2017, and 2019. In 2020, our research was pre-
sented at “Black Hat,” the most prominent Cybersecurity
conference since 1997. These achievements show
that Panasonic commands the leading position in the
Cybersecurity industry.
Panasonic aims to provide “Lifestyle Updates” that
deliver the best option to every customer by continu-
ously improving our products and services after sale. We
position Cybersecurity technology as a core technology
that supports our “Lifestyle Updates” in many business
areas such as factories, buildings, automotive solutions,
and homes. This technology is not only applied to our cur-
rent products or services, but also provides innovative
Cybersecurity solutions to customers, such as “security
consulting services,” “security monitoring services,” and
“intrusion detection software,” which contribute to a safe
and secure society in the era of IoT.
Panasonic initiatives in Cybersecurity Solutions
Accomplishments in security technologies
AV Products
ICT Devices
HEMS
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)
Continuously updated
IoT Cybersecurity Solutions
• Security consulting
• Security monitoring services
• Intrusion detection software
Monitor
Update
Factories
Automobiles
Buildings
Homes
Protect
Panasonic Annual Report 2020
35 Strategies of Functions to Support Our Business
Message from the CHRO
“Become the Best
Place to Work”
where diverse talents work
at their best
Shigeki Mishima
Executive Officer
Chief Human Resources Officer (CHRO)
“Develop people before making products.”
That is what Panasonic founder Konosuke Matsushita
used to say when expressing his views about human
resources. This very philosophy underpins Panasonic’s
people-oriented approach, and based on this thinking, we
believe it is our mission to spearhead business challenges
through the development of people, organizations, and
corporate culture. To this end, and as part of our human
resources strategies, we aim to “Become the Best Place
to Work” where diverse talents work at their best with the
greater goal of realizing our brand slogan “A Better Life, A
Better World.”
The environment surrounding human resources
and the type of employees we seek to develop
The environment surrounding human resources has changed
dramatically in recent years. One factor behind this change
is the remarkable evolution of technology capable of replac-
ing labor, such as AI and robotics, in response to the antic-
ipated worldwide decline in the working-age population as
a percentage of overall population. Furthermore, an era in
which more people will likely live to the age of 100 is fast
approaching with life expectancies in mainly developed coun-
tries continuing to increase. As such, prolonged careers and
diversified personal values toward working are constantly
progressing. And these environmental changes have inten-
sified all at once as a result of the COVID-19.
As we respond to such changes and adopt the right
human resources strategy required for this new age, we
must also successfully deploy a business strategy aimed at
transforming our business model from one traditionally cen-
tered on products to one that delivers “Lifestyle Updates”
and shifts “from hardware to experience.”
Accordingly, we believe the type of employees required
in this new era are those that can achieve higher levels of
self-sustaining growth and fully maximize their wide-rang-
ing capabilities. In order to nurture such human talents, the
Company must provide an environment in which each indi-
vidual employee can play an active role. This kind of relation-
ship between the Company and its employees is the source
of corporate competitiveness and I believe it enables us to
continually deliver new value to society.
Human resources strategies linked to our
business strategy
At Panasonic we are currently driving forward a business
strategy aimed at transforming our business model into one
that delivers “Lifestyle Updates” and shifts “from hardware to
experience.” I believe autonomous management holds the key
to the success of this strategy, which will enable Panasonic—a
conglomerate of multiple businesses—to generate synergies
between various operations and achieve growth on a global
scale by addressing the needs of each industry.
To propel a business strategy based on this kind of auton-
omous management, I believe we must also focus on auton-
omy in our human resources strategies too. That means
moving away from our approach that up until now was cen-
tered on the combination of “Panasonic Corporation” and
“Japan,” to focus more on “business-based perspectives”
and “global regions.” As such, we need to formulate and exe-
cute competitive and unique human resources strategies for
each business and region. Accordingly, we intend to transfer
responsibilities to and increase empowerment in each oper-
ating company concerning human resources with our transi-
tion to a holding company system in April 2022 and promote
human resources strategies best suited to their respective
business strategies. On the other hand, Panasonic Holdings
Corporation will take on the role of vigorously supporting the
execution of human resources strategies to develop man-
agement executives, ensuring Group and global corporate
governance, and having Professional Services Corporation
enhance its consulting capabilities for strategies, measures,
and management of systems, as well as shared services
functions.
Panasonic Annual Report 2020 Strategies of Functions to Support Our Business
36
Appointing and developing management
executives—Business execution structure
and development of management executives
As for the appointment of heads of business, we are moving
away from the conventional idea of selecting a leader from
existing successor candidates and shifting to the idea of nom-
inating a person that is most qualified for the position (the
right person for the right job). In other words, we are aiming
to boost competitiveness by appointing the most suitable
people required in each business—all of which continue to
become more specialized and sharpened.
We are furthering the development of management exec-
utives that make up our portfolio of talents for heads of busi-
ness and each job function by discovering and hiring a diverse
pool of employees regardless of age, experience, national-
ity, or gender, and offering them the opportunity to handle
tough assignments*1. For example, taking responsibility for
PL, BS, and CF in specific businesses.
Regarding training for executive candidates, we are cur-
rently preparing the most appropriate programs from within
and outside the Company to suit the circumstances of partici-
pants and meet their individual needs. In fiscal 2021 we com-
pletely revamped the training curriculum and introduced such
programs as LEL (Launching Executive Leaders)*2 and CEL
(Creating Executive Leaders)*3, both of which place a par-
ticular emphasis on improving thoughts and behaviors that
lead to change. We are aggressively promoting the develop-
ment of management executives mainly by stimulating their
aspirations as management executives and offering them the
chance to acquire necessary management literacy via numer-
ous learning opportunities and friendly competition with par-
ticipants from various business fields.
As part of the process of appointment and development
of management executives with this approach, in October
2019 we undertook a review of our business execution
structure in order to realize a business structure that can
resiliently respond to volatile changes in the business envi-
ronment. This review aimed to clarify management roles and
responsibilities by reorganizing the structure into two groups:
executive officers tasked with leading the Group’s business
structural reforms from the perspective of Group-wide opti-
mization; and a business execution layer that will execute
the transformation of individual businesses with the aim of
strengthening their operations.
Furthermore, for the business execution layer, a core part
of Panasonic’s business management, tasked with improving
profitability and generating future competitive advantage in
their respective businesses, in fiscal 2021 we introduced a
compensation system that rewards results, demands clearer
accountability, and further encourages them to take up the
challenge of instigating change for the future.
Human resources development initiatives
As for Group-wide human resources strategies, in addition to
our business execution structure and development of man-
agement executives, we offer support to employees taking
on challenges, learning, and growing, as well as measures
aimed at creating safe and secure workplaces.
Regarding our support for employees taking on challenges,
learning, and growing, we continue to develop an interactive
personnel management called “A Better Dialogue” to bring
out the enthusiasm in each and every employee so they can
deliver results. At the same time, we are introducing a system
whereby employees can apply for new postings within the
Company and expand their areas of activity, and we are push-
ing ahead with concrete initiatives on organizational develop-
ment and diversity and inclusion with the aim of maximizing
the potential of individuals and organizations.
In creating safe and secure workplaces and guided by our
respect for human rights in line with our management philos-
ophy, we are once again reviewing our working styles and
personnel management in the midst of the COVID-19. At the
same time, we are making every effort to abide by compli-
ance guidelines.
*1 Tough assignment
Taking on a role that comes with a responsibility and is a completely dif-
ferent and tough experience for the individual. For example, a position that
involves responsibility for PL, BS, and CF, a position that involves being in
charge of planning and launching a new business, or a position that involves
leading structural reforms.
*2 Launching Executive Leaders (LEL)
Training that aims to provide management executives with the finishing touches
and firm resolve to comprehensively leverage their competency as thoughts
and behaviors that lead to change and put management principles into action.
*3 Creating Executive Leaders (CEL)
Training that aims to prepare management executives by equipping them
with self-awareness of the management skills to realize a customer focus,
strategic mindset, and reformation by leveraging management literacy.
Reforming the business management structure
• 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
for the right job
×
Selection of
junior generation
Previous
Executive Officers
Employees
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.
Assignment
Heads of Business assigned based on the right-person-for-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
Development
stage
Identification and acquisition
of diverse talents
Targets will be carefully selected
and reviewed
Diverse job experiences
Change role/position within five years
Panasonic Annual Report 2020
37 ESG as Our Management Foundation
ESG Initiatives (Opportunities and Social Responsibilities)
Since its foundation, Panasonic has endeavored to contribute to the progress and development of society and the well-being
of people through its business activities based on the thinking that as a public entity of society the Company must grow
together with society and its stakeholders. Konosuke Matsushita, the founder of Panasonic, listed the following three prin-
ciples when talking about corporate social responsibility: (1) to contribute to the development of society and people’s happi-
ness through our core business activities; (2) to generate fair profits from our business activities and return those profits to the
Main opportunities and
social responsibilities
Opportunity
Items that contribute to the enhancement of corporate value
Social
responsibility
Items that minimize the risk of damage to corporate value
Related information
This Annual Report
Other
Opportunity
Contribute to growth in businesses related to the environment and energy with the
use of clean technology, such as energy-saving, battery, and hydrogen technologies
Message from the Environmental Compliance Administrator (P55)
Sustainability Data Book
Focusing on energy and resources as a climate change measure
Energy
Social
responsibility
Combat climate change, including more stringent regulations mainly on energy
efficiency
Resources
Social
responsibility
Promote manufacturing to achieve a recycling-oriented society, including the recy-
cling of factory waste
Human resources
Opportunity
Contribute to business model transformation and the creation of new businesses
mainly through the development of management executives, the development and
the utilization of a diverse pool of human resources, and the creation of organizations
Corporate
citizenship activities
Opportunity
Work on solving social issues in a way that supplements Panasonic’s main business,
and contribute to business growth as well by enhancing brand value and tapping new
markets
Human rights and
occupational health
and safety
Social
responsibility
Abide by all labor laws and regulations, respect basic human rights, including the pro-
hibition of forced labor, child labor, and all forms of discrimination, and develop safe
and comfortable workplace environments
CSR procurement
Social
responsibility
Establish sustainable supply chains by working together with suppliers to promote pro-
curement activities that fulfill social responsibilities concerning mainly legal compliance,
human rights and labor issues, health and safety, and global environmental conservation
Product quality
Social
responsibility
Improve product quality and ensure product safety, observe product quality compli-
ance, and engage in optimal manufacturing for every product
Compliance
Social
responsibility
Establish a global infrastructure and foster a compliance culture, aimed mainly at
preventing the violation of competition laws and implementing the anti-bribery and
anti-corruption policy, and promote the use of a global hotline
Risk management
Social
responsibility
Identify key risks of the entire Group from among those that may affect business man-
agement, and strengthen Company-wide risk management through a process of eval-
uation and progress monitoring of the countermeasures by the Board of Directors and
making improvement based on that
Opportunity
Support timely and decisive decisions based on the decision-making functions of the
Board of Directors, and accelerate the development of mainstay businesses and port-
folio reform through flexible investments and appropriate risk taking
Corporate
governance
Social
responsibility
Minimize erroneous investment decisions and other risks by conducting objective
and multi-faceted examinations based on the supervisory functions of the Board of
Directors
Environment: Policy
Website
Initiatives for SDGs
Sustainability Data Book
System for the Promotion of CSR
Activities
Human Resources Development
and Promotion of Diversity
Respect for Human Rights
Occupational Health and Safety
Responsible Supply Chain
Raising Product Quality Levels and
Ensuring Product Safety
Fair Operating Practices
Risk Management
Website
Corporate Citizenship Activities
Initiatives for SDGs
Corporate Governance Report
Initiatives towards the Environment (P56-P58)
Environmental sustainability management / Energy-related initiatives /
Resources-related initiatives / Response to TCFD
Message from the CHRO (P35-P36)
Become the Best Place to Work
where diverse talents work at their best
Human Resources Initiatives (P59-P60)
safe and secure workplaces
CSR Procurement (P61-P62)
Supporting employee taking on challenges, learning, and growing / Creating
Procurement policy / CSR self-assessments / Responsible minerals procure-
ment / Environmental initiatives
Message from the Chairman of the Board (P41-P42)
Practicing our management philosophy based on ESG to achieve sustainable
growth and enhance corporate value
Messages from Outside Directors (P43-P46)
Directors, Audit & Supervisory Board Members, and Executive Officers
(P47-P48)
Corporate Governance Structure and Initiatives (P49-P54)
The Company considers corporate governance to be a key foundation for increas-
ing its corporate value and will continue strengthening governance, including
enhancing the discussion of business strategies by the Board of Directors
E
(
e
n
v
i
r
o
n
m
e
n
t
)
S
(
s
o
c
i
e
t
y
)
G
(
g
o
v
e
r
n
a
n
c
e
)
Panasonic Annual Report 2020
Main opportunities and
social responsibilities
Opportunity
Contribute to growth in businesses related to the environment and energy with the
use of clean technology, such as energy-saving, battery, and hydrogen technologies
Energy
Social
Combat climate change, including more stringent regulations mainly on energy
responsibility
efficiency
Resources
responsibility
cling of factory waste
Social
Promote manufacturing to achieve a recycling-oriented society, including the recy-
Human resources
Opportunity
mainly through the development of management executives, the development and
the utilization of a diverse pool of human resources, and the creation of organizations
Contribute to business model transformation and the creation of new businesses
Corporate
citizenship activities
markets
Opportunity
and contribute to business growth as well by enhancing brand value and tapping new
Work on solving social issues in a way that supplements Panasonic’s main business,
Human rights and
occupational health
and safety
Social
responsibility
Abide by all labor laws and regulations, respect basic human rights, including the pro-
hibition of forced labor, child labor, and all forms of discrimination, and develop safe
and comfortable workplace environments
CSR procurement
Social
responsibility
Establish sustainable supply chains by working together with suppliers to promote pro-
curement activities that fulfill social responsibilities concerning mainly legal compliance,
human rights and labor issues, health and safety, and global environmental conservation
Product quality
Social
responsibility
Improve product quality and ensure product safety, observe product quality compli-
ance, and engage in optimal manufacturing for every product
Compliance
Social
responsibility
Establish a global infrastructure and foster a compliance culture, aimed mainly at
preventing the violation of competition laws and implementing the anti-bribery and
anti-corruption policy, and promote the use of a global hotline
Risk management
Social
responsibility
agement, and strengthen Company-wide risk management through a process of eval-
uation and progress monitoring of the countermeasures by the Board of Directors and
Identify key risks of the entire Group from among those that may affect business man-
making improvement based on that
Opportunity
Board of Directors, and accelerate the development of mainstay businesses and port-
Support timely and decisive decisions based on the decision-making functions of the
folio reform through flexible investments and appropriate risk taking
Corporate
governance
Social
responsibility
Directors
Minimize erroneous investment decisions and other risks by conducting objective
and multi-faceted examinations based on the supervisory functions of the Board of
ESG as Our Management Foundation
38
nation and its people in various ways; and (3) to make every process of our corporate activities support the goal of a healthy
society. These principles now serve as the foundation of our ESG initiatives (Please refer to “Management Philosophy.”)
We consider ESG to be one of our management foundations that underpin the Company’s business activities and we will
therefore always aim to achieve sustainable increases in corporate value by identifying business opportunities and fulfilling
our social responsibilities.
