Hirose Electric Business Results Briefing for FY2023
"2024" Medium and Long‐term Growth Strategy
May 8, 2024
Hirose Electric Co., Ltd.
President
Kazunori Ishii
Cautionary Statement
In this material, there are descriptions based on current estimation by Hirose Electric.
Hirose cautions you that a number of important risks, uncertainties and others could cause actual results to differ materially from those discussed in the *forward-looking statements. Thank you for your understanding.
*Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "aim," "may" or "might" and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. These statements are based on management's assumptions and beliefs in light of the information currently available to it.
Macro Environment → Hirose's Value
Changes in the environment for customers and applications
Advancement of IoT/5G/AI
Electronic devices exist everywhere along with the technology evolution and the diversification of use environment, and its usage are enlarged.
Consumer values being more diverse
Segmentation of product features are being progressed such as customization to satisfy preferences and the products resolving social issues.
Geopolitical risks increasing
Decoupling increase the complexity of supply chain, and
quality control in decentralized site and the collaboration become more difficult.
Requirement of quality becoming severe
Electronic devices hold significant security involvement such as autonomous driving.
To the world of Connecting Technologies.
HRS:Deepening our providing values
The conventional role of connectors to connect devices and to support customer coalition are enlarged. KSFs of customers are diving to deeper field.
Product
features Design, Performance, Specifications
Sustainable relations
Partnership of trust
◦Stable supply
◦Stable product quality ◦Knowledge of customers
Synergy of values
Co-creation◦Co-R&D
◦Interactive technology
communications ◦3C+1C network
Potential of "Connecting business" is increasing. | |
HRS makes progress to meet and exceed the expectation of customers. | 2 |
© 2024 HIROSE ELECTRIC CO., LTD. All rights reserved. |
Mid-term Management Objectives
Emerge from a period of supply chain turmoil in FY2020 to 2023 and move into a new growth phase.
Sales target in FY2027 | Sales revenue:JPY 230 billions | |
Operating Profit Margin:25 % or more | ||
Others
Telecom1% 3%
1% | Consumer | |
All | ||
3% | ||
General | (Smartphone) | |
22% | 34% | |
Industrial 32% 31%
Inter:FY2023(Actual)
Outer:FY2027(Forecast)
(Consumer)
16%
27%
Automotive
30%
- Aim for the growth above the industry average and increase our market share through the growth with quality.
- Establish well balanced 3 business pillars in FY2027
- Consumer:Stable growth with competitive products and strong customer relationship
- Automotive:Become a mainstay of growth through our flexibility and resilience
- General Industial:Make a leap forward in the global market by taking advantage of cross segment knowledge and experience.
- Explore another NEW growth driver in addition to the 3 pillars
© 2024 HIROSE ELECTRIC CO., LTD. All rights reserved. | 3 |
HRS: Growth Image
By maintaining high profitability business and make continuous growth in medium and long-term
Actual | Result Forecast Future Direction |
25.0% or more
Bottomed out the backlash from COVID-19 bubble. Draw a new growth scenario.
© 2024 HIROSE ELECTRIC CO., LTD. All rights reserved. | 4 |
Initiatives on the Segments and Functions (1/2)
ALL Consumer
Maintain and Strengthen
the Competitiveness
Enhancing our product and manufacturing capability as a leading company of micro connector
BM55 Series
・World's smallest class ・Power/signal hybrid ・Fully armored micro
connector
CES® 2023
Automotive
Strengthening Customer Relationship
Establish a good R&D partner relationship with car makers developing new mobility.
Joined KYOHOKAI
In Apr. 2024, HRS was approved to join KYOHOKAI and share the knowledge beyond the border of companies
*KYOHOKAI: Partnership organization between Toyota and suppliers
General Industrial
Cooperation with various customers
and organizations
Accelerates the cooperation with customers and organizations to provide our values in the market widely spread.
ix Industrial
Provides core-technology for new standardized product switching from RJ-45 used in ethernet connection
・Co-developing with the Harting group Expanding partners
・Downsizing and robustness
Innovation Awards Honoree
New Koriyama factoryCompletion in Apr. 2024 Enhances the capabilities of production engineering
*75% smaller
Customers
*The CES Innovation Awards are based upon descriptive materials submitted to the judges. CTA did not verify the accuracy of any submission or of any claims made and did not test the item to which the award was given.
