Business Results Announcements

Fiscal 2019

Period : from April 1, 2018 to March 31, 2019

3rd Quarter Results

Period : from October 1, 2018 to December 31, 2018
Date : February 14, 2019

2nd Quarter Results

Period : from July 1, 2018 to September 30, 2018
Date : November 7, 2018
Speaker : Koichi Moriya, President and CEO

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    QWhy was the definitive agreement with the sponsor not executed at the end of October as scheduled initially?

    AAs we are thoroughly discussing details such as the future direction with the sponsor, it is taking longer than expected. However, we are continuing consultations and discussions to execute a definitive agreement with them.

    QWhat is the status of significant revision measures in the OEM business that are being considered?

    AWhile conducting various consultations and discussions, we have determined that it is necessary to carry out improvement measures not only in the OEM business but on a group-wide basis. Going forward, we will focus on the early restoration of the financial base, business and structural reforms on a group-wide basis, and the enhancement of the corporate governance system.

    QIn the business forecasts for the full-year, why was the forecast for operating income/loss left unchanged while that for net sales was revised downward by 30.0 billion yen?

    ADespite lower profit due to a decrease in net sales, the forecast for operating income/loss was left unchanged as a decrease in depreciation and amortization as well as a reduction in costs, including in R&D expenses, are expected.

    QWhy was the full-year forecast for depreciation and amortization revised?

    AIn addition to reviews of investment schedule, due to a review of the amortization period to match the sales period in some parts of the OEM business, the forecast has been revised downward by 4.0 billion yen.

    QHow are the situations of the consumer market business in Car Electronics?

    ADue to the impact of weak local currencies and market conditions mainly in emerging markets, net sales for the first half of the fiscal year fell short of our plan, and full-year sales plan was revised mainly in Central and South America and the ASEAN region.

    QWhy was there a significant year-on-year increase in the operating income of Others business in 2Q? Will this effect continue in the second half of the fiscal year onward?

    AWhile FA systems contributed significantly to operating income in 2Q, they will become a decreasing factor in the second half of the fiscal year due to a business transfer.

1st Quarter Results

Period : from April 1, 2018 to June 30, 2018
Date : August 6, 2018
Speaker : Koichi Moriya, President and CEO

Slides (PDF 230 KB)

News Release (PDF 244 KB)

Some statements in the consolidated financial statements
have been corrected.
(October 23, 2018)

Fact Sheets (PDF 45 KB)

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    QWhat are the key points of measures taken by President Moriya since he took office in June?

    AGoing forward, the key points that we will work on are: 1) Significant revision to the OEM business in Car Electronics, 2) Reallocation of management resources including technological ones, 3) Improvement of operational accuracy and strengthening of management structure, and 4) Generation of free cash flows. Discussions and negotiations are underway regarding the revision to the OEM business, aiming for an announcement around this fall. Management resources are being steadily reallocated by shifting to new businesses and growth fields such as telematics services and autonomous driving. Through the sharing of my thoughts and current issues and frank discussions with employees, I shall work towards creating a new Pioneer.

    QHow were the results of the consumer market business in Car Electronics in 1Q?

    AIn 1Q, overall performance was largely as expected, owing to favorable sales of telematics services, despite the impact mainly of weak economic conditions and local currencies in Central and South America. From 2Q onward, besides progress in the introduction of new car AV products, we also expect the recovery of emerging markets in the second half.

    QWhat are the details of the second-generation 3D-LiDAR sensor, scheduled to be shipped in September?

    APositioned as the "2018 model," we will elevate its performance to a level that satisfies use and evaluation as a practical product. As its usage potential is expanding beyond automobiles, we will work to stimulate further demand for it.

Fiscal 2018

Period : from April 1, 2017 to March 31, 2018

Annual Results

Period : from April 1, 2017 to March 31, 2018
Date : May 14, 2018
Speaker : Susumu Kotani, President and CEO

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    QWhat do you mean by significant revision measures in the OEM business of Car Electronics?

    AIn the OEM business, while a certain level of effects has been obtained by implementing measures such as raising the efficiency of development and manufacturing, and reducing the cost of sales, improvements in profitability have been delayed as the burden of investment in development for large scale orders have increased. Also, from the perspective of how we can provide good products to customers by strengthening our value proposition capabilities, we are currently actively examining and discussing initiatives, including joint ventures with business partners.