Related information
This Annual Report
Other
Message from the Environmental Compliance Administrator (P55)
Sustainability Data Book
Focusing on energy and resources as a climate change measure
Initiatives towards the Environment (P56-P58)
Environmental sustainability management / Energy-related initiatives /
Resources-related initiatives / Response to TCFD
Environment: Policy
Website
Initiatives for SDGs
Sustainability Data Book
System for the Promotion of CSR
Activities
Human Resources Development
and Promotion of Diversity
Respect for Human Rights
Occupational Health and Safety
Responsible Supply Chain
Raising Product Quality Levels and
Ensuring Product Safety
Fair Operating Practices
Risk Management
Website
Corporate Citizenship Activities
Initiatives for SDGs
Corporate Governance Report
Message from the CHRO (P35-P36)
Become the Best Place to Work
where diverse talents work at their best
Human Resources Initiatives (P59-P60)
Supporting employee taking on challenges, learning, and growing / Creating
safe and secure workplaces
CSR Procurement (P61-P62)
Procurement policy / CSR self-assessments / Responsible minerals procure-
ment / Environmental initiatives
Message from the Chairman of the Board (P41-P42)
Practicing our management philosophy based on ESG to achieve sustainable
growth and enhance corporate value
Messages from Outside Directors (P43-P46)
Directors, Audit & Supervisory Board Members, and Executive Officers
(P47-P48)
Corporate Governance Structure and Initiatives (P49-P54)
The Company considers corporate governance to be a key foundation for increas-
ing its corporate value and will continue strengthening governance, including
enhancing the discussion of business strategies by the Board of Directors
Panasonic Annual Report 2020 39
ESG as Our Management Foundation
ESG Highlights
CO2 Emissions in Production Activities and CO2 Emissions per Basic Unit
(Million tons)
5.0
4.0
3.0
2.0
1.0
0
69%
2.23
(%)
100
80
60
40
20
0
3/’16
3/’17
3/’18
3/’19
3/’20
Volume of CO2 emissions (left scale)
CO2 emissions per basic unit (Calculated based on the fiscal year ended March 2014) (right scale)
Amount of In-house Renewable Energy Adoption
(10,000 MWh)
4.0
3.0
2.0
1.0
0
3.2
3/’17
3/’18
3/’19
3/’20
Number of Women in Managerial Positions/
Percentage of Women in Positions of Responsibility
(Persons)
600
400
200
0
573
8.0%
(%)
9.0
6.0
3.0
0
4/’16
4/’17
4/’18
4/’19
4/’20
(as of April 30 of each year)
Number of women in managerial positions (left scale)
Percentage of women in positions of responsibility (right scale)
Note: Figures are based on the persons in managerial positions (section leader or higher) and persons in positions of
responsibility (including chief and assistant chief positions) at Panasonic Corporation and its key domestic Group companies.
Number of Board Members/Outside Director Ratio
(Persons)
20
16
12
8
4
0
46.2%
6
7
(%)
50
40
30
20
10
0
6/’16
6/’17
6/’18
6/’19
6/’20
(as of June 30 of each year)
Outside directors (left scale)
Inside directors (left scale)
Ratio of outside directors (right scale)
At its factories, Panasonic is push-
ing ahead with the promotion of
zero-CO2 model factories and work-
ing to increase the use of renewable
energy. Total CO2 emissions in this fis-
cal year amounted to 2.23 million tons,
while the volume of emissions per net
sales had decreased 31% compared
to the fiscal year ended March 2014.
* In the fiscal year ended March 2020 we reviewed
the CO2 emission factor for electricity for previ-
ous fiscal years.
For details:
https://www.panasonic.com/global/corporate/
sustainability/eco/co2/site.html
Owing to the solar photovoltaic sys-
tems newly adopted at our business
sites in China and Japan and the com-
mencement of full-scale operations
of existing photovoltaic systems, the
amount of in-house renewable energy
adoption in this fiscal year for the entire
Company reached 32,000 MWh.
For details:
https://www.panasonic.com/global/corporate/
sustainability/eco/co2/site.html
Promoting diversity is one of our key
management initiatives and we are
especially cognizant of the fact that
in Japan there is a pressing need to
appoint more women to senior man-
agement and decision-making posi-
tions. As a result of various initiatives,
the number of women in manage-
rial positions and the percentage of
women in positions of responsibility
at Panasonic is rising year on year.
For details:
https://www.panasonic.com/global/corporate/
sustainability/pdf/sdb2020e-06.pdf
In fiscal 2017 we overhauled the
structure of the Board of Directors
so as to enhance its objectivity and
neutrality and strengthen its supervi-
sory function. As of June 30, 2020,
the Board comprises 13 directors,
46.2% of which hail from outside of
the Company.
For details:
Please refer to “Corporate Governance Structure
and Initiatives.”
Panasonic Annual Report 2020
External Recognition (Fiscal Year Ended March 2020)
ESG as Our Management Foundation
40
Panasonic’s ESG initiatives implemented thus far have been highly rated by global indices and credit rating agencies.
• Selected as a constituent stock in multiple ESG investment indices
•FTSE4Good Index Series (20 consecutive years)
•MSCI ESG Leaders Indexes (10 consecutive years)
•FTSE Blossom Japan Index (4 consecutive years)
•MSCI Japan ESG Select Leaders Index (4 consecutive years)
• Selected as a constituent stock since 2018 in the environment-focused S&P/JPX Carbon Efficient Index
• Awarded the highest Gold rating for five consecutive years by EcoVadis in its assessment of supplier sustain-
3/’16
3/’17
3/’18
3/’19
3/’20
ability performance
Volume of CO2 emissions (left scale)
CO2 emissions per basic unit (Calculated based on the fiscal year ended March 2014) (right scale)
We have also been selected as a constituent stock since 2014 in the JPX-Nikkei Index 400, a stock market index compris-
ing attractive companies for investors that meet the requirements of global investment standards, including the efficient
use of capital and investor-focused management perspectives.
THE INCLUSION OF PANASONIC 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 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.
(Million tons)
5.0
4.0
3.0
2.0
1.0
0
4.0
3.0
2.0
1.0
0
(10,000 MWh)
(Persons)
600
400
200
0
(Persons)
20
16
12
8
4
0
69%
2.23
3.2
573
8.0%
46.2%
6
7
(%)
100
80
60
40
20
0
(%)
9.0
6.0
3.0
0
(%)
50
40
30
20
10
0
3/’17
3/’18
3/’19
3/’20
4/’16
4/’17
4/’18
4/’19
4/’20
(as of April 30 of each year)
Number of women in managerial positions (left scale)
Percentage of women in positions of responsibility (right scale)
Note: Figures are based on the persons in managerial positions (section leader or higher) and persons in positions of
responsibility (including chief and assistant chief positions) at Panasonic Corporation and its key domestic Group companies.
6/’16
6/’17
6/’18
6/’19
6/’20
(as of June 30 of each year)
Outside directors (left scale)
Inside directors (left scale)
Ratio of outside directors (right scale)
Panasonic Annual Report 2020
41
ESG as Our Management Foundation
Message from the Chairman of the Board
Practicing our
management philosophy
based on ESG to achieve
sustainable growth and
enhance corporate value
Shusaku Nagae
Director, Chairman of the Board
Solving social issues and contributing
to the further development of society
through our business activities
Continuing to reform governance and
improving the effectiveness of the Board
of Directors
For more than 100 years since its founding, Panasonic has
helped solve issues and contributed to the development of
people’s lives and society through business activities based
on the philosophy that “a company is a public entity of soci-
ety.” We are fulfilling our role as a corporation and endeav-
oring to enhance corporate value by continuing to provide
value to customers, shareholders, and other stakeholders.
In recent years, the Sustainable Development Goals
(SDGs) have garnered a lot of attention as a blueprint for the
international community to tackle issues faced by society
with the goal of realizing a sustainable world. Panasonic has
long contributed to the achievement of the SDGs by putting
our management philosophy into practice through our busi-
ness activities. We believe the social challenges highlighted
by the SDGs present opportunities for us to create new busi-
nesses and be innovative, so with this in mind, we will push
ahead with initiatives that aim to deliver solutions, including
those that involve co-creation with other companies.
Moreover, ESG (environmental, social, and governance)
has increasingly gained attention from the capital markets
as one factor used to assess corporate value and has now
become a key indicator in the evaluation of companies. With
governance-focused ESG underpinning our corporate man-
agement, we are advancing our initiatives on improving the
effectiveness of the Board of Directors, reforming our orga-
nizational culture, and tackling issues concerning the global
environment. Moving forward, we will aim to achieve sus-
tainable growth and enhance corporate value by putting into
practice our management philosophy, which we have posi-
tioned as one platform that underpins the Company’s busi-
ness activities.
Thus far Panasonic has reformed its corporate governance on
multiple occasions in order to continuously engage in highly
transparent and fair business activities. In fiscal 2016 we estab-
lished the optional Nomination and Compensation Advisory
Committee. In response to inquiries from, and consult with,
the Board of Directors, the Committee monitors the candidates
for the CEO successor and considers the candidates for direc-
tor, executive officer, and Audit & Supervisory Board mem-
ber, and deliberates on the compensation system for directors
and executive officers. We have also introduced a system to
evaluate the effectiveness of the Board of Directors and every
year all members attending Board meetings are required to
answer a questionnaire, the results and assessments of which
are reported to the Board of Directors. We have taken steps to
further increase management agility, transparency, and objec-
tivity mainly by having raised the minimum ratio of outside
directors to one-third of the total since fiscal 2018 and clarify-
ing the roles of directors and executive officers.
As part of the effectiveness evaluations of the Board of
Directors carried out in fiscal 2020, in addition to the usual
questionnaire, we conducted interviews with all directors and
Audit & Supervisory Board members based on the advice of a
third-party organization. The interviews focused on the ques-
tionnaire items that returned low scores or items for which
opinions varied. In this way, we are pushing ahead with ini-
tiatives geared towards improving the effectiveness of the
Board of Directors by mainly clarifying material issues and the
measures to address them, and reflecting such measures into
Board operation and its agenda. From fiscal 2021 the objectivity
and neutrality of the Board has been bolstered by the addition
of two more outside directors (from four to six) and the incorpo-
ration of even more knowledge, expertise, and diversity. Also,
Panasonic Annual Report 2020
ESG as Our Management Foundation
42
as part of our efforts to deepen the understanding of outside
directors and outside Audit & Supervisory Board members
regarding the Company’s business and develop an environ-
ment in which they can play their role, we constantly offer them
the opportunities to make visits to our business sites.
Panasonic has resolved to transition to a holding company
system in April 2022 with the goal of enhancing our business
competitiveness from a medium- to long-term perspective.
We intend to increase the empowerment of our operating
companies to improve their expertise and speed of deci-
sion-making. That said, our approach to optimizing gover-
nance implemented thus far will remain unchanged and we
will continue to undertake reforms aimed at improving the
effectiveness of the Board of Directors.
Fostering an organizational culture in
which our diverse human resources can
deploy their talents
To achieve sustainable growth, a company must foster an
organizational culture in which its employees—the source of
value creation—can work comfortably and demonstrate their
capabilities. And in order for an organization to leverage col-
lective wisdom and strengthen its creativity and competitive-
ness, it is imperative that it realizes diversity and inclusion in
the workplace, free of discrimination based on gender, age,
race, beliefs, or any other personal attributes. At Panasonic,
we support these values and we are committed to devel-
oping workplace environments where people with differ-
ent points of view and knowledge can mingle, respect each
other’s values, and have frank discussions. We aim to realize
innovation and the creation of new value by letting each and
every employee prove themselves as professionals, thereby
reinforcing our strengths as an organization.
In the midst of the spread of COVID-19 infections, the
work style of teleworking from any location has gained trac-
tion particularly among indirect department employees, most
of whom used to commute to the office. While certain ben-
efits have been observed as a direct result of this change in
working style, for example, more efficient use of time and
improvements in productivity, there have been disadvan-
tages, such as communication and workplace management
difficulties. Whilst we must strive to improve the develop-
ment and management of workplace environments and take
greater advantage of the merits of teleworking, our sights
should be set on improving the skills and productivity of every
employee, maximizing achievements as an organization, and
bolstering our competitive edge. At the same time, we will
look to actively employ measures geared towards improving
and making progress on key employee topics such as perfor-
mance assessments, motivation, and health management.
Tackling environmental issues with a focus
on energy and resources
Under the framework of the Paris Agreement, Japan and
many other countries aim to realize a carbon-neutral society.
Panasonic too, through business growth, is doing what it can
to contribute to this goal. As we work towards achieving the
Panasonic Environment Vision 2050 formulated in 2017, we
are currently advancing initiatives on two key issues: energy
and resources. For the former, we aim to create more energy
than we consume through to the year 2050 by curbing the
amount of energy used in mainly business activities while
increasing the amount of energy we create. For the latter,
we are working to create circular economy businesses that
promote the effective use of resources. For example, shar-
ing services and expanding our efforts to recycle and reuse
products and parts.
In addition, based on the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD), we
have identified risks and opportunities stemming from cli-
mate change, and we are currently analyzing their impacts
and examining what countermeasures are needed. In par-
ticular, we anticipate risks associated with the transition to
a low-carbon economy—i.e., the loss of sales opportunities
on products that fail to meet country standards—and phys-
ical risks like impacts on operations at manufacturing sites.
We expect the impact of these risks on our businesses to
be minor, primarily because we are taking steps to lower our
CO2 emissions with the launch of energy-saving and ener-
gy-creating products and the rollout of zero-CO2 model fac-
tories, alongside other measures such as the formulation of
a Business Continuity Plan (BCP) and Business Continuity
Management (BCM) Guidelines. Nevertheless, we will con-
tinue to monitor the effects of climate change going forward.
Given that we do business globally in a wide range of
areas, we also consider it important that we play a role in
contributing to disaster prevention, mitigation, recovery, and
reconstruction in the same way we address environmental
issues. Every year we are seeing bigger-than-expected natu-
ral disasters causing damages globally. We will look to make
use of our solutions and systems and contribute to the real-
ization of a safer, more secure society by helping to prevent
disasters, minimize damage, and answering the call for help
during recovery and reconstruction.
Continuing to communicate our medium-
to long-term vision and results
With the aim of improving profitability and achieving profit
growth in the future, we continue to reform our business port-
folio and enhance our management structure as part of the
Mid-term strategy that started in fiscal 2020. We continue
to make steady progress on these initiatives. In November
2020 we announced to transition to a holding company sys-
tem (planned, April 2022) to further enhance our business
competitiveness and achieve sustainable growth, but our
policy of steadily executing the current Mid-term strategy
will remain unchanged.
For a deeper understanding and support of our investors, I
believe it is important that we continuously communicate the
Company’s vision for the future, along with the progress and
results of the Mid-term strategy. The Board of Directors will
fully support these activities. I would like to ask for your kind
attention to our initiatives designed to transform the Company.
Panasonic Annual Report 2020
43 ESG as Our Management Foundation
Messages from Outside Directors
Implementing the management
philosophy and pursuing
business growth by combining
quality with speed
Michitaka Sawada
Outside Director
Director, Chair of Kao Corporation. Leading a global company, he has
achieved continuous profit growth, and prioritizes ESG-focused man-
agement with the goal of realizing a sustainable society.
Appointed outside director of Panasonic in June 2020.
in place at the Company. The Board of Directors val-
ues diversity and its members exchange opinions in a
frank and honest manner. The optional Nomination and
Compensation Advisory Committee has strengthened its
objectivity and transparency. The challenge up ahead is to
further leverage this structure. In particular, we will need
to discuss in much greater detail on how the Board of
Directors should be at the Company’s transition to a hold-
ing company system.
—What are your expectations of Panasonic?
With regards to the management of the Group, I feel that
convincing discussions have taken place after corporate
activities undertaken thus far were reviewed. There are
pros and cons to all systems, but what matters is how
they are utilized. I’d like to see the heads of each oper-
ating company embrace autonomous management and
set their sights on running their respective companies in
a way that lets the holding company system thrive. Going
back to basics when difficulties arise, or in other words,
revisiting Panasonic’s management philosophy, is a valid
approach, but the most important thing is that it’s done in
a way that is in step with the current times.
Panasonic seeks to contribute to society by provid-
ing “Lifestyle Updates” through various businesses, but
even brilliant businesses continue to change according
to the times and the operating environment. To achieve
business growth, first and foremostly the Company must
prove useful in society. And being able to combine high
quality with speed will lead to business growth, but
what underpins this is “people.” Every employee should
be motivated to serve society and adapt to changes at
greater speed. That is what leads to business growth
and even greater support of all stakeholders. If this cycle
can be repeated, Panasonic can become a company that
excels on the world stage and I am confident it has the
potential to do so.
— For what reasons did you accept the position of
outside director at Panasonic and what do you
think is your role on the Board of Directors?
There were two reasons. The first was to utilize my knowl-
edge and experience as a president of a manufacturing
company. I believed that the knowledge and experience
I’ve gained from a style of management that stresses the
importance of a corporate philosophy and emphasizes
ESG (environment, social, and governance) from the cus-
tomer’s perspective would be a positive for Panasonic’s
development and growth. The second reason was to make
use of my characteristics as a researcher engaged in all
facets of manufacturing. Researchers are good at exam-
ining issues intrinsically, so I believed I’d be able to pro-
vide advice from this perspective upon decision-making.
