CFO Message
To improve corporate value sustainably, we will strategically integrate financial and non-financial values, drive improvements in ROE, and foster future growth expectations.
Jun Hishinuma
Chief Financial Officer, Member of the Board and Senior Managing Executive Officer
As CFO, my mission is to maximize sustainable corporate value. The key to achieving this is an integration of financial and non-financial values. Financial represents current performance while non-financial, also referred to as "pre-financial," represents sources that will generate financial value in the future. I view it as my responsibility to maximize these different forms of values across varying timelines to accurately communicate with capital markets.
In the 2026 Medium-Term Business Plan, we position the Meiji ROESG®*, which combines the financial indicator ROE with elements of ESG, as our highest priority management KPI. The most important indicator of increases in corporate value is price book-value ratio (PBR), which is comprised of ROE and price earnings ratio (PER). In addition to improving ROE, we will work to increase our PER by reducing capital costs and increasing future growth potential and make sustainable improvements to PBR.
By promoting Meiji ROESG Management thus far, we have steadily established within the Group an awareness that sustainability is a source of our competitive advantage and added value. By contributing to people's health through food and pharmaceuticals, our Group business itself is strongly linked to sustainability. However, enhancing our ability to earn is essential to sustainable growth.
In the new Medium-Term Business Plan set to begin from FY2027, we plan to position ROE as our highest priority management indicator. While maintaining the approach of pursuing a fusion of sustainability and business strategy, we will refine our business strategy to improve ROE.
To improve ROE, we will promote specific policies targeting profitability, efficiency, and financial leverage. Regarding profitability and efficiency, we will enhance business management centered on ROIC. Through structural reforms and by optimizing our business portfolio, we will concentrate management resources on growth domains to transition to a lean business structure. For financial leverage, we will pursue an optimal balance between growth investments and returns to shareholders. We will aim to reduce our current equity ratio of over 60% to roughly between 50 and 55% as we build our optimal capital structure. We will implement these policies with speed to restore ROE to 10%, with the medium- to long-term goal of achieving and stabilizing ROE in the 15% range.
Additionally, we will steadily increase earnings per share (EPS) by investing in highly profitable businesses to drive profit growth and by conducting opportunistic share buybacks to reduce the number of issued shares. At the same time, we will proactively communicate with capital markets regarding the progress of our growth strategies and capital policies to increase our PER, which represents growth expectations for our company. By increasing both EPS and PER, and improving our total shareholder return (TSR), we will meet the expectations of our shareholders and investors.
June 2026