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).

As part of their shareholder returns, Ichigo <2337> distributes dividends. As a basic policy for dividends, they have introduced a 'progressive dividend policy' which is rare in Japan. It is a clear policy of 'no dividend reductions, only maintaining or increasing dividends' as a commitment to the company's sustainable value improvement and long-term shareholder returns. They have maintained the progressive dividend policy for 12 consecutive periods and have a reputation for stability. In addition, under the new management goal, the shareholder capital dividend payout ratio (DOE) has been raised from 3% or more to 4% or more. The dividend for the 2024 February period was 9.00 yen per year (1.00 yen increase compared to the previous period) with a dividend payout ratio of 33.5%. It is expected that the dividend for the 2025 February period will be 10.00 yen per year (an increase of 1.00 yen from the previous period), with a dividend payout ratio of 31.2%. Following the dividend increase for the 2023 February period (from 7.00 yen in the previous period to 8.00 yen), it is expected to be the third consecutive increase.

The company has set a proactive stance towards improving shareholder value through a flexible share buyback as part of their long-term VISION 'Ichigo 2030'. Following this policy, they have conducted their own share buyback ranging from 1.5 billion yen to 6 billion yen annually for seven consecutive periods from the 2018 February period to the 2024 February period. With strong financial foundations, the company can expect to improve shareholder value through their own share purchases depending on the market price of their stocks, even in the current period and beyond.

(Written by FISCO Guest Analyst, Hideo Kakuta)