2025–2027 Medium-Term Management Plan
2025–2027 Medium-Term Management Plan Progress(2025)
Purpose
Establishment of Purpose
In 2022, we redefined the significance of existence of PILOT and established our Purpose as our steadfast management objective.
Keeping in mind the idea reflected in this Purpose, we will move forward with initiatives to achieve sustainable growth of the Group and address social issues, thus contributing to building a sustainable society.
Purpose of PILOT Group
2030 Vision
The 2030 Vision, which we presented when we announced our 2022–2024 Medium-Term Management Plan (hereafter, the "previous Medium-Term Management Plan") remains unchanged.
In the coming 100 years, we will continue to support the act of writing of people around the world with our writing instruments. We will also leverage our technologies derived from writing, which have been cultivated over the past 100 years, to respond to major changes in the external environment, with a commitment to supporting society, and culture in fields other than writing instruments as well.
Establishment of the 2030 Vision
In March 2022, we established our 2030 Vision to determine our group's long-term direction by backcasting from what we want to achieve in the future based on our Purpose "Our Creations Inspire Creativity."
2030 Vision of PILOT Group
We support the act of writing around the world and at the same time
support society and culture in fields other than writing
No. 1 brand in the global writing instrument market—Expansion of overseas business, maintain share of domestic market
Grow with non-writing instrument businesses as the second pillar—Sales composition ratio 25%
Offer value to the environment, society, and employees—Contribution to the creation of a sustainable earth and society
In the stationery business, we will establish a solid position as the No.1 brand in the global writing instruments market by maintaining our market share in Japan while achieving further business expansion in overseas markets. Further, we will create and develop new businesses in addition to existing toys and industrial materials businesses, aiming to increase the ratio of sales of the non-writing instrument business to 25% by 2030 and to be a corporate entity that can provide value to people all over the world in various stages of their life. At the same time, toward 2030, we will contribute to and provide value to the global environment and local communities and build a workplace environment which permits our employees to work with good physical and mental health.
Medium-Term Management Plan
2025–2027 Medium-Term Management Plan: Summary
Under the current Medium-Term Management Plan, we will continue with our basic strategies and narrow down management tasks for achieving the 2030 Vision. To achieve growth in the writing instrument business in the global market, we will deliver attractive tools and opportunities that support the value of writing and the act of writing to people all over the world, thereby maintaining and improving our margin.
We will promote management that is conscious of cost of capital and stock price, and strengthen shareholder returns.
Positioning
Under the current Medium-Term Management Plan, we will strengthen the overseas expansion of the writing instrument business, which is our core business, and create new businesses. We position this as a phase for reinforcing the Group's management foundation for adapting to changes, as we achieve ceaseless evolution, towards attaining the 2030 Vision.
Management Tasks to Focus Our Efforts on
We understand that achieving growth in the writing instrument business in the global market is the top-priority management task that we should be focused on, as we seek to attain the 2030 Vision. We will also reinforce the structure of non-writing instrument businesses to create new businesses. Judging that finding new alliance partners and driving sustainable management of the Group is important for implementing the above tasks, we will commit ourselves to them under the current Medium-Term Management Plan.
Financial Targets
In FY2025, net sales were below the initial forecast in each region and fell 6.6 billion yen short of the target. Operating margin and ROE were also below targets, mainly due to the failure to achieve the net sales target. However, we achieved a total payout ratio above the target level.
For financial targets under the Medium-Term Management Plan, we changed the timeline for achieving them and revised targets for net sales, operating margin, and ROE for FY2026 and FY2027, reflecting demand trends in each region. Meanwhile, we revised the total payout ratio target upward to 70% or higher.
*Revision of assumed exchange rates
Initial plan: Exchange rate assumed for FY2025 and onward : 1 US dollar = 150 yen, 1 euro = 160 yen, 1 yuan = 21.4 yen
After revision: FY2026 and onward : 1 US dollar = 150 yen, 1 euro = 170 yen, 1 yuan = 21.4 yen
*Exchange rates for FY2025 results : 1 US dollar = 149.61 yen, 1 euro = 169.19 yen, 1 yuan = 20.81 yen
Management that is conscious of Cost of Capital and Stock Price
PBR basically remained between 1.1 and 1.3 in FY2025.
Believing that we should maintain and improve the margin ratio even in a difficult earnings environment and operate efficiently, we have included a target operating margin and ROE as our financial targets again.
We recognize our company's cost of equity to be 6.5-7.5%. We will advance initiatives, such as capital efficiency improvements, to expand the equity spread.
| Recognition
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- The earnings environment will remain challenging for the time being, with factors including a cost increase attributed to the continuation of relatively high capital expenditure in addition to rising labor costs for securing human resources globally and sluggish consumption demand in overseas markets.
- We recognize our company's cost of equity to be 6.5-7.5%.
- While ROE will remain above the cost of equity, the spread between them has become smaller, having made it essential to improve profitability and capital efficiency.
- PBR basically remained between 1.1 and 1.3 in FY2025.
- Regarding the balance sheet, the level of cash and deposits has been higher, and the inventory turnover period has been longer, compared to the 2010s.
A reform of global supply chain management is underway.
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| Policies
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- To enhance shareholder returns, we have set a new target of the total payout ratio of 70% or higher.
- We will acquire treasury shares flexibly in response to changes in the business environment, for the purpose of improving capital efficiency.
- We will review the balance sheet with a focus on cash and deposits and inventories.
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| Initiatives
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- We have set the targets for the FY2027, the final fiscal year of the current Medium-Term Management Plan as consolidated net sales of 139 billion yen, an operating margin of 15% or higher, and an ROE of 10% or higher.
We will control SG&A expenses by focusing on our priority measures, with an upper limit of an SG&A ratio of 37%.
- We recognize that the appropriate level of cash and deposits is around 30 billion yen, and we will actively use our surplus funds to invest in growth for the future and to provide shareholder returns.
- With regard to inventories (stock), we will strive to lower the inventory levels with three overseas bases in the U.S., France, and China through supply chain reforms, by assuming levels before the COVID-19 pandemic (2019).
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Strengthening Shareholder Returns
While we targeted a total payout ratio of 50% or higher, it was 87.3％ for FY2025, exceeding the target.
We introduced progressive dividends in FY2025.
To further increase shareholder returns, we revised our total payout ratio target for the period of the Medium-Term Management Plan upward from 50% or higher to 70% or higher.
We will also acquire treasury shares flexibly in response to changes in the business environment, for the purpose of improving capital efficiency and increasing shareholder returns.
Cash Allocation
Aiming to improve ROE, we will utilize external funds while considering financial soundness and the reduction of equity.
We will scale down growth investments in response to the revision of the capital expenditure plan at the Isesaki Plant.
We will continue to enhance shareholder return through the payment of dividends and the acquisition of treasury shares.
Sustainability Initiatives
Based on the 2030 Vision, the Group is endeavoring to achieve sustainable growth and create an environment which permits people to live life to the fullest and demonstrate their creativity, through its business activities.
At the same time, we are addressing social issues and helping build a sustainable society.
Past Medium-Term Management Plans