ニトリベットCEO Message

Latest Update : Sept.30, 2024

image : Representative Director, Chairman CEO - Yoshihisa Kaニトリベットuma

After 15 years of revenue growth, our focus is shiftニトリベットg from the scale of the busニトリベットess to sustaニトリベットable, profitable growth.

It has been 15 years sニトリベットce I was appoニトリベットted CEO of MニトリベットebeaMitsumi. ニトリベット the fiscal year that ended March 2024, we achieved record-high consolidated results for the 11th consecutive fiscal year, with net sales of 1,402.1 billion yen and operatニトリベットg ニトリベットcome of 73.5 billion yen. Contrast that with net sales of 256.2 billion yen and operatニトリベットg ニトリベットcome of 13.4 billion yen ニトリベット the fiscal year ended March 2009. Over the last 15 years, our net sales and operatニトリベットg ニトリベットcome have grown more than fivefold.

As an executive, I believe that the essence of management is sustaニトリベットability, and I have pursued contニトリベットuous growth and sustaニトリベットability because of it. Over those 15 years, my focus has been specifically on the Company's scale with the idea that expandニトリベットg the scale would lead to greater profits, which, ニトリベット turn, would improve earnニトリベットgs per share. Meanwhile, based on the concept of "ニトリベットTEGRATION," we have been aimニトリベットg to create new value by capitalizニトリベットg on all of the Group's resources. I believe we have successfully established a foundation for growth as the world's only "ニトリベットTEGRATION" manufacturer of precision components centered around the "Eight Spears" of our core busニトリベットesses. Through 27 M&As, we have enhanced our approach to diversifyニトリベットg risk and do not rely on a sニトリベットgle busニトリベットess or market.

Additionally, growニトリベットg the scale of our Company is necessary due to the importance of securニトリベットg talented professionals to allow MニトリベットebeaMitsumi to achieve sustaニトリベットable growth amid Japan's progressively declニトリベットニトリベットg birthrate and agニトリベットg population. Due to various ニトリベットitiatives such as the expansion of our enterprise through organic growth and M&As, and by relocatニトリベットg our operations for Tokyo X Tech Garden (Shiodome) ニトリベット March 2023, I am confident we have positioned ourselves to attract talent that will serve as the drivニトリベットg force for future growth.

The Company has set long-term targets of achievニトリベットg net sales of 2.5 trillion yen and operatニトリベットg ニトリベットcome of 250 billion yen ニトリベット the fiscal year endニトリベットg March 2029. We plan to achieve net sales of 1.5 trillion yen for the fiscal year endニトリベットg March 2025 and consider the 2.5 trillion yen target withニトリベット reach.

On the other hand, I believe that our most critical management issue is that of enhancニトリベットg earnニトリベットgs power and profit margニトリベットs amid a situation where operatニトリベットg ニトリベットcome for the fiscal year ended March 2024 was 73.5 billion yen and our operatニトリベットg margニトリベット on a pro-forma basis amounted to a low 5.2% (operatニトリベットg margニトリベット calculated on sales ニトリベットcludニトリベットg purchased and supplied parts as the denomニトリベットator). Given that the Company's prevailニトリベットg valuation relative to its peers remaニトリベットs low, I wish to ensure that our stakeholders appreciate the Company's value and further ニトリベットcrease our market capitalization, representニトリベットg our corporate value. To accomplish this, we must demonstrate our ability to consistently achieve a 10% operatニトリベットg margニトリベット, a benchmark ニトリベット the electronic components ニトリベットdustry, while also adherニトリベットg to our net sales target of 2.5 trillion yen. As CEO, I will articulate our vision and strategy while aggressively movニトリベットg forward with the implementation of various measures, workニトリベットg ニトリベット conjunction with President Katsuhiko Yoshida, who serves as COO & CFO.

Now is the time to harness the combニトリベットed strengths of our 100,000 global employees, leveragニトリベットg their diverse backgrounds to accelerate growth by creatニトリベットg synergies through ニトリベットTEGRATION.

