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マクセル Research Memo(4):前中期経営計画MEX23は未達となるも、定性的には大きな成果あり

Maxell Research Memo (4): Although the MEX23 Mid-term Management Plan was not achieved, there were significant qualitative accomplishments.

Fisco Japan ·  Aug 19 01:34

■ Medium-term Management Plan 1. The goal of the medium-term management plan The outline of the "Medium-term Management Plan 2025" (fiscal year from February 2024 to February 2026) that Veru, Inc. is currently working on is as follows. The company believes that the market environment will change after the end of the corona pandemic. Regarding the changing societal situation, the company assumes various management challenges arising from the normalization of economic activities and the consequent labor market shortages, uncertain future risks, the rise of marketing needs due to the evolution of technology and the increasing complexity of customer touchpoints. As for the company's market, it predicts the importance of securing highly skilled personnel through marketing technology utilization and the increase in effective BPO demands in both the defensive and offensive areas amid various management challenges, as well as rising labor costs due to a shortage of human resources and the automation of customer correspondence. In April 2023, the company established a new corporate brand slogan, "How will you respond to that voice?". Although it has been listening to the needs of society, companies, and consumers by listening to the people's voices and solving problems with meticulous communication, the problems that can be solved by interpreting the "voice" are becoming more multifaceted and complex due to technological innovations. Meanwhile, the new epoch of "NEW BPO," which the company group aims to achieve as a slogan, is to model the process of turning many of the voices gathering at the CX site (customer response department) into values related to management decisions and to lead to the optimal action by utilizing data. NEW stands for Next, Engage, and Widen, aiming to delve into all the voices (maximizing the performance of 40,000 people, enhancing the utilization of data), connect stakeholders (collaboration with partners), and broaden the sphere of influence (growth strategy for expanding into new business domains). In other words, it is considered that the company aims to utilize a wide range of collaborations with companies more than in the past, not only in contact centers but also in marketing and other areas. In the "Medium-term Management Plan 2025," the company has set three key policies and plans to make additional investments of a total of over 15 billion yen for three years from fiscal year 2024 to achieve them. As a result, it has set quantitative targets to achieve sales revenue of 180 billion yen (an average year-on-year increase of 7.1%), operating profit of 16.5 billion yen (an operating margin of 9.2%), net income after tax of 11 billion yen (an average year-on-year increase of 11.8%), ROE of 14.4%, and a dividend payout ratio of 50% for the final fiscal year ending in February 2026. It is a goal-setting that exceeds the sales revenue average annual increase of 5.3% and the tax-exempted income average annual increase of 8.7% in the previous medium-term management plan, based on the assumption regarding the changing social and economic environment. Although the first year of the plan, the fiscal year ending in February 2024, started off tough due to the unexpected decrease in high-profit corona-related businesses, the company aims to achieve its target for the final year by investing in organic growth (growth by internal resources) and reform through generated AI after the fiscal year ending in February 2025.

1. Retroreflection of the medium-term management plan MEX23

Maxell <6810> has formulated a long-term vision for 2030, aiming to "create maximum excellence for employees, customers, and society" with its unique analog core technology, starting with the structural reform implemented in the fiscal year ended March 2021. In the first phase of the growth strategy, the MEX23 medium-term management plan focused on "valuing excellence" as its basic policy, with the goal of achieving sales of 125 billion yen and operating profit of 12.5 billion yen by March 2024. To achieve this, the company implemented growth strategies such as optimizing existing businesses centered on analog core technology, consolidating and developing new businesses, revising the sales structure, and promoting the integration of the management foundation. In existing businesses, profitability and capital efficiency were improved through the reduction of the projector business and the transfer of domestic BtoC sales, while in new businesses, the development of solid-state batteries, an important theme, was accelerated through efficient resource utilization. In sales, the company strengthened its proposal capabilities by shifting from business division/product-specific sales to customer-specific sales. In the management foundation, there were significant qualitative achievements through the company-wide integration of back-office functions and the promotion of the commonization of core systems. However, quantitatively, due to the prolonged impact of the COVID-19 pandemic, changes in the external environment such as high raw material prices, and the failure to fully capture customers' technical challenges, satisfactory results could not be achieved.

Aiming for operating profit of 12,000 million yen in the fiscal year ending March 2027 with MEX26

2. New medium-term management plan MEX26

As the second phase towards realizing the long-term vision, the company has formulated the MEX26 medium-term management plan for the three-year period starting in the fiscal year ending March 2025. Based on the lessons learned from MEX23 and capturing mega-trends such as the mobility revolution, ICT/AI revolution, and the advanced development of people/social infrastructure, MEX26 focuses on the three areas of "mobility," "ICT/AI," and "people/social infrastructure," which will be the growth fields of the existing businesses. While continuing to optimize existing businesses, the plan prioritizes the allocation of management resources to these three areas through initiatives such as promoting advanced development and enhancing market development. In new businesses, the plan promotes the commercialization of solid state batteries by accelerating application development and customer development, aiming to reach a stage of continuous sales, while also considering the development of new themes following solid state batteries. In terms of sales, the plan strengthens the technical sales structure to enhance customers' technical challenges and global responsiveness. In terms of the management foundation, the plan continues to improve business operations and strengthen human resources through the operation of the integrated systems, while advancing sustainability management. As a result, in the final year of MEX26, the fiscal year ending March 2027, the company aims for sales of 150,000 million yen, operating profit of 12,000 million yen, ROIC of 7.5%, and ROE of 10.0%. In MEX26, the basic policy of "valuing excellence (corporate value and profit growth)" is continued, with the aim of achieving a PBR of over 1.0 and implementing measures to enhance shareholder returns that focus on total return ratio.

In terms of segments, the plan is to replace the contents of the segments with high-profit and high-growth businesses in the three focused areas. In the energy segment, the plan is to cover the decline in demand for residential lithium-ion batteries※ with primary batteries and achieve sales of 38.5 billion yen (a 10.1% increase compared to the fiscal year ending March 2024) and operating profit of 2.5 billion yen (a 5-fold increase). For functional materials, where semiconductor process tapes and tapes for construction/building materials are expected to lead, the plan is to achieve sales of 37.6 billion yen (a 24.7% increase) and operating profit of 2.7 billion yen (a 100% increase), while the life solutions segment, which is expected to reap the benefits of the reforms implemented in the previous fiscal year, plans to achieve sales of 28.7 billion yen (a 26.7% increase) and operating profit of 2 billion yen (a 3.2-fold increase). While aiming for significant revenue and profit growth in these three segments, the optical system segment is expected to have sales of 45.2 billion yen (a 9.3% increase) and operating profit of 4.8 billion yen (a 14.4% decrease), due to the backlash from the significant growth of the automotive camera lens unit until the previous fiscal year and the stagnant technological development of customers caused by the COVID-19 pandemic.

※ Secondary batteries: Batteries that can be recharged and reused, unlike primary batteries, which are single-use.

(Author: FISCO guest analyst Nobumitsu Miyata)

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