Medium-Term Management Plan
What We Are Aiming For
The Nisshinbo Group’s Aims
- The Nisshinbo Group's mission is to contribute to society through business activities, and we have continued to reconfigure our business around areas where we can contribute to society.
- We aim to continue working to resolve social issues by providing solutions that leverage the Group's strengths.
Aims
Connect Everything, Create Value
We provide solutions to social challenges through sensing,
wireless communication, and information processing technologies.
Medium-to long-term changes in our business environment and business opportunities
Growing demand for action to counter climate change
- Expanding need for products that help reduce greenhouse gas emissions and save energy
- Growing importance of solutions to cope with increasingly severe disasters
Demographic changes (falling birthrate, aging population, labor shortage)
- Increased demand for automation of industrial equipment and transportation to save labor and improve safety
- Increased needs for telemedicine and monitoring services, etc.
Development of a digital society
- A society in which cyberspace and physical space are seamlessly connected has arrived.
- Increased provision of information, products, and services that meet the needs of individuals, as well as labor-saving, automation, and efficiency
Nisshinbo Group Corporate Philosophy
Change and Challenge!
For the creation of the future of Earth and People.
Medium-Term Management Plan Positioning and Priority Measures
2024-2026Priority Measures
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1 Pursue a transformation of the business portfolio
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2 Build a business model that looks to future growth and invest management resources in a focused manner
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3 Reduce management risk by further strengthening the management base
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Business Portfolio
Our Target Portfolio
| Percentage of net sales from the Wireless and Communications/Micro Devices businesses | Percentage of operating income from the Wireless and Communications/Micro Devices businesses | |
|---|---|---|
| Fiscal 2009 | 21% | - |
| Fiscal 2023 | 44% | 46% |
| Fiscal 2026 | 65% | 70% |
| Around 2035 | 80% or more | 80% or more |
| Operating margin | ROIC | ROE | |
|---|---|---|---|
| Fiscal 2023 | 2.3% | 2% | -7.8% |
| Fiscal 2026 | 6.5% | 6% | 10% |
| Around 2035 | 10% or more | or more 8% | or more 10% |
Directions for the Transformation of Our Business Portfolio
We will optimize the allocation of management resources by identifying businesses that align with our corporate philosophy and demonstrate growth potential, business profitability, and return on capital, in order to promote the transformation of our business portfolio to achieve our "aims for around 2035."
Reconfigurations of our business portfolio to date
- Expansion of the Wireless and Communications/Micro Devices businesses
- Restructuring of problem businesses, focusing on profitability
Directions for transforming our business portfolio under the current medium-term management plan
- Optimize the allocation of management resources to actively invest in focus areas and identify businesses in non-core areas
- Focus on businesses that are consistent with the Nisshinbo Group's corporate philosophy and demonstrate growth potential, business profitability, return on capital, and industry competitiveness
- Conduct a valuation based on business characteristics and risks by setting WACC/hurdle rates for each business
Wireless and Communications/Micro Devices business
- Establish positioning as a focus area and accelerate growth
- Build a business model that leverages digital technology
Materials business (Automobile Brakes, Precision Instruments, Chemicals, Textiles)
- Grow by focusing on high-profit areas that contribute to the environment and have synergies with the Wireless and Communications/Micro Devices businesses
- Identify areas for growth and areas for downsizing or withdrawal
Real Estate business
- Continue to subdivide asset holdings
Business Strategy
Wireless and Communications Business
Target Directions
We intend to build a profitable portfolio centered on the provision of social infrastructure systems and after-sales services.
- Create synergies by leveraging the strengths of the Japan Radio Group and Hitachi Kokusai Electric Group* (image recognition technology, 5G wireless communication technology, etc.)
- Boost business profitability through continuous portfolio reviews
- Improve cash flow generation capability and profitability through cost structure reforms and inventory reduction
- JRC Mobility will prepare for the next stage by preparing for connected, sensing systems, mobility infrastructure, and other growth areas.
*Became consolidated subsidiaries in December 2023
Quantitative Targets
Micro Devices Business
Target Directions
Contribute toward the resolution of issues faced by society and customers by creating customer value leveraging the value we have provided through analog technology
- Maintain sales expansion by capturing growth in the analog semiconductor market
- Improve profitability through a shift to high-function products such as multi-functional ICs and modules
- Develop analog solution devices utilizing distinctive sensors such as sound, smell, and microwave
- Develop unit and digital business development with a view to the future through collaboration among technologies within and outside the Group, in addition to existing technologies in the areas of electronic devices and microwaves
Quantitative Targets
Materials Business
Automobile Brakes business
Target Directions
Measures under the medium-term management plan
- Expand sales of copper-free friction materials to meet environmental regulations
- Improve product performance and achieve higher added value to meet xEVand CASE requirements
- Improve profitability through rationalization by integrating bases in China
Quantitative Targets
Precision Instruments business
Target Directions
Measures under the medium-term management plan
- Shift to more profitable areas by leveraging core technologies and concentrating on high value-added products
- Improve profitability by increasing production capacity for next-generation model parts for the shift to self-driving automobiles and by adding more value to existing products
Quantitative Targets
Chemicals business
Target Directions
Measures under the medium-term management plan
- Invest to expand supply capacity, including in the construction of new plants and the automation of production lines for fuel cell separators
- Continued research and development of products with superior safety and environmental impact as well as durability by leveraging core technologies
Quantitative Targets
Textiles business
Target Directions
Measures under the medium-term management plan
- In the textile business, we will cultivate new customers such as major apparel manufacturers and retailers by promoting value to customers in terms of wrinkle resistance, design, comfort, and functionality.
