Corporate Strategy

Management Policy

The Mitsubishi Electric Group, based on its Corporate Mission and Seven Guiding Principles, has positioned corporate social responsibility (CSR) initiatives as the pillar of its corporate management. Accordingly, the Group aspires to win the appreciation of its stakeholders for its initiatives aimed at resolving various challenges that society is now confronting. Furthermore, it seeks to become a corporation that is trusted by society, customers, shareholders and employees, and that earns their satisfaction through its business activities.

Taking on these challenges on a global basis, the Group is promoting energy-saving products and systems while helping to develop social infrastructure, with the aim of providing solutions for environmental issues, and resource and energy issues. In doing so, the Group embodies its corporate mission in the context of the current environment as a "global, leading green company" capable of contributing to the realisation of a prosperous society that simultaneously achieves "sustainability" and "safety, security and comfort."

Since the 2002 financial year, the Mitsubishi Electric Group has continued to pursue sustainable growth by undertaking balanced management initiatives that stem from the three perspectives of growth, profitability and efficiency, and soundness. Looking ahead, the Group will continue carrying out such initiatives and thereby increase its corporate value.

As for corporate ethics and compliance, the entire Mitsubishi Electric Group will continue to strictly observe all statutory, regulatory and ethical requirements while strengthening internal control.

Management Targets

Toward "High-Quality" Growth

In line with its efforts to achieve a higher level of growth, the Mitsubishi Electric Group has revised its growth targets for the 2021 financial year to consolidated net sales of ¥5.0 trillion or more and an operating income ratio of 8% or more. The Group will also continue with efforts to achieve the following management targets: secure an ROE of 10% or more and secure an interest-bearing debt to total assets ratio of 15% or less.

In fiscal 2016, the Mitsubishi Electric Group achieved a second consecutive year of record-high consolidated net sales, which totalled ¥4,394.3 billion. Operating income stood at ¥301.1 billion. In addition, the Group continued to achieve its management targets for ROE of 10% or more and a ratio of interest-bearing debt to total assets of 15% or less, recording figures of 12.4% and 10.0% respectively.

Moving forward, the Group will continue to focus on executing balanced management initiatives, thereby pursuing "high-quality" growth.

[Growth Targets to be Achieved by the 2021 Financial Year]

Net sales: ¥5.0 trillion or more
Operating income ratio: 8% or more

[Management Targets to be Continuously and Stably Achieved]

ROE: 10% or more
Ratio of interest-bearing debt to total assets: 15% or less

Bolstering Growth Strategies

Realising Growth through Value Creation with Growth Drivers

The Mitsubishi Electric Group's strength lies in its abundant technological assets, which encompass a wide range of technologies such as control technologies and power electronics. In addition, the Group possesses a solid operating platform that encompasses materials procurement, production, quality assurance, and sales and services, in all of which a culture of improvement is firmly entrenched. The Mitsubishi Electric Group is thus well-positioned to freely leverage its competitive edge in a wide range of diverse businesses.

With this in mind, the Group has positioned "making strong businesses stronger" as the core of its growth strategies. Currently, the Group has identified eight businesses: power systems, transportation systems, building systems, factory automation (FA) systems, automotive equipment, space systems, power devices and air-conditioning and refrigeration systems, as growth drivers. Focusing on these businesses, the Group will expand its operations in markets worldwide, ranging from Japan, North America, Europe and China to newly emerging nations, including those elsewhere in Asia. As it moves forward, the Group will continue to create and provide new value to satisfy the needs of each market and garner the appreciation of customers, thereby securing sustainable growth.

Additional Value Creation through Technology Synergies and Business Synergies

Towards securing its fiscal 2021 growth targets and sustained business expansion, the Mitsubishi Electric Group is accelerating and strengthening its initiatives to create additional value by combining and co-ordinating its technologies and technologies, and businesses and businesses, while enhancing each product, system and service.

Specifically, the Group seeks to create technology synergies and business synergies through the co-ordination of business activities. In addition to improving the performance and reliability of every product and service it offers, the Group will enhance its responsiveness to customers' business challenges and needs by innovatively combining its technologies, products, systems and services. Through these efforts, the Group will garner even greater customer recognition in existing business fields while developing new businesses and markets and thus secure greater earnings.

Increasing the Allocation of Resources to Steps Aimed at Strengthening Competitiveness

As it increases the allocation of development, capital and other investment resources, the Mitsubishi Electric Group targets business fields where the Group is capable of quickly securing growth while generating short-term investment benefits as well as those exhibiting a high probability of expansion with little or no performance volatility. At the same time, the Group constantly reviews and refreshes its business portfolio to reallocate its management resources to growth fields. Moreover, the Group works to strengthen this portfolio by continuously creating new strong businesses capable of driving future growth. In addition, the Group is committed to forward-looking R&D aimed at securing a more robust technological platform that will, in turn, ensure its sustainable growth from fiscal 2021 onward.

Aiming to augment its growth, the Mitsubishi Electric Group will also actively pursue collaborative ties and M&As from the three perspectives of: supplementing product groups and technology fields in which the Group is lacking to expand business; securing sales and service networks when advancing into new regions and markets; and acquiring new customer segments in order to bolster the Group's business platform.

Building a Robust Management Foundation

To strengthen its management foundation, the Mitsubishi Electric Group continuously strives to enhance its capital efficiency. As a part of initiatives to this end, the Group continues to expand net sales and reduce costs while engaging in activities aimed at improving inventory turnover, trade receivables turnover, and Just in Time operations. In addition to implementing these efforts in an exhaustive manner, in fiscal 2016 the Group began utilising an internal performance indicator, ROIC (calculated by Mitsubishi Electric's own standards), to monitor asset efficiency by business segment, thereby improving the ROE of Group operations.

Looking ahead, the Mitsubishi Electric Group will continue to focus on generating stable cash flows, actively investing in growth fields, maintaining well-balanced shareholder returns commensurate with profit growth, and diligently working to increase corporate value.

Continuous Innovation

The Mitsubishi Electric Group will steadfastly carry out its management policies guided by a commitment to balanced management, while putting into practice its overarching corporate statement, "Changes for the Better". Each and every employee will share the common goal of developing new frontiers through continuous innovation, and the Mitsubishi Electric Group—by continuing to undergo transformation itself—will mature into a corporation that is always producing something better.