Global Home About Panasonic > IR Information > IR Library > Financial Announcements > Revision of Financial Results Forecast for Fiscal 2009 (ending March 31, 2009) Q&A Summary

Revision of Financial Results Forecast for Fiscal 2009 (ending March 31, 2009) Q&A Summary

Q Why have you decided to announce your full-year forecast revision at this stage in the uncertain current business conditions?
A October, when we announced our second quarter financial results, was the crucial month to act on business structural reforms as quickly as possible, since we started to see the deterioration of our sales. In mid November, when we analyzed financial forecasts of business domain companies, the figures were worse than we had expected. Therefore, we decided to announce our full year forecast revisions at the earliest opportunity. By making this announcement internally and externally, we will be able to accelerate the speed of the business structural reforms.
Q Please give us a breakdown of negative impact of 300 billion yen on economic downturn and price competition in operating profit.
A The 300 billion yen consists of 220 billion yen due to a decrease in sales and 80 billion yen as a result of price decline.
Q In which regions and what products do you expect a large decrease in sales?
A Sales for the second half of fiscal 2009 are expected to decrease by 650 billion yen, which includes a decrease of 360 billion yen in the business-to-business (B to B). In the B to B business, sales have been weak in automobiles related products, electronic components and factory automation equipment since the second quarter of fiscal 2009. Additionally, sales in business-to-consumer (B to C) have been sluggish since the second half of fiscal 2009, due mainly to weak consumer demand in overseas markets and cash flow problems in some mass retailers.
Q What products are significantly affected by the price decline in the consumer electronics products?
A Price declines in flat-panel TV sales are very severe and the most affected. The Company expected 20% price decline for fiscal 2009 at the beginning of this fiscal year, but now estimates it to be 30%.
Q Please give us a breakdown of a decrease in operating profit by segment.
A Operating profit is expected to decrease by 220 billion yen compared with the Company's original forecast. Of this decrease, 150 billion yen is for Digital AVC Networks segment, 30 billion yen is for Components and Devices segment and 30 billion yen is for Other segment. The 150 billion yen for Digital AVC Networks is broken down as follows: 30 billion yen is automotive related products, 30 billion yen is optical disc-drive related products and the rest is AVC related products.
Q How much positive effect do you expect as a result of business restructuring?
A The business restructuring expenses will be 155 billion yen for fiscal 2009, and the effect is expected to be 50 billion yen in the next fiscal year.
Q Will you change the full year target of unit sales in flat-panel TVs and digital cameras for fiscal 2009?
A There is a possibility that we might narrowly miss our target of 11 million units in flat-panel TVs, but we predict the unit sales will exceed 10 million units. Price declines have now a greater influence on the results forecast than the decrease of unit sales. With regard to digital cameras, sales might be approximately 15% lower than our original plan of 13 million units.
Q How much will you reduce capital investment by?
A We are planning to reduce capital investment for fiscal 2009 by 50 billion yen to 480 billion yen, compared with our original forecast of 530 billion yen.
Q What is the forecast for the net cash balance?
A The Company originally expected 800 billion yen as the net cash balance at the end of this fiscal year. Although we will implement measures to reduce the capital investment, the net cash balance is possibly fall to 600 billion yen due to a sharp profit decline.
Q You mentioned that Panasonic expects to incur 60 billion yen as a write-down of investment securities. What is the Company's policy of cross-shareholdings?
A With regard to cross-shareholdings, the Company considers the strategic capital alliance between the parties to be important. The Company maintains the policy of implementing cross-shareholdings with the aim of further strengthening the business alliance.
Q Is there a possibility that IPS Alpha Technology, Ltd. will change the starting schedule at the LCD panel plant in Himeji, Hyogo?
A The plan for commencing operation of the first stage, which is scheduled in January 2010, has not been changed. However, whether we keep to all plans as scheduled for the first stage of operation will have to be carefully reviewed.
Q Although you indicated a severe business outlook for fiscal 2010, are you going to keep the targets of the mid-term management plan GP3?
A We will not change our targets of 10 trillion yen net sales, 10% ROE and reduction of 300,000 tons in emission of CO2. We will implement concrete measures and make every effort to get closer to these targets.
Q What do you think of the outlook for fiscal 2010?
A We aim to implement initiatives in order to enhance profit in the next fiscal year.
Disclaimer Regarding Forward-Looking Statements
  This Q&A includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Panasonic and its Group companies (the Panasonic Group). To the extent that statements in this Q&A do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Panasonic Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Panasonic Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Panasonic undertakes no obligation to publicly update any forward-looking statements after the date of this Q&A. Investors are advised to consult any further disclosures by Panasonic in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
  The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the ability of the Panasonic Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and good will, and deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Panasonic Group. The factors listed above are not all-inclusive and further information is contained in Panasonic latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

Global Home About Panasonic > IR Information > IR Library > Financial Announcements > Revision of Financial Results Forecast for Fiscal 2009 (ending March 31, 2009) Q&A Summary