Thank you very much for joining us today despite your very busy schedule. I am Tsuga, CEO of Panasonic Corporation. I'd like to share with you the Panasonic's transformation for sustainable growth. The company came to a conclusion to make a major transformation to pursue further sustainable growth with a long-term vision based on the current midterm plan. Let me explain the outline. First of all, this is a review. Those are the major points of our midterm strategy announced in May 2019. First, to execute each business strategy toward profit growth and profitability improvement based on the three business classifications of core growth, core creation, and revitalization. Second, to thoroughly enhance our management structure, which involves reducing fixed costs and taking measures to businesses with loss-making structures.
Through these initiatives, we aim to overcome our low-profit structure as well as to become a company that achieves lifestyle updates and generates new contributions to society. This shows the current progress of the major points. In terms of executing portfolio management, while our business performance has been partially impacted by COVID-19, we have steadily made progress in formulating and executing business strategies for each business classification. Regarding the EBITDA margin of core growth business, while COVID-19 has had some impact on our market conditions, by excluding this impact, we are expecting EBITDA margin to increase year- on- year and become close to the 10% target we set for midterm strategy. We're also seeing progress in specific initiatives. For the spatial solutions business, we created new value through promoting the integration of air conditioning and indoor air quality businesses, mainly in China. Panasonic is gaining stronger market presence.
For the Gemba process business, targeting SCM area as a growth area, we made a 20% strategic investment in Blue Yonder. In terms of thorough enhancement of management structure, we have steadily reduced costs, mainly fixed costs. The progress at the first half exceeds that of the initial target, including the measures to businesses with loss-making structures. Going forward, we will continue with our utmost efforts in enhancing management structure toward the profit contribution of JPY 100 billion in fiscal year 2022. Following this progress in the current medium-term strategy, the company aims to achieve sustainable growth through speedy countermeasures to environmental changes and further enhancement of business competitiveness. Based on this, we will carry out a major transformation in the group's basic structure. Let me explain the details.
In proceeding with this midterm strategy, I am now confident that the business areas constituting our pillars of the future can be found mainly in the classification of core growth businesses. Our next task is to thoroughly enhance the business competitiveness of those areas and draw a picture that allows us to develop sustainably. To accomplish this, it is necessary to build an organizational structure that enables individual businesses to operate with a sense of speed, always take up challenges aggressively, and enhance their own competitiveness. In addition, it is crucially important to further energize the business Gemba or operating frontlines by reviewing various systems, such as development of new systems and considering the kind of roles that indirect functions should play. Furthermore, from the group-wide perspective, we aim to achieve stronger growth as a group.
This includes defining the next growth areas while improving our flexibility to handle changes in the business environment. Therefore, we have made a decision to drastically reshape the company. To be specific, the company will reorganize its current company system comprised of seven divisional companies, and in April 2022, we will transition to a holding company system by focusing on specific business areas, possessing the best-in-class level of expertise. We will make further contributions to society and our customers with a sharpened competitive edge that is unmatched by our competitors. In other words, we will become specialized and sharpened, which is essential to enhancing our business competitiveness. Through this organizational change, we will accelerate the move in becoming specialized and sharpened in each business by drastically increasing empowerment to the operating companies for thorough autonomous management.
The holding company will actively support each business becoming specialized and sharpened, as well as swiftly and accurately implementing growth strategy from the group-wide perspective, including defining, creating growth areas, and making investments. By doing this, we will set up a structure that enables us to enhance the corporate value of the entire group. This chart shows the outline of the new structure. First, upon transition to the holding company system, the corporate name of the current Panasonic Corporation will be changed to Panasonic Holdings Corporation. The name Panasonic Corporation will be succeeded to a newly established operational company, as shown on the left, based upon current appliance company and life solutions company.
