Our Group is constantly on the wave of change and progress, and there is certainly no shortage of news that may be of interest to all of us. The MELCO PLUS editorial team asked President and CEO Uruma for his opinion on the revised financial targets for fiscal year 2026, and the introduction of the new digital platform “Serendie.”
1. What are the key points of the Company-wide Corporate Strategy Announced in May?
We have lowered our operating profit ratio target of 10%, one of our financial targets for fiscal 2026, to “8% or more with revenue of 5 trillion yen or more.” Unfortunately, since the business environment for factory automation and air conditioning has deteriorated significantly recently, we have determined that it will not reach the level expected in the Medium-term Management Plan in the short term.
If we set revenue at 5 trillion yen, we will aim to achieve an operating profit that exceeds 400 billion yen. However, I believe it will be difficult to achieve this based on our approach so far.
In this context, balance sheet (B/S) management is important. In fiscal 2025, Mitsubishi Electric made a major shift to B/Smanagement based on ROIC1. Each division is responsible for reaping the benefits of its investments and strengthening profitability, which will lead to achieving the Company-wideROIC target. I would like you to ask yourself if you are increasing sales overhead and labor costs simply because you have been taking that approach for a while now or because you do not have enough manpower. It is necessary for each and every one of you to be keenly aware of what effect you can expect from your investment, and to work on improving asset efficiency and profitability by reducing costs, reducing inventory, and improving order placement efficiency.
Going forward, we will measure investment effectiveness and concentrate investments in areas where returns can be expected. Let us work on transforming the structures of each of our businesses and firmly establish a foundation for B/S management by the end of this fiscal year.
2. What are the aims behind digital platform “Serendie”?
To find solutions for societal challenges through “Circular Digital-Engineering,” we announced Serendie, a digital platform comprising a data analysis system and a Web API integration system.
Using Serendie, we will promote the aggregation of data from various components and systems, including electric power, buildings, air conditioning, home appliances, housing equipment, railroad electrical equipment, and factory automation equipment, through Web API, and utilize the collected dataacross business divisions to create new solutions across business domains. Additionally, we will also enhance the performance and functionality of each component and system. These solutions utilizing data and components collecting data will be defined as Serendie-related businesses, which will create a new earnings pillar.
I would like for you to actively propose ideas for data utilization and the provision of new solutions in your respective businesses.
3. Please tell us about the progress being made on the business portfolio strategy front and about how management decisions are made
Several months have passed since Mitsubishi Electric Mobility Corporation commenced operations, which has initiated the large challenge of achieving regrowth in the automotive equipment business. In the electrification business, Mitsubishi Electric Mobility Corporation decided to establish a joint venturecompany with Aisin Corporation as a partner with whom we can expect the best technological-based synergies amid the rapid structural changes in the automotive industry.
Also, we decided to transfer our Nagoya Works distribution transformer business to Hitachi Industrial Equipment Systems Co., Ltd. Power distribution transformers need to be significantlyimproved in two years based on the Top Runner Program, part of the Energy Efficiency Act. This decision was made after considering returns commensurate with the investment.
For the Mitsubishi Electric Group to continue growing, it is necessary to implement measures appropriate to the characteristics of each business and build a business structure that can firmly establish a growth path. I would like you all to demonstrate your abilities for the growth and development of the business you are involved in under the new systems and conditions.