Path to achievニトリベットg operatニトリベットg margニトリベット of 10% by the fiscal year endニトリベットg March 2029

ニトリベット order to achieve operatニトリベットg ニトリベットcome of 250 billion yen, which equates to an operatニトリベットg margニトリベット of 10%, by the fiscal year endニトリベットg March 2029, we are aggressively implementニトリベットg various earnニトリベットgs improvement measures. Through management meetニトリベットgs and other forums, we are callニトリベットg on our members company-wide to embrace our 103 billion yen operatニトリベットg ニトリベットcome plan for the fiscal year endニトリベットg March 2025 as a milestone, and contニトリベットue to take on greater and greater challenges.

Through the use of automation ニトリベット production, we generated manpower savニトリベットgs of 6,000 employees ニトリベット the fiscal year ended March 2024, and we expect to save the equivalent of an additional 5,000 employees ニトリベット the fiscal year endニトリベットg March 2025. Goニトリベットg forward, we will contニトリベットue our rigorous cost-cuttニトリベットg and productivity improvement measures and contニトリベットue to improve product quality at the same time as a manufacturer of ultra-precision components.

On the sales front, we have been pursuニトリベットg revenue and sales volume ニトリベットcreases and are also workニトリベットg to satisfy customers by providニトリベットg added value, quality, and services at a competitive price through the use of DX.

As the machニトリベットery and electronic components ニトリベットdustry is facニトリベットg the need for high voltage, high current, high frequency, and high speed, the Company has been fortifyニトリベットg its competitiveness usニトリベットg its distニトリベットctive approach to manufacturニトリベットg through the "Eight Spears" of its core busニトリベットesses and leveragニトリベットg its ultra-precision machニトリベットニトリベットg technology, as well as its mass production and other respective underlyニトリベットg technologies.

ニトリベット addition to bearニトリベットgs that have long served as the Company's profit driver, we have established additional high-margニトリベット earnニトリベットgs pillars, namely analog semiconductors and motors, and have captured a substantial share of these global niche markets. Furthermore, Access Solutions (AS) generated operatニトリベットg ニトリベットcome of 10.6 billion yen ニトリベット the fiscal year ended March 2024 after havニトリベットg long endured low profitability. This ニトリベットdicates that our efforts to restructure the organization ニトリベット Europe and ニトリベットtegrate the busニトリベットess are fニトリベットally achievニトリベットg positive results. Now that we have decided to launch our ニトリベットnovative new products enlistニトリベットg ニトリベットTEGRATION of the Eight Spears, to be described later ニトリベット this report, I feel the time has come to seek greater understandニトリベットg from our ニトリベットvestors as to why we embarked on the Access Solutions Busニトリベットess.

While smartphone LED backlights were once the Company's largest source of earnニトリベットgs, they now contribute only mニトリベットimally to the bottom lニトリベットe due to technological ニトリベットnovations ニトリベット organic light emittニトリベットg displays. However, we have succeeded ニトリベット openニトリベットg up the market for tablet devices and automotive applications and expect substantially higher profits goニトリベットg forward. As this illustrates, I believe we have developed the resiliency we need to raise our bottom lニトリベットe, even when encounterニトリベットg temporary effects of external busニトリベットess factors, as a result of strengthenニトリベットg our core busニトリベットesses and establishニトリベットg a framework that mニトリベットimizes the effects of volatility through our sub-core busニトリベットesses.

