Mitsubishi Electric Corp. · TSE:6503
Mitsubishi Electric — Investor Presentation (November 2021)
42 slides from Mitsubishi Electric's investor presentation, November 2021
Slide 1: Mitsubishi Electric Corporate Strategy
Mitsubishi Electric Corporate Strategy November 2021 Mitsubishi Electric Corporation ©Mitsubishi Electric ©Mitsubishi Electric Corporation Corporation
Slide 2: Introduction
Introduction Thank you for your continued understanding and support for the activities of the Mitsubishi Electric Group. We would like to reiterate our sincere apologies to our customers, shareholders, and broader society for the impact of the series of improper quality control practices that have o
Slide 3: Three Reform Areas for Regaining Trust
Three Reform Areas for Regaining Trust Established the Emergency Response Division and commissioned a quality-related investigation by an Investigative Committee of external experts in response to a series of improper quality control practices. Took seriously the findings on the non-compliance of th
Slide 4: Three Reform Areas: Quality Assurance Reform
Three Reform Areas for Regaining Trust (a) Quality assurance reform: Establish the Corporate Quality Assurance Reengineering Group & appoint a Chief Quality Officer from outside the company Establish a new quality assurance system, share knowledge and provide flexible support across business divis
Slide 5: Three Reform Areas: Governance Reform
Three Reform Areas for Regaining Trust (c) Governance reform: reform the Board of Directors & establish the Governance Review Committee ■Strengthen management supervisory function & improve internal control and governance systems • Undertake sustainable, mid- to long-term initiatives to reform the f
Slide 6: Contents
Contents Introduction ＜Appendix＞ Three Reform Areas for Regaining Trust ・Single-year Outlook for FY2021 1. Corporate Principle (Consolidated Performance) 2. Management Policy ・Outlook for FY2021 (Segment Forecast) 3. Strategy and FY2025 target 4. Medium-term Management Plan Towards FY2025 ・Outlook f
Slide 7: Corporate Principle
1 Corporate Principle On the occasion of the 100th anniversary, the company has revised its corporate philosophy system to update the Group's reason for existence as well as the core values and attitude that all employees are asked to embrace and cherish in serving customers and society as a whole.
Slide 8: Management Policy
2 Management Policy In addition to realizing corporate management that balances growth, profitability/efficiency, and soundness, we will contribute to realizing sustainability through all of our activities, and further enhance corporate value that emphasizes the creation of both economic and social
Slide 9: Strategy: Activities for value creation
3 Strategy Provide Integrated Solutions to address diversifying social challenges, in the four fields of Life, Industry, Infrastructure and Mobility, uniting all the capabilities inside and outside of the Group. For this purpose, we will enhance our business foundation fostered over the past 100 yea
Slide 10: Strategy (Integrated Solutions)
Strategy 3 (Integrated Solutions) What is Mitsubishi Electric Integrated Solutions? Offer Integrated Solutions that only we can provide by combining our strong core components with a wealth of Field Knowledge and advanced digital technologies. Advanced Core components Field Knowledge digital technol
Slide 11: Medium-term Management Plan Towards FY2025
M e d i u m - t e r m M a n a g e m e n t P l a n To w a r d s F Y 2 0 2 5 4 ©Mitsubishi Electric ©Mitsubishi Electric Corporation Corporation 11
Slide 12: FY2025 Financial Targets
Medium-term Management Plan 4 To w a r d s F Y 2 0 2 5 FY2025 Financial Targets Revenue ¥5 trillion Operating Profit Margin 10% ROE 10% Cash Generation(*) ¥3.4 trillion/5 years * Adjusted operating cash flow (CF) ©Mitsubishi Electric Corporation 12
Slide 13: Important Measures to Achieve Financial Targets
I m p o r t a n t M e a s u r e s t o A c h i e v e F i n a n c i a l Ta r g e t s 4-1 ©Mitsubishi Electric ©Mitsubishi Electric Corporation Corporation 13
Slide 14: Strengthening of Business Portfolio Strategy [1 of 5]
a. Strengthening of Business 4-1 Portfolio Strategy [1 of 5] Approach to Business Portfolio Strategy Classify businesses according to their characteristics and optimize investment of management resources. High Resilient Businesses Key Growth Businesses <Have stable demand and contribute to our <Grow
