[Company analysis] Panasonic Corporation (パナソニック)

「Panasonic Corporation (パナソニック)」 is a major electrical manufacturer headquartered in Osaka. In addition to home appliances for general consumers, they are conducting various  business centered on electronic equipment such as industrial equipment, communication equipment, housing equipment, and environment-related equipment. In the same industry, they have the 3rd largest sales volume in Japan after「Hitachi, Ltd.(日立製作所)」and「Sony Corporation(ソニー)」. The number of consolidated employees is approximately 271,869.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Panasonic Corporation
Company name (Japanese)	パナソニック
Date of establishment	Thursday, March 7, 1918
Headquarters location	〒571-8501 大阪府門真市大字門真1006番地
Capital	258,700
Consolidated sales	8,002,733
Consolidated operating profit	411,498
Consolidated total assets	6,013,931
Consolidated capital	2,084,615
Capital adequacy ratio	34.7%
Consolidated number of employees	271,869

 

 

 

2. Summary and Features

 
「Panasonic」was founded in 1918, by Matsushita Konosuke(松下幸之助), and its original name was「Matsushita Denkikigu Seisakusho(松下電気器具製作所)」that makes electrical sockets. At that time, Matsushita developed a bicycle lamp of "National Lamp", which became a big hit product in Japan.

After that, they expanded their business territories almost unlimitedly. They decided to handle almost all consumer electronic products such as electric kettles, hair dryers, rice cookers, as well as home appliances such as image / audio appliances, refrigerators, and washing machines. As a result, the popularity of the「Panasonic」has risen, and 「Panasonic」became the Japan's leading general electric home appliance maker. In the 1980s,「Panasonic」 was one of the largest consumer electronics manufacturers in the world on par with「GE」. By the 1990s, it was the largest consumer electronics manufacturer in Japan.
  

In the past,「Panasonic」focused on products and services for consumers, but since 2013, they decided to expand their B2B business. As a result, they have now got the top share in Japan in the fields of industrial batteries, solar power generation equipment for homes, lighting equipment, and electrical equipment. As a comprehensive home appliance manufacturer, they maintain a high market share in multiple home appliance fields. In terms of sales, home appliances account for about 24% of the total.

In 2004, they made「Matsushita Electric Works, Ltd.(松下電工)」a subsidiary. And conducting integration and reorganization, they tried to improve management efficiency. In 2009, this company purchased「Sanyo Electric Co., Ltd.,(三洋電機)」 which was being reconstructed, and achieved the world's top class lithium-ion battery manufacturer and the world's 7th largest solar cell business. In addition, It has the world's top share in the electronic equipment field of various industries such as aviation, navigation, wireless telephones, commercial refrigerators. In particular,「Panosonic」got a global market share of 80% in the aviation related electronic equipment field.

However, since the 2000s, the sales and operating profits have been deteriorated due to the Chinese and Korean home electronics manufacturers. To overcome this, they have been carrying out restructuring since 2012, and now they somehow are able to secure a stable profit margin in the 5% range. The biggest advantage of「Panasonic」is, they are strength in electronic parts related to electric vehicles. The demands for the eletric vehicle is expected to be incread in near future and this company has world top share in the fields of lithium-ion batteries, automobile camera modules, and ultrasonic sensors.

However, it can be pointed out that they have low sales ratio on infrastructure-related products. Therefore, company-wide performance tends to be affected by changes in the global economy. In the case of home appliances in particular, the price competition in the market is becoming more intense due to the entry of Chinese companies. In addition, there is a risk about "Solid-state battery" which might replace the position of current lithium-ion battery for electric vehicles.

 

 

3. Major Business

 

■ Home appliances business
They mainly deal with B2C products such as air conditioners and washing machines. The generally known image of 「Panasonic」is based on this home appliances business.

■ Eco Solution Business
They handle housing and electrical equipment, etc., and the main business is B2B transactions.

■ Connected Solution Business
Entertainment-related business such as logistics systems and aircraft. It specializes in B2B, and is said to have the highest operating profit margin in the Panasonic business.

■ Automotive and Industrial Systems
This is a business related to automobile maintenance and industrial machinery, which is one of the strengths of「Panasonic」. It produces automobile parts, electronic parts, liquid panels, semiconductors, etc.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		7,343,707	7,982,164	8,002,733
Consolidated operating profit		276,784	380,539	411,498
Consolidated total assets		5,982,961	6,291,148	6,013,931
Consolidated net assets		1,759,935	1,882,285	2,084,615
Breakdown of sales	Home appliances business	2,324,500	2,588,400	2,750,600
	Eco solution business	1,545,700	1,623,500	2,036,100
	AVC network business	1,040,700	1,119,300	1,127,700
	Automobile & Industrial system business	2,561,200	2,803,500	2,983,100
	Others	656,600	675,900	309,500
	Adjustments	-785,000	-828,400	-1,204,300