Pioneer : Announces Business Results for 2Q Fiscal 2017 (PDF 321 KB)

For Immediate Release November 10, 2016

Pioneer Corporation today announced its consolidated second-quarter and six-month business results for the period ended September 30, 2016.

(In millions of yen except per share information)

Three months ended September 30

Six months ended September 30

* Net income (loss) attributable to owners of Pioneer Corporation

For the second quarter of fiscal 2017, the three months ended September 30, 2016, consolidated net sales declined 16.3% year on year, to ¥95,068 million, mainly from the negative effects of the Japanese yen's appreciation.

Operating income was ¥1,140 million, a 43.3% decrease year on year, reflecting a decrease in sales, despite a decrease in selling, general and administrative (SG&A) expenses mainly due to foreign exchange rate movements, and an improvement in the cost of sales ratio. Net loss attributable to owners of Pioneer was ¥305 million, compared with a net income of ¥520 million for the second quarter of fiscal 2016, mainly due to the decrease in operating income.

During the second quarter of fiscal 2017, the average value of the Japanese yen rose 19.3% against the U.S. dollar year on year, to ¥102.43=1 U.S. dollar, and 19.0% against the euro, to ¥114.28=1 euro.

For further information, please contact: Investor Relations & Public Relations Division Corporate Management Division

Pioneer Corporation, Tokyo

Phone: +81-3-6634-8777 / Fax: +81-3-6634-8745

E-mail: pioneer_ir@post.pioneer.co.jp IR Website: http://pioneer.jp/en/ir/

Car Electronics sales declined 12.8% year on year, to ¥78,338 million, mainly from the negative effects of the Japanese yen's appreciation.

Sales of consumers market business declined. Sales of car audio products fell due to a decrease in overseas sales, primarily in North America. Car navigation system sales were roughly flat year on year.

Sales of OEM business declined. Sales of car audio products fell, mainly because of a decrease in North America, despite higher sales in Japan. Car navigation system sales decreased mainly from lower sales in China and Southeast Asia, despite higher sales in Japan.

OEM business sales accounted for 59% of total Car Electronics sales, remaining flat year on year.

By geographic region, sales in Japan increased 2.6%, to ¥33,040 million, and overseas sales decreased 21.4%, to ¥45,298 million.

Operating income declined 17.3% year on year, to ¥1,731 million, due to the decline in sales, despite lower SG&A expenses and an improved cost of sales ratio, mainly as a result of foreign exchange rate movements.

In the Others segment, sales declined 29.5% year on year, to ¥16,730 million. In addition to decreased sales of optical disc drive-related products and factory automation systems, the negative effects of the Japanese yen's appreciation mainly led to an overall decline.

By geographic region, sales in Japan decreased 29.0%, to ¥8,787 million, and overseas sales decreased 30.0%, to ¥7,943 million.

The segment's operating loss was ¥578 million, compared with an operating income of ¥661 million for the second quarter of fiscal 2016, mainly from a decrease in sales.

For the first half of fiscal 2017, the six months ended September 30, 2016, consolidated net sales declined 14.5% year on year, to ¥190,397 million, mainly from the negative effects of the Japanese yen's appreciation.

Operating income declined 27.0% from the first half of fiscal 2016, to ¥1,516 million. This was due to the decline in sales, despite a decline in SG&A expenses mainly due to foreign exchange rate movements, and an improvement in the cost of sales ratio. Net income attributable to owners of Pioneer was ¥966 million compared with a net loss of ¥1,994 million year on year mainly due to a ¥1,790 million foreign exchange gain, which increased by ¥1,421 million from the same period a year ago, despite the decrease in operating income.

During the first half of fiscal 2017, the average value of the Japanese yen increased 15.7% year on year against the U.S. dollar, to ¥105.29=1 U.S. dollar, and rose 14.3% against the euro, to ¥118.15=1 euro.

Notes: 1. Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment transactions.

2. From fiscal 2017, map software, previously classified in "Others," is reclassified in "Car Electronics." Figures for the second quarter of fiscal 2016 have been reclassified accordingly.