Under the new Panasonic Corporation, we aim to exert significant synergy effect and comprehensive strengths, mainly with spatial solutions business classified as one of the core growth business, including taking up challenges in white goods as well as consumer electronics and residential space in China. We will pursue value creation that is unique to Panasonic, bringing better health to the mind and body by staying close to people. Also, Gemba process business and industrial solutions business, which are also classified as core growth business, will be incorporated as operational companies. Furthermore, regarding the automotive battery business for prismatic, we established a joint venture with Toyota Motor Corporation. For cylindrical, profitability has improved in our business. For Tesla, the direction for our next challenge is becoming clear. Combining the non-automotive battery business, the energy business will be incorporated as an operating company.
We'll steadily grow this business by reclassifying it to core growth business. These four operational companies will play the central role for the development of the group going forward. For businesses such as automotive and housing businesses, we will refine sound competitiveness as individual operating companies to overcome current issues, as well as clarifying their own growth path. In this way, they will contribute to raise corporate value of the Panasonic Group. Panasonic Holdings Corporation, the parent holding company, and the newly established company in charge of professional services will be supporting each operating company's aim to enhance competitiveness in their respective areas. The holding company will support each operating company's growth strategy to become more specialized and sharpened and enhance competitiveness from a functional aspect. In addition, it will formulate and execute the group-wide growth strategy to realize higher corporate value from a group-wide perspective.
The aim of the professional services corporation is to become an organization of experts, being highly efficient and providing high added value by visualizing and continuously revising the value provided by indirect functions. In terms of the system, the following reforms will be made. First, to promote specializing and sharpening of each business, we'll boldly increase empowerment to operating companies for speedy decision-making. At the same time, we'll clarify the responsibility on results for those in management responsibilities, as well as enhance corporate governance to improve quality of decision-making through clearer accountability. We'll optimize cost structure by flexibly introducing various systems, including personnel systems suitable to the environment each business operates in. Thus, we'll enhance competitiveness required to address each industry. Regarding the multi-layers and overlaps at indirect functions, in line with changes, we'll simplify the indirect functions by establishing a separate corporation for professional services.
Through this, we aim to achieve further management efficiency and contribute largely to the competitiveness of the operating companies. Now, I will explain which direction our growth strategy will drive us under the new structure based upon the four core growth business. These are the three major areas where Panasonic aim to make contributions. We expect significant market growth for the future in these three areas. On the left, the area closely related to people as our DNA. Here, the new Panasonic Corporation will play a major role to take up the challenge to provide value through lifestyle updates. Considering the COVID-19 circumstances and further aging of society, the possibilities to offer contributions in this area will expand much further.
In this area, we aim to be unique and unmatched to offer contribution in air conditioning and indoor air quality, leveraging synergy between appliances and life solutions, which means former Matsushita Electric Industrial and Matsushita Electric Works. In the center, the area to address issues at the Gemba operational frontlines, such as manufacturing, logistics, and distribution. Here, we aim to bring greater innovation to the processes at the Gemba by combining strengths of our manufacturing expertise and digital technology. This business is about getting involved in the Gemba of our corporate customers who face various issues and offering them solutions. By doing this, we can greatly contribute to transforming their management. I have a strong feeling that our business opportunities are expanding already, and we can expect long-term growth.
Finally, on the right is the area related to supporting the foundation for the development of society from the electronics perspective, mainly with our device and energy businesses. Without evolution in these technologies, communication infrastructure such as 5G, batteries for mobility, digitalization, and green society cannot be materialized. We'll ensure to capture the ever-increasing important business opportunities by thoroughly enhancing technologies and manufacturing capabilities, as well as establishing presence in the area of people and electric electronics. We'll further pursue our strengths. Between them is the area of addressing issues at the Gemba, where we will expand new businesses. This is our idea of approaching growth and contributions as the Panasonic Group. What we are aiming for with this transition to a new structure is, first, achieving sustainable growth in a highly profitable business structure with the four businesses serving as our future pillars.
This will be done through specializing and sharpening, along with increased competitiveness of all our businesses. Second is making Panasonic a brand that shares values with society. Under the new structure, the Panasonic brand will become an ever more important asset that connects the entire group. We want to share values with our customers and society and continue to generate new value with them. By doing this, we want to further evolve the brand and the company itself. The raison d'être for Panasonic is always to contribute to the society, and this will never change. Thus, we view this reorganization as a necessary process for us to fulfill our reason of existence during an age of radical changes. Under autonomous management, we will thoroughly refine the specialization at each business area, as well as staying close to and making further contributions to people's lives and society.
