Integrated Report 2023
Philosophy system
Foundation Spirit
Code of Conduct
Management Philosophy
Group Statement
Hard work, prosperous lifestyle
In "hard work," we put our determination to give our all in our work during working hours. "Prosperous lifestyle" suggests that payments be increased and employees and shareholders earn fair returns, as performance improves.
Since 2008, we have been further promoting this idea to better motivate employees by realizing a performance-based pay system of an industry-leading level.
The writings of
founder Zenshiro Takamoto
- Our Company will aim to provide a comfortable and safe work environment, respecting our employees' needs for self-esteem and encouraging every individual to achieve their fullest potential.
- Our Company will do its utmost to satisfy its customers, shareholders, and suppliers.
- Our Company will strive to maintain a global outlook and continue to conquer challenges in technological innovations to provide high value-added products for our customers.
- Our Company is committed to being a good corporate citizen and actively participating in those communities where we are represented.
Table of Contents
Chapter 1 Value Creation | Chapter 4 Sustainability |
Philosophy system ………………………… 01 | Sustainability Management ……………… 35 |
Greeting………………………………………… 03 | Environmental Initiatives …………………… 37 |
The Daitron Group History……………… 05 | Human Resource Initiatives ……………… 39 |
Financial and Non-Financial Highlights ……… 07 | Health and Safety Initiatives ……………… 41 |
Our Value Creation Process …………… 09 | Quality Initiatives……………………………… 42 |
The Source of Our Value Creation……… 11 | Chapter 5 Governance |
Chapter 2 Growth Strategy | Corporate Governance …………………… 43 |
President Message ………………………… 15 | Officers Introduction ………………………… 49 |
Division Manager-Business Administration Message…… 19 | Outside Directors Messages …………… 51 |
Overview of Medium-Term Business Plan …… 21 | Chapter 6 Data Book |
Chapter 3 Business Strategy | Financial Summary…………………………… 53 |
Business Management System and Segment Information …… 27 | Company Information/Stock Information …… 55 |
Strategies by Management Organization…… 29 | |
Product Lines ………………………………… 33 |
- Editorial Policy
The Daitron Group has prepared the Daitron Integrated Report 2023 to help all stakeholders understand our efforts to create sustainable value.
In addition to our most recent business results, this report describes our management policies and strategies, including notable case studies. For detailed financial data and other information, please visit our website.
- Scope of Reporting
Period Fiscal Year Ended December 31, 2022 (January 1, 2022 to December 31, 2022)
*Some information from outside of this period is also included.
Organization Daitron Group
*Caution Regarding Future Outlooks
The forward-looking statements in this integrated report, including future plan figures and measures, are calculated based on judgments and assumptions that the Company has made based on information currently available and that it believes to be reasonable.Accordingly, actual results may differ from these forecasts due to various important factors such as economic conditions in major domestic and overseas markets and fluctuations in foreign exchange rates.
Grasp markets from a global viewpoint to create and provide values one step ahead of customer needs
This Group Statement expresses our idea of what the Daitron Group should be like.Further, "NEXT" (NETWORK, ENGINEERING, X[SYNERGY], TRADING) implies our aspiration to create new value as an engineering trading company leading the electronics industry and capitalizing on its network.
01 I n t e g r a t e d R e p o r t 2 0 2 3
I n t e g r a t e d R e p o r t 2 0 2 3 | 02 |
Greeting
Chapter 1 | Value Creation |
Contributing to future value creation through electronics
Chairman and Director | CEO & COO | |
President, CEO and COO | ||
Isayuki Mae | Shinsuke Tsuchiya |
Daitron Co., Ltd. (then called Daito Shoji Co., Ltd.) was established in 1952, starting its journey as a trading company. In 1969, the Daitron trademark was registered, and in 1970, we took several actions toward full-scale manufacturing functionality, including spinning off our technical division. Our unique dual trading and manufacturer functionalities comprise a truly important element of our DNA that has been passed down to the present and has been refined over the years to become one of our major strengths.
In the 71 years since our founding, we have built a broad and stable customer base by meeting the needs of all industries through a wide range of product lines covering the entire electronics domain, from electronic devices and components to manufacturing equipment. As a result, we have built deep and complex trust relationships with our customers, who are also our suppliers and joint developers. With this, our customer base has evolved into an even stronger "partner base." This is also a very significant source of competitiveness for us.
With regard to the global development of our business, we have been focused on building overseas networks from an early stage, such as becoming the exclusive distributor for advanced technology manufacturers in the U.S. and other countries in the 1950s. This track record and experience have been the basis for our steady overseas expansion, beginning with the establishment of a U.S. subsidiary in 1986.
