FY 2019-2021
Medium-Term Management
Plan Briefing Session
Materials
August 8, 2019

Nikko Co., Ltd.
(Tokyo Stock Exchange Code: 6306)
Masaru Tsuji, President and Representative Director

In this briefing material, AP demotes asphalt plants in our business and BP concrete
plants.

1

Contents

Net Sales and Operating Income Trends by Business Segment

p. 3

Previous Medium-Term Management Plan (FY 2016–2018)

pp. 4, 5

Basic Policyp. 6

Net Sales and Operating Income Trends by Nikko Group
Business Segment

p. 7

Dividend Payout Ratio and ROE

p. 8

Measures for Each Business Segment

pp. 9-13

Net Sales and Operating Income Plans under Medium-Term

pp. 14, 15

Management Plan
Committees and Projects under Medium-Term Management

p. 16

Plan
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2

2

Net Sales and Operating Income Trends by Business Segment(Net sales)
30,00025,000(Operating income)AP-related business

12.3%

8.1%

7.2%

7.6%

6,000

15,0005.9%

15,000

7.9%

8.6%

8.6%

3,500
8.4%

10.8%

4,000
3,000

4,000
10.7%

5,000

7.8%

20,000(mil. yen)

BP-related business

20,000

3,000

2,500
10,000

2,000
1,500

10,0005,000

17,25815,071

17,252

16,58017,1792,000
16,4342,125

10,267

5,000

8,577

1,000
1,214

1,234

1,253

1,348

678

963

0

0

8,287

5,000

14.7%

15.0%

13.9%

18.5%

1,000
7,893

878

712

1,006

1,015

666

500
0

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Previous medium-term plan
Environment- and conveyor-related business

9,521

0

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

6,000

9,356

Previous medium-term plan

2,500

Other business-related business

7,000
6,000

2,000

9.0%

10.1%

10.0%

10.3%

2,500
10.7%

2,000

5,000

4,000

6.4%
8.5%

1,500

7.8%

1,500

4,000

3,000
1,000
2,000

3,931
2,853

1,000

1,944
166

527

2,289
337

2,000
2,775

2,647
369

3,000

308

500

4,495

4,301

0

4,677

451

277

417

462

502

0

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

0
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Previous medium-term plan
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4,480

500
388

Net sales

4,133

1,000

417

0

1,000
4,292

Previous medium-term plan
Operating income
NIKKO CO., LTD.

Operating margin
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3

 First, we would like to review the previous medium-term plan.
 We wanted all businesses to grow during the previous medium-term plan, but the APrelated business declined in FY 2018. It was primarily caused by the circumstances at
users such as delays in foundation work and delays in application.
 Sales of BP declined in the final fiscal year.

3

Previous Medium-Term Management Plan (FY 2016–2018) (1)
Numerical targets under the previous Medium-term plan: net sales of 32.0 bil. yen and operating marginof 7.0% (average for the period)
7.0%
6.0%

(mil. yen)

4.8%

4.4%

7.0%

5.9%6.0%
4.5%

45,0001.1% 0.7%
1.1%
1.0% 0.7%▲ 0.2%▲ 0.4%

5.7%

2.0% 2.2%

33,20332,00035,000(0.2%)(0.4%)

32,71732,07325,00027,08725,03524,86424,553

23,971

24,812

23,8561,500
23,803
2,249

22,175

1,832

1,944

185

271
△
55
(55)

189

265

2,240

2,103

1,824

1,629
1,427

1,186

5,000
248

2,500

31,78030,707
26,9423,500

35,114

34,11015,000

4,500

500

541

470

△
98
(98)

(500)
▲500

▲ (5,000)
5,000

売上高
Net sales

Operating
営業利益
incomewww.nikko-net.co.jp ⓒ CopyrightOperatingmargin
営業利益率

NIKKO CO., LTD.

Previous Medium-Term
Management Plan

2019 All rights reserved.

4

 The numerical targets of the previous medium-term plan were average net sales of
32.0 bil. yen for the entire group and operating margin of 7%, but the operating
margin target was unachieved.

