The Long-term management plan, SG-Vision 2030, that we announced in 2021 presents a roadmap to the achievement of our Long-term vision. In it, we have set ourselves the target of achieving the levels indicated in the table at right as a corporate group.

In SG-2023, Phase 1 of the Long-term vision, with “Transformation” as our management theme, we advanced our plans, envisaging our stakeholders appreciating that ShinMaywa has changed.
During the plan period, we met with difficult circumstances when the global economy was hit hard by the spread of COVID-19. However, looking back on our performance during SG-2023, net sales in FY2021, the first year of the plan, exceeded those of the previous year, and we maintained the same level of operating profit as well. These results renewed my strong sense that many of our businesses form part of the social infrastructure.
Social activity has since recovered, but inflation accelerated in a short period of time, causing raw  materials prices to skyrocket, while labor and transport costs also increased due to labor shortages. These and other factors meant that the Group’s current operating profit ratio is below 5%. We need to take urgent measures to address the sluggishness of our profit ratio, which is an indicator of competitiveness. This situation is largely attributable to the Special Purpose Truck segment, which is our main source of earnings, so we will continue to take concrete countermeasures, including increasing prices.
Under these circumstances, one area in which we can truly feel the transformation that is the theme of SG-2023 is the significant growth of the Industrial Machinery & Environmental Systems segment, which until now has had little chance to enjoy the spotlight. Lately, we have been receiving many questions and comments expressing expectations of this segment. The main driver of this breakthrough has been the rise of KOREA VACUUM LIMITED, which we welcomed into the Group by M&A in 2018. This company makes equipment needed in the manufacturing process of lithium-ion batteries used in electric vehicle (EVs). It has responded exceedingly well to the demands of customers that are planning capital investment in vehicle-mounted batteries to accommodate the future popularization of EVs. It has been part of the Group for five years now, and looking back on the M&A that we conducted with expectations of the quality of its products and its adaptability to the global market, I have a real sense that the decision we made at the time was the correct one.
In other developments, although yet in its early days, at my instigation, we established a New Business Strategic Division in Head Office as an organization devoted to the creation and launch of new businesses. We have also started an employee-participation activity for the generation of new business ideas, which is organized by the new division. In such ways, we have indicated to both inside and outside the company our resolve to make a company-wide effort to address the long-standing issue of new business creation. This also represents part of the “transformation” of breaking free from the status quo.
Further, we were able to continue to pay dividends to shareholders based on the dividend payout ratio initially indicated throughout the period of SG-2023.

The theme of SG-2026, Phase 2 of the Long-term vision, is “Expansion.” We named the three phases toward the achievement of the lofty targets set forth in SG-Vision 2030 “Transformation,” “Expansion,” and “Advancement,” respectively. SG-2026 will be an important three years that will lead into the final “Advancement” phase.
Net sales in the fiscal year ended March 31, 2024 (FY2023) totaled 257.0 billion yen. To achieve the target level of SG-Vision 2030, we will need to increase that even further by more than 50%. While we have not indicated a target level for operating profit, in conjunction with the increase in sales, improving profitability will be a major challenge. While we fell short of targets for operating profit, ROE and ROIC in SG-2023, we will work hard to achieve the targets for SG-2026 and meet the expectations of our stakeholders.

Currently, we are working on the following six policies under SG-2026.

It is vital that these six policies be put into practice while remaining conscious of their individual relationships to our management initiatives. Those relationships are portrayed in diagram form in the  "Value Creation Process."
Based on this Value Creation Process, we hope to show how we will realize “Expansion” by achieving the following  management targets.

Revitalization of business activities will be the source of growth —Focusing efforts on “delving deeper” and “exploring”—

For our core businesses, we will focus our efforts on the following points aimed at expansion of earnings. We will discuss the current and future value of our various businesses and products (business portfolio) and, in addition to delving deeper into our current businesses, we will identify targets of growth investment.

Focus points by segment (partial excerpt*)

Segment	Focus points
Special Purpose Truck	Make elemental equipment intelligent → Create new added value  Expand domain of the special purpose truck subscription business Expand sales of component products overseas
Parking Systems	Strengthen support for CASE using SPASA, ShinMaywa’s parking support app Expand sales of aircraft passenger boarding bridges with automated remote control functions Diversify car parking system maintenance service business (social infrastructure, industrial equipment area, etc.)
Industrial Machinery & Environmental Systems	Automatic wire processors: Roll out automated products for high-speed communication cable processing Vacuum technology: Develop peripheral equipment for  EV manufacturing equipment and expand variations of existing products Environment-related: Increase added value and produce labor saving through application of ShinMaywa’s proprietary original AI / IoT technologies
Fluid	Rainwater countermeasures: Expand scale of heavy rain/ flooding countermeasures area Sewerage area: Introduce after-sales services and  digital transformation technologies to address energy conservation and social change Use production base in Thailand to strengthen competitiveness in Asian region
Aircraft	Commercial aircraft:  Research of new compound materials and recycled materials → Product development STOL Amphibians:  Stabilize earnings and strengthen operational support by launching business related to performance-based logistics (PBL)  Appeal to future customers with the fixed-wing unmanned aerial vehicle (UAV) (developed by ShinMaywa)

*For more detailed information, please refer to the explanatory materials  "Medium-term Management Plan [SG-2026] "" posted on the " Presentation of Financial Results " page of this website.

