Integrated Report 2019

23/110

21LINTEC INTEGRATED REPORT 2019Increasing Capital EfficiencyAs a leading company in such fields as adhesive products and specialty papers, the LINTEC Group has developed business in a wide range of fields and has built a stable earnings foundation. As a result, at the end of March 2019, we had a high level of financial soundness, with an equity ratio of 65.3%, a current ratio of 240%, and a debt-to-equity ratio of 0.09 times. However, from the perspective of capital efficiency, major issues that we face include how we will utilize our equity and increase profitability.Under the current LIP-2019 medium-term business plan, we have set a target of ROE of 9% or more for the fiscal year ending March 31, 2020, the final fiscal year of the plan. Unfortunately, in the fiscal year ended March 31, 2019, the second year of the plan, our ROE was limited to approximately 7%. Moving forward, we will not only invest in new businesses linked to higher earnings in the future but also continue to consider M&A initiatives in a forward-looking manner if we decide that they are a match for our businesses. We will work to increase profits by strength-ening the regional strategy to further expand sales in Japan and overseas, creating new differentiated products, and bolstering the corporate structure through cost structure reforms. In addition, we will take steps to achieve an ROE that substantially exceeds our cost of capital, which is currently approximately 6%, including strengthening shareholder return, centered on dividends.Enhancing Shareholder ReturnsLINTEC regards the enhancement of returns to sharehold-ers as one of its most important management issues. In distributing profits, our basic policy is to provide stable and continued dividends with consideration for each fiscal year’s consolidated performance, while also working to strengthen our management foundation. In accordance with this basic policy, for the fiscal year ended March 31, 2019, we paid a full-year dividend of ¥78 per share, an increase of ¥12 per share from the previous fiscal year. With regard to dividend payments for the fiscal year ending March 31, 2020, we plan to pay a dividend of ¥78 per share, the same as in the previous year, and we expect a consoli-dated dividend payout ratio of 41.7%. Moving forward, we will continue working to further enhance shareholder returns through improvements in our results.Cash Dividends per Share / Dividend Payout RatioMy Role as CFOIn settings that require a high degree of management judgment, such as investment in new businesses and M&A initiatives, I will strive to provide solid support for the decision-making and business execution of the Company’s top management. I will also be involved in the formulation of the next medium-term business plan. I believe it will be important to ensure that the significance and importance of the plan’s management indicators are understood throughout the Group. Moreover, I worked at the regional headquarters in Singapore until March 2018, and I will take steps to leverage that experience as I endeavor to support the growth of overseas Group companies. As CFO, I am involved with a wide range of issues, and going forward, I will strive to increase LINTEC’s corporate value by raising capital efficiency and enhancing shareholder returns.Finally, I will point out that, as CFO, I am embarrassed that at the end of the previous year, our Price Book-value Ratio (PBR) fell below 1.0 times, where it has since remained. We must endeavor to increase corporate value through constructive dialog with investors, and accordingly the Company will work to implement aggressive information disclosure, and to explain the results and business forecasts for each business more thoroughly. In these ways, I will work to promote the understanding of investors and to support the formation of an appropriate stock price.201620172018201920208080606040402020007843.543.541.741.742.341.635.778666654¥% Cash Dividends per Share Dividend Payout Ratio (right)(Fiscal year ended / ending March 31)(Forecast)ESGStrategyOverviewFinancial Information