4Previous Medium-Term Management Plan (FY 2016–2018) (2)Business environment
While shipments of asphalt mixture and concrete in Japan continued to decline slightly, orders
remained strong thanks to sustained strong capital investment appetite of customers. In the final
fiscal year of FY 2018, sales were below the level of FY 2017, which was caused by a hold-up indelivery timing due to circumstances at the customer side. In China, the high-end market, which
Nikko targets, expanded reflecting increasingly stricter environmental restrictions. The ASEAN
market stagnated because of factors including foreign exchange and elections.

Issues under the previous medium-term plan
• The existing fields progressed largely in line with the plan. While the new fields fell short of theplan, the company held NIKKO Messe 2018 (exhibition of new products) in the final year of theMedium-Term Management Plan. Through Messe, we were able to showcase our new products andtechnologies and were able to get some response in the form of sales growth of new products
during the new Medium-Term Management Plan period.
• Overseas, sales of recycling plants increased more than expected in China due to the increasingly
stricter environmental regulations, but we could not achieve expansion of the market in ASEAN
region. We will focus on it by positioning it as the utmost priority in the new Medium-Term
Management Plan.
•As for profitability, we raised prices in the final fiscal year, but there was no immediate effect. We
will continue to work on profit improvement through sales expansion of the new VP series.
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5

 As for the business environment, the orders were strong in the pervious term, reflecting
strong capital investment appetite of customers. We were not able to achieve the sales
budget due to delay in delivery timing, etc., while orders remained strong.
 We have been focusing on the ASEAN region for about five years, but the business stagnated
due to foreign exchange fluctuations and the state of affairs in the countries.
 Deployment in new markets and of new products was the primary focus in the previous
medium-term plan, but we were unable to achieve it. We consider this as an issue.

 We held NIKKO Messe 2018 (exhibition of new products) in Japan in autumn of last year, thefinal year of the medium-term plan, and made large-scale preparation for awakening themarket. It temporarily became a slightly negative factor on sales, etc., as the employees spent
their energy on it, but we will follow up to harvest the fruits. We were able to showcase our
new products and technologies at the Messe and were able to get some response in the formof sales growth of new products under the new medium-term plan.
 As I have explained in the business environment of China, demand for recycling asphalt
mixture has emerged due to the increasingly stricter environmental regulations, and wewould like to expand sales by deploying technology, which is our strong point.

 As for profits, we raised prices in the final year, and we expect the impact to show in the
future partly due to the fact that we handle products where the sales are realized over a longterm with respect to the order. We also think the new key asphalt plant product VP series willcontribute to sales and profits.

5Basic PolicyLong-term (10 years) basic policy, looking into the future

1. Strengthen revenue base in Japan

We aim to improve profitability by boosting product appeal byraising the level of all divisions of sales, service, engineering, andmanufacturing.
(Profit margin of 10%)

2. Establish overseas sales

We, as a manufacturer, aim to establish new overseas bases tospread Nikko products, which are the best in the world, in the
ASEAN region.
(To double current level of overseas sales from 4.5 bil. yen to 9.0
bil. yen.)

3. Promote new businesses (M&A)

We will invest management resources in expansion of new
businesses and nurture products that will become new pillars of
the industrial and construction machinery fields.
(To create 10.0 bil. yen in sales from the new businesses.)

4. Put work-style reform into practice

We will improve operation efficiency and significantly improvelabor productivity.
(To centralize office work and utilize IoT and AI)

5. Make ROE a KPI

We aim to achieve market valuation of 50.0 bil. yen or more andROE of 8% or higher. We will also aim for a dividend payout ratioof 60% or higher and enhance returns to shareholders.

