Air Water Unveils New Medium-Term Management Plan, Shifting to “Pursuit of Profitability”

“terrAWell30 2nd stage” Targets FY2025-FY2027

OSAKA, Japan – June 10, 2025 – Air Water Inc. announced the formulation of its new medium-term management plan, “terrAWell30 2nd stage,” covering the three-year period from FY2025 to FY2027.

The company has established “terrAWell30” as its vision for FY2030, aiming to contribute to solving social issues through its business activities along two growth axes: “Global Environment” and “Wellness”. These axes are based on the company’s diverse business domains and address social issues such as climate change and a super-aging society, with the goal of achieving sustainable growth and increasing corporate value.

Transitioning from Scale Expansion After Achieving ¥1 Trillion Revenue

Reviewing the previous medium-term management plan, “terrAWell30 1st stage” (FY2022-FY2024), the company successfully achieved revenue of ¥1 trillion in FY2022, a goal pursued since FY2010, marking a transition to a new corporate stage. During the 1st stage, Air Water worked to optimize the Group’s management resources, expand growth areas including overseas, digital, and semiconductor-related businesses, and strengthen the profitability of domestic businesses. As a result, the annual growth rates (CAGR) for revenue and operating income in the 1st stage showed steady growth of 6.6% and 4.9%, respectively.

Focus on Business Portfolio Transformation and Growth Investment

The “terrAWell30 2nd stage” signifies a transition from the “expansion of scale” phase of the 1st stage to a phase focused on the “pursuit of profitability”. The plan involves a thorough review of existing businesses and efficient investment of generated management resources into growth businesses. Simultaneously, the company will implement improvements and rationalization, primarily in low-growth and low-profit businesses, to reform its business portfolio. This strategic shift aims to lead to the “Evolution toward Sustainable Growth” in the 3rd stage (FY2028-2030) and ultimately achieve a market capitalization of ¥1 trillion (double the current level) by FY2030.

The company plans to pursue further growth under five management policies, one of which is the Business Strategy. This Business portfolio strategy includes investing funds generated from “cash cow” businesses, such as the domestic gas business, into high-growth businesses. Low-growth and low-profit businesses will be moved to a determining phase, potentially including withdrawals.

Financial Targets and Shareholder Return Policy Outlined

Key numerical targets set for the end of FY2027 are an operating income margin of 8.5%, ROE of 11%, and ROIC of 7%. The targets for the end of FY2030 are set at 10% or more, 12% or more, and 8% or more, respectively.

In terms of capital allocation, the total planned investment for FY2025-FY2027 is ¥320 billion, an increase from ¥286.4 billion in FY2022-FY2024. This includes growth investments of ¥250 billion for capital investment and M&A. Maintenance and renewal capital investment is projected at ¥70 billion. The company intends to aggressively implement large-scale investments for dramatic growth by raising debt as needed.

Regarding shareholder returns, the plan allocates ¥80 billion for the same period. The target dividend payout ratio is 35% (raised from 30% until FY2023), with the introduction of progressive dividends aimed at achieving both sustainable growth and enhanced shareholder returns. The company will also consider flexible share buybacks based on capital efficiency and stock price levels, taking into account the balance with growth investments.

Commitment to ESG Initiatives

The plan also references non-financial KPIs related to ESG initiatives. By FY2030, the company aims to reduce GHG emissions by 30% (compared to FY2020). Preliminary results for FY2024 show a 3.4% reduction. Other targets include an 80% waste recycling rate by FY2030 (65% in FY2021, 77% in FY2024), a 10% reduction in water consumption per unit of production by FY2030 (compared to FY2021, 9.5% in FY2024), and increasing the ratio of female managers at Air Water Inc. to 15% by FY2030 (5.7% in FY2024). The company also aims to eradicate industrial accidents, targeting a frequency rate of 0.8 or less by FY2030 (1.34 in FY2024).

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