G :Governance
Corporate Governance
Economic Performance
Responsible Department
Each business location and department
Our position and Targets
Why is “Economic Performance” a critical issue to be addressed?
Explanation of the reason and background
The Yokohama Rubber Group launched its new medium-term management plan, "Yokohama Transformation 2026" (YX2026), in 2024.
The previous medium-term management plan, "YX2023," focused on both "deepening" the strengths of our existing businesses and "exploring" new value propositions to meet the evolving needs of the automotive industry. We vigorously pursued this across all business domains, enhancing product development, production, and sales. Furthermore, we undertook initiatives to bolster market competitiveness through acquisitions and business restructuring.
In particular, the tire business underwent significant transformation, shifting the sales ratio of consumer tires to commercial tires from 3:2 to 1:1, aligning it with market size. This "grand strategy" aimed to strengthen the highly profitable OHT (off-highway tire) business.
To enhance asset efficiency, we strategically executed the sale of businesses, subsidiaries, policy-held stocks, and idle assets. Funds generated from these activities were reinvested strategically to fuel growth and enhance corporate value.
Building upon the success of "YX2023," we aim to drive further corporate value enhancement by continuing these initiatives with even greater vigor.
The previous medium-term management plan, "YX2023," focused on both "deepening" the strengths of our existing businesses and "exploring" new value propositions to meet the evolving needs of the automotive industry. We vigorously pursued this across all business domains, enhancing product development, production, and sales. Furthermore, we undertook initiatives to bolster market competitiveness through acquisitions and business restructuring.
In particular, the tire business underwent significant transformation, shifting the sales ratio of consumer tires to commercial tires from 3:2 to 1:1, aligning it with market size. This "grand strategy" aimed to strengthen the highly profitable OHT (off-highway tire) business.
To enhance asset efficiency, we strategically executed the sale of businesses, subsidiaries, policy-held stocks, and idle assets. Funds generated from these activities were reinvested strategically to fuel growth and enhance corporate value.
Building upon the success of "YX2023," we aim to drive further corporate value enhancement by continuing these initiatives with even greater vigor.
Vision (attainment goal) / target
The "Yokohama Transformation 2026" (YX2026) builds upon the success of the previous medium-term plan, "Yokohama Transformation 2023" (YX2023), by further deepening the strengths of our existing businesses and exploring new value propositions. With a resolute commitment to leaving no negative legacy for future generations, YX2026 will serve as the "grand finale" of our transformation journey.
Guided by this vision, we will aggressively execute growth strategies across all business units, aiming to achieve "Hockey Stick Growth" (exponential growth) by the end of YX2026 or during fiscal year 2027.
For fiscal year 2026, we project the following ambitious targets:
Guided by this vision, we will aggressively execute growth strategies across all business units, aiming to achieve "Hockey Stick Growth" (exponential growth) by the end of YX2026 or during fiscal year 2027.
For fiscal year 2026, we project the following ambitious targets:
- Revenue: ¥1,150 billion
- Operating Income: ¥1,300 billion
- Operating Income Margin: 11%
- ROE (Return on Equity): Over 10%
Quantitative targets for 2026
| Revenue | 1.15 trillion yen |
|---|---|
| Operating Income | 130 billion yen |
| Operating Income Margin | 11% |
| Equity Ratio | Around 50% |
| ROE | Over 10% |
| Operating Cash Flow | 385 billion yen (Cumulative over 3 years) |
| Capital Expenditure (CAPEX) | Within Depreciation (Excluding Strategic Investments) |
| Consumer Tires | The consumer tire market has witnessed a surge in low-cost, low-priced tires from emerging manufacturers, leading to increased market share. YX2026 aims to counter this trend by aggressively maximizing the proportion of high-value-added products, driving profitability. To achieve "Hockey Stick Growth" and compete effectively against the cost competitiveness of emerging players, we will implement a "One-Year Factory" initiative, aiming to build and operationalize a new factory within a single year. To further maximize the proportion of high-value-added products, we will continue to promote the adoption of our tires as original equipment on premium vehicles and actively participate in global motorsports to enhance brand value. Additionally, we will continue to implement our "Product and Regional Business Strategy," strengthening our development, supply, and sales capabilities in alignment with regional market trends. |
|---|---|
