February 19, 2024 | |
For Immediate Release | |
Company name | Okabe Co., Ltd. |
Representative | Hirohide Kawase, Representative Director, |
President and Chief Executive Officer | |
(Securities Code: 5959, TSE Prime Market) | |
Contact | Yasushi Hosomichi, Director and |
Senior Managing Executive Officer | |
in charge of Administrative Division | |
(TEL. +81-3-3624-5119) |
Notice of Formulation of Medium-Term Management Plan
okabe Transformation 2026 (OX-2026)and Change in Dividend Policy
Okabe Co., Ltd. announces that the Okabe Group has formulated its new medium-term management plan for the three- year period from fiscal 2024 to fiscal 2026, entitled okabe Transformation 2026 (OX-2026).
Under the previous medium-term management plan for the period from July 2021 to fiscal year 2024, the Group worked hard to address priority issues including management for the sustainable development goals (SDGs) including decarbonization and use of digital transformation (DX) while maintaining its orientation of seeking continuous growth together with society on the basis of assumption of the external environment after the COVID-19 pandemic.
Meanwhile, the preconditions for the plan changed significantly, such as soaring prices of goods and the severe labor shortage in the construction industry. In addition, the Tokyo Stock Exchange made a request to listed companies in March 2023. In response, it is vital to recognize the importance of establishing management with an awareness of capital costs and share prices and to address it by harnessing the full strength of the Group.
On the basis of this understanding, the Group placed emphasis on transforming itself instead of being a mere extension of the past management and introduced a term of transformation to the title of its new medium-term management plan. Without being swayed by past decision-making and mindsets, the Group will aim to transform itself intrepidly in the three-year period. It will upgrade its strategy with a view towards continuous growth.
1. Formulation of okabe Corporate Vision 2040
The Group has formulated okabe Corporate Vision 2040. It represents what the Group aspires to be like in 2040 in accordance with its management philosophy of contributing to society by providing safety and security. The Group believes that concerted efforts by all its individual personnel to carry out their respective duties with a view to realization of okabe Corporate Vision 2040 will lead to higher corporate value and to common interests for shareholders.
okabe Corporate Vision 2040
Up to now, and into the future,
we are striving to be a global solutions provider that provides safety and security
in the lives of people around the world by cultivating
Creativity × Connectivity × People Power
as a manufacturer of earthquake-resistant construction materials that support construction.
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Position of medium-term management plan okabe Transformation 2026 (OX-2026)
The Group has defined the next three years as a period of transformation for establishing a new revenue base with a view to realizing okabe Corporate Vision 2040. For the purpose of determining specific activities, the Group has drawn up a new medium-term management plan entitled obabe Transformation 2026 (OX-2026).
With the OX-2026, the Group will see changes in business environment and risks as opportunities. It will aim to provide solutions for material issues in Japan and beyond. For attaining continuous growth, the Group will revise its business portfolio and concentrate its management resources to implement sustainability management. - Outline of the business strategy under the OX-2026
- Customer-centricinitiatives
(prioritizing the development of a system to solve customers' problems and the implementation of initiatives to solve them)
- Develop products that will solve issues faced by customers and society
- Develop new products and create new businesses to meet emerging needs
- Establish a Product & Solution Planning Department that will specialize in construction in Japan
- Offer solutions suitable for the North American and ASEAN markets to accelerate global expansion of the construction business
- Launch a business focusing on blue carbon in the marine business
- Implement human capital management and strengthen the foundation of management
- Set challenging non-financial key performance indicator (KPI) targets, especially for KPIs related to human capital, and work to achieve them
- Improve governance of overseas subsidiaries
- Promote digital transformation
- Upgrade the main systems and transform business processes
- Promote digital transformation to differentiate the Group from its competitors, create new business opportunities and consider and implement initiatives that will increase sales
- Establish an IT Strategy Department
- Customer-centricinitiatives
- Numerical management targets under the OX-2026
FY2023 results | FY2024 targets | FY2025 plan | FY2026 plan | |
Net sales | 78,152 million yen | 70,000 million yen | 72,500 million yen | 75,500 million yen |
Operating profit | 4,082 million yen | 4,100 million yen | 4,700 million yen | 5,000 million yen |
Operating profit margin | 5.2% | 5.9% | 6.5% | 6.6% |
Profit | -7,097 million yen | 2,800 million yen | 3,120 million yen | 3,320 million yen |
ROE | -11.1% | 4.7% | 5.4% | 6.0% |
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- Investment plan
The Company will invest a total of 21 billion yen during the three-year period from 2024 to 2026. Major investments planned include strategic investments such as M&A transactions as well as investments in human capital and in activities related to DX and decarbonization. - Changes in the dividend policy
The Company has pursued a dividend policy of determining the dividend of surplus in overall consideration of consolidated financial results, strengthening of the corporate structure, the increase of retained earnings in preparation for future business expansion and other factors, while following a basic principle of maintaining stable dividends. Going forward, although the Company will retain this basic stance, it will put a greater emphasis on its own continued growth and long-term interests for shareholders and pay attention to the dividend on equity (DOE) ratio and aim to raise its level in the medium- and long-term future with a view to increasing dividend stability.
