Message from Top Management
Transformation to Long-term oriented management:
Long-term and Medium-term management plans launched to achieve the Long-term vision
Thank you for your continued support of the ShinMaywa Group.
It is now more than one year since the start of the COVID-19 pandemic, which has had major impacts on countries around the world including Japan, and it is still uncertain when the pandemic will be brought under control. I pray for the souls of those who have been lost to this disease and for the recovery of those who are currently afflicted by it, and I would like to express my deepest respect and gratitude to the healthcare professionals who are working to treat COVID-19 patients every day.
Review of FY2020 during the COVID-19 Pandemic
During the 2020 fiscal year, which was the final year of the “Change for Growing, 2020” (CFG2020) Medium-term management plan, we focused mainly on increasing the added value of our main products and services in Japan and on strategic growth by establishing new production sites and implementing M&A overseas while raising productivity and reinforcing sales in order to achieve our targets.
In the Aircraft Division, production lines were temporarily suspended in conjunction with production adjustments by customers (Boeing), and during the year, we implemented a variety of measures to prevent the spread of COVID-19 with the highest priority on the safety of employees and business partners and we made extraordinary decisions and took unprecedented action.
Unfortunately, we were unable to achieve the initial management targets set in CFG2020 due to effects of the COVID-19 pandemic, but net sales reached nearly the forecast announced in July 2020, and operating income substantially exceeded the forecast.
Formulation of Long-term management plan commenced and new Medium-term management plan launched
The various changes and experiences during the year were significant drivers of our transformation to Long-term oriented management. Specifically, we began formulating the “Sustainable Growth with Vision 2030” (SG-Vision 2030) Long-term management plan as an expression of the group that we want to be in 2030 based on the Management philosophy announced one year earlier. This is the first time that ShinMaywa Industries, Ltd. has formulated a long-term plan covering 10 years, and the process is still underway, but we believe that it will be difficult to achieve our vision in a single step, and accordingly, we decided to pursue our vision for 2030 through three Medium-term management plans. The first step is “SG-Vision 2030 Phase 1: Transformation” (SG-2023), which was launched in spring of this year. As indicated by its title, the coming three years will be an important period for the transformation to Long-term oriented management and linking to growth in “Phase 2: Enlargement.”
In SG-Vision 2030, we set priority topics, targets, and various measures based on two fundamental policies—long-term business strategies and strengthening management foundations with the aim of achieving our Long-term vision—and will pursue dramatic growth as a group. As a part of this, we will introduce ROIC (return on invested capital*) management and will undertake portfolio management.
Under SG-2023, which constitutes the first phase of SG-Vision 2030, we will continue the measures initiated under CFG2020 and create new business for the ShinMaywa Group with a focus on co-creation with internal and external partners so that we can expand the scope of our contribution to the SDGs. Since it is not yet possible to predict when the COVID-19 pandemic will be brought under control, we project that in the Aircraft segment, which struggled during the previous fiscal year, demand for commercial aircraft will continue to slump and adverse conditions will persist. Consequently, we will leverage core technologies in key businesses to propose and develop new business. In other segments, we will pursue net sales and operating income in excess of the CFG2020 targets.
It seems likely that it will be necessary to continue COVID-19 infection prevention measures for some time, and we hope that all our shareholders will take good care of themselves and ask for their continued support of the ShinMaywa Group under these trying circumstances.
* An indicator of the amount of profit generated using capital invested by a company for its business activities.
President & CEO