| Commercial Tires | Off-Highway Tires business The OHT market is projected to be worth approximately ¥4 trillion, with an anticipated annual growth rate of 6%. This represents a significantly higher growth rate than the 2% annual growth expected in the consumer tire market, indicating strong potential for expansion.Yokohama Rubber Group currently holds the top market share in agricultural and forestry machinery tires, which are expected to account for around 40% of the OHT market. We will leverage our multi-brand strategy, encompassing Tier 1 to Tier 3, to further strengthen our position by capitalizing on our strengths in manufacturing, sales, and technology. In the industrial and port vehicle tire market, which is estimated to represent 25% of the OHT market, Yokohama Rubber Group currently holds the second-largest market share. We will expand the reach of our specialized tire maintenance service, "Interfit," provided by dedicated staff. While our share in construction and mining vehicle tires remains relatively small, we will explore "Programmatic M&A" opportunities to drive growth in this segment and across the OHT business as a whole, targeting "Hockey Stick Growth." In addition to expanding production capacity, we will accelerate the creation of synergies within the Yokohama Rubber Group, following the acquisition of Trelleborg Wheel Systems (now Yokohama-TWS or Y-TWS) in May 2023. Truck & Bus Radial business The TBR (truck and bus) tire market is facing increased competition from emerging tire manufacturers, who are expanding their production and market supply. In response, governments in Europe and North America have implemented protective measures such as anti-dumping and countervailing duties.Yokohama Rubber Group will capitalize on these measures by focusing on sales in countries and regions where fair pricing is maintained, aiming for profitable growth. |
| Multiple Business | The MB (Multiple Business) segment has established a profitable foundation through the restructuring and cost improvement initiatives implemented during "YX2023." Under "YX2026," we will position the hose and piping business as a "growth driver" and undertake value chain restructuring and production structure reform in North America. In the industrial materials business, we will solidify our dominant market position in conveyor belts within Japan and implement internal improvements to achieve a stable, high-profit structure in marine hoses. Overall, the MB segment aims to achieve a 10% operating profit margin by fiscal year 2026, enhancing its presence within the Yokohama Rubber Group. |
| Technology/production | "YX2026" will focus on strengthening the foundation of the Yokohama Rubber Group as a whole, guided by the motto "High quality, affordable, and fast." "High Quality" will involve strengthening the adoption of our tires as original equipment on next-generation premium vehicles. "Affordable" will be achieved through a fundamental and aggressive cost reduction strategy, ensuring competitive pricing. "Fast" will involve accelerating tire development and pursuing the "One-Year Factory" initiative, a key element of the "Hockey Stick Growth" strategy for consumer tires. |
Financial Strategy："YX2026" will prioritize enhancing corporate value through strategic investments aimed at achieving "Hockey Stick Growth."
Asset Efficiency: We will further advance the sale of policy-held stocks to optimize asset allocation.
Capital Structure: We will strive to achieve an optimal capital balance aligned with our business structure, targeting a 50% equity ratio.
PER (Price-to-Earnings Ratio) Improvement: We will enhance investor relations (IR) events through increased information dissemination and dialogue to reduce capital costs and improve expected growth rates.
Capital Allocation: Out of the projected cumulative cash inflow of approximately ¥450 billion over the next three years, around ¥320 billion will be allocated to strategic and operational investments.
Shareholder Returns: While prioritizing investments for sustained profit growth, we remain committed to our fundamental policy of maintaining stable dividends while ensuring sufficient internal reserves for future business development and strengthening our management structure. We aim to steadily increase dividends in a stable and continuous manner.
New Medium-term Management Plan YX2026
Asset Efficiency: We will further advance the sale of policy-held stocks to optimize asset allocation.
Capital Structure: We will strive to achieve an optimal capital balance aligned with our business structure, targeting a 50% equity ratio.
PER (Price-to-Earnings Ratio) Improvement: We will enhance investor relations (IR) events through increased information dissemination and dialogue to reduce capital costs and improve expected growth rates.
Capital Allocation: Out of the projected cumulative cash inflow of approximately ¥450 billion over the next three years, around ¥320 billion will be allocated to strategic and operational investments.
Shareholder Returns: While prioritizing investments for sustained profit growth, we remain committed to our fundamental policy of maintaining stable dividends while ensuring sufficient internal reserves for future business development and strengthening our management structure. We aim to steadily increase dividends in a stable and continuous manner.
Review of FY 2023 Activities
Distribution of economic value to stakeholders
Move the screen to the left or right to see the table information
| Distribution amount (million yen) |
Calculation method | |||
|---|---|---|---|---|
| Stakeholders | FY 2023 | FY 2023 | FY 2021 | |
| Business partners and suppliers | 310,055 | 323,773 | 246,427 | Cost of sales + SG&A expenses (excluding personnel expenses) |
| Employees | 53,574 | 52,153 | 53,204 | Cost of sales + SG&A expenses (personnel expenses) |
| Shareholders | 10,767 | 10,603 | 10,277 | Dividends paid |
| Creditors | 6,155 | 2,890 | 2,158 | Interest paid |
| Government and administration | 24,284 | 28,444 | 12,951 | Corporate taxes, etc. paid |
| Society | 76 | 198 | 214 | Donations (entertainment expenses), etc. [High school and university laboratories] |
| Internal | 68,285 | 30,911 | 29,682 | Net income - dividend amount |
| Total | 473,196 | 448,972 | 354,913 | |
- 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 1,665 million yen.