The Company will set a rough payout ratio target of 30% or higher. However, in overall consideration of the management environment, future business developments and others, it will maintain stable dividends for a medium- and long-term future with attention paid to the DOE ratio and continue its positive actions for returning profits to shareholders.
The Company will not change its policy on the purchase of treasury shares. It will purchase them as appropriate on the basis of overall consideration and judgment on the share price level, the need to carry out flexible and prompt capital policies, impacts on our financial position and other factors.
Before change
After change
The Company's basic policy is to maintain stable dividends, a payout ratio of 30% or more, to enhance the return of profits to shareholders. The dividend is also linked to consolidated business results and comprehensively reflects the need to bolster internal reserves to strengthen the Company's financial position and fund future business operations, among other needs.
The Company's basic policy for dividends of surplus is to pay both an interim dividend and a year-end dividend each year.
The Company's basic policy is to allocate profits according to performance while maintaining a healthy financial position on the basis of positioning the return of profits to shareholders as a top priority management issue and recognizing importance of capital efficiency. Maintaininga payout ratio of 30% or more, it also basically seeks to steadily raise the dividend level by paying attention to the return on equity (ROE) ratio, by achieving continuous growth and others.
The Company's basic policy for dividends of surplus is to pay both an interim dividend and a year-end dividend each year.
For details about the new medium-term management plan okabe Transformation 2026 (OX-2026), refer to the attached material entitled New Medium-TermManagement Plan okabe Transformation 2026 (OX-2026).
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New Medium-Term Management Plan
OX-2026
Okabe Transformation 2026
Okabe Co., Ltd. (Stock Code: 5959)
February 19, 2024
Future figures stated in financial forecasts and elsewhere in this material are forward-looking statements based on currently available information and involve risks and uncertainties. Investors are therefore asked not to make investment decisions based solely on these forecasts. Please note that actual results may differ materially from the forecasts due to various key factors. These factors that may impact actual results include economic circumstances surrounding the Company's business domains and fluctuations in foreign exchange rates against the U.S. dollar and other currencies.
INDEX
01 Vision | 02 Review of Previous |
Medium-Term | |
Management Plan | |
Corporate Vision | Results |
- Concept behind Vision
- Materiality
03 Outline of OX-2026 | 04 Business Strategy | 05 Corporate Value Enhancement | |
Strategy | |||
Awareness of the External | Construction-Related Products | Analysis of Present Status and Factor | |
Environment | in Japan | Analysis | |
Positioning of the New Medium- | Construction-Related Products | Towards Reaching 1 or More in PBR | |
Term Management Plan | outside Japan | Investment plan | |
Outline of Business Strategy | Performance Targets by | Addition of Shareholder Return | |
Basic Policy for Financial | Segment | Indicator | |
Strategy | Implementing Human Capital | ESG Targets | |
Numerical Management Targets | Management | Medium-Term Targets in Major KPIs | 2 |
01 Vision | 02 Review of Previous Medium- | 03 Outline of OX-2026 | 04 Business Strategy | 05 Corporate Value |
Term Management Plan | Enhancement Strategy |
Okabe Corporate Vision 2040
Management Philosophy
Contributing to society by providing safety and security
Okabe Corporate Vision 2040
Up to now, and into the future,
we are striving to be a global solutions provider that provides safety and security in the lives of people around the world by cultivating Creativity × Connectivity × People Power as a manufacturer of earthquake-resistant construction materials that support construction.
Management Strategy
OX-2026 (Okabe Transformation 2026), a new medium-term management plan
3
01 Vision | 02 Review of Previous Medium- | 03 Outline of OX-2026 | 04 Business Strategy | 05 Corporate Value |
Term Management Plan | Enhancement Strategy |
Concept behind Vision
Up to now, and into the
future,
we are striving to be a
global solutions
provider that provides safety and security in the lives of people around the world by cultivating Creativity × Connectivity × People Power as a manufacturer of earthquake-resistant construction materials that support construction.
For over 100 years since our founding, we have been selecting what we should maintain and what we should change in line with the times.