    QWhat is your plan of this fiscal year for the consumer market business of Car Electronics?

    AWe aim to increase sales centered on emerging countries by measures such as the timely launch of new products and enhancement of our product lineup in a way that matches the needs of the market.

    QWhat fields will you focus on going forward?

    AWe will focus on the solution business that leverages our strength of having technological capabilities in both hardware and software. Telematics services for automobile insurance, and business-use services for the delivery and transportation industry that combine navigation and cloud services have taken off, and new business opportunities in the map business are also emerging. Also, autonomous driving is an important field for future growth, and we will thoroughly implement initiatives in the field including necessary investments.

3rd Quarter Results

Period : from October 1, 2017 to December 31, 2017
Date : February 9, 2018
Speaker : Susumu Kotani, President and CEO

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    QWhat are the reasons behind the revision of the full-year business forecasts for Car Electronics? What are conditions like in each region?

    AThe main factor that led to this revision was that sales of the consumer market business in 3Q were lower than planned in both North America and emerging countries. In North America, the launch of new car AV products was delayed from February in the initial plan to July, and effects of the delay resulted in inadequate sell-in to the stores during 3Q. Also, price competition at the year-end holiday season affected sales. In emerging countries, the level of market recovery varied across regions, and sales were lower than expected in some regions during 3Q, resulting in sales remaining on the same level year on year.

    QWhat are the factors that led to the deterioration of the cost of sales ratio in 3Q?

    AAlthough the cost reduction measures we have been implementing are showing some results, due to the deterioration in the fixed cost ratio stemming from lower sales and the effect of soaring component prices, the cost of sales ratio in 3Q deteriorated year on year. In 4Q, although the effects of soaring component prices will continue, we plan to counter that by expanding sales.

    QWhat is the background of the expectation of an improvement in operating income for Car Electronics from 3Q to 4Q?

    AWe foresee sales increase in 4Q compared to 3Q mainly in the consumer market business, expecting higher sales in telematics services for automobile insurance, the sales expansion of car AV products in North America where our market share is already recovering, and recovery in emerging countries centering on South America. In addition, sales increase in the highly profitable map business will also contribute.

2nd Quarter Results

Period : from July 1, 2017 to September 30, 2017
Date : November 9, 2017
Speaker : Susumu Kotani, President and CEO

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    QWhat were the results for 1H by region in the consumer market business of Car Electronics, and what is your outlook for 2H?

    AIn 1H, overseas, we have been introducing new car AV products in stages, starting with North America in July, and in Japan we began introducing new Cyber Navi car navigation systems in September. In 2H, we will introduce new Raku Navi car navigation systems in affordable price ranges in Japan, and we are targeting sales growth both in Japan and overseas. In emerging markets, we are targeting sales growth of approximately 15% year on year over the full year, and, as a whole, performance in 1H was largely in line with this target despite some variation by region, and we expect this trend to continue in 2H.

    QWhat are your expectations for the future business environment in the consumer market business of Car Electronics? What are your strategies by region?

    ACar navigation systems and car AV products are the main focus in developed markets. On the other hand, conventional car audio products are the main focus in emerging markets, but demand is increasing for audio products with displays that connect to smartphones. Since new car sales are expected to continue increasing in emerging markets, we plan to expand sales by rolling out products tailored to the differing demands of each market.

    QPlease tell us about capital expenditures, and depreciation and amortization (D&A).

    AWe intend to make capital expenditures of approximately 21.0 billion yen in 2H, mostly in software development. This is a relatively high level owing to the effect of long-term OEM orders, but 2H shall be the peak.
    D&A was basically conducted over a two-year period from the time of completion of software using the straight-line method, but we have now additionally adopted, for large and long-term orders, the accounting treatment of D&A based on estimated sales volume in order to balance sales and D&A. Approximately 45.0 billion yen in “software in progress” as of the end of 1H will be gradually transferred to “software” account going forward.

    QWhat do you consider on the level of inventories as of the end of 1H, at 55.0 billion yen?

    AIf we exclude the impact of currency exchange, it has decreased year on year, and we think we are controlling inventories well.

1st Quarter Results

Period : from April 1, 2017 to June 30, 2017
Date : August 7, 2017
Speaker : Susumu Kotani, President and CEO

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    QWhat was the cause of 1Q net sales falling short of the target?

