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Management Policy

Medium-Term Business Strategy

CS B2024

The Brother Group has formulated the medium-term business strategy "CS B2024" for the period from FY2022 to FY2024 as a road map to achieve the Brother Group Vision "At your side 2030."

Outline

Based on "Take off towards our new future" in CS B2024, the Brother Group will undertake business portfolio transformation—including expansions in the industrial area and transformation in the printing area—as well as management foundation transformation for a sustainable future.

CS B2024 outline

Four priority themes

  1. Towards expansion in the Industrial area
    • Achieve significant growth in Industrial Equipment business
      We will achieve significant growth in the Industrial Equipment business by contributing to enhancing customers' competitiveness of manufacturing and reducing CO2 emissions, through improving productivity and environmental performance.
    • Accelerate growth in Domino business
      We will accelerate growth by enhancing product strength in the digital printing area and strengthening relationships with customers in the coding and marking area, and at the same time, enhance industrial inkjet technology foundation to secure long-term competitiveness.
  2. Towards transformation in the Printing area
    • Accelerate P&S business model transformation
      We will strive to further strengthen the profitability of existing business even amid the harsh market environment, and at the same time, promote transformation for the future, including accelerating the shift to a business model that connects with customers, such as a contract-based business model, and expanding commercial & industrial labeling business.
  3. Towards the business portfolio of the future
    • Create new businesses that help to address materialities
      We will search widely for business opportunities that enable working people's productivity and creativity and help protect the earth by further evolving Brother's strengths.
    • Evolving printing technology with inkjet at its core and expanding its range of applications
      We will advance the evolution of printing technology with inkjet at its core and expand its range of applications in both the industrial and consumer areas.
  4. Management foundation transformation for a sustainable future
    • Undertake environmental efforts towards carbon neutrality
      We will promote efforts towards achieving targets in reduction of CO2 emissions, resource circulation, and biodiversity conservation stated in the Brother Group Environmental Vision 2050. In particular, we will undertake reduction of CO2 emissions through various activities to achieve carbon neutrality in the Brother Group's business activities by 2050.
    • Enhance and expand connections with customers
      We will connect with even more customers and continuously provide more value than ever before in each of our businesses. Furthermore, we will use data obtained through connections with customers to create even more customer value and seek business model transformation. In addition, we will achieve stable product supply by building resilient supply chains.
    • Foundation for all transformations - Evolve Brother's unique management system "Brother Value Chain Management" (BVCM)*, encourage employees to take on challenges, and improve employee engagement
      As a cornerstone of transformation, we will continuously evolve BVCM, encourage employees to take on challenges, and improve employee engagement to continue to improve the productivity and creativity of the Brother Group.
  • Brother Value Chain Management (BVCM)
    Brother's unique customer-oriented management system defining the flow of value provision to customers

Materiality and Sustainability Targets

The Brother Group has identified five materialities (priority social issues) in order to "contribute to society and help protect the earth" as we set as "Our Purpose" in the Brother Group Vision "At your side 2030." We have set sustainability targets to address these materialities and will promote company-wide efforts to address them as a management issue.

