■Art Nature ＜7823＞ Mid-Term Management Plan

1. Environmental awareness

The domestic hair market has been declining over a long period of time, and although it is recovering from the COVID-19 pandemic in the short term, it has not yet returned to the scale before the COVID-19 pandemic, so it can be said that it is an environment where opportunities and risks coexist in the medium term. Risks are concerns about chronic labor shortages leading to intensifying recruitment competition for hairdressers, increases in costs and sales and administration costs due to depreciation of yen and soaring resources, and a decrease in the number of future customers due to population decline. Opportunities include a recovery in demand for wigs from temporary concentration on travel and eating out immediately after COVID-19, and the expansion of usage opportunities for wigs due to the Elderly Employment Stability Law revisions and the Women's Advancement Promotion Law revisions, etc., and changes in sales promotion and customer attraction are also likely to lead to differentiation in the short to medium term for companies with financial resources. Also, in the medium to long term, activation of seniors, which are the main customer groups, and adoption of the baby boomer junior generation, etc. are expected against the backdrop of differentiation, so it can be said that it is a market where strong demand is expected to continue for the company.

2. New Mid-Term Management Plan “Art Nature Advance Plan”

In 2017, based on the group's motto “What I want to cheer up is to smile,” the company formulated a long-term vision called “10 years to open up a new future, Open the Future,” targeting 2027, the 60th anniversary of its founding, and switched to management that emphasizes improving customer satisfaction and increasing profits, and stepped into a new business area. The long-term vision was divided into three medium-term visions, and in 1stStep's medium-term management plan 2017-2019, efforts were made to recover business performance from the slump until then in order to build a “solid foundation” based on the vision of “the birth of art nature that opens up the next generation.” In the medium-term management plan 2020-2022, which is 2ndStep, the challenge of further increasing business value was carried out under the vision of “Art Nature's Challenge to Open Up the Next Generation.” In the 3rd STEP medium-term management plan 2023-2025 “Art Nature Advance Plan,” which began in the 2024/3 fiscal year, we aim to achieve the vision of “a leap forward in art nature that opens up the next generation” in order to realize a long-term vision that is close to leveraging results and issues so far.

In the “Art Nature Advance Plan,” environmental changes surrounding the company are extremely drastic, but they are aiming for sales of 50 billion yen or more by improving business performance, expanding market share, and developing new areas of business. We focus on the three main themes of value creation, sustainability promotion, and dialogue with the market, and in value creation, we will establish a position as a market leader in the domestic hair industry and promote business development in new fields. In promoting sustainability, while realizing a sustainable society by strengthening compliance with corporate governance codes and implementing the SDGs, we aim to improve labor productivity, production stability, and office efficiency in order to continuously improve corporate value. Further improvements in information disclosure and additional shareholder return measures are being considered in dialogue with the market. Thus, as financial targets, we aim for sales of 52.3 billion yen, an ordinary profit margin of 10.0% (5.23 billion yen), and ROE of 10.2% for the fiscal year ending 2026/3. As non-financial targets, we aim for a hair industry share of over 40%, setting GHG emissions (until 2025), a ratio of female managers of 22% or more, the current wage gap between men and women +1.0% or more, and a male childcare leave acquisition rate of 82% or more. Business performance was tough for the fiscal year ending 2024/3, but since other companies are in the same environment, it seems that the company's market share is growing for both men and women, and they are continuing to advance the following growth strategy toward their initial goals.

(Written by FISCO Visiting Analyst Miyata Hitomitsu)