Toyo Denki Seizo K K : Notice Concerning Management Targets of Medium-Term Management Plan
July 12, 2023
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July 13, 2023
To Whom It May Concern,
Company Name
Toyo Denki Seizo K.K.
Representative
Akira Watanabe,
President, Representative Director
(Stock Code: 6505 TSE Standard)
Inquiries
Jun Nukina, Operating Officer, General
Manager, Management Planning Division
Tel.: +81-3-5202-8122
Notice Concerning Management Targets of Medium-Term Management Plan
Toyo Denki Group (hereinafter the "Group") is pleased to announce that it has revised its Medium-Term Management Plan 2026, which was announced on July 14, 2022, and whose final year is the fiscal year ending May 2026, and has established new management targets for three years from the fiscal year ending May 2024 to the fiscal year ending May 2026.
1. Background of the review
We positioned the fiscal year ended May 2023, the initial year of the Medium-Term Management Plan, as "a year to thoroughly take initiatives in structural reforms to increase profitability," carrying on from the fiscal year ended May 2022 when there was impairment treatment of business assets related to the Industrial Business segment. And initiatives toward revitalizing and transforming Toyo Denki have been strongly promoted. Also, we announced that the numerical targets of Medium-Term Management Plan 2026 toward the fiscal year ending May 2026 would be presented in July 2023, based on the progress and results of the structural reforms over the past year and the business environment.
2. Basic Policy of Medium-Term Management Plan 2026
The Group had decided to work on a new four-yearmedium-term management plan based on the achievements obtained along with remaining issues in the medium-term management plan Revitalize 2020/2022 (fiscal year ended May 2019 to fiscal year ended May 2022) that was implemented until the fiscal year ended May 2022. Meanwhile, the Group was not able to secure sufficient profitability to respond to major changes in the business environment, including the decrease in number of railway passengers due to the COVID-19 pandemic and a review of testing equipment for electrification of automobiles. As a consequence, results were substantially below what was planned.
Taking into account the issues the Company itself is facing which also became clear from the results, we have positioned Medium-Term Management Plan 2026 (fiscal year ending May 2023 to fiscal year ending May 2026) as a period to achieve revitalization and transformation of Toyo Denki so as to recover and improve corporate value.
To do so, we aim to achieve ROE of 8% or more by promoting three basic policies of the Plan: (1) expansion of new businesses and products, (2) thorough improvement in earnings structure of existing businesses, and (3) improvement in asset efficiency with awareness of capital cost.
Three basic policies
Contents
Expansion of new businesses and
Strengthen and expedite development of new business areas across
(1)
the company, and respond to electrification, DX, and
products
decarbonization
Thorough improvement in earnings
Drastically strengthen profitability of both factories and sales from
(2)
the viewpoint of improving production efficiency and securing
structure of existing businesses
appropriate selling prices
Improvement in asset efficiency
Continue to reduce cross-shareholdings, review capital efficiency
(3)
of each business and consider reallocation of management
with awareness of capital cost
resources
3. Target management indicators
(100 million yen)
Medium-Term Management Plan 2026
Company-wide
FYE May
FYE May
FYE May
FYE May
(consolidated)
2022 results
2023 results
2024 plan
2026 plan
Net sales
301.5
310.2
345.0
400.0
Operating profit
1.7
5.1
6.0
20.0
(Operating
0.5%
1.7%
1.7%
5.0%
margin)
Ordinary profit
7.6
9.8
9.5
24.0
Profit
(9.3)
8.2
8.0
16.0
ROE
(4.0)%
3.5%
4.0%
8.0%
Dividend payout
-
32.7%
35.4%
30.0% or
ratio
more
Consolidated sales by segment
Transportation
194.5
198.5
218.0
250.0
Business
Industry
99.0
99.0
116.0
130.0
Business
ICT Solution
7.9
12.5
11.0
20.0
Business
(100 million yen)
Net sales
Medium-Term Management Plan 2026
Revitalization and
Transformation of Toyo Denki
(100 million yen)
Operating Profit/ ROE
Operating
Operating
ROE
profit
margin
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Disclaimer
TOYO Electric Mfg. Co. Ltd. published this content on 13 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 06:10:09 UTC.
Toyo Denki Seizo KK is a Japan-based company mainly engaged in the manufacture and sale of electrical machinery and equipment for the transportation, industrial and information and communication technology (ICT) business, and related work. The transportation segment is engaged in manufacture and sale of electrical equipment for railway vehicles, new transportation system vehicles, special vehicles, and power storage devices for railways, and related work. The industrial segment is engaged in manufacture and sale of industrial production and processing equipment systems, automotive test systems, power generation and power supply systems, water and sewage equipment systems, on-board electrical equipment, and other ancillary works. The ICT Solutions segment is engaged in the manufacture and sale of station equipment systems, Internet of Things (IoT) solutions (cloud-based remote monitoring and control systems), and other related work. It is also engaged in worker dispatch business.