Notice of Formulation of New Medium-Term Business Plan, LINTEC INNOVATION PLAN 2019 (LIP-2019)
Mar. 16, 2017
LINTEC Corporation (hereinafter “LINTEC”) hereby announces that LINTEC and its consolidated subsidiaries (hereinafter “the Group”) have formulated a new three-year medium-term business plan, LINTEC INNOVATION PLAN 2019 (hereinafter “LIP-2019”) for the period from April 2017 to March 2020. The overview is described below.
LINTEC’s previous three-year medium-term business plan, LINTEC INNOVATION PLAN 2016 (hereinafter “LIP-2016”), which started in April 2014, was focused on a basic policy of returning to a growth path through active management and continuous innovation. Under LIP-2016, we successfully implemented several key initiatives including the continuous growth of the Japanese domestic business, expansion of the business scale in countries and regions with the potential for economic development, creation of innovative new products that will support the next generation and promotion of M&A to quickly achieve the business strategy.
However, the Group’s business results were materially affected by the slowdown in economic growth in emerging countries in Asia and by sluggish personal consumption in Japan, among other factors. Consequently, the results for the fiscal year ending March 2017, the final fiscal year under LIP-2016, are expected to fall below the quantitative targets set at the formulation of the said plan, namely consolidated net sales of 240 billion yen and consolidated operating income of 20 billion yen.
In order to achieve sustained growth and development into the future, in the face of continuing uncertainty about the Group’s business environment, we have formulated a new medium-term business plan, LIP-2019. This new plan will take effect as of the start of the new fiscal year on April 1, 2017.
Overview of LINTEC INNOVATION PLAN 2019 (LIP-2019)
Based on the achievements and lessons from LIP-2016, the new medium-term business plan, LIP-2019, calls for a basic policy of deepening innovation aimed at driving new growth. Accordingly, we will aggressively pursue a number of key initiatives.
The issues to address range widely from the maximum realization of synergies with the three companies from Europe and America acquired in 2016, both in terms of sales and technology, to the full utilization of the Advanced Technology Building of the Research & Development Div., which was completed in 2015 to accelerate the input speed of new products and strengthen the development of new materials with an eye toward the next generation. LIP-2019 also includes initiatives targeted at strengthening the corporate structure and addressing social concerns. Under this new plan, the Group will take on new challenges for growth as one.
I. Basic Policy
Deepening innovation aimed at driving new growth
II. Key Initiatives
- Strengthening of regional strategy
- Increase in the domestic share and development of new markets and new demands
- Strategic investment and business expansion in the Asian region
- Expansion of the existing fields in Europe and America and the pursuit of synergies with the acquired subsidiaries
- Creation of new value
- Creation of products for differentiation which exceed customer needs
- Development of next-generation products anticipating market changes
- Bolstering the corporate structure
- Ensuring soundness of the Group companies and continual increase in earnings
- Promotion of cross-sectional operational reforms
- Further promotion of cost structure reforms
- Activities for realizing a sustainable society
- Promotion of business activities conducive to solving social concerns
- Promotion of work-style reforms, fostering of diverse human resources and encouragement of their active participation in the workplace
III. Quantitative targets
Major numerical targets in the final year of LIP-2019, the fiscal year ending March 31, 2020 (on a consolidated basis)
- Net sales: ￥270.0 billion
- Operating income: ￥25.0 billion
- Operating profit margin: more than 9%
- ROE (Return on Equity): more than 9%
- The medium-term business plan was formulated based on information available when these materials were prepared. It is possible, however, that the Company’s actual business results will vary from those projected in the medium-term business plan due to a variety of factors.
The contents of the News Release are as of the announcement date. Please note that they may differ from the latest information.