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Panasonic aims to boost profit by more than 60% in 2 years

Japanese maker of consumer electronics Panasonic Corp. said May 30 that it aims to boost profit by more than 60% in the next two years by reaping the benefits of investments and increasing sales of value-added products.

The Osaka-based company wants to increase operating profit 63% by the year ending March 31, 2019, to ¥450 billion from ¥276.8 billion in fiscal 2017. The company also wants to boost net profit by 67% in the same period to at least ¥250 billion from ¥149.4 billion.

The maker of televisions, refrigerators and car-navigation systems met with investors in Tokyo to discuss its strategy for the next two years for its four business units: appliances, eco solutions, connected solutions, and automotive and industrial systems.

The automotive and industrial systems division, which represented nearly 35% of Panasonic's fiscal 2017 sales, the biggest share, aims to boost operating profit by 72% on 28% sales growth in the next two years, during which it expects to start profiting from its investments in focus areas. Over the next year, Panasonic expects to continue investing in automotive infotainment, automotive batteries and film capacitors for plug-in battery electric vehicles.

Panasonic added that it aims to become one of the top 10 global automotive components suppliers by fiscal 2022.

Meanwhile, the appliances segment, which represents nearly a third of Panasonic's sales, aims to lift operating profit 12% over the next year by selling more high-margin premium products. It plans to invest in high-growth products like air conditioners, food retail equipment, and small appliances such as hair dryers and rice cookers. And it hopes to minimize its risks by reducing its investments and boosting profits in struggling businesses, such as televisions. The company intends to boost the sales of its value-added products in India and Europe, expanding from its efforts in Japan, China and other Asian countries.

The eco solutions segment, which suffered a sales and profit decline in fiscal 2017, aims to transform its business partly by entering into home-renovation operations. It also wants to reinforce its solar cell business through its joint venture with U.S. solar panel-maker Tesla Inc. The segment accounted for 21% of fiscal 2017 sales.

The connected solutions segment, which represented 14% of fiscal 2017 sales, aims to enhance its involvement in the software and internet of things business, as well as expanding its presence in the U.S., Europe and China.

For fiscal 2018, Panasonic projects net profit to advance 7.1% to ¥160 billion from ¥149.4 billion the previous year, on a 6.2% sales growth to ¥7.8 trillion from ¥7.3 trillion. Operating profit is forecast to grow 21% to ¥335 billion from ¥276.8 billion.

As of May 29, US1$ was equivalent to ¥111.29.