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| Mid-term Business Plan based
on the SANYO EVOLUTION PROJECT |
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Tokyo, November 18, 2005----SANYO Electric Co., Ltd. (SANYO), today
announced its mid-term business plan based on the SANYO EVOLUTION
PROJECT (Fiscal Year 2005-2007).
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| 1. Overview of Mid-term Business
Plan |
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| SANYO has been pushing ahead with structural reforms under the SANYO
EVOLUTION PROJECT as part of its efforts to become a global company
in the 21st century. SANYO will strive to achieve a V-shaped recovery
after the next term by rebuilding its business portfolio through ‘selection
& focus’ of its businesses; and reforms in its cost structure
through operational improvements, organizational changes and improvements
in its financial position. SANYO would, as a result, break away from
being a General Consumer Electronics Manufacturer to one focused on
cutting-edge Environment and Energy products and services, selecting
and focusing its businesses around its core strengths and rebuilding
its business foundation to ensure growth in the future. |
| 2. Realignment and Rebuilding of
Businesses |
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| Under the ‘Think GAIA’ vision, SANYO has selected HVAC
(Heating, Ventilating and Air Conditioning) products & Commercial
Equipment, Power Solutions and Personal Mobile Devices as its three
core businesses and will make concentrated investments in these. On
the other hand, regarding businesses other than the core businesses,
such as the Finance business, AV business, Semiconductor business,
Home Appliance business, their business models would be fundamentally
reviewed for structural reforms and the following measures would be
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(1) Regarding Core businesses
Regarding the power solutions business, with its world leading rechargeable
battery business as the center, SANYO would aim for an overwhelming
top position in the world through its growth strategy in the automobile
sector. In the HVAC & Commercial Equipment businesses, through
expanding its strategy overseas, mainly China and Europe, SANYO would
strengthen its global competitiveness. With regards to the personal
mobile devices business, SANYO would strive to create a new business
model for a ubiquitous society through the integration and strengthening
of its digital camera and mobile phones businesses.
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(2) Businesses to undergo structural reforms
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Finance business |
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Through operational and capital tie-ups with major partners,
SANYO aims to strengthen its finance business and promote autonomy
of its finance business as an independent finance division.
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| 2) |
AV Business |
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The termination of unprofitable businesses such as DVD players,
DVD recorders and VCRs has already been announced. Regarding
the TV business, drastic structural reorganization will be implemented,
not ignoring the possibility of alliances with other companies.
By promoting focus of production and procurement in China, SANYO
would aim to maximize the scale-merit of the 6.5 million units
it produces globally. Moreover, with regards to HD-DVD, SANYO
would stop the development of HD-DVD players/recorders and focus
its resources on developing optical pick-ups. SANYO will however
sell SANYO branded HD-DVD players/recorders on an OEM basis.
Condensers and other highly profitable devices that support
the AV business would be continued and focused on.
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| 3) |
Semiconductor business |
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Regarding the semiconductor business, with the lingering effects
of the Niigata Earthquake affecting business, SANYO would greatly
shrink the scale of business by withdrawing from unprofitable
businesses. A review of inventory valuation and disposal of
impairment loss on fixed assets would be carried out, which
would then enable focus of resources on SANYO’s strong
points. SANYO aims to then expand profits in this concentrated
area and promote its autonomy as an independent division.
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| 4) |
Home appliance business |
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In addition to pushing forth with large-scale restructuring
of the home appliance business based on international strategy,
SANYO would undertake a drastic review of its sales, general
and administrative expenses. Along with focusing its management
resources in the high-end sector as a measure to raise profitability
by increasing resource-efficiency, SANYO would strengthen alliances
to further increase the efficiency of its managerial resources. |
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| 4. Regarding the Mid-Term Business
Plan |
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| Consolidated |
(Unit: Billions of yen) |
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Fiscal Year 2005 |
Fiscal Year 2006 |
Fiscal Year 2007 |
| Net Sales |
2,440 |
2,490 |
2,640 |
| Operating Income (Loss) |
(17) |
75 |
97 |
Income (Loss) before
income tax |
(202) |
47 |
75 |
| Net Income (Loss) |
(233) |
29.5 |
62 |
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| Non-Consolidated |
(Unit: Billions of yen) |
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Fiscal Year 2005 |
Fiscal Year 2006 |
Fiscal Year 2007 |
| Net Sales |
1,390 |
1,260 |
1,370 |
| Operating Income (Loss) |
(31) |
22 |
25 |
| Ordinary Profit (Loss) |
(38) |
15 |
21 |
| Net Income (Loss) |
(344) |
4.5 |
15 |
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