One thing that we have valued is Creativity.
We will strive to be a company that supports the safety and security of buildings and people through our creative technological capabilities.
We will continue to utilize new technologies to create solutions for the automation of construction work, zero emissions, and more.
Another thing is Connectivity.
This represents the power to connect with people, which is created through communication with customers, shareholders/investors, subcontractors/suppliers, employees, and local communities, and the power to connect critical components and materials used in construction sites to enhance safety.
Yet another is People Power.
As stated in our corporate creed, "We will endeavor to cultivate human resources for sustainable development," and "The Group will be a workplace that employees will not regret devoting their lives to," we believe that the foundation of everything we do lies in "People Power," and this will remain unchanging even in 2040.
Underlying these three strengths is our desire to "contribute to society by providing safety and security."
While we envision various changes in our external environment, we are committed to being a company | |
that can contribute to a sustainable society as a member of the global community so that the global | |
environment and humankind can change for the better. | 4 |
01 Vision | 02 Review of Previous Medium- | 03 Outline of OX-2026 | 04 Business Strategy | 05 Corporate Value |
Term Management Plan | Enhancement Strategy |
Okabe Group's Materiality
Category | Type of activities | Materiality | Target SDGs | |
1 | Increasing severity of earthquakes, heavy rains, | |||
and other disasters | ||||
S | Creating a sustainable | 2 | Changes in construction business environment | |
society through safety | ||||
Social | and security | 3 | Declining population and aging society of Japan | |
- Personal relationships and human capital management
- Climate change and global warming
E | Environmental | ||
6 | Achieving environmental conservation, | ||
considerations and | |||
decarbonization, and resource recycling | |||
Environment | resource conservation | ||
7 Maintenance of marine resources
G | Improving managerial | 8 | Strengthening of governance |
soundness and | |||
Governance | transparency | ||
5
01 Vision | 02 Review of Previous Medium- | 03 Outline of OX-2026 | 04 Business Strategy | 05 Corporate Value |
Term Management Plan | Enhancement Strategy |
Results under Previous Medium-Term Management Plan
- Net sales, profit and other figures remained above the targets on the whole until FY2022. However, profit declined significantly for FY2023.
FY2021 results | FY2022 results | FY2023 results | |
Net sales | 64,829 million yen | 76,854 million yen | 78,152 million yen |
Operating profit | 4,334 million yen | 5,271 million yen | 4,082 million yen |
Ordinary profit | 4,726 million yen | 5,471 million yen | 4,303 million yen |
Ordinary profit ratio | 7.3% | 7.1% | 5.5% |
Profit | 2,627 million yen | 3,848 million yen | -7,097 million yen |
ROE | 4.4% | 6.0% | -11.1% |
- While capital investment is falling below the planned figure for the three years from 2022 to 2024, strategic investment has been higher.
Three-year investment plan | FY2022 results | FY2023 results | Achievement rate (at the | |||
lapse of two years) | ||||||
11.0 billion yen | 0.8 billion yen | 1.8 billion yen | ||||
Capital investment | 2.6 billion yen | 24.3 | ||||
( | %) | |||||
Strategic investment | 10.0 billion yen | 7.7 billion yen | 0.2 billion yen | 7.9 billion yen (79.1%) | ||
(including M&A) | ||||||
21.0 billion yen | 8.5 billion yen | 2.0 billion yen | 10.5 billion yen | 50.4 | ||
Total | ||||||
( | %) | |||||
6 |
01 Vision | 02 Review of Previous Medium- | 03 Outline of OX-2026 | 04 Business Strategy | 05 Corporate Value |
Term Management Plan | Enhancement Strategy |
Awareness of the External Environment
Social
infrastructure
Low birthrate and aging population
DX
Market demands
- Growth in public investment amid the intensification of disasters and deterioration of infrastructure in Japan
- Existence of infrastructure projects that drive the construction market in North America
- Rising demand in ASEAN and elsewhere due to delays in infrastructure development
- Increase in capital investment for achieving carbon neutrality
- Decreases in population and in the construction workforce, spread of inflation and acceleration of the fall in the birthrate and aging of the population
- Climbing demand for labor-saving that will help shorten construction periods
- Climbing demand for automated, unmanned operation and other operations using digital technologies and changes in the construction industry through DX
- Actions for management with an awareness of capital cost and share prices (to swiftly reach 1 in PBR)
Diverse society
- Diversification of work styles, learning styles and lifestyles and respect for diversity
7
Attachments
- Original Link
- Original Document
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Disclaimer
OKABE Co. Ltd. published this content on 19 February 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 08:26:09 UTC.