Toyobo Co., Ltd. announced its long-term vision, Sustainable Vision 2030 in May 2022. We hereby announce that we have prepared the 2030 Medium-Term Management Plan (FY 3/27 – FY 3/31), which is positioned in the latter half of Sustainable Vision 2030.
Presentation material is placed in: Presentation of Medium-Term Management Plan
The 2025 Medium-Term Management Plan (FY 3/23 – FY 3/26) has been positioned as a milestone for achieving targets set in Sustainable Vision 2030, and has been designated as 4 years to remake and prepare. We have been working on this initiative. While we advanced the development of infrastructure for safety, disaster prevention, and quality assurance, and aggressively executed capital investment in parallel, our earning power declined due to delays in the reorganization of our business portfolio, a delay in responding to environmental changes, and delays in launching large-scale growth investments. During the 2025 Medium-Term Management Plan period, while we recovered in the latter half by promoting ensured pricing commensurate with value and cost-cutting through company-wide projects, financial indices such as operating profit, ROE, and ROIC are expected to fall short of targets.
Review
● Foundation strengthened in areas such as safety,
disaster prevention, and quality assurance
● Aggressively executed capital investment but delayed launch of
growth investment
● TOYOBO MC: Launch and development of infrastructure
● Improved profitability of three businesses
requiring improvement
● Deterioration of financial structure
Reflection
● Reorganization of business portfolio
● Realization of results from growth investment
● TOYOBO MC: Outcomes of reformation and growth strategies
● Measures for challenged businesses
● Improvement of capital efficiency and stringent management of
working capital
● One-team management
Within TOYOBO PVVs corporate philosophy, the Toyobo Group holds a vision that states, We will continue to create the solutions needed by people and the earth with our materials and science. To achieve this, we have prepared a new Value Creation Story and brand slogan. By setting Advanced materials, Healthcare, and Environment and energy as priority areas, we will create sustainable prosperity for people and the planet.
Continue to create the solutions needed by people and the earth
with our materials and science
Priority areas: Advanced materials, Healthcare, Environment and energy
● Under the principle of “Jun-Ri-Soku-Yu” (Adhering to reason leads to prosperity),
● we will continue helping to solve social issues through a corporate culture defined by
our DNA of flexibility and transformation, perseverance, and sincerity, underpinned by
our core technologies: Polymer and Biotechnology.
● By optimizing a diverse range of materials to achieve target performance through
co-creation with customers and collaboration with partners, we create customers value
and sustainable prosperity for people and the planet.
In so doing, we also continue to seek growth and development of our people and the Group.
~Realizing the results of growth investment and preparation~
The 2030 Medium-Term Management Plan (FY 3/27 – FY 3/31) is positioned in the latter half of Sustainable Vision 2030, and aims to balance improvement of financial structure and profit growth, as well as attain ROE of over 8% by FY 3/31. Specifically, we will advance the 3 measures of Business portfolio reforms, Laying the groundwork for the future, and Foundation establishment and strengthening on the basic premise of Thorough safety and disaster prevention, quality, and compliance.
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* Profit / Beginning and ending balance average shareholder’s equity
** NOPAT / (Interest-bearing debt + Net assets)
We will categorize each business into the four quadrants of Priority businesses, Maintenance and improvement businesses, Development businesses, and Challenged businesses based on the two axes of profitability and growth potential, and conduct business operations according to their respective positions. In FY 3/29, we plan to set Industrial film, Biotechnology, Medical materials, and electronics materials of Environmental and Functional Materials as the businesses positioned as our Priority businesses, and increase the proportion of capital employed for Priority businesses from 27% to over 50%.
● Priority businesses: Actively allocate resources to expand earnings
● Maintenance and improvement businesses: Maximize earnings while curbing investment
● Development businesses: Strengthen competitiveness and enhance profitability
● Challenged businesses: Improve profitability
- Profitability : ROA by business = Operating profit / Capital employed by business ※Target hurdle rate of 8.0%
- Growth potential :Quantify future market growth rate, market scale and market share
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*Inorganic and carve-out are not included
We will shift resources towards priority areas in the value proposition areas of Advanced materials, Healthcare, and Environment and energy.
Policy ● Shift resources to three value proposition areas and accelerate commercialization
● Strengthen marketing functions (fusion of technology development with market and customer development)
Resource allocation ● New creation and basic technology: 20%, New product development: 65%, Support of businesses: 15%
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*“Vitrimer" is a registered trademark of FONDS ESPCI PARIS.
We will strengthen our management foundation through a human resource strategy linked to management strategy, promotion of Toyobo-Transformation (TX), promotion of safety, disaster prevention, and quality activities in accordance with the roadmap, strengthening risk management, and other initiatives. With TX, under the leadership of the management team, we will advance activities that undertake a revolution to add value and transform the Group into a sustainable enterprise through a basic policy of eliminate, consolidate, and connect.
● Human capital
● TX (Toyobo-Transformation)
● Safety and disaster prevention, and quality
● Risk management and Governance
● Infrastructure development
Each growth strategy of Films, Life Scienc, and Environmenal and Functional Materials is as follows.
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*Mainly TOYOBO MC
Financial indicators of 2030 Medium-Term Management Plan are as follows.
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*1 Operating profit + Depreciation (includes goodwill) *2 Profit / Beginning and ending balance average shareholder’s equity
*3 NOPAT / (Interest-bearing debt + Net assets) *4 (Interest-bearing debt‐Cash and deposits)＜Ending＞／EBITDA
*5 Inorganic and carve-out are not included
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Cash flows from operating activities for the 2025 Medium-Term Management Plan are forecasted to be an annual average of ¥22.5 billion, while for FY 3/27 – FY 3/29, they will be increased to ¥46.7 billion.
Additionally, by reducing capital investments from an annual average of ¥44.0 billion to an annual average of ¥35.0 billion, we will increase free cash flow and improve our financial position.
*Inorganic and carve-out are not included
Large-scale investment has peaked out during 4 years of 2025 Medium-Term Management Plan and growth investment in Films has completed.
We will imvest aggressively in Life Science and Environmental and Functional Materials within 3 years of FY 3/27 to FY 3/29. Additionaly, inorganic strategies will be flexibly assessed and executed.
We acknowledge that providing returns to shareholders is one of its highest priorities. We continually provide a stable dividend in a comprehensive consideration of such factors as sustainable profit levels, retention of earnings for future investment, and improving the financial position, with a target total return ratio of 30%.
Management that is Conscious of Cost of Capital and Stock Price
We are promoting management that is mindful of the cost of capital. We aim to promote the 3 measures of Business portfolio reforms, Laying the groundwork for the future, and Foundation establishment and strengthening, balance the improvement of financial structure with profit growth, and attain ROE of over 8% and PBR of over 1.0. Through these efforts, we will steadily advance the balance of social value and corporate value set in Sustainable Vision 2030, and achieve sustainable growth.
Previous Medium-Term Management Plan
Previous Medium-Term Management Plans are placed in the link elow.