Message from the Chief Financial Officer

Nankai Group has formulated a new Medium-term Management Plan, " NANKAI Group Medium-term Management Plan 2025-2027," targeting FY2025 through FY2027. This plan aims to break away from conventional practices and transform itself into a new Nankai Group to ensure that the Group will continue to fulfill its social mission into the future.

During this Medium-term Management Plan, we will focus our investments on both the real estate and public transportation businesses to achieve an “Accelerated expansion of the real estate business” and a “Transformation into a public transportation business that paves the way for the future,” further developing our core businesses and significantly increasing corporate value.

We plan to invest up to 360 billion yen, the largest amount in our history, accelerating growth investments and safety renewal investments. To secure investment funds while ensuring basic financial soundness, we will utilize cash flows from operating activities, borrowings, and bonds payable. Additionally, we will work on selling assets held and reducing cross-shareholdings.

To respond toward managing the company with an awareness of capital costs and stock prices, we will implement measures that contribute to improving both ROE and PER, such as management using ROIC, reviewing our business portfolio, and promoting growth strategies, with the goal of improving PBR and corporate value.

In this Medium-term Management Plan, we will make focused investments, which may temporarily slow profit growth due to increased depreciation and amortization. However, we will continue to grow our top line through steady execution of each strategy. Our target for operating income in FY2027 is 36.0 billion yen or more, representing a record-high operating income. Furthermore, by strengthening the link between business strategy and financial strategy, we aim to achieve both growth and financial soundness. Specifically, we target a ratio of net interest-bearing debt to EBITDA in the 7 times range and an ROE level of around 7% in FY2027.

Regarding shareholder returns, while our basic policy has been to provide stable dividends, we have decided to introduce quantitative indicators to strengthen shareholder returns, in light of the capital accumulation progressing and financial stability improving. Under this Medium-Term Management Plan, we will uphold a policy of stable dividends while gradually increasing the consolidated dividend payout ratio, aiming for around 30% by FY2027, and will proactively and flexibly acquire treasury shares. We will make our utmost efforts to meet the expectations of our shareholders, taking into account our performance and financial condition.