Medium-term Management Plan

Meidensha Corporation (MEIDEN) has launched its Medium-term Management Plan 2024, which defines its business strategies for four years from fiscal 2021 to fiscal 2024.
The Medium-term Management Plan 2024 (“MTMP 2024”) constitutes a “jump” phase, and our goal will be to realize “high-quality” growth by both expanding business and improving profit margins.

1 New Medium-term Management Plan: Framework

1.1 Positioning and thinking

New Medium-term Management Plan: Framework

We clarified the direction of growth businesses in the time before last medium-term plan, and focused on both steady business expansion and investment in growth in previous medium-term management plan. The Medium-term Management Plan 2024 constitutes a “jump” phase, and our goal will be to realize “high-quality” growth by both expanding business and improving profit margins. In addition, in order to strengthen a management base that enables us to realize sustainable growth, we will promote management ambidexterity and ESG management.

1.2 Period

The term of the plan was set at four years, and we positioned the first year of the plan, fiscal 2021, as a phase for establishing a concrete strategy for the remaining three years, fiscal 2022-24, while recovering from the effects of COVID-19.
While the outlook for COVID-19 is beginning to appear more promising, the management environment surrounding the Meiden Group is drastically changing, with rising commodity prices and wages, increasing geopolitical risks, and rapid depreciation of the yen. In response, in April 2022 we updated the strategy and numerical targets in line with the current management environment.

2 Financial and Non-financial Indicators (Updated FY2022)

Quantitative targets are based on the assumption that the pandemic will subside during this medium-term period and that economic activities will return to normal by fiscal 2024. In terms of  financial indicators, despite the fiscal 2022 update, companywide targets announced in fiscal 2021 remain unchanged. Further, we formulated and newly announced the following KPIs mainly from a sustainability (ESG) standpoint.

Financial indicators

In billion yen
FY2021 (Results) FY2024 (Targets)
Orders 259.6 300.0
Net sales 255.0 300.0
Operationg income 9.4 18.0
Ordinary income 10.2 17.5
Net income 6.7 12.0
FY2021 (Results) FY2024 (Targets)
Operating margin 3.7% 6.0%
ROE 6.8% 10.0%
ROIC 4.5% 8.0%
Capital investments Accumulated 4-year total: ¥60.0 billion (of which growth investments: ¥20.0 billion)
(2021 results: ¥10.7 billion; 2022 forecast: ¥16.5 billion)
Research and development Accumulated 4-year total: ¥40.0 billion
(2021 results: ¥9.8 billion; 2022 forecast: ¥11.0 billion)
In billion yen
FY2021 (Results) FY2024 (Targets)
Net worth 101.9 March 31, 2025: ¥120.0 billion
Consolidated dividend payout ratio Stably at 30% level (FY2021: 33.7%)

Non-financial indicators

GHG emissions from business activities:
Scope 1 and 2 (Compared to FY2019)
FY2024: 6% reduction
FY2030: 30% reduction
GHG emissions from product use:
Scope 3 (Compared to FY2019)
FY2024: 6% reduction
FY2030: 15% reduction
2040: RE100; 2050: Achieve carbon neutrality
Female executives (proper) FY2024: At least 1
FY2030: At least 3

(of which 1 is an executive officer)
Presidents of local subsidiaries who are foreign nationals FY2024: At least 3
FY2030: At least 5

(of which 1 is an executive officer)
Employee NPS® (Compared to 2021) FY2024:10% improvement
New businesses Net sales: ¥5.0 billion
Figures in blue show changes from MAY 2021 announcement

3 Group Strategies (Updated FY2022)

Power Infrastructure Business Group

Vision for 2030

Become a sustainability partner that offers stable electric power supplies and a renewable energy business

Quantitative targets FY2024

In billion yen
Quantitative targets FY2024 Previous announcement 2021 result
Orders 59.5 58.0 55.8
Net sales 57.5 55.5 52.3
Operating income 1.3 2.0 (1.8)

Major strategies

  • Reinforce manufacturing capabilities for electric power products, expand into new renewable energy-related product areas
  • Accelerate roll out of domestic renewable energy business (wind power and small- and medium-sized hydroelectric power)
  • Improve earnings power of key overseas locations (India, Vietnam, US,and Germany), partially reorganize locations in ASEAN and China
  • Improve added value through reinforcement of services (advanced maintenance using ICT, promotion of O&M business)

Public, industrial & Commercial Sector Business Group

Vision for 2030

Value integrity and responsibility, and continuously support social infrastructure through people, technology, and digitalization

