It has been two years since Mr. Uruma became President & CEO, and we are making a big company-wide move toward growth such as introduction of Business Area (BA) management structure and large-scale structural reforms. The MELCO PLUS Editorial Team asked Mr. Uruma for his candid views on topics that we believe are of great interest to many employees.
1. What do you wish to convey regarding the corporate strategy announced in May?
In fiscal 2023, we posted consolidated revenue of 5.36 trillion yen, achieving one of the targets of our medium-term plan—revenue of at least 5 trillion yen—a full three years ahead of schedule. I am sincerely grateful for everyone’s efforts behind this remarkable achievement. We will now sharpen our focus on achieving an operating margin and return on equity (ROE) of 10% as well as newly emphasize return on invested capital (ROIC)* and asset efficiency. We will no longer be satisfied with simply being in the black and instead we will make decisions based on ROIC, including the efficient use of assets and achieving profits that exceed investor expectations. I am therefore asking everyone to gain a firm understanding of this new approach.
* Indicates how efficiently we allocate procured capital to generate profit. Mitsubishi Electric’s version of ROIC = Profit after tax ÷ (working capital + fixed assets)
2. Why was it necessary to spin off the automotive equipment business?
I think many of you were surprised to learn that we were spinning off the automotive equipment business. The reason, however, is not that the business is in the red. Rather, our intention is to take on the bold challenge of regrowing our automotive equipment business and transforming them into a “winning business.” The structure of the automotive industry is changing rapidly, so it is vital that we streamline decision-making processes and speed up business operations. Additionally, initiatives to achieve electrification and autonomous driving will require huge investments and there are limits to how much one company can do this alone. Separating the business as an independent entity will allow us to search for ideal partners who can offer us technical synergies for creating a business structure capable of charting a solid growth path.
3. What is your vision of a “Circular Digital-Engineering” company?
For many years, we have taken pride in offering highly competitive components (devices), but we have not been able to fully utilize the data they generate. Now, however, we intend to collect and analyze this data in a company-wide digital space, and to share and utilize the results throughout our Group. This will enable us to further enhance our components and integrated solutions to deliver new value to customers. This cycle is what I aim to achieve in becoming a Circular Digital-Engineering company that continuously creates value by integrating strong components with the power of digital technology. I want to leverage our strengths through unique digital transformation (DX) strategies to play a strong role in solving social challenges.