Based on its corporate philosophy of "For People, Society and the Earth", MMC Group has set out a new vision of "Circulating resources for a sustainable future" and a new mission of "Create a sustainable future (a prosperous, recycling-oriented and decarbonized society)". MMC Group will strive to enhance the value of its shares and corporate value through the FY2031 Strategy.
The outline of the FY2031 Strategy is as follows.
MMC group has set out "Our Commitment" of "For people, society and the earth, circulating resources for a sustainable future". MMC Group will build a recycling system of metal resources based on our strengths and realize growth throughout the value chain by expanding the scope, regions, and scale of our operations.
The FY2031 Strategy will be divided into two phases, Phase 1 from FY2024 to FY2026 and Phase 2 from FY2027 to FY2031, in order to achieve the Our Commitment. In Phase 1, MMC will promote improving profit growth and profitability by strengthening cost competitiveness and investing in medium- to long-term growth areas centered on resource recycling. In Phase 2, MMC will expand business scale through regional development including overseas, in addition to expansion of target business areas.
During Phase 1, MMC plans cash outflows of ¥230 billion in growth investments, ¥130 billion in maintenance and upgrading investments, and ¥60 billion in dividends, etc., against a cumulative cash inflow of ¥420 billion. During Phase 2, MMC plans cash outflows of ¥330 billion in growth investments, ¥210 billion in maintenance and upgrading investments, ¥180 billion in dividends, etc., and ¥70 billion in interest-bearing debt reduction, against a cumulative cash inflow of ¥790 billion.
Based on the recognition that returning profits to its shareholders is one of the most important management issues, MMC decides profit allocation based on a comprehensive assessment of factors across its management, which include earnings for the period, internal reserves, and financial standing.
With regard to the profit allocation during the FY2031 Strategy period, MMC will pay out for a dividend with a payout ratio of around 30% in Phase 1 from FY2024 to FY2026. MMC will also aim to enhance shareholder returns in Phase 2 from FY2026 to FY2031. In addition, MMC will continue to consider flexibly repurchasing its own shares in light of financial discipline such as cash flow conditions, stock prices, and net D/E ratios.
In Phase 1, MMC will implement measures such as cost reduction and process optimization to increase profitability by improving ROIC. In Phase 2, the ROIC spread, which is the difference between ROIC and WACC by business segment, will be positive in all businesses, including the Resources business, which requires long-term upfront investment. MMC will aim to maximize economic profit, which can be derived by multiplying the ROIC spread by invested capital (= ROIC spread × invested capital, hereinafter referred to as "EP ").
MMC's management policy for the business portfolio is as follows.
Of the total growth investment of ¥560 billion through FY2031, MMC plans to invest ¥250 billion to contribute to a recycling-oriented society through investments in mines and the tungsten business, etc., ¥280 billion to contribute to a prosperous society by strengthening the competitiveness of the Advanced Products Company and Metalworking Solutions Company, and ¥30 billion to contribute to a decarbonized society by strengthening the geothermal power generation business, etc.
MMC's approach to investment allocation is as follows.
Under the FY2031 Strategy, MMC will also work to strengthen cost competitiveness and reduce costs by a total of approximately ¥24 billion (Phase 1: Approximately ¥9 billion, Phase 2: Approximately ¥15 billion).
The ratio of accumulated cost reductions to operating profit is expected to be approximately 13% in FY2026 and approximately 19% in FY2031.
The target and strategy of each business segment under the FY2031 Strategy are as follows.
Target: Leader in Resource Recycling of Nonferrous Metals
|Business strategy||Resources Business||
|Smelting & Resource Recycling Business||
* Solvent extraction and electrowinning: A two-step hydrometallurgical process consisting of solvent extraction and electrolysis collection
Target: Global First Supplier
|Business strategy||Copper & Copper Alloy Business||
|Electronic Materials & Components Business||
Target: A Leading Company in Tungsten Products Recognized by Customers Globally
|Business strategy||Metalworking Solutions Business||
Transforming into a truly global company with the aim of autonomous business development in strategic markets
<Carbide tools business>
Target: Expansion of Renewable Power Generation to Achieve 100% Self-sufficiency in Renewable Power Electricity
|Business strategy||Renewable Energy Business||
Consolidate the renewable energy business in the Strategic Headquarters as a company-wide effort to expand the business from a long-term perspective
Effective April 1, 2023, MMC integrated the "Environmental recycling business" previously under the Environment & Energy Business Company into the Metals Company and transferred the "Renewable energy business" to the "Renewable Energy Business Division", which was newly established under Strategic Headquarters. (As a result, the Environment & Energy Business Company was abolished as of the same date.)
MMC Group aim to reduce Scope 1, which consists of direct emissions by the business operators, and Scope 2, which consists of indirect emissions resulting from the use of supplied energy of its greenhouse gas (GHG) emissions by 45% by FY2031 (compared to FY2021) and to achieve carbon neutrality by FY2046. MMC Group also aim to reduce Scope 3*, which consists of emissions from other companies that are related to the activities of business operators other than Scope 1 and Scope 2, by 22% by FY2031 (compared to FY2021). Furthermore, MMC aims to achieve 100% self-sufficiency in electricity derived from renewable energy sources by FY2051. (We have revised the GHG emissions reduction target for the Group announced on February 10, 2023, based on our latest business structure.)
*Categories 1, 3, 15
As described below, MMC group will strengthen its initiatives to address issues common to the entire Group and continue to reinforce its management base to enhance corporate value.
|Human resources strategy||
Announcement regarding the establishment of the “long-term management policy” and medium-term management plan (FY2015-2017) “Materials Premium 2016 - Challenge to become the world's leading businesses group” (2014.5.12)