Message from the President

What is a competitive edge?

“The Boundless Pursuit of the Value of Light” is first and foremost of the Stanley Group’s business philosophies, and we are seeking to contribute to society by creating and providing technologies and products based on the spirit of “Outshining Light.”

The Stanley Group has set forth its ideal image of becoming a competitive company in 2030. When you think about competitiveness, you may naturally think about competing against others, but it means something different to the Stanley Group. More than just such ordinary definitions, it also means that by using light to provide safety and security, aspiring for as many people as possible to feel “glad to have come across Stanley Electric’s products,” or “glad to have worked together with Stanley Electric.” These sentiments and our contribution to society stand side by side, equally reflecting the essence of our mission.

Changes are occurring around the world at an unimaginable pace, including the shift to EVs, electronic devices and automation. To demonstrate to the world that their existence is of significance, a greater number of companies need to “not only fundamentally change themselves, but also the industries the operate in. So we want to work with Stanley Electric to create products to achieve this,” and this is why I have a strong level of confidence in that the competitive edge that we have envisioned is correct.

I believe that Stanley Electric not only needs to fulfill its responsibility for supplying component as a manufacturer, but also to become a company capable of playing a role in bringing about major changes throughout the entire industry at a speed that leads the world. Going forward, we make every effort to deliver what our end users are looking for as quickly as possible, as partners working together with our customers—without setting any limits ourselves.

Review of First Year of VIII Three-year Medium-term Management Plan

FY2023, the first year of the VIII Three-Year Medium- Term Management Plan (VIII MTP) running from FY2023 to 2025, was a year where the concept of “maximizing value-added” took hold and there were signs of improvement in the company’s structure beginning to show. The result of our employees taking a positive approach to increasing profitability was that we were able to achieve higher figures than I had thought was possible, and this marked our first step toward growth. Externally, we faced challenges in some regions like China, but were able to offset them with strong performing areas in the Americas. We ideally want to achieve positive results in all the businesses and regions we operate in, but in reality this is not so easy, so we have been able to establish a system where areas we are facing challenges are covered by areas that are performing well, which was a major achievement this year.

Bringing Thai Stanley Electric Public Co., Ltd. (THS) onboard as a consolidated subsidiary has also represented a significant step forward as it brought business development in Thailand and other Asian countries into view—as such, we have updated our sales target from 550 billion yen to 590 billion yen and our operating margin target from 10% to 10.5% for FY2025, the final year of the VIII MTP. Note that we have not made any changes to the 10% operating margin, or “responsible profits,” that we need to we achieve under any environment. In terms of ROE, I hope to achieve our target of 10% for FY2028 faster than scheduled.

Meanwhile, the demands placed on corporations have changed significantly in recent years. Rather than solely pursuing business performance, they have become the pioneers helping to resolve social issues, and need to create value and generate profits while also coexisting with society. As the president of Stanley Electric, I feel that my mission will be to grow the company into one that is deemed indispensable by society, by pressing ahead with achieving our updated management goals and also maximizing our corporate value by resolving social issues.

Three Concepts for “Becoming a Competitive Company”

To achieve the goal of “Becoming a Competitive Company,” our group is advancing VIII MTP with the three concepts of “Manufacturing under TADAS concept,” “Developing new markets with distinct light technology,” and “Challenging with speed as ’One Stanley’.”

Manufacturing under TADAS concept

“TADAS” is the underlying manufacturing concept, and has been named by adding a “T” to our existing “ADAS” (Advanced Driver Assistance Systems) concept and creating a play on the Japanese word tada, meaning “free.” The value that we deliver is safety and security, and no matter how exceptional our value-added products are, we need to ensure that this safety and security is made available for everyone, everywhere at affordable prices.

In FY2023, we launched our “SNAP2” new production innovation activities to boost our competitiveness in providing good and affordable products. “SNAP2” defines the approach to maximizing value-added and also sets out new activity guidelines linked to business performance and profits, and implements initiatives that apply to all processes, including man-hour improvements not only at production sites, but also man-hour improvements arising from structures that are easier to manufacture at the design stage. While there is the approach of reducing the number of workers without increasing overall production, we are currently using DX to reduce workload and maximize added value. The key feature of “Stanley-DX” that we are pushing ahead with is achieving globally standard systems and business processes. The activities that had been implemented independently at each plant in Japan and overseas in the past will be turned into common global activities incorporating positive aspects of each activity by leveraging DX, to achieve manufacturing for maximizing added value.

Developing new markets with distinct light technology

We are constantly creating value through our proprietary technologies using light, and moving ahead with developing new markets.

