Responsible Department
Each business location and department
Stance and Target
Why is “Economic Performance” a critical issue to be addressed?
Explanation of the reason and background
The Yokohama Rubber Group’s GD2020 Medium-term Management Plan was launched in FY2018.
The basic assumptions underpinning GD2020 are that global demand for tires will grow more rapidly than the rate of increase in the number of motor vehicles produced worldwide, but that competition in the tire market will intensify as tire manufacturers in emerging markets expand their production capacity. Faced with this business environment, Yokohama Rubber has identified three key issues that it needs to focus on: (1) Enhancing our product mix by concentrating resources on high-value-added products; (2) Ensuring that we maximize the benefits from already completed large-scale investment projects and acquisitions; (3) Strengthening our financial position.
Vision (attainment goal) / target Phase IV (FY 2015 to 2017)
Our positioning for the GD2020 Medium-term Management Plan emphasizes “Being prepared for further growth in the 2020s by strengthening our business foundations through the redefining of Yokohama Rubber’s strengths and by implementing growth strategies for each of our businesses that contribute to the enhancement of a unique growth path for each business.”
Our financial targets for the year 2020 are to achieve sales revenue of 700 billion yen, operating income of 70 billion yen, and an operating profit margin of 10%. We are also aiming to achieve a debt/equity ratio (D/E ratio) of 0.6 and a return on equity (ROE) of 10% by the end of FY2020.
Quantitative targets for 2020
-
Sales revenue 700 billion yen Operating income 70 billion yen Operating margin 10％ -
ROE (net income) 10％ D/E ratio 0.6
Measures for vision achievement
The growth strategies for each of our business areas are outlined below. We will also be implementing a technology strategy and brand strategy that make effective use of our company’s strengths.
| Consumer tires business strategy | Further enhancing our presence in the premium tire market |
|---|---|
| Commercial tires business strategy | Positioning off-highway tires as a key growth driver that will support revenue growth over the next 100 years |
| MB operations business strategy | Focusing resources on areas where we are particularly strong |
To strengthen our business foundations, we will be focusing on five key areas: Corporate social responsibility (CSR), human resources strategy, corporate governance, risk management, and financial strategy. In regard to financial strategy, we will be utilizing the cash-flow generated through effective implementation of our growth strategies to strengthen our financial position (by reducing interest-bearing debt, etc.) while also providing appropriate returns to shareholders.
Review of FY 2017 Activities
Distribution of economic value to stakeholders
| Stakeholders | Distribution amount (million yen) | Calculation method | ||
|---|---|---|---|---|
| FY 2017 | FY 2016 | FY 2015 | ||
| Business partners and suppliers | 260,685 | 250,606 | 282,664 | Cost of sales + SG&A expenses (excluding personnel expenses) |
| Employees | 52,370 | 52,230 | 62,344 | Cost of sales + SG&A expenses (personnel expenses) |
| Shareholders | 9,140 | 8,339 | 7,747 | Dividends paid |
| Creditors | 2,915 | 2,699 | 2,961 | Interest paid |
| Government and administration | 17,115 | 12,638 | 20,177 | Corporate taxes, etc. paid |
| Society | 110 | 21 | 12 | Donations (entertainment expenses), etc. [High school and university laboratories] |
| Internal | 8,490 | 10,112 | 3,937 | Net income - dividend amount |
| Total | 350,825 | 336,645 | 379,842 | |
* The figure for “Creditors” and “Government and administration” are for Yokohama Rubber on a consolidated basis, while the other figures are on a non-consolidated basis.
Considerable financial assistance received from government
The amount of financial assistance in taxes and subsidies received from national and municipal governments was 51.7 million yen.