Setting these five policy items at the center, we will strengthen corporate governance andimplement business management that is highly transparent and vibrant.
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6 In the new Medium-Term Management Plan, we formulated the numerical targets forthe next three years by taking the next 10 years into consideration, given the fact that
we are looking to mark our 100th anniversary.
 The long-term policies for the 10 years are as follows.
→ Improve product appeal by upgrading all segments to strengthen revenue base inJapan and increase the profit margin to 10% from the current single digit margins.
→ To establish overseas sales, change the style of marketing, especially in Thailand
and Indonesia, where we are building business.
→ To promote new businesses, we will invest management resources not only in
M&As but also in new businesses we are currently working on so as to nurturethem into key businesses and create sales of 10.0 bil. yen in 10 years.
→ To put into practice work-style reform, we would like to deploy products that
contribute to our customers’ work-style reform, as they also face the same issues.
We will also improve labor productivity, create reserve power and invest in new
areas.
→ In 10 years, we aim to achieve market valuation of 50.0 bil. yen or more, ROE of 8%
or higher, and dividend payout ratio of 60% or more, in order to enhance returns toshareholders.

6Net Sales and Operating Income Trends by Nikko Group Business Segment(mil. yen)Previous Medium-Term Management PlanFY 2016

Net sales
AP-related business Operating income

FY 2017

FY 2018

New Medium-Term Management PlanFY 2019 plan

FY 2020 plan

FY 2021 plan

16,58017,17916,43418,70019,00020,000

1,253

1,348

963

1,570

1,710

1,900

Operating margin

7.5%

7.8%

5.8%

8.3%

9.0%

9.5%

Net sales

9,356

9,522

7,893

9,200

9,300

9,400

BP-related business Operating income

1,006

1,015

666

750

837

893

Operating margin

10.7%

10.6%

8.4%

8.1%

9.0%

9.5%

Net sales

2,647

3,931

2,775

2,900

3,200

3,400

Environment- andconveyor-related
business

Operating income

369

308

417

500

544

578

Operating margin

13.9%

7.8%

15.0%

17.2%

17.0%

17.0%

Net sales

4,133

4,480

4,677

4,900

5,000

5,200

Other business

Operating income

417

462

502

510

559

679

Operating margin

10.0%

10.3%

10.7%

10.4%

11.1%

13.0%

Total for Nikko

Net sales

32,71735,114

31,78035,70036,50038,000Operating income

1,944

2,103

1,427

2,300

2,600

3,000

Operating margin

5.9%

5.9%

4.4%

6.4%

7.1%

7.8%

(1,102)(1,031)(1,122)(1,030)(1,050)(1,050)NIKKO CO., LTD.

2019 All rights reserved.

Corporate expenses

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 In concrete figures, we aim to achieve increase in all segments over the three years,
with net sales of 50.0 bil. yen in 10 years.

7Dividend Payout Ratio and ROE(mil. yen)Previous Medium-Term Management PlanFY 2016

FY 2017

New Medium-Term Management PlanFY 2018

FY 2019 plan

FY 2020 plan

FY 2021 planSales

32,71735,114

31,78035,70036,50038,000Operating income
Net income attributable toowners of parent
Dividend per share

1,944

2,103

1,427

2,300

2,600

3,000

1,340

1,490

1,345

2,000

1,820

2,100

55

60

60

*200

*140

*160

Total dividend

427

459

459

1,600

1,120

1,280

Dividend payout ratio

31.8%

30.8%

34.1%

76.6%

61.5%

60.9%

Net assets

29,08930,28630,41430,81431,51432,334

ROE

4.6%

4.9%

4.4%

6.5%

5.8%

6.5%

*Dividend per share for FY 2019 to 2021 does not take into account the 1-to-5 split of its common stock scheduled to be implemented on October 1, 2019.

6.5%

6.5%
5.8%

4.6%

4.9%

90%

4.4%

76.1%

100

150円
150
yen

61.5%

60.9%

70%
60%

80
100
yen
100円

30.8%

25

25

30

30

35

30

2016

2017

2018

50%

70

34.1%

31.8%

40%
30%

50円
50
yen

Interim dividends

80%

100
70

80

Year-end dividends
Dividend payout ratio

Dividend per share

200
yen
200円

ROE

100%

Dividend payout
ratio

20%
10%
0%

00円
yen

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FY 2019 plan

NIKKO CO., LTD.

FY 2020 plan

FY 2021 plan2019 All rights reserved.

