Since our company's founding, we have devoted ourselves to growing our business and promoting sustainable development based on our Management Rationale: "To provide opportunities for the material and intellectual growth of all our employees, and through our joint efforts, contribute to the advancement of society and humankind." At the core of our Management Rationale is the Kyocera Philosophy, a value system carefully cultivated over the course of more than 60 years.
Today, we find ourselves in a time of great change. Transformative innovations in telecommunication, energy, automotive technology, and other fields are opening a new era for our business. We see this change as a great opportunity. To grow as a company, we must launch new businesses that can help fulfill societal needs ― in fields as diverse as energy and regenerative medicine. To achieve this, we will accelerate investment to spark growth and improve our technological capabilities further. We will seize new business opportunities through our management strategy for sustainable growth.

Organizational Restructuring toward a New Path to Growth

To create an organizational structure that better adapts to major market changes, we consolidated our business divisions in April 2021 into three segments: Core Components, Electronic Components, and Solutions. One of the goals of this restructuring is to revitalize our Amoeba Management system, and we are beginning to see the fruits of our efforts. The Kyocera Group has been diversifying as part of its long-term strategy -- developing not only components-related businesses, but solutions businesses as well. Prior to the reorganization, although we possessed diverse skills and technologies, we were challenged to integrate them into new products and services due to the "walls" between departments that tend to get stronger as a company grows. For this reason, we executed a restructuring to create greater synergies between our businesses by aligning the organization into Components and Solutions groups, and sharing management resources, including staff. As a result, we were able to integrate talent and business infrastructure while retaining the benefits of Amoeba Management.
The new businesses are now beginning to bear fruit. One example is our inkjet printing systems, which will be launched commercially during the next fiscal year. The large volume of wastewater generated in the washing process after textile fabrics are dyed conventionally has become an environmental problem. Our inkjet printing systems use a proprietary pigment ink that eliminates the conventional fabric washing process. Consequently, water consumption and industrial wastewater are greatly reduced, improving environmental impact. In addition to handling small lots and short delivery times, our inkjet printing systems can be installed anywhere. Textile producers using them can enjoy significantly faster production lead times and reduced waste. Our inkjet printing systems are environment-friendly products that can help meet societal needs. This is a great example of our Printer and Inkjet Printhead Divisions working together. It demonstrates how business segment teams can generate greater synergies, and reveals a new path to growth that did not exist previously.
Other examples of organizational restructuring also include company-wide projects that bridge the boundaries of different business divisions. Projects uniting staff of different divisions with a similar knowledge base are creating new opportunities through digitization. Examples include giving IT members from each business segment a concurrent assignment with the Digital Business Promotion Group for knowledge sharing. We have set up a team system to carry out marketing activities with consistency. Beyond consolidating our business segments, company-wide projects are greatly improving the sense of openness within the organization.

Proactive Response to Changes in the Telecommunications, Energy, and Automotive Industries