This is how the Panasonic Group will continue to develop as a group of valuable businesses that is indispensable for the development of the society. I would like to ask for your continued support to Panasonic. I thank you very much for your kind attention.
Thank you. This is Okazaki from Nomura. Now you also announced a new CEO, and I think that Tsuga-san has continued a very healthy and constructive dialogue with us, so we appreciate that very much. Two questions. About the Panasonic Holdings, under the Panasonic Holdings, what is the purpose of establishing Panasonic Corporation? Panasonic Industrial and Panasonic Electric Works were combined, and you would expect to have a synergy. It has been a long time since those two companies were combined, but maybe there were some things that you could not achieve. What are the challenges?
Under this new organization, what do you intend to achieve? Second question is about energy. This time, the batteries are now upgraded to the core growth. What were the changes that you experienced in a year, and why did you make this decision? The investments for the battery business, could you give us any update on that? Thank you.
Thank you for your questions. First, about the new Panasonic. As I said, the core business, that is the home appliance of Panasonic Industrial, Matsushita Electric Industrial, and also Matsushita Electric Works, have lighting, wiring equipment, and also the food refrigeration, including Hussmann. Under this new Panasonic, it took time, but finally, they are combined, and we are now determined to do so. Why did it take so long? When I became the president, the Panasonic was too big.
The challenges of each business, as for the non-profitable business, we conducted the structural reform. That is what we did. As a whole, how can we manage this big Panasonic? That is what we were thinking about. The business division system and four company systems, the company system was introduced. Dividing the businesses is how I try to manage the big company. Those four businesses, as for now, have been divided into seven. At that time, the electric appliance business, the P Company, and also the ME, the Electric Works, that is an ES company. Those were too big to be combined, the appliance and ES business. To manage them in the small-sized units was not something that we could do.
For example, the directors of the Matsushita Electric Works came into the headquarters, and by doing so, we tried to maximize the capability of Matsushita Electric Works. We have promoted the exchange of the personnel. We reduced the sense of resistance among people. By doing so, for the first time, the housing would be coming out of it, and smart life, that is ABC business, is now out of this. We have smaller or more compact, and now finally, we can combine those two. We have been taking time to do this. I hope that's how you understand it. We have taken a long time. Based on our feelings, I think that people are more positive about this combination, and we are ready to do so.
Concerning your question about energy, now, in terms of automotive business, this was changed from the revitalization to the core growth business. Simply, when we had the losses, we could not call it a core business, core growth business. Investments for Tesla, is it possible for us to continue, or for the prismatic battery, can we continue to invest? There are a lot of anxieties. Because of that, within the automotive, that was considered to be revitalization business. To improve the profitability and the prismatic, we started a joint venture with Toyota. By doing this, I think that time has matured, and we now consider that this automotive business should be the core growth. We have divided into this automotive business and now is in the core growth business.
We no longer use the revitalization for automotive business, but we will continue to make efforts. We are still in the process of doing this, and under a new CEO, Kusumi-san is currently working on this. That is how we made this decision. I hope those answer your question. Thank you.
Next question, please. Mr. Ezawa from Citigroup Global Markets Japan.
Thank you. I'm Ezawa from Citigroup Global Markets Japan. One of the challenges for you is speed and executing what you said you will do. When you become a holding company or establish a holding company, then you'll be increasing the speed, as Mr. Tsuga said, and you said for that you'll be increasing empowerment. Including passing on to the next generation, more specifically, the increasing empowerment for increasing speed, what are you going to empower?
It may not be easy, but can you be more specific as to what you are going to do to increase empowerment? That's my first question. Secondly, in the presentation material, with the blue and white boxes, you are showing clearly that housing, smart life, automotive, and other group companies are going to be split out of the group. Can you clearly show the direction? If that is not the case, then what does that mean? Can you explain more specifically? By classifying by different colors, the time required, according to Mr. Tsuga, how long do you think this has to be done? For example, Hitachi, they say that they will be doing this in three years. What is your time frame? Thank you.
