Medium-Term Management Plan

FY2023-2025 Medium-Term Management Plan Click here

Excellence in Science
"Create a Society Full of Empathy"
by Realizing Our Customers' Dreams,
Our Dreams and Efforts Together

1. Strengthen governance and transform organizational culture.

2. While achieving business growth and employee development, we promote the transformation into a problem solving oriented company with the spirit of "Best for Our Customers".

3. Listen to the voices of our global customers, anticipate their challenges, and establish a framework to solve them.

4. Develop products agilely with speed, establish a flexible manufacturing system, and aim for sustainable growth by delivering solutions reliably and holistically.

5. Work on HR development and strategic investments.

• *Excellence in Science: Based on our Corporate Philosophy of "Contributing to Society through Science and Technology," we aim to provide value to our customers while developing one-of-a-kind and No.1 products.

Our “Purpose”

COVID-19 raised the awareness of the importance of Human Life & Well-Being. Also, Due to the global Climate Change, the Well-Being of the Earth is now our common concern. In this business environment, based on our Corporate Philosophy, Management Principle and the Shimadzu Group Sustainability Charter, in pursuit of planetary health, we aim to enhance our corporate value by expanding our business in 3 directions (“Contributing to Human Life & Well-Being,” “Contributing to Well-Being of the Earth” and "Contributing to Industrial Development and a Safe ＆ Secure Society") and 4 domains of social value creation: Healthcare, Green, Material, and Industry.

Transformation

We have developed products using new technologies and delivered them to our customers as value. However, in order to share value with our customers, we must transform ourselves into a company that can provide the “DATA” generated by products they need not only with products but also with Total Solutions, including pre-processing, consumables such as columns, and data analysis software. We have positioned this New Medium-Term Management Plan as a preparation period.
We aim to increase our corporate value by transforming ourselves into a company that provides Total Solutions across Divisions.

Expand business and transform into a company that provides Total Solutions across Divisions.

Basic Policy

Be an Innovative Company that solves social issues with global partners!
- Achieve Sustainable Growth by Technology Development & Social Implementation -

The concept is to provide Total Solutions to customers and achieve sustainable growth as an innovative company that solves social issues with global partners by strengthening both technology development and social implementation.
Our targets in FY2025, the final year of the Medium-Term Management Plan, are to achieve sales of 550 billion yen, operating income of 80 billion yen, operating margin of 14.5%, ROIC of 11.0% or above, and ROE of 12.5% or above. In order to achieve the goal, we set out 5 business strategies and 7 measures to strengthen our management foundation.
The 5 business strategies are "Reinforcing Key Model Business," "Strengthening Med-Tech Business," "Expanding Overseas Business," " Reinforcing & Expanding Recurring Business" and "Developing & Creating New / Future Business." The 7 management platforms are "Reinforcing the Corporate Governance," " Accelerating R&D Activities," "Strategizing International Standardization / Reinforcing Regulatory Response," "Expanding Global Manufacturing Capabilities," and "Propelling DX," as well as "Human Resource Strategy" and "Financial Strategy," which underpin this overall structure.

5 Business Strategies
1. Strengthen Key Model Business

Our mainstay Liquid Chromatographs and Mass Spectrometers aim to provide a one-of-a-kind Total Solution.
As for Technology Development, we will strengthen the competitiveness of core products in both Liquid Chromatographs and Mass Spectrometers. In addition, we will automate the entire process including pre-processing, use AI to improve efficiency, and develop software by application to provide Total Solutions for Pharmaceutical and Food-Tech.
In terms of Social Implementation, we aim to provide Total Solutions by partnering with many companies in preprocessing equipment, columns and software.
We aim to achieve sales of at least 100 billion yen for Liquid Chromatographs and at least 60 billion yen for Mass Spectrometers in FY2025.
In the North American Pharmaceutical market that our company prioritizes, we will promote joint research and development with advanced researchers or significant customers who possess Liquid Chromatography and Mass Spectrometry technology. In addition, we will open an R&D Center in North America to enhance product and application development for future modalities such as nucleic acids and gene therapy drugs. In addition, we will open Pharmaceutical Development Centers on both the East and West coasts to collaborate with Pharmaceutical and Biotechnology customers on method development. We will develop the products and applications that our customers need close to customers in North America.

