Midterm Business Plan
Midterm Business Plan (FY2021 to FY2023)
For five years from 2016, we engaged in the previous Medium-Term Business Plan with the goal of “sustainable growth through innovation.” However, the management and business environments were harsher than we expected when the plan was first established, and while we did achieve some outcomes, we fell far short of our performance goals. Upon reflection of past events, in the three-year Midterm Business Plan starting 2021, we have returned to the Roland DG group’s slogans of “Creativity, BEST, Cooperative Enthusiasm” and will aim to transition into a lean organization capable of sustainable growth.
February 17, 2021 | Presentation, 2021-2023 Mid-term Plan
Midterm business plan vision
Return to the true Roland DG of “Creativity, BEST, Cooperative enthusiasm”
Evolve into a lean organization and build the next mountain of business
- Be a "Niche Market Creator"
- Diversifying needs and digitalization are a chance to use our strengths
- Create new markets by fully leveraging strengths and shift from analog to digital
- Pioneer the Future by "Digital & Co-creation"
- Actively expand circle of Co-creation and use digital tech to create new value and markets
- “Connected” is the key
- Establish a "Culture of Challenge"
- Instill the ambition to seek new challenges into each and every member of our group
- Reborn as a lean organization
- Strong against risk, ready and able to take on all challenges
Midterm plan core strategy
- Lean organization
- Business Portfolio Transition
We will undertake structural reforms to strengthen our competitiveness and respond flexibly to changes in the business environment. At the headquarter, we have implemented an early retirement program to optimize headcount in March 2021 and undertake structural reforms such as reducing costs and integrating our production locations globally. With these efforts, we will aim to reduce fixed costs by approximately 2 billion yen. We will also undertake a thorough review of internal processes to balance efficiency improvement in operations and quality, and solidify the foundations for business growth.
Reduce 2B fixed cost globally through cost control and production location integration
c. 2B (JPY)
- 1. Production: Location Integration
- Shift mass production to Thailand
- Tun Japan into a mother factory
- Shift supply chain function to Thailand
- 2. HQ: Optimize headcount, manage cost
- Implement early retirement program
- Continuous cost management
- 3. Sales subsidiaries: Regional reorganization, manage cost
- Implement reorganization and optimization by region
- Manage cost by leveraging remote/online methods
Business Portfolio Transition
We will focus on growth markets and new markets while striving for efficiency in our existing businesses. With sales in growth markets and new markets accounting for a total of 2.5 billion yen in 2020, we are targeting 10 billion yen by 2023. By breaking free of the sales structure that is dependent on the signage market (outdoor signboards), we will aim for a new stage of growth.
- Growth M
- Diversify solutions and improve efficiency
- Growth Market
- Full-scale entry by dedicated models
- New Market
- Develop niche markets
- SaaS, connected, remote services
Existing Businesses: Diversify solutions and improve efficiency
Diversify Solution and improve efficiency
- Digital Printing
- Launch non-solvent product line
- Streamline operation to improve efficiency
- Expand target application
- Develop dental clinic market
- Reduce cost to improve efficiency
With the maturing of the signage market, which is our mainstay market, and the entry of major corporations into this market, price competition has intensified.
- From the perspective of environmental consideration, the market is expected to shift toward non-solvent inks.
- Streamline operation to improve efficiency
We will develop the dental clinic market through proposals that meet the needs of customers.
- We will propose the production of dentures and implant bases as new areas with digitization potential.
- Chair-side solutions (making prosthetics in-house) are expanding among dental clinics, particularly overseas, to provide “One-visit treatments,” fueled by COVID prevention needs.
Growth Market: Full-scale entry by launching dedicated models
Full-scale entry by launching dedicated models
- Develop growth markets where we have less footprint
- Introduce dedicated product models for both DP & DGSHAPE
We aim to make a full-scale entry into emerging countries which have future potential for market growth. We need to urgently develop dedicated models with functions and prices tailored to meet those markets. We will achieve this through collaborations with external partners and transferring production to our Thai factory. We will strive to increase sales and market share in both the DP and DGSHAPE Businesses through strategies that are suited to the competitive environment.
New Market: Develop niche markets
Develop niche markets
- Target new “3D object decoration” printer market that will emerge by personalization trend
- Leverage current Co-Creation know-how to rapidly develop new markets
- Develop new areas esp. around medical systems at DGSHAPE
We will accelerate the identification of personalization needs developed through our expansion into retail markets and Co-Creation activities. By proposing the digitization of printing processes, where we excel, we will agilely develop niche markets.
- DP Business:
- We established a dedicated team for the Co-Creation of products for specific applications mainly in Europe. This team generated sales of 0.6 billion yen in 2020. By rolling this initiative out globally, we will target sales of 3.0 billion yen in 2023.
- DGSHAPE Business:
- We will aim to establish business in the medical and healthcare fields through a solution which provides traceability systems for surgical instruments ensuring safety and security in the medical field and inventory management systems that improve efficiency for hospital management.
Use connected technology to add value
Start Roland DG Connected
Roland DG Connected Service
- Maintenance Service:
- Prevent breakdowns to reduce downtime
Launch in 2021
- Workflow Service:
- Visualize business process
Launch in 2021
- Business Management Service:
- Automate business
Launch in 2021
- Market place:
- Provide platform to build new market opportunities
In 2021, we have launched software-based connected services as a new, overarching initiative. By connecting with users, we aim to prevent product breakdowns, visualize business process, and automate business. Our future aim is to build platforms that will connect users with each other and provide new market opportunities. By leveraging connected services to streamline users’ operations and assist with their business, we aim to enhance customer loyalty.
Financial Strategy and Financial Target
In addition to maximizing profitability, we will enhance our ability to generate cash by improving the Cash Conversion Cycle (CCC)* through inventory reductions and other means. We will allocate that cash to growth areas and generate “+α” (extra) growth through investments including M&As.
*CCC: Indicator of efficiency of fund operations, expressed as the number of days from purchase until the recovery of cash from sales.
(Final year target)
|Sales (billion yen)||34.7||48|
|Operating profit (billion yen)||0.5||6|
|Operating profit ratio||1.4%||12.5%|
Shareholder return is a key managerial focus for the Company. We aim to provide stable dividends to our shareholders taking into account the cash needs for investment to drive sustainable growth as well as the risk, financial performance and stability.
Specifically, while also accounting for future business needs, we will set 30% payout ratio to consolidated net income and 2% dividend on equity (DOE) as our metrics and pay the higher of the two amounts in order to provide stable dividends to our shareholders.