StrategyLast updated: Oct 19, 2017

Strategy

Review of Previous Medium-term Management Plan “SHINKA!-Advance 2016”

Under the Medium-term Management Plan “SHINKA!- Advance 2016,” we increased profit and, despite operating profit falling short of plans, recorded a fourth straight term of record-high profit. We were also able to achieve net income and ROE that exceeded our plans. As a result of a lack of sales growth in the Growing 8 businesses* that are positioned for growth, their sales failed to achieve targets.

* Growing 8 businesses (G8): Renovation and Home Assets Management (hereafter the Housing Company), Infrastructure Stock and Functional Materials (hereafter the Urban Infrastructure & Environmental Products (UIEP) Company), Functional Infrastructure Materials, Eco-Friendly Materials, Materials for Mobile Devices and Diagnostic Reagent Systems (hereafter the High Performance Plastics (HPP) Company)

The Medium-term Management Plan “SHINKA!-Advance 2016” targets Results
Operating Income

Medium-term Management Plan “SHIFT 2019 -Fusion-”

Under the Medium-term Management Plan “SHIFT 2019 -Fusion-” (from fiscal 2017 to fiscal 2019) we will make “quantitative growth,” by which we grow sales with profitability by appropriate growth investment for the future, compatible with “qualitative transition,” by which we aim for an operating income ratio of more than 10% through ongoing improvements in profitability by constant structural reform.

Basic Policy: SHIFT nature of growth
New phase of growthQuantitative target

Medium-term Management Plan / Whole Picture of Strategy

Under the Medium-term Management Plan “SHIFT 2019-Fusion-,” we will set up a new business framework at the axis of the Group vision and expand the growth engine star businesses by implementing three initiatives: strengthening earnings power, promoting innovation, and cultivating frontier businesses.

Medium-term Management Plan / Whole Picture of Strategy

Medium-term Management Plan / Creation and Expansion of Star Business through Three Actions

Under the Medium-term Management Plan “SHIFT 2019 -Fusion-,” we are targeting the creation of more than 10 star business groups in five growing domains by fiscal 2019, the final year of the Plan.

Medium-term Management Plan / Creation and Expansion of Star Business through Three Actions

Medium-term Management Plan / Fusion

In addition to growth in existing businesses, the thinking is that growth under the Medium-term Management Plan “SHIFT 2019 -Fusion-” will be achieved by creating incremental increases in sales in existing businesses through fusion themes and by accelerating the promotion of new businesses (commercialization of incubation and creation themes).

Medium-term Management Plan / Fusion
Examples of Fusion (Existing businesses)Commercialization of Incubation and Creation Themes

Financial Strategies

Under the Medium-term Management Plan “SHIFT 2019 -Fusion-,” the policy is to conduct aggressive investment while maintaining a sound financial position. To that end, we will double strategic investment and establish a new investment framework for M&As. We will make investments for growth from various perspectives, including establishing a new environmental contribution framework. On the other hand, our policy is to maintain active and stable returns of profits to shareholders through dividends and treasury stock acquisition.

Forward-looking Investments Returns to Shareholders
Capital Policy Approach
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