Kanematsu is pushing ahead the " future 135 ", a six-year medium-term vision up to 2024, the 135th anniversary of our founding, and advancing into the next stage growth.
Progress of the "future 135"（published on May 7, 2021）
The Kanematsu Group is pushing ahead with "future 135", a six-year medium-term vision up to the fiscal year ending March 2024, which is the 135th anniversary of its founding. With March 31, 2021 marking the end of the first three years of the vision, Kanematsu took this as an opportunity to revisit the vision and reaffirm its business direction, taking recent developments such as the progress of business investments and the impact of the COVID-19 pandemic into consideration.
Summary of the first three years of "future 135"
In terms of earnings, the Kanematsu Group made a strong start, achieving year-on-year growth in revenue and profits in the first fiscal year. However, the effects of the COVID-19 pandemic from the closing stages of the second year caused a slowdown in performance. The progress of business investments was also affected, leading to a slower pace of growth than originally envisioned. At the same time, the negative impact of COVID-19 on the Group's businesses has been limited, albeit worse in some areas than others, confirming to some extent the underlying strength of the Kanematsu Group's earnings base.
Meanwhile, the Group's financial performance was also sufficiently robust to ensure management stability, with the equity ratio and the net debt-equity ratio standing at 25.8% and 0.3 times respectively. Also in terms of shareholder returns, the Group kept indicators such as the equity ratio and risk-asset ratio at a stable level, enabling the payment of continuous and stable dividends and, as a result, the dividend payout ratio over the first three years exceeded 30%, which is the upper bound of the target range.
［Trends over the first three years］
| FY2019 | FY2020 | FY2021 | |
|---|---|---|---|
| Operating profit | 30.3 billion yen | 28.4 billion yen | 23.6 billion yen |
| Profit before the tax | 29.2 billion yen | 26,9 billion yen | 23.6 billion yen |
| Profit attributable to owners of the parent | 16.6 billion yen | 14.4 billion yen | 13.3 billion yen |
| ROE | 13.8％ | 11.2％ | 9.7％ |
| Consolidated payout ratio | 30.3％ | 34.8％ | 37.6％ |
Policy for the last three years of "future 135"
Despite unexpected changes in the environment such as the COVID-19 pandemic, there will be no major change
in the basic policy. However, in light of the progress of business investments and the earnings growth
arising from investments, Kanematsu is revising its quantitative targets.
Moreover, Kanematsu will also push ahead with initiatives to address the SDGs and DX that have been newly
included in the priority initiatives.
［Quantitative targets (Final year: the fiscal year ending March 2024）］
| Revised forecast | Original forecast | |
|---|---|---|
| Profit attributable to owners of the parent | 20.0 billion yen | 25.0 billion yen |
| ROE | 10％～12％ | 13％～15％ |
| Total return ratio | 30％～35％ | 25％～30％ |
Please refer the details of Progress of the "future 135" medium-term vision to here.
Overview of future 135 (published on May 9, 2018)
≪Period≫
March 2019‐March 2024
≪Essentials≫
- Continue to extend the strong businesses of the Kanematsu Group and achieve sustainable growth in business areas with a stable earnings base. Aim to achieve consolidated net income of 25 billion yen by pursuing the expansion of the revenue base and the enhancement of added value through effective business investments.
- Focusing on capital efficiency based on the stability of the earnings and financial structures, setting the payout ratio (total return ratio) at 25% - 30%.
- The period will be six years from the fiscal year ending March 2019 to the fiscal year ending March 2024.
≪Quantitative targets (Final year: the fiscal year ending March)≫
| Profit attributable to owners of the parent | 250 billion yen |
|---|---|
| ROE | 13%～15% |
| Total return ratio | 25%～30% |
≪Priority initiatives≫
- Sustainable growth in fundamental businesses and the expansion of the revenue base through business
investments
- Achieve sustainable growth by maintaining a stable revenue structure.
- Carry out business investments while achieving a balance between capital and risk assets, based on the stable financial structure.
- Promote business investments in areas of strength in the two strategies focused on the "revenue base expansion" and the "value added".
- Response to technical innovation
- Promote and expand new businesses with advanced technology (IoT, AI, etc.) ("innovation investment").
- Establishment of management infrastructure for achieving sustainable growth
- Build a framework for global strategy.
- Cultivate management human resources.
- Improve employee satisfaction (ES).
- The Company will carry out individual initiatives and aim for numerical targets based on an operational plan for a single fiscal year in tune with the speed of changes in the environment surrounding the Company and intends to revisit the direction three years later at the halfway point based on the progress of business investments,
etc.
- Note on earnings forecasts Earnings forecasts and other forward-looking statements contained in this material are projections based on information available to the Company on the date of the announcement of this material and reasonable assumptions. Accordingly, please note that the actual results may differ significantly from the forward-looking statements in this material due to various factors.