Medium-term Management Plan, Value Up Further 2026

Fiscal Year 2025-2027

Our focus will be building a foundation that can sustain long-term growth, while maintaining the high level of growth and profitability achieved underthe previous medium-term plan. We will also invest proactively for future growth to achieve our 10-year goals – net sales of ¥1 trillion or more and operating margin of 20% or above – in the fiscal year ending March 31, 2033, as set out in the Management Grand Design announced in September 2023. We will seek to improve our corporate value further through the combination of business growth strategy and business foundation strategy.

Basic concept and main initiatives

The three years covered by Value Up Further 2026 will be an investment phase, building a momentum for new growth while maintaining the financial foundation established in the past four years, for achieving the ¥1 trillion net sales target 10 years later.

1. For business growth
 a. Portfolio management: Combining business and product portfolio management
 b. Business growth strategy: Increasing the presence in the industries we serve to raise
       our corporate value further
 c. Innovation management: Introducing new technologies and products to the
       markets and launching new businesses with net sales of ¥10 billion scale
 d. Intellectual property (IP) strategy: Building an IP portfolio aligned with our business
       and R&D strategies

2. For business foundation
 a. Human resource strategy: Creating a vibrant corporate culture and encouraging
       individual growth
 b. Financial strategy: Building a risk-resilient financial foundation that can support
       business growth
 c. Digital strategy: Enhancing cybersecurity and promoting digital transformation (DX)
       to drive productivity
 d. Facility strategy: Developing facilities to support business growth and R&D

3. For both business growth and business foundation
 a. Sustainability strategy: Pursuing ESG (environmental, social and governance)
       activities across the value chain
 b. Brand strategy: Establishing a presence as a global brand

Financial targets

1. Net sales target:
  ¥1.8 trillion or more in total over three years
2. Operating margin target:
  19% or above in average over three years
3. ROIC target:
  15% or above 
4. Shareholder return policy:
  30% or above consolidated dividend payout ratio
     We will decide share buybacks in a flexible manner, depending on the progress of
     growth investment. 

   Note: Those figures are calculated assuming organic growth only.

Non-financial targets

1. Employee engagement score:
  70% or above by the fiscal year ending March 31, 2027, on a consolidated basis 
2. Greenhouse gas (GHG) emissions:  
  a. Scope 1 and 2 (emission from the company’s business activities): 
         70% or more reduction compared to the fiscal year ended March 31, 2019 (in total emissions)
  b. Scope 3 (emissions from the use of sold products):
         48% or more reduction compared to the fiscal year ended March 31, 2019 (in unit emissions
         per unit of gross profits) 

Note:  The above projections are based on information currently available to the Company and on certain reasonable assumptions. Actual results may differ significantly due to various factors.