8 Regarding dividend payout ratio, it had been our policy to pay dividends equivalent toabout 30% until now, and this year to commemorate the 100th anniversary, we plan
to pay a commemorative dividend of 100 yen per share and an annual dividend of
100 yen per share for a total of 200 yen per share, which will bring the dividend
payout ratio to 76.6%, with the payout ratio at about 38%, excluding thecommemorative dividends.
 For the next fiscal year and afterward, our policy is to keep the dividend payout ratio
at 60% or higher.

8Asphalt Plant (AP) Business Segment
Business environment
While the trend of asphalt mixture shipment has not changed and continues to decline slightly, capital investment
appetite of customers remains strong, as the time has come for upgrading the plants that were built intensively
around 1990.

Measures in the Japanese business

Renewal of plants to continue at the peak pace

160
140
120
100
80
60
40
20
0

(R) Industry-wide shipment volume

99

Mixture production

04

09

14

FY 2019 forecast
Recycled mixture

Asphalt mixture production volume

Virgin mixture
Number of APs installed

50,000

2,000
1,500
1,000
500

0
94

99
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04
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09
2019 All rights reserved.

14(units)94
100,000
volume (1,000 tons)(V) Industry-wide shipment volume

APs shipped

Number of plants

volume (units)

Industry-wide shipment• Increase the sales ratio of the new model asphalt plant (VP), which can handle the rise in the recycled material
blend ratio, to 50% or more.
• Efforts to reduce environmental burden by expanding sales of energy saving (25% reduction in CO2 emissions)equipment• Expand sales of recycled mixture crushing plants• Establish remote controlled shipment system and automated plant shipment system, which enables manpower
reduction

0
FY 2019 forecast
9 The shipment volume of the mainstay AP business segment continues to decline
slightly.
The plants that were newly built during the bubble economy period around 1990
have been in operation for about 30 years with repairs and replacements of mainunits, and (these can no longer be sustained with repairs alone) customers’ appetite
for replacement of facilities has become strong.
 The recycled material blend ratio of asphalt has exceeded 70% and asphalt mixture
using recycled materials has become the mainstream. Until now, we have been
adding facilities for recycling, but we will replace with new plants and VPs withrecycling as the main strength when replacing in the future.
 We are saving energy by improving combustion efficiency, and we also have a trackrecord of APs that use carbon-neutral alternative fuel. We would like to work
thoroughly on CO2 emission reduction by expanding the sales of such plants.
 Along with AP, it is also the time for replacing crushing plants for recycled asphalt
mixture, and we are planning to manufacture crushing plants by ourselves.
 There was demand for fully automated plants in work-style reform at customers.
Taking into consideration the fact that we handle machinery, control andmaintenance entirely by ourselves and have a market share exceeding 70%, weshould be able to realize it and will accelerate the speed at which we work on thisinitiative.
 Since 25 years ago, both number of units and asphalt mixture shipment volume havebeen declining, but the maintenance service ratio to total AP related sales is more

9than 60% and sales are not declining. Going forward, we are utilizing IT to further
expand sales of maintenance service and have been focusing on improving customer
satisfaction by saving manpower.

9

Batching Plant (BP) Business Segment
Business environment• The trend in ready-mixed concrete shipment has not changed, continuing to decline slightly, while the demandfor concrete secondary products is showing an increasing trend. In the future, the number of ready-mixed
concrete plants is expected to decrease and there will be consolidation. The plant owners’ appetite for capital
investment will, on the contrary, be stimulated as the number of ready-mixed concrete plants reaches anoptimum level, so the demand for ready-mixed plants is estimated to remain flat.

Measures in the Japanese business• Leverage DASH brand and boost the dynamic market share to 50% from 40%.
• Ensure profits with environmental products and new technologies from measures for residual and returned
concrete.
• Differentiate by developing a new high-performance mixer and approach concrete plants for secondary
products.
• Expand sales of mobile BP, which is suitable to disaster-stricken areas• Build cloud system by evolving NIKKO Contents Service.
Existing remote maintenance is after-sales maintenance. Evolve it into presales maintenance employing
predictive diagnosis utilizing sensor technology.
• Expand sales of new model automatic mixer cleaner which realizes manpower saving.