Slide 15: Expansion of Key Growth Businesses
a. Strengthening of Business 4-1 Portfolio Strategy [2 of 5] Expansion of Key Growth Businesses Select five Key Growth Businesses that can make major contributions to addressing social challenges in domains expected to grow at a high rate globally. Provide Integrated Solutions with core components a
Slide 16: Priority Allocation of Resource Investment
a. Strengthening of Business 4-1 Portfolio Strategy [3 of 5] Priority Allocation of Resource Investment Invest resources in the amount of ¥2.8 trillion, up ¥0.8 trillion from the previous medium-term management plan, centered on Key Growth Businesses. Attain the FY2025 financial targets (revenue of
Slide 17: Growth Targets for FY2025
a. Strengthening of Business 4-1 Portfolio Strategy [4 of 5] G r o w t h Ta r g e t s f o r F Y 2 0 2 5 Aim to achieve revenue of ¥5 trillion and operating profit margin of 10% in FY2025 by focusing on increasing the scale of Key Growth Businesses and improving profitability. Revenue ¥5tn (¥tn) 4.5
Slide 18: Initiatives in Key Growth Businesses
a. Strengthening of Business 4-1 Portfolio Strategy [5 of 5] Initiatives in Key Growth Businesses Factory Automation (FA) Control Systems Business [PLC, Servo, and CNC] Help build a foundation for industry and technological innovation by globally providing machines, equipment, and solutions that rea
Slide 19: Business DX and Open Innovation
b. Expansion of Integrated 4-1 Solutions [1 of 2] Business DX and Open Innovation Link and analyze data from a variety of devices and systems, and provide customer- optimized solutions. Expand the solution domain through co-creation with customers and active use of M&As, etc. Business Innovation Gro
Slide 20: Open Innovation
4-1 b. Expansion of Integrated Solutions [2 of 2] Open Innovation Expand our solution domain by leveraging external knowledge and technology through means such as M&As, co-creation with customers and partners, and collaborations with start-ups. Expand business domains through M&As Create innovation
Slide 21: Operation DX
4-1 c. Enhancement of Business Foundation [1 of 5] Operation DX Achieve total optimization extending beyond the boundaries of business by standardizing cross- business operations and centralizing reusable data. Promote Operation DX by increasing the sophistication of business management and improvin
Slide 22: Global Response
c. Enhancement of Business 4-1 Foundation [2 of 5] Global Response Strengthen supply and engineering chains globally. Quickly detect and analyze changes in the global political and economic environment in order to respond with agility. ■ Strengthen our global business structure • Formulate and promo
Slide 23: Optimal Group Management System
c. Enhancement of Business 4-1 Foundation [3 of 5] Optimal Group Management System Pursue an optimal group management system by strengthening the functions and reviewing the division of roles of affiliated companies in each value chain. Develop structures and strengthen the development capability of
Slide 24: R&D Strategy
c. Enhancement of Business 4-1 Foundation [4 of 5] R&D Strategy Pursue the enhancement and reform of existing businesses as well as R&D for new value creation in a balanced manner. Aim to address social challenges at an early stage through the active use of open innovation. Strengthen our differenti
Slide 25: Intellectual Property Strategy
4-1 c. Enhancement of Business Foundation [5 of 5] Intellectual Property Strategy Strategy 1. Open Technology Bank Strategy 2. Qualitative IP activity targets Make the technological asset database In addition to quantitative advantages, with 60,000 IPs available to the public enhance qualitative IP
Slide 26: Capital Allocation Policy
4-1 d. Capital Allocation Capital Allocation Policy For capital allocation, giving top priority to investment in growth, further enhance shareholder returns through profit growth. In terms of cash generation, the source of capital, aim to generate ¥3.4 trillion over a five-year period, with a focus
Slide 27: Sustainability Initiatives
Sustainability Initiatives 4-2 ©Mitsubishi Electric ©Mitsubishi Electric Corporation Corporation 27
Slide 28: The Mitsubishi Electric Group's Materiality
4-2 a. Establishment of Materiality The Mitsubishi Electric Group’s Materiality With a view to realize a vibrant and sustainable society, we have set priority items in our sustainability initiatives as materiality. We will actively disclose information on the status of materiality efforts and promot
