Rinnai : Medium-Term Business Plan 2026-2030(3,689KB)

Rinnai Group Medium-Term Business Plan 2026-2030

1. Long-Term Vision

2. Medium-Term Business Plan 2026-2030

2-1. Direction and Numerical Targets

2-2. Key Initiatives

2-3. Capital Policy

In the fields of "heat and lifestyles" and "health and lifestyles," we will create and deliver healthy and comfortable lifestyles to people worldwide while caring for the global environment.

6. Water quality

There is a shortage of available water resources. A future that addresses social challenges related to water, which vary by country.

5. Healthcare

A future that addresses the gap between life expectancy and healthy life expectancy, as well as health challenges associated with aging and lifestyles.

1. Energy and the environment

   
   
   

   Achieve carbon neutrality.

   A future where diverse energy sources are utilized to address government policies and market needs.

   4. AI/digital society

   Consumer needs are shifting from products to

   experiences in this digital-normal world.

   A future where everything is network-connected and seamlessly integrated into our lives in a rational and smart way.

2. People's changing lifestyles

   A future where changes in quality of life and diverse lifestyles create new value.

3. Resilience

A future where we help people prepare for natural disasters, provide support to affected areas, and fulfill our responsibilities as a supplier of daily necessities.

Achieve sustainable and steady growth to broadly expand our initiatives aimed at resolving the social issues we are committed to addressing.

• Help people enjoy exciting lifestyles

• Improve convenience

• Reduce stress

• Enhance safety of living spaces

• Improve hygiene and promote health

• Build resilience

• Support diverse energy sources.

  Address each country's energy policies

  Contribute to carbon neutrality

• Reduce CO2 emissions

• Reduce PM2.5 emissions

• Use water resources efficiently and improve water quality

• Ensure stable supply of products

  Further strengthen BCP Stabilize our supply chains

• Support disaster response activities

• Collaborate with local governments

• Strengthen our after-sales services

Leveraging diverse energy sources, we will help resolve social challenges

in related to "heat and lifestyles" and "health and lifestyles."

At the same time,

we respect diverse lifestyles and values around the world and will continue creating better ways of living.

Support people around the world

Improve people's

quality of life

Emphasize people's

safety and security

Contribute to the

global environment

Drive technological progress and innovation

Take on new business frontiers

Deliver value globally in line with region-specific challenges

Leverage heat and health to improve people's quality of life and offer products and services that enhance well-being

Deliver safe, reliable products and services Provide peace of mind during disasters and emergencies

Support diverse energy sources and advance decarbonization while reducing environmental impact

Keep technology evolving and leverage it to drive innovation

Adapt to social changes and expand our scope of contribution to ensure ongoing business evolution

A company that is trusted and valued by people around the world through our contributions to everyday living

Medium-Term Business Plan 2026-2030

Taking advantage of the global trend toward carbon neutrality, we are poised to achieve even greater success.

By combining a medium- to long-term perspective with short-term execution capabilities

and tackling social challenges, we aim to continue achieving sustainable and steady growth.

accelerate 2030

(accel) Anchor the Core and Create Expanding Leap

Strengthen existing core businesses to deliver continued expansion

In this medium-term business plan, we define the next five years as a critically important period to further strengthen the foundations established under New ERA 2025, create new businesses, and expand into new regions to accelerate sustainable growth.

Profitability

Fiscal 2031 target Fiscal 2026 actual

Financial strength

Fiscal 2031 target Fiscal 2026 actual

Environmental contributions

Fiscal 2031 target Fiscal 2026 actual

Social contributions

Fiscal 2031 target Fiscal 2026 actual

*1 Fiscal 2031 (March 2031) interim target in RIM2050 (vs fiscal 2021 (March 2021)) *2 Positive response rate (parent company only)

Key Initiatives

New businesses

• Leverage strengths to tackle new fields

• Create new value by fusing proprietary technologies with advanced innovations

• Strengthen stability of product supply

  
  
  Solidify our foundations and achieve sustainable growth in existing businesses

  • Strengthen earnings base through continued launch of strategic products

  • Incorporate new needs and technologies to address evolving lifestyles

  • Deploy high-value-added products tailored to demand in growth markets

  Strongly protect

• Enter the electrification market in earnest in light of national energy policies.