The Board of Directors has a parent-like role towards
the execution side of the business. For instance, its
role is to issue a warning when a correction is needed,
or encourage the execution side to take on further chal-
lenges. As an outside director I hope to fulfil this paren-
tal role by monitoring the execution side of the business
through a different lens and provide support to ensure the
right path is taken.
—What is your impression of Panasonic?
My impression is a diligent and hardworking company
loved by many people, that may not be too efficient at
times. This straightforwardness, on the other hand, can
also bring an enormous growth potential. So far I’ve vis-
ited two of the Company’s business sites, and through
factory visits and presentations I've got a sense of how
enthusiastic the employees are. If the strategies, initia-
tives, and activities that aim to realize the Company’s
vision can be smoothly set in motion to align with the
goals of that vision, I am sure Panasonic can become a
company regarded even more highly.
Also, a corporate governance structure has been
Panasonic Annual Report 2020 ESG as Our Management Foundation
44
Supporting reforms aimed at
enhancing corporate value
Yuko Kawamoto
Outside Director
Professor at Waseda University Graduate School. She has served on
a number of Japanese government committees for finance, econom-
ics, and others, and as an outside director for domestic and over-
seas companies. She is a specialist in financial theory and corporate
governance.
Appointed outside director of Panasonic in June 2020.
and corporate culture problems that hamper open dis-
cussion, as well as raising cost awareness and executing
numerous reforms with a greater focus on speed.
Also, given that the Company continues to undertake
reforms to place a more suitable structure, I feel that cer-
tain activities will need to be carried out up ahead so as to
add even more substance to Panasonic’s corporate gover-
nance. The Board of Directors possesses corporate strat-
egy decision-making functions and supervisory functions,
but in addition to the examination of more suitable admin-
istration for certain situations and more ideal systems and
functions, the Board of Directors should further invigorate
discussions and enhance its effectiveness so that it can
have more of an impact as a team.
—What are your expectations of Panasonic?
Under a holding company system, Panasonic aims to trans-
fer responsibilities to and increase empowerment in its oper-
ating companies, and clarify accountability. I certainly hope
that this new structure can reinforce what had been neces-
sary. When making the transition to a holding company sys-
tem, it will be crucial that Panasonic harnesses its strengths
and designs the system in greater detail so that it’s easy
to understand even for an outsider. I believe Panasonic can
become a company that is more highly valued as long as
each operating company earnestly reaches out to its cus-
tomers, fully leverages its strengths—namely, brand power,
technological capabilities, and know-how—and contributes
to solving issues in society with a sense of speed.
And even though the Company’s ESG initiatives and com-
munication channels still need improving, I feel that these
aspects have been assessed favorably to a certain extent
by society. Considering that Panasonic possesses credit-
worthiness, infrastructure, and plentiful human resources,
I believe there to be plenty of room for enhancing its corpo-
rate value if it can demonstrate its capabilities as a team. I
certainly expect the Company to attach importance to this
consciousness and tie it into its future activities.
— For what reasons did you accept the position of
outside director at Panasonic and what do you
think is your role on the Board of Directors?
In my career so far I’ve served as an outside director at
multiple domestic and overseas companies, and also
served on a number of Japanese government committees.
I accepted the position because I believed I would be able
to draw on my experience and expertise and, as a catalyst
for corporate transformation, contribute to the Company’s
reforms with the goal of enhancing corporate value.
I believe there are two roles as an outside director.
One role is to provide awareness to the execution side
of the business. I hope to monitor the direction of the
Company’s business and provide an awareness to those
executing business so they can examine its appropri-
ateness. In doing so, I hope to work alongside and look
at how much we can enhance corporate value by. The
important thing is whether the execution side of the busi-
ness can turn this awareness into action. That is where
the strength of an organization really lies.
My other role is to help immeasurably improve the
probability of appointing the most suitable leader who is
in step with times to lead the Company.
—What is your impression of Panasonic?
I feel that Panasonic is a company that possesses techno-
logical capabilities and has a lot of talented people, whilst
conversations are always intellectual, stimulating, and hon-
est. That said, just looking at Panasonic’s business perfor-
mance at present, it may be difficult to say the skills of
each employee are being fully utilized for the organization.
It’s a traditional company with a solid reputation through-
out society and its products have a bright and pleasant
image, but those strengths should be translating into bet-
ter results. I’m hoping that profitability improvement and
profit growth can be achieved through a process of elimi-
nating practices no longer useful along with organizational
Panasonic Annual Report 2020
45 ESG as Our Management Foundation
Messages from Outside Directors
Yoshinobu Tsutsui
Outside Director
Hiroko Ota
Outside Director
About the effectiveness of the Board of Directors
I definitely sense that the Board’s effectiveness is improving year on year. In fact, there
are two points that symbolize this improvement: (1) the productive discussions that
have unfolded this fiscal year regarding how the Group’s structure should be as it makes
a transition to a holding company system; and (2) the thoroughgoing deliberation pro-
cess undertaken by the Nomination and Compensation Advisory Committee which
decides on leadership changes.
About the transition to a holding company system
I’ve so far participated in discussions about the transition with a supporting stance
because I believe it is a significant development that will usher in a new chapter in the his-
tory of Panasonic and trigger business portfolio reform and profitability structural reform.
What we must focus on under the new system is bold decision-making and restructur-
ing of accountability system by the top management of the holding company and of each
operating company. To this end, it is vital that functions and roles—which will be essen-
tially different from those of the Company’s Board of Directors and the boards of each
operating company thus far—are made more sophisticated, transparent, and effective. I
will be keeping a close eye on the transition to ensure that tangible and realistic substance
will be incorporated into the new holding company system.
About ESG
ESG is often associated with high expectations for global sustainability, but for corpora-
tions there are always some risks involved. To overcome these challenges, more unified
ESG information disclosure and action is key. The businesses of each operating com-
pany are capable of contributing a great deal to ESG initiatives, therefore an integrated
Group approach going forward will demonstrate a stronger commitment to ESG issues
and should help strengthen its ability to cope with unforeseen risks. From a long-term
perspective, I have high expectations that Panasonic will set its sights on becoming a
company that can combine growth performance with ESG assessments.
About the effectiveness of the Board of Directors
Progress was made on sharing issues with all directors, including outside directors,
at Board meetings this fiscal year. For example, we deliberated on the Company’s
medium- to long-term strategy, such as its business structure over the next 10 years
and the basic structure surrounding Group management, and we exchanged straight-
forward, exhaustive opinions about past investments and other management issues.
The corporate governance structure continues to be strengthened and all directors ben-
efited from more detailed reports on compliance initiatives. As for the multiple candi-
dates for the CEO successor selected by the Nomination and Compensation Advisory
Committee, I commend the objective and transparent way in which they were chosen
through a process of being separately interviewed outside the Committee a number of
times by the three outside directors that sit on the Committee.
About the transition to a holding company system
Employing a holding company system had long been a key option for establishing profit-
able growth businesses. We can now say that the Company is in a position to put such
a plan into action by realizing cross-value between Divisional Companies and eliminat-
ing low-profit businesses. To ensure the success of this system, it is imperative that
the Company returns to the starting point of “autonomous management,” ventures to
increase empowerment in each business, and clarifies accountability for their business
results. And speed is of pivotal importance here, which is why I will be watching closely
to make sure that the Company develops its system with a sense of speed during the pre-
paratory phase leading up to the transition to a holding company system.
About ESG
Panasonic was among the first companies to undertake initiatives that address issues
of the environment, but given the rapidly growing interest in environmental and social
issues worldwide, I expect the Company to ramp up its activities with greater sensitiv-
ity and proactively communicate its ESG endeavors to all stakeholders.
Panasonic Annual Report 2020 ESG as Our Management Foundation
46
Kazuhiko Toyama
Outside Director
Kunio Noji
Outside Director
About the effectiveness of the Board of Directors
At meetings of the Board of Directors there have been more opportunities to discuss
the Company’s structure and basic strategies from a more long-term, in-depth point of
view. There have also been more situations to engage in substantial discussion about the
Company’s underlying transformation regarding the major direction of medium- to long-
term management, which also coincided with the selection of management candidates.
About the transition to a holding company system
I believe the transition is precisely what is required to facilitate the metabolism of busi-
nesses and functions for the overall Group, to enable decision-making at each business
level, and in particular, to ensure that major strategic pivots are carried out quickly and
decisively. As we increase empowerment in each operating company up ahead, man-
agement will need to sit down and discuss how it should go about redefining the role
of the holding company’s Board of Directors and how to enhance its effectiveness.
Furthermore, we can anticipate that during the transition process the Board will likely
come up against various strategic issues and topics that need to be discussed from a
fundamental point of view. I therefore believe that in order to enhance the effectiveness
of the Board of Directors, we will need to figure out how to set agenda items and con-
duct the meetings during that transitional period.
About ESG
I believe ESG needs to be organized in the following way: (1) areas in which ESG should
be integrated into and identified in business processes; and (2) areas that should be
invested in or allocated funds from earnings on the assumption of strong earnings capa-
bilities. Ever since the founder advocated corporate social responsibility, Panasonic’s
business activities have, in a sense, embraced the forward-looking ideas of ESG and
the SDGs. The Board of Directors and the execution side of the business must set great
value on these basic thoughts and relentlessly and constantly pursue a company, man-
agement, and business style that resonates with stronger earnings and ESG initiatives.
About the effectiveness of the Board of Directors
Since assuming my position as an outside director last year, the Board has continued to
discuss various management issues. I believe the Company is currently concerned with
two matters: (1) growth strategy (new business pillars); and (2) steadily improving prof-
itability in existing businesses. The growth strategy will be rolled out over the medium
term and it will take some time before we start seeing results, which is why we must
nurture the seeds of numerous new businesses. And in order to steadily improve prof-
itability in existing businesses, it is important that the necessary reforms are imple-
mented with a sense of speed and that the achievement of set goals is given top priority.
It is from this perspective that I intend to closely monitor the activities of each business.
About the transition to a holding company system
I feel that the Board of Directors has been able to candidly discuss realistic proposals
put forward in response to current issues, whilst reflecting on the Company’s manage-
ment history. That said, in any organization, it always comes down to how such plans
can be materialized. I expect Panasonic to take full advantage of the merits of a hold-
ing company system to deliver results by steadily carrying out management that is fully
autonomous.
About ESG
To a certain extent, I believe Panasonic’s stakeholders have formed a favorable opin-
ion of its social contributions and environmental initiatives. Environmental and social
measures are one platform that underpins the Company’s business activities, and it is
important that targets are set in all of its core business operations and that the results
translate into business growth and profitability.
Panasonic Annual Report 2020 47
ESG as Our Management Foundation
Directors, Audit & Supervisory Board Members,
and Executive Officers (As of June 25, 2020)
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
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. 2020 Chairman, Panasonic Corporation of China (current
position)
Yasuyuki Higuchi
Senior Managing
Executive Officer /
CEO, Connected
Solutions Company
Tetsuro Homma
Senior Managing
Executive Officer /
CEO, China & Northeast
Asia Company
Representative Director
Directors
Mototsugu Sato
Executive Vice President /
CEO, US Company
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)
Aug. 2019 CEO, US 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)
Sep. 2019 CEO, Panasonic Holding (Netherlands) B.V. (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)
Hirokazu Umeda
Managing Executive
Officer / CFO
Laurence W.
Bates
Managing Executive
Officer / GC / CRO
/ CCO
Executive Officers
President
Kazuhiro Tsuga
Chief Executive Officer (CEO)
Executive Vice President
Mototsugu Sato
Director, Corporate Strategy Division
CEO, US Company
In charge of General Affairs and Social Relations
Occupational Safety and Health Director
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
Chairman, Panasonic Corporation of China
Masahisa Shibata
In charge of Automotive Sales
Yasuyuki Higuchi
CEO, Connected Solutions Company
Shinji Sakamoto
CEO, Industrial Solutions Company
Panasonic Annual Report 2020
Directors
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)
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
Yoshinobu Tsutsui
(Independent director)
Toshihide Tominaga
Company (current position)
ESG as Our Management Foundation
48
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)
Hiroko Ota
(Independent director)
Eiji Fujii
Apr. 1984 Joined the Company
July 2015 Managing Officer, Automotive & Industrial Systems
Company of the Company / Director, Engineering Division
Apr. 2017 Executive Officer of the Company / Vice
President, Automotive & Industrial Systems
Company / In charge of Technology and Director,
Engineering Division
Apr. 2019 Executive Officer of the Company / Vice
President, Industrial Solutions Company / In charge
of Technology and Director, Engineering Division /
In charge of Intellectual Property
June 2020 Senior Audit & Supervisory Board Member of the
Company (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)
Outside Audit & Supervisory Board Members
Executive Officers
Kazuhiko Toyama
(Independent director)
Kunio Noji
(Independent director)
Michitaka Sawada
(Independent director)
Yuko Kawamoto
(Independent director)
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)
Yoshio Sato
(Independent Audit &
Supervisory Board member)
June 2012 Representative Director, President and Chief
Executive Officer, Kao Corporation (current
position)
June 2020 Director of the Company (current position)
July 2001 Senior Expert, McKinsey & Company (Tokyo)
Apr. 2004 Professor of Graduate School of Finance,
Accounting and Law, Waseda University (now
Graduate School of Business and Finance)
(current position)
June 2020 Director of the Company (current position)
Toshio Kinoshita
(Independent Audit &
Supervisory Board member)
Setsuko Yufu
(Independent Audit &
Supervisory Board member)
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)
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)
Apr. 1981 Registered as Attorney at Law (Japan) (current
position)
Sep. 1986 Joined Loeff Claeys Verbeke (Brussels) (now Allen
& Overy (Brussels))
Jan. 2002 Partner, Atsumi & Usui (now Atsumi & Sakai
Janssen Foreign Law Joint Enterprise) (current
position)
June 2020 Audit & Supervisory Board Member of the
Company (current position)
Managing Executive Officers
Takashi Toyama
Representative in Tokyo
In charge of Government and External Relations
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
In charge of the Automotive Segment
CEO, Automotive Company
Masahiro Shinada
In charge of the Appliances Segment
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
In charge of the Life Solutions Segment
CEO, Life Solutions Company
In charge of Construction Safety Regulations
Administration Department
Eiichi Katayama
Chief Strategy Officer (CSO)
In charge of Business Development
Executive Officers
Manish Sharma
President, Panasonic India Pvt. Ltd.
Shigeki Mishima
Chief Human Resources Officer (CHRO)
Panasonic Annual Report 2020 49
ESG as Our Management Foundation
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
Outline of structure (As of June 25, 2020)
The Company, since its establishment, has operated its
business under its management philosophy, “contribut-
ing 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 dia-
logue with various stakeholders such as shareholders and
customers, making an effort to execute transparent busi-
ness 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.
The Board of Directors
• The Board of Directors is composed of thirteen direc-
tors including six outside directors, of whom two are
women (outside director).
• The chairperson of the Board is the chairman who does
not execute duties (inside director).
• The Board of Directors focuses on “corporate strategy
decision-making” and “company oversight” as a corpo-
rate decision-making body.
• The Company elects outside directors from among
managers of external entities, who have extensive man-
agerial experience in various careers and deep insight,
and are expected to provide valuable opinions as super-
visors of decision-making related to business execution
and the execution of directorsʼ duties.
• All directors are reelected at the annual general meeting
of shareholders.
Corporate Governance Structure
Election
Board of Directors
Supervisory Functions
Corporate Strategy Decision-
making Functions
Empowerment & Supervision
Executive Functions
Group Strategy Meeting*2
l
S
h
a
r
e
h
o
d
e
r
s
M
e
e
t
i
n
g
Audit
Nomination and Compensation
Advisory Committee*1
President
*3
Audit & Supervisory Board
Election
Audit
Auditing Functions
Divisional Companies
Business Divisions
Regional Management
Corporate Strategy
Head Office
Professional Business
Support Sector
Collaboration
Election
Accounting Auditor
Accounting Audit
Innovation Promotion Sector
*1 Deliberates on advisory matters and reports to the Board of Directors
*2 Complements Board of Directorsʼ decision-making
*3 Including affiliated companies (Japan and overseas), etc.
