President × Analysts Roundtable Discussion
Progress and Challenges in Portfolio Reform
In July 2025, President Nakamura held a three-way discussion with Mr. Nakayama of Nissay Asset Management Corporation and Mr. Watanabe of SMBC Nikko Securities Inc. They exchanged views on a review of the past five years of portfolio reform and on initiatives for future growth.
On portfolio reform over the past five years
Nakayama
The reasons I became interested in Maxell include: having a product portfolio that, in a market with few surprises, earns stable sales and profits with high market share; holding the No. 1 share in optical products and battery products; and having a strong presence in primary batteries, which are in a stable market, generating high share and high profitability with products such as micro batteries for TPMS (tire pressure monitoring system) sensors, while also possessing latent growth potential in new areas.
I regarded the profit expansion in Maxell’s BtoC business as riding a temporary boom, so I was closely watching to see how you would allocate management resources. Looking back on how you ultimately reached the management decision to withdraw, what do you see as the issues?
I regarded the profit expansion in Maxell’s BtoC business as riding a temporary boom, so I was closely watching to see how you would allocate management resources. Looking back on how you ultimately reached the management decision to withdraw, what do you see as the issues?
Nakamura
We carried out our reform of the BtoC business from 2022 to 2023. Since the 2000s, overseas companies’ BtoC products have become more competitive, making it difficult to differentiate on performance alone, and in Japan today BtoC superiority is determined more by a company’s ability to supply to distribution channels than by product performance. Amid this, during the COVID-19 pandemic in 2020, sales of anti- bacterial deodorizers expanded and market interest in health products was extremely high, so, hoping to make another strong showing, we took on the challenge of developing higher value-added products. We believed there was an opportunity, but in the end cost competitiveness proved challenging, so we switched to a scheme to transfer the business to the best owner. I regret that we should have made the management decision earlier.
Nakayama
Many companies talk about “structural reform,” yet fundamental reforms are not carried out, and a few years later they once again incur losses and are forced to restructure. I evaluate Maxell as having seen structural reform through to completion in the following respects:
・Sequentially executing portfolio reform under the ABC-XYZ operations (profit and loss control by business)
・Deciding to withdraw from the prismatic lithium-ion battery business following the BtoC business
・Making an early management decision on the projector business and currently generating earnings from patents
If reforms continue to be carried out in a timely manner under the discipline of ABC-XYZ, then I think it will be recognized that portfolio reform has taken root at Maxell.
・Sequentially executing portfolio reform under the ABC-XYZ operations (profit and loss control by business)
・Deciding to withdraw from the prismatic lithium-ion battery business following the BtoC business
・Making an early management decision on the projector business and currently generating earnings from patents
If reforms continue to be carried out in a timely manner under the discipline of ABC-XYZ, then I think it will be recognized that portfolio reform has taken root at Maxell.
Nakamura
In the prismatic lithium-ion battery business, while operating profit and capital efficiency were low, there was a certain level of sales that covered fixed costs. However, in the medium to long term it was necessary to shift our footing and connect to new businesses, and as we reached a certain outlook for shifting to all-solid-state batteries, we decided on withdrawal in fiscal 2024.
Challenges and Expectations for Future Growth
Watanabe
When I look at the balance between sowing the seeds of growth and overall company profits, I feel like it is too heavily weighted toward profits. Not every seed will lead to high profitability and high growth, so I believe more seeds need to be sown. Planting seeds while advancing structural reform is difficult, but even if all-solid-state batteries do not proceed as assumed, it is desirable to have a portfolio with multiple alternatives.
Nakamura
That point is indeed crucial for Maxell’s growth. We were relisted in 2014, and pursued a growth strategy through M&A; however, we had the bitter experience of doing too much too quickly. When I became president, I strongly felt the need to build businesses starting from in-house technology development. Therefore, in 2021, when we launched the previous Mid-Term Management Plan MEX23, we integrated the development of new products and new businesses that had been conducted within each of the four business divisions using their own resources into the New Business Producing Division, thereby strengthening the framework for launching new businesses.
Currently, all-solid-state batteries are about to get off the ground, and we have many other seeds with growth potential. We intend to allocate sufficient resources and move forward with commercialization in an organized manner.
Currently, all-solid-state batteries are about to get off the ground, and we have many other seeds with growth potential. We intend to allocate sufficient resources and move forward with commercialization in an organized manner.
