TOKYO, 27th May 2020 – OSAKI ELECTRIC, a leading Japanese smart meter company, has announced "Mid-term Management Plan," covering five years through the fiscal year ending March 31, 2025. The Company applies a rolling method to its Mid-term Management Plan, previously announced on May 14th, 2019.
1. Management Policies
The OSAKI Group aims to become “Global Energy Solution Leader,” providing solutions to various energy-related issues in our society. The Mid-term Management Plan includes strategies to expand energy-related businesses and by carrying out the plan, the OSAKI Group is committed to creating new values to society and attaining sustainable corporate growth.
(1) Analysis on Fiscal 2019 Results
In Japan, sales fell short of the initial year forecast of the Mid-term Targets. This was due to a larger-than-expected decrease in demand for smart meters, in addition to delays in some projects for solution services and new businesses. Profits were in-line with the initial year forecasts from cost reduction efforts. In fiscal 2019, orders for smart locks, the “OPELO series” for the new businesses were strong and it is expected to grow continuously into the next fiscal year. The company also initiated projects to employ local 5G.
In the global market (outside Japan), sales were in-line with the initial year forecast. On the profit front, the Group recorded a loss on valuation of inventories of materials, largely due to changes for the smart meter specifications in the U.K. Also, there was an increase in freight costs to meet delivery deadlines of important customers. All in all, profits were low compared to the initial-year forecasts. However, the profit of global businesses significantly improved from the previous fiscal year attributable to projects in the Middle East, achieving the strategic goal to expand global business profits.
(2) Policies for Fiscal 2020 and afterwards
While demand in the Japanese smart meter market has reached its peak and continues to remain at low levels for the next few years, the OSAKI Group holds technologies and experience that are applicable in realizing “new lifestyles,” (minimum direct contacts), a countermeasure the government recommends against the COVID-19 infection after lifting the state of emergency.
The Company will expand solutions which save direct contacts such as power-saving solutions including automatic measurement as well as smart locks, to drive mid-term growth.
In the global business, the Group forecasts a decrease in demand due to delays in the installation process of smart meters at cities that were under lockdown during the COVID-19 epidemic. However, demand for smart meters is expected to recover as lockdowns are lifted. While carefully monitoring lockdown status of the relevant cities, the Group prepares to reinforce its development and production in response to anticipated recovery of the demand.
OSAKI ELECTRIC announced the postponement of transition to a holding company, previously resolved and announced on February 4, 2020. The Company has taken preventive actions against the continuing spread of COVID-19 since April 2020, and has decided that it is difficult to attain and place human resources necessary for the transition procedures to a holding company at the moment. The Company, however, introduces the executive officer system in its continuous efforts to reinforce corporate governance.
The Company expects sales and profits to decrease temporarily due to aforementioned factors related to the worldwide COVID-19 epidemic for the fiscal year ending March 31, 2021. Accordingly, the Company reviewed its Mid-term Targets for Fiscal 2020 through 2022 and moved the targets back by one year.
2. Strategies based on Management Policies and Mid-term Targets
(1) Strategies based on Management Policies
- Expanding Global Business
- Developing value-added smart meter businesses
- Developing new products and services
- Building resilient operations structure
(2) Mid-term Targets
* Forecasts for Fiscal 2020 include impact on business performance from the COVID-19 epidemic.
Forecasts for Fiscal 2021 and 2022, Target for Fiscal 2024 do not include impact of the epidemic.
About OSAKI ELECTRIC
OSAKI ELECTRIC CO. LTD. is one of the leading smart meter companies in the world. OSAKI ELECTRIC is focused on designing, developing and manufacturing innovative and technologically advanced energy meters and metering systems for the global utility industry. OSAKI's business portfolio includes a comprehensive range of premium quality metering products, energy management systems and IoT/AI integrated smart services. For more information, please visit https://www.osaki.co.jp/en/index.html