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10 The business trend for BP is similar to that of AP and shipment volume of readymixed concrete is also on a declining trend. Infrastructure has already beendeveloped and it has shifted to the maintenance era, and we have to take measures
also in the BP business.
 Currently, the annual market share of BP is about 40% and we will carry out activities
to overcome other companies and increase the share to 50% as a target in three
years.

 We will introduce new products and technologies for environmental measures
addressing returned concrete, which is concrete returned from work sites, andresidual concrete, which occurs in the manufacturing process, and grow them.
 We will introduce new models in a timely manner to respond to mixing of new, highperformance and high quality concrete.
 We have been introducing new mobile BP products that can be operated at disasterstricken areas since last year and we will expand sales of these products.

 Like AP, we will evolve the remote maintenance service we have been offering for
more than 15 years into preventive maintenance.
 We will work on manpower saving for other matters, which are taking up ourcustomers’ time.

10

Maintenance (MS) Business Segment
Maintenance method reform (work-style reform)•Promote replacement of products that save manpower and require less maintenance.
•Reform of inspection method using IoT including wearable, sensor, etc.
•Build cloud system by evolving NIKKO Contents Service.
Existing remote maintenance is after-sales maintenance. Evolve it into presales
maintenance employing predictive diagnosis utilizing sensor technology.

Improve customer satisfaction•Expand Nikko Fan by expanding Plant Training Center and technical training.
Completed refurbishment of Plant Training Center at the head office and Tokyo Service
Center in 2019.
•Bolster backup structure with the Customer Support Center (CSC).

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11

 In the maintenance service business, we will promote switching to products that
contribute to work-style reform at customers.
 We are also working on reform of inspection methods such as personnel at a support
center checking the situation of the worksite by utilizing Smartglasses, which is a
wearable terminal, to provide technical support and accurate responses.
 We also have been offering maintenance training for plant operators for several
decades to improve customer satisfaction and have them continue to use the plants
in good condition. We are receiving increasing requests from customers regarding theissue of skill transfer, so we will enhance training and technical courses to further
foster a sense of unity with customers.

11

Overseas (Chinese) Business Segment
Business environment
Demand for renewal and modification of existing asphalt plants will increase primarily in the urban
areas given the active infrastructure investment policy of the government and increasingly stricter
environmental regulations. We expect the trade friction between the U.S. and China not to have any
direct impact on infrastructure investment in China and the business environment would remain
reasonable.

Respond to changes to stationary plant factories.
(i) Introduce new development projects into the market one by one: mixer 6t/B, RU enlargement,
etc.
(ii) Differentiate by introducing new equipment with environmental measures.

(iii) Fully expand the maintenance service business (targeting large-scale stationary plants).

Handle facilities that are suitable for the stationary plant factory.
(i) Improve plant functions.

(ii) Improve safety and ease of maintenance of plants.
(iii) Work on remote monitoring system (response to remote maintenance)

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12 Even though the situation in China is unstable due to the trade war between China
and the U.S., investment in domestic demand-related infrastructure is strong.
Expressways run throughout the nation and it has become necessary to constructroads branching from them, which in turn has led to requirements for having one
plant in each area in addition to the plants for expressways.
 In the Chinese market, our APs are recognized as high-end plants and we can expect
the market to expand.

 It has become possible for us to deploy the technology we have to respond to theenvironmental regulations and it has become easier for us to differentiate ourselves.
 In the year 2019 also, there have been many orders, exceeding the levels of theprevious fiscal year. Nevertheless, we don’t have any intention expand our production
capacity.
 In China, we sell about 20 units of AP a year and that figure has been expanding.
While supporting it, we will expand the maintenance field like in Japan and aim tobuild a recurring revenue model.
 At the stationary plant, we will also pursue initiatives related to remote maintenanceservice like in Japan.

