- Issues and Themes
in Phase III
in Phase III
in Phase III
- Growth Strategy: Diversified Products
- Reinforcing Our Corporate Foundation / Corporate Social Responsibility
Issues and Themes in Phase III
Working in the Spirit of Robust and Responsive Growth
A concern in Phase III is that the debt crisis in Europe could cause economic stagnation there and could affect the global economy adversely. We expect the world’s emerging economies to weather the effects of the European crisis, however, and to continue growing over the medium term.
The economic outlook for Japan is mixed. Demand associated with the recovery from the Great East Japan Earthquake will provide something of an economic stimulus. Exports are likely to suffer, however, from the still-strong yen.
At Yokohama, two important issues had become conspicuous by Phase II: (1) our failure to keep pace with the growth in global tire demand and (2) the sluggish growth in our diversified operations. Our task in Phase III in regard to those issues is twofold: (1) fortify our operations to cope flexibly with changes in the business environment and (2) set the stage for accelerating growth in Phase IV. In that spirit, we have adopted the slogan “Robust and Responsive Growth” for Phase III.
Progress in Phase II in Fortifying our Corporate Fabric
Our focus in Phase II was on quality growth. The economic and business environment deteriorated markedly during Phase II. The Lehman Shock of September 2008 precipitated a slump in global demand. That undermined our unit sales volume, and the continuing appreciation of Japan’s currency further diminished our yen-denominated sales volume. Operating income suffered an additional blow, meanwhile, from the upward trend in raw material prices.
Despite the adverse earnings environment, our aggregate operating income was 15% higher in the two years and nine months of Phase II (shorted by three months on account of the change in our fiscal year) than in the three years of Phase I. That increase occurred even as aggregate sales declined. And our aggregate operating return on sales was one percentage point higher than in Phase I. That evidences progress in positioning our operations to generate profit irrespective of changes in the operating environment.
Our Attainment of Our Financial Targets in Phase II
Our chief financial targets for the third and culminating year of Phase II were to achieve net sales of ¥550.0 billion, operating income of ¥38.5 billion, and operating return on sales of 7.0%. The change in our fiscal accounting period resulted in a nine-month fiscal period, but we have prepared 12-month conversions, in which the first quarter overlaps the fourth quarter of the previous fiscal year. In that conversion, our sales in 2011 totaled ¥557.8 billion, exceeding our target. Operating income and the operating margin in the 12-month conversion fell short of our targets, however, at ¥26.8 billion and 4.8%.