Slide 29: Initiative to Realize a Decarbonized Society
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [1 of 8] Initiative to Realize a Decarbonized Society Revise our Environmental Sustainability Vision 2050 towards the realization of a decarbonized society, further enhancing our initiatives to reduce greenhouse gas emissions. Greenhouse gas
Slide 30: Addressing social challenges through Our Businesses
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [2 of 8] Addressing social challenges through Our Businesses Offer solutions to social challenges through our business activities, including responding to changes in how people interact with each other, the increasing intensity of disasters,
Slide 31: Human Rights and Diversity
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [3 of 8] Human Rights and Diversity ■Promote respect for human rights and diversity globally Promote initiatives based on the Mitsubishi Electric Group Human Rights Policy(*) Assess human rights impact as an entire Group Enhance the quality o
Slide 32: Employee Engagement
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [4 of 8] Employee Engagement ■Realize a work environment where all employees can work with vitality We take the series of work-related issues extremely seriously. Positioning the prevention of recurrence of such issues as our top management p
Slide 33: Information Security
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [5 of 8] Information Security ■Develop a comprehensive, multi-layered defense system Based on past incidents of unauthorized access, reinforce our information security infrastructure and strengthen measures against the latest attack patterns,
Slide 34: Governance
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [6 of 8] Governance Appoint Outside Directors as chairpersons of Nomination, Auditing and Compensation committees to strengthen the supervisory function, and establish specialized organizations under the direct control of the President to str
Slide 35: Activities to Promote Sustainability
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [7 of 8] Activities to Promote Sustainability ■Philanthropic activities Contribute to sustainability through all corporate activities Donations by a matching gift system carried out with its employees “Mitsubishi Electric SOCIO-ROOTS Fund” Do
Slide 36: Initiatives and External Evaluations
b . S t a t u s o f Va r i o u s I n i t i a t i ve s 4-2 [8 of 8] Initiatives Continue our commitment to the UN Global Expressed approval for the recommendations by the Task Force Compact on Climate-related Financial Disclosures (TCFD) (*1) Continue to promote initiatives and disclose information i
Slide 37: Appendix
Appendix ©Mitsubishi Electric ©Mitsubishi Electric Corporation Corporation 37
Slide 38: Single-year Business Outlook (Consolidated Performance)
Single-year Business Outlook Appendix (Consolidated Performance) FY2018 FY2019 FY2020 FY2021 Actual Actual Actual Forecast 6-Month 6-Month (Oct. 2021) 111JPY/US$ 109JPY/US$ 106JPY/US$ 106JPY/US$ 110JPY/US$ 110JPY/US$ (Billions of JPY) 128JPY/Euro 121JPY/Euro 122JPY/Euro 124JPY/Euro 131JPY/Euro 128JP
Slide 39: Business Outlook (Segment Forecast) and FY2025 target
Business Outlook(Segment Forecast) Appendix and FY2025 target (Billions of JPY) FY2018 FY2019 FY2020 FY2021 FY2025 Actual Actual Actual Forecast Target 6-Month 6-Month (Oct. 2021) 111JPY/US$ 109JPY/US$ 106JPY/US$ 106JPY/US$ 110JPY/US$ 110JPY/US$ 105JPY/US$ 128JPY/Euro 121JPY/Euro 122JPY/Euro 124JPY/
Slide 40: Business Outlook (Sub-segment Forecast) and FY2025 target
Business Outlook(Sub-segment Forecast) Appendix and FY2025 target (Billions of JPY) FY2020 FY2021 FY2025 Actual Forecast Target (Oct. 2021) 106JPY/US$ 110JPY/US$ 105JPY/US$ 124JPY/Euro 128JPY/Euro 115JPY/Euro Energy & Electric Revenue 1,270.2 1,250.0 \1.5tn Systems Operating Profit 108.9 80.0 9% （%）
Slide 41: Cautionary Statement
Cautionary Statement While the statements herein including the forecast of the Mitsubishi Electric Group are based on assumptions the Group considers to be reasonable under the circumstances on the date of announcement, actual results may differ significantly from forecasts. Such factors materially
Slide 42: » MITSUBISHI
» MITSUBISHI ELECTRIC Changes for the Better ML. Minor sary,
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