12

Overseas (ASEAN) Business Segment
Summary of product and service measures◼

Along with the sales enhancement of the new product business, we aim to enter into the business of second-hand products,
parts, and maintenance corresponding to the targets and needs.
Profitability
Degree ofcontribution to
profits(i)

Strengthen
new plant
sales

(ii)

Enter thesecond-handplant business(iii)

Enter the parts
sales business(iv)

Enter themaintenanceservicebusiness–

Reviewproductgroups✓✓✓Secure double thecurrent sales and makeit a main revenue
source.

✓✓Level of needs
fulfillment

IssuesScope of needs tobe metLevel of difficulty
to solve

Fulfill the requirementsfor quality and stable
operation by some users.
Review targets andimprove opportunity loss.

✓✓✓

Enhance sales structure.
Expand dealers andbuild partner
management structure✓✓

Procurement and stock
management of secondhand products
Quality assurance
Alliance with dealers
handling second-handproducts.

Secure new revenue
sourcePotential for capturing
sales volume, though
unit price is lower than
new products✓

It is purely a support
measure for selling new
and second-handproducts.

✓

Offer parts quickly,
which is what all users
seek.

✓

Parts stock
management✓

Support maintenanceby customers
themselves, which is aneed for medium scaleor smaller customers.

✓

Local maintenancestructure(rotation from Japan,
hiring of local
engineers)

Enhance the lineup of
products in the low
price range.
Reduce loss ofopportunity.

✓✓✓

Control the secondhand products, which
account for majority ofthe market, and control
sales channels of Nikko
products.

✓

✓
✓

✓

✓
✓

✓

It is purely a support
measure for selling new
and second-handproducts.

✓✓

Profitability is lower
than the existing
business of new plants.

✓

www.nikko-net.co.jp ⓒ CopyrightDecline in brand value
Unclear positioning
Possible to fulfill withsecond-hand products

NIKKO CO., LTD.

✓

Competitiveedges

Feasibility

Timing ofrealization

Level of originality

Experience

Time it takes

Trust in quality (stable
operation)
Control of running costswith technologicalsupportEase of operation
Even though they aresecond-hand products,
offer high quality
products and do nothandle inferior
products.
Quality as genuine
product parts
Enable handling of key
parts that can beoffered only by the
manufacturers.

✓

Necessary to review
sales strategy✓

Necessary to establish
operation of a new
business, which wehave no experienceeven in Japan.

✓

Short term(within 1 year)✓

Medium to long term(within 2 to 3 years)✓

Necessary to build astructure locally.

✓

Medium term(within 1 to 2 years)✓

Medium term(within 1 to 2 years)✓

Long term(requires 3 to 5 years)✓

Knowhow accumulated
in the Japanese market✓

Necessary to build astructure locally.

✓

Introducing low-orderproducts means lessdifferentiation withcompetitors (?)✓

Newly require productdesign, price setting,production facilities,etc.

2019 All rights reserved.

13

 In the ASEAN region, while cumulative sales volume increased to double digits, thelocal purchasing power and economic power are insufficient for buying products thatare of grades equivalent to those in Japan. We are manufacturing core units in Japan,
and assembling and selling them overseas, and sales are somewhat stagnating.
 We are reviewing the methods taken so far with the help of consultants and areconsidering improving sales and service efficiency by building local bases.

13

Net Sales and Operating Income Plans under Medium-Term Management Plan (1)(mil. yen)AP-related business(Net sales)(Operating income)

