New Growth Strategy
We have decided to formulate a new growth strategy, "Revive Vision 2030," with 2030 as the final year.
New Growth Strategy : "Revive Vision 2030"
Moving toward 2030
Guiding Principles for 2030
Since the 1990s, Ushio has worked to improve its profit margin in a rapidly growing and changing market. However, the 2008 Global Financial Crisis transformed our operating environment, triggering a downward trend in profitability. Changing course, we defined a new mission and vision in the First Medium-Term Management Plan, announced in July 2020, to guide us in developing Ushio into a constantly growing company as we move forward toward 2030. Subsequently, due to the changes in the business environment, we reviewed the Second Medium-Term Management Plan (announced in May 2023), then formulated a new growth strategy with fiscal year 2030 as the final year and reset our guiding principles for 2030 (Mission and Value), which were announced in May 2024. Under the new growth strategy, we aim to grow alongside customers, primarily in Industrial Processes area, as a "light" innovation company.
Review of Previous Medium-Term Management Plan (the Second Medium-Term Management Plan)
In the Second Medium-Term Management Plan (previous medium-term management plan) announced in May 2023, we set a policy of achieving our goals as the "cultivate growth" phase toward our Vision 2030. However, in addition to external factors that caused changes in the business environment surrounding us, such as the deterioration in the semiconductor market, there were internal factors that forced us to review the plan for Industrial Processes, which were the main growth driver in the previous medium-term management plan, resulting in a significant deviation from the plan and necessitating a fundamental review of the growth strategy. Accordingly, we developed a new growth strategy, the “New Growth Strategy: Revive Vision 2030*,” which we announced in May 2024.
*Using the word “Revive,” we express Ushio’s determination to “realize our goals through great transformation.”
Positioning of New Growth Strategy
The “New Growth Strategy: Revive Vision 2030”, announced in May 2024, revised the policies of the previous medium-term management plan and, based on new strategic policies, formulated a more feasible scenario for enhancing corporate value. We divided the period into Phase I (from FY2024 to FY2026) and Phase II (from FY2027 to FY2030) in order to achieve our goals for 2030. In Phase I, we will transform business portfolio by redefining strategic fields. In Phase II, we will optimize Phase I outcomes and deliver steady business growth. We will deploy all measures to achieve our performance targets for Phase I: ROE of 8% or more and Phase II: ROE of 12% or more.
Basic Policies
In the New Growth Strategy (Revive Vision 2030), we set coefficient targets to be achieved in Phase I and Phase II and developed a policy to pursue a growth strategy that emphasizes management efficiency. Three of the specific policies are: ”Focus growth, development investments, and resources on IP Business to drive expansion”; “Enhance efficiency”; and “Balance growth investments and capital efficiency”. Under these policies, we aim to achieve our coefficient targets by formulating more effective business strategies and financial strategies and closely monitoring of the plan.
Business Strategy: Business Portfolio Transformation
Under the “business portfolio transformation,” in order to enhance profitability (FY2030: Generate operating margin of 12% or more*), we will bolster unprofitable businesses and transform our business portfolio with a focus on Industrial Processes, which is our core business. In addition, we will undertake clear business assessments, review and balance investment plans, and shift to areas where Ushio can exploit its unique strengths.
*Operating margin target is reference value
Financial Strategy: Initiatives to Boost ROE
In the New Growth Strategy (Revive Vision 2030), we set coefficient targets for Phase I:ROE of ８％ or more and Phase II: ROE of 12％ or more. We will improve PER as well as ROE to swiftly attain a PBR of more than 1x. In order to improve ROE, we will implement business portfolio transformation and promote business strategies to expand the growth of Industrial Processes, planning to invest 40.0 billion yen or more in Phase I for the growth. In addition, to optimize its capital, we plan to carry out share buybacks and dividend payments totaling 65.0 to 75.0 billion yen in Phase I. Furthermore, in order to steadily improve ROE, we will maintain financial discipline and improve asset efficiency as part of our balance sheet management.
ESG management
Under the New Growth Strategy (Revive Vision 2030), in order to manage both business and sustainability, we aim to further enhance our corporate value by strengthening our ESG management initiatives. We will clarify non-financial key performance indicator goals and undertake full-fledged activities in order to pursue the “five management focuses” that are the material issues for achieving our goals for 2030. In addition, we will increase the contribution of engagement to our results by strengthening our activities aimed to enhance engagement both internally and externally.
Human Capital Strategy
Under the New Growth Strategy (Revive Vision 2030), we have clarified basic policies on investing in human capital. We set three policies for achieving our goals for 2030. With regard to the headcount by segment, we will concentrate human capital on Industrial Processes, which is our priority area. For that, we will conduct human capital investments and reskilling within the company as well as reviewing hiring and training and remuneration structure.
Governance Structure
We have been promoting the strengthening of our governance, and through further strengthening it, we aim to achieve our goals for 2030 in the New Growth Strategy. Further initiatives will be announced as appropriate.
