- Medium-Term Business Strategy
- Cost of Capital-Conscious Management
- Previous Medium-Term Business Strategy
Cost of Capital-Conscious Management (Cost of Capital, ROI Index, Market Valuation)
Deepen "management conscious of cost of capital and stock price" based on the financial policy of the medium-term business strategy
| Topic | Present | Policy |
|---|---|---|
| Capital cost |
|
✔Reduce the cost of shareholders' equity by promoting business portfolio transformation while also utilizing interest-bearing debt |
| ROI index | ROE 5-year* average: 8.1% |
✔Basic policy of soundly increasing ROE through business growth ✔Aim to achieve ROE of 10% or more above cost of capital over the medium to long term |
| Shareholder return |
Dividend per share, FY2022: 68 yen FY2023: 84 yen (planned) FY2024: 100 yen (planned) -Plan to increase dividend depending on factors such as business performance |
✔Provide stable and continuous shareholder returns ✔Consider additional shareholder returns depending on factors such as business performance, and flexibly carry out repurchase of our own shares |
| Market valuation |
P/B ratio 5-year* average: 1.05x Most recent: 1.08x -Recent P/B ratio over 1x due to recovery in performance |
✔Aiming to continuously increase shareholder value in accordance with the CS B2024 financial policy ✔Aim for further improvement of P/B ratio by improving profitability and promoting business portfolio transformation through continuous growth investment |
- From FY2019 to FY2023
Our view of "management with an awareness of cost of capital and stock price" and our future initiatives are as follows.
Capital cost
The current cost of equity is estimated around 7% to 10%. It is calculated based on CAPM, but since it varies depending on the timing of calculation and different assumptions, it is taken as a range. We will continue to transform our business portfolio and reduce the cost of equity while also utilizing interest-bearing debt.
ROI index
ROE has averaged 8.1% over the past five years. Our basic policy is to soundly increase ROE through business growth, and we aim to achieve a level of ROE (10% or more) maintaining an equity spread.
Shareholder return
Our basic policy is to provide stable and continuous shareholder returns. We will also consider additional shareholder returns, including raising the level of dividends, depending on factors such as business performance. In addition, we will flexibly carry out repurchase of our own shares.
In FY2022, we paid a dividend of 68 yen per share. For FY2023 and FY2024, we plan to increase dividends depending on factors such as business performance.
Market valuation
The P/B ratio has averaged 1.05 times in the past five years and was approximately 1.08 times as of the end of FY2023. We plan to further improve the P/B ratio by improving profitability and promoting business portfolio transformation through continuous growth investment.
We will further deepen our management conscious of cost of capital and ROI based on the financial policy of our CS B2024 medium-term business strategy in order to meet the expectations of our stakeholders, achieve sustainable growth, and enhance corporate value.
