Japanese

Shareholders and investors

Basic approach

To enhance sustainable corporate value, we have adopted ROE (Return on Equity), which comprehensively reflects profitability, asset efficiency, and financial leverage, as one of our key management indicators. We will accelerate our efforts to improve capital efficiency. While our company's shareholder equity cost is approximately 8% based on global standards, we have set a management goal of achieving an ROE that exceeds this level and are committed to expanding the equity spread (ROE - shareholder equity cost).
[Enhancement of corporate value]　[Maximization of earning power]　[Promotion of capital Policies]　[Improvement of capital Efficiency]

Financial management

Balance sheet (As of the end of March 2024)

Financial soundness

In addition to focusing on improving indicators such as operating profit margin, ROE, and ROIC, we place importance on financial health indicators such as the D/E ratio (debt to equity ratio) to maintain sound finances.

Approach to strategic investments

From the perspective of asset and capital efficiency, we will continue to promote efficient business operations. This year, with a view toward 2030, we have set the direction for mid- to long-term investments and resource allocation. In terms of resource allocation, we plan to reduce capital investment in existing businesses by 45% and focus on creating strategic investments, including C/N, as well as investments in new businesses. For development personnel, we will promote reskilling and rotation, shifting resources towards new businesses.

Cash flow and cash allocation

While considering financial soundness, we will utilize the cash flow generated from operating activities for capital investments, strategic investments aimed at enhancing long-term corporate value, and shareholder returns. We plan to generate over 40 billion yen in cash inflows through operating cash flow, the sale of non-core assets, and bank borrowings.For cash allocation, approximately 40% of the cash inflows will be allocated to strategic investments. When reviewing individual investment projects, we will carefully evaluate their strategic significance, associated risks, and mitigation measures, as well as verify future cash flow projections and investment returns. All decisions will be made cautiously, taking financial soundness into account.

Medium to long-term plan

Medium to long-term plan

Shareholder returns with a focus on capital efficiency

Regarding dividends, we aim to maintain long-term stable dividends by setting standards such as "dividend payout ratio" and "shareholder equity dividend rate." Additionally, we strive to enhance shareholder returns by optimizing financial soundness and capital costs, while implementing flexible dividends in line with business performance. As for share buybacks, we will act swiftly, taking into comprehensive consideration factors such as the capital structure based on business plans and evaluations in the capital markets, while maintaining financial soundness and securing investments in growth businesses.

Activities for enhancing corporate value

Our company actively engages in constructive dialogue with stakeholders, including shareholders and institutional investors, to achieve sustainable growth and enhance corporate value over the medium to long term. This fiscal year, we held a "Business Strategy Briefing" to explain our medium- to long-term plans. We will share the feedback obtained through these dialogues and continue working towards enhancing corporate value.

Main initiatives and achievements

  • Automotive engineering exposition 2024 (May)
  • Business strategy briefing (May)
  • Annual general meeting of shareholders (June)
  • Individual meetings with institutional investors and securities analysts (Ongoing)

Related information

Sustainability

  • Sustainability of Taiho Kogyo
  • Materiality
  • Value creation process
  • The environment
  • Manufacturing
  • Human resources and the climate of the company
  • Safety and health management
  • Supply chain
  • Contributing to society and local communities
  • Shareholders and investors
  • Governance
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