* Please refer to the “Corporate Governance Report” for our systems for ensuring appropriate business operations (the basic policy of the
internal control system, and its operational status).
Panasonic Annual Report 2020
ESG as Our Management Foundation
50
Themes discussed by Board of Directors in fiscal 2020
In fiscal 2020, the Board of Directors discussed and
reached decisions on various matters as part of its portfo-
lio management efforts. These included transfer and ter-
mination of businesses with loss-making structures and
injections of external capital to maintain business competi-
tiveness, medium- to long-term business strategies includ-
ing establishment of joint ventures and large-scale capital
investments, as well as important aspects of business exe-
cution, such as dividend policy and executive HR issues.
The Board also received business reports from Divi-
sional Company CEOs and regional representatives, as
well as directors in charge of R&D, compliance, quality
management, and the like. In the process, it verified the
operational status of the Groupʼs internal control system
in addition to supervising business execution.
The Board also discussed the past summary and the
future direction of M&As, as well as investment and finan-
cial soundness, innovations, and technology portfolio
strategy. Here, the Board sought to take maximum advan-
tage of the knowledge of outside officers and reflect that
knowledge in its medium- to long-term vision.
In addition, the Board carefully examined the significance
of possessing strategic shareholdings and also received
evaluation reports on the effectiveness of its own activities.
Themes discussed in fiscal 2020
Deliberation/decision
Monitoring status of business
execution
Debate
Other
• Business portfolio reforms
• Establishment of joint ventures, large-scale capital investments, etc.
• Dividend policy, executive HR issues, etc.
• Performance and initiatives by company and region
• Status of R&D, compliance, and quality initiatives
• Operational status of internal control system
• M&As (past summary and future direction)
• Investment and financial soundness
• Innovation and technology portfolio strategy
• Significance of possessing strategic shareholdings
• Effectiveness evaluations of Board of Directors
Audit & Supervisory Board members (A&SB
members) and Audit & Supervisory Board (A&SB)
• The A&SB is composed of five A&SB members includ-
ing 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 dis-
cretionary 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 operat-
ing sites. The senior A&SB members are elected from
among those who have experience in positions equiva-
lent to or higher than managing director.
• The Company elects outside A&SB members from
among managers, lawyers, and certified public accoun-
tants, who have extensive expertise with various careers
and deep insight and can be expected to conduct valu-
able audits of the execution of business by directors.
Optional Nomination and Compensation Advisory
Committee
• Composed of five members, the majority of whom are
independent outside directors.
• Chaired by an independent outside director.
• Deliberates on the results of internal reviews of the
nomination of candidates for director, executive offi-
cer, and audit & supervisory board member and on the
appropriateness of the Companyʼs director and execu-
tive 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.
• Met four times in fiscal 2020; discussions included
results of internal investigations of candidates for direc-
tors and others and compensation for directors in the
current fiscal year; reports were submitted to the Board
of Directors.
Group strategy meeting
• Meetings are held about twice monthly in principle to
discuss and set the direction of the Groupʼs medium- to
long-term strategy and priority issues.
• Chaired by the president, around 10 members of upper
management participate, including 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.
Panasonic Annual Report 2020
51
ESG as Our Management Foundation
Corporate Governance Structure and Initiatives
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 direc-
tors, 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 exper-
The Company’s Outside Directors
tise, 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 out-
side director and appoint them at the ordinary general
meeting of shareholders, thereby enhancing the objectiv-
ity and neutrality of the Board of Directors and strength-
ening the supervisory function.
Yoshinobu Tsutsui
Hiroko Ota
Kazuhiko Toyama
Chairman of the Board, Nippon Life
Insurance Company
He brings extensive experience at the
highest level of management along
with expertise in domestic and inter-
national financial developments.
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.
Representative Director (CEO), Industrial
Growth Platform, Inc.
A leading figure in corporate gov-
ernance in Japan, he is involved in
numerous corporate revitalization proj-
ects as the former COO of Industrial
Revitalization Corporation of Japan.
Kunio Noji
Michitaka Sawada
Yuko Kawamoto
Senior Advisor, Komatsu Ltd.
One of Japanʼs most noted executives,
he built Komatsu into a global corpora-
tion. He advocates reform of business
management through innovation.
President and Chief Executive Officer,
Kao Corporation
Leading a global company, he achieved
continuous profit growth and prioritizes
ESG-focused management to realize a
sustainable society.
Professor, Waseda University Graduate
School
A specialist in financial theory and cor-
porate governance, she has served on a
number of Japanese government com-
mittees of finance, economics and oth-
ers, and an outside director at domestic
and overseas companies.
Panasonic Annual Report 2020 ESG as Our Management Foundation
52
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 inde-
pendence standards required by financial instruments
exchanges such as the Tokyo Stock Exchange. For exam-
ple, the following persons are not considered independent.
• Business executives of the parent company and/or sis-
ter companies
• Major business partner of the Company or said execut-
ing 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 consoli-
dated sales. “Significant,” in the case of individuals, shall
be judged as 12 million yen. For a detailed definition of the
Companyʼs 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 meet-
ing and provision of information to enable effective discus-
sions by the Board of Directors. In addition, the Company
provides them with the opportunity to visit major operating
sites and plants (Outside directorsʼ visit to business sites).
Activities Aimed at Strengthening Corporate Governance
Implementation and utilization of evaluation
of the Board of Directors effectiveness
Once a year, the Board of Directors administers a ques-
tionnaire to all its members in order to further enhance the
Boardʼs effectiveness. The results and evaluations of the
questionnaire are reported to the Board of Directors.
As part of effectiveness evaluations in fiscal 2020, we
deployed third-party perspectives to conduct face-to-face
interviews (in addition to the questionnaire-based survey
as done to date). In the questionnaire, we focused on items
that previously had low or inconsistent evaluations, and we
clarified improvement measures for issues thus identified.
Items of the survey in fiscal 2020
• Verification of the Board of Directors operation pol-
icy for fiscal 2020
• How discussions/deliberations should be carried out
at Board of Directors meetings (discussions/delibera-
tions the Board of Directors should ideally have)
• Unity of the Board of Directors
• The Board of Directors-shareholders (investors) rela-
tions, how they should be
• The Board of Directorsʼ operations and others
Upon analyzing the results of the survey and interview, the
Companyʼs findings with respect to the effectiveness of the
Board of Directors are such that the current state of the Board
is essentially appropriate in terms of its monitoring and deci-
sion-making function. On the other hand, findings with respect
to strengthening functions of the Board of Directors included
opinions that in order to strengthen functions of the Board of
Directors, discussions at the Board of Directors should be acti-
vated and information sharing with Outside Directors/Audit &
Supervisory Board Members should be further promoted, and
we are taking steps to respond and improve.
Evaluating the effectiveness of the Board of Directors started in fiscal 2016. Corporate Governance has been strengthened while incor-
porating opinions and proposals from questionnaires.
Board of
Directors
Nomination
and
Compensation
Advisory
Committee
Initiatives
and other
mechanisms
Fiscal 2014
Fiscal 2015
Fiscal 2016
Fiscal 2017
Fiscal 2018
Fiscal 2019
Fiscal 2020
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
As of June 30, 2020
Increased the number
of outside directors
from four to six
Outside director ratio
46.2%
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
Reviewed the
business execution
system
Introduced restricted
stock compensation
Discontinued the ESV
Plan*
Clarified the roles
of directors and
executive officers
* The Policy toward Large-Scale Purchases of Panasonic Shares
Panasonic Annual Report 2020 53
ESG as Our Management Foundation
Corporate Governance Structure and Initiatives
Compensation
Compensation for directors depends on each personʼs
role and is divided into three parts: Basic compensation
(fixed), performance-based compensation (short-term
incentive), and restricted stock compensation (long-term
incentive). Outside directors and Audit & Supervisory
Board members receive only basic compensation, which
is fixed.
Performance-based compensation
Performance-based compensation is designed as a
short-term incentive to boost business performance. It
is determined each year in conjunction with performance
evaluations of Panasonic as a whole and the specific busi-
ness of which the director is in charge. From the fiscal
2020 result, evaluation items focus on achievement of
operating cash flow targets, as well as a combination of
indicators, including adjusted operating profit, net income,
and inventories.
Performance-based compensation fluctuates widely
depending on business results. It is designed to range from
a minimum of 0% of basic compensation to a maximum of
over 150% (75% when the standard value is achieved).
Restricted stock compensation
Restricted stock compensation, which is a long-term
incentive, is allocated with the aim of providing an incen-
tive to continuously improve corporate value and promote
further value sharing with the Companyʼs shareholders.
Reflecting on the reasons for introducing restricted stock
compensation, the ratio of the incentive option to the
overall compensation package is designed to increase as
the position of the recipient director or executive officer
gets higher. In addition, the total amount is set based on
overall considerations of various items, such as 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 Companyʼs director and executive officer
compensation system. In November 2015, the Company
has established an optional Nomination and Compensa-
tion 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 Companyʼs director and
executive officer compensation system.
Illustration of Compensation Structure*1
Restricted stock compensation
Basic compensation
1
Performance-based
compensation
0.75*2
0.25*3
Short-term incentive
Long-term incentive
*1 Excluding Outside Directors
*2 When the standard value is achieved
*3 Average compensation of applicable directors. The percentages
vary according to the role and position.
Amount of Compensation for Directors and A&SB Mem-
bers for Fiscal 2020 (ended March 2020)
Classification
Number
of
persons
Amount (million yen)
Basic
compensation
Performance-
based
compensation
Restricted
stock
compensation
Directors (other
than outside
directors)
A&SBMs (other
than outside
A&SBMs)
Outside
directors
Outside
A&SBMs
9
833
574
186
73
3
5
3
80
65
39
80
65
39
—
—
—
—
—
—
Note: Three directors and one A&SB member who retired at the conclusion
of the 112th Ordinary General Meeting of Shareholders held on June 27,
2019 are included in the above.
Directors Who Received Compensation over 100 Mil-
lion Yen
Name
Classification
Amount (million yen)
Basic
compensation
Performance-
based
compensation
Restricted stock
compensation
Shusaku
Nagae
Kazuhiro
Tsuga
Mototsugu
Sato
Yasuyuki
Higuchi
Director
109
100
Director
186
104
Director
121
Director
125
78
74
—
48
31
41
9
34
12
10
Panasonic Annual Report 2020 ESG as Our Management Foundation
54
Information disclosure / Dialogue
Information disclosure approach and system
The Company clearly defines its policy on information dis-
closure in the Panasonic Code of Conduct, the guideline
for putting the Groupʼs 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 share-
holders and investors. (For more details, please visit the
Disclosure Policy page on the Companyʼs website.)
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 cus-
tomersʼ requests and comments and reflect them in
our business policies and activities. We will seek to
be an enterprise with high transparency.
(Quotes from the Panasonic Code of Conduct)
Under this basic policy, we disclose information where
disclosure of this information is required by securities-re-
lated 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 submis-
sion of annual securities reports, quarterly reports, etc.,
the Disclosure Committee, which is comprised of gen-
eral managers from principal departments that handle rel-
evant information, confirms the validity of the descriptive
content and the appropriateness of the disclosure proce-
dures under the supervision of the CEO and chief finan-
cial officer (CFO).
Based on listing regulations, Company information that
requires timely disclosure shall be immediately reported
to the Corporate Finance & IR Department or the Finan-
cial & Accounting Department and disclosed timely and
appropriately.
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 con-
trol 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-assess-
ment programs at each of the Divisional Companies and
Business Divisions, etc. Then, internal auditing manag-
ers of the Divisional Companies appointed by the Com-
pany at each of the Divisional Companies, etc. conduct
audits. Based on these audits, the Internal Control Pro-
motion Office supervises the Group-wide internal control
audits in order to confirm its effectiveness. In fiscal 2020,
Panasonic had a total of 400 personnel assigned to con-
duct 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 inves-
tors. This includes announcements of financial results and
individual meetings. Also, the IR staff members in the Cor-
porate Finance & IR Department are in charge of day-to-
day communication with shareholders and investors. For
IR geared toward institutional investors and securities ana-
lysts, the Company conducts presentation meetings of
quarterly financial results announcements, annual presen-
tations regarding business policy of the Company and Divi-
sional Companies, and other activities.
Also, for overseas investors, the Company holds pre-
sentation meetings utilizing conferences hosted by finan-
cial institutions. Views and management issues obtained
from shareholders and investors through IR activities are
conveyed to senior management and the relevant depart-
ments including Divisional Companies in internal meet-
ings such as the Group Strategy Meeting and are utilized
to improve the quality of management of the entire Group.
Panasonic Annual Report 2020
55
ESG as Our Management Foundation
Message from the Environmental Compliance Administrator
Focusing on energy and
resources as a climate
change measure
Hirotoshi Uehara
Director, Quality & Environment Division
The growing focus on the UNʼs Sustainable Development
Goals (SDGs) and the Paris Agreement, through which
countries have allied together to combat global warming,
indicates the seriousness of environmental and energy
issues worldwide. In October 2020, the Japanese gov-
ernment announced plans to become a carbon-neutral/
carbon-free society by the year 2050. In this environment,
Panasonic has carried out scenario analyses with respect
to the recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD), identified specific
risks and opportunities, and confirmed the resilience of
the Companyʼs strategy.
Ever since its establishment, the Panasonic Group has
actively addressed global environmental issues based on
the management philosophy of contributing to the devel-
opment of peopleʼs lives and society. Furthermore, in
2017 we formulated the Panasonic Environment Vision
2050 so that we can continue to meet the expectations
and demands of our stakeholders. As we aim to balance
a better life with a sustainable global environment, we
believe that reducing the amount of energy we use and
working to create and efficiently utilize an even greater
amount of clean energy is in itself the very notion of
“going carbon neutral.” To that end, in consideration of
the gravity of social issues and the degree of relevance
pertaining to Panasonicʼs businesses, we formulated our
Green Plan 2021 with a focus on the material issues of
energy and resources. Under this Plan, we will accelerate
the development of products, technologies, and solutions
in the areas of energy creation, energy saving, energy
storage, and energy management.
To step up the pace of these initiatives, Panasonic, as
a managing company, joined the Environmental Digital
Platform launched in June 2020 by Konica Minolta, which
plays the role of an operating company. A total of 16 partic-
ipating companies aims to facilitate the sharing of environ-
mental knowledge, information, and know-how, as well as
improve the environmental sustainability management of
each company and generate new business opportunities.
In terms of the Groupʼs activities, firstly as an initiative
for reducing the amount of “energy used,” Panasonic is
working on energy-saving designs by making “the size of
contribution toward energy savings” a goal among its main
products. In fiscal year ended March 2020 (fiscal 2020),
our lights, air conditioners, and refrigerators contributed to
greater energy reductions. As for production activities, we
are working to achieve zero-CO2 model factories world-
wide. In fiscal 2020, our Costa Rica plant joined the ranks
of zero-CO2 model factories, following Japan, Belgium,
and Brazil in fiscal 2019. We plan to build zero-CO2 model
factories in other regions to serve as local models—next
up we intend to target China and other regions in Asia.
As an initiative for increasing the amount of “energy cre-
ated,” Panasonic is stepping up the development of fuel
cell technology to generate electricity from hydrogen as an
energy source. At our Kusatsu site in Shiga Prefecture, we
constructed a hydrogen station called “H2 Kusatsu Farm” to
supply hydrogen to fuel cell-powered forklifts. The hydrogen
is produced by water electrolysis using renewable energy in
an effort to make site logistics carbon-free.
Meanwhile, for “resources,” in line with changes in
customer lifestyles and values, Panasonic is also taking
up the challenge of creating circular economy business
models that do not rely on the consumption of resources
to generate sustainable growth. We are taking steps to
make factory waste items the object of creative design,
thereby turning them into completely different products
of novel value. Moreover, we are currently launching a
global circular economy project so that we can pick up
the pace of initiatives in the area of resources recycling.
Through initiatives like these, Panasonic will aim to
achieve the goals it has set in the Panasonic Environment
Vision 2050 by expanding and accelerating initiatives
related to energy and resources.
Panasonic Annual Report 2020
Initiatives towards the Environment
ESG as Our Management Foundation
56
Environmental sustainability management
Vision and action plan
Guided by the Panasonic Environment Vision 2050 formu-
lated by the Group, Panasonic will take up the challenge
of expanding “energy created” to exceed the amount of
“energy used” with its sights set on the year 2050.
