Long-Term Management Plan
DIC Corporation has revised its targets for fiscal year 2025, the final year of Phase 1 of its DIC Vision 2030 long-term management plan, announced on February 18, 2022, as indicated below. Targets for fiscal year 2030, the final year of the plan, will be given careful consideration and will be disclosed at the formulation stage of Phase 2, which will begin in fiscal year 2026.
Revised targets for Phase 1 of DIC Vision 2030
| Fiscal year 2023 (Actual) |
Fiscal year 2024 (Target) |
Fiscal year 2025 (Final year of Phase 1) |
||
|---|---|---|---|---|
| Original target | Revised target | |||
| Net sales Operating income |
¥1,038.7 ¥17.9 |
¥1,100 ¥30 |
¥1,100 ¥80 |
¥1,150 ¥40 |
Background to the revision
DIC has positioned the four years from fiscal year 2022 through fiscal year 2025 as Phase 1 of DIC Vision 2030, a period for foundation building to facilitate realization of the Company’s vision for itself in the future. During this phase, the Company has been exploring numerous possible new businesses by investing in multiple R&D themes and making acquisitions. While some of these efforts have thus far met with success, because of the resulting dispersal of management resources and delays in selecting from among diverse themes, new businesses have not become profitable as quickly as envisaged for Phase 1 and results have therefore deviated from initial expectations. Furthermore, rapid changes in the business environment—including increasing geopolitical risks arising from, among others, Russia’s invasion of Ukraine, along with rising inflation worldwide—subsequent to the formulation of DIC Vision 2030 have made the achievement of Phase 1 goals, such as those set for newly acquired businesses, very challenging. In light of these factors, the Company took the decision to revise its targets for Phase 1 targets.
Summary of the amended plan
The vision for DIC in the future and the basic policy set forth in DIC Vision 2030 remain essentially unchanged. However, the Company will prioritize the balanced allocation of management resources, taking into account current operating conditions, and will press ahead with the strategies of Phase 1 while paying particular attention to the following issues:
- Optimize allocation of management resources;
- Swiftly create next-generation and growth businesses;
- Pursue synergies with newly acquired businesses to achieve intended results;
- Accelerate rationalization efforts in businesses in need of structural reform; and
- Promote efficient sustainability strategies.
Measures to Implement Management that is Conscious of Capital Costs and SharePrice
Policy and Targets for Improvement of Capital Efficiency
DIC recognizes improving return on capital as a key management challenge and works to improve capital efficiency by promoting selectivity and concentration. Taking consideration of the current situation, DIC set a specific target of ROIC 4.0〜5.0%, exceeding weighted average cost of capital (WACC) and ROE 7.0〜8.0％, exceeding cost of equity（respectively by 2026）aiming for the improvement.
| FY2023 （Actual） |
FY 2026 targets and measures | ||
|---|---|---|---|
| ROIC | 1.5% | 4.0～5.0% ≧ WACC | Structural reforms and a review of the allocation of management resources are expected to underpin a swift improvement. |
| ROE | -10.6% | 7.0～8.0% ≧ Cost of equity | FY 2026 is simply a transit point in the drive to improve capitale eficiency and bolster corporate value. |
Measures to Implement Management that is Conscious of Capital Costs and Share Price
DIC forcuses to execute following measures and initiative to implement management that is conscious of capital cost and share price.
- Prioritize the balanced allocation of management resources.
- Promote structural reforms to improve profitability in and leverage synergies with the Colors & Effects pigments business.
- Withdraw from unprofitable and noncore businesses.
- Streamline the balance sheet by shrinking cross-shareholdings and other assets.
- Pursue approach to financial management centered on maintaining an A credit rating and achieving a net D/E ratio of 1.0‒1.10 times.
- Set a minimum limit for annual dividends per share of ¥100. Any additional cash generated will also be applied to returns to shareholders.
- Strive to reduce capital costs by, among others, working to ensure a stable operating performance, achieving consistent dividends through the setting of a minimum dividend limit.
- Establish the Corporate Value Improvement Committee, which will explore the role of companies in society from a high-level, broad viewpoint and advise the Board of Directors from a third-party regarding the improvement of corporate value over the long term.
- Appoint outside directors and external experts to be committee members, emphasizing independence and objectivity.
- Themes for deliberation are general matters related to ensuring management is conscious of capital costs and share price and include measures to improve ROIC and make effective use of owned assets and management of Kawamura Memorial DIC Museum of Art.
Promote business portfolio transformation
Clarify policy for cash allocation
Reduce capital costs
Strive to improve corporate value
Related Documents
For further details, please refer below:
![Revision of DIC Vision 2030 Phase 1 Targets [747KB]](/images/ir/management/plan/dic_vision_Revision2030_en.jpg)
New Vision Statement and DIC Vision 2030 Long-Term Management Plan
DIC Corporation announced its redefined vision statement and new long-term management plan DIC Vision 2030 on February 18th, 2022. For further details, please refer below.
