Medium-Term Management PlanAGC plus-2023
AGC has formulated a new medium-term management plan, AGC plus-2023, as a framework for continuing steady progress under its long-term strategy, Vision 2030. Our financial targets and key strategies under this plan are as follows*.
* The financial targets set in 2021 were achieved ahead of schedule and were therefore raised in February 2022.
Operating profit of strategic businesses
- Q1. What is the strategic direction of your business portfolio reforms?
- A1. We aim to achieve an “ambidextrous” management approach based on the deepening of core businesses and the further exploration of strategic business areas.
Under its AGC plus 2.0 management policy, AGC has been using “ambidextrous” management to deepen core businesses and explore strategic businesses. Our key priorities and strategic directions for each business under AGC plus-2023 are outlined below.
In terms of the allocation of investment resources, the Group will continue to strengthen investment in strategic businesses, which will increase by 100 billion yen compared with the previous medium-term management plan to 280 billion yen. We will also improve the asset efficiency of its each business and transform our business portfolio with the aim of maintaining a Group-wide return on capital employed (ROCE) of 10% or higher and achieving EBITDA of 433 billion yen in 2023.
- Q2. What is your policy on the allocation of capital?
- A2. We are committed to maintaining a sound financial structure over the medium- to long-term future. At the same time, we plan to seize opportunities for investment in growth businesses, while also paying dividends and implementing share buybacks.
We will accelerate the sale of assets, such as cross-held stocks. The cash generated will be allocated primarily to strategic businesses and other businesses with high asset efficiency.
The AGC Group's basic policy on shareholder returns is to maintain stable dividends with a target consolidated payout ratio of 40%, while flexibly implementing share buybacks. In line with this policy, we plan to secure investment opportunities in growth businesses and implement dividend payments and share buybacks while maintaining mid/long-term financial soundness.
The capital allocation policy for AGC plus-2023 based on the above business plan, investment plan, and shareholder return policy is as follows.
- Q3. Please outline your policy on sustainability management.
- A3. We aim to achieve net zero carbon emissions by 2050.
Throughout its history, AGC has built relationships of trust with its customers as a foundation for its efforts to address changing needs and solve social issues by taking up the challenge of research and development and business creation based on long-term perspectives. We will continue to fulfill our mission—"an everyday essential of our world"—by using our unique materials and solutions to contribute to global and social sustainability.
As part of our contribution to the realization of a sustainable global environment, we have set a new goal of achieving net-zero carbon emissions in 2050. As milestones, we are aiming for a 30% reduction in our process GHG emissions and a 50% improvement in GHG emissions per unit of sales * by 2030.
* GHG emissions per unit of sales = GHG emissions/net sales
- Q4. What is your policy on DX initiatives?
- A4. We will develop human resources who combine highly specialized professional knowledge with advanced data analysis skills.
Until now, AGC has used digitalization to transform business processes in areas such as development and manufacturing, sales and marketing, and logistics. We are also focusing on the cultivation of digital talent who can support our transformation by combining highly specialized business knowledge with advanced data analysis skills. By the end of 2020, our in-house development programs had produced 1,600 data scientists, as well as 40 data experts capable of using data science to solve problems in their areas of activity. By 2025, we plan to train 5,000 data scientists and 100 data experts.
Going forward, the AGC Group will transform its business model by further advancing and combining the initiatives that it has cultivated up to this point. In this way, we will build a competitive advantage and provide new added value to our customers and society.