“Energy used” refers to the energy used in production
and other business activities, as well as the energy con-
sumed by our products when used by our customers.
“Energy created” refers to clean energy that is created
and/or made available by our products and services, such
as photovoltaic power generation systems, storage bat-
teries, and energy solutions.
Panasonic’s Green Plan 2021, an environmental action
plan formulated with the goal of realizing the Panasonic
Environment Vision 2050, clearly lays out the targets that
we need to achieve within the three years through fiscal
2022, alongside an 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
Energy ratio (created versus used) in fiscal 2020
In achieving zero-CO2 model factories, we have reduced the
amount of energy used during production, but the amount
of energy consumed during procurement and distribution is
increasing, which has led to the increase in the total amount
(234 thousand GWh) of energy used. However, we made
progress on the energy ratio (created versus used) to 1:9 from
roughly 1:10 (when the Panasonic Environment Vision 2050
was formulated) by increasing the total amount (26 thousand
GWh) of energy created, which mainly comprises photovoltaic
power generation systems, fuel cells, and automotive batteries.
Environmental Action Plan — “Green Plan 2021” (Extract)
Category
2021 targets (fiscal 2022)
Fiscal 2020 results
Increase the ratio of total energy created to
total energy used
Total energy created: total energy used = 1:8.5
1:9.0
Increase amount of energy created Amount of energy created: 30 thousand GWh or more
26 thousand GWh
Increase size of contribution
toward energy savings through
products and services
Size of contribution toward energy savings through
products and services:
Direct: 25 thousand GWh or more
Indirect: 2 thousand GWh or more
Direct:
28 thousand GWh
Indirect:
2.3 thousand GWh
Products
&
Services
Expand energy creation businesses
—
—
—
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 thousand MWh or more
32 thousand MWh
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 thousand tons or more
(2019 to 2021 total)
13 thousand tons
Achieve Zero Waste Emissions from factories
globally
Factory waste recycling rate: 99% or more
98.9%
Establishment of Environmental Digital Platform in
association with other companies
With the aim of sharing environmental know-how across
Japan’s entire industrial sector and improving the effi-
ciency of environmental sustainability management,
we joined forces with Konica Minolta to establish the
Environmental Digital Platform in which 16 compa-
nies currently participate in. As a managing company,
Panasonic participates from the standpoint of enhancing
the platform’s content and supporting its administration.
We provide case examples of activities, related technology,
and solutions, which will hopefully lead to the co-creation
of new value. We are also using this platform to promote
our rollout of renewable energy and the global deployment
of energy-saving initiatives.
Konica Minolta’s press release:
https://www.konicaminolta.com/jp-ja/newsroom/2020/0605-01-01.html
(Japanese only)
Panasonic Annual Report 2020
57
ESG as Our Management Foundation
Initiatives towards the Environment
Energy-related initiatives
Zero-CO2 model factories
In fiscal 2020, one more manufacturing site achieved
zero-CO2 model factory status, in addition to three in fis-
cal 2019. By making these factories leading models and
by gradually increasing their numbers around the world,
Panasonic will steadily ramp up manufacturing activities
that do not emit CO2.
Europe
Japan
South America
Panasonic Energy Belgium
Panasonic Eco Technology Center
Panasonic Brazil
Panasonic Energy Belgium installed wind
power generation systems in its factory
and has been utilizing electricity derived
from renewable energy. It also replaced
purchased electricity with the electricity
derived from renewable energy.
All operations at Panasonic Eco Technology
Center are now powered by electricity
derived from 100% renewable energy. This
Group company also uses carbon credits to
offset its remaining CO2 emissions derived
from fossil fuels. Accordingly, its factory
has achieved zero-CO2 status.
Panasonic Brazil’s three factories in San
Jose, Manaus, and Extrema were the first
in the Group to power their manufacturing
operations using electricity derived from
100% renewable energy.
Zero-CO2 showroom
Panasonic Center Tokyo
As part of our efforts to expand our zero-CO2
model factory initiatives to the non-man-
ufacturing sector, we set up Panasonic’s
first-ever zero-CO2 showroom at Panasonic
Center Tokyo. And as a site that utilizes
hydrogen-based energy, we will facilitate
demonstrations of Panasonic’s proprietary
pure hydrogen fuel cells.
Panasonic Centroamericana
Having installed photovoltaic power genera-
tion systems in its factory and entered into a
contract with a public power utility to procure
renewable energy, Panasonic Centroamericana
now utilizes 100% renewable energy for its
electricity needs. It also uses carbon credits
to offset its remaining CO2 emissions derived
from fossil fuels. Accordingly, its factory has
achieved zero-CO2 status.
Hydrogen energy
As Japan sets its sights on transitioning to a carbon-free society, the Panasonic Group is using hydrogen as a new energy
source to help realize a society that is free of CO2 emissions. In this way, we aim to contribute to the creation of a soci-
ety that enjoys peace of mind because it uses clean energy.
Panasonic Ecology Systems
Kusatsu Farm (hydrogen station)
At the Kasugai Factory of Panasonic Ecology Systems, tests are
underway to demonstrate that electricity generated by a pure hydro-
gen fuel cell system using hydrogen produced from renewable energy
can be used to supply manufacturing lines.
A hydrogen station on the grounds of the Kusatsu Factory produces
hydrogen using electrolysis powered by renewable energy, then com-
presses and stores it. By supplying this hydrogen to fuel cell-powered
forklifts, the station contributes to making site logistics carbon-free.
Electricity
Pure hydrogen fuel cell system
Manufacturing line at Kasugai Factory
Panasonic Annual Report 2020 Resources-related initiatives
Upcycled products
In aiming to realize a recycling-oriented society, Panasonic
is starting to undertake initiatives on reusing factory waste.
We are taking steps to utilize factory waste (parts
and offcuts) and identify new value through creative
design, thereby turning such items into completely differ-
ent “upcycled” products. As one form of renovation that
enhances the value of a certain space, we are efficiently
utilizing factory waste generated in the manufacturing
process of our clothes irons, rice cookers, and modular
kitchen units to make upcycled products like bookends,
lighting fixtures, and tables.
ESG as Our Management Foundation
58
Circular economy
Whilst evolving conventional recycling-oriented manufac-
turing, Panasonic is also tackling the creation of circular
economy businesses.
Driven by the eco-design concept of maximizing value
during customer use, the Company is pushing ahead with
the creation of circular economy businesses that pursue
sustainable economic growth without relying on the con-
sumption of resources, as well as initiatives for evolv-
ing recycling-oriented manufacturing by harnessing new
materials and state-of-the-art digital technology. In this
way the Company seeks to balance the idea of “a better
life” with a sustainable global environment, as called for in
the Panasonic Environment Vision 2050.
Concept of activities for a circular economy
Creation of
circular economy
business
Sharing platform
Product as a service
Repair/Maintenance
Achieving
“a better life” and
“a sustainable global
environment”
Top left: Bookends made from
clothes irons
Top right: Light shade made from
the inner pot of a rice cooker
Bottom left: Imitation marble table
Refurbish
Use
Remanufacturing
Pro-
duction
Procure-
ment
Design
Zero waste emission
Eco-design
Utilization of
sustainable materials
Reduction of total
resources used
Recycling
Evolution of
recycling-oriented
manufacturing
Response to TCFD
We compiled and disclosed information in our Sustainability Data Book 2020 in line with the
recommendations of the TCFD.
Governance Disclosing information regarding our system to promote Panasonic Environmental Sustainability Management
spearheaded by the Board of Directors, as well as the meeting bodies required to engage in such management
Identifying risks and opportunities and performing scenario analyses
Strategy
Scenario
Anticipated situations
Potential impact on Panasonic
2°C scenario
More stringent regulations:
Introduction of carbon pricing
Minor impact owing to the fact that we are working on reducing CO2 emissions from products and manu-
facturing by adopting various measures, including the enhancement of energy efficiency in existing prod-
ucts, the creation of products that generate energy, and the rollout of zero-CO2 model factories.
More stringent regulations:
Changes/modifications to envi-
ronmental regulations
Minor impact owing to the fact that we continue to keep abreast of environmental laws and regula-
tions around the world through collaboration with regional headquarters and environmental depart-
ments in respective regions.
4°C scenario
Increase in abnormal weather
Minor impact owing to the fact that we are strengthening our risk management system by formulating
Business Continuity Management (BCM) Guidelines based on a designated Business Continuity Plan (BCP).
Risk management
Disclosing information about Panasonic’s risk management systems and activities for each Divi-
sional Company, as well as from a Company-wide standpoint
Metrics and targets Setting short-term targets based on the amount of energy as metrics in our Green Plan 2021
Setting medium- to long-term targets based on GHG emissions as metrics (approved Science
Based Targets (SBTs))
Emissions from business activities (scope 1 and 2)
Target
30% reduction by 2030 (vs. fiscal 2014)
Zero by 2050
Emissions from use of Panasonic products (scope 3)
30% reduction by 2030 (vs. fiscal 2014)
Progress
112%
34%
22%
Panasonic Annual Report 2020
59 ESG as Our Management Foundation
Human Resources Initiatives
Supporting employees taking on
challenges, learning, and growing
In the years ahead, our operating environment will likely
experience increasingly significant changes, including
those affecting the labor market and diversification of
customer values. Panasonic believes that possessing a
diverse pool of human resources capable of fully maxi-
mizing their capabilities during such times will be the
driving force behind the Company’s transformation and
growth. To this end, we are stepping up our initiatives for
the development of employees that are ready to take on
challenges, the creation of organizations that engage in
co-creation, and diversity and inclusion.
1. Developing employees that are ready to take on
challenges
One of our global initiatives is the roll-out of the “A Better
Dialogue” project to support every employee’s personal
growth and challenges by mainly utilizing one-on-one
meetings to enhance the quality and quantity of dialogue
with their respective managers. In addition, we have put
in place a system of global core common knowledge that
can be accessed by all global employees so that each indi-
vidual employee can deeply understand the importance
of learning and engage in self-studying. By utilizing this
system, employees can acquire 24 areas of global com-
mon knowledge that should be mastered.
In Japan, we launched the “A Better Workstyle” pro-
gram in fiscal 2019. This initiative has two aims: (1) to
have every employee choose a better working style and
grow as an individual whilst feeling that their work is
rewarding; and (2) to achieve further development of the
Company. As part of the initiative, employees concretely
express their aspirations (what they aim to become) and
goals (what they want to do) for the future. And in order
to create an environment in which they can continue
to grow, we have thus far provided more opportunities
that facilitate growth, primarily through external working
experiences and in-company multitasking.
In fiscal 2021 we are further evolving this program and
relaunching it as “A Better Workstyle 2.0” to generate new
value and contribute to our customers. In order to create new
value for customers, we believe we need to once again reas-
sess our existing values from the ground up. For that reason,
we have identified all of the items that each employee should
be mindful of implementing on a daily basis from their respec-
tive standpoints and compiled them into 10 statements. We
are also simultaneously implementing the following three ini-
tiatives (1) Better self-determination: Individuals should take
up the challenge of adopting a new working style and creating
value based on their own judgment in order to fully maximize
their own capabilities. (2) Better cooperation and co-creation:
Individuals and organizations possessing various capabilities
and values should cross boundaries to connect with others in
order to generate new value. (3) Better working environments:
Organizations should enhance productivity as much as possi-
ble by making full use of digital technology to reform business
processes and reviewing inefficient systems and rules.
2. Creating organizations that engage in co-creation
Our mission for organizational development is to create
organizations and a culture in which individuals and teams
can fully exert their true potential. Based on this approach,
Panasonic continues to undertake a number of initiatives in
countries and regions around the world. For example, at our
Tesla business site in North America, we have listened to
the opinions of employees closest to the frontline regarding
certain issues. In response, we established a high perfor-
mance culture management framework for ramping up the
support of the leadership team in order to solve those issues,
which is helping transform the mindset of every employee.
In Japan, we set up a dedicated team at the head office in
2015 to carry out activities for a total of 90 business sites and
departments, mainly focusing on building relationships within
organizations, encouraging dialogue, formulating visions, and
providing leadership development support.
Also, every year as a global initiative we ask all employees
A Better Workstyle 2.0
A Better Dialogue workshop
Better cooperation and co-creation
(managers, co-workers, external partners)
Managers
Better self-determination
(full maximization of individual capabilities/
responsibilities and judgment)
Customers
Individual
achievements
Team
results
Organizational
results
Individuals
Co-workers
Team
External
partners
Organization
Creation of
new value
for customers
Better working environments
(business process reforms/elimination of
systems that stand as barriers)
Panasonic Annual Report 2020
ESG as Our Management Foundation
60
to participate in an employee opinion survey as a way of con-
ducting a fixed-point observation of employee engagement.
The results of the survey are shared in the workplace and
used to improve the workplace environment, for example,
through the aforementioned initiatives on the development of
employees and the creation of organizations. We are begin-
ning to see some positive results come out of these initia-
tives, such as an increase in real value regarding the growth
opportunities that the Company extends to employees to
support their personal growth.
3. Diversity & Inclusion
Panasonic brings together people of different back-
grounds—whether it be geographically, culturally, or his-
torically—as well as people possessing different capabilities
and attributes, such as gender, age, race, beliefs, religion,
nationality, sexual orientation, or gender identity. We aim
to always be a Group that draws on the collective wis-
dom of all employees to spark innovation. To that end, we
implement initiatives regarding diversity in different regions
worldwide so that each and every employee can harness
their individuality and actively demonstrate their abilities.
For example, in Japan we are focused on developing an
environment in which our diverse pool of employees can
prove themselves, mainly by running unconscious bias train-
ing sessions*1 for management education and organizing
networking sessions to further facilitate communication
among employees with disabilities, foreign national employ-
ees, female employees, or employees that consider them-
selves to be part of the LGBTQ community. In Europe too,
from the perspective that diversity in the leadership group
can help boost productivity and profitability, and with the
aim of nurturing female leaders and diversifying the pipe-
line of human resources, we run a Women in Leadership
Program throughout the year to improve skill levels and
change mindsets mainly through 360-degree evaluations,
coaching, and the drafting of personal transformation plans.
* Please refer to our Global Diversity Policy for more information about how
Panasonic develops and utilizes its diverse pool of human resources.
Creating safe and secure workplaces
The COVID-19 brought about an opportunity to rapidly accel-
erate our transformation of working styles. Based on the
assumption that all employees are conscious about prevent-
ing the spread of infection to create safe and secure work-
places, CEO Kazuhiro Tsuga sent a message to all employees
of the Panasonic Group saying that the Company would opti-
mize the way of management by combining real operations
with digital technology, while urging every employee to act
autonomously in an effort to continue increasing organiza-
tional productivity through cooperation and co-creation. As
such, we are working to raise employee awareness and fos-
ter a culture of systematization in order to hasten the maxi-
mum use of digital networks throughout the Company. More
specifically, in order to enhance the value we generate, we
are endeavoring to optimize real and digital operations for
each job type and workplace and are implementing initia-
tives that raise the productivity of both organizations and
individuals. In addition, we are reviewing our personnel/labor
management systems and frameworks, particularly those
regarding working hours and locations.
To thoroughly ensure compliance we implement various
initiatives and measures that aim to raise awareness of com-
pliance across the entire Group and foster a culture of com-
pliance in the workplace. In fiscal 2021 we are reaffirming
employees to check that they have a correct understanding
of the laws and regulations pertaining to their business and
region and to utilize our global hotline “EARS”*2 in order to
detect issues from an early stage and prevent incidents from
occurring. We are also stepping up awareness activities aimed
at eradicating various forms of harassment in the workplace.
*1 Unconscious bias training
So that we can create organizations capable of realizing a whole host of
synergies, this training aims to equip employees with a correct understand-
ing and awareness of unconscious bias.
*2 EARS (Ethical Action Real Solutions)
Panasonic’s internal whistle-blowing hotline for employees to report concerns
about compliance matters. All reports concerning compliance matters go
through an independent, external system operated by a specialist firm. Reports
can be submitted anonymously, confidentially, and without fear of retaliation.