First of all, speed and exercising what we said we would do were the challenges, you say. You're right.
Now, why is it that we are not able to have increased speed? Firstly, if you accelerate, then there's a problem, and then you have no other choice but to brake, to put your foot on the brake pedal. It is not the case that we have not pressed the accelerating pedal. If you accelerate too much, if you increase the speed too much, which may undermine profitability, for example, automotive business. Hence, in the past, it is not that we were not focusing upon increasing speed. However, if you increase speed, then risk is also going to increase. Who is going to take the ownership or the responsibility for the risks? The organization for responsibility of the result was not clear. Where does that come from? This all boils down to big Panasonic. As a slogan, we say, "Cross-value innovation, taking advantage of the strengths of Panasonic.
We are going to increase the value for the customers with cross-value. We are still sending this message. If you look too much horizontally, then the vertical axis becomes weak. If you try to be smooth in a horizontal manner, resources were shifted, for example, exchange of human resources, which was fine as a big Panasonic, but the speed, the vertical axis was slower. If there are 10 businesses, then making decision for one business, other remaining 9 companies also participating in the decision-making, does that increase the speed? No, speed will be slower. Expertise for making decisions needs to be enhanced. We can have both the speed and depth. In what area can we do that? If we remain as a big Panasonic, we are not able to do that.
It has taken time, it is true, but we are able to see better, and it is more focused. Therefore, speed and exercising what we said we will do are being done. It became easier to increase empowerment. Depending upon how we are going to structure, we will be increasing empowerment. With the speed, risk will increase. Not just expertise, but other areas of governance will have to be taken into consideration carefully. With regards to your second question, white boxes, where will these businesses go? What's your question? One option would be for them to go somewhere, but rather than that, as I mentioned, for example, housing, how to take synergy horizontally. We have been paying attention to synergy. Housing, where does it discontinue? What is the profit situation? Was not visible at the beginning.
It wasn't really a business division to speak of. We have the manufacturing, sales, and development integrated and moving this to head office, LAS, and AP with these businesses. We can see the inflow and outflow, including money. It became visible. Automobile, it was used part of the LAS, but as an automotive, it became more visualized, including losses. Smart life network as well. Next present, Mr. Kusumi, when he was engaged in TV business, he visualized the business. It has to be made visible, but making that visible does not mean the business will go outside the company. Inside, competitiveness of the business needs to be enhanced. Everything hinges upon increasing competitiveness. If partnership is needed and something new might be done, in which case we will consider a partnership, and it should be done on a voluntary basis by the business operating company.
Top-down, Panasonic Holdings is coming up with such idea. It's not the objective of doing this. The time horizon at an early stage enhances competitiveness early. If we're not able to do that, we have to increase profitability first. We have to make clear revitalization area and increasing profitability. These need to be done in a short time horizon. Thank you.
Now let us move on to the next question. Nakane-san of Mizuho Securities. Thank you.
Thank you very much. Thank you very much, and I hope you continue for the next five months. Two questions. This time, you become the holdings company, and I'm sure that you cannot talk about everything, but as an image, what kind of size of the headcounts are you thinking of? Also expenses or costs. What kind of cost should we expect for the next fiscal year?
Usually, holding companies should be thin and the other businesses thicker. Could you talk about what we should expect? Second question is about before starting the medium-term business plan, management plan. You mentioned that under revitalization, the automotive batteries and automotive solutions are under here. It has been 18 months since that time. What could you achieve and what could you not achieve, or what do you expect to achieve, and how do you pass it on to Kusumi-san? As much as you can discuss.
The first question probably can be better answered by Katayama-san, who is with me here.
I can talk about generally, but as for specific headcount, I cannot talk about that. With this reorganization, the major purpose is with this Panasonic Corporation to make sure that there is a good synergy.
