Pioneer Corporation Susumu Kotani, President and CEO September 16, 2014

Transcription

1 Business Strategy Meeting Pioneer Corporation Susumu Kotani, President and CEO September 16, 2014

2 2 Main Points of Today s Meeting Pioneer aims to be a leading company of Comprehensive Infotainment in vehicles, maximizing synergies between its OEM and consumer-market businesses, in the car electronics industry that big changes have happened. Realign business portfolio, and concentrate management resources in Car Electronics business Accelerate selection and concentration in Home Electronics and Others businesses Grow further home AV and DJ equipment businesses and enhance their brand value with outside partners Establish a firm management base to support the growth strategy, by Group-wide streamlining through realigning g and reconstruction of the financial base

3 3 Business Strategy Meeting I. Business Environment and Management Objectives II. III. 1. Changes in Business Environment 2. Our Direction 3. Realignment of Business Portfolio Growth Strategy 1. Key Points 2. Growth Strategy Financial Strategy

4 4 Business Strategy Meeting I. Business Environment and Management Objectives II. III. 1. Changes in Business Environment 2. Our Direction 3. Realignment of Business Portfolio Growth Strategy 1. Key Points 2. Growth Strategy Financial Strategy

5 5 I-1. Changes in Business Environment Changes in Market Environment Pioneer s Strengths and Approach Auto Industry Car Electronics Industry Growth in auto sales in emerging markets Increasing use of IT in automobile, automated driving, and Advanced Driver Assistance System (ADAS) Increasing connected cars through h communication and cloud Increasing modularization and consolidation of suppliers to be mega suppliers Increase of OEM ratio Integration of AV equipment and navigation equipment Full-scale entry of Google* and Apple* into auto market Reliability & Brand Technological Capabilities & Ability to Provide Solutions High confidence of OEM customers High brand recognition and market share in global market Ability to develop world-first, advanced devices High audio and visual quality Highly precise mapping content Expertise in user interface and entertainment know-how To lead products ready for connected car life Information service business Technology Functions & Customer Value Shift to open platforms of Operating System Shift from value in function to value through experience Market environment has entered phase of major transformation Cost Competitiveness & Business Structure Cost competitiveness through the merits of scale Covers both OEM and consumer businesses Alliances with NTT DOCOMO, INC. and Mitsubishi Electric Corporation Pioneer has the capabilities to address this transformation Pioneer has major opportunity to survive and grow in the car electronics industry. * Google is a trademark of Google Inc. * Apple is a trademark of Apple Inc., registered in the United States and other countries.

6 6 I-2. Our Direction Aim to be a leading company of Comprehensive Infotainment, generating comfort, excitement, safety and reliability in vehicles OEM Aim to be an indispensable key supplier to automakers and their mega suppliers. Provide Brand Value Synergy Cost Quality Reliability Consumer market Aim to be a pioneer through promoting world-first and the most advanced value in connected car life markets.

7 7 I-3. Realignment of Business Portfolio Further accelerate concentration of management resources in Car Electronics to achieve our direction Focus our major strategic markets on growth markets, and establish business structure centered on Car Electronics Aim to maintain and grow brand in home AV products and DJ equipment together with optimal outside partners Business Portfolio Current Future Growth Markets New Areas Car Electronics Car AV systems Car Speakers Cloud services New Areas OLED lighting Medical and healthcarerelated OLED lighting Medical and healthcarerelated Quickly Commercialize Car Electronics Car AV systems Car Speakers Cloud services Growth Car Electronics Car navigation systems New-solution products Non Car Businesses Car Electronics related Map Software Factory automation systems Non Car Businesses Non Car Businesses Car Electronics Car navigation systems New-solution products Improve earnings structure Promote dissemination Car Electronics related Map Software Factory automation systems Expand under growth strategy Further enhance earnings strength Non Car Businesses Home AV products AV accessories DJ equipment Home AV products AV accessories Maintain brand through alliances DJ equipment Grow under new sponsors Non Car Businesses Non Car Businesses Mature Markets Other businesses Other businesses Accelerate selection and concentration Low Profitability High Low Profitability High

8 8 Business Strategy Meeting I. Business Environment and Management Objectives II. III. 1. Changes in Business Environment 2. Our Direction 3. Realignment of Business Portfolio Growth Strategy 1. Key Points 2. Growth Strategy Financial Strategy

9 9 II-1. Key Points Our Direction Leading company for Comprehensive Infotainment Key Action Plans Grow connected cars business* Promote connected car life business * Linkage with cloud based information services in cars Grow OEM business Grow business with existing OEM customers, and achieve sales growth by obtaining new OEM customers New challenge in emerging markets Cultivate new business for both compact cars and cars without pre-installed car audio products Strengthen management base Establish firm management base to support growth strategy

