With the world at the mercy of COVID-19 in fiscal 2020,our Company was forced to restrict its activities in many scenarios, making the year one that tested our patience with the inability to move forward with plans. Looking at our operating results, net sales declined 11.3% year on year to ¥42.08 billion, operating profit declined 33.3% to ¥1.25 billion, ordinary profit declined 27.5% to ¥1.46 billion, and profit attributable to owners of parent declined by 33.7% to ¥950 million.
Major changes are taking place in circumstances surrounding our Group. In response to the global heightening of environmental awareness spurred by climate change and the biodiversity crisis, the achievement of a carbon-neutral society has become an urgent issue. The government of Japan has declared its aim to realize such a society by cutting greenhouse gas emissions to virtually zero by 2050.
As a company existing in this age, we recognize our natural responsibility to act with consideration of the sustainability of society and the planet by making efforts not only in the environmental field but also in matters such as gender equality and achieving a just society.
We further recognize that companies unable to respond to change will necessarily disappear. Another pressing issue for us is adapting to the scheduled spring 2022 market restructuring of the Tokyo Stock Exchange, which will set up a Prime Market with stricter listing standards.
Continuing as a company needed by society
In May 2021, we celebrated the 125th anniversary of our founding. Long before the terms “SDGs” and “ESG” came into being, we have engaged in business with a mission of creating a safe and secure society and under a principle of solving issues in society. We were the first company in Japan to tackle many of our fields of business, and we have created products that boast top spots within their business niches. We were also early to undertake improvement of the work environment and employee welfare, during a history that includes the establishment of Japan’s first health insurance association. These achievements have come down to us today as the DNA of TOKYO KEIKI, which strives to solve social issues while also advancing our business. Now, at this major turning point in our history, we hope to return anew to our origin and connect it to the development of our business.
A growth strategy that starts with sustainability
By continuing to grow sustainably through the dual activities of contributing to protection of the global environment and solving social issues to ensure people’s safety and security, we seek to continue as a company that is needed by society. With this determination in mind, in June 2021 we launched TOKYO KEIKI Vision 2030 with the aim of achieving sustainable growth and improvement of our medium- to long-term corporate value through the creation of global niche-leading businesses from the approach of the SDGs.
TOKYO KEIKI Vision 2030 is our declaration of intent to make a sharp turn toward growth rooted in sustainability and ESG initiatives. To achieve this, we identified the management issues faced by our Group and the social issues toward which our Company can make contributions. We further clarified five business domains that we should strengthen, key points for deepening our existing businesses, and issues related to human resource development and organizational reform, among other matters. Based on our vision, we seek to grow as a company that once again takes a bold lead in solving social issues.
As a part of our internal reforms aimed at this, we created two new organizations: the Future Design Unit that aims for bottom-up innovation, and the Sustainability Office that seeks to promote ESG- and SDG-related activities across the company. To supervise the Sustainability Promotion Office, we also established a Sustainability Committee, of which I serve as Chairman. Under this new structure, we intend to draw out innovation from the standpoint of sustainability and connect this to growth strategies.
Medium-term Business Plan
Spanning three years from fiscal 2021, our Medium-term Business Plan has the primary goal of strengthening foundations and solidifying fundamentals based on our medium- to long-term strategy, to achieve the goals set in TOKYO KEIKI Vision 2030. The three-year period also marks a phase of discovery, focus, and development of the growth drivers that will support our future.
Our basic policy is to continue creating unique, high-value-added products aimed at solving the social issues addressed by the SDGs. By growing profits through contributions to safety and the environment and by achieving sustainable growth and enhancing our medium- to long-term corporate value, we intend to meet the demands and expectations of our stakeholders. To achieve this, we plan to move forward with initiatives based on three basic policies: (1) Expansion of our business domains, (2) Promotion of globalization, and (3) Continuous strengthening of our existing businesses.
We applied for a transition to the Tokyo Stock Exchange’s Prime Market in the spring of 2022, and have made it our mission to prepare a commensurate level of governance and to continuously enhance our corporate value. At the same time, the number of issues that our Group must solve, such as the creation of a sustainable society and the advance of a digital society, is increasing. While linking these to each other, we will continue our efforts toward becoming a company that grows sustainably.
I ask all of our stakeholders for their continued guidance and support.
President & CEO
Since our founding and long before the word “sustainability” became recognized, our Group has made contributions to society by providing products and services that solve issues in Japan’s social infrastructure.
While we acknowledge that this historical background makes us a company that is highly attuned to the sustainability concept of connecting company growth with contribution to solving environmental and social issues, our launch of sustainability organizations took place in June 2021, and we have just begun corporate management with awareness rooted in the context of sustainability.
With my appointment as the person in charge of promoting sustainability, I recognize my mission as reorganizing our conventional business from the modern perspective of sustainability management and connecting this to the future vision indicated in TOKYO KEIKI Vision 2030, to lay a foundation for our next 100 years of development.
Recent years have seen active movement around the world involving sustainability, including the expansion of ESG-related investment and the European Green Deal set of policy initiatives. In order for our Group to continue as a sustainable company listed on the Tokyo Stock Exchange Prime Market and to remain a company that will long be needed by society, I believe it is imperative that we not only demonstrate superiority in our conventional products and services and in our financial base, but also continuously add new ability to create corporate value that solves environmental problems and social issues.
To sustainably add this new value, all of our employees must hold a strong sense of responsibility that seeks to contribute to society through the business activities they are involved in. Transforming the Group as a whole into a collection of employees that hold this mindset is also one of the roles assigned to the person in charge of sustainability promotion.
We will organize our in-house structure and examine diverse sustainability initiatives, including the earlier-mentioned enhancement of corporate value in a manner considerate of the environment and society, actions aimed at carbon neutrality and TCFD recommendations, and promotion of diversity and inclusion, and will press forward to demonstrate concrete initiatives.
Executive Officer, Chief of Sustainability Promotion
At the center of our Group, the Sustainability Office plans and promotes measures involving sustainability management.
The Sustainability Committee is chaired by the President & CEO and selects Members from Internal Directors and Executive Officers. It functions as a meeting body that discusses and shares sustainability management-related policies and measures, and executes decisions without delay across the Group.
It also makes proposals on key measures and issues progress reports to the Management Conference and the Board of Directors.