■ Long-term Growth Strategy

1. Medium-term Management Plan Takashima (8007) announced its medium-term management plan, 'SustainaX (Cross)' with the final year being the 2023 fiscal year. While following the basic strategies of the previous medium-term management plan 'Sustaina2020,' such as 'unrivaled strategy,' 'improvement in productivity,' and 'strengthening of corporate governance,' it has further promoted the formation and expansion of each function from design to construction and support in the value chain through 'further evolution of unrivaled strategy,' 'acquisition of strong cost competitiveness through increased productivity,' and 'strengthening of corporate governance.' At the same time, it has also been working to transform its business structure and portfolio for the establishment of a long-term growth foundation. Specifically, through the 'further evolution of the unrivaled strategy,' it has contributed to the development of a sustainable society by providing energy-saving solutions, lightweighting solutions, and labor-saving solutions. It has improved productivity and reduced costs through a review of all operations and systemization while maintaining an internal control and compliance system as part of 'acquiring strong cost competitiveness through increased productivity.' As part of 'strengthening corporate governance,' the company has been continuously working towards building a more solid 'aggressive governance' structure in consideration of the various principles of the Corporate Governance Code. The system investment implemented in the second quarter of the 2023 fiscal year and the two M&A transactions, the newly established energy distribution system and the Shinbou Edix, which was acquired in December 2022, are based on these policies. After the medium-term management plan 'SustainaX (Cross)' ended in the 2023 fiscal year, the company formulated a new medium-term management plan as 'SustainaV (Value)' (fiscal year 2024-2026) in March 2023. As a super-long-term goal, the company aims to achieve a 'carbon-neutral society' by 2050 and simultaneously realize adaptation to a sustainable society and sustained growth through value creation that captures market growth opportunities. With the goal of achieving net sales of 110 billion yen (building materials segment: 70 billion yen, industrial materials segment: 20 billion yen, electronic and device segment: 20 billion yen), operating income of 2.6 billion yen, net income attributable to shareholders of the parent company of 1.9 billion yen, ROE of 8% or more, ROIC of 6% or more, and total shareholder return of 50% by the end of the 2026 fiscal year as midterm targets, and by leveraging the cash and external funds of each business to increase net income attributable to the parent company and ROE. The midterm performance targets were revised upward in December 2023, with net sales, operating income, and net income attributable to the parent company being revised upward by 10 billion yen, 0.3 billion yen, and 0.2 billion yen, respectively, compared to the time of the medium-term management plan announcement. The upward revision of the target figures for the building materials segment by 10 billion yen reflects the results of the merger and acquisition of Iwasui Development carried out in June 2023 and the strong performance in the construction materials field. In addition, the company has set aside 15 billion yen as a growth investment frame. Each business is classified into 'basic expansion-focused businesses,' which aim for aggressive expansion through the company's strengths and growth investment, and 'future investment-focused businesses,' which invest in the long-term market opportunities and develop future core businesses. The company has also invested in M&As for the purpose of strengthening its business portfolio and diversification, as well as factories, facilities, personnel, and IT as investment targets. The company has also made an upward revision to the growth investment framework. Initially, when the medium-term management plan was formulated, a growth investment frame of more than 10 billion yen was set, but with the achievement of 8.95 billion yen by the end of the second quarter of the 2024 fiscal year and steady progress, the target amount for growth investment was further increased. The company will continue to aggressively invest in the investment areas it has identified, while being mindful of capital costs in the future.

NeoMarketing <4196> has formulated a three-year medium-term management plan (from September 2024 to September 2026). Until the fiscal year ending September 2023, the company has built an internal structure to provide self-support services in marketing support and accumulated its customer base and support records. In the future, as it enters a growth phase, it has formulated its first medium-term management plan. In the first year of the plan, September 2024, as a preliminary investment period, it expects a temporary decline in profit margin until the newly hired sales force becomes established. By the final year, September 2026, it expects the new recruits to perform well and has set ambitious numerical targets: revenue of 4 billion yen (CAGR 26.5%), operating profit of 50 million yen (same 58.1%), and ROE of 24.2%. Its aim is to improve corporate value by achieving these targets.

The service-based revenue target for the fiscal year ending September 2026 is set at 801 million yen (an increase of 62.8% compared to the fiscal year ending September 2023) for insight-driven, 1,328 million yen (an increase of 54.6%) for customer-driven, 971 million yen (an increase of 131.2%) for digital marketing/PR, and 900 million yen (an increase of 78.9%) for customer success/other. In addition, the major KPIs (on an individual basis) for achieving numerical targets in September 2026 are planning to reach 86 marketing consultants (an increase of 49 from the previous year), 1,270 trading partners (an increase of 528), and a customer unit price of 3 million yen (an increase of 110,000 yen).

To achieve medium-term corporate growth, NeoMarketing intends to invest actively in personnel to increase the number of trading partners, expand its services menu, and aim to raise customer unit prices. It plans to promote services from research such as insight-driven, customer-driven, to marketing measures like digital marketing/PR, and comprehensive services.

(Written by FISCO guest analyst Nozomi Kokushige).