• Roll out products tailored to regional characteristics centered on heat pump water heaters

• Build a competitive advantage by leveraging core technologies and sales

networks developed in gas appliances

• Reinforce human capital

• Rebuild business processes through AI and digital technologies

• Strengthen Governance

  Medium-Term Business Plan "accelerate 2030": Business Strategies

• Enter the electrification market in earnest in light of national energy policies.

• Roll out products tailored to regional characteristics centered on heat pump water heaters

• Build a competitive advantage by leveraging core technologies and sales

networks developed in gas appliances

New businesses

• Leverage strengths to tackle new fields

• Create new value by fusing proprietary technologies with advanced innovations

• • Strengthen earnings base through continued launch of strategic products

  • Incorporate new needs and technologies to address evolving lifestyles

  • Deploy high-value-added products tailored to demand in growth markets

    Strengthen our management foundation

• Strengthen stability of product supply

• Reinforce human capital

• Rebuild business processes through AI and digital technologies

• Strengthen Governance

  Strategy for Electrified Products

• Fully move into electrified products globally (centered on existing lineup) to support a carbon-neutral society

• Leverage our strength in "long-established distribution channels in each market" and "core technologies and user-friendly products (refined through

  gas appliances)"

  Hybrid water heaters

  Tankless Storage-type water heaters water heaters

  Ovens

  Dishwashers/ dryers

  IH stovetops Range hoods

  Heat pump water heaters

  Electric water heaters

  Electric kitchen appliances

  Main fields we should focus on

Heat pump water heaters

• Consolidate in-house heat pump development and manufacturing technologies to develop an appealing global lineup of heat pump water heaters

• Expand heat pump business by leveraging sales networks established through existing products and offering bundled sales with complementary products

  Integrate heat pump technologies

  Integrate technologies developed in each country to enhance overall technological capabilities

  Leverage distribution networks built through gas appliances

  
  
  

  Uncover needs through close engagement with users

  
  
  

  Heat pump water heaters (Oceania)

  CONDENSER

  
  
  

  Hybrid water heaters (Japan)

  Combine with complementary products

  EXPANSIN VALVE

  COMPRESSOR

  
  
  
  
  

  EVAPORATOR

  -Standardize components

  -In-house production of components

  -Conduct joint procurement

  
  
  
  
  

  Solar power generation Storage batteries

  Expand lineup of appealing products Drive business expansion

  Launch Strategic Heat Pump Water Heaters in North America

• U.S. Department of Energy regulations on thermal efficiency of water heaters are expected to significantly change the market during the medium-term plan period

• Use this timing to launch competitive strategic products, expand market share, and drive significant growth

  North American electric storage-type water heater market (Rinnai forecasts)

  Enviro ntal

  regulat are reshaping market

  2025

  2026

  2027

  2028

  2029

  2030

  2031

  2032

  nme ions the

  Heat pump storage-

  type water heaters

2025年 2026年 2027年 2028年 2029年 2030年 2031年 2032年

* No. of electric storage-type water heaters = Electric storage water heaters + Heat pump storage water heaters

Electric heat pump water heaters for North America

• Expand sales by leveraging strong existing distribution channels (built through gas appliances) centered on countries/regions where Rinnai products

  are already sold

• Apply accumulated core technologies in functionality and performance to electrified products to deliver distinctive value, develop new business models, and improve profitability

  Kitchen

  
  
  

  IH cooktops Dishwashers/dryers Range hoods

  Bathroom

  
  
  

  Tankless water heaters Storage-type water heaters

  Expand sales by leveraging strong existing distribution channels centered on countries/regions where Rinnai products are already sold

  
  
  ×

  Automated cooking

  
  
  

  IH cooktops

  Aggregators

Demand-response business

Establish a sustainable revenue model by remotely controlling electric water heaters in response to power surpluses and shortages

Deliver distinctive value and develop new business models

Medium-Term Business Plan "accelerate 2030": Business Strategies

• Enter the electrification market in earnest in light of national energy policies.

