Message from the Officer in Charge of Finance

Masakazu Soejima

Director and Executive Officer
Head of Corporate Strategy;
In charge of Accounting, Finance,
Investor Relations and
Group Procurement Strategy

Performance for Fiscal Years 2022 and 2023

The financial results for the fiscal year 2022 showed an increase in sales of 84.4 billion yen from the previous term, totaling 906 billion yen. However, operating profit saw a significant decrease of 7.3 billion yen. Factors contributing to the increase in sales include price transfer in the domestic packaging business, strong performance of materials for automotive secondary batteries, and solid performance of Stolle Machinery Company, LLC (Stolle). On the other hand, the main factor for the decrease in profit was the cost increase due to the surge in raw material and energy prices in the domestic market.

The performance forecast for the fiscal year 2023* is for sales of 947 billion yen, operating profit of 30 billion yen, and ordinary profit of 32.5 billion yen. Factors contributing to the increase in sales include the progress of price transfer and the growth of our steel plate related business. The expected increase in operating profit is due to the limited impact of the surge in raw material and energy prices and the progress of price transfer. We saw a significant decrease in profit in fiscal 2022, and a full recovery is not yet in sight in fiscal 2023. In response to this current situation, we announced the Capital Efficiency Initiative 2027, setting a goal of increasing ROE to 8% or more and operating profit to 650 billion yen.

 *Values announced on February 7, 2024.

Growth Strategy for Improving Capital Efficiency Initiative 2027

The pillar of our growth strategy is the optimization of our business portfolio. We will redirect the management resources that have been invested primarily in the packaging business toward the growth areas of engineering, filling, logistics, steel plate related, and functional material related businesses, accelerating their expansion. Promising businesses such as the development of steel plate related components for automotive secondary batteries and barrier films for functional materials related businesses have emerged. Additionally, considering the high potential for market expansion in Southeast Asia in the filling and packaging businesses, we aim to achieve growth through mergers and acquisitions.

The domestic packaging container business remains an important business that supports our group's foundation. We will continue to work on improving profitability while also addressing the reconstruction of unprofitable business areas and the rise in labor costs, strengthening our foundation.

Capital and Financial Strategy for Capital Efficiency Initiative 2027

The pillar of our Capital and Financial Strategy is to enhance asset efficiency. To achieve this, we will significantly strengthen shareholder returns through dividends and share buybacks. We will also proceed with reducing policy-held shares, compressing assets in unprofitable business areas, and selling real estate, and enhancing its value.

Cash Allocation for Capital Efficiency Initiative 2027

In cash allocation, we strategically distribute funds for investment and shareholder returns using operating cash flows, asset sales, and fundraising as its sources. We anticipate operating cash flows to be approximately 370 billion yen, with the main contributing factors being revenue improvement and contributions from growth areas. The plan includes a cash inflow of approximately 80 billion yen from asset sales and fundraising, with approximately 270 billion yen allocated to investments in growth areas and existing businesses, and approximately 180 billion yen allocated to shareholder returns.

Cash allocation

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  • The dividends for FY2026 and FY2027 are assumptions based on the planned level for FY2025, and the dividend plans for the years will be determined based on actual earnings.
  • We plan to repurchase a total of 60 billion yen worth of shares during the period of the current mid-term management plan. While the repurchase amount for the FY2026–2027 period is expected to be around 40 billion yen, it will be finally determined based on the shareholder return policy of the next mid-term management plan.

Looking ahead

Regarding communication with stakeholders, which has become increasingly important in recent years, we believe it is crucial to listen carefully to the voices of not only shareholders and investors but also employees, customers, suppliers, and others, communicating the challenges we currently face and timely disseminating appropriate information .