Management Capital and Strengths

Strengthening Capital Cultivated since Our Founding

We strive to bolster our business foundation through effective use of various forms of capital cultivated since our founding.

Human Capital As we develop talent that can succeed across our global business, we are also enhancing the ways we grow digital talent that can make use of the latest technologies.

In order to achieve an ROE greater than 10% as quickly as possible in our transformation into a manufacturing and innovative services company, it is essential that each and every employee faces their work with a goal-oriented mindset to create added value. As a foundation to accomplish this, it is absolutely critical to provide our employees with flexible ways to work, improve work-life balance, create an environment and culture that respects diversity, and strengthen the relationship of trust between employees.
Furthermore, as we continue to maintain a stable working environment for our employees, it is important that we maintain and improve both their mental and physical health. In addition to these initiatives, THK is striving to develop global talent, digital talent, and the next generation of management.

Manufacturing
Capital By bolstering our production structure in each region to produce in areas of demand, we continue to build our brand by providing customers around the world with a stable supply of high-quality products.

In order to achieve an ROE greater than 10% as quickly as possible, it is crucial that we work to increase productivity per person by efficiently maximizing utilization of our automated equipment. For this reason, we are installing robots and automated equipment to extend unmanned operating time and, ultimately, to realize a 24-hour production structure with fewer people. Furthermore, in addition to having employees actively participate in external trainings to learn how to use new equipment effectively, we are also promoting innovation in the 5 M's of our manufacturing process (Man, Machine, Method, Material, and Measurement) and driving sustainable improvements to product quality and productivity through a variety of DX activities made possible by the Smart Factory project currently being rolled out on our production floors.

Financial Capital We drive greater shareholder returns through profitability enhanced by structural reform and growth investments and through strong cash flow generation.

THK has reviewed its entire suite of capital policies with the aim of achieving an ROE greater than 10% as quickly as possible. With the immediate requirement for equity capital, the denominator of ROE, set at approximately ¥300 billion, we have adopted a dividend on equity ratio (DOE) of 8% and are working to reduce equity capital by purchasing ¥40 billion of treasury stock. For the numerator of the ROE equation, profit, we will drive wholesale structural reform while allocating generated profits towards strengthening competitiveness and investments in our growth. In these ways, we will not only achieve an ROE greater than 10%, but push beyond that point to raise our ROE beyond our capital stock costs for the sake of increasing corporate value to ensure that we can continue to provide stable returns to our shareholders.

Technology and
Intellectual
Capital We secure our competitive advantage through a thorough, customer-focused design cycle; adapting our core technologies to give rise to products and services with new and better functionality; and judicious management of our intellectual property rights.

As price competition with similar products intensifies, THK may be forced to go toe-to-toe with companies making products that may or may not be reliable. In anticipation of this, we are working to establish test- and research-based evidence of the reliability of THK products and, as a manufacturing and innovative services company, making further advances with the technical services we offer as well as with the quality of our products.