■Higashi Twenty-One<9029>'s growth strategy

3. Shareholder Return Strategy

Regarding shareholder returns, the basic policy is to strengthen the financial structure that is the foundation for long-term development and maintain stable dividends, while also returning profits obtained through growth with a target consolidated dividend payout ratio of 30% or more. Based on this policy, the dividend for the 2024 fiscal year will be 36.0 yen, an increase of 6.0 yen from the previous year (end of period lump sum payment). The dividend payout ratio will be 31.4%. The dividend for fiscal year 2025 is expected to be 38.0 yen, an increase of 2.0 yen from the previous year (end of period lump sum payment). With four consecutive years of dividend increases, the expected dividend payout ratio is 30.6%. The company has set a dividend target of 40.0 yen for fiscal year 2026 in the medium-term management plan, and we at the company expect further enhancement of shareholder returns with the medium- to long-term growth of profits.

Also promoting sustainability management

4. Sustainability Management

Regarding sustainability management (ESG management), in December 2021 we established the "Sustainability Basic Policy," and additionally, in the medium-term management plan for 2026, we established the group purpose "Always providing peace of mind and more surprises. With people, technology, and IT, we create new value and link it to a prosperous tomorrow." We aim for business growth by enhancing service value and further strengthening IT service businesses, among other measures, toward our contributions to "stable supply of logistics" and "practicing responsible corporate management," as a logistics provider, while also promoting sustainability management.

As measures to address climate change, we promote achieving a low-pollution vehicle introduction rate of 10% or more for company-owned vehicles and strengthening information disclosure based on TCFD (Task Force on Climate-related Financial Disclosures) recommendations.

For efforts toward improving the value of human capital, we promote securing talent through recruitment strategies and labor environment improvements and increasing productivity through skill development for existing employees in order to achieve our goals in the medium-term management plan for 2026. Furthermore, in the "Comfortable Workplace Certification System" (official name: Driver Workplace Environment Certification System), our company and World Corporation have each acquired a two-star certification, and four other group companies have acquired a one-star certification. Additionally, we aim to have a female managerial ratio of 10% or higher at the end of fiscal year 2026, a male parental leave acquisition rate of 50% or higher per term, and a paid vacation acquisition rate of 63% or higher per term.

In strengthening corporate governance, we transitioned to a company with a Nomination Committee in June 2019 to clearly separate supervision and execution in management and are promoting the strengthening of independent and objective management oversight functions and swift business execution through significant authority transfer. Additionally, we will continue to evaluate the effectiveness of directors and committees and work to further enhance governance.

Our perspective

Our company highly evaluates the fact that the company's business expansion strategy based on an ambitious long-term vision, such as revising upward the final year target of its medium-term management plan for 2026, has been clearly demonstrated. As the potential for medium- to long-term growth increases with the acceleration of the growth strategy, we continue to pay attention to the progress of the growth strategy.

(Authored by FISCO guest analyst Masanobu Mizuta)