Panasonic Announces Annual Business Policy

  Panasonic Announces Annual Business Policy

Business Wire

OSAKA, Japan -- May 11, 2012

President Fumio Ohtsubo of Panasonic Corporation
(NYSE:PC)(TOKYO:6752)("Panasonic") today announced its business policy for the
fiscal year ending March 2013 (fiscal 2013) at the company's business policy
meeting. Addressing before an audience of Panasonic Group employees, he
summarized the group's progress made in the previous business year and
outlined its goals for fiscal 2013. The following is a summary of his
presentation.

1. Achievements

(1) Vision toward 100th Anniversary and Implementation of GT12: Panasonic
embarked on the GT12 in 2010 as the first step to achieve its vision of
becoming the "No. 1 Green Innovation Company in the Electronics Industry" by
the 100th anniversary of its founding. The vision aims to realize a
sustainable and better living by integrating the company's contribution to the
environmental protection and business growth. The midterm business plan calls
for paradigm shifts in its business from existing to new fields, from
Japan-oriented to globally-oriented and from individual product-oriented to
solutions and systems business-oriented, with the aim to make a company filled
with significant growth potential.

(2) Integration and Reorganization following Acquisition of PEW and SANYO:
After turning Panasonic Electric Works Co., Ltd. (PEW) and SANYO Electric Co.,
Ltd. (SANYO) into wholly-owned subsidiaries, Panasonic implemented a
group-wide reorganization in January 2012. Based on business models developed
from customers' perspectives, the company reorganized its structure by
consolidating 14 internal companies, called "business domain," under five
segments into nine business domain companies under three business fields.
Through the reorganization, Panasonic has established the structure enabling
the company to have direct contact with customers globally. In the consumer
business field, marketing divisions were united into one to strengthen its
frontline functions globally. The reform has also introduced a new structure
and system enabling to demonstrate its collective strength across the entire
group companies and promote comprehensive solutions. Panasonic has also built
up a framework to maximize synergies brought about by the acquisitions of PEW
and SANYO, primarily in the environment and energy related businesses. At the
same time, Panasonic has pushed ahead with eliminating overlapping businesses
and streamlining operations.

(3) Large-scale Structural Reform: In a continuing tough business environment
- with the global economic slowdown, the appreciation of the yen and the
flooding in Thailand - Panasonic carried out restructuring of unprofitable
businesses to reduce fixed costs, incurring goodwill impairment loss for SANYO
businesses and streamlining the entire group. Overall, the company booked
restructuring costs of 767.1 billion yen in fiscal 2012, ended March 2012, to
remove all obstacles for the future profitability of the company.

(4) Summary: Panasonic fell short of the numerical management goals set in the
GT12 and was forced to give up them. However, the company has built the
structure and foundation towards achieving its vision of the Green Innovation
Company. Taking measures to overcome challenges, the company will start afresh
to move forward pursuing growth with profitability.

2-1. Initiatives for Fiscal 2013 (Positioning and Business Targets)

In fiscal 2013, Panasonic has to show ever greater performance. The company
will strive to achieve a V-shaped recovery, getting the most out of the new
organization. Panasonic has set the business targets for fiscal 2013 as
follows:

(Changes from FY2012)
Sales                                   8,100.0 billion yen   +3%
                                         260.0 billion yen      +216.3 billion
Operating Profit(%)                                             yen
                                         (3.2%)
Net Income attributable to Panasonic     50.0 billion yen       +822.2 billion
Corporation(%)                                                  yen
                                         (0.6%)
ROE                                      2.6%                   ‐
Free Cash Flow                           100.0 billion yen      +439.9 billion
                                                                yen
                                         41.00 million tons     +0.63 million
CO[2] Emission Reduction                                      tons
                                         (compared to FY2006)
                                                                

2-2. Initiatives for Fiscal 2013 (Basic Policy and Measures)

(1) Focus on Profitability

1) Restructure Unprofitable Business: Panasonic will reap the fruit of the
large-scale structural reform of the TV business carried out in the last
fiscal year. In the TV set business, the company aims to steer it into the
black through thorough cost cuts by reducing unprofitable models and reviewing
cost structure. In the panel business, Panasonic aims at significant
improvements in profitability by reducing fixed cost and shifting focus to
non-TV products such as medical equipment, tablet PCs and electronic
whiteboards.

2) Increase Profitability in Growing Businesses:

Solar Business: Targeting the residential sector, where benefits of the
high-efficient HIT solar panels can be fully utilized, Panasonic will make the
fullest use of the group's sales channels in Japan to significantly increase
sales. Panasonic has set sales target of 450 megawatts or more, 1.6 times the
previous year, to capture top market share in the Japanese market. A new solar
manufacturing facility in Malaysia, which is slated to become operational in
December 2012, will significantly bolster Panasonic's cost competitiveness and
supply capacity. Panasonic started to propose new values with such devices as
energy creation-storage coordination systems by linking devices and equipment
in various ways. Panasonic expects domestic sales of 110.0 billion yen from
the solar-related systems as a whole, including power conditioners and storage
batteries, and will maintain high growth with profitability.

