Challenge 2027: Stage 2
Mid-Term Management Plan 2025-2027
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Table of Contents
1 Reviewing the Previous Mid-Term Management PlanP. 3
Challenge 2024
2 Long-Term Vision P. 8
3 Mid-Term Management Plan Challenge 2027
1. Growth Strategy by Business SegmentP.14
2. Business Growth by R&D StrategyP.25
3. Growth by Human Resources StrategyP.33
4. Financial Strategy and Capital ProfitabilityP.39
Reviewing the Previous Mid-Term Management Plan Challenge 2024
◆ Optimization of business portfolio and increased corporate value based on the five strategies of the previous Mid-Term Management Plan
< Five Strategies >
1. Accelerate growth businesses
2. Expand R&D
3. Improve profitability of existing businesses
4. Advance ESG management
5. Restructuring of business infrastructure
< Management Policy > Aiming to increase corporate value by optimizing business portfolio
< Review > ✕ : Market environment slowed down for electronic materials and silicon wafers
〇 △ △ 〇
: Narrowed down development fields (to about half). Three research laboratories system
: Although operating profit of 3.0 billion yen was achieved, profit margin improvement was insufficient
: Promoted initiatives such as climate change and human capital investment
: Implemented a review of shifting to an operating holding company structure. Expansion of IT environment, etc.
〇
: Carried out management in line with our business portfolio
⊳ Integration of businesses in the Focus and Development Areas into one company
⊳ Aggressive investment in the Focus and Development Area businesses
⊳ Withdrawal from some unprofitable businesses and products
⊳ Profitability improvement in the Base Area businesses (increase in operating profit)
◆ Profitability improved thanks to the fruition of various planned initiatives and changes in the external environment
FY2021
FY2024 Initial Plan
(Start of the previous Mid-Term Management Plan)
(Final year of the previous Mid-Term Management Plan)
FY2022
FY2023
FY2024
Net sales
33.8 billion yen
37.0 billion yen
36.0 billion yen
36.5 billion yen
38.0 billion yen Operating profit
2.50 billion yen
3.0 billion yen
2.64 billion yen
3.35 billion yen
2.9 billion yen
Profit
2.33 billion yen
2.2 billion yen
2.24 billion yen
2.59 billion yen
2.8 billion yen
✓ Operating profit achieved the initial plan by +350 million yen in FY2023.
Profit-focused initiatives such as fair price negotiations and manufacturing cost reductions yielded results. Contributions from new businesses and new products were still small.
✓ The markets for electronic materials and silicon wafers were sluggish due to the effects of domestic and international inventory adjustments.
In particular, profits in the silicon wafer sector have significantly declined even in the final year.
Reviewing of profit structure as the "Foundation Enhancement" stage. Respond flexibly to changes in the external environment
While optimizing the business portfolio, aim to further strengthen profitability by establishing new businesses
◆ Decided on capital investment of approximately 9.0 billion yen in total
Review of capital investment plan | Focus and Development Areas 6.0 billion yen, of which 2.5 billion yen completed, 3.5 billion yen in progress | Base Area 2.5 billion yen, of which 1.5 billion yen completed, 1.0 billion yen in progress | DX 500 million yen |
✓ Decided to increase investment in the ammonium perchlorate business and material assessment service (contract testing business), where future demand is expected.
The investment in construction to increase production capacity for ammonium perchlorate completed up to the first stage. Contracted battery testing laboratory is scheduled to start operation in 2025.
✓ In addition to above investment, decided to implement the investment in aging facilities in each business area, including the Base Area. Regarding some energy-saving investments, the investment content verification took longer than expected, so it was postponed to the Challenge 2027 period.
✓ In DX promotion, implemented replacement of the core systems and enhancement of the IT department. Scheduled to start operation in 2025.
Plans to increase production capacity and upgrade aging facilities are in the start to the execution stage
Further expansion of new businesses and Focus and Development Area businesses is a future management issue
◆ Formulated "Rolling Plan 2023" and "Grow Up Plan 2024" with the Mid-Term Management Plan "Challenge 2024" as the core
◆ Considered initiatives while analyzing capital profitability and market valuation
FY2021
Changes in operating profit ratio and capital profitability
Operating profitProfit
Operating profit ratio
4,000
9.2%
ROE
3,000
2,000
1,000
0
10.0% 8.0% 6.0% 4.0% 2.0% 0.0%
FY2022
FY2023
Capital profitability (ROE)
High
FY2024 Forecast Forecast
✓ The management policy of "3% up in operating profit ratio" was not achieved.
Margin increased only by 1.8% in FY2023 (compared to FY2021).
✓ Improvement of capital profitability and market valuation remained incomplete.
Continue to work on it as a medium- to long-term management issue.
Long-Term Vision
What is Carlit Co., Ltd.?
✓ Derive core technologies into various products and services to provide value to society and life
✓ Organized business groups and introduced business portfolio management in the Mid-Term Management Plan Challenge 2024
Previous Mid-Term Management Plan Challenge 2024's Business Portfolio
Growthpotential
Next-generation battery assessment service
Explosives and signal flares
Ceramic abrasive grain
Profitability
Development Area Base Area Basic chemicals Focus Area
Electronic materials Silicon wafers
Contract beverage manufacturing | Environmental solutions (construction, architecture, painting, and design) |
Metal working parts |
Management Philosophy Framework
To contribute to a sustainable societyby combining the power of
Looking back on our business, which has been around for over 100 years, we recognized it as our "Raison d'etre (Purpose)."
At the same time, we have defined the value that we provide to society and people for the next 100 years as "Our Vision."
"chemistry" and "technology" to support people's happy lives.
The founder's philosophy of "Strenuous Efforts,"
For Confidence and Infinite Challenges
Our management philosophy is to continue new challenges, with the "trust" that we have built since our founding, handling hazardous materials and explosives, as our banner.
In the Mid-Term Management Plans, we use the "Infinite Challenges" of our management philosophy as a keyword, and named the previous term "Challenge 2024" and this term "Challenge 2027."
In addition to our three Values (Code of Conduct), the Basic Policy for
1. Customer First Policy Sustainability is positioned as a common concept in all philosophy frameworks.
[Basic Policy for Sustainability] Through manufacturing and the
which means rising to the occasion in the face of adversity, to never giving up, and creating businesses needed by society with an indomitable fighting spirit, is the foundation of our management philosophy framework.
provision of services under our management philosophy, the Carlit Group intends to contribute to the resolution of social issues to help build a sustainable society.
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