■Fuyo General Lease ＜8424＞ Growth Strategy
1. The direction of the medium-term management plan
The medium-term management plan (5 years) began in the fiscal year ending 2023/3, and is now in its 3rd year. Based on progress so far, environmental awareness, etc., there is no change in strategic direction or numerical targets. With “Fuyo Shared Value 2026” as a vision, it is a policy aiming for “solving social issues” through human growth and dialogue and sustainable growth through simultaneous realization of “economic value,” and both financial and non-financial items have been set for management goals.
(1) Growth Drivers
Based on strategic fields up until now (and new areas), it is a strategy that aims to improve profitability through differentiation after classifying them into 3 growth drivers: 1) the RT field aiming for strategic growth that captures social crustal changes, 2) the AT field aiming for accelerated growth that captures market trends, and 3) the GP field aiming for stable growth in the core field, then concentrates management resources into the RT and AT fields where market expansion and creation are expected, and the GP field is expected to expand and create markets It's there. Furthermore, “mobility” and “circular economy” are positioned in the RT field, “energy environment,” “BPO/ICT,” and “healthcare” are positioned in the AT field, and “real estate” and “aircraft” are positioned in the GP field.
(2) Image of resource allocation and profit portfolios
Approximately 1 trillion yen (cumulative total for 5 years) will be concentrated into the RT and AT fields, which are growth areas, to simultaneously improve ROA and accumulate operating asset balances. As for the GP field, which is the core field, the policy is to further improve profitability, leading to an increase in overall ROA. Operating asset balances after 5 years are expected to be at the level of 3 trillion yen (0.5 trillion yen increase compared to the fiscal year ending 2022/3), and it is expected that the RT and AT fields will double while involving asset replacement from 400 billion yen to 800 billion yen. Ordinary profit is planned to be 75 billion yen after 5 years, but looking at the composition ratio, the RT field will rise significantly from 6% to 9%, the AT field from 13% to 24%, and the GP field will remain almost flat at 41% to 40%. Meanwhile, conventional “general lease finance” has dropped drastically from 40% to 27%, and apparently “de-finance leasing” and “de-finance” are progressing.
(3) Management Targets
Both financial targets and non-financial targets are set as performance indicators for business strategies based on the three growth drivers, and the idea is to simultaneously realize “corporate value” and “social value.” We have set 4 financial targets: ordinary income of 75 billion yen, ROA of 2.5%, capital adequacy ratio of 13-15%, and ROE of 10% or more, and we aim to further improve profitability while balancing a certain level of financial discipline and capital efficiency. Non-financial targets are a policy to establish items to be addressed from the three perspectives of 1) the environment, 2) society and people, and 3) human resource investment, leading to a sustainable increase in the company's corporate value through “solving social issues” through the realization of a decarbonized society and a recycling-oriented society. Also, as a countermeasure against climate change, we will continue to advance efforts aimed at achieving carbon neutrality and RE100*, which are targets for 2030.
*An international business union whose goal is to procure 100% of the electricity consumed in business activities using renewable energy.
2. Basic strategies and goals in each business field
(1) Mobility (RT field)
While demand for EVs and FCVs to achieve carbon neutrality is expanding, it is a strategy to develop one-stop services centered on partner collaboration, centered on the vehicle area and logistics area, based on an environment where social issues in the logistics industry become serious, such as driver shortages and long working hours. In the vehicle area, we plan to build new business models such as the EV one-stop service*1 and expand the non-asset business centered on fleet BPO*2. In the logistics area, we are working to create collaborative projects through collaboration with the Yamato Group, strengthen global mobility businesses through cooperation with overseas group companies, strengthen truck finance centered on Yamato Lease, and expand surrounding areas. The financial targets aim for ordinary income of 7 billion yen (3.7 billion yen increase compared to the fiscal year ending 2022/3) and ROA of 2.5% (same increase of 0.6 points). The non-financial target is an EV/FCV ownership ratio of 30% (up 30 points from the same period).
*1 Through cooperation with partner companies, we provide a one-stop service from EV introduction review consulting to charger installation consulting/construction, finance/vehicle management, and energy management. It also has a high affinity with the “energy environment,” which is the company's strength.
*2 It supports improvements in work efficiency, starting with labor saving, through telematics services, vehicle utilization rate optimization consulting, etc.
(Written by FISCO Visiting Analyst Ikuo Shibata)