Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
April 1, 2025
To whom it may concern
Company: Nitta Corporation
Representative: Seiichi Kitamura, President Code: 5186; Prime Market, Tokyo Stock Exchange Contact: Koichi Kakegami, Director, Executive Officer, and General Manager of Corporate Center
Tel: +81-6-6563-1211
Notice Concerning Formulation of Phase 2 of SHIFT2030 Medium- to Long-Term Business Plan
Nitta Corporation (the "Company") hereby announces the formulation of Phase 2 (FY2025-FY2027) of the SHIFT2030 medium- to long-term business plan, which extends through FY2030.
Please refer to the attached material for specific details.
1. Progress of Phase 1 of the SHIFT2030 Medium- to Long-Term Business Plan and setting of Phase 2 targets
The Company has been working on the SHIFT2030 Medium- to Long-Term Business Plan since FY2021. Its performance was largely strong during Phase 1 (FY2021-FY2024) despite the uncertain business environment, including the COVID-19 pandemic, Russia's invasion of Ukraine, and conflict in the Middle East. With the additional tailwind of yen depreciation, the Company expects to achieve its main targets for this phase of the plan.
In the newly formulated Phase 2 (FY2025-FY2027), the Company expects to face increasing uncertainty in many areas, including the political and economic policies of the U.S. and changes in relations with Japan and other countries as a result of these policies. The Company has set the following targets for Phase 2 and is working toward further sustainable growth and maximization of corporate value.
In addition, a new management structure has taken effect today. Under this new structure, the Nitta Group will work as one to achieve the SHIFT2030 Medium- to Long-Term Business Plan.
Targets | SHIFT2030 Phase 1 | SHIFT2030 Phase 2 FY2027 target | SHIFT2030 Phase 3 FY2030 target | |
FY2024 initial plan | FY2024 forecast | |||
Net sales | ¥90.0 billion | ¥90.0 billion | ¥105.0 billion | ¥120.0 billion |
Operating income to net sales ratio | 5.0% | 5.6% | 7% | 8% |
Business ROIC* | - | - | 7% | 9% |
New product sales ratio | 10% | 10% | 10% | 10% |
Overseas sales growth rate (vs. FY2020) | 130% | 150% | 160% | 180% |
Capital expenditure, etc. | ¥21.8 billion (for four years) | ¥15.8 billion (for four years) | ¥17.0 billion (for three years) | ¥15.0 billion (for three years) |
* Business ROIC = Operating income after tax / Average business assets (working capital + property, plant and equipment and intangible assets)
2. Initiative policies and details
In Phase 2, the Company will maximize corporate value by steadily implementing the growth strategy set forth in the SHIFT2030 Medium- to Long-Term Business Plan and by promoting management that emphasizes capital efficiency and shareholder returns.
(1) SHIFT2030 growth strategy
In SHIFT2030, the Group aspires to become a "SHIFT INNOVATOR cored around manufacturing." By continuing 2 "SHIFTs"-SHIFT for deepening and SHIFT for searching, it aims to expand its business fields. Under this plan, we will steadily implement growth strategy for each segment and work to achieve the final year targets of the plan (net sales of ¥120.0 billion and operating income to sales of 8%).
(2) Improving capital efficiency
To enhance corporate value, the Company will reallocate resources by optimizing its business and product portfolios, improve business ROIC, support the growth of equity-method affiliates, and reduce cross-shareholdings. Through these efforts, we will continue to improve capital efficiency.
(3) Strengthening shareholder returns
Recognizing returns of profits to shareholders to be a key management topic, the Company has established the basic policy of paying appropriate dividends that reflect financial results while continuing to strengthen and enhance its corporate foundations.
During the period through the end of Phase 2 (through FY2027) of the SHIFT2030 Medium- to Long-Term Business Plan, the Company will follow the basic policy and meet shareholder expectations through continued stable, steady increases in dividends (of at least 10 yen/share per year during the period), targeting a consolidated payout ratio of at least 30% and a dividend-on-equity (DOE) ratio of at least 2.5%.
Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
SHIFT2030
Medium- to Long-Term Business Plan
Phase 2 (2025-27)
NITTA CORPORATION
Contents
Medium- to Long-Term Business Plan ("MTBP") Looking Back on SHIFT2030 Phase 1 (2021-24) SHIFT2030 Phase 2 (2025-27)
…… P.3
1. Basic Strategy to Maximize Corporate Value
2. Qualitative Targets: Three SHIFTs
3. Quantitative Targets
4. Growth Strategy
…… P.4 …… P.5 …… P.6 …… P.8
5. Efforts to Create New Businesses
6. Efforts to Improve Capital Efficiency
7. Shareholder Return Policy
8. ESG Initiatives
…… P.12 …… P.13 …… P.16 …… P.17
Looking Back on SHIFT2030 Phase 1 (2021-24)
Performance was strong during Phase 1 despite the uncertain business environment, including the COVID- 19 pandemic, Russia's invasion of Ukraine, and the conflict in the Middle East. With the additional tailwind
of yen depreciation, we expect to achieve our main targets for net sales and operating income to sales.
(%)
(¥billion) | 12.0 1,200.0 O海v外ers売ea上s n高et salesD国o内me売sti上c n高et sales営Op業era利tin益g 率income to sales 10.0 1,000.0 800 80.0 60.0 40.0 20.0 0 73.4 83.7 6.4 88.0 88.6 90.0 8.0 5.7 5.6 5.0 6.0 3.9 4.0 2.0 100% 125% 139% 133% 150% 0.0 FY2020 FY2021 FY2022 FY2023 FY2024 Results Results 実績 Results 実績 Results 実績 Forecast 実績見込 A CORPORATION実績 |
NITTA CORPORATION |
Phase 1 final year FY2024 target | FY2024 forecast (revised Feb. 7, 2025) | Difference | |
Neettssaaleles s(B(i¥llibonilsliofnyse)n) | 90.0 | 90.0 | +0 |
Oppeerraatitnigngincinocmoemtoestaolesa(l%e)s (%) | 5.0 | 5.6 | +0.6 |
Neewwpprordoudcut csatlseaslreastiroa(t%io) (%) | 10.0 | 10.0 | +0.0 |
Ovveerrsseeasasaslaeslegsrogwrothwrtahter(a%te) *(v%s.)FY*v20s. FY20 | 130 | 150 | +20 |
Caappititaal leexpxepnednitduirteuarme oaumnot (uBniltlio(¥nsboifllyioen)s) Phhaassee11cucmumulautliavteive | 21.8 | 15.8 | -6.0 |
1. Basic Strategy to Maximize Corporate Value
To maximize corporate value, the Nitta Group will steadily implement the growth strategy identified in the SHIFT2030 medium- to long-term business plan and promote management focused on capital efficiency and shareholder returns.
➢ Promoting ROIC management
➢ Allocating resources by optimizing business and product portfolios
➢ Reducing cross shareholdings
➢ Steady annual increases in dividends (of at least 10 yen/share per year)
➢ Payout ratio of at least 30%, dividends-on-equity (DOE) ratio of at least 2.5%
➢ Flexible purchase of treasury shares
Maximizing corporate value
Capital efficiency
Shareholder returns
(FY2023-FY2027)
2. Qualitative Targets : Three SHIFTs
Continue with the qualitative targets set when SHIFT2030 was developed
1. SHIFT for Growth
Sustainably grow existing business Search for new business
Accelerate new product development
2. SHIFT for Corporate Value Enhancement
Enhance quality and total cost competitiveness Strengthen corporate governance and compliance Promote ESG and achieve the Goals of SDGs
3. SHIFT for Further Globalization
Further the global expansion of each business Strengthen global support via the Corporate Section
3-1. Quantitative Targets
◼ Quantitative targets for FY2027, the final year of Phase 2, have been set as follows
◼ Business ROIC*, a measure of capital efficiency, has been added to quantitative targets
◼ The target for overseas sales growth rate has been raised to focus on further globalization in Phase 2
* Business ROIC : Operating income after tax / Average business assets (working capital + property, plant and equipment and intangible assets)
* Targets underlined in the table are items that have been revised from the initial plan.