- Promotion of the Shirt Revitalization Project
- In the retail business, shift the business model to an OMO that integrates physical stores and e-commerce sites.
Quantitative Targets
Real Estate Business
Target Directions
Measures under the medium-term management plan
- We will systematically subdivide holdings (Agile convert into cash)
Quantitative Targets
Innovation-Creating Initiatives
We will create new digital services of value to users by integrating the core technologies of the Nisshinbo Group, with a focus on the Wireless and Communications and Micro Devices businesses.
The Nisshinbo Group’s core technologies
Sensing
Utilizing proprietary sensors to make everything visible
- Utilization of a wide variety of sensors including electromagnetic waves, sound waves, cameras, and semiconductors
- Sophisticated object detection through sensor fusion
- Digitization of sensing information
Wireless communications
Seamlessly connecting land, sea, air, and space to transmit and collect information
- Provision of high-capacity wireless communications to facilitate further growth in information volume
- Provision of seamless communications in previously unconnected areas
- Ensuring robust security
Information processing
Creating new value through digital technology
- Efficient analysis of large volumes and a wide variety of data
- Creation of new value for individuals, business, and society through the use of AI and other digital technologies
Integration of core technologies + external
technologies and knowledge, alliances, M&A
Provision of valuable digital services to users
Reinforcing the Management Base (Sustainability)
Key Themes for Reinforcing the Management Base
- Continuously strengthen the management foundation across the Group to realize our aims
- Reduce management risk and the cost of capital by addressing key themes, aiming for sustainable growth and the enhancement of corporate value over the medium to long term
- Respect and protect the human rights of all people associated with the Company, and promote business activities with an awareness of respecting, protecting, and promoting human rights
Key themes and policy initiatives for reinforcing the management base
Respect for human rights
- Strengthen management systems that foster a consciousness toward respecting, protecting, and promoting human rights through human rights due diligence efforts
Develop business with consideration for environmental impact
- Consider opportunities and risks related to reduction of greenhouse gas emissions and natural capital
- Steadily promote business to expand sales of products that contribute to a sustainable society
Promote the acquisition, development, and advancement of diverse human resources
- Promote the acquisition, development, and success of diverse human resources based on the Nisshinbo Group Human Resources Strategy
Build a responsible supply chain
- Promote sustainable procurement initiatives throughout the supply chain
Improve the effectiveness of corporate governance
- Continue corporate governance reforms to establish effective governance
Management Targets
Financial
| Metrics | Fiscal 2026 targets | |
|---|---|---|
| Growth | Net sales | ¥580.0 billion |
| Percentage of net sales from the Wireless and Communications and Micro Devices businesses | 65% | |
| Profitability | Operating income | ¥38.0 billion |
| Percentage of operating income from the Wireless and Communications and Micro Devices businesses | 70% | |
| Operating margin | 6.5% | |
| Efficiency | ROE | 10% |
| ROIC | 6% | |
| Soundness | D/E ratio | 0.7 times or less |
| Shareholder returns | Dividend payout ratio | 40% |
Non-financial*
| Category | Fiscal 2024 targets | |
|---|---|---|
| Human rights | Promote business and human rights initiatives | Formulate human rights policies, introduce and promote human rights due diligence in areas of high human rights risk |
| Environment | Reduce of greenhouse gas emissions | Reduction of 35% or more compared to fiscal 2014 |
| Expand sales of products that contribute to a sustainable society | Accounting for 60% or more of sales | |
| Human capital | Training of management candidates necessary for business promotion | Increase the ratio of successor program participants in management posts (executive officers and above) |
| Strengthen career recruitment to correct personnel age structure | Strengthen career recruitment to correct personnel age structure | |
| Promote diverse human resources |
Continue to conduct global survey Percentage of female managers: 6% Percentage of male employees taking childcare leave:30% or more of eligible male employees |
|
| Supply chain | Implement improvements in sustainable procurement in cooperation with suppliers | 100% evaluation in the improvement status of major suppliers (80% or more of transaction value) based on the results of the sustainable procurement survey |
| Global response measures | Study and implement supply chain deployment methods for overseas suppliers and key overseas locations |
| Category | Fiscal 2024 targets | |
|---|---|---|
| Human rights | Promote business and human rights initiatives | Formulate human rights policies, introduce and promote human rights due diligence in areas of high human rights risk |
| Environment | Reduce of greenhouse gas emissions | Reduction of 35% or more compared to fiscal 2014 |
| Expand sales of products that contribute to a sustainable society | Accounting for 60% or more of sales | |
| Human capital | Training of management candidates necessary for business promotion | Increase the ratio of successor program participants in management posts (executive officers and above) |
| Strengthen career recruitment to correct personnel age structure | Strengthen career recruitment to correct personnel age structure | |
| Promote diverse human resources |
Continue to conduct global survey Percentage of female managers: 6% Percentage of male employees taking childcare leave:30% or more of eligible male employees |
|
| Supply chain | Implement improvements in sustainable procurement in cooperation with suppliers | 100% evaluation in the improvement status of major suppliers (80% or more of transaction value) based on the results of the sustainable procurement survey |
| Global response measures | Study and implement supply chain deployment methods for overseas suppliers and key overseas locations |
*Target values in the Fifth Sustainability Promotion Plan (fiscal 2022–2024)
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