10 10 II-2. Growth Strategy Action Plans Grow Connected Cars Business Challenge in Emerging g g Countries Grow OEM Business Strengthen Management g Base Promote connected car life business by combining information services, peripheral devices and hardware, utilizing our technologies and assets Information services Smart Loop platform Mobile Telematics Center Map data DOCOMO DriveNet Info * Augmented Reality (AR) technology Head-up display (HUD) /light source module Hardware Connected technology AV products Peripheral devices OLED lighting * DOCOMO DriveNet Info is a trademark of NTT DOCOMO, INC.

11 11 II-2. Growth Strategy Action Plans Grow Connected Cars Business Grow OEM Business Challenge in Emerging g Countries Strengthen Management Base Strengthening our key aspects with corporate alliances and M&A in consideration Strength Points of improvement Information services In-house map data Cloud platform to gather big data (Mobile Telematics Center) Business based on corporate alliance with NTT DOCOMO, INC. + Precise map data towards automated driving and map data of emerging countries Form business value in data analyzing technology through corporate alliances in consideration Peripheral devices Knowledge in user interface Development and production of HUD and light source module Development and production of OLED lighting + Alliances and M&A for sensing devices and user interface (UI) related equipment and devices, etc. Hardware Leading manufacturer of car AV equipment Advanced proposing and technological capabilities, such as AR Technological and production capabilities in speakers + Integration of AV equipment and navigation equipment Prior adaptation of open platform Linkage with smartphones and cloud platforms

12 12 II-2. Growth Strategy Action Plans Grow Connected Cars Business Grow OEM Business Challenge in Emerging Countries Strengthen Management Base The value that connected car life provides Create a completely new car experience Safety and Reliability Relieved driving concern under less pressure Comfortable Operation Significant relief, or free from operational stress of navigation and entertainment Enjoyment Entertainment to be more enjoyable

13 13 II-2. Growth Strategy Action Plans Grow Connected Cars Business Grow OEM Business Challenge in Strengthen Emerging g Countries Management Base Promote connected car life business Aim to grow in the new business area with proposals for car AV products and solution services reflecting connected car-life expansion Consumer market Commercial market Prior introduction of the connected value products in the consumer market Expansion of Connected devices towards the ultra-low price zone Market cultivation through collaboration with third parties Aim synergies at OEM and commercial markets Expanding line-up of connected applicable devices Develop e potential t market through solution o proposals backed by our technologies & assets ( An example for solution business) Market Approx. 80% of business-use of total market : Potential market Our Strength Own technologies and assets such as high performance navigation, precise map data and mobile telematics center Audio-visual entertainment Linkage with car functions + Advanced networking proposal Mid to high end price zone Low price zone Ultra-low price zone Current Future Towards FY20, majority of products will be shifted to connected function-ready equipment Business-use cars in Japan Total # of cars in this market: 17M Potential market: Approx. 80% Image of solution proposal for Japanese market リース lease car rental * * others car 1 2 sales sharing Pioneer business- use navigation delivery server *1: Other companies applications *2: Navigation applications Pioneer center s services Operation management center system (Serviced by our telematics center and map data)

14 14 II-2. Growth Strategy Action Plans Grow Connected Cars Business Grow OEM Business Challenge in Emerging Countries Strengthen Management Base Sales increase by growth of business with existing OEM customers and obtaining new OEM customers Gain OEM customers with proposals for connected car life and cost competitiveness, and establish position as a key supplier that maximizes value of automobiles Strength and points of improvement Provide solution proposal of attractive connected car life and key modules, ahead of competitors Precise map data necessary for automated driving Key module, such as HUD Information service business Thorough reinforcement of cost competitiveness OEM Business Sales Trend (Estimates) Action plans Sales expansion with existing OEM customers Acquisition of new global OEM customers Full-scale promotion of car speaker business <Target> Double sales amount by FY20, compared with FY14 Forecast for New Car Sales with Connected Car Technology and Function 4 times (Pioneer estimates) OEM Car Speaker Market 1.2 times (Pioneer estimates) Commodity Mid-Premium FY14 FY17 FY20 Estimate further sales increase from FY17 onwards CY2014 CY2020 Sales expansion of connected cars FY14 FY19 Steady Growth of Car Speaker Market Upper-Premium Hi-End

