Basic Policy on Distribution of Profits

1.Principle of Capital Strategy

We aim to increase corporate value by making strategic investments for sustainable growth and improving capital efficiency, while striving to further enhance shareholder returns.

  • We will make aggressive investments to realize sustainable growth, including technology development (investment in intellectual property), human resource development (investment in human capital), capital investment, and M&A.
  • ROE: One of our important management targets is 10%, and we aim to build an optimal capital and liability structure that is mindful of the cost of capital and a stable financial base in preparation for emergencies.
  • With regard to shareholder returns, we aim to improve total stock returns by increasing stock prices over the medium to long term, in addition to directly returning profits to shareholders.

[ Dividend Policy (Approach to Shareholder Returns) ]

  1. (1)The company targets a consolidated dividend payout ratio of 20% to 25%.
  2. (2)Aim for a stable and continuous increase in dividends per share.
  3. (3)We will flexibly repurchase and dispose of treasury stock, giving consideration to the total return ratio.

In the fiscal year ended March 2022, the business environment surrounding our group became extremely demanding due to the continued expansion of new corona viruses and rising raw material costs. As a result, net income came in at the level of the revised earnings forecast announced on February 9, 2022.

At the meeting of the Board of Directors held on May 23, 2022, the year-end dividend for the year ended March 31, 2022 was set at ¥18 per share based on the initial forecast, taking into account the results of the fiscal year under review and the stable dividend policy regarding the distribution of profits. With the addition of an interim dividend of ¥17 per share, the annual dividend will be ¥35 per share, for a consolidated dividend payout ratio of 31.3%.

For the fiscal year ending March 2023, based on the basic policy mentioned above, we plan to pay an annual divident of ¥35 per share. This results in a consolidated dividend payout ratio of 30.4% for the year ending March 31, 2023.

2.Dividend Trends (Per Share)

Fiscal Year 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3
Cash Dividends Per Share (yen) 22 23 29 32 32 35
Total dividends (Millions of yen) 1,253 1,311 1,654 1,794 1,771 1,916
Net Sales (Millions of yen) 141,977 154,724 162,189 160,925 163,635 170,321
Consolidated Net Income (Millions of yen) 5,659 6,204 8,259 8,808 8,375 6,117
Net income per share (yen) 99.34 108.91 144.78 155.51 150.93 111.70
Consolidated dividend payout ratio 22.1% 21.1% 20.0% 20.6% 21.2% 31.3%
ROE 7.0% 7.2% 8.9% 9.1% 8.3% 5.8%
Average number of shares during the period (shares) 56,971,564 56,973,829 57,045,725 56,642,827 55,489,651 54,764,416

*The Company conducted a 2-for-1 stock split on January 1, 2017. Figures for related items have been adjusted.