Seiko Epson Corporation (“Epson”) has unveiled ENGINEERED FUTURE 2035, a Long-Term Corporate Vision that maps out the company’s strategy to 2035, along with a new Mid-Term Business Plan (2026-2028) that represents the first phase of work under the vision.
Epson to use ROIC metric
For both plans, Epson will use ROIC (Return on Invested Capital) as a management metric to account for capital allocation, redesign its business portfolio, and focus resources on strategic growth domains. The FY2028 ROIC target is 8% or more. As far as putting a number on the I in ROIC, Epson plan to invest approximately ¥280 billion in its growth strategy over three years.
ENGINEERED FUTURE 2035
Epson sees the next decade as one in which volatility is the norm. Environmental and geopolitical risks are predicted to rapidly change, and it is felt that resources and energy will be increasingly constrained, and demographic changes will result in labour shortages worldwide.
Epson insight suggests that with shrinking labour pools in developed economies and capability gaps in emerging markets, sustainability depends on using resources, energy and talent more efficiently. The future must be deliberately engineered through technology designed, refined and optimised to work effectively in real-world conditions.
Sho-Sho-Sei Foundation
That is why Epson seeks to leverage the efficient, compact, and precise technologies and philosophy it has developed over more than eight decades, building on the foundation of “Sho-Sho-Sei,” to create value that supports the transformation of society and industry through real-world implementation. The essence of Epson lies in advancing technology and in translating advanced technology into things that are genuinely useful in the real world.
Epson plan to deliver new value to the world by combining their efficient, compact, and precise technologies with designs optimised for real-world uses.
From industry and across learning, working, and living, Epson plan to enhance productivity and reliability and expand “the world’s possibilities”. So that people and the planet can continue to advance together, Epson plan to simultaneously raise both social value and corporate value.
Mid-Term Business Plan, Phase 1 (2026-2028)
Epson’s business structure in the past has been highly dependent on mature markets, presenting challenges in terms of resource allocation to growth areas, execution speed, and capital efficiency.
In Phase 1, Epson will confront these challenges head-on, transforming the earnings base and focusing resource allocation on growth domains. Management will emphasise capital efficiency, using ROIC as the primary management metric. By exercising disciplined ROIC-based management, Epson will aim to achieve a ROIC of 8% by fiscal 2028 and to build a solid foundation for sustainable growth.
Specifically, Epson will review its fixed cost structure and asset efficiency, redesign global operations and the supply chain, and strengthen sales in emerging markets.
Epson will simultaneously expand and enhance recurring business and solutions. These efforts are planned to enable Epson to reduce invested capital while enhancing the earning power of its businesses. At the same time, the company will prioritise the allocation of the cash generated to future growth domains, accelerating the transformation of its business portfolio. Capital is planned to be optimally allocated, with investment and business decisions made based on disciplined ROIC.
Cash created through the transformation of the earnings base will be actively deployed, under disciplined capital allocation, to projects that maximize long-term value creation. In addition to strategic investments in things such as mergers and acquisitions, Epson will invest a total of ¥280 billion over the three-year period in growth domains, including in the Precision Innovation segment as the primary growth engine and the Industrial & Robotics segment, which will be a key growth driver for the next phase.
Throughout the period of the mid-term business plan, Epson will reinforce its management discipline and execution capabilities to sustain growth and increase corporate value, while driving structural transformation toward 2035.
Epson New Business Segments
Epson has redefined its business segments based on its policy of focusing resources on growth domains. They are listed below:
- Precision Innovation segment will play the role of growth engine.
- Inkjet solutions business, microdevices business, Epson Atmix.
- Industrial & Robotics segment role will be to generate robust growth in Phase 2.
- Commercial & industrial printing business, robotics business.
- Office & Home Printing sement role is to generate steady cash.
- Office and home IJP business.
- Visual & Lifestyle segment role is to generate steady cash.
- Visual products business, wearable products business, PC business.
This article contains forward-looking statements, and caution should be exercised when relying on such information that may or may not occur in the future.