Then, in 1993, around 40 years after the Company's founding, we reached a major turning point. It was the dawn of the Internet and personal computers, and there was a great sense of anticipation that electronics technology would change the world.
It was amid this atmosphere of the times that we established a new Management Philosophy with the aim of long-term growth and advancement. Simultaneously, as a new form of management to pursue this philosophy, we launched the 1st Medium-Term Business Plan (1M), aiming to operate our
business based on medium- to long-term goals and strategies. This was such a major change, it could truly be called a "second founding." Since that time, our Group's management has been based on our medium-term business plans, and we have continued to achieve steady growth.
Now, 30 years later, we press forward under the 10th Medium-Term Business Plan (10M). Once again, we face a time of great change. As technologies such as IoT and AI make great strides, society finds itself up against a mountain of issues, including climate change as well as labor shortages due to the declining birthrate and aging population. Here, we believe that electronics technology will serve as a key technology driving solutions to the myriad social and environmental issues the world faces.
In 10M, we seize upon these major changes in the business environment and are pressing ahead with the establishment of a new management structure for future change.
First, at the start of 10M, we made changes to the basic ideas shared by all Group employees. We newly formulated a long-term management slogan expressing our vision for the future: "Make a leap forward in the global market as a technology-based company."
Next, during the 10M period, in order to materialize the Group's efforts to solve social and environmental issues, in other words, to work toward sustainability, we identified materiality, established a system for action, and started full-fledged activities toward sustainability.
Today, we recognize that we are entering a period that should be positioned as our "third founding." Going forward, we will work to create new value demanded by societies of the future based on our achievements and experience accumulated over the 71 years since our founding and our unique electronics technology.
We ask for your continued support of the Group.
03 I n t e g r a t e d R e p o r t 2 0 2 3 | I n t e g r a t e d R e p o r t 2 0 2 3 | 04 |
The Daitron Group History
In the 71 years since our founding,
we have grown alongside the development of the electronics industry in Japan and around the world
Our beginnings in 1952 were as a trading company, and we established a manufacturing subsidiary in 1970 by spinning off our technical division.This was the start of our Group "combined manufacturing and sales policy" management system that has continued to the present day.
We have established a unique presence in the industry by being an electronics trading company with a manufacturing function, which enables us to meet the needs of our customers in niche fields.
Then, in 2017, for our next stage of growth, we integrated two domestic manufacturing subsidiaries and began to create a new revenue base through combined manufacturing and sales as Daitron, achieving rapid growth alongside the development of the electronics industry.
Chapter 1 | Value Creation |
2022 | |||||||||||||||
• Transitioned to the Tokyo Stock Exchange | |||||||||||||||
Prime Market | |||||||||||||||
• Locally incorporated a subsidiary in Singapore | |||||||||||||||
2021 | |||||||||||||||
• Upgraded the Taipei Branch, | |||||||||||||||
Taiwan into a | |||||||||||||||
locally-incorporated | |||||||||||||||
Exceeded | subsidiary | ||||||||||||||
50 billion yen | |||||||||||||||
in net sales | 2017 | ||||||||||||||
2006 | • Integrated two manufacturing | ||||||||||||||
subsidiaries, marking the | |||||||||||||||
• Listed on the Tokyo Stock Exchange | |||||||||||||||
start of Daitron Co., Ltd. | |||||||||||||||
1st Section | |||||||||||||||
1998 | • Established Daito-Tec Co., Ltd. | ||||||||||||||
• Upgraded the Seoul Branch, Korea into a | |||||||||||||||
Upgraded the Malaysian Representative Office to a | locally-incorporated subsidiary | ||||||||||||||
locally-incorporated subsidiary | |||||||||||||||
2008 | |||||||||||||||
2001 | Locally incorporated a subsidiary in | ||||||||||||||
Listed on the Tokyo Stock | Bangkok, Thailand | ||||||||||||||
1999 | Exchange 2nd Section | 2011 | |||||||||||||
2002 | |||||||||||||||
Locally incorporated a subsidiary in | |||||||||||||||
Stock | |||||||||||||||
Locally incorporated | Shenzhen, China | ||||||||||||||
publicly listed | |||||||||||||||
subsidiaries in | |||||||||||||||
Hong Kong and Shanghai, | |||||||||||||||
China | |||||||||||||||
(billion yen)
90
80
70
60
50
40
1952 Founded
Exceeded
10 billion yen in net sales
1970
Spun off the technical division,
established Daito Denshi Kougyou Co., Ltd.
1986
Locally incorporated a subsidiary in Oregon, U.S.