Today's business environment includes rising geopolitical uncertainty, as seen in the strained relations between the United States and China, and Russia's presence in Ukraine. Meanwhile, due to the widespread adoption of remote work and remote services following the COVID-19 pandemic, and the rise of the "digital native" generation, digitization is accelerating. Semiconductor-related industries are thus expanding at a record pace, bringing favorable market conditions for the Kyocera Group. Semiconductor packaging and ceramic component technology have been our traditional core competencies, and I feel that the time has come to push onward and upward once again after the stagnation of the past few years. In the past, capital investments were made in response to customer demand. However, it is now clear that this practice is too slow and we will get behind if we continue to respond this way. While digitization has accelerated fluctuations in demand, building and expanding factories takes time. Our decision-making must be based on solid market analysis. Further, in terms of human resources, it is becoming more difficult to hire new staff due to declining birthrates and aging populations. More and more people are also finding it difficult to change their place of residence due to circumstances surrounding a spouse's job. To respond to these changes in the business environment, we opened the Minatomirai Research Center in Yokohama; and in Japan's Kansai region, we built a new production technology facility at our Yasu Plant, both conveniently accessible to rail commuters. By establishing sites that are convenient for commuting, we hope to enhance our ability to recruit and retain talented human resources.
In terms of each business sector, changes in the telecommunications, energy, and automotive industries are having a major impact on our business. In the telecommunications sector, as we aim to commercialize IoT-based solutions, developing 5G and "Beyond 5G" technologies will be crucial to our success. Telecommunications technology is central to transportation and autonomous driving. In fact, telecom networks have become essential basic infrastructure for future product and service development. In our Document Solutions Business, we expect office equipment to experience a gradual decline in demand. Meanwhile, demand for commercial and industrial printers is expected to continue to increase, so we will focus on developing inkjet printers. In the energy sector, we believe there is still room for much wider adoption of renewable energy, both by individuals and corporations. By installing storage batteries in a solar power system, energy generated during the day can be used even at night. In urban areas where storage batteries are difficult to install, the widespread adoption of fuel cells that use natural gas shows tremendous promise. Kyocera's business covers all of these solutions -- solar power generation, fuel cells, and storage batteries -- and we are examining the possibility of establishing a subscription model for renewable energy. In the automotive industry, the major shift from gas-powered vehicles to electric vehicles (EV) depends on advances in battery technology, making it difficult to predict the exact timing of this transformation. We are watching these trends closely. EVs require parts that are completely different from internal-combustion technology, so we will continue to make upfront investments while carefully monitoring the timing the EV trend. We also plan to roll out a wide range of parts for internal combustion engines, including those for plugin hybrid vehicles.
With regard to further digitizing our manufacturing plants, we continue to shift our Yasu Plant into a smart factory to produce storage batteries, and our new plants will get this technology as well. We plan to adopt a Manufacturing Execution System (MES) at our existing plants to improve productivity and efficiency through the greater use of robotics. We will strive to further digitize our indirect divisions and conduct a fundamental review of business rules and processes.

Management Strategy for Further Growth

As a medium-to-long-term growth goal, we are targeting 3 trillion yen in annual sales revenue by the fiscal year ending March 31, 2029. Central to this goal are Kyocera businesses that help fulfill societal needs, such as the aforementioned inkjet printing systems and renewable energy products. Some products in our Solutions Business have relatively short life cycles. In contrast, our Components Business includes many products that are becoming more sophisticated and smaller, yet their original role and function have remained unchanged. Consequently, this area should continue to deliver results over the long term. To ensure the steady growth of our Components Business, we will embark on a program of strategic investments. Gallium nitride (GaN), a material used to make highly efficient and durable semiconductors, is capable of producing lasers with several times the brightness and long-distance irradiation of LEDs. GaN is therefore labeled as a next-generation material that can further promote energy conservation. Just as we did in the development of lasers using GaN, we will continue to actively acquire and develop future core technologies. We are also creating and expanding businesses in the medical field to help fulfill societal needs. We have long been involved in making orthopedic joint replacement systems. More recently, we have begun collaborating with an Australian company specializing in joint regenerative medicine -- both through investment and by conducting clinical trials. Regenerative medicine is just one of the long-term future challenges we are pursuing. Another challenge is research into joint health care. I would like us to develop businesses related to all kinds of orthopedic joint issues, including preventive medicine. As the population ages, health care will become extremely important. We intend to work on businesses that contribute to this field. Our goals in these domains are clear.
In the past, we formulated fiscal plans one year at a time, but to aggressively expand in the aforementioned fields, we are considering a medium-term management plan based on investments with a three-year outlook in mind. In addition to our plants in Thailand and Vietnam, we plan to build new plants to increase our production of semiconductor-related products, while further increasing our investment in new technologies.
M&A and business alliances are also important for future growth. We have conducted an active M&A program over the past five years. Although our pace of M&A investment has settled down recently, we are always attentive to a good deal and equipped to act swiftly when necessary. We believe that start-up companies can play a key role in our future growth as well. At the same time, we will accelerate and expand the scope of our business alliances. We believe that business alliances are essential for achieving success with renewable energy subscription models and in regenerative medicine.