Total assets as of September 30, 2016 were ¥279,427 million, a decrease of ¥18,585 million from March 31, 2016, mainly due to decreases in trade receivables and cash and deposits. Trade receivables decreased ¥11,172 million, to ¥63,424 million, mostly reflecting lower sales for the second quarter of fiscal 2017 compared with sales for the fourth quarter of fiscal 2016, as well as the effects of the Japanese yen's appreciation.

Cash and deposits decreased ¥6,718 million, to ¥45,275 million.

Total liabilities were ¥198,218 million, a ¥9,308 million decrease from March 31, 2016. This was primarily due to the Japanese yen's appreciation, in which trade payables decreased by ¥5,102 million, accrued expenses decreased by ¥1,704 million and accrued pension and severance costs decreased by ¥1,390 million.

Total equity was ¥81,209 million, a ¥9,277 million decline from March 31, 2016.

This mainly reflected a ¥10,864 million decrease in foreign currency translation adjustments resulted from the appreciation of the Japanese yen against the U.S. dollar compared to the rate as of March 31, 2016, despite a ¥1,859 increase in defined retirement benefit plans and the recording of ¥966 million in net income attributable to owners of Pioneer during the first half of fiscal 2017.

During the first half of fiscal 2017, operating activities provided net cash in the amount of ¥11,029 million, compared with ¥3,386 million in net cash used in the same period a year ago. This was mainly because of a ¥9,521 million decline in the amount of a decrease in accrued expenses, primarily in the absence of the payment of special retirement benefits in the first quarter of fiscal 2016, and a ¥6,325 million decrease in trade receivables compared with an increase in ¥663 million in the same period a year ago.

Investing activities used net cash in the amount of ¥18,844 million, a ¥10,707 million increase year on year, mainly from a ¥7,918 million increase in the purchase of noncurrent assets.

Financing activities provided net cash in the amount of ¥3,290 million compared with 5,635 million in net cash used in the same period a year ago, due to an increase in the amount of borrowing compared to a decrease in borrowing in the same period last year.

Foreign currency translation adjustments on cash and cash equivalents were a negative ¥3,253 million, compared with a negative ¥688 million in the same period a year ago.

As a result, cash and cash equivalents as of September 30, 2016, totaled ¥44,215 million, a ¥7,778 million decrease from March 31, 2016.

Consolidated business forecasts for fiscal 2017, ending March 31, 2017, have not been changed from those announced on August 5, 2016.

(In millions of yen)

Forecasts for fiscal 2017

Results for fiscal 2016

Percent change

Net sales ¥400,000 ¥449,630 -11.0% Operating income 8,000 7,304 +9.5

Ordinary income 7,000 7,250 -3.4

Net income * ¥ 1,000 ¥ 731 +36.8%

* Net income attributable to owners of Pioneer Corporation

For the above consolidated business forecasts, the yen-U.S. dollar and yen-euro exchange rate assumptions for the third quarter onward remain unchanged at ¥105 and

¥115, respectively.

Statements made in this release with respect to our current plans, estimates, strategies and beliefs, and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management's assumptions and beliefs in light of the information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. It is not our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We disclaim any such obligation. Risks and uncertainties that might affect us include, but are not limited to: (i) general economic conditions in our markets, particularly levels of consumer spending, and levels of demand in the major industrial sectors which we serve; (ii) exchange rates, particularly between the Japanese yen and the U.S. dollar, the euro, and other currencies in which we make significant sales or in which our assets and liabilities are denominated;

(iii) our ability to continuously design and develop and win acceptance for our products in extremely competitive markets; (iv) our ability to successfully implement our business strategies; (v) the success of our joint ventures, alliances and other business relationships with third parties; (vi) our ability to access funding;

(vii) our continued ability to devote sufficient resources to research and development, and capital expenditure; (viii) our ability to ensure the quality of our products; (ix) conditions in which we are able to continuously procure key parts essential to our manufacturing operations; and (x) the outcome of contingencies.

Pioneer Corporation is a leading global manufacturer of car electronics products. Its shares are traded on the Tokyo Stock Exchange.

# # # # # #

Attached are consolidated financial statements for the three months and the six months ended September 30, 2016.