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Yokohama Rubber announced its new mid-term management plan “Yokohama Transformation 2026” (YX2026). The new plan will be implemented over the next three years (2024 to 2026) as a follow-up plan to Yokohama Transformation 2023 (YX2023).
Yokohama Rubber said that under the YX2026 plan, it will further promote the development of existing business advantages and the exploration of new values. The company said management will resolutely implement the growth strategies formulated by each business unit, aiming to achieve “hockey stick growth” during the 2026-2027 fiscal year. Management’s targets for fiscal 2026 (the last year of YX2026) are sales revenue of 1,150 billion yen (approximately US$7.7 billion), operating profit of 130 billion yen (approximately US$865 million), operating profit margin of 11%, and ROE ( Return on equity) exceeds 10%.
Yokohama Rubber said that in the consumer tire market, emerging low-cost, low-price tire manufacturers have expanded production capacity and increased market share in recent years. In response, Yokohama Rubber stated during YX2026 that it will accelerate efforts to maximize the sales proportion of high value-added tires to improve the profitability of the consumer tire business. In addition, the Consumer Tire Business launched the “Build a Plant in One Year” challenge, aiming to bring the new plant into production within one year, achieve the low cost and high efficiency required to compete cost-competitively with emerging tire manufacturers, and achieve “hockey stick growth” . In order to maximize the sales proportion of high-value-added tires and enhance brand value, the company said it will promote its tires as original equipment (OE) for high-end cars and continue to participate in racing events around the world. Yokohama said it will also continue to implement its product and regional strategies, focusing on strengthening the development, supply and sales of tires in response to specific trends in each regional market.
During YX2026, Yokohama Rubber stated that it will implement technology and production strategies based on the motto of “low cost and rapid development of high-quality products.” Premium products refer to strengthening the development of OE tires suitable for next-generation premium cars, low cost refers to significantly reducing costs in a way that other companies cannot match, and rapid development refers to a one-year factory challenge. Yokohama Rubber said it is aimed at achieving “Hockey Stick Growth” and the core of its consumer tire strategy to accelerate tire development.
The company said management will seriously consider environmentally-related investments that also contribute to the company’s bottom line. One example is the new plan under YX2026 to reduce 2019 level Scope 1 and 2 greenhouse gas emissions by 30% by 2026 and 40% by 2030, while reducing costs. In addition, in order to reduce scope 3 emissions, Yokohama Rubber said it will promote the greater use of sustainable materials and plans to increase its proportion of sustainable materials to 28% in 2026 and 30% in 2030. However, during YX2026, the company said it would consider increasing the proportion of sustainable materials. The target for 2030 is to reach 40% without any additional cost.
Regarding capital allocation during YX2026, Yokohama said it plans to allocate approximately 320 billion yen (approximately US$2.1 billion) of the expected increase in cash of 450 billion yen (approximately US$3 billion) over three years to strategic investments and ongoing operating investments. Finally, regarding shareholder returns, Yokohama Rubber stated that it aims to steadily and stably increase dividends in line with its basic policy of maintaining stable dividends, while ensuring sufficient internal reserves to support its business development and consolidate its financial position, while continuing to actively invest in Sustainable development and profit growth.
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