Quantitative targets FY2024

In billion yen
Quantitative targets FY2024 Previous announcement 2021 result
Orders 95.0 95.8 95.5
Net sales 94.6 92.8 94.7
Operating income 6.1 5.6 6.1

Major strategies

  • Provide solutions and designs to water suppliers and sewage treatment operators through Water Cloud Computing Service
  • Ensure efficient use of management resources and promote public-private patnerships
  • provide environmentally friendly produsts and services (water and sewage, railway)
  • Reinforce management of overseas plants and large-scale railway projects

Field service Engineering Business Unit Group

Vision for 2030

Achieve innovation in maintenance through DX, and contribute to the maintenance of sale, secure social infrastructure through new solutions and enhanced experiential value for customers

Quantitative targets FY2024

In billion yen
Quantitative targets FY2024 Previous announcement 2021 result
Orders 42.0 42.0 41.8
Net sales 41.6 41.0 39.5
Operating income 6.0 6.0 5.9

Major strategies

  • Further expand one-stop services
  • Expand range of solutions services that prioritize energy-saving and reduced GHG emissions
  • Expand service business for semiconductor manufacturing equipment (orders target for FY2024: ¥3.2 billion)
  • Quickly develop fully capable engineers (plan for an annual increase of 30 engineers, provide locally rooted services, etc,)

Mobility & Electrical components Business Group

Vision for 2030

Achieve an electrification- and digitalization-driven carbon neutral society through change-resistant manufacturing capabilities, and contribute to the spread of green mobility

Quantitative targets FY2024

In billion yen
Quantitative targets FY2024 Previous announcement 2021 result
Orders 97.0 100.0 65.3
Net sales 96.0 100.0 63.8
Operating income 7.1 8.1 (0.2)

Major strategies

  • Electric Motor Solutions: Promote energy-saving and higher efficiency solutions, and proceed with partnership strategies
  • Mobility T&S: Propose testing equipment for EVs and reinforce maintenance services
  • Electronic Equipment: Retain customers through the provision of products suited to market needs

We are struggling with the progress of OEM sales and production, but we will rebuild the system to recover from the progress delay and secure sales

Key initiatives for the EV business
  • Secure nominations: Incorporate load from FY2025 onwards, develop new products for the future
  • Improve andreinforce produciton capacity: Organize produciton capacity in China
  • Develop new markets and acquire new customers: Develop new markets and acquire new customers to ensure stable acquisition of load

Numerical information (including management targets) posted on this page is based on the “Medium-Term Management Plan 2024 Update” announced on May 13, 2022.
For figures such as the latest management targets, please refer to the "IR Library".

4 Promotion of Sustainability (ESG) Management and Ambidextrous Management

4.1 Sustainability Management

Since our company’s founding in 1897, we have developed products and services using technology that meets the needs of the times and the people living then. We want to be a compelling company that proactively works to create a new society in these current times of great change. Our ideal state of being/vision incorporates this thought.

imagine the society aimed for in 2030, and establish an ideal state of being/vision.Back-calculate what should be done this year, and deepen management and business strategy by focusing on ESG management.

We established focus areas toward the ideal society. These are business areas where our strengths shine most. We will honor our company’s DNA and promote business activities by focusing on the four values of sustainability, diversification, honesty and responsibility, and being future-oriented.

4.2 Management Ambidexterity

The reason for promoting management ambidexterity is to create new value. In addition to making improvements in existing businesses and growth businesses, we will invest business resources bellow.

(1) The development of new technologies and products to build a decarbonized and resilient society,
(2) The digital technologies which make us achieve labor savings and increase efficiency.
In addition, we will actively pursue partnerships in order to realize innovations through co-creation with other companies.

5 Cash Flow Allocation (Updated FY2022)

The corporate group will invest in growth and make shareholder returns after improving financial soundness. In the MTMP, operating cash flow between fiscal 2022–24 is estimated to be 60.0-65.0 billion yen. We intend to use this as a resource to pay shareholder returns, make capital investments, and strengthen our financial base.

Accumulated operating CF for the next 3 years is expected to be between ¥60.0-¥65.0 billion. In addition to the above, we wiill implement investment, shareholder returns, and financial strengthening by reducing and effiectively utilizing assets.

Our financial strategy is to achieve net worth of 120.0 billion yen and a net D/E ratio of 0.25-0.30X by the end of fiscal 2024. Our investment strategy is to make a total of 50.0 billion yen in capital investments for general investments and growth investments combined between fiscal 2022 and fiscal 20–24. With regard to shareholder returns, we will continue a stable dividend and decide on dividend amounts with the goal of a 30% dividend payout ratio.