5 Business Strategies
2. Strengthen Med-Tech Business

Med-Tech Business is defined as business that provides Total Solutions using liquid biopsy and imaging technology in health management, testing, diagnosis, treatment, and prognosis management for healthy longevity. In terms of Technology Development, we aim to provide value to customers by advancing the development of diagnostic imaging technologies and testing reagents that link cameras, X-ray images, and even AI image analysis, developing clinical Mass Spectrometers for liquid samples, and enhancing products and services, including culture media related business and microbial testing business. As for Social Implementation, in addition to enhancing our product capabilities, we will work with external companies to provide Total Solutions, including pre-processing, reagents and analysis software. In the future, we will aim to build a clinical platform to conduct ultra-early tests using analytical technology and, if there is a possibility of disease, use X-ray technology to diagnose, treat and manage prognosis. In addition, we will combine medical and analytical technologies to provide new value in the form of Advanced Healthcare.

5 Business Strategies
3. Expand Overseas Business

North America will be the most focus region to expand business in the Healthcare domain.
In other regions, we provide optimal total support from sales to service for better alignment with customers.

5 Business Strategies
4. Reinforce & Expand Recurring Business

Using DX and IoT, we will develop remote monitoring and maintenance functions. We will also develop software licensing business using AI.
Furthermore, we will expand the consumables business such as reagents, culture media, and columns. Together with Shimadzu Diagnostics (formerly NISSUI Pharmaceutical Co., Ltd.), we will strengthen the development capabilities of reagents, culture media, and columns through collaboration among the Shimadzu Group.

5 Business Strategies
5. Develop & Create New / Future Business

We will work on material development support for future business creation, such as through the fusion of quantum technology, optical technology, or new software.

Strengthen the 7 Management Foundations

1) Reinforce the Corporate Governance: Compliance matters the most. In the Medium-Term Management Plan, we will enhance monitoring functions, promote risk management, and realize effective internal control. In particular, Group companies will use external organizations to strengthen monitoring not only for financial audits but also for internal control audits. In addition, we will formulate internal audit policies and conduct an internal audit on a global basis.

2) Accelerate R&D Activities: We will improve our development capabilities globally and strengthen our product development structure in each region. Innovation in the development process involves adding agile methods and increasing development speed.

3) Strategize International Standardization / Reinforce Regulatory Response: We will promote standardization in cooperation with national institutions.

4) Expand Global Manufacturing Capabilities: We will reinforce BCM by strengthening procurement functions and expanding in-house production, and we will promote the expansion of manufacturing capacity in Japan, the United States, China, and Malaysia.

5) Propel DX: We will achieve data-driven management by promoting both internal DX and DX with customers.

6) Human Resources Strategy: We develop human resources that lead innovation to solve social issues with diverse partners. We will develop skilled and diverse "Shimadzu-jin" who possess integrity, compliance, perseverance, a willingness to take on challenges, and the ability to learn from failures and grow independently.

7) Financial Strategy: Aiming for strategic investment, we will invest in the four domains where social values are created and strengthen the foundations related to development, manufacturing, and DX. We aim to maintain a payout ratio of at least 30% and return profits to shareholders on an ongoing basis. In addition, ROIC will be introduced to improve capital efficiency because the return on investment is important for active investment.

Environmental and Health Management

1) Environmental Management: Aiming to solve environmental problems and increase corporate value through our core business, we have been working on the following 5 items. Under the current Medium-Term Management Plan, we will work together to reduce CO₂ emissions from suppliers as well as business sites within our own Group to build a decarbonized society. We will also make the transition to a circular economy by utilizing our own technologies for Green Innovation and by using energy-saving, space-saving or sustainable materials in the products.

The Shimadzu Group's Five Initiatives for Environmental Management

1. Responding to Climate Change
2. Initiatives to Create a Circular Society
3. Development and Provision of Environmentally Friendly Products and Services
4. Initiatives to Conserve Biodiversity
5. Proactive Environmental Protection Activities of Each Employee
   

2) Health Management: We established the Health Declaration in 2017 and set 5 themes (exercise, diet, sleep, mind, and smoking cessation). We work to maintain and promote good health so that our employees and their families can live life to the fullest. In the case of our company, we are also working on very early diagnosis of diseases such as cancer, infectious diseases, and dementia by using our own technology. When new technologies are developed, we hope to give back as needed.

(April 2023)

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