• Roll out products tailored to regional characteristics centered on heat pump water heaters

• Build a competitive advantage by leveraging core technologies and sales

networks developed in gas appliances

New businesses

• Leverage strengths to tackle new fields

• Create new value by fusing proprietary technologies with advanced innovations

• • Strengthen earnings base through continued launch of strategic products

  • Incorporate new needs and technologies to address evolving lifestyles

  • Deploy high-value-added products tailored to demand in growth markets

    Strengthen our management foundation

• Strengthen stability of product supply

• Reinforce human capital

• Rebuild business processes through AI and digital technologies

• Strengthen Governance

  Our Business Model and Competitive Advantages

Leverage strong earnings foundation to deploy value-added products aligned with market needs and achieve sustainable growth

Earnings foundation Stable, defensive, replacement-driven business (Economic resilience)

[Market configuration]

• Replacement-driven demand base

  (80% replacement; 20% new construction)

• "Heat" demand largely unaffected by social

  changes

• Essential goods business strongly resilient to economic cycles

• High barriers to entry due to safety regulations

  and certification requirements

• Robust sales and distribution networks to ensure stable supply

Our value chain strengths

Development Manufacturing Sales

Installation After-sales

/

construction service

[Distinctive strengths:

Quality + In-house production + Global supply]

-Quality-driven manufacturing

• High quality and profitability through in-house production of core components

• Agile response to local needs through localized global

  production

  
  
  
  
  
  
  

• Trusted brand grounded in technology, safety, and reliability

  Business model

  [External environment]

  • People's changing lifestyles

  • Progress in energy efficiency, electrification, and smart technologies

Technological foundation and supply capability

highly aligned with growth markets

Generate stable and continuous cash flows

Simultaneously deliver high quality, stable supply, and profitability

Leverage stable earnings and core technologies to invest in and expand into growth areas

Drive steady growth in existing businesses through strategies aligned with lifestyle changes in each region to strengthen management foundation

Mature markets

Growth driven by the continuous launch of strategic products Pursue growth by advancing proprietary technologies to enhance competitive advantage in realizing better lifestyles

Brand of enduring choice

Leverage information from communication with users to develop more attractive products and services

- Target regions: East Asia, North America, Oceania, and Europe

Countries where we have local subsidiaries and distributor presence High-growth regions among expansion markets

Untapped regions

Expand businesses aligned with needs of growth markets

Growth markets

In growth markets driven by "population and income growth and expanding gas infrastructure"：tap into rising demand for higher living standards by leveraging existing technologies and channels to "improve people's quality of life" in each market

• Expansion markets: Latin America and Southeast Asia

• New entry markets: India and Africa

Enhance functionality and added value of our proprietary technologies and pursue growth while strengthening our competitive advantage on a global

scale to improve people's lifestyles

Improve people's quality of life Address global environmental issues

Case study: Air bubble products Case study: Condensing products

Japan United States Australia

• Globally roll out water heaters equipped with ultra-fine bubble technology to

  "improve people's quality of life"

• Leverage ultra-fine bubble technology to enhance the value of hot water and expand into dishwashers (Japan launch: May 2026)

• Promote global transition to highly efficient condensing water heaters and boilers to support a low-carbon society

• Apply condensing technology refined for residential use to commercial water heaters to further support decarbonization

  Enduring Brand of Choice

• Integrate and analyze information gathered through user engagement to provide more appealing products and services

  New product planning

  (Product improvement/ideas)

  Improve service quality (Provide usage tips/support and appeal to potential customers)

  Provide new levels of value

• Repeat this cycle of delivering such offerings to users and become enduring brand of choice

  Become an enduring brand of choice

  Users

  Leverage AI and digital technologies to accelerate virtuous cycle

  Provide high-quality experiences

  Business meetings

  /trade shows

  Websites

  /catalogs

  Products/apps

  /IoT/AI

  Membership programs

  /user communities

  Inquiries

  /inspections/repairs

  Increase user satisfaction to drive long-term sales and profit growth

  Data/information

  Integrate/analyze

  Share feedback and utilize data on Groupwide basis

  Expand Businesses Aligned with Needs of Growth Markets

• Increase business in growth markets earmarked for population growth, rising middle class driven by income growth, and expanding gas infrastructure

• Leverage our technologies and sales channels to help "improve people's quality of life"

  Latin America

  Central American Common Market (CACM)