Second is the operating companies can become more specialized and sharpened to create those companies as a specialized company and also to have a more competitive flat indirect section. Those are the purposes. Nakane-san asked about the Holdings Corporation and the new Panasonic Corporation. There will be very thin layered companies, both of them. This time, this would be two-tiered. As Ezawa-san asked, it is also related to speed. In 2003, we introduced the domain system. At that time, the number of the domains and also underneath it, we had BUs. One domain had about 10 BUs. Then under Mr. Tsuga, we introduced company system, four companies and about 50 areas. One company had about 10 different businesses. This time, under Panasonic Corporation, we have companies, and those are close to business domains or business companies.
Nine companies, one company or one operating company would have three different businesses. It would be more focused areas of the businesses each company is responsible for. They can become more competitive and indirect costs can be reduced. Based on that, we'd like to come up with the optimum size of the headcounts. In that sense, we want to create as slim or flat and less layered companies as possible. As for the second question, the automotive business is now moved from the revitalization to core growth. Now there is an automotive solutions and batteries business. Let me talk about each about the automotive solutions. There was an explosion of developments. That is to say that how do we solve this development problem? That was the biggest challenge that we were faced with. Second is how can we focus more based on the regions?
For example, what do we do about Europe? That was the biggest challenge that we had. Concerning those, Kusumi-san has come up with a very clear policy, and business processes have been changed. The way of development, I think to change that, it would take time. Including the direction, we want to make sure that we can generate profit. Now it is in sight. In that sense, major change is happening. One thing, the recharger or charging system, this is going to be a kind of a lingering issue. We are currently taking measures, but as of now, that is still remaining. As for batteries, a year and a half ago, Tesla, we did not know what would happen to them. Also about Prismatic, the discussion with Toyota was progressing, but we were not sure how this would end.
There are a lot of anxieties. We wanted to accelerate, but we could not do it. Both of them, as for Tesla, it's not just the efforts made by Japan, but also locally, there were a lot of efforts made. With the COVID-19, the Japanese people cannot travel, but the local people try to start the switch to the new line that was accomplished. Now the people with the visa from Japan, we can dispatch people for the high energy density battery. We are switching to that, and the profitability should improve with this. In that sense, in 18 months, the environment surrounding the battery business has changed. As for the cylindrical, this was mainly for the PC, but now the servers for GAFA, for backups, I think they are choosing our batteries. That has been pushing up our profit.
Totally, I think that we are seeing major improvements. Those are the changes that we saw in the past 18 months or so. Thank you very much.
Now we'd like to entertain the next question. Ms. Nishimura from Credit Suisse Securities. Ms. Nishimura from Credit Suisse Securities.
Thank you. My first question, in terms of specialization and sharpening, you are going to compete against dedicated companies. You have strong products, and each business division was autonomous. What will change going forward? Related to that, human resources and the change of the human resources and strengthening and training of human resources, I'd like to hear your policy on that. Second question, batteries. There have been discussions about batteries going forward. Tesla will enter into phase for contributing to profit. In the long run, for Tesla business, there are competitors, and it has produced manufacturers as well.
Is there a possibility for you to change the options? What are the possible options that you are envisaging? These are my questions. Thank you.
Of course. We are at the phase to determine. The details, I am going to just give you a general idea. Competing against dedicated manufacturers, that is required in almost all the areas. For instance, in the consumer electronics business in Panasonic Corporation, it is mostly specialized companies that we are competing against. The companies with comprehensive capabilities are rare, but the capabilities are needed to compete against the specialized companies. At Panasonic Corporation, we should be focusing upon the areas where we can compete. That is going to be subjected to specialization and sharpening. Comprehensive powers and synergies are important in terms of geography and sales. We have to look at that.
In that sense, we have to take advantage of our comprehensive capabilities. For example, device and energy in these areas, we used to be a part of some of the components, Matsushita Electronic Components, for example. Matsushita Electronic Components, then we became bigger Matsushita and device business of Matsushita Electric Works and Sanyo as well. We became a part of bigger Panasonic. Mask Media came up with the announcement of the competitiveness of parts companies, and the name of Panasonic is not on the list any longer, which is unfortunate. Our position needs to be clear, and we have to increase our position. That is called for. In spite of that, under the umbrella of Panasonic, taking advantage of the brand of Panasonic, if people are complacent, that is a big mistake. We dared to make this decision.
