Capital Efficiency Initiative 2027

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Capital Efficiency Initiative 2027

Capital Efficiency Initiative 2027

We launch a new initiative aiming to achieve an ROE of 8% or more for fiscal 2027, pursuing both our growth strategy and capital and financial strategy.

2025

Mid-Term Management
Plan 2025

Action plan to address management
issues and achieve Mid- to
Long-Term Management Goals

[KPIs]: ・ROE: 5.0%

・Net sales: 850 billion yen
Operating income: 50 billion yen

・EBITDA: 110 billion yen
[Three key issues]: 1)Continuous growth in existing business domains

2)Exploring, commercializing and monetizing new growth opportunities

3)Enhancing management foundation to support growth

2027

Capital Efficiency
Initiative 2027

Measures to achieve business
management that pays close
attention to capital costs and
the stock price

[KPIs]: ・ROE: 8.0% or more

・Operating income:65 billion yen

・EBITDA:120 billion yen

・Profit (Net income):48 billion yen

・Equity capital:600 billion yen

・Share repurchase:100 billion yen
(Total for 5 years)
[Basic approaches]: 1)Growth strategy
- Optimizing business portfolio

2)Capital and financial strategy
- Improving asset efficiency

2030

Mid- to Long-Term
Management Goals 2030

Quantitative/qualitative targets
to realize our long-term
management vision

[Economic value]: ・Net sales: 1 trillion yen

・Operating income: 80 billion yen
[Social and environmental value]: 1)Contributing to environmental protection through the Eco Action Plan 2030

2)Building a sustainable value chain

3)Creating a workplace that allows diverse talent to grow and thrive

Measures to achieve an ROE of 8% or more

Aiming to achieve an ROE of 8% or more by increasing profits (R) and lowering equity capital (E).

Increase in R: Operating income
(FY2023–FY2027)

FY2022 (Results): JPY 7.3 bil. + Improving earnings of the packaging business (Cost pass-through/ restructuring): JPY 40-50 bil. + Increasing profits in growing areas: JPY 10-20 bil. = FY2027 (Target): JPY 65 bil.

Aim for operating income
of 65 billion yen by optimizing business portfolio

Decrease in E: Equity capital
(FY2023–FY2027)

FY2022 (Results): JPY 643 bil. + Total profit (net income) for 5 years: Including extraordinary income/losses arising from disposal of strategic shareholdings, business restructuring and other factors - （Dividend payout ＊1: JPY 80 bil. + Share repurchase ＊2: JPY 100 bil.） = FY2027 (Target): JPY 600 bil.

Aim to reduce equity capital
to 600 billion yen by enhancing shareholder returns

＊1The 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.
＊2We 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.

Growth strategy

Optimizing business portfolio
Allocate more resources to growth areas of the engineering/filling/logistics, steel plate related, and functional materials related businesses. Seek appropriate cost pass-through and streamline and restructure unprofitable operations mainly in the domestic packaging business.

*This chart is scrolled

(in billions of yen)	FY2022 results	FY2023–FY2025	FY2027 targets
PackagingRestructuring	Net sales: 544.4 Operating income: -10.7 Operating income margin: -2.0%	Cost pass-through efforts (30 to 35 billion yen)	Net sales: 600.0 Operating income: 30.0 (+40.7) Operating income margin: 5.0%
		Restructure unprofitable operations.
		Reduce environmental impact. / Promote automation, labor saving and other cost cutting efforts.
Engineering/ Filling/LogisticsGrowth (and restructuring)	Net sales: 198.3 Op. income: 8.7 Op. margin: 4.4%	Restructure unprofitable operations.	Net sales: 190.0 Op. income: 13.0 (+4.3) Op. margin: 6.8%
Engineering/ Filling/LogisticsGrowth (and restructuring)	Net sales: 198.3 Op. income: 8.7 Op. margin: 4.4%	Improve profitability by tapping into the growing global market for can making machines. (Engineering) / Increase production capacity in Asian markets with high growth potential. (Filling)	Net sales: 190.0 Op. income: 13.0 (+4.3) Op. margin: 6.8%
Steel PlateGrowth	Net sales: 86.5 Op. income: 4.6 Op. margin: 5.4%	Invest in production of materials and components for automotive rechargeable batteries, which are rapidly growing.	Net sales: 110.0 Op. income: 7.0 (+2.4) Op. margin: 6.4%
Functional MaterialsGrowth	Net sales: 45.7 Op. income: 2.0 Op. margin: 4.4%	Pursue growth through the expansion of business areas by leveraging our technologies in optical and other functional films.	Net sales: 60.0 Op. income: 6.0 (+4.0) Op. margin: 10.0%
Cross-segment growth areasGrowth		Continue to expand components and engineering operations in the mobility market.	Net sales: 80.0 Op. income: 6.0 (+6.0)
Cross-segment growth areasGrowth		Expand filling and packaging manufacturing operations through M&As in growing overseas markets, particularly in South East Asia.	Net sales: 80.0 Op. income: 6.0 (+6.0)