  Andean Community

  MERCOSUR (Southern

  Common Market）

  
  
  

  Brazil

  
  
  

  Tankless water heaters

• Expand business in regions where gas infrastructure is set to grow

• Divide Latin America into three economic blocks and use key countries

  where Rinnai has a presence as springboard to drive expansion

  MERCOSUR (Brazil)

  CACM (Costa Rica) Acquired in 2024

  Andean Community (Peru) Acquired in 2025

  Southeast Asia

  
  
  

  Indonesia

  
  
  

  Tabletop cookers

  
  
  

  Built-in hobs (stovetops)

• Regions earmarked for improved living standards driven by population and income growth: Strengthen profitability by expanding product lineups tailored to local needs as demand for convenience and safety increases

• Regions where our products have yet to gain traction: Reinforce our sales structure

  Build Foundations in Untapped Regions

• Leverage our strengths to build foundations in untapped regions earmarked for population growth and economic expansion

• Help improve people's quality of life and address global environmental issues for the growing middle-class consumer base

  Establish local subsidiaries and agencies Priority strategic regions

  [Trillions of yen]

  
  
  

  India

  Africa

  5,000

  4,000

  3,000

  2,000

  1,000

  0

  Future GDP projections

  2020 2030 2040 2050 2060

  Sources: Goldman Sachs; African Development Bank

  Africa

  Leverage existing business relationships to expand into promising regions primarily in the north and south

  India

  Pursue local expansion through partnerships, starting from major cities where infrastructure development is advancing rapidly

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

  Deploy our diverse product portfolio to tap market demand

  Medium-Term Business Plan "accelerate 2030": Business Strategies

New businesses

• Leverage strengths to tackle new fields

• Create new value by fusing proprietary technologies with advanced innovations

networks developed in gas appliances

• Strengthen stability of product supply

• Reinforce human capital

• Rebuild business processes through AI and digital technologies

• Strengthen Governance

  New Value Creation: Direction

Challenge new businesses adjacent to existing operations (innovative products and business models) and drive new value creation to resolve social issues

• Explore new needs across diverse regions to become enduring brand of choice

• Leverage strengths in proprietary technologies and established distribution channels to expand business scope

  Examples

Water treatment solutions to enhance water quality

Address expected water shortages and work to resolve

Low

High

country-specific water challenges

Example applications for everyday home use

Supply of value-added water

Reuse of waste water

Water purification

Filtration systems Sterilization

and water softening

• Fuse proprietary technologies (refined through existing product development) with advanced innovations to engage society based on Rinnai's vision

  of value

  
  
  

  engineering

  technologies

  Mechanical

  Combustion

  Proprietary technologies

  (strengths)

  New technologies

  ×technologies

  Sensor

  IoT

  AI

  technologies technologies technologies

  
  
  
  
  
  
  

  Examples

• Turn new seeds into reality to resolve social issues in health and lifestyles to consistently deliver inspiring value to consumers

  More comfortable living

  Accelerating New Value Creation

Deploy internal and external resources and step up initiatives to swiftly monetize new businesses

Internal initiatives

Promote deployment of internal resources

• Execute business strategies to further grow and solidify foundations of existing businesses

• Expand electrification business and seed new business fields with view to future

  Net Sales

  ¥470.0 billion

  Net Sales

  ¥620.0 billion

  Change in consolidated net sales (image)

  Solidify our foundations and achieve sustainable growth in existing businesses

  Expand lineup of electrified products (carbon neutrality)

  Create new value

  
  
  

  Fiscal 2026 Fiscal 2031 (plan)

  Medium-Term Business Plan "accelerate 2030": Business Strategies

New businesses

• Leverage strengths to tackle new fields

• Create new value by fusing proprietary technologies with advanced innovations

• Strengthen stability of product supply

  
  
  Solidify our foundations and achieve sustainable growth in existing businesses

  • Strengthen earnings base through continued launch of strategic products

  • Incorporate new needs and technologies to address evolving lifestyles

  • Deploy high-value-added products tailored to demand in growth markets

  Strongly protect

• Enter the electrification market in earnest in light of national energy policies.