Materiality Targets for FY2024 Relevant SDGs
Contribute to society Supporting people's value creation
  • In the Industrial Equipment business, secure performance advantage of products that contribute towards improving customer productivity and reducing CO2 emissions
  • In P&S business, build platform to connect directly with customers towards improving LTV*1 of customers
3 GOOD HEALTH AND WELL-BEING
8 DECENT WORK AND ECONOMIC GROWTH
9 INDUSTRY, INNOVATION AND INFRASTRUCTURE
12 RESPONSIBLE CONSUMPTION AND PRODUCTION
13 CLIMATE ACTION
17 PARTNERSHIPS FOR THE GOALS
Realizing a diverse and active society
  • Visualize employee engagement at the global level and improve engagement survey scores
  • Enhance talent development and governance for encouraging the assignment of local employees to top management positions of facilities outside Japan
  • Strengthen talent pipeline for healthy gender balance in management positions and establish environment for achieving diverse ways of working*2
3 GOOD HEALTH AND WELL-BEING
4 QUALITY EDUCATION
5 GENDER EQUALITY
8 DECENT WORK AND ECONOMIC GROWTH
17 PARTNERSHIPS FOR THE GOALS
Pursuing a responsible value chain
  • Expand the human rights risk assessment on suppliers
  • Attain RBA*3 Gold certification for three Group manufacturing facilities
3 GOOD HEALTH AND WELL-BEING
4 QUALITY EDUCATION
5 GENDER EQUALITY
8 DECENT WORK AND ECONOMIC GROWTH
10 REDUCED INEQUALITIES
17 PARTNERSHIPS FOR THE GOALS
Protect the earth Reducing CO2 emissions
  • [Scope 1 and 2*4]
    Achieve 47% reduction from the FY2015 level (9% reduction during the three-year period from FY2022 to FY2024)
    Ref.) FY2030 Targets: 65% reduction from the FY2015 level
  • [Scope 3*4] Take measures to reduce 150,000 tons through own effort
    Ref.) FY2030 Targets: 30% reduction from the FY2015 level
7 AFFORDABLE AND CLEAN ENERGY
12 RESPONSIBLE CONSUMPTION AND PRODUCTION
13 CLIMATE ACTION
17 PARTNERSHIPS FOR THE GOALS
Circulating resources
  • Achieve ratio of virgin materials used in products of 81% or less
    Ref.) FY2030 Targets: below 65%
6 CLEAN WATER AND SANITATION
11 SUSTAINABLE CITIES AND COMMUNITIES
12 RESPONSIBLE CONSUMPTION AND PRODUCTION
14 LIFE BELOW WATER
15 LIFE ON LAND
17 PARTNERSHIPS FOR THE GOALS
  1. Lifetime Value (LTV)
    Customer lifetime value, which is the value to customers and profits generated for companies over the entire usage period of products and services
  2. Implemented at Brother Industries, Ltd.
  3. Responsible Business Alliance (RBA)
    International organization to promote CSR, which establishes standards to ensure that working conditions are safe, that workers are treated with respect and dignity, and that business operations are conducted environmentally responsibly and ethically in the supply chains of the manufacturing industry
  4. Scope 1, 2, 3
    Categories of greenhouse gas emission sources; Scope 1 refers to direct greenhouse gas emissions by business operators, Scope 2 refers to indirect greenhouse gas emissions resulting from use of electricity, heat, and steam supplied by other entities, and Scope 3 refers to indirect greenhouse gas emissions other than Scope 1 and 2 (emissions by other entities related to the activities of business operators)

Financial Policy

The Brother Group will continuously improve shareholder value by achieving both business growth and sustainability goals. While strengthening shareholder returns based on a stable and continuous dividend policy, we will aggressively invest for the future, utilizing operating cash flow generated from our business as well as interest-bearing debt.

Prior investments for the future

Theme Main Items Amount
Business portfolio transformation
  • Towards expansion in the Industrial area
  • Towards transformation in the Printing area
  • Reinforce sales and service facilities in the Industrial area
  • Reinforce production capacity in the machinery/FA area
  • Expand inkjet development and manufacturing facilities
50 billion yen
  • Towards the business portfolio of the future
  • Strategic investments for M&A, etc.
30 billion yen
Management foundation transformation for a sustainable future
  • Environmental efforts
  • Enhance and expand connections with customers
  • Factory investment for local production for local consumption of products and the realization of a circular economy
  • Introduction of energy-generation equipment at Group facilities
  • Construction of new environmentally friendly building
  • Supply-chain resilience
  • DX investments
70 billion yen
Total 150 billion yen

Stable and continuous shareholder returns

Based on our policy of stable and continuous shareholder returns, we will pay out a minimum annual dividend of 68 yen per share during the period of CS B2024 (with a consolidated payout ratio set at 35% based on the earnings forecast for FY2022), and also consider additional shareholder returns, including an increase in the dividend level, depending on factors such as business performance. We will also flexibly carry out repurchase of our own shares.

Financial Targets

  Targets for FY2024*1
Sales revenue 800 billion yen
Operating profit ratio
(Profit for the period attributable to owners of the parent company ratio)
10% at least
(7% at least)
ROE 10% at least
(above capital cost)

Business portfolio transformation

  1. Exchange rate:1USD=108.00JPY,1EUR=125.00JPY
  2. Reference values for comparison with FY2024 targets and exchange rate assumptions

CS B2024 Update

Updates on the Medium-Term Business Strategy "CS B2024"
(excerpts from the financial results presentation for FY22 posted on May 8, 2023)

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