Changed reporting segments to focus resources on the growth of the Analog Core Business Group
Define Energy, Functional Materials, and Optics & Systems as the “Analog Core Business Group” which should be grown intensively, concentrate management resources, invest aggressively for growth, and also explore growth opportunities through M&A to accelerate business growth
Watanabe
It is important to move forward with portfolio reform and to raise profit margins. I think it is best to allocate a certain share of profits to R&D as seed funding, and then to methodically build mechanisms to increase the success rate of development.
Nakayama
I highly regard the move to consolidate new-business development functions that had been carried out in each department and to pursue overall optimization. What concerns me is whether, while allocating resources to all-solid- state batteries, Maxell’s seeding for initiatives still at the early development stage might be receiving short shrift. It is also important to concentrate resources on marketing, sales, and commercial capabilities, which are areas that remain a challenge, and to change the organizational structure and systems accordingly.
Nakamura
Although volumes are still small, production of all-solid-state batteries on mass-production equipment has begun, and we are entering a phase of shifting them into a business segment. Following that, EMC countermeasure components* and foam molding are now one or two steps before commercialization, and we are increasing resources to advance their development.
Starting in fiscal 2025, customer development for new technology development is being handled by the marketing team within the New Business Producing Division, and we have shifted to a framework that thoroughly captures customers’ issues. Going forward, we will strengthen these activities and will also consider collaborating with trading companies and others to accelerate our efforts.
*EMC：Electromagnetic Compatibility
Starting in fiscal 2025, customer development for new technology development is being handled by the marketing team within the New Business Producing Division, and we have shifted to a framework that thoroughly captures customers’ issues. Going forward, we will strengthen these activities and will also consider collaborating with trading companies and others to accelerate our efforts.
*EMC：Electromagnetic Compatibility
Nakayama
Many technology-oriented companies in Japan struggle with this, and solving it is not easy, but if it can be solved, then the stock market’s evaluation could dramatically change. I hope internal discussions will progress going forward.
Watanabe
When I visited Maxell’s factories, I was once again convinced of the strengths of micro batteries. The longstanding work under stringent conditions to ensure absolutely no leakage matches the needs of the medical device market. I believe that leading with strong products to draw out customer needs will be the first phase toward expansion.
Nakamura
Marketing and sales for the battery business are being strengthened on a global scale. We need to capture needs broadly, and I want our front-line sales teams to keep a strong focus on that. If we concentrate only on batteries, then we can dig deeper into the battery business, but our breadth will not expand; therefore, we are building new mechanisms to address this. While major results will not come immediately, the New Business Producing Division will accelerate the search for new customers and products.
Nakayama
I believe efforts to probe customers’ latent needs are also moving forward, but how is this in practice?
Nakamura
In marketing and technology development within the New Business Producing Division, we have set up phase gates, with the condition that customers request samples on a paid basis. For foam molding and EMC countermeasure components, we are able to provide paid samples to customers. For products that have not yet reached that stage, we are strengthening marketing so they can move to the next gate.
Watanabe
It is clear that Japan will face talent shortages over the next 5 to 10 years, and that operations will become difficult unless companies amicably leverage resources by hiring overseas personnel as well as collaborating with one another. Shouldn’t you accelerate the pace of bringing in external personnel?
Nakamura
The average age of Maxell’s workers is high, so we recognize this as a very important point. Owing to issues of business succession, there are also M&A opportunities involving capable small and mid-sized companies, and if we find companies that can create synergies with Maxell’s core technologies, then we would like to actively consider them.
Watanabe
I think the business transfer from Murata Manufacturing was very positive in terms of consolidating industry resources.
Nakamura
When we formulated the current mid-term management plan, we generated M&A ideas across all segments, and this one had the highest affinity. Although finished battery products may look the same, the manufacturing methods, materials, equipment, and underlying technologies differ. By leveraging each other’s strengths, we expect to create broad and significant synergies, including in product design and equipment design.
Nakayama
By the way, your PBR has remained below 1 for some time. How do you view this internally?
Nakamura
While we have set out a management approach focused on capital efficiency, we believe the lack of share-price appreciation largely reflects volatility, including in growth potential and profitability, and the fact that contributions to performance from new products such as all-solid-state batteries, which are aimed at future growth, are still ahead. If we firmly achieve the targets of the mid-term management plan and are able to communicate more concrete initiatives for expanding the all-solid-state battery business, then I believe the market’s trust and expectations will rise, and that our share price will follow.
Thank you very much for your valuable opinions today.
Thank you very much for your valuable opinions today.
The acquisition of the micro primary battery business from Murata Manufacturing Co., Ltd., announced in June 2025, is, in my view, an excellent outcome. It not only provides expansion in a business where Maxell is strong on its own, but also brings a competitor’s business into the fold to grow the overall business while securing necessary talent.