Optimizing real and digital operations to enhance the value we generate
Case example of examination process
Examples of initiatives for each job type/workplace
Strategy
Business strategy
Technological, sales, and
manufacturing strategies
DX-driven business model transformation and manufacturing innovation
Organizational
productivity
Individual
productivity
Business process
Cooperation and
co-creation within
organizations
Capabilities of the
individual
Customer (external)
interaction process
Optimal selection of remote operations to complement and reinforce real
operations
Internal business process
Classification of work based on business/function; digital technology-powered
process innovation; stronger direct-indirect collaboration
Cooperating teams/
relationships
Invigoration of communication and creation of cooperative framework
through organizational development
Management of
organization leaders
Results of enhancing quality and quantity of dialogue focused on the
sharing of value; accurate understanding of behavior
Individual engagement
Company: Development of an environment that respects the individual;
Individual: Awareness of responsibilities and improvement in self-determination
Development of individual
capabilities
Thorough implementation of real OJT coupled with use of IT tools for
agile learning
Efficiency of the
individual
Time productivity of
individuals
Flexible work system assuming appropriate management of working
hours; reforms to related systems
Panasonic Annual Report 2020 61
ESG as Our Management Foundation
CSR Procurement
Panasonic currently does business with around 10,000
suppliers worldwide, roughly 70% of which are located
in Japan and China. Industry-wise, 34% of them supply
machined parts. We aim to establish fair, equitable, and
sustainable supply chains by realizing co-existence and
mutual prosperity with suppliers who can share our val-
ues on fulfilling social responsibilities regarding not just
economic relationships, but also the environment, CSR,
and society. Fulfilling our social responsibilities together
with our suppliers is in itself the practical implementa-
tion of our management philosophy, and we consider the
establishment of sustainable supply chains to be a key ini-
tiative if we are to steadily undertake procurement activi-
ties in the future and guarantee excellent product quality
and competitive prices in order to deliver product value
that is acceptable to our customers.
Breakdown of
transactions
(by region)
Latin
America
1%
Japan
39%
Machined
parts
34%
Europe
3%
North
America
5%
ASEAN &
India
18%
China
34%
Other
19%
Electricals/
electronics
23%
Procurement policy
Driven by the concept that, based on relationships of
mutual trust and through diligent study and cooperation,
our suppliers are invaluable partners in creating the values
our customers demand, Panasonic’s Procurement Policy
revolves around the following three points.
1. Implementation of global procurement
activities
The Company globally establishes partnerships with
suppliers to respond to production activities on a
global scale, and works to create the functions and
values our customers demand based on relation-
ships of mutual trust and through diligent studies
and cooperation.
2. Implementation of CSR procurement
Complying with laws and regulations, social norms,
and corporate ethics, the Company promotes pro-
curement activities together with suppliers that ful-
fill their social responsibilities, such as human rights,
labor, safety and health, global environmental conser-
vation, and information security.
3. Procurement activities working closely with
suppliers
In order to achieve product values expected by cus-
tomers, the Company serves as the contact point of
suppliers with respect to information, such as the
market trends of materials and goods, new technolo-
gies, new materials, and new processes, and works
to ensure and maintain the quality of purchased
goods, realize competitive prices, and respond to
market changes.
Breakdown of
transactions
(by product)
CSR self-assessments
Raw
materials
24%
(as of March 31, 2020)
It is also important to tackle child labor, forced labor, and
other human rights and labor issues in the supply chain.
When entering into an agreement with a supplier, the
Company asks for the supplier’s cooperation in imple-
menting CSR practices, supporting Panasonic Supply
Chain CSR Promotion Guidelines, and performing CSR
self-assessments.
Panasonic Annual Report 2020 ESG as Our Management Foundation
62
Panasonic Supply Chain CSR Promotion Guidelines
(1) Labor rights: Prohibition of forced labor and child
labor, appropriate working hours and payment of
wages, humane treatment and elimination of dis-
crimination, and freedom of association
(2) Health and safety: Occupational safety and train-
ing for emergency preparedness, machinery and
equipment safeguarding, and health and safety
facilities
(3) Environment: Compliance with the Panasonic
Group Green Procurement Standards
(4) Ethics: Prohibition of corruption and bribery, and
promotion of fair trade and responsible minerals
procurement
(5) Information security: Prevention of information
leakage and protection against threats on com-
puter networks
(6) Quality and safety: Establishment of a product
quality management system, provision of precise
information on products and services, and ensur-
ing of product safety
(7) Contribution to society: Contributing to society
and local community
(8) Management system
In the fiscal year ended March 2016, Panasonic began
requesting that its suppliers conduct a CSR self-assessment
of their initiatives for human rights, health and safety, the
environment, and ethics, and Panasonic has been request-
ing these self-assessments annually since then.
If necessary, the Company has conducted field sur-
veys and urged corrective actions to ensure fair, appropri-
ate, and sustainable transactions. And the Company has
made the same commitment in its Clean Procurement
Declaration, which prohibits any employee from receiving
money and valuables, and accepting any form of hospi-
tality, entertainment or meals from suppliers, and estab-
lished a global hotline by which Panasonic adheres to
higher standards of moderation and ethics in its relation-
ships with suppliers.
Responsible minerals procurement
Panasonic recognizes that the issue of conflict minerals
is a matter of grave concern for society, given the various
risks of child labor and other human rights abuses, harsh
working conditions, environmental destruction, and cor-
ruption in conflict-affected and high-risk regions, as well
as the possibility that they are the source of funds for orga-
nizations engaged in illegal or unethical activities. In order
to promote the responsible procurement of minerals, the
Company participates in JEITA’s Responsible Minerals
Trade Working Group to raise awareness and improve
the efficiency of surveys. Furthermore, since July 2017
the Company has been a member of the Responsible
Minerals Initiative (RMI), through which it obtains the lat-
est industry trends and promotes best practices regard-
ing procurement activities.
Moreover, Panasonic continues to implement initiatives
in line with the Due Diligence Guidance of the Organization
for Economic Co-operation and Development (OECD).
The Company requires all related suppliers to provide
information on smelters/refineries through the supply
chain, and aims to procure minerals from smelters/refiner-
ies that present no issues. In 2019 the Company surveyed
around 3,600 suppliers concerning conflict minerals, but
none of the minerals it sourced from them have been con-
firmed to be directly or indirectly financing armed forces.
There are also concerns about cobalt, which is used in
lithium-ion batteries and other products, owing to human
rights issues such as child labor at mining sites. Panasonic
is constantly addressing this issue, mainly by conducting
cobalt supply chain surveys and identifying and investigat-
ing refineries/smelters.
Environmental initiatives
Panasonic asks its suppliers to actively engage in global envi-
ronmental conservation and environmental management
and also deliver their goods in accordance with its green pro-
curement policy. We have revised our Green Procurement
Standards with the aim of achieving the Green Plan 2021
(Please refer to “Message from Environmental Compliance
Administrator.”) Based on these standards, we will push
ahead with procurement activities so as to contribute to
global environmental conservation together with suppliers.
We ask our suppliers to reduce their environmental impact
by establishing environmental management systems, ensur-
ing comprehensive chemical substance management, low-
ering GHG emissions, promoting the recycling of resources
and water, engaging in biodiversity conservation, shar-
ing results of collaborations (ECO-VC Activity), and urging
upstream suppliers in the supply chain to do the same.
The ECO-VC Activity recognizes outstanding initiatives
and ideas aimed at generating added value. Panasonic,
in its procurement activities, works closely with sup-
pliers from the development stage to not only stream-
line costs, but also reduce CO2 emissions, minimize
the total resources used, and utilize recycled resources.
The Activity receives around 700 applications on aver-
age every year. Through partnerships with suppliers, the
Company is helping to mitigate climate change by contrib-
uting to the reduction in CO2 emissions.
Through these activities Panasonic continues to pro-
mote CSR procurement and fulfill its social responsibilities
together with suppliers. At the same time, by establishing
stable and sustainable supply chains, the Company will
continue to underpin enhancements in corporate value in
the future.
Panasonic Annual Report 2020
63
Financial and Corporate Information
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
7.5
3.6
3.9
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Domestic
Overseas
Operating Profit and Ratio to Sales
(Billions of yen)
500
400
300
200
100
0
293.8
286.7
(%)
10.0
8.0
6.0
4.0
2.0
3.9%
0
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Adjusted Operating Profit (left scale)
Operating Profit (left scale)
Operating Profit/Sales Ratio (right scale)
Net Profit Attributable to Panasonic Corporation Stockholders and ROE
(Billions of yen)
300
200
100
0
-900
225.7
11.5%
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
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
475.0
6.3%
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
R&D Expenditures (left scale)
R&D Expenditures/Sales Ratio (right scale)
(%)
15
10
5
0
-50
(%)
7.5
5.0
2.5
0
Despite year-on-year increases in
domestic sales of in-vehicle infotain-
ment systems and personal computers,
as well as in overseas sales of automo-
tive batteries, domestic housing related
businesses were deconsolidated, and
overseas TVs and Automotive Solu-
tions struggled. Due also to the impact
of COVID-19, consolidated net sales
declined year on year.
Operating profit decreased due largely
to the impact of decreased sales by
weak capital investment demand in
China, as well as the impact of COVID-
19, in addition to recording of restruc-
turing expenses, despite fixed cost
reductions through enhancing man-
agement structure, and rationalization
efforts at the automotive cylindrical
battery factory in North America, as
well as gains from business transfers.
Note: Adjusted operating profit = sales - cost of
sales - SG&A
Due to the decrease in operating profit,
net profit attributable to Panasonic
Corporation stockholders declined. This
was despite a decrease in income taxes
owing to tax benefits associated with
the reorganization of subsidiaries. As a
result, ROE ended the year at 11.5%.
Panasonic concentrated on develop-
ment of new technologies and new
products to underpin the future based
on the growth strategies for the major
business fields. In addition, the Group
developed technologies such as IoT, arti-
ficial intelligence (AI), and big data, and
also actively worked to create new busi-
nesses that make use of such technol-
ogies. As a result, R&D expenditures
totaled 475.0 billion yen.
(Billions of yen)
500
400
300
200
100
0
600
400
200
0
-200
-400
-600
(Billions of yen)
(Billions of yen)
1,600
1,200
800
400
0
(Yen)
40.0
30.0
20.0
10.0
0
268.9
205.0
430.3
272.1
224.2
-206.1
3/’20
1,471.4
1,016.5
30.0
31.0%
(%)
40.0
30.0
20.0
10.0
0
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Capital Investment
Depreciation
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
U.S. GAAP
IFRS
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Free Cash Flow
Free Cash Flow Excluding Strategic Investments
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Cash and Cash Equivalents
Interest-Bearing Debt
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Dividends Declared per Share (left scale)
Consolidated Payout Ratio (right scale)
Panasonic Annual Report 2020 Financial and Corporate Information
64
Capital Investment and Depreciation
(Billions of yen)
500
400
300
200
100
0
268.9
205.0
Panasonic makes capital investment
based on a policy of steady invest-
ments primarily in key businesses for
future growth. The main capital invest-
ments for fiscal 2020 have been made
in production facilities in Japan and
China for lithium-ion batteries for auto-
motive use and in production facilities
for electronic components, etc.
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Domestic
Overseas
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Capital Investment
Depreciation
Free Cash Flows
(Billions of yen)
600
400
200
0
-200
-400
-600
430.3
272.1
224.2
-206.1
3/’20
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
U.S. GAAP
IFRS
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Free Cash Flow
Free Cash Flow Excluding Strategic Investments
Cash and Cash Equivalents and Interest-Bearing Debt
(Billions of yen)
1,600
1,200
800
400
0
1,471.4
1,016.5
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Cash and Cash Equivalents
Interest-Bearing Debt
Dividends Declared per Share and Consolidated Payout Ratio
(Yen)
40.0
30.0
20.0
10.0
0
30.0
31.0%
(%)
40.0
30.0
20.0
10.0
0
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
R&D Expenditures (left scale)
R&D Expenditures/Sales Ratio (right scale)
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Dividends Declared per Share (left scale)
Consolidated Payout Ratio (right scale)
Free cash flow increased significantly
year on year, to 224.2 billion yen, due
to cash inflows from the sales of busi-
nesses and assets, as well as improve-
ment in working capital and thorough
controls of capital investments and inven-
tories. This was despite upfront invest-
ments in automotive prismatic batteries.
Note: Lease receivables collected as a result of
application of finance lease accounting as les-
sor—based on product supply contracts deter-
mined to contain leases—are included in cash
flows from investing activities. (Lease receiv-
ables collected amounted to 37.2 billion yen
in fiscal 2020, 167.3 billion yen in fiscal 2019,
and 19.3 billion yen in fiscal 2018.)
Cash and cash equivalents increased
year on year, due primarily to the
improvement in free cash flow. Inter-
est-bearing debt also increased, due
mainly to issuance of bonds and an
increase in lease liabilities resulting from
the application of IFRS 16, “Leases” in
the year under review.
Note: Interest-bearing debt (amounting to 1,471.4
billion yen at March 31, 2020) includes
lease liabilities of 266.9 billion yen.
Panasonic works to provide a stable,
sustained dividend based on a target
consolidated payout ratio of approxi-
mately 30%. According to this policy,
the annual dividend per share for fiscal
2020 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 attribut-
able to Panasonic Corporation is negative.
(Trillions of yen)
(Billions of yen)
(Billions of yen)
(Billions of yen)
9
6
3
0
500
400
300
200
100
0
300
200
100
0
-900
600
400
200
0
7.5
3.6
3.9
293.8
286.7
(%)
10.0
8.0
6.0
4.0
2.0
3.9%
0
225.7
11.5%
475.0
6.3%
(%)
15
10
5
0
-50
(%)
7.5
5.0
2.5
0
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Adjusted Operating Profit (left scale)
Operating Profit (left scale)
Operating Profit/Sales Ratio (right scale)
3/’11
3/’12
3/’13
3/’14
3/’15
3/’16
3/’16
3/’17
3/’18
3/’19
3/’20
U.S. GAAP
IFRS
Net Profit Attributable to Panasonic Corporation Stockholders (left scale)
ROE (right scale)
Panasonic Annual Report 2020 65 Financial and Corporate Information
At a Glance
Reportable Segment
Fiscal 2020 Operating Results
Sales (Years ended March 31)
Adjusted operating profit (reference)
Fiscal 2020 Net Sales
Composition Ratio
Appliances
15%
31%
18%
Consolidated
Net Sales
¥7,490.6 billion
13%
23%
Life Solutions
Note: Net sales composition ratio is calculated by dividing the sales
of each reportable segment by the total of reportable segment
sales (excluding “Other” and “Eliminations and Adjustments”).
Connected Solutions
Spatial sterilizing/deodorizing
equipment using sodium
hypochlorite (Ziaino)
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 competi-
tive devices.
Fiscal 2019
Fiscal 2020
Appliances
Appliances
Let's Note notebook
PCs for corporates
Collaboration with Linkwiz, Inc.
to enhance welding processes
in manufacturing
Fall detection system for
Odakyu Electric Railway Co., Ltd.
Automotive
Car cockpits
Heads-up display
(Display example)
In-vehicle lithium-ion battery
Eco Solutions
Name
change
Life Solutions
Industrial Solutions
Connected
Solutions
Connected
Solutions
Automotive &
Industrial Systems
Organization
change
Automotive
Industrial
Solutions
Multi-layer circuit board
material, which meets the
requirements for high-speed
transmission
Storage module for
lithium-ion battery
Power Coil for
automotive use
Operating Profit (Years ended March 31)
• Operating profit/sales ratio
(Billions of yen)
3,000
2,750.6
2,592.6
(Billions of yen)
83.6
85.6
71.1
55.7
4.0
3.1
2.1
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
2,500
(Billions of yen)
200
2,036.1
1,912.5
179.8
9.4
1,250
100
89.9
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
1,200
1,127.7
(Billions of yen)
100
99.9
1,035.7
64.6
98.1
3.2
94.4
92.2
76.2
8.9
8.4
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
2,000
(Billions of yen)
1,523.2
1,482.4
-0.8
-11.8
-12.1
-30.5
-3.1
-46.6
-4.0
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
1,500
1,422.3
1,282.7
(Billions of yen)
68.6
63.5
4.8
37.6
3/‘19
3/‘20
3/‘19
3/‘20
4.6
0.4
0
2,000
1,000
0
0
800
400
0
1,000
0
1,000
500
0
90
60
30
0
0
50
0
0
-25
-50
80
60
40
20
0
(%)
6.0
2.0
0
(%)
12.0
6.0
0
(%)
12.0
6.0
0
(%)
0
-2.0
(%)
6.0
4.5
3.0
1.5
Panasonic Annual Report 2020 15%
31%
18%
Consolidated
Net Sales
¥7,490.6 billion
13%
23%
Reportable Segment
Fiscal 2020 Operating Results
Sales (Years ended March 31)
Financial and Corporate Information
66
Operating Profit (Years ended March 31)
Adjusted operating profit (reference)
• Operating profit/sales ratio
Sales decreased by 6% to 2,592.6 billion yen from a year ago, declining overall as
a result of struggling sales of TVs and digital cameras primarily in Europe, and the
impact of COVID-19, despite increased sales of room air-conditioners in Asia and
large air-conditioners in Japan.
