Looking Back at Our FY2024 Results

We achieved our best performance ever in FY2024, attaining sales revenue of ¥300 billion and business profit of ¥30 billion, targets that our Group has held for many years. There was steady progress in semiconductor materials, driven by strong domestic demand in China. In quality of life products, we have seen good growth overall, including the expansion of sales of films for electronic components and semiconductors to China and the ASEAN region.
For high-performance plastics, although sales remained robust in Asia, the business environment was tough, including a slump in automotive applications in Europe and the US. The phenol-related business in North America in particular recorded impairment losses, due in part to a more competitive environment, which resulted in a lower operating profit and profit attributable to owners of parent compared to the previous year. However, this was also a year of steady progress toward structural reforms to improve profitability, including consolidating production sites, putting state-of-the-art facilities into operation, getting rid of unprofitable products, and establishing new products.

FY2024 Results

Financial Targets for FY2025

Despite a share buyback of ¥20 billion, ROE fell to 6.5% in FY2024 due to a decrease in profit. There are uncertainties in FY2025, including the rising value of the yen and reciprocal tariffs causing stagnation in the automotive market. However, with the continued strength of the Chinese semiconductor market and a review of our product portfolio, we aim to increase revenue and profit from last fiscal year and achieve record results this year, aiming for a sales revenue of ¥310 billion, business profit of ¥32.5 billion, operating profit of ¥31 billion, and profit of ¥23.5 billion. Alongside this, ROE is expected to improve to 8%, and we will continue to promote business growth and capital optimization in order to achieve 9% in FY2026 (the final fiscal year of the current Medium-term Business Plan) and the target of 10% for FY2030.
We have planned shareholder returns of ¥30 billion during the current Medium-term Business Plan period. Our policy is to pay stable, continuous dividends, with a guideline dividend payout ratio of 40%.

Sales Revenue and Business Profit

ROE Transition

Cash Allocation: Results and Forecast

We are progressing as planned with the capital investment of ¥50 billion and growth investment of ¥20 billion, as set out in our Medium-term Business Plan. As part of our growth investment, we are integrating our corporate-wide LOB systems to realize data-driven management. For research and development, we are investing in future-looking new projects such as the Project Team to Commercialize Brain-Machine Interface (BMI) and the Project Team to Prepare for Mass Production of Functional Membranes for Hydrogen Production.
In terms of strategic investment, we are investing in venture capital and actively working on external collaboration projects, such as establishing the Co-creation Research Center with Tohoku University. We are exploring opportunities for M&A, mainly in our priority areas of semiconductors and healthcare. Merging with companies with different ideas and DNA could bring huge opportunities for our Group. We will continue to explore M&A opportunities that will help to transform our business portfolio.

Distribution of Operating Resources Taking the Cost of Capital into Consideration (FY2024–2026)

Dialogue with Shareholders and Investors

We place great importance on dialogue with our shareholders and investors, aiming for sustainable growth and medium- to long-term improvement in corporate value through active communication. We are increasing the number of IR meetings each year. Over 300 meetings were held in FY2024, over 10% of which were attended by Directors. We are also focusing on creating opportunities for communication. In May 2024, we held small meetings to explain our Medium-term Business Plan to major sell-side analysts and buy-side institutional investors, and in December we held small meetings for major sell-side analysts.
From 2025, we have also started new Shareholder Relations (SR) activities in order to ensure shareholders’ views are reflected in company management from a long-term perspective. We will continue to expand opportunities for dialogue, through briefing sessions and so on.
Valuable feedback from shareholders and investors will be shared with the Board of Directors and leveraged in our measures toward sustainable growth.

Cash Flow

Share Price Transition

EPS Transition

PBR Transition

Boosting Shareholder Return

As a Group, we place great importance on sustained improvement in corporate value and returning profits to shareholders. In light of our cash flow situation, we implemented a share buyback of ¥20 billion in FY2024 in order to rectify the balance sheet and enhance shareholder returns. Although our profit was lower than the previous fiscal year, the annual dividend increased by ¥20, including a ¥5 dividend to celebrate our 70th anniversary, resulting in a dividend payout ratio of 46%. We plan to increase the annual dividend by ¥10 in FY2025, with a predicted dividend payout ratio of 39%, close to the target of 40%.
In the past, shareholder returns have essentially been achieved by paying progressive dividends. To clarify our policy of returning profits in a stable and continuous manner, we would like to consider introducing dividends that are not affected by profits, such as dividend on equity ratio (DOE). Going forward, we will continue to provide stable shareholder returns based on responsive decision-making, comprehensively taking into account the balance of funding requirements, the situation of investments, future plans, and so on.

Dividends and Dividend Payout Ratio (Consolidated)

*1 We have executed a two-for-one stock split of common shares with an effective date of April 1, 2024. The dividend amounts above (yen per share) are calculated assuming that the stock split was executed at the beginning of FY2020.

*2 Including ¥5 commemorative dividend to mark our 70th anniversary (March 1, 2025).