Shareholder return strategy: No. 1<3562> changed its shareholder return policy along with the publication of the new mid-term management plan "Evolution 2027" and showed the direction of significantly strengthening shareholder return. So far, we have aimed for stable dividends (30% dividend payout ratio as a guide), but in the future, we plan to implement stable and continuous shareholder dividends based on a policy of aiming for a 30% dividend payout ratio, regardless of changes in annual performance. A notable feature is that we have set a minimum dividend of the previous year's annual dividend per share and will continue to increase dividends, which is a significant enhancement of shareholder return and can also be evaluated as a expression of confidence in profit growth. Moreover, we have a policy of "flexibly implementing under financial discipline" for acquiring our own shares, showing a more proactive stance.* *Considering the gap between our own perception of the stock price and the market evaluation, ROE, capital efficiency, and CF level, we have a policy of implementing it flexibly. Dividends for the fiscal year ending February 2024 will increase by 1 yen from the previous year, as expected at the beginning of the period, to 33 yen per share (mid-term dividend of 16.5 yen and year-end dividend of 16.5 yen). We also acquired 340,000 shares of our own stock (with a purchase price of 397 million yen). Despite the anticipated decline in profits for the fiscal year ending February 2025, we are expected to follow the policy of increasing dividends every period and issue a dividend of 1 yen per share (a commemorative dividend for the 35th anniversary of our founding), with an expected increase of 2 yen from the previous year to 35 yen per share (mid-term dividend of 17.5 yen and year-end dividend of 17.5 yen).

Mitsui Matsushima Holdings <1518> regards the return of profits to shareholders as one of its important management policies, and its basic policy is to continue to return profits to shareholders based on management performance while securing the internal reserves necessary to respond to future stable corporate growth and changes in the business environment. Based on this basic policy, it is implementing dividends without a reduction in the regular dividend base for the 18th term. The annual dividend per share for the fiscal year ending March 2024 is 100.0 yen, a decrease of 220.0 yen compared to the previous year, but the previous year paid a commemorative dividend of 240.0 yen for the 110th founding anniversary and highest profit, which increased by 20.0 yen compared to the regular dividend base. In addition, the year-end dividend was increased by 20.0 yen compared to the initial forecast, indicating the company's emphasis on shareholder returns. As for dividends for the fiscal year ending March 2025, it plans to pay 100.0 yen per share (50.0 yen for the interim and 50.0 yen for the year-end).

We believe that the company's cash generation ability will continue to increase steadily while executing M&A. In fact, the segment profit before goodwill amortization, which excludes the 'goodwill depreciation expense' (which is deducted from the profit and loss statement as an M&A expense every year, even though there is no actual cash outflow, so the amount added back is the net cash output), has certainly increased by adding back the goodwill depreciation expense that is deducted as an M&A expense in the lifestyle-related business segment. We believe that the company will continue to accumulate cash as the source of dividends by implementing high-quality M&A and firmly returning it to shareholders.

The company also implements a shareholder benefit program. For the fiscal year ending March 2024, it is presenting merchandise gift certificates (10,000 yen) from Hanabishi, restaurant gift certificates (3,000 yen) that can be used at Mitsui Port Club and La Rochelle 3 stores, and premium pet food gift certificates (worth 2,500 yen) from KMT based on the number of shares held.

(Written by FISCO Guest Analyst Yoichiro Shimizu)