Over 100 years since its founding in 1917, the Toyo Seikan Group has developed and supplied packaging containers in line with the constantly changing lifestyle and society by processing a wide range of materials, such as metal, plastic, paper and glass, bringing out the unique characteristics of each material.
Under our Management Philosophy established in April 2016, we continue to pursue development and evolution for the next 100 years, working on the creation of a more fulfilling life for people and environmentally friendly systems for society with our technologies of material development and processing.
Business Results for the Year Ended March 31, 2021 (FY2020)
The Japanese economy remained in a challenging situation during the fiscal year ended March 2021 (fiscal 2020) although there were some signs of recovery as a result of various measures against the COVID-19 outbreak.
In such a situation, the Group's net sales for the year declined 5.3% from the previous year to 748,724 million yen. While there was a certain level of growth in demand for our products due to an increase in “at-home” consumption as people were urged to stay home to prevent infection, sales of packaging products, particularly beverage containers, were significantly affected by weak spending around business districts and in the leisure and food service industries amid the pandemic. Operating income and ordinary income fell from the year earlier, recording 26,667 million yen (down 2.2%) and 27,326 million yen (down 3.8%), respectively, despite a decrease in raw material and energy costs. Consequently, the Group posted a profit attributable to owners of parent of 15,946 million yen, compared to the loss of 520 million yen for the previous year.
Review of the Fifth Mid-Term Management Plan
During the period of the Toyo Seikan Group Fifth Mid-Term Management Plan, from fiscal 2018 to 2020, we implemented various initiatives and projects based on the basic policy of the plan.
With the plastic-free movement gaining momentum and metal cans drawing renewed attention, the Group's major operating company Toyo Seikan has been adding the capacity of aluminum can production at its Ishioka Plant to respond to growing demand for aluminum cans for low-alcohol beverages such as chuhai cocktails. The plant started up a new line as scheduled in April 2021. Outside Japan, Stolle Machinery Company, the US-based group company supplying can and end making equipment, is working to meet the strong demand for metal cans in the United States, Europe and other markets in the world amid increased awareness of environmental issues.
For creating a carbon-free society, automotive electrification is progressing at a faster pace globally. In April 2021, the Group's major material supplier Toyo Kohan started operating a new line to produce materials used in rechargeable batteries for electric and hybrid vehicles.
In Europe, TOSYALI TOYO CELIK ANONIM SIRKETI, which has been manufacturing and supplying cold-rolled and surface-treated steel sheets in Turkey since 2017, turned to profit in 2020, the final year of the Fifth Mid-Term Management Plan.
We feel that the businesses in which we have been investing management resources are now taking off.
In our open innovation initiative "OPEN UP! PROJECT," following the first investment in Shiok Meats, a Singapore-based startup to develop cell-cultured shrimp and crustacean meat, we have started our second investment project this year. In March 2021, we entered into a capital and business alliance with a healthcare IT solution provider, Oishii Kenko Inc. Through this partnership, we will pursue the development of technologies for "IoP" (Internet of Packaging), thereby contributing to a new diet lifestyle for better health and other solutions to social issues.
While the COVID-19 pandemic has a significant impact on our operations, the various measures implemented under the previous mid-term management plan for the past three years are bearing positive results, which should strengthen the drivers of growth under the new mid-term management plan announced in May 2021.
Long-Term Management Vision and Mid-Term Management Plan 2025
The environment surrounding the Group is now changing beyond expectations, as various social issues to address are emerging. The COVID-19 pandemic has also dramatically changed people's lifestyles. Against this backdrop, in May 2021, we launched the Long-Term Management Vision 2050 "The Future, Wrapped for All" toward the year 2050. The new long-term vision has set a goal as to what we aim and want to be: a “daily living platform” for people all over the world to live safe, secure and fulfilling lives. It aims for a society that accepts differences and diversity to allow individual people to value their own lives, and a society that continues to allow people to live happily into the future without harming the environment. In the process of formulating this vision, various members from across group companies, including younger employees, future leaders of the Group, as well as management members participated in discussions to consider the future of our group.
In order to realize our long-term management vision, we have set quantitative and qualitative management targets to be achieved by 2030 as the Mid- to Long-Term Management Goals 2030. As quantitative targets, we aim to achieve 1 trillion yen in net sales and 80 billion yen in operating income on a consolidated basis by fiscal 2030. As qualitative targets, we focus on the main targets in the Eco Action Plan 2030, which are the Group's environmental targets, as well as on "building a sustainable value chain" and "creating a work environment that allows various members to grow and demonstrate their different abilities."
TAs an action plan to achieve the Mid- to Long-Term Management Goals 2030, we have also developed the Mid-Term Management Plan 2025 for the five years from fiscal 2021. Under the new plan, we will pursue a continuous growth toward the "daily living platform" by working on three key issues, as follows:
1) Continuous growth in existing business domains
2) Exploring, commercializing and monetizing new growth opportunities
3) Enhancing management foundation to support growth
In a road map we have drawn to achieve continuous growth, we plan to expand our value chain into the areas of engineering, filling and logistics based on our packaging business. We will also seek more opportunities in growing areas for our steel plate related business, such as battery materials, and functional material business, such as optical functional films, as well as in emerging business fields in which we aim to offer new systems to solve social issues.
Future prospects remain unclear as we are not sure when the pandemic will be over. At this time of uncertainty, we have formulated the long-term management vision and, to realize the vision, set the mid- to long-term management goals and developed the new five-year mid-term management plan. Making the most of our strengths, including our products, technologies and services, to meet the expectations of our stakeholders, we will implement all measures in the mid-term plan to maximize our corporate value.
As for profit distribution, our Fifth Mid-Term Management Plan followed our basic dividend policy of ensuring stable and constant payment and set a minimum annual dividend of 14 yen per share during its period to fiscal 2020. From fiscal 2021, we have renewed our profit distribution policy under the newly established Mid-Term Management Plan 2025. The new policy aims for a total return ratio of 80 percent and a payout ratio of 50% or higher and sets a minimum annual dividend of 46 yen per share, which will be gradually increased going forward. For fiscal 2020, we decided to pay a year-end dividend of 36 yen per share, and therefore the annual dividend for the year was 43 yen per share.
We would greatly appreciate your continued support and encouragement.