Medium-Term Management Plan
Our group has set a goal of “BreakThrough600” (net sales of ¥60 billion, OP of ¥7.5 billion, and ROE of 15.0%) by 2030.
Currently, the company is implementing its Medium-Term Management Plan “TY2027” (FY9/25 - FY9/2027), which ends in FY9/2027, midpoint to the year 2030, with the goal of achieving ¥45.0 billion in net sales, ¥4.5 billion in OP, and 11% ROE in the final year.
*For details, please refer to the following file.
Long-Term Vision “BT600－2030”
TOYO’s Vision for 2030
BreakThrough600
Challenge to exceed ¥60.0bn in net sales
Net Sales
¥60.0bn
+αOP
¥7.5bn
ROE
15%
We aim for further increase in our corporate value by focusing on “Advanced Mobility, Sustainable Energy, and Defense & Security” that contribute to the environment and society, promoting “High Value-Added Strategy” to provide unique value to customers, “Overseas Strategy” to expand business in the global market, and “M&A Strategy” to achieve rapid growth
Growth Trajectory
M&A
- Successful M&A to accelerate scale expansion
Growth Businesses
- Advanced Mobility business continues to drive growth
- Sustainable Energy business will see results of “TY2027” in 2030
- Ocean / Defense & Security business growing in line with long-term development of national defense capabilities
Existing Businesses
- Generate stable cash flow with steady sales growth in each business
By contributing to society, we aim to improve our corporate value in a sustainable manner and provide further returns to our stakeholders
Medium-Term Management Plan “TY2027”
Business Strategy
- Focused Business Areas
- Differentiation by Offering High Value-Added Products
- Expansion of Overseas Businesses
- M&A to Accelerate Growth Strategy
Focused Business Areas: Advanced Mobility
Expand the VILS business
Expanding business in the VILS field for AD/ADAS development through automobile development simulation centered on the hub dynamometer manufactured by subsidiary Rototest
Hub dynamometer
[Market]
Automotive simulation market is predicted to reach US$2.5bn in 2024 and US$4.45bn in 2030*
[Key strategy]
Global business development of solutions centered on Rototest's hub dynamometer system
*Source: 360iResearch 2024
Promote the air mobility business
Expanding sales of measuring instruments for the development and testing of “eVTOL” (flying cars) and launching certification testing services in partnership with a US company
Image of measurement technology image for eVTOL development
[Market]
Domestic air mobility parts market is expected to reach ¥74.5 billion in 2030 and ¥450 billion in 2035*
[Key strategy]
- Proposal for measurement solutions based on our experience working with SkyDrive
- Collaboration with a US partner with certification expertise
*Source: Yano Research Institute, 2023
Focused Business Areas: Sustainable Energy
Expand decarbonization business with hydrogen energy-related products
- Expanding sales of fuel cell/water electrolysis evaluation equipment for the hydrogen market
- Utilizing subsidiary L.Tail and aggressive global expansion
[Market]
The revised “Basic Hydrogen Strategy” in 2023 estimates that ¥15 trillion in public and private investment is planned over the next 15 years.*
[Key strategy]
- Strengthening the production capabilities of L.Tail, which manufactures and installs fluid control equipment, to improve in-house development
- Expansion of global sales through OEM production of fuel cell evaluation systems
*Source: The Ministerial Council on Renewable Energy, Hydrogen and Related Issues 2023
“Sowing the seeds” for future battery business expansion
- Creating added value through our own solutions
- Accelerating new technology and product development through open innovation
Utilizing research by the University of Tokyo, TOYO has commercialized impedance analysis software, adding value to existing businesses
[Market]
The “Battery Industry Strategy” announced in 2022 calls for expansion of both in-vehicle and stationary battery use, with the market expected to reach approx. ¥40 trillion by 2030.* Government-funded projects such as the GI Fund & GteX are also boosting investment
[Key strategy]
- Differentiation by developing new, original and high-value-added solutions
- Strengthening open innovation with companies and universities, and accelerating the development of new technologies and products
*Source: Ministry of Economy, Trade and Industry 2022
Focused Business Areas: Defense & Security
Provide equipment that contributes to improving defense capabilities
Expanding sales of defense equipment such as multibeam echosounders, underwater communication systems, and infrared cameras to be installed on ships