30
20
10
1952 | 1970 1971 1972 1973 1974 1975 19761977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 | 1994 1995 1996 | 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 |
*Bar graph shows net sales over time |
0
1950s
1952
•Established Daito Shoji Co., Ltd. in Kita-ku, Osaka with a capital of 300,000 yen.
•Focused on sales of tape recorders, which was not common in those days, as a distributor of Tokyo Telecommunications Engineering Corporation (now Sony Group Corporation).
■ 1954
•Moved the head office to Doyama-cho,Kita-ku, Osaka to respond to expanded business.
•Enhanced the purchasing division for Sony products and started sales of transformers from TAMURA Corporation and connectors from Hirose Shokai Co., Ltd. (now Hirose Electric Co., Ltd.) and Tajimi Electrics Co., Ltd.
■ 1957
•Moved the head office to Oimatsu-cho,Kita-ku, Osaka to respond to expanded business.
■ 1958
•Established the Tokyo Branch in
Hanazono-cho,Shinjuku-ku, Tokyo.
■ 1959
•Started to import and sell wear testing instruments and measuring instruments, etc. of U.S.-based Taber Industries as its Far-Eastern distributor.
1960s
■ 1969
•Registered the Daitron trademark.
1970s
■ 1970
•Spun off the technical division, established Daito Denshi Kougyou Co., Ltd.
■ 1975
•Opened the Product Control Center in
Tarumi-cho,Suita-shi, Osaka.
1980s
■ 1980
•The First Ritto Factory was completed in Iseochi, Ritto-shi, Shiga.Started the manufacture of cables and harnesses using Bendix connectors.
■ 1986
•Locally incorporated a subsidiary in Oregon, U.S.
■ 1988
•Changed the trade name from Daito Denshi Kougyou Co., Ltd. to Daitron Technology Co., Ltd.
1990s
■ 1991
•The new head office building was completed in Shima-machi,Chuo-ku, Osaka.
■ 1993
•Established the Management Philosophy.
■ 1994
•Spun off the Electrical Wiring Division and established subsidiary Daito Denso Co., Ltd.
■ 1998
•Changed the trade name to Daito Electron Co., Ltd., renovated the Daitron trademark logo design at the same time.
•Upgraded the Malaysian Representative Office to a locally-incorporated subsidiary.
•Obtained ISO 9002 certification for our Electronics Operations Procurement Department (Tokyo and Osaka) and Tama Sales Office.
■ 1999
•Shares made publicly available on the over-the-counter market at the Japan Securities Dealers Association (securities code: 7609).
2000s
- 2001
•Listed on the 2nd Section of the Tokyo Stock Exchange and the Osaka Securities Exchange, and increased capital to 2.186 billion yen through a public offering.
- 2002
•Locally incorporated subsidiaries in Hong Kong and Shanghai, China.
- 2004
•Integrated all the sales offices and Logistics Center located in Osaka Prefecture into the new head office building in Miyahara, Yodogawa-ku, Osaka.
- 2006
•Listed on the 1st Sections of both the Tokyo Stock Exchange and the Osaka Securities Exchange.
•Upgraded the Seoul Branch, Korea into a locally-incorporated subsidiary.
- 2007
•Daito Denso Co., Ltd. makes Takawa Industry Co., Ltd. a subsidiary.
- 2008
•Locally incorporated a subsidiary in Bangkok, Thailand.
- 2009
•Took over the business for semiconductor manufacturing equipment from Emtec Co., Ltd.
2010s
- 2011
•Locally incorporated a subsidiary in Shenzhen, China.
- 2016
•Completed Chubu Factory as a core Group factory in Ichinomiya-shi, Aichi.
- 2017
•Integrated domestic subsidiaries Daito Denso Co., Ltd. and Daitron Technology Co., Ltd. and changed the trade name to Daitron Co., Ltd.
•Made Tanimoto Denso Co., Ltd. a wholly-owned subsidiary and established Daito-Tec Co., Ltd.
- 2018
•Completed Chubu Second Factory on the premises of Chubu Factory.
2020s
- 2021
•Daito-Tec Co., Ltd. completed a new factory in Hiroshima-shi, Hiroshima.
•Upgraded the Taipei Branch, Taiwan into a locally-incorporated subsidiary.
- 2022
•Transitioned to the Tokyo Stock Exchange Prime Market.
•Locally incorporated a subsidiary in Singapore.
- 2023
•Locally incorporated a subsidiary in Eindhoven, The Netherlands.
