Roland (7944) Investor presentation summary

Strategic direction and market positioning

• Aims to accelerate transformation into a high-profit, customer experience (CX)-driven company by focusing investments on demand creation and enhancing CX for electronic musical instruments.

• Targets global expansion with a focus on electronic instruments, leveraging strong market share in key categories like electronic drums, guitar effects, and synthesizers.

• Identifies huge growth potential in emerging markets and among new user segments, with digitalization and AI as key enablers.

• Three strategic pillars: Direct Connect (customer engagement), Innovation (new products/tech), and Expansion in Emerging Markets.

• Plans to realize returns on prior investments in data utilization and management foundation.

Financial targets and performance

• Sets FY2028 targets: sales of ¥120.0bn (+18.9%), operating profit of ¥14.4bn (+53.0%), and OP margin of 12.0%.

• Net profit goal of ¥10.2bn, ROIC of 18%+, and ROE of 20%+ by FY2028.

• Sales growth to be driven by Direct Connect, Innovation, and Emerging Markets, with emerging markets targeted for 12% CAGR.

• Operating profit growth supported by increased sales volume, price optimization, and cost control, offset by higher SG&A investments.

• Capital allocation prioritizes dividends and debt service, with a 50% total payout ratio target and a DOE floor of 5%.

Key strategic initiatives

• Direct Connect: Develop Wi-Fi-enabled instruments, expand direct-to-consumer channels, and launch the Roland App for personalized user engagement.

• Innovation: Expand digital wind instruments, co-develop products via alliances, and accelerate AI-driven development.

• Expansion in Emerging Markets: Launch region-specific models, broaden sales channels, and strengthen logistics in high-growth regions like China, India, and Latin America.

• Strengthen management foundation through M&A, production optimization, and increased equity compensation for executives.

• Sustainability focus includes innovation, responsible supply chain, workplace health, cultural support, environmental conservation, and governance.