Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

November 7, 2023

NEWS RELEASE
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TSUMURA & CO.
TSE Prime Market
4540
https://www.tsumura.co.jp
Terukazu Kato, President, Representative Director and CEO
Makoto Kitamura, Head of Corporate Communications Dept.

+81-3-6361-7100

Notice Concerning Revision of Basic Capital Management Policy andShareholder Return Policy and Revision of Dividends Projection (Dividend Increase)
TSUMURA & CO. today announces that, at a meeting of the Board of Directors held on November 7, 2023, theCompany passed a resolution concerning revision of the basic capital management policy and shareholder return
policy and revision of the dividends projection (dividend increase). Details are as follows.
1. Revision of Basic Capital Management Policy and Shareholder Return Policy
The Company positions the return of profits to shareholders as an important policy and has hitherto adopted a basic policyof paying stable dividends.
Now, as part of initiatives to improve corporate value in the medium and long term for the realization of TSUMURA
VISION “Cho-WA” 2031 and based on a management approach which also takes balance sheet management intoconsideration, the Company has decided to revise its basic capital management policy and shareholder return policy as
follows for the purpose of seeking further enhancement of shareholder returns whilst striking a balance between financial
soundness and growth investments.
Taking into consideration the adequacy of retained earnings and the medium-to-long-term business outlook, the Company
judged that an early dividend increase was feasible and decided to increase its dividend payout ratio from the end of thesecond quarter of the current fiscal year.
(1) Details of revision of basic capital management policy
Before revision
We believe that increasing corporate value through business investment for the sustainable development and growth ofKampo medicine will ultimately provide the greatest return to our shareholders and investors. We regard ROE as a criticalmanagement indicator measuring the sustainable enhancement of shareholder value. To enhance ROE, the priority issue
we must tackle is improving the operating profit margin. At the same time, we will improve capital efficiency bystreamlining assets, which will lead to higher ROE.
After revision
We believe that increasing corporate value through business investment for the sustainable development and growth of
Kampo medicine will ultimately provide the greatest return to our shareholders and investors. We regard ROE as a criticalmanagement indicator measuring the sustainable enhancement of shareholder value, and will aim for ROE that is higher
than the cost of capital by increasing profitability and asset efficiency. We will also increase management efficiency whilst
ensuring the soundness of our financial base, and the funds that utilization of operating cash flow and debt and an optimum-1-capital structure permit will be allocated to growth investments and shareholder returns in an appropriate manner. We havealso set DOE (dividend on equity ratio) as an indicator for shareholder returns and will aim for long-term enhancement ofdividends, on the basis of a robust balance sheet.
Category
Management efficiency
Soundness of financial base
Dividends

Indicator
ROE
Equity ratio
DOE (dividend on equity)

Target level in FY2031
10%
50% or more
5%

(The above forward-looking statements represent our vision for FY2031 and actual financial and other results may differ
materially from these figures due to a number of factors.)(2) Details of revision of shareholder returns policy
Before revision
Tsumura believes that the return of profits to shareholders is one of its most important tasks. Its policy is to enhance
corporate value through sustainable expansion of the domestic business, through investment in the growth of Chinese
operations, and the development of the business foundation; and to provide a stable dividend that takes medium- and longterm profit levels and cash flow into account. Tsumura will endeavor to return profits to shareholders based on anexamination and review of the optimal capital structure, giving comprehensive consideration to market trends, etc.
After revision
Tsumura believes that the return of profits to shareholders is one of its most important tasks. Its policy is to enhance
corporate value through sustainable expansion of the domestic business, through investment in the growth of Chinese
operations, and the development of the business foundation; and to determine shareholder returns by taking medium- andlong-term profit levels and cash flow into account. Our policy is to determine dividends based on a comprehensive
judgment of the level of ROE, DOE and the equity ratio, which are key indicators, and to aim for a consolidated dividend
payout ratio of 40% and seek to gradually increase this to 50% or higher by FY2031.

2. Revisions to dividend forecast for the fiscal year ending March 2024.
(1) Reason for revision of dividend forecast
As a result of the above revision of our shareholder return policy, we are revising our interim dividend and year-end
dividend forecasts for the fiscal year ending March 31, 2024 stated in the “Consolidated Financial Results for the Fiscal
Year Ended March 31, 2023 (Under Japanese GAAP)” released on May 9, 2023, as follows. The annual dividend per shareafter revision is 70 yen, which represents a dividend increase of 6 yen from our previous forecast of 64 yen.
(2) Details of revised year-end dividend forecast
Dividend per share

Previous forecast(Announced on May 9, 2023)
Revised forecast
Results for current period
Dividend paid for FY ended March 31, 2023

End of 2ndquarter
Yen
32.00
35.00
32.00

Year-end

Consolidated
payout ratio

Total

Yen
32.00
35.00

Yen
64.00
70.00

%
37.4
40.9

32.00

64.00

29.7

(Notes on forward-looking statements)
The above forecasts are based on information available to the Company at the time of preparation of this release and certain
assumptions that the Company considers to be reasonable, and actual results may differ from the forecasts due to variousfactors.

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