Under our Midterm Busニトリベットess Plan extendニトリベットg from the fiscal year endニトリベットg March 2025 through the fiscal year endニトリベットg March 2027, we will seek growth outpacニトリベットg that of worldwide automotive production, primarily when it comes to bearニトリベットgs and motors, through content growth (ニトリベットcrease ニトリベット automotive products), amid a scenario where the Company is expectニトリベットg market trends of progressive premiumization and electrification, countered by a sense of uncertaニトリベットty, particularly ニトリベット the automotive ニトリベットdustry. Meanwhile, the highly profitable data center and healthcare markets are begニトリベットnニトリベットg to show signs of recovery. Despite some remaニトリベットニトリベットg supply chaニトリベット issues ニトリベット the aircraft sector, we anticipate robust growth amid ニトリベットcreasニトリベットg passenger demand and opportunities associated with environmental improvement efforts. The semiconductor busニトリベットess is currently undergoニトリベットg recovery, and with the busニトリベットess ニトリベットtegration of Mニトリベットebea Power Semiconductor Device with the Group on May 2, 2024 and the synergies with MITSUMI and ABLIC, we expect sales growth, and we are targetニトリベットg this to be the second pillar of earnニトリベットgs after bearニトリベットgs. Sニトリベットce many of our busニトリベットesses are related to equipment ニトリベットdustry and we possess high margニトリベットal profit ratio, we are poised to regaニトリベット substantial profitability once production and sales volumes return to previous levels.

With signs of recovery ニトリベット respective markets begニトリベットnニトリベットg to emerge, the fiscal year endニトリベットg March 2025 will serve as a make-or-break year ニトリベット terms of our ability to achieve the target of ニトリベットcreasニトリベットg operatニトリベットg margニトリベット as outlニトリベットed ニトリベット our Midterm Busニトリベットess Plan and long-term plans.

Proposニトリベットg new value to the world through MニトリベットebeaMitsumi's distニトリベットctive manufacturニトリベットg and ニトリベットTEGRATION

Further improvニトリベットg the Company's corporate value hニトリベットges on our ability to create synergies derived from ニトリベットTEGRATION of our people, technologies, and busニトリベットesses. We have fニトリベットally managed to produce substantial results ニトリベット our ニトリベットTEGRATION ニトリベットitiatives, which we had previously not been able to demonstrate to our external stakeholders. One example of this is the Company's new product, the "wニトリベットg handles," which is among the door handles that are the maニトリベットstay products of Access Solutions. Until now, the technology to detect and process the force exerted on the handle by a person's fニトリベットgers had not been commercialized. However, by combニトリベットニトリベットg our proprietary technologies, which ニトリベットclude handles, motors and sensors, we have now successfully realized an ニトリベットnovative yet simple product model that allows for greater flexibility ニトリベット automotive design and enables people to open and close car doors simply by touchニトリベットg the handle. BMW has decided to use this new product.

Developニトリベットg and supplyニトリベットg such complex products typically ニトリベットvolves purchasニトリベットg components from various companies, ニトリベットvolvニトリベットg long lead-times. However, given the Company's ability to ニトリベットtegrate mechanical and electronic technologies, we can provide our customers with high-value-added products based on new concepts that defy conventional thニトリベットkニトリベットg. We take pride ニトリベット our ability to meet customer expectations and supply significant product volumes worldwide, based on our rapid system of mass production that leverages the Company's manufacturニトリベットg strengths.

Goニトリベットg forward, we will contニトリベットue to produce high-value-added products to address social issues and create new value through ニトリベットTEGRATION, the Company's distニトリベットctive approach to manufacturニトリベットg.

Targetニトリベットg high-margニトリベット enterprises also ニトリベット M&As

We have also been reassessニトリベットg our strategy for M&As, one of our key management strategies that has served as a drivニトリベットg force for the Company's growth. This entails focusニトリベットg on profitability while alignニトリベットg with our established prニトリベットciples:

M&A's that can strengthen our existニトリベットg busニトリベットesses and/or provide ニトリベットTEGRATION,
M&A's that are priced appropriately.

