Panasonic announces annual results, group reorganization

Despite the tough price competition, appreciation of the Yen and rising material costs, along with the loss of production and subdued demand due to the Great East Japan Earthquake, Panasonic’s operating profit improved by 60 percent to Yen 305.3 billion (Euro 2.53 billion), resulting in a net income of Yen 74 billion (Euro 613 million) compared with a loss of Yen 103.5 billion (Euro 857 million) a year ago.

Sales in Panasonic’s Digital AVC Networks business reached Yen 3.304 trillion (Euro 27.4 billion), down 3 percent compard with the previous year. According to Panasonic, the result was mainly affected by declining sales of mobile phones and digital cameras, partially offset by favorable sales of blu-ray disk recorders. Operating profit in the business increased 32 percent to Yen 115 billion (Euro 952 million), mainly due to successful cost reduction measures and streamlining efforts.

For the next few years, Panasonic announced a drastic group-wide reorganization. The company’s currently five business segments will be turned into three business sectors: Consumer (AVC Networks and Heating/Refrigeration/Air Conditioning & Home Applicances), Components & Devices (Automotive Systems, Components & Devices and Energy Devices) and Solution (Systems & Communications), Environment & Energy Solutions, Health Care & Medial Solutions and Factory Solutions). The measures will include the termination of approximately 17,000 jobs, resulting in a total workforce of 350,000 people by fiscal 2013. Panasonic said it aims to achieve sales of at least Yen 3 trillion (Euro 25 billion) from each of the three business sectors in fiscal 2013.

As for individual businesses, Panasonic will increase purchase of LCD panels from outside vendors and transfer a production line from its third domestic PDP plant in Amagasaki City in Japan to China. The company said it will focus on panel sizes in which it can give full play to its competitiveness in flat panels.