Yokowo Co., Ltd.

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“Constantly on the cutting edge” President Takayuki Tokuma

We have always strived to remain constantly at the cutting edge ever since the Yokowo Group was first established. Drawing on our core competencies in the rapidly evolving communications and electronic component industry, as a specialist in antennas, fine connectors, microwaves and advanced devices, we have continued to harness our uniquely advanced technical capabilities to offer revolutionary products in each of our core markets, in the automotive, semiconductor testing systems, mobile device and advanced medical device sectors.

We have set out the following Basic Management Policy in an effort to further improve the Group's corporate value.

Basic Management Policy

  1. We are dedicated to quality and aim to establish Yokowo as a quality brand by offering the highest quality and eliminating environmentally harmful substances.
  2. As a technology-based enterprise, we aim to continually upgrade and refine our antenna, microwave, ceramic and micro precision processing technologies and actively introduce new technologies to enable us to offer products with improved added value and provide customers with the wide-ranging product capabilities and applied technologies they need.
  3. We aim to accelerate taking our business to new levels by pursuing innovation strongly in three key areas: product innovation (to enhance business and product structures), process innovation (to enhance business processes and systems) and personnel innovation (to enhance human resources), and by promoting management innovation (to enhance management and business operation) with a view to future growth in addition.

Medium-term Management Targets

Business model reforms to achieve high quality, full-scale growth and the Minimum 8 [The Minimum 8: Secure a sales growth rate, a minimum operating profit margin, and a return on equity of 8%]

Medium-term Management Strategy

The paradigm shift in the world economy continues, and shows no signs of slowing down. Likewise, we are seeing the ongoing advancement of commoditization and the transition to borderless markets. Commoditization refers to reduction or loss of first movers’ advantage following the rapid diffusion of new technologies and products. The transition to borderless markets indicates the integration of technologies and products from different areas to create new markets.

In the midst of these circumstances, we are working to implement the three forms of innovation specified in the Basic Management Policy in an effort to continually enhance our corporate value. These are innovation in products, innovation in processes, and innovation in personnel.

For the fiscal year under review (ended March 31, 2018), consolidated net sales reached a record high for the fourth consecutive term, with operating income showing a year-on-year significantly increase. As a result, we have got one step closer to the target of securing a minimum operating profit margin of 8%, which is one of our Medium-Term Management Targets.

However, for the purpose of constructing a structure capable of consistently achieving the medium-term management targets, or the Minimum 8, we will vigorously push ahead with management innovation to accelerate the three innovations mentioned above. We will also work swiftly to normalize operations at production bases in the vehicle communication equipment segment, which is a key issue in terms of profit structure for the fiscal year under review, and we will seek to attain stable growth for the entire company and a strong, high-profitability structure by transitioning the business model from a medium-term perspective.

In accordance with this principle, we have determined the following key measures in the new medium-term management plan that will start in the fiscal year ending March 31, 2019 and will conclude in the fiscal year ending March 31, 2021.

Outline of Medium-term Management Plan
  1. Carrying out management innovation
    Realize a business operation that meets customer needs in collaboration with development, manufacturing and sales personnel and enhance manufacturing management capabilities
    1. Strengthen the operation of business divisions based on customer needs
    2. Strengthen manufacturing management capability
    3. Accelerate business visualization by establishing a managerial dashboard and encourage data utilization
  2. Upgrading process innovation
    Apply the new five-S* concept to the entire business process and dramatically organize the IT environment to enhance the productivity of back office operations
    (* The new five S's refer to Simple, Slim, Small, Short and Smooth.)
    1. Apply the new five-S concept more broadly to critical process lines
    2. Apply the new five-S concept more broadly to the entire business process
    3. Dramatically organize the IT environment to enhance the productivity of back office operations
    4. Continue to reform the fixed-cost structure
  3. Implementing product innovation to transform industry and market changes into opportunities
    1. Implement the project on the advanced driver-assistance system (ADAS) and automatic driving
    2. Construct a structure for the high frequency test tools business
    3. Commercialize the optical connector project and so on
  4. Carrying out personnel innovation
    1. Make good use of personnel from around the world and carry out the Tomioka International Specialist Park (TISP) project
    2. Move forward with diversity management
  5. Tightening business risk control

We will be strongly pushing ahead with the priority measures mentioned above in a bid to achieve the Minimum 8 medium-term management targets for the period of the medium-term management plan.

Issues to be Addressed

As mentioned previously, sales and operating profit increased in the consolidated fiscal year ended March 2018. However, we are yet unachieved a minimum operating profit margin of 8%, which is one of our Medium-Term Management Targets, and we still realize improving profitability is the most important issue. We will focus intensively on the matters specified below for the fiscal year ending March 31, 2019, which is the initial year of the new medium-term management plan mentioned above.

  1. Vehicle communication equipment segment

    Normalization of operations at the plants in China and Vietnam by bolstering manufacturing management capabilities, expansion of transfer from the China plant to the Vietnam plant, advancement of outsourcing according to characteristics of specific products, such as the extra value and the size of orders received, introduction of production lines in conformity with the new five-S concept and other actions to increase cost competitiveness for rebuilding the profit structure

  2. Circuit testing connector segment

    Addition of production lines in conformity with the new five-S concept, outsourcing of design and production of products with relatively low extra value, full-scale entry into the field of semiconductor front-end testing for continued sales and profitability growth

  3. Personal communication equipment segment

    Fine connector business : Sales and income expansion by entering new markets and starting new business deals
    Medical device business : Increase of production equipment and launch of mass production of new assembly products as planed

  4. New business domains

    LTCC (Low temperature co-fired ceramics) business : Expansion of mass production of interposer substrates and LED substrates to help increase companywide profit
    Optical connectors : Construction of a product line and activities for gaining certification with global standards

In addition, we are aware of the need to fulfill our corporate social responsibility (CSR) at a higher level as a globally operating firm. We will therefore continue to take comprehensive CSR actions that address a wide range of issues, including the environment, compliance, corporate governance, the protection of human rights, and the protection of information assets.
Our Group will make full efforts to achieve the Minimum 8 in accordance with the medium-term management plan. We hope that we can count on the continued support and guidance of our shareholders.