Resources to Help Achieve Management Strategies

With regard to organizational structure and HR improvement, my own experience of working in the Corporate Fine Ceramics Group has shown me that staff members tend to develop a narrow outlook if they just stay in the same division. That's why we decided to introduce a job rotation initiative. It is extremely valuable for staff to work in several different divisions early in their careers to absorb all of the various experiences and knowledge. Ideally, I would like our junior staff to experience working in three or four areas before moving up to the management level. Working overseas is no exception, and we have begun assigning personnel between the Electronic Components Division in Japan and our U.S. subsidiary, KYOCERA AVX Corporation.
The Kyocera Group maintains a solid financial base, with nearly 2 trillion yen in financial assets, including cash, deposits, and stocks. We often invest using cash reserves but we also procure funds externally and borrow from financial institutions when appropriate.
In terms of performance, in the previous fiscal year, we achieved profit before income taxes approximately 200 billion yen and a return on equity (ROE) of around 5%. We estimate that our ROE will increase to more than 10% if our sales revenue reaches 3 trillion yen and profit before income taxes reaches 600 billion yen. Our immediate goal is to achieve sales revenue of 2 trillion yen. We are also aiming to achieve profit before income taxes of 300 billion yen and an ROE of 8% as soon as possible. We will sow the seeds to achieve these goals by making capital investments and actively engaging in research and development. We anticipate that the next three years will be a preparation period for this business growth, followed by a significant increase in profits.
With regard to our business portfolio, we will implement streamlining measures when appropriate, such as closing redundant operations in Japan and overseas if necessary. We believe we must work on rebuilding our energyrelated business, in which profitability has been an issue, so it can once again generate solid profits.

Environmental, Social, and Governance Initiatives Based on the Kyocera Philosophy

ESG management has a high affinity with the Kyocera Philosophy. In fact, we have been putting this thinking into practice from day one. Environmental issues in particular have become a critical topic that is now inseparable from business activities.
As mentioned above, textile printing, for example, uses a large amount of water in the process of washing fabrics, and the resulting wastewater has a negative impact on the environment. We will try to solve this problem through digitization and proprietary technology. Also, with regard to energy issues, Japan's expectations for renewable energy are higher than those of many other countries, so we must consider how we can play a larger role. We would like to help achieve carbon neutrality throughout Japan, not only through our solar cells and storage batteries but also other products and services -- such as solid-oxide fuel cells (SOFCs) for urban apartments, where installing solar cells and storage batteries is difficult. As for resource recycling and the circular economy, our cutting tool products are made of tungsten. Tungsten is a resource that cannot be found in Japan, so this is an area in which our recycling efforts will increase in the future. We have already established technology in the recycling field.
We are working to create a better environment for our employees based on the statement: "To provide opportunities for the material and intellectual growth of all our employees," which is part of the Management Rationale established by our founder, Kazuo Inamori, that guides how we run the company. With regard to work practices, due in part to the impact of the COVID-19 pandemic, we have increased workplace flexibility by introducing remote work and flextime systems where feasible. To spark greater communication and networking within the company, we are setting up community spaces that all employees can use. We are also working to create a system that enables reliable communication and the timely sharing of information with our suppliers. In recent years, we have been requesting information on human rights risks and greenhouse gas (GHG) emissions from our suppliers. Since data from international suppliers can be difficult to ascertain, we anticipate that a company-wide risk management system will be needed to identify and minimize or eliminate all such risks.
We are also working to strengthen our corporate governance. In June 2021, we reduced our total number of internal directors and reviewed the composition of our board. The appointment of new outside directors with key management expertise has made our board of directors meetings more vibrant than ever before. In the past, discussions at the meetings were centered on investment-related matters. However, today, we are trying to shift discussion from a medium-to-long-term perspective, narrowing down investment-related matters to those that are particularly important, and emphasizing monthly performance monitoring, understanding our shareholders' needs and examining our management plan. We also recognize that the composition of our audit and supervisory board and the role of our internal audit system will become increasingly important in the future. We will continue to do our best to strengthen our corporate governance.

To Our Stakeholders

Since my appointment as president, I have felt that the Kyocera Group's growth rate has been slow, and this has also been pointed out by our stakeholders. To overcome this situation, we are making active, conscious efforts to expand both capital investment and research and development programs. Despite the fact that we were hit by the COVID-19 pandemic just as we were beginning to see results from our efforts, in the fiscal year ending March 31, 2022, we were able to achieve record sales revenue. We also succeeded in improving our ROE, from around 3% to 5%. I believe that we will be able to achieve sales revenue of 2 trillion yen, which has been one of our goals for the current fiscal year ending March 31, 2023. We are also accelerating growth investments to achieve our immediate goal of 300 billion yen in profit before income taxes and an ROE of 8%. We will use these three years as a preparation period to lay solid groundwork for future growth. I thank all of our stakeholders for your continued support of the Kyocera Group and I encourage you to expect more success from us in the future.