Medium-term Management Plan

> For detailed presentation material, please click here.

*Update progress and growth strategy on May 11, 2023.

 Toyobo Co., Ltd., observed the 140th anniversary of its founding in May 2022. On this occasion, the company stipulated a long-term vision, Sustainable Vision 2030 and 2025 Medium-Term Management Plan (FY 3/23 to FY 3/26).

 The Sustainable Vision 2030 predicts change in the future business environment and shows the ideal state of the Toyobo Group in 2030, as well as sustainability indices and action plans, based on its corporate philosophy of “Jun-Ri-Soku-Yu (Adhering to reason leads to prosperity).” Under this long-term vision, the company is committed to becoming a sustainable company that contributes to (society’s) sustainability, while changing its corporate culture to one oriented toward sustainable growth.

 The 2025 Medium-Term Management Plan (FY 3/23 to FY 3/26) regards the period covered by the plan as a pass point in its efforts to attain the goals stipulated in the Sustainable Vision 2030 and four years of remaking and preparation with the aim of building a foundation for sustainable growth based on a basic policy comprising four measures.

 Each of four measures are incorporated into the respective action plans to be implemented.

 Regarding Measure 2 “Reorganization of the Business Portfolio,” Toyobo will map each operation in the company’s business landscape on the basis of profitability and growth potential, and categorize it into four quadrants. It then will manage each business operation based on its positioning. Hurdle rate of two axes is set as Return on Capital Employed (ROCE) and Compound Annual Growth Rate (CAGR), respectively. When determining whether the business is a “stable earning businesses” or a “businesses requiring improvement,” the company takes into account not only the hurdle rate but also qualitative information. Also, the company considers measures by stratified business.

 

 

 Toyobo will continue to actively make investments in film business and life science business as “businesses focusing expansion” because they have a competitive edge and their markets are expected to grow.

 In addition, the company aims to make the field of environmental and functional materials business of “stable earning businesses” as the driver for “third growth” by establishing a joint venture with Mitsubishi Corporation. By combining its technological capabilities and Mitsubishi Corporation’s comprehensive power, including its broad industrial knowledge and networks, Toyobo will aim to boost its presence in the global market and providing solutions to match diverse and complex industrial needs.

 Also, the company will steadily promote master plans to achieve normalization in textile business, airbag fabrics business and contract manufacturing of pharmaceuticals business as “businesses requiring improvement”. 

 Detailed presentation on films business and life science business is available below link.

 Targets of 2025 Medium-Term Management Plan are net sales of 450 billion yen, operating profit of 35 billion yen, and profit attributable to owners of parent of 15 billion yen.
 Important financial indicators are EBITDA, the total of operating profit and depreciation, to actively make investments for sustainable growth, and Return on Invested Capital (ROIC) to promote management emphasizing capital efficiency. The company focuses on optimum allocation of management resources from both growth potential and capital efficiency.

                * NOPAT / (Interest-bearing debt + Net assets)

                 ** (Interest-bearing debt‐Cash and deposits)＜Ending＞／EBITDA

 

 

 Toyobo plans capital investment totaling 240 billion yen in the next four years, a drastic increase over actual figures made during the period covered by the previous medium-term management plan. It will make safety and industrial accident prevention measures as well as environmental measures among its top priorities and actively make investments for growth. To build a foundation for realizing sustainable growth, Toyobo will sophisticate the core system and strengthen its business foundation as part of its investment in remaking the company.

 Toyobo will prioritize investment while monitoring operating cash flow trends.

 Toyobo’s cash flow allocation gives first priority to safety, disaster prevention and environmental responses, and at the same time, makes aggressive investment in growing businesses. It will increase external financing and the company will manage it within the range of D/E ratio of less than 1.2 times, and Net Deb / EBITDA ratio of the four times level.

 The target for the total shareholder return ratio during the term of 2025 Medium-Term Management Plan (FY 3/23 to FY 3/26) is 30%.