Our offices at our founding | The newly-opened Tokyo Branch | The Product Control Center | Production of Bendix connectors | Our first day on the Tokyo Stock Exchange | Listing ceremony for the 2nd Section at |
TSE Arrows |
The Chubu Factory
The head office building
05 I n t e g r a t e d R e p o r t 2 0 2 3 | I n t e g r a t e d R e p o r t 2 0 2 3 | 06 |
Chapter 1
Financial and Non-Financial Highlights
Value Creation
Financial Information (Consolidated) | |||||||||||
Net sales (million yen) | Gross profit (million yen) | ||||||||||
100,000 | 20,000 | ||||||||||
87,639 | 17,587 | ||||||||||
80,000 | 72,341 | 12,818 | 14,281 | ||||||||
61,621 | 15,000 | ||||||||||
12,482 | |||||||||||
59,662 | 57,418 | 11,476 | |||||||||
60,000 | |||||||||||
10,000 | |||||||||||
40,000 | |||||||||||
5,000 | |||||||||||
20,000 | |||||||||||
0 | 0 | ||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2018 | 2019 | 2020 | 2021 | 2022 |
Non-Financial Information | |||||||
Operating income (million yen) | Daitron (Consolidated) | Number of Group | |||||
8,000 | Number of Employees | Companies | |||||
6,000 | 6,051 | 942 | 12 | ||||
(As of December 31, 2022) | (As of April 1, 2023) | ||||||
4,196 | • Japan: 790 | • Japan: 2 | |||||
• Overseas: 152 | • Overseas: 10 | ||||||
4,000 | |||||||
3,546 3,205 | |||||||
2,403 | |||||||
2,000 | |||||||
0 | |||||||
2018 | 2019 | 2020 | 2021 | 2022 |
Worldwide Group
Locations
37
(As of April 1, 2023)
- Sales Offices: 27(Japan: 16, Overseas: 11)
- Manufacturing locations: 8(Japan: 7, Overseas: 1)
- Representative Offices: 2(Overseas)
Net income attributable to owners of parent (million yen)
Total assets (million yen) | Shareholders' equity/ Total assets (%) |
5,000 | ||||
4,237 | ||||
4,000 | ||||
3,000 | 2,953 | |||
2,274 | 2,171 | |||
2,000 | 1,610 | |||
1,000 | ||||
0 | ||||
2018 | 2019 | 2020 | 2021 | 2022 |
80,000 | ||||
63,202 | ||||
60,000 | 58,454 | |||
46,247 | ||||
45,757 | ||||
43,114 | ||||
40,000 | ||||
20,000 | ||||
0 | ||||
2018 | 2019 | 2020 | 2021 | 2022 |
60.0
45.0 | 39.4 | 41.0 | 42.8 | 41.1 |
38.4 | ||||
30.0 |
15.0
0
2018 2019 2020 2021 2022
Daitron (Non-Consolidated) | Original product ratio | |
Partner Base | ||
(sales base) | ||
6 800 | 16.0 | % |
Approx. , | companies | |
(As of December 31, 2022) | (FY2022) |
- Customers: Approx. 5,000 companies
- Suppliers: Approx. 1,800 companies
Overseas business ratio
(sales base)
25.5%
(FY2022)
Net income per share (yen)
400 | 381.78 | |||
300 | 266.18 | |||
205.25 | ||||
200 | 195.86 | |||
145.24 | ||||
100 | ||||
0 | ||||
2018 | 2019 | 2020 | 2021 | 2022 |
07 I n t e g r a t e d R e p o r t 2 0 2 3 |
Net assets per share (yen)
2,500 | 2,342.79 | |||
2,000 | 2,023.23 | |||
1,784.66 | ||||
1,691.87 | ||||
1,530.94 | ||||
1,500 | ||||
1,000 | ||||
500 | ||||
0 | ||||
2018 | 2019 | 2020 | 2021 | 2022 |
Dividends per share (yen)
120 | 115 | ||||
90 | 80* | ||||
60 | 55 | 60 | |||
50 | |||||
30 | |||||
0 | |||||
2018 | 2019 | 2020 | 2021 | 2022 |
*Includes 70th period commemorative dividends of 10 yen
Daitron (Non-Consolidated) | Daitron (Non-Consolidated) | |
Ratio of female hires | ||
Ratio of childcare leave taken | ||
(Women as a share of new hires*) | ||
45.6% | 56.5% | |
(2022 results) | (2022 results) | |
* Data for new regular employees | • Women: 100% | |
(not including contract and part-time employees) | • Men: 41.2% | |
Daitron (Non-Consolidated)
Ratio of outside officers
60%
(As of March 30, 2023)
- Directors: 7 (including 4 outside directors)
-
Corporate Auditors: 3 (including 2 outside corporate auditors)
• Total Officers: 10 (including 6 outside officers)
I n t e g r a t e d R e p o r t 2 0 2 3 | 08 |
Our Value Creation Process
We aim to make a leap forward in the global market as a technology-based company and create new value for the world
Chapter 1 | Value Creation |
Surrounding megatrends
Diversifying technologies
(Increasing importance of semiconductor back-end process)
Spreading EV & automated driving
Changing business methods
Evolving cloud computing
Spreading local 5G and 6G systems
Fully spreading automated equipment
Further changing manufacturing sites
2050 carbon neutrality
*Electronics is one of the key technologies
Efforts in management
Strengths and superiority of our business method
Combined strengths and superiority only a trading company
with the manufacturing function can have
[Combined manufacturing and sales strengths]
