Top Message

President and Chief Executive Officer
Hiroaki Oda

We have achieved steady results on the financial side in fiscal 2023, but looking more closely, those results were strongly supported by the Real Estate Division, which performed well. While the non-financial side was generally good, I feel that there are still several areas that need to be addressed. In fiscal 2024, the halfway point in our current Medium-Term Management Plan, we will need to reaffirm and clarify those issues, and put measures in place that will ensure they are resolved.

Looking back over the past two years, I think I can sum them up as: I have been working frantically. On my first day as president, I communicated internally that I want the Fuyo Lease Group to become a corporate group that is trusted. The collective trust of our customers in our individual employees becomes, in turn, their trust in the company, and I am the person who stands at the head of that company. Constantly aware of my position as leader, I continued to send out messages about what specifically we should be doing to bring the Group as a whole closer to achieving its mission. I have spent these two years doing everything I possibly can to increase the number of people who share in and will move on this approach.

Traveling around our sites, and talking with employees in Japan and overseas, I began to hear stories like, "I took on the challenge of offering a proposal that would lead to a solution for a social issue, and I was thrilled when the customer decided to adopt it." That employee was able to seize on signs of environmental change and offer a proposal that took advantage of their own learning, earning them a successful experience. I feel that one component of our Vision, to support the challenges and growth of each employee, is gradually becoming a reality. This is something I would like to spread even further.

Under our Medium-Term Management Plan, the Group is working to achieve sustainable growth by investing management resources based an approach known as "zone management," which divides business domains into four quadrants to select and concentrate on strategic fields. We have reflected the Group's unique and distinctive competitive strategy in each of our business units.

The Transformation Zone is positioned as a growth driver, and is given priority in the investment of management resources. One area in which we are making steady progress is the Energy & Environment field. We are steadily building up a track record of investments, primarily in Europe, that capture the trend toward expanding renewable energy, and will focus even more on this area heading into 2030. A key feature of this effort is that we have established a business model that we promote through joint ventures by building relationships with three major partner companies in Europe where we will receive the right to be chosen as partner company first. The U.K. subsidiary we recently established will pursue further new partnerships. In Japan, we will also promote efforts to address the areas of supply and demand adjustment and energy management, such as working on a large-scale grid storage battery business, that will contribute to the stabilization of the power grid.

The BPO/ICT field, which we have established as a separate business area, is a distinctive business unit not found in other leasing companies. This area has an affinity with the leasing business and is growing in line with customer needs. We will work to expand the business both by improving service quality through the use of DX, and by improving productivity by strengthening our business processing systems, thus further accelerating growth.

The Healthcare field saw a decline in financing needs, in part due to publicly funded support for medical institutions and similar entities arising from the COVID-19 pandemic. However, demand for funding has finally begun recovering, and we have seen an increase in BPO discussions involving medical and nursing care work. We expect this sector to grow going forward.

In the Rising Transformation Zone, overseas business in the Mobility & Logistics field is progressing well and is steadily growing. In the vehicles area, EV penetration remains gradual, but since we have already put in place a system for one-stop EV services, we will respond capably to growth going forward. We will also dig deeper into logistics-related businesses, including warehouses, frozen and cold storage facilities, material handling equipment, forklifts and other related areas. These efforts will not be restricted to Japan, as we are working to expand the business on the West Coast of the United States and in Thailand.

In the Circular Economy field, we have launched the Fuyo Circular Economy Lease, and are promoting a system that ensures the reuse and recycling of products that are returned to the Hachioji Technical Center (for PCs) and the Fuyo Reuse Center (for forklifts and other items). We believe that our mission as a leasing business is to further develop a variety of leased assets, from solar panels to real estate, into a business from the perspective of a circular economy.

Our business was founded as a lease and finance company, and the creation of new business domains has been achieved through alliances with companies that have the expertise and experience our Group lacks. BPO is one such example, and going forward we will continue actively working to create new value. Recently, for example, we participated in the Kobe Arena Project, with a focus on new urban development utilizing sports and entertainment. Urban development is an aggregation of solutions to a variety of social issues, and is an area in which we can put our unique approach to CSV into practice. Leveraging our financing strengths and our ability to connect people, we will take on the challenge of creating new areas of business.

My idea of CSV management is the practice of resolving social issues. Today, there are always social issues that lie beyond the needs of our customers. In a time when all companies must approach the resolution of social issues from the perspective of ESG and the SDGs, we can contribute to resolving those issues that lie ahead by gaining our customers' trust, understanding their needs and providing the appropriate solutions. This is why I am not particularly aware of CSV as a separate practice.

In the Group's various decision-making processes, we have increasingly incorporated the criterion of whether a particular decision will contribute to resolving social issues. Our employees, too, have become highly aware of this perspective in their efforts to address customer needs. As we move forward with this approach, our goal is to ensure that the very way we do business will itself be tied to resolving social issues.

To achieve the Fuyo Lease Group's Vision for 2030, I believe it is essential that we strengthen human capital and DX as a foundation supporting value creation. With the understanding that people are our most important asset, we have set out a target to increase human resource development expenses to 300% of their original amount over the five-year term of the Medium-Term Management Plan, which we believe will dramatically increase employee opportunities for self-improvement and the quality of their knowledge and expertise. The most important thing, however, is to create a workplace environment in which employees feel free to make full use of what they have learned in their actual work.

One thing I am determined to do in my dialogue with our employees is to listen carefully. If we can listen seriously and without interruption to what a variety of people have to say—regardless of race, gender, disability or age—and can find ourselves in agreement with them, that is what will lead to the inclusion of diversity.

If there is a project I am not familiar with, the other person will likely know more about it than I do, and so I listen carefully. Once I grasped the heart of the matter and gotten it straight in my own head, from that point my role is to serve as a wall for the other person to bounce ideas off of. I might respond with ideas for alternative approaches, deepening the dialogue and in turn making it possible to have a discussion that both parties can relate to and agree with. Through this process, our employees grow.

We are now working to create a climate in which this kind of back-and-forth between supervisors and their subordinates can take place. This will improve the quality of their work and lead to the creation of significant value, which in the end will result in employee satisfaction and a sense that their jobs are rewarding.

The DX initiatives we are promoting fall into two categories: "In-house DX" and "DX for customers." For in-house DX, we are advancing efforts to streamline our operations. As for DX for customers, one approach involves packaged solutions offered by BPO companies to customers dealing with those same concerns. Another approach is to support the customers' DX shift through subscriptions and recurring services, leveraging the unique features of a lease and finance company. Since these projects always involve data processing and billing processes, the ability to offer packaged solutions that include BPO services such as payments, collections and billing is a strength unique to the Fuyo Lease Group. I believe that this system, which cannot be imitated by others, represents the foundation of Fuyo Lease Group's value creation.

Our mission is to contribute to realizing a prosperous society and sustainable growth. This "sustainable growth" refers to both society and the Group itself. To achieve sustainable growth, the Company must consistently generate steady profits. By returning those profits as dividends, we can earn the trust of our shareholders. By contributing to the realization of a prosperous society, we can also earn the trust of the general public. By achieving the non-financial targets that serve as indicators of this realization, we can gain the trust of our customers and our employees. I believe that earning the trust of these three groups, valuing our aspiration to create shared value with our various stakeholders, and striving to fulfill our mission is what will enable us to answer to the expectations of all of our stakeholders. We ask for your continued understanding and support going forward, and hope you will look forward to what lies ahead for the Fuyo Lease Group.