Lithium-ion Battery Business: In the consumer-use battery business, Panasonic
will focus on the following three points: boosting cost competitiveness by
increasing materials procurement in China and Korea; making high-capacity
batteries using the company's own technology; and speeding up development and
customer support. Then, the company will reinforce its offerings in such
fast-growing markets as ultrabook PCs and smartphones that require slim and
high-capacity batteries. In the automotive battery business, the company will
take a multi-directional approach in addressing eco cars. Capitalizing on its
advantage as a leading battery manufacturer, Panasonic strives to increase
sales of automotive use batteries more than five-fold by maximizing the
production capacity and cost competitiveness. The company aims to return both
consumer and automotive battery businesses on the profit path this fiscal
year.

Appliances Business: Panasonic aims to achieve a 20% increase in overseas
sales in fiscal 2013 over the previous business year, seeking for growth
opportunities across its products and the globe. To attain this goal, the
company will create locally-oriented products based on studies of its
lifestyle research centers. Launching of its energy-efficient Eco Navi
appliances in the global market and offering of small appliance as groups of
products are also part of the company's plans to strengthen and expand the
appliances business as a stable profit source.

3) Creating Strong B to B Business

Panasonic will create solutions-type business models. A good example is
aircraft in-flight entertainment systems business. The in-flight AV system
supplier stays connected with its customers and keeps delivering high values
in services and products.

4) Establish Comprehensive Business Models

The comprehensive solutions business creates and offers new values across
business domain companies at Panasonic. To provide maximum value to its
customers, Panasonic will assemble competitive individual products, combine
and link them into a system and provide repair and maintenance service.
Panasonic will make a company-wide effort to promote its "100 Arrows" project,
which aims to create 100 business models in the comprehensive solutions
business. In fiscal 2013, Panasonic plans to develop 50 arrows including those
already in the start-up stage, aiming to generate sales of 170.0 billion yen
or more.

5) Strengthen Business Structure: Panasonic will enforce cost cuts across the
group, including the head office, to improve profit structure. The efforts
will include cost cuts through optimization of procurement activity on a
global scale, maximization of synergies and reduction of fixed costs as a
group-wide emergency management action. With these cost cutting efforts,
Panasonic aims to lower the break-even point by 7% in fiscal 2013,
strengthening the business structure to the level of fiscal 2011.

(2) Strengthen Products

1) Pursue Locally-oriented Products: In home appliances, Panasonic will
combine its environmental core technology with lifestyle research and
consecutively launch high-volume-segment products with No.1 eco performance,
such as air conditioners, refrigerators and washing machines, in China and
other emerging economies. In the TV business, Panasonic will propose products
unique to each market by combining its VIERA TV's smart functions and local
content. Starting in India, the company will introduce locally-oriented
products in other countries.

2) Both Engineering and Marketing Directly Contact with Customers: Industrial
Devices Company, working with the Corporate Device Application Division, will
strengthen its ability to understand customers' needs proactively and propose
solutions by capturing market needs and trends in a timely manner and actively
get itself involved in the early stage of product development such as
conceiving and designing processes at customers. The company will take this
proactive marketing approach, focusing on rapidly-growing areas, including
smartphones and eco cars.

3) Be Competitive by Combining and Linking Products: Panasonic will hone the
strengths that make it different from other companies, such as its
technologies to link products and ability to offer a variety of product lines.
In the Japanese market, Panasonic will introduce from fiscal 2013 a line-up of
"smart" home appliances, including a microwave oven that allows users to
download a recipe using their smartphones and set the cooking instructions.

(3) Take Initiatives to Change Itself and Make Changes

1) Overcome Challenges: Each and every Panasonic employee is challenged to
draw vitality to break down barriers. In the development of large-size air
conditioners, for example, Panasonic has built a framework and foundation on
which members from the former Panasonic Home Appliances Company and SANYO
working hand in hand, crossing the organizational boundaries, to blend their
technologies together and create innovative products.

2) Transform with Local Leadership: Panasonic is pushing forward projects
aiming for a substantial sales increase in India and Brazil. When implementing
these projects and developing new businesses, local companies of Panasonic
will take initiatives, leading and involving relevant business domain
companies and functions to succeed.

3) Reform Head Office Functions: Panasonic is reforming and simplifying the
head office functions as well as rebuilding group-wide management system,
aiming to have a small head office focusing on strategy and investment. The
company will complete the reform of its head office by the end of fiscal 2013.

(4) Targets and Initiatives of Individual Business Domains

1) Consumer Business Field: Returning to profitability is the top priority for
AVC Networks Company. To accomplish, the company will improve the bottom line
of the TV business and shift its resources to non-TV and non-commoditized
businesses. At the same time, the company will strive to create new pillars to
drive business growth for the next generation.

Appliances Company will endeavor to accelerate global growth of its B to C
business (finished products). It will also aim to expand its B to B business,
such as large-size air conditioners and cold chain. It will also work to
increase added values for products and improve cost competitiveness.