Hirose Korea
Expansion
and production, and BCP. Operation starts from mid. May
Organizations
PROFINET
CC-Link
GigE Vision etc.
Partners
Harting
Amphenol etc.
Expanding Hirose Korea which is a R&D and manufacturing center for micro connector
© 2024 HIROSE ELECTRIC CO., LTD. All rights reserved.
Harness
manufacturer Subcontractors
6
Initiatives on the Segments and Functions (2/2)
Enhancing the production engineering capability
"Tohoku Advanced Technology Center" (TAT Center) started in operation at Morioka-city,
Iwate-prefecture from March 2024.
HRS's | Sub- |
contractors | |
factories | |
TAT Center "connecting wisdom"
Engineering | Production |
department | Engineering |
department |
Missions of TAT Center
- Strengthen software engineering on production facilities
- Facility development hub to target on shortening lead time
- Provide training to be advanced production engineers and construct "Co-creation field" to learn technics with subcontractors
Building informationSite area:6,983㎡ Building area:2,092㎡
Building structure:Steel frame and one-story
Energy:Renewable energy 100%
(Private power generation with solar panels 40kW and purchasing)
Creates job opportunities for professionals and contributes to the development of
engineering group to challenge to the global markets.
7
FY2024 Policy
- FY 2024 >>>
Strengthen the competence of "Foresight, Sensitivity and Driving force", recover and move forward.
<Special Strengthening Points>
〈1〉 Technological development capability and product appeal (Proposal to design and mass production)
〈2〉 "Manufacturing expertise"
(KAIZEN & manufacturing innovation) 〈3〉 Human capital development
(Continued: the 1st year of deepening)
Continuous
growth, evolution
"Individuals + Team will improve their capabilities", deepen and evolve
- A Small Company Connecting Wisdom >>>
HRS Group competing on "Product appeal & Manufacturing Expertise"
© 2024 HIROSE ELECTRIC CO., LTD. All rights reserved. | 8 |
Capital Policy
Mid-Term Basic Policy (FY2024-2027)
Mid-Term Capital Allocation
Revised shareholder return policy | In order to develop next business pilar in addition to existing | ||||||
Dividend on equity ratio (DOE): 5% | three pillars, we plan to make strategic investments outside of | ||||||
existing businesses. We will allocate the capital according to the | |||||||
investment scale. | |||||||
As Hirose Electric Group, which advocates continuous stable growth and | |||||||
high profits, we have adopted the dividend on equity (DOE) ratio, which is | FY2024-2027 Cumulative Image | ||||||
less susceptible to single-year performance, as an indicator of shareholder | |||||||
returns, with the aim of achieving a stable increase in dividends. | Strategic | ||||||
FY2027: Aims to stably achieve 25% | |||||||
Investments | |||||||
operating profit margin and 10% ROE | (M&A, etc.) | ||||||
10-20% | |||||||
Shareholder | |||||||
Returns | |||||||
Sales | 30-40% | ||||||
CF | |||||||
100% | Business | ||||||
Investments | |||||||
(Production Facilities | |||||||
/Infrastructure) | |||||||
* This policy might be reviewed in the following cases. | 50% | ||||||
(1) Unexpected and sudden changes in the environment | |||||||
(conflicts, natural disasters, infectious diseases, etc.) | |||||||
(2) When it becomes necessary to invest a large amount of M&A funds. | 9 | ||||||
© 2024 HIROSE ELECTRIC CO., LTD. All rights reserved. |
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HRS - Hirose Electric Co. Ltd. published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 01:29:06 UTC.