CFO Message
CFO’s Message

Aiming for 100 years of dividend increases
by strengthening our property consulting
systemDirector, Managing Executive Officer, and General Manager of Corporate Planning Division Shintaro Hashiba

Aoyama Zaisan Networks has entered a period of expansion and growth toward its long-term
vision of becoming Japan's No. 1 comprehensive property consulting firm supported by clients
who know, "When it comes to property, it's Aoyama Zaisan Networks." CFO Shintaro Hashiba
discusses current circumstances and future propects from a financial perspective.
Favorable business environment expected to continue— Performance in 2020 and 2021 was affected by theCOVID-19 pandemic, but could you tell us about yourlonger-term outlook for the business environment?
I think that the business environment is looking good.
With the increase in the number of people subject to inheritance tax following the 2015 revision of the taxation
law, we are receiving a lot of inquiries from wealthy individuals. Business performance is becoming increasingly polarized, and the respective needs for business succession
by family members or employees, M&As, and businessclosures are all growing. Moreover, the value of assets
in rural areas is declining and companies are transferring
assets to Tokyo. The question of how to pass on assets
and ensure the survival of companies and of families has
become a key social issue throughout Japan.
For more than 30 years, AZN has taken a different approach in providing services to address these social issues and client needs. We have accumulated a great dealof expertise, which has enabled us to build a unique position in the property consulting field. For regional matters,
we have established an AZN National Network with accounting firms, and have strengthened cooperation withregional financial institutions and other organizations. We
have also upgraded our own systems, making it possible
for us to deliver our property consulting services throughout Japan.
— Amid these circumstances, this year marks thestart of the Third Medium-Term Management Plan.
Could tell us more about financial policies?
In 2009, AZN posted a significant loss due to the global
financial collapse. This led to a significant shift in our business model—from the pursuit of short-term profits to abusiness model of steadily accumulating profits throughproperty consulting by building long-term relationships
with our clients. After 10 years, we believe we have built
a financial structure that is capable of generating stableearnings.
As its corporate slogan, AZN proudly declares "We willremain your best partner in 100 years." This means that
we will have to continue providing our consulting services
across successive generations. With this in mind, we havemade it our top financial priority to establish a level of cash
and cash equivalents that will allow us to continue providing property consulting services for several years without
interruption, even in the event of another major economic
risk.

● Dividends & dividend payout ratio● ROE (return on equity)■ Interim ■ Year-end ■ Commemorative(Units: yen)

25.0
2.5

26.5

19.5
15.0

28.0

17.0
14.0

31.0

18.0

16

13.0

10.0

11.0

38.3

35.7

80.3

45.7

44.3 (%)

2018

2019

2020

2021

2022 (forecast)

45.0

FY

2017

22.2

22.0

158.5

Payout ratio

25

31.1

20

16.5

12.5

7.0

28.6

30

9.5

5.5

(%)
35

Aoyama Zaisan Networks ｜ Integrated Report 2022

1012.750

2017
December

2018
December

2019
December

2020
December

2021
December

Building from a financially sound base,we will strive to improve profitability andminimize capital costs, and work hard toreturn profits to shareholders by continuously increasing dividends.

It is also essential for our continued growth that shareholders hold shares of the company's stock in a stablefashion. In FY2021, we increased dividends for 11 consecutive fiscal years, and we intend to continue our policyof increasing dividends. This may sound absurd, but webelieve that if we are to realize 100-year property consulting, we should also aim for consecutive dividend increases for the next 100 years.
Focus on building the foundation
for corporate continuity— From a financial perspective, what are the key
points of the Third Medium-Term Management Plan?
We intend to continue to follow our policy of financial
soundness and achieve both sustainable growth andshareholder returns, while remaining conscious of capitalefficiency.
First is sustainable growth. The wellspring of AZNGroup's profits is property consulting, which accounts
for 63.4% of our gross profit. In our Third Medium-Term
Management Plan, which runs until FY2024, we are seeking 35% growth in operating profit, centered on growth in
the property consulting business.
In FY2022, the first fiscal year of this Plan, we will workto establish strategic individualized services, secure personnel for business projects, and build systems to meetthe needs of new clients for property succession, management, and business succession, starting with strategic
individualized services such as Advantage Club. In orderto secure the human resources we will need over the next
three years, our HR investment expenses in FY2022 will
be more than 20% of the previous fiscal year's level. We
will also focus on instituting divisions of labor to increase
productivity and customer service, improving the officeenvironment, creating a better working environment for
women to take on active roles in the company, and investing in systems. We will also expand the functions of theAdvantage Club application and the ART system, which
we started operating in the previous fiscal year, and develop a real estate management system for effective utilization of land, thereby promoting the DX transformation of
our property consulting services.

Meanwhile, strong demand for Advantage Club continues to be seen—in FY2021, we exceeded our goal of
15 billion yen, generating 16.25 billion yen. We will continue to strengthen our alliances with real estate companies,REITs, financial institutions, and accounting firms in orderto achieve our cumulative goal of 30 billion yen from partnerships in FY2022.
In terms of shareholder returns, we give comprehensive
consideration to our financial condition, cash flow, andrevenue prospects, and place the highest priority on continuously increasing dividends, aiming for a dividend payout ratio of 50%, return on equity (ROE) of 20%, and dividend on equity (DOE) of 10%. In FY2021, we achieved adividend payout ratio of 45.7%, ROE of 22.0%, and DOEof 10.1%, and we aim to achieve a DOE that exceeds thecost of capital.
Also, starting last fiscal year, we have set internal targets
for return on invested capital (ROIC) for each business division, seeking to maximize our corporate value by improving
returns on capital. We believe it is important to first secure
ROE by increasing revenues, as we expect a temporary
increase in debt-to-equity ratio (D/E ratio) due to our organizational restructuring, which includes the launch of subsidiaries to provide strategic individualized services, as wellas our focus on Advantage Club business. Based on ourapproach of maintaining financial soundness, we will workto achieve the Third Medium-Term Management Plan byboth improving profitability and minimizing capital costs.
Working for the future happiness of clients
My role is to work to solve problems while at the sametime maintaining financial soundness and investment discipline appropriate for a consulting firm, while promoting
growth investments that place the highest priority on human capital investment. We aim to continuously expand
profits and increase the satisfaction of all stakeholders,including clients, shareholders, business partners, andemployees. We will also steadily undertake ESG initiatives, driven by our Sustainability Committee, to help resolve materiality issues, and strive to improve not only ourcorporate value as expressed in figures, but also the kindof corporate value that society truly calls for.

Aoyama Zaisan Networks ｜ Integrated Report 202217