TOKYO, October 29, 2020 -- Oki Electric Industry Co., Ltd. (TOKYO: 6703) has formulated "Medium-Term Business Plan 2022", covering the period from FY2020 through FY2022. Based on the acceleration of changes brought about by the spread of COVID-19, we plan to implement structural reforms and create the foundations for achieving sustainable growth through solving social issues by leveraging our strengths in AI edge technology and "Mono-zukuri" (manufacturing). As we approach the 150 year anniversary in 2031, the OKI Group aims to help create a safe and convenient infrastructure for customers and society as a whole through the key Japanese concepts of "Mono-zukuri" and "Koto-zukuri(creation of solutions and services)".

1. Medium-Term Business Plan targets (numerical targets)

Management targets

Operating income

20.0 billion yen or more

Shareholders'equity ratio

30%

FY 2022 numerical plans as a prerequisite for targets

Net sales

465.0 billion yen

Operating income

20.0 billion yen

Net income

12.0 billion yen

Shareholders' equity

115.0 billion yen

Shareholders' equity ratio

30%

Returns to shareholders

30% or higher

ROE

10%

2. Business Environment and Vision

Various social issues such as environmental problems, natural disasters, and labor shortages have surfaced, affecting economic activities and daily life. In particular, COVID-19 showed that the change occurred in an instant. In this environment, OKI will solve social issues through the critical Mono-zukuri and Koto-zukuri that support social infrastructure services that cannot be stopped with the key message of "Delivering OK! to your life." We will also strengthen ESG initiatives based on the newly established materiality (material issues) and aim to increase corporate value over the medium to long term.

3. Structural Reform towards Growth

1. Restructuring the Business Portfolio

   By integrating the 3 business segments (Mechatronic systems, Printers, and EMS) focused on hardware, we will promote a shift to strategic fields such as manufacturing services and the creation of devices that solve social issues. Overseas operations will be fundamentally reviewed in line with a new sales strategy centered on products that can compete globally.

   As part of these measures, Oki Data Corporation which operates the printer business will be merged into Oki Electric Industry Co., Ltd. in April 2021. We aim to grow our Component & Platform business by strengthening our product development capabilities through a shift in development resources and utilizing the Group's global sales bases, production bases and production control functions.

2. Evolving Mono-zukuri foundation

   Through the integration of our hardware business, we will promote the integration of technologies to respond to diversifying needs with development structure of 700 people. At the same time, in order to achieve the cost competitiveness, quality, and speed demanded by our customers and partners, we will reorganize our production functions and implement reforms aimed at producing products at optimal locations and reducing costs. We will also promote the development of smart factories as an initiative of Manufacturing DX (digital transformation).

3. Cost reforms in shared Group functions

   Through the reform of common divisions, we will reduce procurement costs by 10 billion and personnel and expenses by 4 billion over the 3-year period. We will promote the integration of procurement functions within the Group and the restructuring of the supply chain, as well as the optimization of cross-group functions in line with portfolio restructuring to reduce operating costs. In addition, we will promote office reform through flexible working styles, including telework, to improve productivity.

4. Growth Strategy

By combining OKI's strengths in Mono-zukuri and AI edge technology, we aim to transform ourselves into a company that offers solutions to social issues and achieve growth through solving more customer issues. While major competitors are focusing on the cloud, OKI will differentiate itself by providing real field equipment in the edge domain and visualizing field data acquired from such equipment through AI edge technology and real-time processing in conjunction with the cloud.

1. Growth strategies in Solutions Systems business

   While securing stable earnings in existing business areas, we will transform our business portfolio with DX as a growth area to solve social issues. Our goal is to increase sales in the DX domain by more than double in the three years to fiscal 22. The solutions business utilizing AI edge technologies forms an ecosystem through cooperation with customers and partners, and accelerates business creation and social implementation through co-creation.

2. Components & Platforms business

   We will develop and deliver components (terminals, modules) that contribute to solving social issues, such as unmanned, non-contact, and non-face-to-face operations in response to the new normal. We will also promote the creation of platforms and services for Mono-zukuri, which is our strength. We will expand our collaboration with global partners regardless of our own brand and promote market development.

3. Innovation efforts

   In order to continuously create new businesses and products that contribute to society, we will promote an innovation management system through co-creation. By combining R & D and business development utilizing the strengths of the AI edge, we will promote co-creation that contributes to solving social issues.

5. Investing for Growth

1. Capital investment

   We plan to invest 70.0 billion yen ~ 80.0 billion yen over a period of three years in facilities, equipment, and IT systems for the entire Group that form the foundation of our growth strategy.

2. Research and development

   We plan to invest 40 billion yen over a period of three years, mainly in the area of AI edge technology, which is our core technology, and in the development of components that solve social issues.

About Oki Electric Industry Co., Ltd.

Founded in 1881, OKI is Japan's leading information and telecommunication manufacturer. Headquartered in Tokyo, Japan, OKI provides top-quality products, technologies, and solutions to customers through its info-telecom systems and printer operations. Its various business divisions function synergistically to bring to market exciting new products and technologies that meet a wide range of customer needs in various sectors. Visit OKI's global website at https://www.oki.com/.

• Medium-Term Business Plan 2022 [1.8MB]
• Medium-Term Business Plan 2022 (with notes) [1.1MB]

• * Information in the press releases is current on the date of the press announcement, but is subject to change without prior notice.

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