Panasonic : CEO Signals Determination to Decisively Implement Reforms in FY25 as Organization Enters Final Year of Medium-term Strategy

What is your outlook for the three growth areas of automotive batteries, air quality and air-conditioning, and supply chain management software?

Automotive Battery Business
With plug-in hybrids and hybrids being reevaluated over electric vehicles (EVs) in the North American market, the global trend toward EVs remains unchanged-although the pace of demand growth has slowed. If issues such as the supply of electricity from renewable energy sources and improvements to infrastructure-including high-speed recharging-can be resolved, then the shift to EVs will make steady progress, especially in areas related to passenger cars and "last-mile" commercial vehicles.

In the North American business, profitability is strong at the Nevada plant, but the Kansas plant is in the start-up phase and the capital investment will be commensurate. The Kansas plant is scheduled to begin mass production at the end of FY25, and is expected to be profitable from FY27. We are targeting double-digit ROIC in FY28 and beyond. Even without U.S. IRA⁵ subsidies, we will continue to pursue the goal of achieving our ROIC target as soon as possible.

⁵ IRA: Inflation Reduction Act

Air Quality & Air-Conditioning-Air to Water (A2W)⁶ in Europe
While it is true that market growth has been slower than expected, something that we could not have foreseen when preparing the Medium-term Strategy, there is a common understanding within the industry that this is an area that can be expected to grow steadily in the future-and we agree with that assessment. The critical issue is how to gain market share in each country. Every company is making their best effort; the approach we're taking is to be the solution of choice for installers. Our immediate priority is to sharpen our operations so that the business can be profitable even when faced by unpredictable fluctuations in demand.

⁶ A2W: Heat pump hot water heaters

Supply Chain Management Software
While Blue Yonder is the main focus of our efforts in this area, we will continue to promote reforms by CEO Duncan Angove, who joined us in FY2023. Among the concrete results achieved to date was the release of the first Native SaaS⁷ product last year.

The supply chain management business, including Blue Yonder, is currently considering preparations for listing in the future. Although the timing has yet to be determined, we will make investments to gain competitiveness so that Blue Yonder's corporate value will be properly evaluated by the capital market at the time of listing.

⁷ SaaS: Software as a Service-a service that allows clients to use software running on the service provider's side via a network.