In the Automotive Equipment Business sector, the shift to EVs calls for new products and functions that are out of the box of conventional wisdom. Thus we have come up with a new function that uses the front section of the vehicle as a display used to communicate with nearby people in traffic with the content shown on that display. This was achieved with the features of the display we developed: highefficiency LEDs, reliability of quality for withstanding onboard conditions, and a high level of flexibility for installation on the vehicle body. We also command an extremely high market share in the motorcycle sector. In emerging countries like India, production numbers of motorcycles is more than ten-fold that of vehicles, and going forward, we will be focusing on expanding our market share in emerging countries so that we are also able to benefit from economies of scale in terms of material purchases.

In the electronic business sector, there are a range of new types of light sources becoming available, including VCSELs that are a type of advanced laser, and PCSELs that will alter the very concept of light through the use of nanotechnology. To develop these light sources while also transforming our corporate structure at the same time, we are taking on the challenge of creating products that will cultivate new markets through industry-academia collaboration as well as considering investment in start-up companies.

Challenging with speed as “One Stanley”

We are pursuing even further globalization, starting with our target of 8% of sales from non-Japanese automotive manufacturers in FY2028.

Upon reflecting recent circumstances at Stanley Electric myself, it seems that we have been reluctant to try out new things. Yet overseas manufacturers take a more dynamic approach with a “Let’s just try it first” attitude, particularly those with younger generation employees. The “One Stanley” approach is our way of delivering value, not only “from Japan” but also “globally and simultaneously” while incorporating such an attitude.

THS that became a consolidateed subsidiary in 2024 is not only highly profitable, but the Thai employees working there are very capable and extremely talented, and have positive outlook on everything. Our two subsidiaries in the Americas are also managed by Americans, and the speed of their management is remarkable. We are working to increase the pace of our own business development, by moving ahead shifting management to local human resources like these.

A broader look at the global market reveals that Thailand is positioned as an important Asian country in terms of motorization, and we will continue to honing business with a central focus on THS. Moreover, we will also be making an effort to supply automotive manufacturers in China, where they are advancing at a remarkable pace. In the Americas, I think it will be important to boost Stanley Electric’s presence in the overall supply chain spanning from North America to South America. We will also focus on strengthening our relationship with our business partner in India, Lumax Industries Ltd. as a means of capturing market share there.

Materiality as the Source of Our Competitiveness

To become a competitive company, we have identified five material issues (materiality) from among a large number of social issues. Of these, I want to focus particularly on “Creating new value in harmony with the environment” and “Individual welfare and growth.”

When it comes to “Creating new value in harmony with the environment,” it is extremely challenging for us as a manufacturing company to minimize our impact on the environment while also creating value. Yet for Stanley Electric, initiatives aimed at tackling climate change are not a risk but an opportunity for growth.

We will be aiming to achieve sustainable growth while meeting the needs of society, by working on power saving and longer life as a manufacturer of LED products, and developing new resin materials as a manufacturer of resin products that require a high amount of energy. The Research & Development Laboratory that is currently being rebuilt is focusing on two core topics of research and development toward achieving light efficiency and carbon neutrality, and operates with the view to reducing CO₂ emissions, not only for our company but for society as a whole.

When it comes to “Individual welfare and growth,” we are aiming to grow into a company that comes up with competitive products by creating an environment where each and every employee is able to work in a comfortable manner and with a sense of fulfillment. To achieve this, we have made fundamental revisions to our human resources policy.

Our new human resources policy is “Self-motivated” challenge-driven human resources ~ A group turning Change to Chance ~. We are providing support to our employees to assist them reach their own “vision.” To ensure an understanding of our new policy, I make sure to create opportunities to communicate directly with our employees in Japan and overseas to explain the direction of our human resource development and the need to reform our culture and climate. We will be enhancing the job satisfaction of our employees by giving them a feel for growth and career fulfillment, and encourage them to plan out their individual lives by working for Stanley Electric.

To all our stakeholders

I am certain that Stanley Electric owes what it is to our shareholders. Our financial base comes from the institutional and individual investors who have a desire of owning our stock, and we are seeking to increase the number of enthusiasts who think “It was great owning stock in Stanley Electric.” We view this is the same as our customers who are “glad to have come across Stanley Electric’s products,” or business partners who are “glad to have worked together with Stanley Electric.”

To this end, we will be further accelerating efforts to boost shareholder value. In addition to boosting profits in a positive manner, we will be making forwardlooking investments based on appropriate capital policies to achieve a positive spiral that will lead to even further business growth. We will applying the earnings we have generated for our next investments, and return the results to our shareholders.

Stanley Electric will continue evolving together with society by helping to resolve social issues as a company involved with the business of light. Going forward, we will continue publishing the integrated report, as well as engage in sincere dialogue with all our stakeholders, including shareholders, in order to achieve this. I would like to ask for your continued support and encouragement.

STANLEY ELECTRIC CO., LTD.
President and Representative Director