2027 Medium-Term Management Plan

Performance

The Company is pursuing its 2030 Vision through a three-phase approach. Phase 1, the 2024 MediumTerm Management Plan (2022 through 2024), focused on responding to market growth toward 2030, maintaining our market share, and achieving revenue growth. To this end, we have invested over ¥55 billion to strengthen our supply system.

However, due to a decline in sales resulting from market changes, an increase in fixed costs associated with upfront investments, deterioration in capital efficiency, and higher development costs for sensors and sensor modules aimed at expanding our business domains, capital profitability declined.

Targets and Results

2027 Medium-Term Management Plan

Key Measures of Phase 2

In light of these circumstances, the Company has formulated Phase 2 of its Medium-Term Management Plan (2025 through 2027), setting forth the basic policy of “Achieve profit growth and efficiency with ROIC-based management.” Under this policy, the Company will strive to realize sustainable growth in corporate value by improving capital profitability.

As key initiatives, the Company will actively expand sales in growth markets by leveraging its strengths, while also working to improve the profitability of unprofitable products. In addition, the Company will further enhance product performance through the News Release strengthening of fundamental materials research, thereby differentiating itself from competitors, responding to the diverse needs of customers, and promoting the development of new products for innovation-driven markets. To reinforce its corporate structure, the Company will focus on the implementation of ROIC-based management, the improvement of value-added productivity per employee, and reducing GHG while maintaining financial performance. 

Financial / Non-financial Targets

Financial Strategy

Capital Allocation

We plan to secure over ¥30 billion in operating cash flow over three years through business expansion in growth markets, compression of working capital, and optimization of inventory. The intended use of these funds includes capital expenditures, primarily for additional production and renewal investments in growth products, repayment of interest-bearing debt to maintain financial soundness, and shareholder returns in accordance with our dividend policy.

Shareholder Returns

The Company regards the return of profits to shareholders as one of its important management priorities. From the perspective of comprehensive capital allocation, our basic policy is to prioritize reinvestment in the business and optimization of shareholders’ equity, while continuing to pay dividends. For the time being, the annual dividend will be set at no less than ¥30 per share, with a consolidated dividend payout ratio of around 30% as a reference.

Management with an awareness of capital cost and share price

Our current PBR remains sluggish, reflecting challenges in both our expected future growth and current capital profitability. Over the past ten years (FY03/2015 through FY03/2025), except for the fiscal year ended March 31, 2023, our ROE has consistently fallen below our assumed capital cost range of 8.5% to 11%. Through the execution of the 2027 Medium-Term Management Plan, we aim to enhance both profitability and capital efficiency.

In addition, we will strengthen our investor relations framework and deepen engagement with our five groups of stakeholders, including shareholders and investors.

Through these efforts, we will work to increase expectations for future growth, mitigate perceived risks, and strive to achieve a PBR of over 1.0 as early as possible.

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