Mid-Term Business Plan
Mid-Term Business Plan 2025
The Mid-Term Business Plan 2025 was made by backcasting what the Kubota Group should be in 2025 to realize the long-term vision GMB2030. Positioning the five years up to 2025 as the period for laying the foundation to realize GMB2030, we will work on measures based on the main themes.
- Overview of the Mid-Term Business Plan 2025
- Mid-Term Business Plan: Specific Initiatives
- Financial Targets for 2025
Overview of the Mid-Term Business Plan 2025
We have established themes to be addressed in the Mid-Term Business Plan to respond to changes in the environment surrounding the Kubota Group and resolve various business challenges.
Changes in the Environment Surrounding the Kubota Group and Business Challenges
- Corporate social responsibility has become heavier and heavier due to changes in society surrounding companies.
- Kubota needs to establish a new business model which enables sustainable growth 10 years later taking into account social issues and megatrends (realization of GMB2030).
- Kubota needs to take advantage of opportunities to expand existing businesses and promote to establish the foundation for further growth.
- Profit margin has a tendency to decline due to intensifying competition and upfront investment.
- As businesses become more globalized, a management control system is no longer in line with current business.
Main Themes of Mid-Term Business Plan 2025
- Promotion of ESG management
- Establishment of the foundation for realizing GMB2030 that supports the next generation
- Expansion of revenue in existing businesses
- Improvement of profit margin
- Development of infrastructure that supports sustainable growth
In addition to these main themes, we will promote digital transformation (DX) across all themes and proceed with specific efforts toward achieving the Mid-Term Business Plan 2025.
Mid-Term Business Plan: Specific Initiatives
1. Shift to Business Operations that Position ESG at the Core of Management
Kubota will promote ESG management using the company’s own approach to advance initiatives that are more ESG aware than ever.
As a company that engages in reducing environmental impacts and solving social issues through business, ESG Management Strategy Meeting and ESG Promotion Department are established under the direct control of the President in order to promote its own unique ESG initiatives (K-ESG) in addition to general initiatives. ESG Management Strategy Meeting is positioned as the institution that determines the Group’s important business management policies, and ESG will be recognized as the basis for decision-making on future business development.
We will also add stakeholder contribution as a perspective to the S (Society) of ESG, and provide all stakeholders with opportunities to contribute to solving social issues through gaining empathy with and participation in Kubota’s business.
2. Initiatives to Secure Candidates of Growth Drivers for the Next Generation
Establishment of a Structure from Selection of Themes to Commercialization
The ESG Management Strategy Meeting oversees the selection of development themes, R&D organizational structure and role sharing, as well as business incubation in order to realize GMB2030 as important matters for the future.
Initiatives of R&D and Commercialization
Aiming to secure multiple business models, products, services, and market candidates that become the growth drivers in the next generation by 2025
3. Promotion of Business Strategies that Take Advantage of Growth Opportunities
Status-analysis and Basis Strategies
Analyze the current situation, and then deepen our existing businesses.
Setting and Promoting Growth Drivers
The following businesses are positioned as growth drivers for the next five years.
North America/Construction Machinery Business
Aiming for a significant increase in market share by expanding product lineup and locally integrated operations of development, production, and sales
ASEAN/Farm & Industrial Machinery Business
Aiming for a further increase in sales of farm equipment and construction machinery along with urbanization
Farm & Industrial Machinery/After-market Business
Aiming to expand "after-sales business" by utilizing abundant operating machineries on a global level
Water & Environment/Solution Business
Aiming to shift from equipment sales-oriented business to O&M- and solution-oriented business by utilizing IoT and other technologies
Machinery/Expansion of India Machinery business and entry into the basic market
Aiming to expand global business by increasing market share in tractor, the world's largest market, and exporting basic machinery
4. Improvement of Profit Structure by Strengthening the Business Foundation in the Mid-Term
Sustainable growth requires proactive resource investment, as well as investments to prepare for various risks such as disasters, improvements to the working environment and other purposes in the ESG field. We will address measures as described below to generate investment resources without causing profit margins to decline.
5. Development of Infrastructure that Supports Sustainable Growth
Reform of a business operation structure
Transforming operation structure in response to globalization
Initiatives to secure and strengthen human resources
Strengthening human resources who support sustainable growth by strengthening recruitment and cultivation, as well as providing opportunities
Strengthening risk management
Developing and expanding organization that can develop countermeasures more actively in response to various risks
6. Promotion of DX as a Common Theme
Bringing about innovation in “products, services, and production sites”, “business processes”, and “communications and collaborations” by developing and utilizing a platform that is the foundation for DX, and ensuring the promotion of the five main themes
Financial Targets for 2025
Under the Mid-Term Business Plan 2025, we aim to increase sales by 20% from 2019 to 2.3 trillion yen and operating profit by 50% to 300 billion yen. In addition, we will conduct business management focused on capital efficiency and strive to strengthen shareholder returns under the Mid-Term Business Plan. We aim to achieve a cumulative total of 280 billion yen in free cash flow over the five years up to 2025, maintain ROE of at least 10% between 2021 and 2025, and at least 11% in 2025.
- Reference Materials
The materials published in February 2022 are available here:
- Management Policy and Mid-Term Business Plan Progress
- Related Information