■ Long-term Growth Strategy

1. Vision for 2030.

Yamano Holdings <7571> has been focusing on the formation of a profitable segment, improvement of productivity and profitability, and strengthening sustainable management as key initiatives since the 3rd stage of the second founding from the fiscal year ending in March 2019. During this time, despite the significant impact of the COVID-19 pandemic, the company has been working on recovering profitability through structural reforms of its business and expanding into the education and reuse sectors. However, although the recovery of consumption was expected after the end of the COVID-19 pandemic, the high energy prices and rapid inflation have led to a change in consumer mindset, resulting in a decrease in revenue and profit for the fiscal year ending in March 2024. On the other hand, the company recognizes that the changing international situation, demographic trends, diversification of consumer values from "things" to "experiences," "time," and "meaning," and the accelerated changes in the business environment due to the shortage of successors for small and medium-sized enterprises, among other factors, have had a significant impact on its performance due to the insufficient development of new customers and the chronic shortage of personnel in each department resulting from the COVID-19 pandemic. They consider addressing the structural reforms caused by human capital as an urgent issue and have announced the "Medium-Term Management Plan ~Tsunageru2027~" (from the fiscal year ending in March 2025 to the fiscal year ending in March 2027) in May 2024.

In formulating the medium-term plan, based on the Yamano Group's corporate philosophy, the company has set its mission as "Continuously creating a rich and colorful lifestyle" and established the "2030 Vision" with the goal of 2030 as "a company that employees want to invest in." In addition, all employees adhere to the values (beliefs and code of conduct) that they trust in, which are "We have a spirit of service," "We have the power of unity," "We have the spirit of practice," "We have the belief in victory," and "We take action to achieve our goals." The company aims to become a company that is chosen and invested in by successfully fulfilling its mission and actively investing in human capital, which will lead to increased employee engagement and organizational vitality. This will result in improved performance through the practice of each employee's best practices and the enhancement of organizational productivity, ultimately leading to the return to stakeholders, including employees, and the realization of a strong organization that connects the company and its employees (Tsunageru).

Furthermore, the company is reaffirming its business growth model. The Yamano Group has achieved many friendly win-win M&A successes in the past and has accumulated a customer network based on the brand power of its founder, "Aiko Yamano." The company's assets and strengths include the ability to carry out bold M&A, delegation of business operation rights to business leaders to increase motivation while ensuring thorough information sharing and actual performance management, and maximizing business operational capabilities. Leveraging these strengths, the company actively promotes business succession-type M&A targeting many small and medium-sized enterprises facing challenges such as a shortage of successors, expands its business domains focusing on lifestyle businesses, and aims to create various products and services that can quickly respond to changing and diversifying lifestyles and consumer awareness and behavior. It is also expected that the development of an organizational structure that allows flexible management of the business portfolio, such as replacing businesses, will be crucial.

(Author: FISCO Guest Analyst Shuji Matsumoto)