stnemtsevnhtworGi nruter redloherahS¥130.0 billions In principle, no reduction in dividends through the fiscal year ending March 31, 2027, the final year of Cash flows during Stage 2 (operating income + depreciation and amortization + amortization of goodwill): Approx. External fundingthe final year of the plan, the fiscal year ending March 31, 2027: consolidated net sales of ¥315.0 billion, operating income of ¥25.5 billion, profit attributable to owners of parent of ¥18.0 billion, an operating profit margin of 8% or more, and return on equity of 8% or more. During the first year of the plan, the fiscal year ending March 31, 2025, we Improving Profitability and Capital Efficiency In the fiscal year ended March 31, 2024, LINTEC acquired Label Supply, a Canadian company that sells adhesive products for seals and labels, while deciding to dissolve LINTEC SPECIALITY FILMS (KOREA), INC. and LINTEC SPECIALTY FILMS (TAIWAN), INC., which manufacture and sell optical-related products. We made this decision due to the lack of prospects for a recovery in performance at both locations, partly due to the rise of Chinese companies in the polarizing film business. Some shareholders and investors suggested tough measures, including the down-sizing of or withdrawal from low-profit businesses in order to optimize the business portfolio. However, we believe our strength lies in our existing structure, comprising three seg-ments and six operations. This arrangement facilitates the integrated production of adhesive products and the transfer and application of technology between operations. Accordingly, our top priority is to improve the profitability of our existing busi-nesses, rather than to downsize or withdraw from businesses. The LINTEC Group has been implementing various measures to enhance profitability, such as reducing costs, improving productivity, and adjusting prices. Despite the headwinds we face, we are steadily seeing positive results from our actions. Moving forward, our policy is to continue making thorough improvements while working to optimize our business portfolio.Cash Allocation for Sustained Growth During the period of LSV 2030-Stage 2, we expect to gener-ate approximately ¥130.0 billion in cash flow. We intend to use this cash mainly for growth investments in areas such as R&D, production facilities, talent acquisition, DX, and M&A, Capital investment, otherApprox. ¥60.0 billion R&D investmentApprox. ¥32.0 billionM&A and other flexible investmentsStage 2, and a target dividend payout ratio of at least 40% or divided on equity ratio of 3%. Flexible acquisition of treasury stock• Multilayer ceramic capacitor-related tape coating facilities• Semiconductor-related adhesive tape coating facilities• Release paper coating facilities• Environmental investment• DX-related investment• Development of new tape, equipment, and proprietary processes for semiconductor packaging technology• Establishment of mass production system for carbon nanotubes (CNTs) pellicles for extreme ultraviolet (EUV) lithography equipment• Development of environmentally friendly products• Expansion into new countries and regions, markets, and areas of businessexpect the operating environment to remain uncertain. Even so, we anticipate an increase in sales and profits. We project net sales of ¥290.0 billion, operating income of ¥18.0 billion, and profit attributable to owners of parent of ¥13.0 billion, driven by a recovery in sales volume and large orders for semiconductor-related equipment for AI applications. Additionally, after the semi-annual creation and analysis of balance sheets for each operation in the fiscal year ended March 31, 2024, issues regarding the turnover ratio of fixed assets and inventory assets became apparent. Following discussions with the heads of each operation, we established KPIs for each operation and are now entering a phase of full-scale execution. Employees are also becoming more engaged in the relationship between their work and financial metrics. Going forward, we will work together on a united front, cultivating close collaboration between the procure-ment and production departments to improve profitability and earnings. The utilization of digital transformation (DX) is also essen-tial to the Company becoming more cost competitive. As the person in charge of the cross-functional DX promotion proj-ect LDX 2030, I am driving the transformation of our busi-ness model through DX. The project is structured into six subcommittees. Each subcommittee is responsible for a transformation theme, such as business process improve-ment and sales, with the path determined by backcasting from the desired future state. We have developed a road map through the fiscal year ending March 31, 2027, and are implementing measures accordingly.as well as the enhancement of shareholder returns. We plan to strategically allocate funds, funneling investments where needed to enhance corporate value. We plan to allocate approximately ¥60.0 billion to capital 21
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