Investor Relation

Message to Shareholders

Aiming for Further Growth and Greater Social Contribution Our New Medium-Term Management Plan, VISION 2025 President & Representative Director Atsushi Tokushige

Fiscal 2022, the year ending March 31, 2022, is the first year of our new medium-term management plan, VISION 2025. This new four-year management plan continues the momentum of VISION 2020 and is aimed at further increasing enterprise value and contributing to society though our businesses.

Review of VISION 2020

Results of VISION 2020

Our medium-term management plan VISION 2020 began in fiscal 2016 and concluded in fiscal 2021. I would like to describe the initiatives undertaken during this six-year period and review the results.

VISION 2020 was based on the principles of growth, stability and value creation and targeted \200 billion in net sales, an ordinary income ratio of 3.5% or higher, and ROE of 15% or more in fiscal 2021, its final year. The plan aimed for stable earnings growth in the Computer Networks and Electronics Components businesses, which it positioned as core businesses. At the same time, in the Private Brand Business, the plan sought to establish a business structure to reinforce the development, manufacture and sale of competitive, unique products that leverage the Group’s expertise.

In the Computer Networks Business, we worked to build a stock business model incorporating mainly service businesses, while in the Electronic Components Business, we sought to expand trading rights based on the reinforcement of technical support capabilities. In the Private Brand Business, we made AVAL NAGASAKI CORPORATION (now TED Nagasaki) and FAST CORPORATION consolidated subsidiaries, expanding our business domains and working to reinforce our business infrastructure with the aim of generating synergies with existing businesses to power growth.

As a result of these efforts, in fiscal 2021, net sales totaled \143.2 billion, the ordinary income ratio stood at 3.2%, and ROE came to 11.4%. These results fell short of our targets, reflecting an overly optimistic view of changes in the business environment and planning and forecasting. However, ordinary income, net income attributable to owners of parent, year-end market capitalization and annual dividends reached their highest levels since Tokyo Electron Device was listed. As such, I believe we achieved a certain amount of success in terms of several of our main management indicators.

We will make full use of the experience and lessons learned from these six years as we push forward even harder toward the achievement of the new four-year plan, VISION 2025.


Medium-Term Management Plans:
Results and Plans

New Medium-Term Management Plan, VISION 2025

VISION 2025 is a new medium-term management plan that continues the momentum of VISION 2020. In terms of the business environment, the plan anticipates the arrival of Society 5.0 beginning in 2025. Given this, we have defined our mission under VISION 2025 as “Driving digital transformation” and our vision as “To become a manufacturer with technology trading company functions.”

Digital transformation: The application of digital technologies to create innovative new frameworks, services and businesses.

BUSINESS ENVIRONMENT ―The Arrival of Society 5.0

We predict that in 2025, the transition of the world around us will be underway, from Society 4.0, in which sharing information became easier, to Society 5.0, a highly efficient smart society that achieves high levels of optimization through systems.

In Society 5.0, cutting-edge technologies, such as IoT and robotics, will be capable of replacing certain human resources, improving efficiency and saving labor. Furthermore, data collection and analysis based on AI and big data Technologies will enable the efficient provision of the right goods and services to those who need them, when they need them.

In this highly efficient smart society, a wide range of highly optimized systems will become available.

OUR MISSION ―DRIVING DIGITAL TRANSFORMATION

Providing products and services that can achieve
digital transformation, thus contributing to the sustainable development of a highly efficient smart society

We will provide the products and services needed to realize the digital transformation indispensable to the systems that will become available in Society 5.0. By doing so, we aim to contribute to the sustainable development of a highly efficient smart society while achieving corporate growth.

OUR VISION ―To become a manufacturer with technology trading company functions

To more directly drive the digital transformation of society, Tokyo Electron Device is evolving from a technology trading company with design and manufacturing functions into a manufacturer with technology trading company functions. We aim to develop our businesses from the two perspectives of trading company functions and manufacturer functions. For the former, in terms of evolving technology trading company functions, we will expand our businesses from the provision of products to the provision of services, aiming for greater profit growth. For the latter, looking at the kind of manufacturer we want to be, we aim to become a manufacturer of monozukuri-systems, creating new value with manufacturing and system technology able to replace human functions and are focusing efforts in this area.

Evolving technology trading company functions
  1. Business model that will generate profit from data, service and stock businesses
  2. Maintain and expand a customer base that contributes to the growth of business as a manufacturer
  3. Build a base for stable income
The kind of manufacturer we want to be
  1. Manufacturing system manufacturer
  2. Original design Manufacturer (ODM)
  3. Design development division based on providing solutions to issues
  4. Highly efficient smart factories

Financial Model

We will maintain the basic policy of VISION 2020 of pursuing growth through higher revenue and profit, with the rate of profit growth exceeding the rate of revenue growth. Through ongoing growth focused on profitability,we will work toward the achievement of the financial model of VISION 2025, which we have designated as our target.

Fiscal 2025
Net sales
¥200.0billion ±10%
Ordinary income ratio
>5 %
ROE
>15 %
Percentage of total sales Ordinary income ratio
CN 20% > 13%
EC 70% > 2%
PB 10% > 10%

CN:Computer Networks Business
EC:Electronic Components Business
PB:Private Brand Business

Business Highlights

Fiscal 2022 is the first year of the new medium-term management plan.We are launching a number of measures to reinforce our business frameworks in order to achieve VISION 2025. Going forward, we will accelerate our initiatives to achieve the plan’s targets.

Launch of TED AI Lab

01Business model that will generate profit from data,
service and stock businesses

We have begun operations of TED AI Lab,which provides an environment for AI business demonstration testing. TED AI Lab offers two AI platforms, each with distinct characteristics, to provide demonstration testing services suited to a wide range of customers and applications. Positioning AI as a promising growth field, we are promoting marketing and technological development. In addition, technologies, insights and expertise gleaned from the activities of TED AI Lab will be applied to Tokyo Electron Device’s AI businesses.

TED ROBOT CENTER Opened

02Manufacturing system manufacturer

In June 2021, we opened the TED ROBOT CENTER (TRC), a facility for the development and demonstration of the TriMath 3D vision robot system. In addition to demonstrations of robots equipped with TriMath and explanations of the technology, the facility provides a comprehensive environment encompassing everything from proposing solutions to front-line issues to post-implementation support and system installation trials. Through TRC, we will cultivate latent demand while further enhancing the capabilities of our vision robot systems.

Relocation of TED Nagasaki’s Head Office and Plant

03Highly efficient smart factories

In May 2021, TED Nagasaki opened its new head office and plant. The new plant has approximately 60% more floor area than the previous plant and is designed to accommodate increases in production capacity going forward. Aiming to increase production capacity, we plan to reinforce traceability management and the transparency of production processes. In addition to bolstering production capacity,
we seek to enhance quality assurance systems to make the new facility a high-efficiency smart plant.

To Our Shareholders and Investors

Building on the achievements of the six-year VISION 2020, we are working toward the new targets of VISION 2025. We look forward to your continued support as we move forward.

Investors Guide 2021