I would like to express my sincere gratitude for your continued understanding and support of the Sangetsu Group and its initiatives.
Fiscal 2020 was a year of major changes both with respect to people’s lives and socioeconomically amid ongoing proliferation of COVID-19 virus. Under such circumstances, we have assigned top priority to ensuring the safety of our customers and employees, and have accordingly endeavored to curb adverse effects of the pandemic on our business activities. This has involved taking action to prevent the spread of infection by implementing decentralized workplace operations in our offices, requiring face masks, and rigorously disinfecting surfaces, while promoting telework arrangements which has involved expanding and strengthening our information technology environments. Going forward, we will provide our products to installation sites and customers nationwide upon having ensured the safety of our customers and employees, underpinned by our belief that maintaining consistent product supply even amidst these unprecedented circumstances serves as an important obligation of the Group given our role in supporting the interior design industry.
In May 2020, we released our Long-term Vision of Sangetsu Group 【 DESIGN 2030 】 and our three-year Medium-term Business Plan (2020-2022) 【 D.C. 2022 】, with the aim of articulating our future-oriented growth strategies in terms of setting a path forward for the Sangetsu Group. We have also embarked on achieving the aim of becoming a “Space Creation Company,” which serves as our corporate vision for 2030. This will entail expanding and improving the value we provide through design by modifying our business model in terms of accordingly transforming from a company that has been selling physical products thus far to one that proposes and realizes “experiences” through space design, amid a prevailing scenario of escalating economic value when it comes to conceptual trends in terms of increasingly diverse personal tastes and mounting importance assigned to peace of mind, safety, and health.
Under our Medium-term Business Plan (2020-2022) 【 D.C. 2022 】, which serves as our first step toward realizing this Long-term Vision, we aim to achieve further growth under our basic policy pillars of attaining “expand earnings through qualitative growth of core business” and attaining “growth of profitability in next-generation business based on resources of core business.”
Under the first pillar of our basic policy, “expand earnings through qualitative growth of core business,” we will engage in efforts in the Interior Segment that involve further enhancing our design capabilities while promoting strategic procurement, expanding our service functions, and strengthening our sales structure. In the Exterior Segment, we will expand operations geographically to the Kanto region while also seeking to shift away from handling wholesale operations in the Tokai and Kanto regions upon having newly established the Space Creation Business Unit.
Under the second pillar of our basic policy, “growth of profitability in next-generation business based on resources of core business,” our efforts involve building solid management foundations in respective national markets, pursuing an optimal business model and fully committing ourselves to localization, and strengthening our branding and product portfolio. Moreover, in our Space Creation Segment, newly established under our Medium-term Business Plan, we have been engaging in more specialized business activities encompassing the entire realm of interior space creation enlisting our one-stop solutions extending from design through to installation.
We will endeavor to strengthen business across the entire Group by building a new business model that more broadly covers our value chain extending from manufacturing to installation with our sights set on achieving our Long-term Vision of becoming a “Space Creation Company,” amid a likely scenario of limited growth in Japan’s domestic installation market.
Moreover, we will hold to a basic policy of maintaining a total shareholder return ratio of nearly 100% over three years, and will accordingly make decisions on and announce shareholder returns in a manner that embraces the aim of consistently increasing dividends.
We seek to achieve medium- to long-term growth while making steady progress with respect to implementing measures required amid an extremely uncertain business environment. Interior space is likely to serve as a factor of mounting importance in the years ahead as drastic changes unfold with respect to social structures and values, as well as patterns of human behavior. We will accordingly strive to help ensure that people can live their lives to the fullest by enlisting efforts of the entire Group in overcoming challenges in that regard. I greatly appreciate the continued support of our shareholders and other investors going forward.
President and CEO