Our Diversity

Promoting active roles for womenWorking to increase the diversity of our human resources and further enhance our corporate value
To achieve continuous improvement of corporate value,
the AZN Group conducts analysis* on the correlation between
human resource strategies and management indicators. The
results show a statistically significant correlation between
the ratio of female employees and corporate value (Price-toBook Ratio). We consider this an important fact, and we aim
to increase the ratio of female employees to 40% and theratio of female managers to 30% in the future.
To achieve this goal, we will implement measures toimprove awareness within the company, support careerdevelopment, and improve the working environment (e.g.,curtailing overtime hours, establishing a backup system
to cover for unexpected leave, etc.). In 2023, with thecommitment of our Board of Directors, we also establisheda subcommittee to promote active roles for women. We
are developing further measures to maintain and improvethe diversity of our human capital, the true source of ourconsulting services.
⚫Number of Group Employees and Percentage ofFemale Employees
Group employees
Female employees
Percentage of female employees(employees)

(%)

350

50
298

290

300
250
212
200

31.7

30.1

28.3

27.1

24.5

30

20647078

2019

2020

2021

52

50

92

96
10002018

2022

2023

⚫Number of Group Managers and Percentage ofFemale Managers
Group managers

Female managers

Ratio of female managers(employees)
80

(%)
2571

70
60
50

66
60
16.7

55

59

18.6

18.2

19.7

68 20.6
20

12.7

15

40
1030
20
107

10111214

140

1650

2018

2019

2020

Madoka Mori
As a medical journalist and newscaster, I believe thatthe well-being of the individuals who make up our society
is founded upon physical and mental health, and I havededicated myself to improving health literacy, which isessential for well-being. I was appointed as an outside
director because of my affinity with the company'svision, which aims to drive growth by enhancing financial,physical, and mental resources.
I believe that individual health issues in the workplace
have a significant impact on everyone around, and that
resolving these issues leads to a better overall work
environment. Women's health issues, in particular, often
impact their performance and careers, and measures toaddress them are urgently needed.
To contribute to a virtuous cycle of mental and physicalhealth and growth, I will work earnestly to address theseissues, drawing on my knowledge as a medical journalist
and my own experience of overcoming life events andhealth challenges to continue my career.

32.2

150
100

Outside Director

40

259

247

236

Leveraging knowledge and experiencefor sound and healthy management

2021

Aoyama Zaisan Networks ｜ Integrated Report 2024

2022

2023

Changes in society, changes in the way
we work, and the importance of diversity
Executive Officer, Real Estate Division
General Manager, Regional Development Project Division

Masako Miyagami
The best part of the real estate business is that no twoproperties are ever the same—you discover something neweach time. I joined the company in 2003 because I was sure
I could learn more deeply through handling real estate forclients.
Since joining the company, the way I work has changed
following broader changes in society. For example, thespread of remote work has made it easier to balance workwith raising children. People can work according to theirown circumstances, regardless of gender or age. Japan’ssociety has been making steady progress in this respect,assisted by technology.
AZN has also kept pace with these social changes,
and our diversity is steadily increasing. It's great to have
employees from different backgrounds pool their wisdom
to think about solving client issues, among other things.
In the future, I hope to contribute to the company's
growth from a broader perspective as an executive officer
who plays an active part in management.

*An analytical model to clarify the relationship between non-financial capital and corporate value (PBR): ESG
accounting value proposition and disclosure, Ryohei Yanagi, Monthly Capital Markets 2021.4 (No.428)

CFO Message CFOʼs Message
ROIC management encourages autonomous
efforts to improve in each department
In recent years, we have focused on building relationships with local clients inconjunction with regional financial institutions, and steady results are evident.
Return on Invested Capital (ROIC) management, which we introduced severalyears ago, is taking root in all departments. We are focusing on human resource
development, aiming for sustainable growth.

Greater investment in consultants and other human resources—Could you give an overview of how your businesshas evolved in recent years?
For about two years, we have been strengthening ourpartnerships with regional financial institutions and enhancing
our eight strategic individualized services. The need for these
services is growing and our client numbers are increasing
every year. We expect to see even more regional financial
institutions cooperating with us in the future.
Succession of local companies is a major theme forregional financial institutions. Many of these are leading
companies that play a role in driving the local economy.
Smooth business succession of crucial business partners isa major challenge for regional financial institutions. In manycases, it is necessary to prepare for the succession of not
only the business but also the family's property and otherassets at the same time.
Many companies are facing difficult circumstances due tochanges in industrial structure and the COVID-19 pandemic.
On a case-by-case basis, some companies may be able
to re-energize themselves through M&A. Our wide range
of know-how and solutions tailored to the characteristics
of each company can help resolve regional issues, which ishighly valued by the regional financial institutions with which
we work.
—Could you tell us about areas of focus for the future?
Above all, it is important to develop consultants and otherhuman resources. We have made major changes from theOJT-centered policies of several years ago. Starting last year,
we have clearly formulated a stance of investing in humanShareholder Return Policy(1) Dividend payout ratio at 50% level(2) Continuous dividend increases(3) Maintain DOE level above cost ofshareholders' equity*Assuming a cost of equity of approximately 8%

FY2021 FY2022 FY2023 3-year average

TargetPayout ratio 45.7%

50.1%

48.3 %

48.0%

50% level

DOE

11.0%

11.2%

10.8%

10% level

10.1%

Director, Managing Executive Officer

Shintaro Hashiba

resources, including the use of external training services.
In FY2024, we are increasing human resource-related
expenses by approximately ¥500 million, mainly by improving
salary levels and investing in education. Human resource
development takes time, but I get the sense that it leads toindividual growth.

Robust balance sheet and expanded cash flow
—What do you emphasize for sustainable growth, from afinancial perspective?
Above all, our focus is on maintaining a robust balance sheet
and expanding our cash flow. As for the balance sheet, wehold two years of SG&A expenses as cash and deposits
to ensure that we can continue operations no matter what
unforeseen circumstances may arise. At the same time,
we maintain a certain level of interest-bearing debt in orderto lower our weighted average cost of capital (WACC).
However, net debt is kept negative.
Although we deal in real estate, we have a policy of not
holding any real estate inventory. Thus, our balance sheet isextremely healthy.
In FY2023, our operating cash flow was 2.488 billion
yen and free cash flow was 2.7 billion yen. Expanding cash
flow is important in order to respond quickly to investment
opportunities such as M&As.
Shareholder understanding of these policies is alsoessential. Our policy is to control return on equity (ROE) at
a level of 20% with an assumed cost of capital of 8% and apayout ratio of 50%, aiming for a dividend on equity (DOE)
ratio of 10%. With these goals in mind, we strive for balanced
financial management.
—Could you tell us about the ROIC management thatcommenced in 2021?
The main objective of introducing ROIC management
is to establish autonomous efforts toward improvement,devised by each department. Which value drivers need to beimproved? How should they be improved in order to increase
the ROIC of the department? For example, shorter leadtimes and greater productivity in consulting engagements
are clearly reflected in ROIC figures. Such discussions andinitiatives are becoming more active within departments, andwe feel that ROIC management is showing how effective it is.

Aoyama Zaisan Networks ｜ Integrated Report 202417