MidMid--Term Business StrategyTerm Business Strategy

CHALLENGE 30+Creation, Passion, Challenge

May 13th, 2010Director, Corporate Planning

Satoshi Soma

1

Contents

1. 2009FY Review1）

Revenue Analysis

2）

Offense and Defense3）

Awards from Market

2. Mid-term Business Strategy1）

Business Environment Change

2）

CHALLENGE 30+3）

Growth Strategy 4+1

4）

Business Plan

2

50

100

150

200

250

02FY 03FY 04FY 06FY

Net Sales[unit：¥billion]

10

05FY

Operating Profit[unit：¥billion]

222213

222

253 265265

Operating Profit moved into the black by strengthening company structure

07FY

252

1

08FY

196

88FY ListedTSE 2nd Sec.

¥74bln

91FY ListedTSE 1st Sec.

¥106bln

12.3 11.3 10.1 9.6 10.17.0

10.6

Net Sales OperatingProfit

09FY

168168

2

△△ ¥¥100 100 blnbln△△ 40%40%

0.20.2

2

1.2009FY Review1) Revenue Analysis

3

98

70

108

88

50

100

150

200

250

02FY 03FY 04FY 06FY

30

20

10

135

129129

12405FY

99

123

7866

156

30.0

17.6

22.4

28.7

135

19.1

222 213222

253 265265

123

Improved R&D investment efficiency and expanded Information & Communication Segment

129

29.3

07FY

252252

28.2

08FY

196196

InformationCommunication

Audio R&D

InformationCommunication

58%

Audio42%

09FY

168168

20.5

21Information

Communication51%

Audio49%

1.2009FY Review1) Revenue Analysis

Net Sales[unit：¥billion]

R&D costOperating Profit[unit：¥billion]

4

-200

0

20

40

60

１Q ２Q ３Q ４Q １Q ２Q ３Q ４Q

Net Sales

100

-100

6360

40

32

0.3 0.7

△3.9△7.2

2008FY 2009FY

1

2.42.4 3.43.4

48484444

40403636

△0.8△0.8

△4.8△4.8

2

3

Slow but constant recovery1.2009FY Review

1) Revenue Analysis

Operation Profit/Loss

Net Sales[unit：¥billion]

Operating Profit[unit：¥billion]

5

Domestic Aftermarket increased revenue with a new biz model

X08 ”Perfect Fit” Increased revenue & expanded share

X08

＋ Perfect Fit（Vehicle-specific Installation KIT）

＝

13.713.7

5.8

(¥bln)

20092008

1. 2009FY Review2) Offence and Defense

3

2

1

2.4 times

2.4 times

Domestic AftermarketDomestic AftermarketInformation Communication RevenueInformation Communication Revenue

(Award from a Japanese newspaper)

6

Operating Profit/Loss Monthly BEPOperating Profit/Loss Monthly BEP

End of 08FYEnd of 08FY

09FY09FY

Accelerate CHALLENGE 30+

△0.8

△4.8

△10.6

20

18

15

13 13

BEP1Q1Q 2Q2Q 3Q3Q 4Q4Q

2.43.4

1

¥160bln Bottom Structure

2

1. 2009FY Review2) Offence and Defense

[unit：¥billion]

7

(Break Even Point)

Received Various Awards / High evaluation for Products & Systems

2009 Car Goods of the YearFirst one in Aftermarket : Camera system

X08 Awards from Newspapers & MagazineThe NIKKAN JIDOSHA AHINBUN / Auto Sound

2010 International CES Awards “Innovations Designs and Engineering Awards”

2009 Kakaku.com Product Award( Gold prize & silver prize )

1. 2009FY Review3) Awards from Market

8

(百万台)

ALPINE Forecast

TraditionalHead Unit

Navigation

InformationCamera, Sensor

Display Audio

ＣＥＣＥ

Device LinkDevice Link

ＩＴＳＩＴＳ

9086

80 8390

98105

112118

124130

136143

151System Integration NeedsSystem Integration NeedsSystem Integration Needs

Business Domain : Vehicle infotainment market expands

1

2. Mid-term Business Strategy1) Business Environment Change

78

93

72

95

65

96

65

97

69

1119

72

13111

74

15214

75

17

3

17

75

19

4

20

75

21

4

24

73

22

5

29

72

24

6

34

70

26

7

40

68

28

7

48

0

50

100

150

07 08 09 10 11 12 13 14 15 16 17 18 19 20

(unit: million QTY)

9

BEP ¥18bln/mo

Completion of the bottom structure (defense) and Switch to the growth strategy (offense)

1

Realize Growth Strategies

Product Value Adding

Profitability structure to grow

BEP ¥ 13bln/mo

Drastically decreased B.E.P

2. Mid-term Business Strategy2) CHALLENGE 30+

2009FY 2010FY 2011FY

Establish the Bottom structure

220102010

ProfitProfit--earningearning

B.E.P.¥13 bln/moB.E.P.¥13 bln/mo

Product CostStructureReform

IndirectStructureReform

R&DStructureReform

Growth StrategyGrowth Strategy

20102010Profitability

BEP ¥ 14bln/mo

10

＋

⑤ China & other emerging counties strategy

1New value creation as a car electronics specialist,

and growth in China market

Growth strategies 4+12. Mid-term Business Strategy3) Growth Strategy 4+1

② Alliance Strategy

①AVNCD* Strategy

④ Green Strategy

③Link Strategy

“Offense”Valuable ProductCreation

11AVNCD*: Audio Visual Navigation Communication Drive-assist

AVNCD Strategy

High-end AVNCD：Maintain strong sales and further expansion with new models

X088 : First one in the Market: 8" Display

(Display area 1.43 times to that of 7" display)

X08S：X08 SuccessorNew model launch in 10FYDomestic After market NAVI X08

2

"Perfect FIT""Perfect FIT"

2. Mid-term Business Strategy3) Growth Strategy 4+1

1

12

Utilize our own and others' technologies

Alliance Strategy

Alliances with outside companies depending on theme

DriveAssist

CommunicationContent

MAP DB CrossLicense

Collaboration with

Competitors

2

China Biz.

Elemental technology Green device

AcousticTechnology

Semi-Conductor

2. Mid-term Business Strategy3) Growth Strategy 4+1

1

13

Accelerate development of eco-friendly technology

Lower power consumption

Light weight Activity for Lighter weightActivity for Lighter weight

Lower power consumptionLower power consumption

Eco TechnologyEco TechnologySolution creationSolution creation

Green Strategy

■ ALPS Green Device- Inverter- Coil1

2

For ITSFor ITS：：EV/HVEV/HV

■ Participate NAGASAKI EVITS Project

3

■ Working on 50%-lighter-weight and lower-power-consumption productex) Head unit, Amplifier

2. Mid-term Business Strategy3) Growth Strategy 4+1

14

Business plan reset

‘07

‘08

0

200

250

-5

0

5

10

15

‘11‘10

Restart to ¥200bln in 2012 with ¥10bln operating profit

150

20

196

252

7.06.0

8.0

▲10.610.6 ‘12

10.0

‘09

0.20.2

180180190190

200200

168

-10

1

2Operating

ProfitOperating

Profit

2. Mid-term Business Strategy4) Business Plan

Net Sales[unit：¥billion]

Operating Profit[unit：¥billion]

15