Investor Relations President’s Message
To our Shareholders and Investors
We have been implementing the "IKO Medium-term Business Plan 2020 CHANGE & CHALLENGE ~ Next Stage: ACCOMPLISH" in the three years since April 2018. We have been working on various measures such as strengthening both domestic production and the global supply chain throughout the entire Nippon Thompson Group, including international production subsidiaries like IKO Thompson Vietnam and UBC in China, developing new products with IKO technology through industry-academia collaboration, strengthening our intellectual property strategy, implementing a new human resources system, managing profitability product-by-product and planning sales strategies with a new core ERP system. IKO has thus aimed to establish highly profitable operations by making the best use of all management resources.
This produced the historical record sales in the fiscal year ending March 2019 (the first year of the medium-term business plan), but amid bewildering market fluctuations arising from the US-China trade conflict and the COVID-19 crisis, securing stable sales and profits remained a challenge.
Achieving sustainable growth that is resilient to fluctuations and changes
Recent technological innovations and the growing interest in SDGs are rapidly changing social values. We are seeing the market expansions in our target industries against the backdrop of spreading AI, IoT, and 5G, as well as the autonomation of various machines and the shift to EV in the automobile industry. At the same time, customer needs are becoming more sophisticated and diversified, and we believe that the importance of machine element parts will further increase.
We launched the "IKO Medium-term Business Plan 2023: Deepening, Expanding, and Embracing Change" in April 2021 in order to secure stable profits and achieve sustainable future growth in this environment by enhancing our response capability against market fluctuations and social changes. With the three new basic policies of "Deepening," "Expanding," and "Embracing Change," the entire Nippon Thompson Group will work together to enhance value for our customers and co-create more value.
First, "Deepening" means delving deeper into existing businesses that we have developed into strengths, for example providing high value-added products and services, further improving the quality and accuracy of products, as well as shortening the production lead time of the entire Nippon Thompson Group, thus working to firmly secure the cash for future growth.
Next, "Expanding" means strengthening industry-academia-government collaboration and strategic alliances with partner companies in order to take on the challenge of developing original new products and co-creating new value by finding out precise customer needs.
Finally, "Embracing Change" means building a strong organizational foundation by fostering global leaders and promoting digital transformation. The entire Nippon Thompson Group will function as a "One-Team" to help implement "Deepening" and "Expanding" by creating durable connections with customers and various other stakeholders.
In addition, IKO VISION 2030 (100+ billion yen net sales, 15+ billion yen operating income, and 10%+ ROE) has been established so that all employees can tackle challenges from a long-term perspective. However, the goals of the Medium-term Business Plan 2023 are "4.5+ billion yen operating income and 5%+ ROE" on three years’ average during the Medium-term Business Plan since we aim for stable and reliable corporate value increases even amid an unstable business environment. Setting this as an important milestone for achieving our long-term goals, we will work to ensure future growth.
Sustainable management of Nippon Thompson
In order to achieve sustainable growth, we believe that it is important not only to increase economic value by completing the Medium-term Business Plan but also to increase social value through sustainable management.
Therefore, we have made an SDG Statement to identify six new IKO Group materialities and actively promote efforts to solve environmental and social challenges.