Technology Sales power (marketing power) Manufacturing power Product range (broad product portfolio)
[Overwhelming channel power]
Supplier channel Customer channel
Promoting four | 1 | Business structure reform | |
2 | Maximize merger synergy | ||
basic strategic | |||
3 | Accelerate growth in focus areas and markets | ||
policies | |||
4 | Strategy toward sustained growth | ||
Business operation
Responding to a wide range of electronics demand of the industry for both electronic equipment & components and manufacturing equipment
[Electronic Equipment & | [Manufacturing Equipment |
Components Business] | Business] |
Electronic Components and | LSI manufacturing equipment |
Assembly | Electronic Materials |
Semiconductors | Manufacturing Equipment |
Optical device manufacturing | |
Embedded Systems | |
equipment | |
Power Supply Equipment | |
FPD manufacturing equipment | |
Image-Related Equipment & Parts | |
Energy Device Manufacturing | |
Information Systems, etc. | Equipment, etc. |
[Growth Strategy]
We will drive 10M
aiming for sustained expansion of net sales and operating income
Future vision to aim for
Long-Term Management Slogan
Make a leap forward in the global market as a technology-based company
Materiality (sustainability key issues)
Create the Four Values based on established management foundations!
1 Partner value creation
2 Human resource value creation
3 Social & environmental value creation
4 Economic value creation
Management bases
Foundation Spirit / Code of Conduct | Combined manufacturing | Business structure |
and sales | ||
[Philosophy | Management Philosophy | [Strengths] | Partner base | High profitability |
system] | ||||
Group Statement | Field capability | See pages 11-12 for details |
Our Basic Policy on Corporate Governance
[Management | Compliance and Corporate Ethics |
foundations] | Risk management |
CSR Basic Policy/Materiality |
09 I n t e g r a t e d R e p o r t 2 0 2 3 | I n t e g r a t e d R e p o r t 2 0 2 3 | 10 |
The Source of Our Value Creation 1 Strengths
As a technology-based company, Daitron Group
Chapter 1 | Value Creation |
has built highly competitive, unique strengths
Combined manufacturing and sales
Number of | Original product | Number of | |||
manufacturing | |||||
sales offices* | ratio | ||||
locations | |||||
28 | 16.0% | 8 | |||
(Japan :16; Overseas :12) | (Japan : 7; Overseas : 1) | ||||
* Includes Representative | 14.0 | ||||
Offices | |||||
12.1 | 11.7 | 11.4 |
Starting out as an electronics trading company, we have always been particular about being responsive to our customers' wide range of needs. Having frequently faced the reality that many needs cannot be met only by purchasing products from suppliers, we decided to develop and manufacture products in areas not covered by suppliers despite a certain level of needs, and have gradually strengthened our manufacturing capabilities through the establishment of manufacturing subsidiaries and other measures. As a result, Daitron Group has become a corporate group with both manufacturing and trading company functions, and our current management is based on combined manufacturing and sales exerting great synergy from the integration of these two functions.
Field capability
to provide close
customer orientation, marketing capability,and high level of expertise
In the course of promoting combined manufacturing and sales management, we have cultivated thorough customer-oriented sales, advanced marketing capability, and a high level of expertise. We are proud that our field capabilities providing customers with these three functions combined is one of the major reasons why customers prefer us.
By constantly refining our field capabilities, we aim to become the corporate group with the No. 1 customer satisfaction.
20.3 | 10.4 | ||
19.1 | 18.3 | ||
16.0 | |||
15.8 |
2018 2019 2020 2021 2022
Original product net sales: billion yen
Original product ratio (net sales basis): %
Though the original product ratio, one of the KPIs in our growth strategy, is on the decline, net sales are growing. This is partly due to the remarkable growth in sales of purchased products amid recent rapid market expansion. We will continue to strive to achieve the 25% original product ratio target and expand synergies from combined manufacturing and sales.
Our business structure is broadly divided into two areas: the Electronic Equipment and Components Business and the Manufacturing Equipment Business.
