To bolster profitability, under the common slogan of “Benchmarking Against Fuji Electric in the Past,” all employees reviewed the way the Group does business from ground up, continuously implemented Pro-7 Activities that aim to enhance work quality, and implemented thorough cost reductions through centralized Group purchasing, global procurement, moving operations in-house, and expense reductions through improved operational efficiency. In addition, by promoting local production and local consumption, we have been able to reduce foreign exchange risk by decreasing the negative impact of exchange rate movements.

The FY2018 Medium-Term Management Plan targets net sales of  ¥900.0 billion, with operating income of  ¥54.0 billion, and profit attributable to owners of parent of  ¥34.0 billion. Despite an uncertain outlook for the global economy and the adverse effect from the yen’s appreciation, we are aiming for an operating margin of more than 6%.

We also plan to maintain the equity ratio at 32%, and with profit growth, ROE of 12%. Our policy of bolstering profitability to improve our financial position, while using the cash generated by corporate activities to invest for medium-to-long term business growth, and providing returns to shareholders in line with profit growth, is unchanged.

We believe Fuji Electric’s further development requires three steps.

First, we need to review our structure to utilize our strengths. We have a strong track record with customers in power electronics, and we will enhance these components and expand the business by using combinations of these strong components to provide systems to customers. With developments in IoT and other manufacturing reforms and growing demand for energy, today we need to provide stable supplies of energy in harmony with the environment. We are building a structure that focuses on two areas: automation, labor savings, and energy conservation with drive control systems as the core product, and stable supplies of electricity with power supplies as the core product. Specifically, we are innovating operations in the industrial infrastructure and power electronics businesses, and also through the electric power distribution being carried out by the social engineering systems business.

The second step is to expand our overseas business. We will achieve results from the M&A we have conducted to date and carry out new M&A that bring the scale of our business to the next level. In Asia, we have set up the APAC Regional Corporate Strategy Office, in Singapore, which is responsible for ASEAN countries, to optimize and expedite our businesses in the region. Managing both the industrial infrastructure and power electronics businesses together, functions from marketing and sales to engineering are integrated, with the aim of growing the business by maximizing our strengths and differentiating ourselves from other companies.

The third step is to create high-value-added products that meet customer demand. Traditionally, we have primarily developed products that were merely replacements for previous products. The contribution to profits from replacement products is limited. We need to return to our roots as a manufacturer and focus on developing and creating products that customers need and want. This means developing businesses that will support the Company in five to 10 years.

Capital investment will go primarily to overseas production bases and the strengthening of our manufacturing capabilities utilizing the IoT.

With regard to research and development, we will accelerate our development of SiC devices and modules, which are next generation power semiconductors, toward the development of competitive, high-value-added products focusing on electronic devices and power electronics, and use these devices and modules to develop SiC-equipped power electronics equipment. Looking further into the future, upfront investment will emphasize the development of modules for automobiles and railway rolling stock.

Human resources are the driving force behind all of these initiatives. Fuji Electric’s corporate slogan is “to be enthusiastic, ambitious, and sensitive.” “Enthusiasm” means the creative enthusiasm to create new things. “Ambition” means setting high goals and working hard to achieve them. “Sensitive” means being a spiritually rich person who appreciates small things and shares the joys of customers as their own. This slogan can be regarded as Fuji Electric’s DNA, and placing importance on these traits also puts an emphasis on developing human resources who can perform at the global level and encouraging women to play active roles.

In terms of global human resource development, we carry out regular training programs for employees at various levels. In addition, to grow as the Company of the future, it is essential to have female employees play a more active role, and we aim to increase the number of female officers to 300 by fiscal 2020, from the current 172.

In addition, as Japan’s birthrate declines and society ages, we will work to create a corporate environment that can accommodate flexible working styles, including enabling employees to balance work and nursing care for family members, to support a diverse range of employee lifestyles.

Fuji Electric’s concept of CSR is to contribute to society through business activities using energy and environment technologies, while at the same time taking into consideration the effect of all of its corporate activities on society and the environment.

To promote CSR on a global basis, we are a member of the United Nations Global Compact (GC), and its 10 principles, covering the four fields of human rights, labor, the environment, and the prevention of corruption, are reflected in the Fuji Electric Code of Conduct, which directly impacts our daily activities and corporate actions.

Corporate governance has recently become increasingly important. Fuji Electric complies with Japan’s Corporate Governance Code, and it will continue to strive to increase management transparency and soundness, and to enhance corporate value even further.