    AThis was mainly because OEM orders were lower than the target, as they were affected by conditions in the automotive market in North America. We have also revised our net sales forecasts downward for 2Q onward, reflecting recent orders.

    QWhat is the effect of changes to the currency exchange assumptions in the forecasts for fiscal 2018?

    AYen depreciation against the euro is a positive factor for profit versus previous forecasts. On the other hand, in emerging market currencies, the Thai baht is trending higher against the U.S. dollar, and this is a negative factor for profit, owing to the relationship with manufacturing in Car Electronics.

    QWhat measures are you taking to reduce costs, with regard to the expectation of an improvement in the cost of sales ratio in fiscal 2018?

    AVarious measures to reduce costs have started to produce an effect from fiscal 2017, including modular design and a shared platform, integrated development of car AV products and car navigation systems as well as a review of manufacturing locations, and we expect these measures to contribute over the full year in fiscal 2018.

    QWhat is the status of progress in the development of the 3D-LiDAR sensor?

    AThe development of the 3D-LiDAR sensor is progressing well. We intend to supply samples to automakers and other companies from this fall as planned.

    QWhat is your opinion on consolidation of other companies in the car electronics industry?

    AThere is extremely rapid change in relation to autonomous driving, and not only automakers but also other industries' companies are actively entering this field. We have technology and other assets that are indispensable for autonomous driving and aim to be an "essential company" in this area, but it is difficult for Pioneer only to do everything. We aim to form alliances with strong partners with whom we can utilize our strengths and create synergies.

Fiscal 2017

Period : from April 1, 2016 to March 31, 2017

Annual Results

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    QWhat was the state of each country within emerging markets, which was the main cause of net sales for fiscal 2017 underperforming the target? What is your view for these markets in the forecasts for fiscal 2018?

    AAs for Car Electronics sales for consumer markets in emerging countries, we were projecting a recovery from the second half of fiscal 2017, and Brazil and Russia were on a recovery trend, but going into 4Q, sales in Mexico and India fell short of our targets. For fiscal 2018, we expect increases from fiscal 2017, as we have already begun to see a recovery in countries such as Mexico and India, and sales of new cars are also growing in the ASEAN region.

    QWhat is the background to the significant improvement in the cost of sales ratio in fiscal 2018? How do you view changes for the consumer markets and for OEM?

    AIn Car Electronics, we expect an improvement in the cost of sales ratio for both the consumer markets and OEM. For the consumer markets, in addition to a recovery in markets in emerging countries, we are also projecting a contribution from the introduction of new products with an improved cost of sales ratio such as car AV products for overseas markets and car navigation systems for Japanese market. The improvement for OEM is due to a decrease in depreciation and amortization. In addition, we expect an improvement in the Others business owing to the effect of business mix.

    QWhat is the balance of income between the first half of fiscal 2018 and the second half?

    AAs for operating income, we expect it to be weighted more toward the second half than in previous years, owing to the timing of the introduction of new products in Car Electronics.

    QWhat progress has been made in the autonomous driving field?

    AThe development of 3D-LiDAR sensor is progressing well. The increase in R&D expenses in fiscal 2018 is because we are bringing forward 3D-LiDAR development expenses, and this fall, we plan to develop a working sample and supply it to automakers. With regard to the collaboration with HERE, we are discussing specific themes following the business partnership announced in February, and plan to make an announcement as soon as confirmed.

    QWhat is the purpose of the “reversal of additional paid-in capital” announced that will be proposed at the General Meeting of Shareholders?

    AWe consider the resumption of dividends is one of the most important management issues, and we have worked on securing funds for a dividend. Now, as preparation for the resumption of dividends, we have decided to submit a proposal on the “reversal of additional paid-in capital” to the General Meeting of Shareholders to be held in June 2017.

3rd Quarter Results

Period : from October 1, 2016 to December 31, 2016
Date : February 13, 2017
Speaker : Susumu Kotani, President and CEO

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    QWhat was the state of recovery in emerging markets during 3Q?

    AIn emerging markets overall, sales increased year on year, and we see a recovery trend. By region, Brazil, ASEAN region, and Russia have begun to recover from the second half.

    QWhat is the background for the 4.0 billion yen net income forecast for 4Q against the 3.0 billion yen net loss for the nine months?

