Initiatives for improving capital profitability

Kurabo <3106> announced the "Initiatives for Improving Capital Profitability" in May 2024. It aims to achieve an ROE of 8% or more within the next medium-term management plan period (until March 2028), and to aim for a realization of 10% or more by the end of the term in March 2031, taking up the challenge of improving ROE as a task to realize management that is conscious of capital costs and stock prices. Specifically, it will focus its management resources on the "semiconductor manufacturing related market", the "automation and control device market", and the "medical market", where high profitability and growth are expected, and will work on building a business portfolio that achieves sustainable growth as outlined in "Long-term Vision 2030". At the same time, it will be conscious of capital efficiency, and will 1) practice disciplined capital allocation, and 2) proceed with the reduction of policy-held shares. For 1), it will practice a total return ratio of 50% or higher being promoted in the current medium-term management plan, and will consider further shareholder returns of surplus funds after executing growth investments. For 2), it plans to gradually sell off policy-held shares to below 20% of consolidated net assets, and utilize the cash obtained there to be allocated to share buybacks, as well as growth investments including M&A for the rearrangement of the business portfolio.

(Written by Fisco Guest Analyst Ikuo Shibata)