The Manufacturing Equipment Business includes equipment installed on production lines at manufacturers' plants and used to produce semiconductors, electronic materials, optical devices, energy devices, etc. The Electronic Equipment and Components Business, on the other hand, includes products installed in and incorporated into various
Business structure
enabling total success from upstream to downstream of electronics
Component ratio for sales by product segment
Manufacturing Equipment
Business
27.8
Our Group's relationships with our business partners are extremely unique and strong due to our longstanding efforts in this area. While many companies have only a single relationship with their business partners, we have many business partners who are customers, suppliers, and development partners. These complex business relationships make up what we call our "partner base." This is one of the major strengths that we have gained by promoting combined manufacturing and sales.
Partner base
Daitron's unique partner base
Through combined manufacturing and | Partner |
sales management, establishing complex | |
companies | |
business relationships | |
Toward comprehensive business from | |
As | |
electronic equipment and components to | |
customers | |
manufacturing equipment | |
Daitron | |
Developing competitive suppliers | As |
(converting customers into suppliers) | suppliers |
Accelerating product development to | As |
development | |
strengthen Daitron's brand power | |
partners | |
facilities and equipment. As the electronics market significantly expands its base, our Group's business covers a wide range of fields and domains, from upstream to downstream, offering a wide range of business opportunities for the future.
High profitability
Gross profit ratio
20.1% 17.5
14.2
12.8 12.4 11.4
21.5 20.3 20.0 19.7 20.1
%
Electronic Equipment and
Components Business
72.2%
By driving management through combined manufacturing and sales, we have established a foundation to ensure an overwhelmingly higher profit ratio compared to general electronic traders.
From the viewpoint of maintaining and strengthening its high profitability base, we have set a goal of securing a gross profit ratio of 20%, and this has generally trended around 20%.
2018 | 2019 | 2020 | 2021 | 2022 |
Gross profit: billion yen Gross profit ratio: %
11 I n t e g r a t e d R e p o r t 2 0 2 3 | I n t e g r a t e d R e p o r t 2 0 2 3 | 12 |
The Source of Our Value Creation 2 Our Business Method
Chapter 1 | Value Creation |
Further developing our own unique business method as a technology-based electronics company under the combined manufacturing and sales policy
Creates high added-value by combined manufacturing and sales functions as the core of the Group
Through the merger of three companies, Daitron Co., Ltd. has begun to move forward as an organization capable of creating new value by integrating the information and expertise of a trading company and technological development capabilities related to electronic equipment and components and manufacturing equipment. At the core of this Group driving combined
Provides comprehensive support from "production" to "use"
in the electronics industry
We support the electronics industry over a wide range of areas with our electronic equipment and components used in diverse business sites
Trusted customer assets, a large number of accounts
With our approximately 600 major business partners and 5,000 business partners total, mainly consisting of customers in Japan, we currently enjoy considerable customer assets.
The Daitron Group is a global corporate group with a total of 11 Group companies in Japan and overseas. We are centered on Daitron Co., Ltd., which has both trading company and manufacturer functions.
We offer a broad product lineup in the electronics field through its product lineup in the two segments of Electronic Equipment and Components and Manufacturing Equipment.
manufacturing and sales, we take the lead in all functions, from technology development to manufacturing, sales, and maintenance, both in Japan and overseas.
Foresight to uncover cutting-edge products and promising markets
and products as well as various manufacturing equipment required in production.
Marketing ability based on customer needs
This large number of accounts mitigates the impact of fluctuations in the performance of individual customers and contributes to securing stable sales.
In the trading company function, we have discovered around 1,800 suppliers from all over the world, while we have expanded the number of customers to about 5,000 companies both in Japan and overseas. The scale of these two wings of our business forms the partner base that supports our Group's stable growth.
In the manufacturing function, we develop and manufacture products leveraging our unique marketing capabilities or jointly develop products with suppliers, focusing on niche markets that our suppliers do not address and that we believe we should address.
Through this combined manufacturing and sales management, we continue a unique history as a technology-based company in the electronics industry.
Procurement Source
Japanese
manufacturers
American and European
manufacturers
Asian
manufacturers
Total number of
business partners: Approx. 1,800 companies
(Major business partners: Approx. 200 companies)
Manufacturing & Processing Function | Sales Function |
Merged with two manufacturing subsidiaries Daitron Co., Ltd. Jan. 2017-
Domestic Manufacturing Group Company
Daito-Tec Co., Ltd.
US Group Company
DAITRON INC.
Europe Group Company
DAITRON (NETHERLANDS) B.V.
Asian Group Company
DAITRON (KOREA) CO., LTD.
DAITRON (H.K.) CO., LTD.
DAITRON (SHANGHAI) CO., LTD.