    AFor 4Q, we forecast 4.6 billion yen for operating income and the foreign exchange gains that are projected to arise under current foreign exchange rate assumptions.

    QWhat is the background for the 2.5 billion yen decline in the depreciation and amortization estimate for the full year?

    AThis is due to a change in the timing of capital expenditures, and revisions to development schedules for some of our products.

    QWhat is the purpose for the transfer of cable-TV business to Technicolor, a French multimedia company, for which an extraordinary loss was recorded?

    ATo concentrate resources on the core business of Car Electronics, we had been seeking a partner in the cable-TV business. With this optimal business partner, we aim to expand the cable-TV business. From fiscal 2018 onward, income of cable-TV business will be recorded as equity in gains of affiliated companies under non-operating income.

    QRegarding the partnership with HERE, what are the differences with the previous announcements?

    AUntil this point, announcements were made about proof experiment of “data ecosystem” to update HD (high definition) maps utilizing 3D-LiDAR sensors in our future plans, but this time, it’s about expanding the scope of the partnership for businesses on a global scale in the near future. We will generate new business models through initiatives that include mutual usage of current digital maps and cloud-based probe data owned by both companies.

2nd Quarter Results

Period : from July 1, 2016 to September 30, 2016
Date : November 10, 2016
Speaker : Susumu Kotani, President and CEO

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    QWhat was the breakdown by currency for the negative 0.5 billion yen impact of currency exchange on operating income for 2Q?
    Also, are there any changes from the previous plan for currency rate assumptions in the Thai baht, Brazilian real, and Russian ruble?

    AWhile the negative impact from the U.S. dollar and the positive impact from the euro offset each other, other currencies including the Chinese yuan and the Thai baht had negative effects on operating income for 2Q. Currency rates for emerging markets during the second half have been modified slightly, in light of current conditions.

    QAre there any signs of a recovery in consumer-market car audio products in emerging markets?
    If sales do not meet plans, can this be offset by cost reductions in areas such as SG&A expenses?

    AAlthough recovery conditions in emerging markets vary by country, emerging markets overall are on a recovery trend, and as new models will be launched globally during the second half, we forecast higher sales compared to the first half.
    In cost reductions, the effects of measures such as promoting modular design concept, integrated development of car AV products and car navigation systems, and promoting open platforms are producing results from fiscal 2017, and this is leading to an improvement in the cost of sales ratio for the full year.

    QWhat is the background for the 5.0 billion yen increase in the forecast of borrowings from the previous forecast?

    ATo ensure progress in the medium-term plan, we decided that it was preferable to secure funds ahead of expected future funding demand.

    QIs progress in improvement in production efficiency and the cost of sales ratio accelerating compared to the medium-term plan?

    AReduction in costs, including materials expenses, is progressing in line with plans.

1st Quarter Results

Period : from April 1, 2016 to June 30, 2016
Date : August 5, 2016
Speaker : Susumu Kotani, President and CEO

Slides (PDF 261 KB)

Amended the figure of shipment forecast
for car CD players of page 14/19
(November 10, 2016)

News Release (PDF 254 KB)

Fact Sheets (PDF 81.6 KB)

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    QWhat were the effects of the Kumamoto Earthquake in Japan?

    AWe saw a negative effect of approximately 2.0 billion yen in net sales, mainly in OEM business. However, we managed to offset this through other regions, recovering to a shortfall of a few hundred million yen compared to our plan.

    QWhat is the current state of recovery for consumer-market car audio products in emerging markets?

    AUnder the previous plan, projections called for the recovery in the ASEAN region and Russia to begin at the beginning of fiscal 2017 and for the recovery in Brazil and the Middle East to begin in the second half. At present, as market prospects remain uncertain and currency exchange trends are unclear, income forecasts for the full year remain unchanged.
    Emerging markets have high potential, and our medium-term growth strategy incorporates expanding businesses there. By pressing forward with product development tailored to each region, we plan to introduce products that can expand sales as markets recover.

    QWhat impact will the revised currency exchange assumptions have on net sales and operating income for fiscal 2017?

    AThe 20.0 billion yen decrease in net sales compared to the previous forecast is entirely attributable to revised currency exchange assumptions. Regarding operating income, although we forecast the positive impact of revised currency exchange assumption in Car Electronics, the full-year operating income forecast remains unchanged reflecting growing uncertainty in emerging markets.

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