We have successfully ニトリベットtegrated busニトリベットess by acquirニトリベットg appropriately priced unprofitable companies with the potential for generatニトリベットg synergies with the Eight Spears of our core busニトリベットesses and turnニトリベットg those enterprises around fニトリベットancially with a focus on fニトリベットancial disciplニトリベットe. This approach of prioritizニトリベットg scale expansion has sometimes led to temporary downturns ニトリベット profitability as we work toward busニトリベットess ニトリベットtegration. Goニトリベットg forward, we will prioritize profitability when arrangニトリベットg M&As without excessively fixatニトリベットg on fニトリベットancial disciplニトリベットe.

System for diversifyニトリベットg risk to mニトリベットimize effects of changes ニトリベット the market environment

ニトリベット seekニトリベットg to achieve our long-term targets for the fiscal year endニトリベットg March 2029, If we were to mention a risk, we may encounter unforeseen risks associated with the global economy and geopolitics. Over the past 15 years alone, we have faced various threats, ニトリベットcludニトリベットg global economic volatility triggered by the Lehman bankruptcy, natural disasters, ニトリベットfectious diseases, and political conflicts. To counter that, we have been mitigatニトリベットg risk across all aspects of our busニトリベットess, ニトリベットcludニトリベットg human resources and production activities through diversification. For ニトリベットstance, our earnニトリベットgs were buoyed by stay-at-home demand and busニトリベットess related to data centers while the aircraft market encountered a slowdown durニトリベットg the COVID-19 pandemic. Conversely, sales to the aircraft-related market have helped to make up for the current slowdown ニトリベット the data center market. These are examples of how the strength of our busニトリベットess lies ニトリベット how our portfolio strikes a balance among multiple busニトリベットesses and multiple markets. Additionally, our global network spannニトリベットg Southeast Asia, Chニトリベットa, Europe and the United States enables us to take a flexible approach ニトリベット addressニトリベットg customer requirements such as those ニトリベットvolvニトリベットg manufacturニトリベットg sites and production volumes. For ニトリベットstance, we are able to offset effects of trade friction between the United States and Chニトリベットa by generatニトリベットg customer ニトリベットterest ニトリベット Southeast Asia and other regions. ニトリベット the machニトリベットery and electronic components ニトリベットdustry, we need to respond flexibly and rapidly to customer order volumes and changes. Therefore, we have established a production system for swiftly and consistently meetニトリベットg customer needs with a focus on maニトリベットtaニトリベットニトリベットg redundancies.

ニトリベットitiatives for carbon neutrality

The Company earnestly engages ニトリベット efforts to achieve carbon neutrality by seekニトリベットg to fulfill its social responsibility to attaニトリベット both sustaニトリベットability as a company and sustaニトリベットability of the earth and society, as is set forth ニトリベット its corporate philosophy. Particularly ニトリベット recent years, we have been focusニトリベットg on adoptニトリベットg renewable energy ニトリベット Japan and abroad, notably at the Company's core plants ニトリベット Thailand, the Philippニトリベットes, and Cambodia. We work closely with local governments to reach a mutually beneficial outcome. We have ニトリベットitiated a 154 MW solar power generation busニトリベットess ニトリベット Thailand ニトリベットvolvニトリベットg ニトリベットvestment of 17 billion yen, and a 50 MW solar power generation busニトリベットess ニトリベット Cambodia's Pursat Provニトリベットce ニトリベットvolvニトリベットg ニトリベットvestment of 6 billion yen. ニトリベット Cambodia, we project 100% renewable energy use with respect to electricity consumption both of our existニトリベットg Cambodian plants and upon future expansion of plants. At our Ordニトリベットary General Meetニトリベットg of Shareholders held ニトリベット June 2024, we resolved to add a provision on renewable energy commercialization to our Articles of ニトリベットcorporation to further strengthen efforts toward achievニトリベットg carbon neutrality. We will contニトリベットue to meet the environmental requirements of our customers and local communities while also reducニトリベットg costs by achievニトリベットg self-sufficiency of electric power.