DAITRON (SHENZHEN) CO., LTD.
DAITRON(TAIWAN)CO., LTD.
DAITRON (MALAYSIA) SDN. BHD.
DAITRON (THAILAND) CO., LTD.
DAITRON (SINGAPORE) PTE. LTD.
Product Lines | Customer |
Cutting-edge logistics system | |
Japanese market | |
Electronic | |
Equipment | |
and | American and |
Components | |
European market | |
Business | |
Manufacturing | Asian market |
Equipment | |
Business | |
Total number of | |
business partners: | |
Approx. 5,000 companies | |
(Major business partners: Approx. 600 companies) |
13 I n t e g r a t e d R e p o r t 2 0 2 3 | I n t e g r a t e d R e p o r t 2 0 2 3 | 14 |
President Message
By mastering electronics as a key
technology for achieving "2050 carbon neutral," we will contribute to resolving social and environmental issues
Business environment
The electronics industry is pushing toward mid- to long-term growth trends
Chapter 2 | Growth Strategy |
President, CEO and COO
Shinsuke
Tsuchiya
Performance trends
Double-digit growth in net sales and operating income, marking record highs for two consecutive years
We belong to the electronics industry, which is entering a period of expansion and growth in the medium to long term. This is despite some concerns in the short term, such as the lingering global shortage of semiconductors and electronic components, a lull in the shift toward digital technologies accelerated by the COVID-19 pandemic, and semiconductor production entering an adjustment phase in some areas.
With the rapid development of cutting-edgeICT-related technologies such as IoT, AI, 5G & 6G, and Big Data, the demand base in the electronics industry is expanding signifi- cantly. For example, automation (robotics) is advancing in all industries as they utilize IoT technology to collect information (big data) from sensors mounted on various objects through high-speed,large-capacity communication networks such
as 5G & 6G, which is then analyzed by AI to automatically perform the necessary processing. Beyond this, the Jap- anese government's Society 5.0 plan for a future society envisions a future with smart factories and logistics sites, smart cities for public services across entire cities, smart homes, and at the individual level, wearable devices. Today, amid these diverse efforts to create the future unfold in every industry, our Group's business partners are spread across a wide range of industries, from automobiles and electronics to the three commodities (food, pharmaceuticals, and cosmetics), construction, logistics, e-commerce, and more. These trends are growing in scale and speed with each passing year, opening up unprecedented growth opportunities ahead of our Group.
We are pressing forward under the 10th Medium-Term Business Plan (10M), which began in fiscal 2021.
In fiscal 2021, the first year under 10M, we were able to achieve record highs in both net sales and operating income by achieving growth surpassing the residual effects of the COVID-19 pandemic.
In fiscal 2022, the second year, both the electronic equipment and components and manufacturing equipment sectors performed well as demand continued to grow significantly due to active capital investment in IoT, AI, 5G & 6G-related fields, despite the impact of the global semiconductor and electronic component shortages. As a result, we were able to achieve record consolidated results in fiscal 2022 for the second consecutive year, both in terms of net sales and operating income. With a 21.1% increase
in net sales and a 44.2% increase in operating income over the previous year, we are gaining momentum toward our long-term target of becoming a company with consolidated sales of 100 billion yen. We aim to achieve this target as soon as possible and to sustain high growth in fiscal 2023, the final year of the 10M plan.
With respect to the return of profits to shareholders, we strive to pay stable dividends on an ongoing basis, based on a payout ratio of 30%. Following on from fiscal 2021, we have increased the dividend for fiscal 2022 amid a significant increase in sales and profit, and have set the annual dividend per share for fiscal 2022 at 115 yen (a year-on-year increase of 35 yen). Going forward, we will continue to consider ways to enhance shareholder returns on an ad hoc basis, including a review of our dividend standards.
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President Message
Progress of the Medium-Term Business Plan
Management aimed at both securing profits and future investment based on the basic policy of "continued profitable growth"
Chapter 2 | Growth Strategy |
Driving change in business portfolios through the creation of new business
Our basic policy in 10M is "continued profitable growth." Here, our aims are sustained expansion of net sales and operating income and securing 20% gross profit ratio. We are also simultaneously estimating an annual SGA increase of around 3-5% to proactively promote investments forming the foundation of sustained growth. In other words, our management aims to both secure profits and invest in the future.
Looking at the results to date, we have sustained high growth in both net sales and operating income in the first (fiscal 2021)
Basic policy in 10M
and second (fiscal 2022) years of the 10M plan, with double-digit increases in both. In addition, the gross profit margin is around the 20% level, at 19.7% in fiscal 2021 and 20.1% in fiscal 2022. The reason for the margin being slightly below 20% in fiscal 2021 is that the growth of purchased products exceeded the growth of original products amid the boom in the overall electronics industry.
