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Medium-Term Management Plan (FY2017-2019)

Transforming our management system

Evolving into a solution provider

We will evolve from a conventional supplier of materials into “a solution provider” that both delivers solutions for social issues and is also committed to realizing discontinuous growth.

Bold management system revamping

As a step towards becoming a solution provider, we transformed our management system from product-based business units to a new organizational structure comprising Solutions Vehicles (SVs) and Solutions Units (SUs).

Solutions
Vehicle
(Business Units)
  • The driving force for growth strategy execution from a solutions perspective
  • Create new business models and utilize open innovation, alliances, M&A and other types of insourced and outsourced operations to advance business growth
Solutions
Unit
(Segments)
  • Business domains set up based on solutions provided by SVs
  • Help solve social issues by strengthening ties between business units
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New Domains’ Objectives

Material Solutions Unit
Contribute to global environmental conservation and comfortable living
  • Provide outstanding materials for evolving social infrastructure, mobility (lighter weight, more fuel efficient vehicles), and more
  • Provide solutions where materials like biopolymers are of direct help to ecological society
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Quality of Life Solutions Unit
Contribute to energy-saving and a rich life
  • Deliver energy-efficient housing solutions ⇒ Create a high quality, sustainable housing market
  • Provide unique materials and services that excel regarding both energy-saving and smart application needs
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Health Care Solutions Unit
Contribute to a society advancing in age and medical sophistication
  • Strengthen marketing and product development globally in cutting-edge medical fields including biopharmaceuticals, and regenerative medicine and cell therapy
  • Proactively utilize open innovation and U.S. R&D bases
  • Provide solutions that deliver value by fusing devices and medicine
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Nutrition Solutions Unit
Contribute to health and a plentiful, varied diet
  • Provide a broad range of solutions that help diversify and enrich people’s diets.
  • Offer solutions that help prevent disease and promote health, and enhance the food materials lineup
  • Deliver solutions that assist production in the fields of agriculture, livestock, and fishery
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Growth Drivers

Our goal is dramatic growth. To get there, we will speed up business portfolio transformation via three growth drivers: R&D, Globalization, and Active Investment.

R&D
  • Develop materials that give us an edge in providing solutions for social problems
  • Embrace open innovation and other insourced and outsourced operations to acquire trailblazing technology
  • Keep aggressively deploying resources and realize a new product sales ratio of 30% or higher
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Globalization
  • Swiftly promote regionally distinctive growth strategies from a “Glocal” perspective
  • End cycle of intensive investment in Asia and commence investment to restart growth in Europe and the Americas
  • Aggressively pursue entry into new businesses as well as M&As and alliances
Aim to quickly achieve an overseas sales ratio of 50%
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Active Investment
  • Investment budget of \200-300 billion that includes capital expenditures, business alliances, and M&As
Capital Investment Promote investments in facilities utilizing evolved technology with a focus on Material and QOL, mainly targeting markets peripheral to existing businesse
Investments Promote investments in business tie-ups, M&As and so on with a focus on Health Care and Nutrition, targeting new or peripheral markets in areas where we have existing technologies and can generate synergies

Performance Targets

  • We regard this medium-term management plan as important towards reaching the sales of \1 trillion and operating income of \120 billion that are targeted in our long-term vision.
  • We aim to accelerate business portfolio transforming under the new management system to achieve our performance targets, regardless of numerous uncertainties including geopolitical risks, political trends, and foreign exchange rates and crude oil market prices.
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Transformation of Business Portfolio

We will sharply increase the Health Care and Quality of Life solutions units’ share of total sales by providing new materials and products as well as solutions of value and executing M&A.
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Shareholder Return Policy

Basic Policy
Targeted consolidated payout ratio is 30%
Stably continue paying dividends and purchasing treasury stock
Past three years result201420152016
Dividends per share (¥/share)161818
Payout ratio (consolidated)29.9%28.6%29.2%
Number of treasury shares purchased (thousand)2,0001,9642,000
Total return ratio (consolidated)38.7%37.2%38.0%
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