Capital & financial strategy

Improving asset efficiency
Substantially increase returns to shareholders through dividend payment and share buybacks, which we have gradually enhanced. Further reduce “strategic shareholdings” (incl. cross-shareholdings). Reduce assets in unprofitable operations and streamline real estate management (disposal and adding value).

*This chart is scrolled

[FY2013-FY2017]Payout ratio of 20% or more, [FY2018-FY2020]Share repurchase worth 30 billion yen, Annual dividend per share of 14 yen or more, [FY2021-]Total return ratio of 80% or more, Payout ratio of 50% or more,[FY2023-FY2027]Total share repurchase during 5 years: approx. 100 billion yen*

＊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.

Cash allocation (FY2023 - FY2027)

Seeking business growth and higher returns on capital, we will strategically allocate funds obtained from operating cash flows and through asset disposal and fundraising to investment activities and shareholder returns.

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[Cash inflows] Asset disposal & fundraising 80 billion yen or more, Operating cash flow 370 billion yen, [Cash outflows] Investment 270 billion yen (Expanding business opportunities in new growth areas 145 billion yen, Reinforcing foundations for existing operations 110 billion yen, Enhancing management foundation 15 billion yen), Shareholder returns 180 billion yen (Dividend payout 80 billion yen, Share repurchase 100 billion yen), [Details of income and spending] Asset disposal & fundraising (- Dispose of approx. 40 billion yen worth of strategic shareholding (incl. cross-shareholding) by FY2027. (20 billion yen worth unsold under Mid-Term Management Plan 2025 (- To date, 20 billion yen worth has been sold under the plan. - Additional 20 billion yen worth to be sold)) - Reduce assets in unprofitable operations and dispose of real estate. - Improve financial efficiency through the use of debt financing.), Investment (- Continuous investment to enhance growing existing operations, including automotive rechargeable battery materials and components. - Investment in new fields with growth potential / M&As - Continuous investment to maintain solid foundations for existing operations), Share-holder returns (- Expected total dividend payout: approx. 80 billion yen*1 (- Aim for an average consolidated payout ratio of 50 percent or more (FY2021–FY2025) - Set a minimum annual dividend of 46 yen per share and gradually increase the amount. (FY2021–FY2025)) - Total share repurchase amount: approx. 100 billion yen*2 (- Substantially increase returns to shareholders, which we have gradually enhanced.))

＊1The 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.
＊2We 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.

Financial targets

New targets for profit and equity capital for fiscal 2027 to further improve capital efficiency

*This chart is scrolled

				New initiative
		FY2022 (Results)	FY2025	FY2027	FY2030
Earnings (billion yen)	Net sales	906.0	850^＊1	－ [1,050] (For reference)	1,000^＊1
	Operating income	7.3	50	65	80
	EBITDA	60.3	110	120	－
	Profit (Net income)	10.3	35	48	－
Returns on capital (billion yen)	ROE (%)	1.6%	5.0%	8.0% or more
Returns on capital (billion yen)	Equity capital (Additional target)	643.0	－	600
		FY2022 (Results)	FY2021-2025	FY2023-2027
Returns to share-holders	Consolidated payout ratio (%) (Dividend per share)	156% (89 yen)	Target 50% or more (Minimum 46 yen, to be gradually increased)	Same as left Total payout for 5 years: 80 billion yen^＊2
Returns to share-holders	Total return ratio (%) (Share repurchase)	156% ( – )	Target 80% or more (9.2 billion yen worth already repurchased)	Total repurchase for 5 years: 100 billion yen^＊3

＊1The sales targets for FY2025 and FY2030 have remained unchanged since the current sales growth reflects the impact of currency fluctuations and efforts to pass on higher energy costs to customers, among other factors.
＊2The 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.
＊3We 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.