Pioneer : Announces Business Results for Fiscal 2017 (PDF 317 KB)

For Immediate Release May 12, 2017

Pioneer Corporation today announced its consolidated business results for fiscal 2017, the year ended March 31, 2017.

(In millions of yen except per share information) Year ended March 31

2017 2016 Percentchange

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

In fiscal 2017, consolidated net sales declined 14.0% year on year, to ¥386,682 million, mainly from a decrease in sales of Car Electronics, particularly in OEM business, and the negative effects of the Japanese yen's appreciation.

Operating income was ¥4,167 million, a 42.9% decrease year on year, reflecting a decrease in net 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 ¥5,054 million, compared with a net income of ¥731 million for fiscal 2016. This was mainly due to a decrease in operating income, and a recording of ¥3,014 million extraordinary loss of restructuring costs overseas.

During fiscal 2017, the average value of the Japanese yen rose 10.9% against the

U.S. dollar year on year, to ¥108.38=1 U.S. dollar, and increased 11.6% against the euro, to ¥118.79=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 12.7% year on year, to ¥312,489 million, mainly due to a decrease in sales of OEM business and the negative effects of the Japanese yen's appreciation.

Sales of consumer market business declined. Sales of car audio products fell because of a decrease overseas, primarily in North America. Car navigation system sales declined, because of a decrease in Japan and North America, despite an increase in China.

Sales of OEM business declined. Sales of car audio products fell because of a decrease overseas, primarily in North America, despite higher sales in Japan. Car navigation system sales decreased, due to lower sales in Japan and emerging markets, despite increased sales in North America.

OEM business sales accounted for 58% of total Car Electronics sales, compared with 60% in the previous fiscal year.

By geographic region, sales in Japan decreased 7.8%, to ¥123,631 million, and overseas sales decreased 15.6%, to ¥188,858 million.

Operating income declined 29.5% year on year, to ¥6,051 million, due to the decline in sales, despite lower SG&A expenses and an improved cost of sales ratio, both mainly as a result of foreign exchange rate movements.

In the Others segment, sales declined 19.2% year on year, to ¥74,193 million. Sales increased in factory automation systems, but decreases in sales of home AV products and optical disc drive-related products, and the negative effects of the Japanese yen's appreciation, led to an overall decline.

By geographic region, sales in Japan decreased 18.2%, to ¥39,083 million, and overseas sales decreased 20.2%, to ¥35,110 million.

The segment's operating loss was ¥780 million, compared with a loss of ¥144 million for fiscal 2016, due to the decrease in sales, despite an improvement in the cost of sales ratio.

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 fiscal 2016 have been reclassified accordingly.

Total assets as of March 31, 2017 were ¥281,786 million, a decrease of ¥16,226 million from March 31, 2016, mainly due to decreases in cash and deposits, trade receivables, and inventories, despite an increase in intangible assets. Intangible assets increased

¥9,833 million, to ¥56,793 million, mainly reflecting an increase in software in progress. Meanwhile, cash and deposits decreased ¥13,588 million, to ¥38,405 million. Trade receivables decreased ¥8,540 million, to ¥66,056 million. Inventories decreased ¥3,016 million, to ¥49,821 million.

Total liabilities were ¥194,997 million, a ¥12,529 million decrease from March 31, 2016. This was primarily due to a decrease in trade payables of ¥7,459 million, mainly owing to a decline in purchases, and a decrease of ¥4,002 million in accrued pension and severance costs, despite an increase of ¥1,964 million in borrowings.

Total equity was ¥86,789 million, a ¥3,697 million decline from March 31, 2016. This mainly reflected a recording of ¥5,054 million in net loss attributable to owners of Pioneer for fiscal 2017 and a ¥2,820 million decrease in foreign currency translation adjustments, despite a ¥4,532 million increase in defined retirement benefit plans.

During fiscal 2017, operating activities provided net cash in the amount of ¥19,614 million, on par with the previous fiscal year. This was mainly due to a ¥9,458 million decline in the amount of a decrease in accrued expenses, primarily due to the payment of special retirement benefits in fiscal 2016, despite a ¥6,125 million increase in the amount of decrease in trade payables.

Investing activities used net cash in the amount of ¥34,009 million, a ¥13,926 million increase year on year. This was mainly due to a ¥10,100 million decrease in proceeds from the sale of noncurrent assets and a ¥4,767 million increase in the purchase of noncurrent assets.

Financing activities provided net cash in the amount of ¥1,446 million, a decrease of ¥1,962 million compared with the previous fiscal year. This was mainly due to a

¥15,060 million inflow from the issuance of convertible bonds in the previous fiscal year, although net proceeds of borrowings were recorded, compared with net repayments in the previous fiscal year.

Foreign currency translation adjustments on cash and cash equivalents were a negative ¥639 million, compared with a negative ¥2,300 million in the previous fiscal year.

As a result, cash and cash equivalents as of March 31, 2017, totaled ¥38,405 million, a ¥13,588 million decrease from March 31, 2016.

Consolidated business forecasts for fiscal 2018, ending March 31, 2018, are as follows:

(In millions of yen)

First half Full year

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

For fiscal 2018, Pioneer is projecting almost the same level of net sales as fiscal 2017, reflecting an increase in sales of Car Electronics for consumer markets owing to the positive effect of the introduction of new products, despite a decrease in sales owing mainly to the transfer of the cable TV system-related equipment business.

Operating income is projected to increase to ¥10.0 billion, because of an improvement in the cost of sales ratio mainly due to a decrease in depreciation and amortization, and net income attributable to owners of Pioneer is projected to be ¥3.5 billion.

The yen-U.S. dollar exchange rate assumption for fiscal 2017 is ¥110, and the yen-euro exchange rate assumption is ¥118.

The automotive industry is expected to continue growing, as car sales are increasing on a global scale, mainly in emerging markets. In developed markets, initiatives in anticipation of the coming autonomous driving society, such as creating more advanced and sophisticated cars, are being accelerated.

In response to the diverse needs of customers and great changes towards the autonomous driving society, Pioneer is pursuing its growth strategies tailored to the business characteristics of each of our business pillars of consumer market, OEM, and map and autonomous driving, becoming a leading company in "Comprehensive Infotainment" that creates comfort, excitement, reliability and safety in vehicles.

In the consumer market business, we will maintain stable profitability, and increase sales to promote Pioneer's proprietary "connected car life" by strengthening our smartphone-linked product lineup, proposing new value in the business areas of reliability and safety, and pursuing audio entertainment. We will also strengthen our new commercial-use businesses that utilize cloud, including services for automobile insurance and for fleet vehicles, with our alliances. Furthermore, in emerging markets, we will offer our affordably-priced product line suited for individual regions.

In the OEM business, we aim to improve profitability by efficiently meeting the diverse needs of automakers, and by increasing productivity with improved efficiency of management resources and reviews of our business processes. We also aim to win new orders from automakers by proactively making proposals of our advanced technologies.