• Presentation of Financial Results

Also, regarding exploration activities aimed at the creation of new businesses, centered around the New Business Strategic Division that I mentioned earlier, we have assigned key persons in charge of each of more than ten themes, including those already announced during the SG-2023 period and those that we are currently assessing for commercialization. They often say that the probability of a new business succeeding “three in a thousand,” and we do not believe that creating new sources of earnings will be easy. Nevertheless, with the image of the realization of the Long-term vision in mind, we will be persistent in our efforts so that we may present the “new businesses” that will support the Group.

New business themes that have already been announced

theme	Summary and key points
Small-scale decentralized water reuse system	Collaboration with WOTA CORP. to introduce small-scale decentralized treated water infrastructure as a way to address the aging of sewerage infrastructure and depopulation
Hydrogen supply chain business	Initiative to promote the penetration of the hydrogen transport and storage flow using organic hydride technology in tandem with Hrein Energy Inc.

To be a corporate group that has broad social recognition
- Together with stakeholders always -

In our newly presented Value Creation Process, we have set out a management stance that is more conscious of the stakeholders that have connections with the Group.
Our Management philosophy is our basic way of thinking about management that shows the reason for ShinMaywa Group’s existence, purpose, and mission. The Long-term vision presents our aspirations for 2030 as a waypoint toward that goal. Established on the occasion of the 100th anniversary of the company’s founding, these both present our intentions, but we realized that they lacked a perspective that looked toward our stakeholders.
For this reason, in the process of formulating SG-2026, we reviewed the Value Creation Process to present a clear indication of “provision of value to stakeholders and key issues.”

Value provided by the Group and points of focus

Stakeholders	Value Proposition	Points of focus
Customers	Continue to contribute to solutions to customers’ issues through technologies, products, and services	Customer Satisfaction quality Delivery times
Employees	Provide opportunities to take on challenges autonomously and workplaces where individuals’ capabilities can grow together with the organization	Engagement Career Development Promoting D&I Health and Safety
Business Partners	Realize a relationship of “live and let live in mutual prosperity” with business partners through fair business dealings and equal partnership	CSR Risk Assessment Appropriate price negotiations
Shareholders	Aim to maximize corporate value by improving management through dialogue with shareholders	Enhancement of shareholder value Dialogue with shareholders and investors
Local communities and Society	Solve communities’ and society’s issues through business activities and advance alongside them	Conclude regional comprehensive collaboration agreements Create jobs for people with disabilities

The Group’s main business is manufacturing, and in addition to the added value of our products, one of our strengths is the support systems that we have in place within the Group, which enable our products to be used with peace of mind on a daily basis. We are also proud of the fact that,  in the broad range of fields that cannot be contained within the category of “transportation equipment manufacturing,” we are on an equal footing with many companies that specialize in single businesses within those areas.
Under these circumstances, we have demonstrated the value of our existence by concentrating management resources on business activities and meeting customer expectations. However, amid increasing social demands from many different directions, as a corporation listed on the Prime Market of the Tokyo Stock Exchange (TSE), cherishing our connections with our stakeholders, we want to be a presence that our stakeholders will always need and hold expectations toward through our daily activities. Our intention is to reward our stakeholders by implementing the focuses of attention and effort presented here and realizing the details described in the Value Provision column.
I understand that some of our shareholders are concerned about the fact that our price to book ratio (PBR), an indicator of the significance of our presence on the share market, is less than 1, which is the borderline indicated by the TSE. We submitted our measures for improvement to the TSE in May 2024 and are now working on their implementation. This matter is also mentioned by Mr. Kume, Director, Managing Executive Officer, and General Manager of Finance & Accounting Dept. in the Message from the Officer in Charge of Finance section of this report, which I encourage you to read.

Pursuit of the Management philosophy- What I value -

So far, I have explained our Long-term vision toward 2030 and our management plans to achieve that vision, namely, SG-Vision 2030, SG-2023, and SG-2026. All of these will be achieved only if the Group has the trust of its customers and other stakeholders.
At the foot of the Value Creation Process diagram, we have “Corporate principles,” “Action guidelines,” and “Code of conduct.” This is because the entire process is founded on the premise that the company and each and every person who works there will comply with these things.
In this respect, the fact that our Parking Systems Division was the subject of an on-site inspection by the Japan Fair Trade Commission in September 2023 is truly regrettable and has caused great concern in our stakeholders. I would like to take this opportunity to apologize that this unsettling situation has gone on for so long.
Because there have been news reports that this investigation involves multiple companies, we believe that it will take some time before the results of the inspection are revealed. We are still cooperating fully with the FTC’s inspections, but meanwhile, as well as pledging anew to put the “Corporate principles,” “Action guidelines,” and “Code of conduct” into practice within the Group, we are working to further strengthen our risk management structure. While we will, of course, respond immediately when any misconduct or scandal is revealed, our greatest emphasis will be on prevention.
I am now in my eighth year as President, and I have real sense that the intensity and speed of social change are greater than any era in my experience. As such, we have summed up my own convictions and the intentions of the management executives in the new SG-2026 plan and the Value Creation Process, so that they will serve as an unwavering foundation. While cherishing our history, we will nurture new businesses that will achieve sustainable growth that gives a sense of “transformation” and “expansion” to our era, and strive to become a corporate group for which all our stakeholders can hold high hopes for the future. I therefore ask for your continued guidance and support.