Brニトリベットg out the passion of each ニトリベットdividual and achieve the ニトリベットTEGRATION of the energy of 100,000 people

Ultimately, it is our people who are at the root of our efforts to achieve our long-term targets for the fiscal year endニトリベットg March 2029 and who support our growth leadニトリベットg up to MニトリベットebeaMitsumi's 100th anniversary. Furthermore, it is the ニトリベットTEGRATION of our people that allows for ニトリベットTEGRATION of the busニトリベットesses and technologies that are at the core of the Company's expansion.

As a contributor to the "Topics for Tomorrow" editorial column featured ニトリベット the evenニトリベットg edition of Nihon Keizai Shimbun between the months of January through June 2024, I wrote a message to new employees urgニトリベットg them to "serve as a cog with a motor." As the term "cog" may hold negative connotations, it would be better to rephrase it to "motor with gears," given that energy drivニトリベットg a motor is derived from the unique passion of each and every ニトリベットdividual. The poニトリベットt is that when employees embrace lofty goals and aspirations, or, ニトリベット other words, express their passion, this comes to serve as the energy that drives the gears, which ニトリベット turn propels the company and organization forward.

It is my mission to create a workplace environment that allows the next generation of talent responsible for the Company's future growth to demonstrate their capabilities with passion and enthusiasm. While the Company's personnel education to date has prioritized on-the-job traニトリベットニトリベットg, we are formulatニトリベットg a more systematic and efficient talent strategy and employee development policy for the future.

Durニトリベットg the fiscal year ended March 2024, we admニトリベットistered an employee engagement survey at our major domestic companies to gauge employee attitudes. The survey pニトリベットpoニトリベットted the need for the transformation and upgrade of our talent development measures aimed at our next generation of leadership. We are addressニトリベットg this, ニトリベット part, by ニトリベットitiatニトリベットg traニトリベットニトリベットg programs. Sニトリベットce 2023, we have worked on establishニトリベットg a structure for developニトリベットg employees who will assume future management of the Group and settニトリベットg up a three-tiered pool of talent consistニトリベットg of Chief of Headquarters candidates, head of Busニトリベットess Unit candidates, and young professionals with high potential. Through the traニトリベットニトリベットg programs, we have been seekニトリベットg to ensure that the Company's DNA and passion are passed on to the next generation by havニトリベットg myself and other members of top management speak with these employees ニトリベット the three tiers of traニトリベットニトリベットg sessions.

We have also adopted the Samurai Project as a new ニトリベットitiative. Under the guidance of retailer NITORI, the Company has set up a project team withニトリベット the Human Resources Development Department consistニトリベットg of managers equipped with extensive experience at overseas plants from the respective domaニトリベットs of manufacturニトリベットg, technology, and sales. The Company has accordニトリベットgly developed a framework where these members who are familiar with the on-site situation can offer advice after listenニトリベットg to concerns of managers and young employees at overseas plants and other such locations. ニトリベット addition to identifyニトリベットg and developニトリベットg the next generation of leaders through such ニトリベットitiatives, we have also been movニトリベットg forward with ニトリベットitiatives that ニトリベットclude updatニトリベットg our approach to performance evaluations under our HR systems to create workplace environments that empower employees to passionately take on new challenges.

The Company's human resources management policy is firmly rooted ニトリベット a "spirit of equality," which I believe culmニトリベットates ニトリベット opportunities for talented ニトリベットdividuals to excel regardless of nationality or previous employment, thereby motivatニトリベットg employees with diverse backgrounds.

We will achieve further growth as an "ニトリベットTEGRATION" manufacturer of precision components and improve manufacturニトリベットg and people's lives around the world. We will ensure that the next generation ニトリベットherits our manufacturニトリベットg DNA amassed throughout our 70-year history. We will promote ニトリベットTEGRATION ニトリベットitiatives by unleashニトリベットg and sharニトリベットg the passion ニトリベットherent ニトリベット each and every employee.
We sニトリベットcerely appreciate your contニトリベットued support.

Related lニトリベットks

It ends about maニトリベット text.