Medium-term Management Plan

Under our Medium-term Management Plan 2024, we formulated CITIZEN Group Vision 2030 "Crafting a new tomorrow." To achieve this vision, we set ourselves the goal of actively investing and laying the foundations for growth. Under our Medium-term Management Plan 2027, we will build on the growth foundations we have laid over the past three years to achieve further growth and development and increase our earning capacity.

Medium-term Management Plan Presentation

Review of the Implementation of Medium-term Management Plan 2024

The Watches Business is expected to achieve increased net sales for a third consecutive year, reflecting continued market growth in North America and Europe and recovery of the domestic market. The operating profit margin also remained at a high level exceeding 10%.

The Machine Tools Business is in an adjustment phase. Over the period of the Medium-term Management Plan 2024, we have made steady progress establishing our business foundations, including expanding production capacity.

The Devices and Components Business faced an uphill struggle this fiscal year, partly due to the effects of China's economic slowdown and the lackluster automotive components market; however, we are working to improve profitability. In the Electronics and Other Products Business, photo printers sold well on the back of firm demand.

Business Portfolio

With the Watches Business and Machine Tools Business still positioned as core businesses that drive the Group's growth, we will aim for further growth and development by strategically investing our resources, while also focusing on improving profit margins and capital efficiency and achieving sustainable improvement in corporate value.

In the Watches Business, we will target net sales of 190 billion yen, and aim to achieve business growth and strengthen profitability through enhancement of the value provided by brands. In the Machine Tools Business, we will demonstrate the true value of "manufacturing and sales innovation" to drive the sales expansion and customer development in the global market, aiming to achieve a net sales target of 100 billion yen. In the Devices and Components Business, we will press ahead with selection and concentration and allocate more resources to businesses with growth potential to transform them into profitable businesses that will grow steadily. From FY2025, we will integrate devices and components and electronics products into one segment called the Devices and Components Business and our net sales target for this segment is 70 billion yen.

Numerical targets

Our numerical targets under the Medium-term Management Plan 2027 are: net sales of 360 billion yen; an operating profit margin of 9.0%; and an ROE of 9.0% or higher. Our basic policy is to build on the growth foundations we have laid during the Medium-term Management Plan 2024 to achieve further growth and development and increase our earning capacity.
Going forward, we will continue implementing initiatives to maximize business growth and corporate value.

Watches Business

Our policy for the Watches Business is to "Drive business growth and enhance profitability by elevating the value of our brands.", and our FY2027 financial targets are net sales of 190 billion yen and an operating profit margin of 12.0%.

Our three key strategies are as follows.
"Enhance value provided by brands through global strategy."
"Further step up initiatives in the North American market."
"Develop movements for the realization of high-value-added products."

Machine Tools Business

In the Machine Tools Business, we will demonstrate real value of "manufacturing and sales innovation," for achievement of net sales of 100 billion yen, and our FY2027 targets are net sales of 100 billion yen and an operating profit margin of 15%.

Our three key strategies are as follows.
"Implement region-specific strategy for net sales of 100 billion yen."
"Implement global sales strategy for the Miyano Brand (medium and large machines)."
"Expand market share through creation of customer value."

Cash allocation

Looking at cash inflow, we expect operating cash flow of around 95 billion yen, and we will continue focusing on the optimization of assets owned.
Looking at cash outflow, specifically investment for growth and rationalization, we are planning investment on a larger scale than under the Medium-term Management Plan 2024, and we plan to make ongoing growth investments.

The investment can be broadly broken down into three components: the Watches Business, the Machine Tools Business and DX investment, with more than 70% of total investment will be in core businesses. Since capital investment in the Machine Tools Business was completed for the time being under the Medium-term Management Plan 2024, under the Medium-term Management Plan 2027, we plan to focus on investment for the growth and rationalization of the Watches Business.

CITIZEN Group Materiality

While there are no changes to the five materialities identified under our Medium-term Management Plan 2024, we have updated our initiatives, taking into consideration climate change scenario analysis and conditions both inside and outside the company.

Sustainable management

"This shows the main KPIs for our materialities.
We are setting a CO2 emissions reduction target for Scope 3 CO2 emissions for the first time, in addition to the target for Scope 1 and 2 emissions. For the first time, we are also setting a target ratio of sustainable products, which contribute to business growth while helping solve social issues, to the Group's consolidated sales. We have also set a target ratio of female managers for the first time.
Going forward, we will continue steadily taking action to comply with new disclosure requirements. "

DX Strategy

The measures we will take are as shown here. We will aim for a shift to efficient and customer-centric business processes through the use of data and digital technologies, including standardizing designs and reforming processes, strengthening data sharing, and promoting the use of generative AI. We will also implement a host of other measures including building a data management structure, nurturing digital human resources, and using digital technologies to transfer technologies and skills.

Human resources strategy

We will implement measures under the three overarching themes of "Enhancement of job satisfaction," "Development of human resources" and "DEI."

We will improve employee engagement and promote health and productivity management with the aim of achieving sustainable growth as a company and the wellbeing of employees.
We will aim to nurture the human resources that bring about corporate transformation and acquire and develop the human resources necessary for business continuity, and we will seek to standardize talent management and skills management systems across the Group.
Additionally, we will promote DEI, adding equity to diversity and inclusion, and we will promote the active participation of diverse human resources, and systematically nurture and promote female candidates for managerial positions.