Mid-term Direction 2024

Mid-term Direction 2021 review

In 2018, Murata established “Mid-term Direction 2021” as the policy for the next three years (from FY2019 to FY2021). With “Mid-term Direction 2021,” we aimed to provide value to customers by rebuilding strong business foundations to support our growing business and by capturing broadening business opportunities. We also aimed to be a company where each employee plays an important role, feel rewarded and grow through their work. We identified three group-wide issues to achieve continuous and sound growth, and strived to solve these issues.

Management targets

Mid-term Direction 2021 review

Although we saw a continuous increase in demand for components due to the advancement of automobile electrification and increase of new products for smartphones, we are expecting less-than-projected growth and will miss the sales target due to the production adjustment of electronics and stock adjustment of electronic components in FY2019. The ratio of operating income to net sales is expected to achieve the target due to improved profitability of each product and improved product mix. ROIC (pretax basis) is also expected to achieve the target due to significant improvement of the ratio of operating income to net assets compared with the plan despite tepid sales compared with the plan and delay in the improvement of capital turnover in terms of largescale investment.

Towards Mid-term Direction 2024

There were changes in market conditions and difficulties caused by the COVID-19 pandemic, but we take it seriously that our sales growth will be less than planned. We will continue to focus on the ratio of operating income to net sales and ROIC (pre-tax basis) in the next mid-term Direction. For that reason, we will strive to take portfolio management to a higher level and maximize synergies from M&As made previously and aim to increase our profitability and capital efficiency.

Group-wide issues

Mid-term Direction 2024

Vision 2030, which was established as a long-term direction, sets out the necessary preparations in details as well as the direction the company aims for. And the first phase to achieve Vision 2030 is set forth in “Mid-term Direction 2024” (FY2022 to FY2024). In this three-year period, in addition to solving the currently existing problems, we strive to capture the changes in the environment from a long-term perspective and perform backcasting to identify necessary preparations to get where we want to be.

Basic policy

Group-wide targets

Capital allocation policy

  • Continue investing in main businesses (components, devices/modules) and steadily generate cash
  • Treat long-term environmental investment, acquisition of technologies, risk countermeasures, IT infrastructure, etc., as strategic investments and actively pursue them
  • Meet stakeholder expectations by maintaining a solid financial footing while using surplus funds to expand shareholder returns, including stock buybacks