About UsMedium-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: Positioning and thinking
1.1 Positioning and thinking
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.
Although vaccination is progressing, the worldwide spread of COVID-19 remains unpredictable.. Given these circumstances, we decided on a four-year plan that positions fiscal 2021 as a phase of establishing a concrete strategy for fiscal 2022-24 while recovering from the effects of COVID-19.
2 Corporate Strategy
2.1 Quantitative Targets and ESG Indicators
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 ESG indicators, a new department specializing ESG and related departments will set KPIs in fiscal 2021 for non-environmental goals (e.g., promotion of diversity).
2.2 Strengthen business management capabilities: Organizational Reform
Prior to starting the new MTMP, we implemented organizational reforms. The objectives of organizational reform are (1) clarification of responsibilities and authority, (2) quick decision-making and generation of business synergies, (3) quick response to environmental changes and diverse needs. This is because the increasing complexity of social issues and the progress of digitalization have made it necessary for us to establishing a structure for collaboration across the Meiden Group.
2.3 Business Reform and Capacity-building
Improving business profitability is essential to achieving high-quality growth. Under this MTMP, we will proceed with initiatives using a two-pronged approach of strengthening product competitiveness and business reform. With these initiatives, we will launch one-year projects and establish and execute specific strategies in fiscal 2021.
3 Group Strategies
4 Promotion of ESG Management and Ambidextrous Management
4.1 ESG 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.
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
The corporate group will invest in growth and make shareholder returns after improving financial soundness. In the MTMP, four-year cumulative operating cash flow is estimated to be 70.0-75.0 billion yen. We intend to use this as a resource to make capital investments, pay shareholder returns, and strengthen our financial base.
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 60.0 billion yen in capital investments for general investments and growth investments combined. 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.