Also, SGA expenses increased 11.2% year on year in fiscal 2021 and 14.4% year on year in fiscal 2022, partly due to proactive investments in human resources and technology development.
In the electronics industry, innovations with technological discontinuity are taking place frequently, and in order to ensure future growth, we must respond appropriately to these changes. To this end, we are working to create new business and gradually bring about a change to its business portfolio.
The Green Facility Department (GFD), which had been a new business cultivated under the previous medium -term business plan, now contributes to profitability as a stable growth business. Currently, we are promoting the
creation of new businesses centering on four projects: the Automotive Project and Medical Project launched in the previous medium-term business plan, and the Battery Project (a sub-project of the Automotive Project) and the Software Business Project launched in the current medium-term business plan. The Automotive Project and Medical Project have already achieved a certain level of success, while we are currently taking actions for the Battery Project and Software Business Project to generate results during the next medium-term business plan.
Continued profitable growth | ||
Aim at sustained expansion of net | Continue to push forward with | Estimate an annual SGA increase by around |
sales & operating income through | 3-5% to promote investments forming the | |
business structure reform to secure | ||
management focusing on growth | foundation of sustained growth (in human | |
20% gross profit ratio |
Pursuing three management indicators to achieve both financial stability and high profitability/growth
potential | resources, technology development, etc.) |
Accelerated strengthening of original product development capabilities and overseas business development capabilities
In pursuit of continued profitable growth, we have set three management indicators as targets within the 10M plan.
For our equity ratio, ROA, and ROE targets of 50%, 6%, and 12% or more, respectively, these indicators were 41.1%, 7.0%, and 17.5% in fiscal 2022.
Target Management Indices of 10M
Striving to reach higher ROA and ROE targets and a similar equity ratio target versus the previous medium-term business plan
Equity Ratio | ROA | ROE | ||
Target | Target | Target |
Looking ahead, KPIs that we are emphasizing in promoting continued profitable growth over the medium to long term are the "original product ratio" and the "overseas business ratio" (both on a net sales basis).
The "original product ratio" was 15.8% in fiscal 2021 and 16.0% in fiscal 2022, compared to a target of 25%. Due to a booming electronics industry, the share of net sales for original
products was relatively low due to higher-than-expected growth in purchased products, but the absolute net sales value grew. In fiscal 2023, the final year of the 10M plan, we will continue our efforts to achieve this target.
The "overseas business ratio" is showing steady growth, at
23.3% in fiscal 2021 and 25.5% in fiscal 2022, on track to achieve our target of 30%. However, we have only set 30% as a milestone
By continuing to aim for levels that exceed our targets, we will strive to achieve both a stable financial base and high profitability and growth, promoting management that will earn the trust and support of our stakeholders.
Sustainability Management
50% or more | 6% or more | 12% or more | ||
Fiscal 2022 results | Fiscal 2022 results | Fiscal 2022 results | ||
41.1% | 7.0% | 17.5% |
along the way to achieving 50% in the future.
Aiming to contribute to the realization of a sustainable society through our businesses using electronics technologies
In the pursuit of these two KPIs, i.e. in the accelerated strengthening of original product development capabilities and overseas business development capabilities, we established the Group Business Promotion Department under the direct supervision of the President on January 1, 2023. This new section is responsible for Group sales strategies and business planning. In addition, we have boldly restructured our organization by placing the section responsible for product development strategy under the direct purview of the President of D&P Company. By doing so, we hope to accelerate our management and make more daring decisions.
With regard to overseas expansion, we locally incorporated a branch and newly-established a local subsidiary in the Nether- lands. By strengthening of these overseas networks, we will make further progress in the next medium-term business plan.
In the spring of 2022, we made steady progress in developing a mechanism and structure for sustainability management, including re-examining its sustainability system, formulating its approach to sustainability, identifying materiality (sustainability key issues), and establishing the Sustainability Committee.
Thereafter, five subcommittee groups based on materiality were established under the umbrella of the Sustainability Committee to study the content of activities and KPIs to be pursued. Looking ahead, we will work diligently to establish KPIs and announce their progress as soon as possible.
In addition, with the aim of strengthening human
capital management going forward, we are improving our environments and various institutions related to work styles, including the introduction of new performance evaluations, further promotion of diversity, and systematization of education and training systems.
In the firm belief that electronics technologies will be the key technologies for reaching carbon neutrality by 2050, we will promote sustainability initiatives and contribute to the realization of a broadly sustainable society through our business activities.
We hope you will look forward to our management of the Daitron Group.
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