Net sales:
¥90.0 billion
Operating income to net sales ratio:
5.6%
New product sales ratio:
Overseas sales growth rate (vs. FY2020):
10% 150%
Capital expenditure :
¥15.8 billion (for 4 years)
SHIFT2030 Phase 1 | SHIFT2030 Phase 2 | SHIFT2030 Phase 3 |
FY2024 forecast | FY2027 target | FY2030 target |
Net sales:
Operating income to net sales ratio:
¥105.0 billion 7%
Business ROIC*:
New product sales ratio:
7% 10%
Overseas sales growth rate (vs. FY2020):
160%
Capital expenditure, etc.
¥17.0 billion (for 3 years)
Net sales:
Operating income to net sales ratio:
¥120.0 billion 8%
Business ROIC*:
New product sales ratio:
9% 10%
Overseas sales growth rate (vs. FY2020):
180%
Capital expenditure, etc.
¥15.0 billion (for 3 years)
Initial MTBP SHIFT2030
Phase 1 | Phase 2 | Phase 3 | ||
2024 | 2027 | 2030 | ||
Net sales | (¥ billions) | 90.0 | - | 115.0+α |
Operating income to sales | (%) | 5.0% | - | 8.0% |
Business ROIC* | (%) | - | - | - |
New product sales ratio | (%) | 10% | - | 10% |
130% | - | 170% | ||
21.8 | 9.4 | 8.8 |
(¥ billions)
Overseas sales growth rate (vs. FY2020) (%) Capital investment, etc.
Forecast | Targets after revision | |
Phase 1 | Phase 2 | Phase 3 |
2024 | 2027 | 2030 |
90.0 | 105.0 | 120.0 |
5.6% | 7.0% | 8.0% |
- | 7.0% | 9.0% |
10% | 10% | 10% |
150% | 160% | 180% |
15.8 | 17.0 | 15.0 |
* Business ROIC formula: Operating income after tax / Average business assets (working capital + property, plant and equipment and intangible assets)
* Figures are percentage increase in overseas sales (compared to FY2020)
4-1. Growth Strategy: Belt and Rubber Products Segment
N売e上t sa高lesゴ: Ruム b化be成r p品rod(u億ct円s ()¥ billion)
Belt products: Deepen existing market
N売e上t sa高lesベ: Beルltsト(¥(億bil円lion))
40.8
Focus resources on conveyance business Shift from power transmission to conveyance Increase market share in logistics, where labor-saving is on the rise
Strengthen solutions sales
Increase market share in increasingly diverse food market
Launch high-performance and differentiated products
NLGTM
PolySprintTM
2020
Pﾌhｪｰasｽeﾞ1 2024
ﾌPｪhｰaｽseﾞ2 2027
Pﾌhｪaｰsｽeﾞ3 2030
Connecting to the next generation: Breakthrough in "convey/carry"
Device products: Expand electronic components and new markets
Create new core businesses by developing high-performance products
Temperature-sensitive adhesive tape (IntelimerTM)
Use in electronic component manufacturing process
Expand horizontally to peripheral markets
RFID tags
Use in linen supply industry requiring cleaning
Expand to new uses such as uniforms
Further accelerate global expansion and invest aggressively
(North America, India, ASEAN region)
Expand market share in North American logistics market Construct new plant to expand sales in Indian market Deepen cultivation of ASEAN region
Expand sales of IntelimerTM and RFID tags Indian manufacturing location:
Nitta Corporation India