Policy of Using Operating Profit and ROE as Key Management Indicators

「In addition, to achieve its medium- to long-term targets and improve its PBR, the Group is introducing ROIC management by segment to improve returns on invested capital, while managing ROE as an important group-wide indicator. At the level of operating companies or individual businesses within each segment, it will manage ROA to improve returns on business assets, work to reduce underutilized assets and other items, and consider portfolio changes involving operating companies or businesses.」

「The Group has set long-term targets of ordinary profit of ¥13 billion and ROE of at least 9.0% for fiscal 2034. To achieve these targets, it will promote the transformation of its business portfolio, without being constrained by sectors, with environmental businesses expected to grow serving as another core business. Alongside improving capital profitability through optimization of shareholders’ equity, it will work to reduce the cost of equity through dialogue with the capital markets and improve share trading volume.」

「The Company places the greatest importance on operating profit, from the perspective of earnings generation, as an objective indicator for assessing progress toward its management targets. It also considers ordinary profit, which reflects income and losses from investments accounted for under the equity method and other items, and net income attributable to owners of the parent, which serves as the basis for returns to shareholders, to be important. In addition, to achieve its medium- to long-term targets and improve its PBR, the Company has established ROA and ROI (return on investment) by business as management items so that it can manage with greater awareness of its cost of capital and capital profitability.」

「The Group has set long-term targets for the future business performance required to achieve sustainable growth: operating profit of ¥10 billion, ordinary profit of ¥13 billion, and ROE of 8.0%. To achieve these targets, the Group recognizes the need to transform its business portfolio away from dependence on its existing paper manufacturing business and toward one centered on environmental businesses expected to grow.」

「The Group has established long-term targets for its future target profile: net sales of ¥120 billion, operating profit of ¥10 billion, an operating margin of 8.3%, and ROE of 8%. It is pursuing further growth opportunities and strengthening the foundations of its existing businesses.」

「The Group has defined its target profile for 10 years from now, consisting of operating profit of ¥10 billion and ROE of 8%, and as the first step toward that profile has formulated the Fourth Medium-Term Management Plan, “NEXT10: The Next Growth, The Next Challenge,” covering the 3 years from the fiscal year ending March 2018. The Group is pursuing further growth opportunities and strengthening and transforming its core businesses.」

「The Company plans to use operating profit and ROE primarily as objective indicators for assessing progress toward its management targets.」