Operating profit decreased 29.9 billion yen to 55.7 billion yen from a year ago
as a result of the impact of COVID-19 and the recording of restructuring expense,
despite strong sales of washing machines and personal-care products in Japan.
(Billions of yen)
3,000
2,750.6
2,592.6
2,000
1,000
0
90
60
30
0
(Billions of yen)
83.6
85.6
(%)
6.0
71.1
55.7
4.0
3.1
2.1
Sales decreased by 6% to 1,912.5 billion yen from a year ago, declining overall because
Panasonic Homes Co., Ltd. and the construction solution business were removed
from the scope of consolidation due to business transfers to Prime Life Technologies
Corporation (PLT), a joint venture with Toyota Motor Corporation. Excluding that effect,
sales increased as a result of the COVID-19 related sales reductions in all SDs at the
end of the fiscal year being covered by the domestic and international electric mate-
rials, housing, bicycles, and nursing care service, which had been solid earlier on.
Operating profit increased 115.2 billion yen to 179.8 billion yen from a year ago,
as a result of higher profit from sales, rationalization measures, along with a gain from
stock transfers etc. in the housing business when PLT was established.
Sales decreased by 8% to 1,035.7 billion yen from a year ago, decreasing overall,
which was mainly due to weaker sales in the process automation business and
avionics business and a sales decline across the segment triggered by the impact
of COVID-19 and other factors, although Panasonic System Solutions Japan Co.,
Ltd. saw an increase in its sales.
Operating profit decreased 2.2 billion yen to 92.2 billion yen from a year ago,
mainly due to losses on lower sales in the process automation business and the
avionics business, a sales decline triggered by the COVID-19, and other factors,
despite accrued capital gains from the transfer of the security systems business.
Sales decreased by 3% to 1,482.4 billion yen from a year ago. Despite increased sales
at automotive batteries, resulting from the effect of investments in capacity expansion,
overall sales declined due to decreased sales at Automotive Solutions which were mainly
impacted by deteriorating market conditions in China and the spread of COVID-19.
The segment recorded an operating loss of 46.6 billion yen, 34.5 billion yen down
from a year ago, mainly because of increases in development expenses in the auto-
motive solutions business for challenging development projects centered on battery
chargers ordered from Europe, as well as recognition of impairment loss on goodwill
at Spanish subsidiary Ficosa International S.A. due to market deterioration. In addition,
there were increases in fixed costs in the automotive batteries business for the produc-
tion launch of high-capacity cells for prismatic lithium-ion batteries at the Himeji Factory
in Japan, despite increases in sales and profit in the automotive batteries business.
Sales decreased by 10% to 1,282.7 billion yen from a year ago, declining overall
as the U.S.-China trade dispute led to a deterioration of the Chinese market and
deterred investments, and the impact of COVID-19, which offset steady growth
in sales in key fields(Note 1) primarily of “automotive CASE(Note 2)” and “informa-
tion communication infrastructure.”
Operating profit decreased 64.0 billion yen to 4.6 billion yen from a year ago,
because efforts to reduce fixed costs and promote the rationalization of materials
fell short of offsetting weak sales and profit triggered by the market downturn and
the COVID-19, and an impairment loss was also accrued when the transfer of the
semiconductors business was decided.
(Note 1) Key fields: the fields of “CASE for automotive use”, “information communication infra-
structure”, and “factory labor saving,” which are continuously evolving
(Note 2) CASE: Connected, Autonomous, Shared & Services, and Electric
2.0
0
(%)
12.0
6.0
0
(%)
12.0
6.0
0
(%)
0
-2.0
(%)
6.0
4.5
3.0
1.5
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
2,500
(Billions of yen)
200
2,036.1
1,912.5
179.8
9.4
1,250
100
89.9
64.6
98.1
3.2
0
0
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
1,200
1,127.7
(Billions of yen)
99.9
100
1,035.7
800
400
0
50
0
94.4
92.2
76.2
8.9
8.4
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
2,000
(Billions of yen)
0
1,523.2
1,482.4
-0.8
-11.8
-12.1
1,000
0
-25
-50
-30.5
-3.1
-46.6
-4.0
3/‘19
3/‘20
3/‘19
3/‘20
(Billions of yen)
68.6
63.5
4.8
37.6
(Billions of yen)
1,500
1,422.3
1,282.7
1,000
500
0
80
60
40
20
0
3/‘19
3/‘20
3/‘19
3/‘20
4.6
0.4
0
Panasonic Annual Report 2020
67 Financial and Corporate Information
At a Glance
Sales Composition (Based on Fiscal 2020 results)
Appliances
Others
Commercial Refrigeration
& Food Equipment
Sales
¥2,592.6 billion
Smart Life Network
Life Solutions
Others
Panasonic Homes
Housing Systems
PSSJ
Mobile Solutions
Connected Solutions
Sub-segments
(Note) “Businesses whose sales are disclosed”
renamed to “Sub-segment” from Fiscal 2021
Business Division
Main products and services
Heating and Cooling
Solutions
Heating and Cooling Solutions
Heating and Cooling Solutions BD
Home Appliances
Smart Life Network
Home Appliances
Commercial Refrigeration & Food Equipment
Cold Chain BD, Hussmann Corporation
Lighting
Others
Lighting
Energy Systems
Sales
Energy Systems
Panasonic Ecology Systems
Panasonic Ecology Systems Co.‚ Ltd.
¥1,912.5 billion
Kitchen Appliances BD, Laundry Systems and Vacuum Cleaner
BD, Beauty and Personal Care BD
Smart Life Network BD
Refrigeration and Air-Conditioning Devices BD, Smart Energy
System BD, sales of other Divisional Company products,
headquarter-related, eliminations, etc.
Lighting BD
Energy Systems BD
Housing Systems BD
Panasonic Homes Co., Ltd.*
Bicycle, nursing-care, sales & marketing, eliminations, etc.
Panasonic Avionics Corporation, Avionics BU
Process Automation BD
Media Entertainment BD
Mobile Solutions BD
Panasonic System Solutions Japan Co., Ltd.
Other businesses, eliminations, etc.
Panasonic Ecology
Systems
Avionics
Sales
¥1,035.7 billion
Process Automation
Media Entertainment
Housing Systems
Panasonic Homes
Others
Avionics
Process Automation
Media Entertainment
Mobile Solutions
PSSJ
Others
The “Others” sub-segment is not shown in the pie chart because the amount has been negative due to the effects of eliminations and adjustments.
Automotive
Others
Automotive Solutions
Automotive Infotainment Systems BD, HMI Systems BD,
Automotive Systems BD, Ficosa International, S.A.
Automotive Batteries
Sales
¥1,482.4 billion
Automotive Solutions
Automotive Batteries
Automotive Energy BD, Tesla Energy BD
Others
Sales of other Divisional Company products, etc.
Industrial Solutions
Others
Devices
Sales
¥1,282.7 billion
Systems
Systems
Devices
Others
Electromechanical Control BD, Industrial Device BD,
Energy Solutions BD
Device Solutions BD, Energy Device BD,
Electronic Materials BD
Semiconductor, LCD, sales of other Divisional Company
products, eliminations, etc.
Panasonic Annual Report 2020 Financial and Corporate Information
68
(as of March 31, 2020)
Heating and Cooling
Solutions
Commercial Refrigeration
& Food Equipment
Sales
¥2,592.6 billion
Smart Life Network
Others
Lighting
Panasonic Homes
Housing Systems
¥1,912.5 billion
Panasonic Ecology
Systems
Avionics
Media Entertainment
Sales
¥1,035.7 billion
Process Automation
Mobile Solutions
PSSJ
Others
Home Appliances
Smart Life Network
Others
Lighting
Energy Systems
Housing Systems
Panasonic Homes
Others
Avionics
Process Automation
Media Entertainment
Mobile Solutions
PSSJ
Others
Sales Composition (Based on Fiscal 2020 results)
Business Division
Main products and services
Sub-segments
(Note) “Businesses whose sales are disclosed”
renamed to “Sub-segment” from Fiscal 2021
Others
Heating and Cooling Solutions
Heating and Cooling Solutions BD
Kitchen Appliances BD, Laundry Systems and Vacuum Cleaner
BD, Beauty and Personal Care BD
Room air-conditioners, large-sized air-conditioners,
refrigerators, washing machines, vacuum cleaners,
Home Appliances
Commercial Refrigeration & Food Equipment
Cold Chain BD, Hussmann Corporation
Smart Life Network BD
Refrigeration and Air-Conditioning Devices BD, Smart Energy
System BD, sales of other Divisional Company products,
headquarter-related, eliminations, etc.
Lighting BD
Energy Systems BD
Sales
Energy Systems
Panasonic Ecology Systems
Panasonic Ecology Systems Co.‚ Ltd.
Housing Systems BD
Panasonic Homes Co., Ltd.*
Bicycle, nursing-care, sales & marketing, eliminations, etc.
*Panasonic Homes Co., Ltd. was deconsolidated in January 7, 2020
Panasonic Avionics Corporation, Avionics BU
Process Automation BD
Media Entertainment BD
Mobile Solutions BD
Panasonic System Solutions Japan Co., Ltd.
Other businesses, eliminations, etc.
microwave ovens, rice cookers, personal-care products, TVs,
digital cameras, video equipment, home audio equipment,
fixed-phones, showcases, compressors, fuel cells
Lighting fixtures, lamps, wiring devices, solar photovoltaic
systems, ventilation and air-conditioning equipment, air
purifiers, kitchen & bath, interior furnishing materials,
exterior finishing materials, bicycles, nursing care service
Aircraft in-flight entertainment systems and communications
services, electronic-components-mounting machines,
welding equipment, projectors, professional AV systems,
PCs and tablets, Solutions for various industries, installation/
operation/maintenance services
Automotive Batteries
Sales
¥1,482.4 billion
Automotive Solutions
Automotive Batteries
Automotive Energy BD, Tesla Energy BD
Automotive Solutions
Automotive Infotainment Systems BD, HMI Systems BD,
Automotive Systems BD, Ficosa International, S.A.
Automotive-use infotainment systems, automotive
switches, automotive audio systems, Advanced driver
assistance systems (ADAS), Device and systems for electric
automobiles, automotive mirrors, automotive-use batteries
Others
Sales of other Divisional Company products, etc.
Others
Devices
Sales
¥1,282.7 billion
Systems
Systems
Devices
Others
Electromechanical Control BD, Industrial Device BD,
Energy Solutions BD
Device Solutions BD, Energy Device BD,
Electronic Materials BD
Semiconductor, LCD, sales of other Divisional Company
products, eliminations, etc.
Relays, switches, power supply, industrial motors and
sensors, small lithium-ion batteries, capacitors, coils,
resistors, electronic circuit board materials, dry batteries,
micro batteries, semiconductors, LCD panels
Panasonic Annual Report 2020 69
Financial and Corporate Information
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
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
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
Income (loss) before income taxes
Net income (loss) attributable to Panasonic Corporation
Capital investment
Depreciation
R&D expenditures
Free cash flow
178,807
74,017
403,778
284,244
527,798
266,250
(812,844)
(772,172)
333,695
295,808
520,217
(339,893)
(398,386)
(754,250)
310,866
277,582
502,223
355,156
206,225
120,442
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
At Year-End (Millions of yen)
Cash and cash equivalents
Total assets
Interest-bearing debt
Panasonic Corporation shareholdersʼ 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 shareholdersʼ 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 shareholdersʼ equity/total assets (%)
Payout ratio (%)
Exchange Rate (Yen)
1 USD
1 EUR
1 RMB
974,826
7,822,870
1,595,269
2,558,992
2,946,335
574,411
6,601,055
1,575,615
1,929,786
1,977,566
496,283
5,397,812
1,143,395
1,264,032
1,304,273
592,467
5,212,994
642,112
1,548,152
1,586,438
1,280,408
5,956,947
972,916
1,823,293
1,992,552
1,014,264
5,596,982
725,919
1,705,056
1,854,314
35.75
—
10.00
1,236.05
(333.96)
—
10.00
834.79
(326.28)
—
—
546.81
52.10
—
13.00
669.74
77.65
77.64
18.00
788.87
83.40
83.39
25.00
734.62
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
Note to U.S. GAAP
1. The Companyʼs financial statements were prepared in conformity with U.S. gener-
ally accepted accounting principles (U.S. GAAP) until the fiscal year ended March
2016.
8. Effective from the beginning of fiscal 2013, investments and depreciation expenses
in molding dies are included in “Capital investment” and “Depreciation,” respectively.
Accordingly, the amounts of “Depreciation” and “Capital investment” for fiscal 2012
are changed.
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 companyʼs financial results with those of
other Japanese companies. See the Companyʼs annual securities report and finan-
cial announcements for the details.
3. The Company defines capital investment as purchases of property, plant and equip-
ment 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 declared per share” reflect those declared by Panasonic in each fiscal
year and consist of interim dividends paid during the fiscal year and year-end divi-
dends paid after the fiscal year-end.
6. Exchange rate is the average rate for the fiscal year.
7. “Diluted net income (loss) attributable to Panasonic Corporation per common share”
from fiscal 2011 to fiscal 2014 has been omitted because the Company did not have
potential common shares that were outstanding for the period.
9. Payout ratios have not been presented for those fiscal years in which the Company
incurred a net loss attributable to Panasonic Corporation.
10. “Interest-bearing debt” is equal to the sum of short-term debt, including current portion
of long-term debt, and long-term debt.
11. 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 shareholdersʼ 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 shareholdersʼ 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
Panasonic Annual Report 2020
Financial and Corporate Information
70
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)
Cash and cash equivalents
Total assets
Interest-bearing debt
Panasonic Corporation stockholdersʼ equity
Total equity
Per Share Data (Yen)
Earnings per share attributable to Panasonic Corporation
stockholders:
Basic
Diluted
Dividends declared per share
Panasonic Corporation stockholdersʼ 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 stockholdersʼ equity/total assets (%)
Payout ratio (%)
Exchange Rate (Yen)
1 USD
1 EUR
1 RMB
3/2016
3/2017
3/2018
3/2019
3/2020
7,626,306
413,246
230,299
227,529
165,212
252,905
238,214
438,851
125,551
1,012,666
5,488,024
724,841
1,444,442
1,647,233
7,343,707
343,616
276,784
275,066
149,360
311,641
224,405
436,130
(34,746)
1,270,787
5,982,961
1,124,004
1,571,889
1,759,935
7,982,164
401,202
380,539
378,590
236,040
392,234
226,576
448,879
(35,646)
1,089,585
6,291,148
1,239,444
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
772,264
6,013,931
998,721
1,913,513
2,084,615
7,490,601
286,663
293,751
291,050
225,707
268,850
204,990
475,005
224,207
1,016,504
6,218,518
1,471,311
1,998,349
2,155,868
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
96.76
96.70
30.00
856.57
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
3.9
3.9
11.5
3.0
1.2
3.1
23.7
32.1
31.0
109
121
15.6
Note to IFRS
1. The Companyʼs consolidated financial statements are prepared in conformity with International Financial Reporting Standards (IFRS).
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 acqui-
sition date and payment date.
4. “Capital investment” and “Depreciation” do not include intangibles.
5. “Dividends declared 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, long-term debt, and lease liabilities.