15 15 II-2. Growth Strategy Action Plans Grow Connected Cars Business Grow OEM Business Challenge in Emerging Countries Strengthen Management Base Cultivate new business for both compact cars and cars without pre-installed car audio products Pursue challenges both of compact cars in emerging market to expect strong growth, and of high global market share Challenge Action Plans Challenge for new models, users, and price range Compact cars in emerging market Existing cars without car audio Estimated New Car Sales Portion 新車販売台数予測 by Region 56% Emerging Countries 61% 新興国 44% 39% 先進国 Developed Countries Population by Earnings in Emerging Markets 新興国における所得別人口 (billion people) 3.0 億 Current Target 0.3 New Target 億 億 億 High-Income bracket (more than US$35,000/year) Upper Middle-Income bracket (more than US$15,000/year) Middle-Income bracket (more than US$5,000/year) Low-Income bracket (less than US$5,000/year) With our high market share and strong brand power, expand business in emerging markets, through M&A in consideration Develop and introduce car AV product suitable for compact car and cars without pre-installed car audio products Cultivate new distribution channels and local dealers Business Reinforcement Roadmap of Emerging Countries FY15 BRICs FY20 ASEAN, such as Indonesia and Thailand, and Latin America, such as Mexico CY2013 年 19 CY2019 年予測 出典 (Source: :FOURIN 世界 動 統計年刊 FOURIN) 2013 CY2020 年 (Source: Ministry of Economy, Trade and Industry in Japan) Middle East and Africa

16 16 Action Plans Grow Connected Cars Business II-2. Growth Strategy Grow OEM Business Challenge in Emerging g Countries 1. Establish a firm management base to support growth strategy Short-term measures to strengthen profitability Strengthen Management Base Aim to strengthen management base through steady group-wide streamlining, as well as profitability improvement for both car navigation systems and car OEM business Car Electronics Current Measures (Effect starts from FY15) Future Measures (Effect will start from FY16) Manufacturing cost reduction by realigning of production sites Shift to sites for lower wages and lower procurement costs R&D and production cost reduction by standardizing products architecture Reduce the number of production processes from design to production and shorten production lead time Improve development efficiency and achieve drastic reductions in development cost by integrating car AV equipment into car navigation equipment Adapt p to the trend of open platform of OS Transfer indirect operations at production sites from Japan to overseas, and introduce IT systems Further shift to overseas manufacturing Effect for FY billion yen* Effect for FY billion yen* 18.5 billion yen* Corporate Streamlining group-wide organization * In comparison with plan for FY15

17 17 II-2. Growth Strategy Action Plans Grow Connected Cars Business Grow OEM Business Challenge in Emerging g Countries Strengthen Management Base 2. Establish a firm management base to support growth strategy Group-wide realigning and streamlining Along with business portfolio realignment, streamline overall Group management structure Restructuring Organizational Head- structure quarters Sites Production Sales/Marketing Functions Restructure organization from business lines to functional lines Eliminate redundancies between headquarters/r&d structure and business divisions by integrating divisions and functions Realign business sites (Kawasaki, Kawagoe), along with streamlining Optimize and redraw production layout, along with portfolio realignment Establishing optimal sales structure for Car Electronics and enhance resources for emerging markets Promote localization through realigning roles and functions both in Japan and overseas Streamlining Group Headcount Directors/Officers Streamline approx.1,500* (7%) (Japan: approx.800 ( 12%), Overseas: approx.700 (5%)) Reduce consolidated headcount by 10% through portfolio realignment and streamlining Reduce the number of executive officers, along with streamlining * Headcount may change due to business integration, schemes for business transfer and so on. In comparison with headcount as of March 31, 2014

18 18 Business Strategy Meeting I. Business Environment and Management Objective II. III. 1. Changes in Business Environment 2. Our Direction 3. Realignment of Business Portfolio Growth Strategy 1. Key Points 2. Growth Strategy Financial Strategy

19 19 III. Financial Strategy Reconstruct financial base to enable investment for the future By review of business portfolio, 1. Generate cash from businesses and assets Concentrate management resources in Car Electronics Transfer partial of home AV and DJ equipment businesses Promote sale of idle assets By improvement of equity ratio and reduction of debt, 2. Establish a sound financial position Streamline to achieve constant profitability Use gains from sales to repay portion of debt Significant improvement of balance sheet Support growth strategy by 3. Creating an appropriate environment for investment Upfront technological investment for nextgeneration car cockpit solutions - Pursue challenge of compact cars in emerging markets - Double OEM car speaker sales - Consider M&A when necessary Strengthen manufacturing, development, and marketing functions as part of growth strategy execution - Enhance solution business utilizing telematics - Maintain and upgrade map data

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