A Message from the PresidentFoster Innovation to Build a Robust Corporate StructureOur second initiative is to foster innovation to build a robust corporate structure, because we believe it is necessary to have such a corporate structure to contribute to the realiza-tion of a sustainable society. As the business environment surrounding the LINTEC Group rapidly changes, it will retain its competitive advantages by strongly pushing for change in design, development, manufacturing, logistics, and business processes through digital transformation (DX) projects. With regard to the production equipment at all of our plants, we are reviewing coating methods and drying processes. We will also scrap and build equipment with the aim of saving energy, increasing quality and efficiency, and reducing labor. By updating production processes, we intend to sharpen our cost competitiveness. Moreover, by reviewing businesses and products with few growth prospects and low margins, LINTEC is advancing a sweeping restructuring to improve the health of management at Group companies with sluggish earnings. The Company aims to maximize profits by executing these measures and keenly engaging in R&D, with the purpose of increasing capital efficiency while maintaining a solid financial foundation.Create New Products and Businesses to Deliver Sustainable GrowthThe third and final initiative is to create new products and businesses, which is essential to sustaining growth. Using our accumulated unique technologies and development capabili-ties, we aim to create new products and businesses with tech-nological innovations and novel ideas that break stereotypes. LINTEC is developing products that help solve social issues, mainly focusing on the fields of electronics, energy, thermal, resources and emissions, and the 3Rs (reduce, reuse, and LINTEC Integrated Report 2021recycle). We are also taking a flexible approach to both M&A in cases when synergies seem possible and strategic invest-ments to expand growth businesses. Moreover, we must estab-lish localization so that overseas Group companies can expand earnings autonomously and at their own pace. The Company intends to sharpen its competitiveness further by creating products that align with market needs and procuring raw materials locally, based on the concept of local production.Financial Indicators for Fiscal Year Ending March 31, 2030Financial indicators for the fiscal year ending March 31, 2030, the final year of our vision, include an operating income margin of at least 12% and ROE of a minimum of 10%. LINTEC is keen to improve profitability and realize returns far in excess of the cost of capital. We did not set numerical targets for net sales and operating income because of uncertainties related to future laws, regulations, and accounting standards, thinking that it would not be prudent to use these metrics as 10-year targets. We also believe it would not be appropriate to commit to a major sales target while being unable to ascer-tain whether new, growing businesses will succeed or not. For this reason, our long-term vision includes only profitability metrics as numerical targets. In past medium-term business plans, the Company tended to emphasize net sales and oper-ating income. In contrast, our new long-term vision is a break from this past, as it focuses more on profitability and capital efficiency. In aiming for sustained growth as a company, it is naturally important for LINTEC to pursue higher levels of net sales and operating income. Accordingly, these targets will be included in the new and subsequent three-year medium-term business plans.18
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