Medium and Long Term Strategies
Vision
Contributing to a Sustainable Society through Manufacturing by Further Improving In-house Technologies and Promoting Application Develpment to New Product Groups
Sodick Group, under the founding spirit of “Create,” “Implement,” and “Overcome Difficulties,” aims to provide the highest value to customers, and strives to contribute for a sustainable society as a company that “Create Your Future”.
Against the backdrop of technological innovation, such as in the automotive and telecommunications industries, rising demand for labor-savings, and the promotion of the Carbon Neutral and Sustainable Development Goals (SDGs), manufacturing sites are also required to further increase precision, speed, and automation, as well as to improve operability, reduce electricity consumption and waste, consolidate process, and promote DX.
We consider "contributing to evolving manufacturing" to be one of our key management issues, and we are promoting business expansion and sustainability initiatives in an integrated manner, including promoting the development of new products, developing total solutions, enhancing after-sales services, and providing added value using DX.
Implementation of Structural Reform
In February 2019, we announced Next Stage 2026, a long-term management plan targeting 2026, the 50th anniversary of our founding. We have pursued initiatives in every business with the aim of achieving sustainable growth. These initiatives include the transformation of the automotive industry, the evolution of IoT and AI techniques, the spread of 5G, and the advancement of manufacturing, while responding flexibly to changes in the business environment surrounding us.
However, the Company’s overall profitability declined due to rapid and drastic changes in the external environment, such as market conditions, competitive environment, and exchange rate fluctuations, as well as the changes in the Chinese market. As a result, we have decided to withdraw our previous mid-to-long-term management plan because it has become difficult to achieve the plan. Also we are pushing ahead with structural reforms in order to drastically reform our profit structure and management structure by reforming our business model.
Basic Policies of Structural Reform
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| 1Breaking free from dependence on China | Consolidate manufacturing at two factories in China into one factory. Reorganize manufacturing operations and expand production items in Japan. |
|---|---|
| 2Selection and concentration | Improve profitability by reorganizing business segments and products based on market trends and competitive environment. |
| 3Restructuring of production and sales system | Rebuild production and sales systems globally in response to yen depreciation and changes in demand. |
| 4Balance sheet improvement | Enhance the cash conversion cycle and reduce long-term inventory. Improve cash flows by reducing inefficient non-current assets, etc. |
Medium-Term Management Plan (FY2024/12-FY2026/12)
We will establish a management foundation for future growth by resolutely implementing structural reforms based on the basic policies of "Breaking free from dependence on China," "Selection and concentration," "Restructuring of production and sales systems," and "Balance sheet improvement." Under the new medium-term management plan, we will reform our low-profit structure at an early stage.
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| Targets (FY Ending December 31, 2026) | ||
|---|---|---|
| Performance Targets | Net sales | 90.7 billion yen |
| Operating Profit | 7.3 billion yen | |
| Financial policy | Capital efficiency | ROE 8% or more (5-year avg.) |
| Financial soundness | Equity ratio of 50% or more | |
| Shareholder Returns | DOE 2% or more※1 total return ratio※2 of 40% or more |
|
- Dividends per share of ¥27 or more (calculated based on the DOE 2% of the average equity at the beginning and end of the FY 2023)
- Total return ratio is calculated as follows:
Total return ratio = ((Dividend for Year n) + (Repurchase of treasury stock for Year n + Year n+1)) Net income for Year n
Calculation formula for the actual total return ratio for FY n:
Actual total return ratio for FY n = (Dividends for Year n) + (Acquisition of treasury stock for Year n) Net income for Year n
◆ Reference: Overview of the medium-term management plan
Medium-Term Management Plan (FY2024/12-FY2026/12)