Summary of our Medium-Term Management Plan "FELIZ 115"
Positioning of the Medium-Term Management Plan "FELIZ 115"
The five-year medium-term management plan "FELIZ 115" launched in April 2020 is based on the implementation of ongoing charges that will occur over the next 100 years, with a focus on the social environment of 2030. Despite the increasing uncertainty throughout the world, we expect the economy to grow steadily, centered on the United States.
The DKS Credo "contributing to the nation through industry" is eternal.
We will focus on five SDGs we selected to which we will dedicate particular effort to achieve the corporate image we aim for 2030.
SDGs Targeted by DKS
Overview of "FELIZ 115"
Logo
FELIZ
This word means happiness in Spanish. DKS chose "FELIZ" because we want to provide stakeholders with happiness. Each letter in the word FELIZ represents one of the five themes of our medium-term management plan in English.
FUTURE
ENVIRONMENT
LIFE
INNOVATION
Z・FLAG / CHALLENGE
115
Looking ahead to the final year of this plan in 2025, this number expresses our plans for the 115th anniversary of our founding.
Basic Approach
- 1. We aim for the achievement of qualitative enhancements in ACTUAL (existing) businesses, the expansion and reinforcement of NEXT (peripheral) businesses, and the development and cultivation of DREAM (new) businesses.
- 2. DKS will maximize the use of total assets resulting from systematic capital expenditures, aiming for an asset turnover ratio of 0.88 times, which is equivalent to annual sales. We will strengthen customer-specific marketing in parallel with product-specific management.
- 3. We will establish a headquarters system for sales, R&D, production and administration, and optimally allocate management resources. We will continue employee happiness management with a performance evaluation system that rewards contributions, to meet the expectations of the four stakeholders surrounding DKS and to enhance corporate value.
FELIZ Matrix: Meeting the Expectations of Our Four Stakeholders| Employees | Shareholders | Customers | Society | |
|---|---|---|---|---|
| F Future | Create on your own | PBR = ROE × PER | Reciprocal partner | Humans or AI |
| E Environment | Distribute according to contribution | ESG-based management | CtoB logistics | Survival of the fittest |
| L Life | Health first | Long-lived brand | Healthcare | 100 years of life |
| I Innovation | Lightning speed | Market capitalization above ¥50 billion | New sales models | 5G life |
| Z Z-Flag/Challenge | Behavioral changes | All-time highest profit | Development-oriented | Era of happiness |
Action Strategy
- 1. Establish ESG-based management targets in line with five of the SDGs (3,7,9,12,17); maintain our position as a top industrial chemical company.
- 2. Increase profits in the electronics, information, environment and energy fields; focus management resources on business development in the life sciences field.
- 3. Transform the marketing strategy significantly to increase the commercialization rate and shorten development periods.
Priority Measures
- 1. Withdraw from noncontributing businesses within the first 1-2 fiscal years.
- 2. Realize early returns on advanced business investments in the Kasumi Plant and other areas.
- 3. Revise the performance evaluation and remuneration systems; establish a system corresponding to contributions.
Management Objectives
| (Consolidated; Billions of yen) | FY2019 Results | FY2024 Targets |
|---|---|---|
| Net Sales | 61.4 | 70.0 |
| Operating income | 4.1 | 4.5 |
| Operating margin | 6.8% | 6.4% |
| Asset turnover ratio | 0.78 times | 0.88 times |
| Capital expenditures | 6.1 | 14.4 (Five-year cumulative total) |
| ROE | 6.4% | 7.3% |
Further Information
- 1. A period of sluggish performance continued for about thirty years, with no increase or decrease in neither net sales nor total assets. Since the 21st century, we have strived to improve our corporate culture by various measures, such as making Yokkaichi Chemical Co., Ltd. a wholly owned subsidiary, purchasing new factory sites, and starting construction of new facilities. Although we hit rock bottom due to the Global Financial Crisis(GFC) of September 2008, earnings from products manufactured in the new factory at the beginning of the former medium term management plan "REACT1000" accounted for 50% of total earnings.
- 2. We have initiated all the 20 slogans that indicate the relationship with our four stakeholders listed in the REACT matrix formulated during the "REACT 1000" plan. We shall improve or withdraw from noncontributing businesses within the first two fiscal years of the "FELIZ 115" plan, and from the third fiscal year onward, we will strive to improve ROIC by increasing the return on invested capital. During our next five years, we will further pursue happiness-based management.
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