Global Consumer Marketing Sector will increase overseas sales, focusing on
appliances and emerging economies. Developing major appliances, mirrorless
single-lens cameras and small appliances as growth pillars, the sector will
strengthen a pull-marketing strategy and actively promote groups of products
overseas.

2) Solutions Business Field: Systems & Communications Company will strengthen
the integrated network business (security, cloud) and focus its efforts on
smartphones in the mobile business. The company will also accelerate global
expansion of solutions business.

Eco Solutions Company will increase sales in the environment and energy fields
with a focus on LED and solar businesses. The company will also accelerate the
shift of resources to expand business overseas. At the same time, it will come
up with concrete ideas for the comprehensive solutions business and obtain
tangible results.

Healthcare Company will accelerate growth, focusing on businesses having sales
channels, and reinforce its marketing capability in the medical and
nursing-care fields, utilizing customer contact points.

Manufacturing Solutions Company will develop new businesses and expand into
growth markets. It will strengthen its manufacturing capability overseas as
well to implement the principle of local production for local consumption.

3) Components & Devices Business Field: Automotive Systems Company will
increase profitability in multimedia business and develop new markets. The
company will work at creating a business model for the EV-related business. At
the same time, it will restructure its BCP (business continuity plan) and
improve product quality.

Industrial Devices Company will establish a strong management structure that
does not depend on sales performance. The company will focus on strengthening
its business in the mobile and environment (vehicles and infrastructure)
fields. Efforts will also be made in eliminating losses in unprofitable
businesses, including semiconductors and optical pickups.

Returning to profitability is the first priority for Energy Company, which
will shift to a profitable management structure. The company will make
strategic investments in key businesses such as solar and lithium-ion
batteries. It will improve profitability of its basic core businesses,
including dry batteries.

3. Towards Green Innovation Company

By the end of 2012, Panasonic will finish laying the foundation, including the
group's reorganization, towards fulfilling its goal of becoming the "No. 1
Green Innovation Company in the Electronics Industry" by 2018. In the next
three years from 2013 to 2015, the company will reconstruct its profit
framework and blaze a path towards the Green Innovation Company. In pursuing
the new goals, Panasonic reaffirms that it is the employees who provide the
foundation for growth. The company will unify and share with all the employees
around the world its personnel development policy as well as personnel system
and structure designed for executives. Each and every employee is asked to
have an entrepreneurial spirit, mix together with other people, gather the
wisdom of all and create something completely new. With the company's
management philosophy in mind, Panasonic will head together towards a V-shaped
recovery.

About Panasonic

Panasonic Corporation is a worldwide leader in the development and manufacture
of electronic products for three business fields, consumer, components &
devices, and solutions. Based in Osaka, Japan, the company recorded
consolidated net sales of 7.85 trillion yen for the year ended March 31, 2012.
It aims to become the No. 1 Green Innovation Company in the Electronics
Industry by the 100th year of its founding in 2018. The company's shares are
listed on the Tokyo, Osaka, Nagoya and New York (NYSE:PC) stock exchanges. For
more information on the company and the Panasonic brand, visit the company's
website at http://panasonic.net/

Disclaimer Regarding Forward-Looking Statements

This press release 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 press release 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 press release.
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 U.S. Securities Exchange Act of 1934 and its other filings.

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
possibility of the Panasonic Group incurring additional costs of raising
funds, because of changes in the fund raising environment; 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 including the business reorganization after the
acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO
Electric Co., Ltd.; 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 goodwill,
deferred tax assets and uncertain tax positions; future changes or revisions
to accounting policies or accounting rules; natural disasters including
earthquakes, prevalence of infectious diseases throughout the world and other
events that may negatively impact business activities of the Panasonic Group;
as well as direct or indirect adverse effects of the Great East Japan
Earthquake on the Panasonic Group in terms of, among others, component
procurement, manufacturing, distribution, economic conditions in Japan
including consumer spending and sales activities overseas, and direct or
indirect adverse effects of the flooding in Thailand on the Panasonic Group in
terms of, among others, component procurement and manufacturing. The factors
listed above are not all-inclusive and further information is contained in
Panasonic's latest annual reports, Form 20-F, and any other reports and
documents which are on file with the U.S. Securities and Exchange Commission.

Contact:

Panasonic Corporation
Media Contacts:
Atsushi Hinoki, +81-3-6403-3040 (Japan)
Global Public Relations Office
or
Panasonic News Bureau (Japan)
Tel: +81-3-3542-6205
or
Jim Reilly, +1-201-392-6067 (U.S.)
or
Anne Guennewig, +49-611-235-457 (Europe)
or
Investor Relations Contacts:
Haruhiko Sezaki, +81-6-6908-1121 (Japan)
Investor Relations
or
Panasonic Finance (America), Inc.
Yuko Iwatsu, +1-212-698-1360 (U.S.)
or
Panasonic Finance (Europe) plc
Hiroko Carvell, +44-20-3008-6887 (Europe)