30,00025,000

7.6%

8.3%

7.8%

9.0%

9.5%

6,000

10.8%

4,000

15,0003,000

16,58017,17916,434

5,000
1,253

1,348

18,7001,570

19,0001,710

20,0002,000

FY 2017

9,200
9,356

FY 2018

FY 2019

FY 2020

FY 2021

plan

plan

plan

Environment- and conveyor-related business
17.2%

5,000

17.0%

1,015

FY 2016

FY 2017

750

837

893

FY 2018

FY 2019

FY 2020

FY 2021

plan

plan

plan

Other business-related business

1,500

2,500
13.0%

6,000
2,000

7.8%

500
0

7,000

5,000

4,000

1,000

666

Medium-term plan
2,500

17.0%

15.0%

13.9%

1,500

7,893

1,006

Medium-term plan
6,000

9,300

9,400

0

0
FY 2016

2,500
2,000

9,521

1,000

3,500
3,000

8.1%

963

0

9.5%

10,000

5,000
1,900

9.0%

8.4%

15,000

5.9%

4,000

10.7%

5,000

20,00010,000BP-related business

20,000

10.0%

10.3%

10.7%

10.4%

11.1%

2,000

1,500

4,000

3,000
1,000
2,000
1,000

3,931
2,775

2,647
369

308

FY 2016

FY 2017

2,900

3,200

500

417

500

544

578

FY 2018

FY 2019

FY 2020

FY 2021

plan

plan

plan

0

3,000
2,000

3,400

0

4,133

4,480

4,677

www.nikko-net.co.jp ⓒ Copyright

5,000

5,200

1,000

500

1,000

679

417

462

502

510

559

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

plan

plan

plan

0

0

Medium-term plan
Net sales

4,900

Medium-term plan
Operating income
NIKKO CO., LTD.

Operating margin
2019 All rights reserved.

14

14

Net Sales and Operating Income Plans under Medium-Term Management Plan (2)(mil. yen)

7.0%

45,00035,000

6.0%

4.4%
1.1% 0.7%
1.1%
1.0% 0.7%▲(0.2%)
0.2%▲(0.4%)
0.4%

5.9% 6.0%
4.8%
4.5%

6.4%

7.1%

7.9%
4,500

2.0% 2.2%

36,50038,000 3,500

35,70035,114

34,11032,07325,00027,08725,03524,86424,553

23,971

24,812

23,856

3,000

1,500
23,803

2,300

2,249

22,175

1,832

185

271

(55)
△
55
▲ (5,000)
5,000

1,944

189

265

470

2,600

2,103

1,629

1,186

5,000
248

2,500

31,78030,707
26,942

15,00032,717

1,427

500

541

(98)
△
98

FY2003 04年度
FY2004 FY2005
FY2006 07年度
FY2007 FY2008
FY2009 10年度
FY2010 11年度
FY2011 12年度
FY2012 13年度
FY2013 14年度
FY2014 15年度
FY2015 16年度
FY2016 17年度
FY2017 18年度
FY2018 19年度
FY2019 FY2020
03年度
05年度 06年度
08年度 09年度
20年度 FY2021
21年度

Net
sales
売上高

Operating
営業利益
incomewww.nikko-net.co.jp ⓒ CopyrightOperatingmargin
営業利益率

NIKKO CO., LTD.

Previous Medium-Term
Management Plan

2019 All rights reserved.

(500)
▲ 500

New Medium-Term
Management Plan

15

15

Committees and Projects under Medium-Term Management PlanClassification

Committee and project list

Sales

Project to liberalize sales of groupproducts

Explanation of function
Generate synergies as the entire company sells the group products.

Sales

Project to promote sales in response
to Expo 2025 Osaka

Vitalize business negotiations related to Expo 2025 Osaka

Maintenance

Project to promote smart services

Sell add-on to existing equipment, replacement with new functions, andsafety equipment as maintenance products.

Maintenance

Project to develop equipment forwork-style reform

Develop products that offer manpower saving, energy saving, and safety(linked to smart service)

Overseas

Project to install business bases in the
ASEAN region

Build business bases for expanding sales in the ASEAN market and expand
overseas business.

Overseas

Second-hand business project

Sell second-hand machines in Japan and abroad (linked to the ASEAN
project)

Engineering

New development project review
committee

Unearths new businesses by deploying core technologies in areas otherthan existing business fields.

Manufacturing

Project to consider establishing global
production bases

Expand business base including overseas procurement and domestic
dispatch to reduce costs and improve productivity.

Operations

Sales innovation project

Improve speed and customer satisfaction with work-style reform in sales
method reform.

Operations

Engineering method reform project

Build design method not constrained by existing methods and boost the
speed of creating manufacture drawing.

www.nikko-net.co.jp ⓒ Copyright

NIKKO CO., LTD.

2019 All rights reserved.

16

 We have started committees and projects to achieve the Medium-Term Management
Plan, and the officers are leading and driving them forward.

16