Management Plan/Growth Strategy

The MCJ Group Vision

Continue to expand our business by offering industry-leading products to customers having high IT literacy.

Expand hardware offerings

We will continue to expand our lineup of diverse digital devices that enable customers to access, exchange, and share information.

Offer more versatile gateways to digital lifestyles

Seamless integration to achieve greater results

Make inroads into content and service businesses

We will integrate our hardware business seamlessly with the content and service businesses.

Offer value-added content and services through gateways

Corporate Vision

A Roadmap to Achieve the Group’s Medium- and Long-Term Vision

Theme for FY2017 to 2019:Lay the groundwork for achieving the Group Vision
Objectives
- Broaden our lineup of gateways — PCs and other digital devices
- Establish a foundation for entering the content and service businesses
Key initiatives
- Bolster our core PC business
- Work with venture tech companies that offer leading-edge devices
- Accelerate non-M&A collaboration with other companies
- Implement a clearly defined M&A policy
- Build a pipeline of leadership talent from within in preparation for achieving greater operational agility
Theme for FY2020 to 2022:Pursue the right balance between growth and investment in order to sustain business expansion
Objectives
- Make our own business platform (value chain and customer base) more robust, through which to offer a wider variety of products
- Expand our offerings of products and services to reach a broader range of customers and enhance profit opportunities
Key initiatives
- Expand our PC business in Japan and PC monitor business overseas to maximize our basic profit
- Aggressively invest in enhancing our value chains and expanding our product offerings as part of bolstering our existing business lines
- Invest in launching the content and service business as part of diversifying our business lines in order to achieve the Group’s Vision
- Achieve greater operational excellence and efficiency internally
Theme for FY2023 to 2025
Objectives
- Bolster the profitability of existing business line
- Lay the groundwork for growth
- Pursue M&A and alliance opportunities to accelerate growth
Key initiatives
- Leverage clearly differentiated products and business models to achieve sales growth that will outpace the industry
- Maintain and reinforce the business foundation, which has been expanding over the past six years, to pursue further growth

Management Metrics

We use the following six key performance indicators (KPIs) to manage our business over the medium term:

Operating profit margin (ratio of operating profit to net sales): 7% or more

ROIC (ratio of net operating profit after tax to invested capital in business)^※1: 15% or more

ROE (ratio of net income to shareholders’ equity)^※2: 15% or more

Dividend payout ratio (ratio of dividends to net income): 30% or more

DOE (ROE x dividend payout ratio): Around4.5%

Total return ratio (ratio of the combined amount of cash dividends paid and share-buyback to profit): 30to40%

※1　Net operating profit after tax = Operating profit x (1 – effective tax rate)
※2　Shareholder’s equity is the average during the fiscal year

Financial Policy

Basic policy

Improve our ability to generate stable free cash flow
Be agile in making a decision to invest for growth
Pursue the right balance between maintaining financial flexibility and taking risks
Continue to return profit to shareholders

Key Points and Policies

Key Point	Policy
Free Cash Flow	Achieve greater profitability with a focus on improving an operating profit margin and ROIC Maximize the subsequent operating cash flow to improve free cash flow
Investment for growth	No major capital expenditures scheduled for FY2020 to 2022 Be agile and flexible in pursuing M&A and other investment opportunities for growth
Financing	Use cash on hand and borrowing to finance M&A and other investment for growth No ceiling on the debt-to-equity ratio set to maintain financial flexibility
Returning profit to shareholders	Returning profit to shareholders is one of the Group’s most important KPIs. Maintain the dividend payout ratio 30% or more ratio regardless of the level of investment each year

Material Download

The MCJ Group’s Mid-Term Management Plan for FY2023 to 2025