AR2017

17/90

Foreign exchange impactYen appreciation is positive for our procurement of pulp and petrochemical raw materials, but overall it is a disad-vantage because it reduces the yen translation of over-seas subsidiaries’ earnings and has a negative impact on the LINTEC parent’s transactions with overseas subsidiar-ies. In the scal year ended March 31, 2017, the yen appre-ciation was a negative of approximately ¥6.8 billion for sales and ¥2.3 billion for operating income. The Group’s overseas sales ratio was 37.8% and foreign exchange impact will now increase further following the consolida-tion of the three acquisitions.To date, operating income sensitivity to ¥1 movement against the U.S. dollar has been around ¥100–¥200 million, but it will increase as a result of the three-company con-solidation. The Group undertakes many transactions in Korean won, Chinese yuan, and Taiwan dollars and this aspect of impact from foreign currency movement also warrants attention. Growth investments and shareholder returnsWe intend to continue making proactive use of cash for capital expenditures in growth areas and M&A. Where necessary, we will nance business expansion with loans. I believe there are various views on ROE enhancement and our view is basically that ROE will rise if we increase prots steadily.Dividends form the basis of our thinking on returns to shareholders, which we regard as one of the most impor-tant management issues. We aim to make stable and con-tinued returns while maintaining a balance with retained earnings to support a healthy balance sheet. In the scal year ended March 31, 2017, we paid an annual dividend of ¥66, an increase of ¥12 over the previous year. In the scal year ending March 31, 2018, we plan to pay an annual divi-dend of ¥66 based on our projection of net income per share of ¥187.11. Dialogue with shareholders and investorsWe believe a good understanding of LINTEC is the key prerequisite for constructive dialogue with shareholders and investors. LINTEC is sometimes difcult to under-stand due to the wide diversity of its business, and views differ depending on the observer. It is important for every-one to have a proper understanding of the true situation, including LINTEC’s special characteristics, its strengths, and its weaknesses. To this end, we have to communicate information at appropriate times and in appropriate ways. We will seek to maintain diverse forms of active dialogue with shareholders and investors that will lead to sustained growth for LINTEC, enhancement of corporate value over the medium and long term, and appropriate pricing of our shares.806040200201420132015201720162018 (Forecast)(Fiscal years ended / ending March 31)423448546666Cash Dividends per Share¥8642020142013201520172016(Fiscal years ended March 31)5.85.67.26.46.6ROE %15LINTEC ANNUAL REPORT 2017