Investors
Top Message
CEO MESSAGE
We will accelerate our evolution into an innovative T-shaped company by focusing our management resources on the integration of hardware and software.
I’m Hideo Izumi, this fiscal year, I assumed the role of President and CEO of Alps Alpine Co., Ltd. I joined the company, formerly known as Alps Electric, in 1985, and have spent most of my career in the business and engineering fields. As we pursue our T-shaped strategy, we will create valuable businesses and products that will lead the next generation—by moving forward with the integration of hardware and software and the fusion of core technologies, and by optimally allocating and utilizing our management resources—with a renewed focus on the medium- to long-term future.
In the first half of the fiscal year, the environment surrounding our company generally continued to recover gradually. Despite the slowdown in the Chinese economy and lingering instability in Sino-American relations, production in the automotive sector improved, as the impact of cuts to production caused by the semiconductor shortage was mitigated. At the same time, future circumstances remain uncertain due to global inflation, including the protracted situation in Ukraine and rising raw material and energy prices, as well as fears of economic recessions in various countries due to policy rate hikes.
In this business environment, the financial results for the first half of the fiscal year showed that the depreciation of the yen made a significant contribution in our components business, and added to the increased adoption of products for amusement applications and tact switches for automotive applications. However, overall business declined because of the impact of the continued decline in consumer electronics, such as mobile devices, due to the demand caused by COVID-19 swinging back. In our sensors and communication business, although sales of communication devices and sensors for in-vehicle applications remained strong, overall business declined due to a switch in customer models for sensors for mobile devices.
In the modules and systems segment, the increased demand for automotive components in line with the recovery in global automobile production, as well as the contribution of new infotainment products launched in the fourth quarter of the previous fiscal year, have resulted in several years of increased component procurement difficulties and price hikes, with associated price shifting and cost-cutting restrictions. We are continuing to hold difficult negotiations with customers. It is precisely because we are now in a chaotic business environment, with EVs at the forefront of dizzying changes in society, that we want to remain steadfast in satisfying our customers. In other words, I want to make us into a company that makes people feel as though they want to adopt our products.
To this end, we want to emphasize dialogue, and with "Beyond Expectations" as our motto, we aim to increase our corporate value by creating customer value that exceeds expectations and forecasts.
We will continue to focus on the concept of stable dividends plus performance-linked dividends, and strive to link this to the growth of our business and the return of profits to our shareholders.
I would like to thank you all for your continued support and encouragement.
CFO MESSAGE
We will further improve our ROE by striking a balance between “investing in growth,” “sound finances,” and “returning profits to shareholders,” and we will continue to increase corporate value throughout Alps Alpine.
In FY2023, a new president was appointed, and we began a new management structure. Through the first half of the fiscal year, we have pushed forward with price optimization of parts and materials amidst the uncertain environment for production and sales plans due to the impact of COVID-19. While we have continued these trends this year, the market environment continues to fluctuate, which includes the impact that the economic slowdown in China has had on digital consumer electronics. In this environment, we have decided to strengthen our efforts to improve earnings, especially in the module and system business, while at the same time renewing and reinforcing our company-wide efforts to improve corporate value under this new structure. While our policy of balancing three goals—growth investment, sound finances, and shareholder returns—remains largely unchanged, we will work to further improve ROE indicators with an awareness of the cost of shareholders' equity.
In order to increase profits, we will expand sales in each segment in the areas of emotion, safety, and environmental value, and enhance the aforementioned cost improvement in the module and system business. Next, in terms of investment for growth and improvement of capital efficiency, we will reorganize our businesses for the third medium-term starting in 2025— redefining them into growth businesses, businesses to be improved, and businesses to be downsized—and will promote the introduction of ROIC in order to transform our business portfolio. In parallel with this growth investment, we will further enhance our investment in people, even more than before, in an effort to improve engagement. Next, in terms of sound finances, we will promote the optimization of cash allocation by optimizing our capital adequacy ratio, etc., in parallel with improving CCC*1, to become net cash positive.
In terms of shareholder returns, we will promote flexible shareholder return measures with a target total return ratio of 35%.
By pushing forward with these measures in a well-balanced and swift manner, we will promote the continual improvement of corporate value throughout the company.
*1 Cash Conversion Cycle