Infrared camera
[Market]
Defense spending to rise significantly between FY9/23 and FY9/27 to boost defense capabilities*
[Key strategy]
- Winning significant orders by introducing a wide range of cutting-edge strategic products to contribute to Japan’s national security
- Continuous product development and recommendations to strengthen defense capabilities
- Specializing in defense equipment, primarily measuring instruments (defense and support systems without direct offensive capability)
*Source: 2020 Defense White Paper
Differentiation by Offering High Value-Added Products
Further expand recurring business
Evolving our business from "selling products" to "selling experiences" to stabilize revenue through repeat orders and increase profit margins
Anechoic chamber at Tsukuba Testing Laboratory, TOYO EMC Engineering
Continue to actively promote recurring business →Aim for approx. 20% growth in 3 years
[Examples]
- Software product subscription business
- Testing and calibration services
- Evaluation and consulting services
- Consumables
Expand business with in-house development
Developing original products to increase added value and margins
*The image is of a product in development
[New In-house Developed Product]
Oil Particle Counter “PI-1000”
Monitoring to measure particles in lubricating oil caused by machine wear overtime in order to optimize maintenance timing and predictive maintenance, resulting in labor savings and an extended life of industrial infrastructure
[Possible targets]
- Automobiles, trains
- Wind / thermal power generators
- Water gates for hydro-power plants
- All oil lubrication devices
Expansion of Overseas Businesses
Establish offices to boost overseas sales
Setting up new offices in Germany and other nations, to expand overseas business, mainly in the US, China, Europe and Asia.
M&A to Accelerate Growth Strategy
M&A Strategy
We promote M&A activities based on fundamental principles to accelerate business growth and realize steady and sustainable corporate value enhancement
Fundamental Principles
Target
Business Expansion: Domestic and overseas companies with technologies and customer bases that accelerate the growth of existing businesses
New Businesses: Domestic and overseas companies that can utilize our technology to develop into new markets and businesses
Strengthening Development: Domestic and overseas companies with development and production capabilities for commercialization of our products
Process
Review System: Due diligence and synergy evaluation conducted by key divisions
Decision-making: Discussion at the Investment Advisory Council and final decision at the Board of Directors
Promoting Integration: Building governance and encouraging synergy realization led by the PMI team
Financial Discipline
Investment Execution: Selecting the optimal fundraising method while maintaining financial soundness
Price Evaluation: Setting an appropriate investment price that reflects synergies and financial impact
Monitoring: Quarterly investment review and monitoring of governance
Sustainability Management
Sustainability Medium-Term Plan “STY2027”
Among the 5 materiality themes, we have set the items on which we will place particular focus in “TY2027” as our mid-term sustainability plan, “STY2027,” and are promoting company-wide initiatives.
01
Contribute to Innovation and Industrial Growth
02
Promote Environmental Conservation
03
Establish a Strong and Sound Management Base
Main Sustainability Goals
by the fiscal year ending September 2027
Obtain a score of "A⁻" or higher
in the CDP
Climate Change ReportIncrease sales
of solutions that
contribute to realizing a decarbonized societyIncrease the ratio of
female managers to11%
or moreObtain certification
as a Health & Productivity Management Outstanding Organizations
Financial & Capital Strategies
Cash Allocation
- Over 50% of operating cash flow and fund raising to be allocated to growth investments, including M&A
- Strategic allocation for shareholder returns; Aiming for business growth and improved capital return
Shareholder Returns
Dividend Policy
DOE of at least 5%
A new dividend policy aimed for continued dividend hikes in future
Share Buybacks
- Completed share buyback announced in August 2024 at the beginning of FY9/25
- Continuing to consider the balance with growth investments as appropriate
KPIs
In the final year of “TY2027,” (FY ending September 2027), which is also the midpoint of “BT600-2030,” we aim for ¥45.0 billion in net sales, ¥4.5 billion in OP, and 11% ROE through organic growth.
With addition of M&As, we aim for net sales of over ¥50.0 billion.
