In this Medium-term Business Plan, we have narrowed down the action tasks to: strengthening business profitability, structural reforms implemented to reinforce profit foundation, and reinforcement of business management system.
　With regard to strengthening business profitability, we are proceeding with selection and concentration of businesses based on whether they will lead to the future of the Company, considering their timeframes, and without being tied down by the past. Specific actions include the sale of equity interests in non-focused businesses. In the office business, we have achieved some results in fiscal 2023, including a steady improvement in profitability. In fiscal 2024, while pursuing growth in strengthening businesses, we will further strengthen business profitability by accelerating business selection and concentration efforts in non-focused businesses and direction-changing businesses.
　To reinforce our profit foundation, we are reducing interest-bearing debt and working capital and other assets. In fiscal 2023, we reduced interest-bearing debt by ¥45.7 billion and operating cash flow was positive ¥83.3 billion yen, mainly due to the reduction of working capital, showing steady progress.
　With respect to reinforcing our business management system, we are working to review investment evaluations and business reviews, strengthen monitoring the risk of impairment losses, and change our business management system to one that allows us to quickly take action.
　Through efforts to address these three issues, we will ensure the achievement of the Mediumterm Business Plan and return to a highly profitable company, thereby charting a growth trajectory once again.

　In fiscal 2025, we plan to achieve company-wide sales of ¥1.05 trillion and a business contribution profit ratio of 5% or more. We will enhance the profitability of the entire Company by increasing the ratio of strengthening businesses, especially strengthening areas for Industry. Based on the current business situation, we expect sales of ¥460 billion and a business contribution profit ratio of 11-13% in fiscal 2025, maintaining the current level or slightly improving it.
　We also set the improvement of ROE as our highest priority goal, aiming to achieve 5% or more by building a well-balanced financial foundation.

Main Financial Indicators

		FY2022 results	FY2023 results	FY2025 plan
Revenue (Billions of yen)	Strengthening business	418.4	416.5	460.0*1
	Company-wide	1,130.3	1,159.9	1,050.0*2
Business contribution profit ratio	Strengthening business	11.5%	7.7%	11-13%
	Company-wide	2.6%	2.2%	5% or higher
ROE		-19.9%	0.9%	5% or higher

*1 Revised on April 4, 2024　

*2 Revenue after deconsolidation of non-focused businesses

Image of Breakdown of Business Contribution Profit

　In order to select and concentrate businesses, this Medium-term Business Plan redefines the positioning of each business into four categories: strengthening business, maintaining profit business, non-focused business, and direction-changing business, and clarifies the expectations and roles of each business.
　The strengthening businesses are those that will drive the Company's growth through further business expansion. Maintaining profit businesses are those that are responsible for stable cash generation, and we will further strengthen their earnings power. Non-focused businesses are those whose role we will determine from a best-owner perspective, including the use of third-party capital. Direction-changing businesses are those that reorient all or part of the business, and, after completing the selection and concentration process, will be put on a growth trajectory.

Business Positioning

　In the Industry Business, we have selected medium-sized stable markets and are building a business with high market share and high profitability as factors for success. In fiscal 2023, due to delays in investment in production facilities by customers of the sensing business and the deterioration of market conditions for displays and other products, and the resulting delay in the development of performance materials products, we believe that the medium-to long-term growth potential for fiscal 2025 and beyond will remain unchanged, despite falling below initial targets. For future growth, the Industry Business is focusing on three areas that will drive the future global economy: displays, mobility, and semiconductor production equipment.
　For example, in the area of displays, the market for small- and medium-sized displays is shifting from conventional LCDs to nextgeneration displays. Seizing this opportunity, we have taken a cross-business approach to ICT brand owners to begin production based on orders of performance films for non-polarizing plates that will contribute to higher image quality in next-generation display products. In this way, in the Industry Business, we will continue to monetize new technologies and products by seizing hanges in the market, identifying issues with customers across the business, and contributing to the resolution of those issues.

Revenue in the Industry Business

　The office business is positioned as a maintaining profit business and is focused on profit and cash contribution. Currently, the decline in MFP print volume is within our expectations, and we are maintaining the gross profit level, partly due to the results of initiatives such as One Rate*. In addition, in fiscal 2023, through a thorough reduction of production costs, we generated profits that exceed our initial plan.
　To further enhance profitability, we will continue to improve sales and service efficiency through the use of AI, as well as implement global structural reforms in the office business. In addition, we will optimize our production system by terminating production at our Chinese production subsidiary Konica Minolta Business Technologies (WUXI) Co., Ltd. by the first half of 2025.
　At the time the Medium-term Business Plan was formulated, it was assumed that the business profit contribution from the office business would decrease significantly in fiscal 2025. However, profitability is currently improving at a pace exceeding the plan, and we expect to reach the ¥30 billion yen level in fiscal 2025, with a profit contribution margin of 7％ or more.

* One Rate: A model that charges a flat rate instead of the traditional billing method that fluctuates monthly

Business Contribution Profit from the Office Business

　In order to achieve sustainable growth in the Medium-term Business Plan and beyond, we will promote global structural reform in fiscal 2024 to improve the productivity of the entire Group.
Specifically, we will promote the automation of operations, including the use of generative AI, and invest in DX so that employees can shift to high-value-added operations that only humans can perform. We will also place the right people in the right positions, focusing on businesses and regions to be strengthened, and continue to invest in education for human capital development to improve engagement.
　Furthermore, the entire Group will optimize its human capital, and plans to reduce the total number of regular and non-regular employees by 2,400 in fiscal 2024, compared to the original plan for fiscal 2025. As a result, we will record a one-time expense of approximately ¥20 billion in fiscal 2024. We expect this to have the effect of boosting profits by approximately ¥5 billion in fiscal 2024 and ¥15 billion in fiscal 2025.
　Through these structural reforms, we will transform ourselves into an organization with high per capita productivity.

　We have been working to reduce losses in non-focused and direction-changing businesses, and in fiscal 2023, we reduced losses by approximately ¥3.5 billion compared to the previous fiscal year. In non-focused business, we deconsolidated a domestic subsidiary in marketing services and concluded agreements for the transfer of 80% equity interests in two Chinese optical component manufacturing companies. In addition, the Company executed the transfer of its equity interest in Invicro, a U.S. subsidiary that provides drug discovery support services in precision medicine.
　For DW-DX, a direction-changing business, we will narrow down the regions and business areas, and aim to transform it into a business that can grow profitably. For Imaging-IoT solutions, we will transform into a solution provider and narrow down the countries in which it is deployed in order to generate profits. We plan to implement these measures by the end of fiscal 2024, aiming to generate revenue in fiscal 2025.

Business contribution profit

* In this graph, non-focused business represents the sum of precision medicine unit and marketing services unit

Reform Results and Future Policies for Non-focused and Direction-changing Businesses