• Roll out products tailored to regional characteristics centered on heat pump water heaters

• Build a competitive advantage by leveraging core technologies and sales

networks developed in gas appliances

• Reinforce human capital

• Rebuild business processes through AI and digital technologies

• Strengthen Governance

  Strengthen Stability of Product Supply

Fulfill responsibilities as a provider of essential goods by strengthening systems to ensure stable product supply to customers even in times of emergency

Establish and operate systems for stable procurement

• Practice multi-sourcing

• Ensure safe inventory buffer

• Strengthen information-sharing with suppliers

  Reduce operational shutdown risks

• Prepare for natural disasters (fires, earthquakes)

• Protect against cyberattacks

  Expand local production for local consumption

• Shorten transport distances

• Increase local sourcing of raw materials and components

  Practice responsible procurement

• Avoid use of conflict minerals

• Consider the environment and human rights

  Secure a stable talent base

• Advance automation through AI and robotics

• Enhance workplace environments and employee

  benefits

  Diversify transportation

• Secure multiple routes

• Develop alternative transport options

  Reinforce Human Capital

Strongly develop talent needed to "achieve sustainable and steady growth"

Reallocate personnel in line with business strategy

Complete DX transformation initiated under New ERA 2025 to help achieve financial targets

Rebuild business processes

Design DX

Shorten development lead times and reduce development costs

Manufacturing DX

Sales DX

Build smart factories (with improved production efficiency and advanced quality control)

Streamline/automate order processing and improve efficiency of sales activities

Strengthen customer engagement and propose sales activities

that support increased revenue

Indirect DX

AI/digital foundation

Customer engagement DX

Fully adopt AI (shift repetitive tasks, document preparation,

coordination tasks, etc., to AI)

• Leverage past initiatives to strengthen governance aimed at achieving sustainable growth of corporate value

• Maintain governance framework that enhances transparency and promotes appropriate risk-taking

  Enhance effectiveness of Board of Directors

Capital Policy

Aim to enhance corporate value and PBR by improving capital efficiency under a balanced capital allocation approach

Manage cash flow effectively and optimize cash levels

Raise awareness of investment returns and make disciplined investments in areas with high growth potential

Fiscal 2031 target: 10%

Fiscal 2031 target: 15%

Aim to achieve sustainable growth of ROE and ROIC

through secured profits exceeding the cost of capital

Medium-term management plan period: Pay progressive dividend increases in principle to provide stable and continuous shareholder returns

Implement flexibly with comprehensive focus on improving capital efficiency, capital

allocation, and share price

Secure liquidity necessary for business operations and achieve both financial soundness and capital efficiency

Approach to required levels of cash

• Set the required cash level at 2.5 x monthly sales (working capital)

• Deploy surplus capital (after internal reallocation) toward growth investments, strategic initiatives, and shareholder returns

  New ERA 2025

Approx. ¥244.4 billion

¥ 218.7 billion

In emergency scenarios (including disasters)

• In the event of large-scale natural disasters requiring additional funding: Respond without relying solely on cash on hand

Example: Foreign-currency deposits with embedded earthquake protection

¥130.0 billion

Required levels of cash

*Definition of liquidity

Cash and deposits + Available-for-sale securities

+ Investment securities − Shares of affiliates

Fiscal 2021 year-end

Fiscal 2026 year-end

Fiscal 2031 year-end

Pursue resource allocation that strengthens earnings power and financial resilience through disciplined strategic investments focused on returns and implementation of shareholder return policy

Inflows

Outflows

Investments

(tangible/intangible assets)

Operating cash flows ~ ¥180.0 billion

¥260.0 billion Including strategic

or more investments

~ ¥70.0 billion

Debt utilization

~¥10.0 billion

Shareholder returns

¥140.0 billion ~

• Dividend payout ratio: Approx. 40%

• Share buyback

Strengthening foundations of existing businesses

[Investment examples]

Expansion of electrified products Increase investments in development of electrified products for overseas markets and in production facilities

Strengthening foundations of existing

businesses

Increase added value of IoT-enabled devices

Build foundations in untapped regions

New value creation

Utilize external resources, etc.

Expansion of electrified products

64%

Strategic investment:

Investments to strengthen competitiveness and support future growth (M&As, etc.)

[Breakdown of

strategic investments]

New value creation

14%

22%

Inflows Outflows