With regards to human resources, there are success cases. That is PSSJ and the solution company under CNS, and they're recruiting by themselves. In some cases, more excellent people than people in Panasonic are working, and their performance is getting better every year. Such success cases are such that excellent human resources are attracted and younger people as well. In total, I think this is the right way to go. With regards to batteries, Tesla business, and although it is 49%, the business with Toyota, we are focusing upon both of these areas. The question is mainly in relation to Tesla 4680, a cylindrical new battery. Tesla made an announcement that they will be producing in-house such batteries. It is not something that Tesla can do by themselves alone. For example, CATL is trying to do, but CATL has never done cylindrical batteries.
LG is doing cylindrical, but they are mainly pouch type. If that is the case, the one with the greatest know-how in cylindrical is us. They had a strong partnership with us, and for them to think about 4680 as a mainstay, without a strong partnership, it is not viable. Hence, their announcement we take as positive. We started development 4680. Specifically at what timing, what kind of investment we are going to make is yet to be decided. On our side, the business of 2170 and 1865, we are going to generate profit and will be making development and investment for new 4680. In the longer term, Tesla, we do not know in what way we can go with them. We do not know yet.
Now let's take another question. Katsura-san from SMBC Nikko Securities. Thank you.
This is Katsura.
Thank you very much for this opportunity. Thank you very much for working as a CEO for a long time. Two questions. First question, Katayama-san is here with us. At the time of May 2020, when you came up with the medium-term management plan from 2022, EBITDA 10% and more than 10% and ROE over 10% or more. With this new organization, what you are aiming at, I am sure that would start under the new management, but how do you position those numbers? Do you think that due to the COVID-19, there will be a one-year delay? Could you talk about the positioning of those numbers? That is my first question. The second question, probably those four pillars, out of them, you might have different numbers. One thing I am interested in is energy business.
As the person before me asked, competitors are Chinese and Korean players, and they are quite desperate. Under the current situation, this is going to be a competition of investments for them. How do you compete against them? Would there be some difference in the competition from the past?
Yes, the first question, Katayama-san will answer.
With the new organization, the targets of the numbers, as Katsura-san said, we have not decided the specific target numbers. At least only with the core growth, 5-10% growth or EBITDA margin of 10%. That was what we said. Corporate-wide, we want to achieve that number at the corporate-wide. At the end of the Q2, the 6% or less was the profitability, and EBITDA margin was close to 10%. We want to enhance that further. That is what we would like to change.
As for energy, Mr. Tsuga will explain this in detail, I'm sure. Tesla and the primary battery and solution-type batteries are included. Rather than or the competition is not so severe, and the business models have been transforming. Based on the Q2 EBITDA margin and operating profit margin, both of them are not so lower than the corporate-wide numbers. As for the second question, if I may add just a little bit, it is true that the competition of investments and whether we can make that investment alone, this would be very difficult to do in the future. Energy business as a core growth business, we are going to continue to compete. By making that statement, how can we continue to accelerate, and how can we continue to do so in the long- term? I'm sure that we can reach an answer.
For example, getting the investments from the third party, that's what we do with Toyota. Energy business requires major investments when we make investments overseas. What kind of partners do we work with? It becomes very important. About China or in China, we placed our foot on the brake. With the new management, I don't know what the new management would think. China, if you go over there, let's work together, they would invest. They would say that, but that could be quite risky. That's why we made that decision. In other countries, there are other possibilities. The world is becoming toward EV or more ecological or more green technology. Various partnerships also are possible. Thank you.
Thank you very much. Next question, please. Mr. Ohno from Morgan Stanley MUFG Securities. Thank you very much.
Tsuga-san, thank you very much for good work for long years. I have two questions. First, as was mentioned, going forward from June onwards, Kusumi-san will be assuming. What do you expect to hope for him to do? What are the expectations? Mr. Tsuga, how are you going to be engaged in the management of the company? Looked from outside in relation to Tesla, you are able to talk with Elon Musk in a good manner. If there's anything that you can say, I would like to appreciate that. Secondly, from investors, there are oftentimes questions as to the schedule going forward. Actually, the procedures change of the corporate name, and from April 2022 will be the start of the new structure. Time-wise, it seems to be rather a long-time horizon. Especially, I would like to focus my question on the following.