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 stockholdersʼ 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 shareholdersʼ 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
Panasonic Annual Report 2020
71
Financial and Corporate Information
Financial Review
Operating Results
Business Overview
During the year ended March 31, 2020 (fiscal 2020) under
review, the global economy saw a moderate growth trend in
the first half of the fiscal year, supported by spending in the
U.S. and favorable employment conditions in Japan. However,
there were also many sudden economic downside factors
such as the slump in spending and investment in China, and
the slowdown of imports and exports from/to various coun-
tries, with a background of trade friction between the U.S. and
China. Moreover, the period saw an increase in Japanʼs con-
sumption tax, and the worldwide spread of the novel corona-
virus infection (COVID-19) toward the end of the fiscal year.
Under such a management environment, in fiscal 2020,
as the first year of the new Mid-term strategy, the Com-
pany executed the portfolio management and enhancement
of management structure with three business classifica-
tions of “Core growth business,” “Co-creation business” and
“Revitalization business.” Specifically, Panasonic prioritizes
its resources in areas where market growth is expected
as well as the Company has advantages, particularly, in
Core growth business in BtoB fields, and have been mak-
ing efforts for future profit growth.
In addition, toward enhancing competitiveness through
collaboration and co-creation with external partners, in hous-
ing business, the Company established a joint venture with
Toyota Motor Corporation related to town development busi-
ness, Prime Life Technologies Corporation on January 7,
2020. This aim is to generate a unique added value by integrat-
ing “housing” and “mobility.” In automotive prismatic battery
business, the Company decided to establish a joint venture,
Prime Planet Energy & Solutions, Inc. with Toyota Motor Cor-
poration. The aim is to develop highly competitive batteries
that have excellent quality, performance and cost-effective-
ness, and to provide a stable supply of batteries. The joint
venture has been in operation since April 1, 2020.
In terms of profitability improvement, the Company
decided to transfer the semiconductor business, which faces
extreme fierce competitive environment, to Nuvoton Technol-
ogy Corporation, under the umbrella of Winbond Electronics
Corporation in Taiwan. This transfer will enable to lead sustain-
able growth by utilizing the Companyʼs accumulated technical
and product capabilities. Furthermore, in LCD panel business,
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
the Company decided to end its production by 2021 due to
the increasingly competitive global market environment.
Net Sales
The Companyʼs consolidated group sales for fiscal 2020
decreased by 6% to 7,490.6 billion yen from a year ago.
Domestic sales decreased due to the deconsolidation of
housing related businesses, in addition to the impact of
COVID-19, despite sales increases in PCs and Infotainment
Systems such as IVI (Note). Overseas sales decreased
due mainly to sluggish sales in TVs and Automotive Solu-
tions, the effect of exchange rates and the impact of the
spread of the novel coronavirus infection, despite signifi-
cant sales increases in Automotive Batteries.
In addition, the impact of COVID-19 occurred in each
segment mainly in Appliances and Connected Solutions.
Note: IVI: In Vehicle Infotainment
Overview by Geographic Region
By geographic region, overall sales in Japan decreased by
3% to 3,609.1 billion yen, from 3,716.6 billion yen a year ago.
Sales overseas decreased by 9% to 3,881.5 billion yen,
from 4,286.1 billion yen a year ago. In real terms, excluding
the impact of exchange rates, sales decreased by 6% year on
year. In North and South America, sales totaled 1,442.3 billion
yen, a year-on-year decrease of 3% in real terms. In Europe,
sales totaled 720.6 billion yen, a year-on-year decrease of
5% in real terms. In Asia, sales were 963.8 billion yen, a 3%
decrease in real terms, and China, sales were 754.8 billion
yen, a 15% decrease in real terms.
Sales by Region
3/2019
3/2020
(Billions of yen)
Local currency
basis vs. 3/2019
Japan
Americas
Europe
Asia
China
Total
3,716.6
1,529.8
807.3
1,015.0
934.0
8,002.7
3,609.1
1,442.3
720.6
963.8
754.8
7,490.6
97%
97%
95%
97%
85%
95%
(Billions of yen)
vs. 3/2019 %/amount
94%
71%
70%
79%
—
-512.1
-117.7
-125.4
-58.4
-4.2%
3/2019
8,002.7
411.5
416.5
284.1
15.7%
111 yen
128 yen
16.5 yen
3/2020
7,490.6
293.8
291.1
225.7
11.5%
109 yen
121 yen
15.6 yen
Panasonic Annual Report 2020
Operating Results
Financial and Corporate Information
72
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
7.5
(Billions of yen)
500
(%)
10.0
(Billions of yen)
500
411.5
416.5
6
3
0
327.0
286.7
293.8
5.0
250
291.1
5.1
3.9
0
0
250
0
(Billions of yen)
300
284.1
225.7
200
100
0
3/’19
3/’20
3/’19
3/’20
3/’19
3/’20
3/’19
3/’20
Adjusted Operating Profit (left scale)
Operating Profit (left scale)
Operating Profit/Sales Ratio (right scale)
Operating Profit
Operating profit decreased by 29% to 293.8 billion yen
from a year ago. Adjusted operating profit fell 40.3 billion
yen year on year, due largely to the impact of decreased
sales by weak capital investment demand in China and
the impact of COVID-19. This was despite fixed cost
reductions through enhancing management structure by
reducing various indirect costs and others, and rational-
ization efforts at the automotive cylindrical battery fac-
Fiscal 2020 Operating Profit Analysis (Billions of yen)
tory in North America.
Although we posted gains from housing-related busi-
ness transfer, we reported a 77.4 billion yen year-on-year
decline in other income (loss). This was due mainly to
recording of restructuring expenses.
As a result, operating profit fell 117.7 billion yen, and
the operating profit ratio decreased from 5.1% to 3.9%.
Sales increase/
decrease
in real terms
411.5
Price declines/
rationalization/
sales mix, etc.
Fixed cost
Deconsolidation
impact
-13.3
Effect of
exchange
rates
-11.8
Other
income/loss
-89.0
+43.2
+30.6
-77.4
293.8
Adjusted operating profit -40.3
Fiscal 2019
Operating profit -117.7
Fiscal 2020
Profit before Income Taxes
Net Profit Attributable to Panasonic
Corporation Stockholders
Finance income increased from 25.6 billion yen the pre-
vious fiscal year to 31.4 billion yen. Finance expenses
increased from 20.6 billion yen to 34.1 billion yen. As a
result, profit before income taxes was 291.1 billion yen,
compared to 416.5 billion yen the previous fiscal year.
Income taxes were 51.0 billion yen, compared to 113.7 bil-
lion yen a year ago. As a result, net profit attributable to
Panasonic Corporation stockholders totaled 225.7 billion
yen, compared to 284.1 billion yen a year ago. Also, net
profit attributable to Panasonic Corporation stockholders
per share was 96.76 yen, against 121.83 yen the previ-
ous fiscal year.
Panasonic Annual Report 2020 73
Financial and Corporate Information
Financial Review
Financial Conditions and Liquidity
Liquidity and Capital Resources
Cash Flows
The Company recognizes the importance of increasing
free cash flow by strengthening business profitability and
developing businesses over the mid- to long-term. The
Company also works simultaneously to create cash flows
through continuous reductions of working capital, revi-
sions of asset holdings and other measures.
Net cash provided by operating activities for fiscal
2020 was 430.3 billion yen and net cash used in investing
activities was 206.1 billion yen. Free cash flow, the total of
the two, was an inflow of 224.2 billion yen. The free cash
flow for fiscal 2020 improved by 213.9 billion yen from
the previous year. This was due mainly to improved work-
ing capital, thorough controls of capital investments and
inventory as well as an increase in cash inflow from the
sales of business and assets, in spite of an upfront invest-
ments in automotive prismatic batteries.
Free Cash Flows
(Years ended March 31)
(Billions of yen)
250
224.2
200
150
100
50
0
-50
10.3
-35.6
3/’18
3/’19
3/’20
The Panasonic Group has a basic policy of generat-
ing 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, exter-
nal financing is obtained through appropriate means based
on financial strength and financial market conditions.
Cash and cash equivalents as of March 31, 2020 were
1,016.5 billion yen, increased by 244.2 billion yen com-
pared with the end of the previous fiscal year.
During fiscal 2020, Panasonic issued USD-dominated
senior notes of USD 2.5 billion in July 2019, and unse-
cured straight bonds of 100.0 billion yen in March 2020,
in order to raise funds for bond redemptions and securing
funds necessary for future business operations. Panaso-
nic mainly issued commercial paper (CP) to secure work-
ing capital and others.
Interest-bearing debt increased to 1,471.4 billion yen
as of March 31, 2020 from 998.7 billion yen at the end
of the previous fiscal year. This is due to the issuance
of USD-denominated senior notes, unsecured straight
bonds and short-term bonds, in addition to an increase of
lease liabilities by applying IFRS 16, “Leases” from April 1,
2019, despite the repayments of straight bonds and other
factors. Panasonic has been entered into three-year com-
mitment line agreements (Note) with several banks in
June 2018, in order to prepare for contingencies such as
potential deterioration of the financial and economic envi-
ronment. 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.
Note: Commitment line agreements: Contracts made with financial institu-
tions 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
1,089.6
1,000
500
0
(Billions of yen)
1,500
1,239.4
1,471.4
1,016.5
1,000
998.7
772.3
500
0
3/’18
3/’19
3/’20
3/’18
3/’19
3/’20
Panasonic Annual Report 2020
Financial Conditions and Liquidity
Capital Investment and Depreciations
Assets, Liabilities and Equity
Financial and Corporate Information
74
The Panasonic Group makes capital investment based on
a policy of steady investments primarily in key businesses
for future growth. Capital investment in fiscal 2020 (tangi-
ble assets only) decreased 31.6 billion yen to 268.9 billion
yen from 300.5 billion yen a year ago. The main capital
investments have been made in production facilities in
Japan and China for lithium-ion batteries for automotive
use and in production facilities for electronic components,
etc. in the Industrial Solutions segment.
Depreciation (tangible assets only) decreased 21.8
billion yen to 205.0 billion yen from 226.8 billion yen a
year ago.
Fiscal 2020 Capital Investment by Segment
(Tangible Assets Only)
Other
¥10.6billion
Industrial
Solutions
¥54.1billion
Automotive
¥103.5billion
¥268.9
billion
Appliances
¥42.8billion
Life
Solutions
¥38.9billion
Connected
Solutions
¥19.0billion
The Companyʼs consolidated total assets as of March 31,
2020 were 6,218.5 billion yen, an increase of 204.6 bil-
lion yen from March 31, 2019. The Companyʼs consoli-
dated total liabilities were 4,062.7 billion yen, an increase
of 133.3 billion yen from March 31, 2019. These are due
mainly to an increase of right-of-use-assets and lease lia-
bilities by applying IFRS 16, in addition to an increase in
cash and cash equivalents and long-term debt by issuing
straight bonds, despite the impact of the deconsolidation
of housing related businesses.
Panasonic Corporation stockholdersʼ equity increased
by 84.8 billion yen to 1,998.3 billion yen, compared to
March 31, 2019. This was due mainly to recording of Net
profit attributable to Panasonic Corporation stockholders.
As a result, the ratio of Panasonic Corporation stock-
holdersʼ equity was 32.1%, increasing from 31.8% on
March 31, 2019.
With non-controlling interests added to Panasonic
Corporation stockholdersʼ equity, total equity was 2,155.9
billion yen.
Total Assets
(Years ended March 31)
(Billions of yen)
8,000
6,291.1
6,013.9
6,218.5
Panasonic Corporation
Stockholders’ Equity
(Years ended March 31)
(Billions of yen)
2,000
1,998.3
1,913.5
1,707.6
4,000
0
1,000
0
3/’18
3/’19
3/’20
3/’18
3/’19
3/’20
For details regarding consolidated financial statements, please refer to
the Companyʼs 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
Panasonic Annual Report 2020 75
Financial and Corporate Information
Corporate Data (As of March 31, 2020)
Panasonic Corporation and Subsidiaries
Years ended March 31
Corporate Data
Company Name: Panasonic Corporation
Stated Capital: 258,867 million yen
(TSE Securities Code: 6752)
Consolidated Companies (including parent company):
Founded: March 1918 (Incorporated in December 1935)
529 companies
Head Office Location: 1006, Oaza Kadoma, Kadoma-shi,
Companies under the Equity Method:
Osaka 571-8501, Japan
72 companies
Number of Employees: 259,385 persons
Share Data
Number of Shares Issued: 2,453,326,997 shares
(Including 120,365,301 shares held by Panasonic)
Number of Shareholders: 488,540
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
American Depositary Receipts (ADRs)
Depositary Bank: J.P. Morgan Chase Bank, N.A.
Stock Exchange: U.S. Over-the-Counter (OTC) Market
ADR Ratio: 1 ADR = 1 Share
Symbol: PCRFY
Stock Transfer Handling Office
Shareowner Services
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)
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
3/2017
3/2018
3/2019
3/2020
Number of Shares Issued
(in thousands of shares)
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
557,102
577,756
499,728
469,295
514,129
486,489
485,053
505,402
2,453,326
488,540
364,618
Shareholders (%)
Number of Shareholders
Distribution by Type of
Japanese Financial
Institutions, etc.
Overseas Investors, etc.
Other Corporations
Individuals and Others
Treasury Stock
Total
Major Shareholders
Name
30.9
22.7
7.1
23.7
15.6
100.0
34.2
21.9
8.4
29.7
5.8
100.0
28.3
25.3
8.3
32.3
5.8
100.0
27.2
33.2
7.4
26.4
5.8
100.0
30.1
32.9
7.1
24.1
5.8
100.0
30.6
31.2
6.9
25.9
5.4
100.0
30.8
32.6
7.0
24.7
4.9
100.0
31.9
33.4
6.8
23.0
4.9
100.0
34.8
28.9
6.8
24.6
4.9
100.0
34.7
30.3
6.1
24.0
4.9
100.0
Share ownership
(in thousands of shares)
Percentage of
total issued shares (%)
The Master Trust Bank of Japan, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. (trust account)
NIPPON LIFE INSURANCE COMPANY
JP MORGAN CHASE BANK 385151
Japan Trustee Services Bank, Ltd. (trust account 5)
Panasonic Corporation Employee Shareholding Association
Japan Trustee Services Bank, Ltd. (trust account 7)
SUMITOMO LIFE INSURANCE COMPANY
STATE STREET BANK WEST CLIENT - TREATY 505234
Matsushita Real Estate Co., Ltd.
188,150
177,805
69,056
54,945
46,536
41,573
41,454
37,465
33,340
29,121
8.06
7.62
2.96
2.35
1.99
1.78
1.77
1.60
1.42
1.24
Notes: 1. The figures in share ownership are rounded down to the nearest thousand shares.
2. Shareholding ratio is calculated by deducting the Companyʼs treasury stock (120,365,301) 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.
Panasonic Annual Report 2020
Financial and Corporate Information
76
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
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
3/2017
3/2018
3/2019
3/2020
Trading Volume (Millions of shares)
1,500
1,000
500
0
3/2011
3/2012
3/2013
3/2014
3/2015
3/2016
3/2017
3/2018
3/2019
3/2020
3/2011
3/2012
3/2013
3/2014
High (Yen)
Low (Yen)
Period-End (Yen)
1,480
826
1,058
1,070
582
761
781
376
654
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
3/2020
1,264.0
691.7
825.0
Corporate Bonds
Unsecured Straight
Bonds in Japan
Series
13th
14th
15th
16th
17th
18th
19th
USD-Denominated
Senior Notes
Due 2022
Due 2024
Due 2029
Years
7
10
5
7
10
6
10
Years
3
5
10
Coupon rate
(per annum)
0.568%
0.934%
0.190%
0.300%
0.470%
0.230%
0.370%
Coupon rate
(per annum)
2.536%
2.679%
3.113%
Aggregate principal
amount of issue
80 billion yen
100 billion yen
200 billion yen
70 billion yen
130 billion yen
30 billion yen
70 billion yen
Aggregate principal
amount of issue
US$ 1 billion
US$ 1 billion
US$ 500 million
Maturity date
March 18, 2022
March 19, 2025
Sept. 17, 2021
Sept. 20, 2023
Sept. 18, 2026
March 5, 2026
March 5, 2030
Maturity date
July 19, 2022
July 19, 2024
July 19, 2029
Investor Relations Offices
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 Panasonicʼs 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 Companyʼs website for more information regarding environmental and social initiatives.
https://www.panasonic.com/global/corporate/sustainability.html
Panasonic Annual Report 2020
https://www.panasonic.com/global