Dear Shareholders and Investors
The Kuraray Group is currently implementing its five-year Medium-Term Management Plan, "PASSION 2026." Looking back at fiscal 2024, the third year of the plan, the global economy grew moderately overall, although it lacked strength in some regions. In this environment, we were able to increase sales volume in many of our businesses, with sales reaching a record high for the fourth consecutive year and operating income reaching the second highest level in our history. In addition, as a key measure under "PASSION 2026", we are promoting the sophistication of our business portfolio. As part of this effort, we recorded impairment losses on fixed assets related to some of our businesses, resulting in lower net income attributable to owners of the parent than in the previous year.
During the first three years of "PASSION 2026", we steadily implemented our business strategy of strengthening our global supply system, shifting to high value-added products, and maximizing customer value, while also responding flexibly and agilely in the face of significant changes in the external environment. As a result, we were able to achieve our sales and profit plan for the third year. Looking ahead to 2026, the final year of the plan, we will further sophisticate our business portfolio and continue to promote our three challenges: 1) sustainability as an opportunity, 2) innovation starting from networking, and 3) transformation of people and organization.
In fiscal 2025, we will respond to growing demand by leveraging our strengths in the EVAL, activated carbon, and dental materials businesses, while improving profitability in the Isoprene and Fibers and Textiles businesses. Based on the above, for fiscal 2025, we plan to achieve sales of \860billion, operating income of \90 billion, ordinary income of \85 billion, and net income attributable to owners of the parent of \45 billion, aiming for increases in both sales and income.
As for fiscal 2026, while we expect to exceed the targets for net sales and operating income set forth in "PASSION 2026", ROE and other indicators are expected to fall slightly short of targets. We will continue to make steady progress in strengthening our earnings power and improving capital efficiency.
The Company positions the distribution of profits to all shareholders as a priority management issue. In fiscal 2024, the annual dividend per share was increased for the third consecutive year to \54 comprising an interim dividend of ¥27 and a year-end dividend of ¥27. In addition, the Company repurchased \20 billion of treasury stock and cancelled 30 million shares.
Moreover, to further enhance shareholder returns, the Company has reviewed its shareholder return policy and decided to adopt a new basic policy from fiscal 2025, which is to "ensure a total return ratio of at least 50% as a proportion of net income attributable to owners of the parent,” "maintain or increase dividends per share," and "aim for continuous share buybacks.” For fiscal 2025, we plan to pay an annual dividend of \54 per share comprising an interim dividend of ¥27 and a year-end dividend of ¥27.
We will continue our efforts to enhance the Kuraray Group's corporate value by strengthening our ability to generate cash in our business activities, as well as by strategically investing resources for growth and enhancing shareholder returns.
On behalf of Kuraray, I would like to extend our gratitude for your continued understanding and generous support.
Hitoshi Kawahara, President and Representative Director