October 2021, the abolishment of the current in-house divisional company and implement structural change. Is that a procedure or kind of structural reform reorganization included? What is the positioning and meaning of October 2021? These are my questions. Thank you.
The first part, I'm going to respond. The second question, Katayama-san will respond. Kusumi-san, when I entered, he has worked with me from the time when he was a freshman. One person in 10 years, one person in 20 years. It is not that he's smart, but he's able to use both his right brain and left brain, and he is able to look at the theories and the practical work in Gemba at the same time. He has his feet rooted onto the ground. Operationally, with a sense of Gemba, how to be involved, I did not have much experience.
That is what I'm hoping most from Kusumi-san. However good the strategy might be, operationally, if there's no operational excellence, then one is not able to win in competition. It's just like a castle in the sky. It's not possible to change everything overnight, but he has that mindset, and he will be strengthening the operational capabilities of the company. That doesn't mean that he is good only at operation. That is not the case at all. I do hope that he'll be exerting his capabilities on that front first. Myself, this time, from April 2022, the structure will change. Governance will be drawing more attention. What would be the contact point with outside? There are areas where a big Panasonic was easier to handle. For the actual business, our company, we are leaving everything in the hands of the present.
With a new structure, if there's going to be something that may become weaker, we need to complement that and supplement that. Overall schedule, let me explain first. In February next year, as I know, each operating company will be determined, after which in May next year, we will have the split company split and will be approved by the AGM. Then, as Tsuga-san said, virtually from October, new organization will start. In April 2022, under the holding corporation and the company split, will be approved and will be approved and then starting from April 2022. It takes time. By February next year, determining the outline of the operating companies, a large number of operating companies will be established. Right now, as Panasonic Corporation, we have the relationship and contract with customers and the government.
With a new corporation, we have to make sure that there will be no impact upon the actual business. You may think that it is slow, but we'll be establishing such a large number of new companies, which means in all the contracts, we have to make sure that there is no problem, which is the reason why it is taking time. Approval of the new organization is by AGM. The schedule is up until May, June. After that, ultimately, allocation and assignment of people. A virtual holding company will start in October. Then officially in April 2022, the new structure will start. We cannot be that slow. In practice, we'll be starting from October. At an earlier stage, the actual operation will be started along with the structure that we have already decided. One supplementary comment.
Not only the structure and the system, but human resources is important this time. On Friday, we have announced the change of the presidents. The new president is now able to be involved in the decision-making. Without being delayed, we are able to move forward and make sure that things will not be changed. That is why we have made the announcement on Friday.
Thank you very much. We're getting close to the end of today's meeting. We can take just one more question. Hirakawa-san from BOFA Securities Japan.
Thank you very much. Hirakawa from BOFA. One question. Mr. Tsuga, more than eight years, you have been the leader. In order to generate profit, the advantages or strength of Panasonic, what are the strengths and what were the weaknesses in your understanding?
This time, with this transition to the holding company, how do you think that you can resolve some of the shortcomings or weaknesses and improve the strength? Thank you.
The strength of Panasonic, there are many, I think. If I may say one thing, we celebrated centenary in 2018. At that time, I thought that we are supported by so many companies and trusted by so many companies. That is something which is a big advantage. Whenever we do something new or something unique, we have supporters and partners. We can find other partners and supporters. This is a very major thing. More recently, Yoky Matsuoka is a wonderful person, and she joined because it was Panasonic. We could invite her. That, I think, is also a strength of Panasonic. As for the weaknesses, that is complete opposite from that.
For example, the company, when you look at the air conditioners, thinking about the air conditioners, and they only talk about air conditioners. In our case, we have to really think about the horizontal view rather than concentrate it into the one area. I think we have so many businesses, and we lack a sense of expertise or focus. Now we are becoming the holding company. Now, with this new organization, air conditioner company can only think about the air conditioners. With this, I think that would change.