Explanation of Strategy

Financial and Capital Strategy
Growth Investments
As the core of the Group is the pharmaceutical business, werecognize that R&D investment is a source of future earnings

Achieving sustainable valueenhancement through abalance of investing in
future growth andimproving capital efficiency
Atsushi Maruo
Senior Managing Member of the Board of Directors,
Representative Director
ASKA Pharmaceutical Holdings

women’s health issues and other problems.
Furthermore, one of the Group’s medium-term management

and is vital for increasing corporate value. In drug discovery

plan strategies is to “Develop Human Resources to Realize

research, we are promoting open innovation and utilizing

Growth Strategies.” To enhance our specialty and ability toexternal resources. In business development, we arecreate, we are working toward various goals such as

strengthening our strategy of in-licensing drugs underdeveloping and acquiring human resources who can responddevelopment and enhancing our pipeline in specialty areas

to new businesses and changes in the environment, andand fields of expertise. Aiming to become a total healthcare

creating a workplace environment where diverse humancompany, we will actively invest in promising business fields,resources can play an active role. Achieving sustainable

not only in pharmaceutical products, while also pursuing

corporate value enhancement depends on linking

capital alliances with other companies and M&A. In March

management and human resources strategies. With this in2023, we established a corporate venture capital fund,mind, we view human resources, the most important of all

ASKA Innovation Investment Limited Partnership, jointly

management resources, as a form of capital, and work towith Future Venture Capital Co., Ltd. This fund will enablemaximize their capabilities through autonomous learning,

us to accelerate collaboration with venture and start-up

which leads to value creation.

companies, creating new value as we work to solve

Assessment of Financial Soundness

Recognition of Changes in the Business Environment and Progress of Medium-Term
Management Plan 2025
In FY2022, with the lifting of restrictions related to theCOVID-19 pandemic, economic activities gradually

and an operating profit margin of 8.4%.
Furthermore, for ROE, which we emphasize as an indicator

Regarding the consolidated financial position of the Group

as appropriate. During FY2022, the Company sold its

as of March 31, 2023, total assets were ¥87,138 million,holdings in three companies. As a first step, we will strive towhile net assets totaled ¥54,533 million, resulting in thequickly bring the market value of our cross-shareholdings toequity ratio of 62.58%. We view ensuring the stability of

below 20% of net assets. We will also continue working toour financial base as an important management issue forbalance equity and interest-bearing debt while ensuring athe Group. On the other hand, from the viewpoint of capitalstable financial base and enhancing capital efficiency byefficiency, the Group judges appropriately whether or not

thoroughly examining investment projects and properly

to continue cross-shareholdings. We strive to reduce thecontrolling risks and costs.

holding of shares determined not to have sufficient meaning

Note: Amounts are rounded down to the nearest million yen.

normalized. However, the business environment remainedof capital efficiency, we have set a target 8.0% for the final

challenging due to the economic impact of factors thatyear of the medium-term management plan. In FY2022, ROE

increased costs such as the sharp rise in energy and raw

was 8.2%, exceeding the target, as it had in the previous

material prices associated with geopolitical risks. Despite thisfiscal year. To consistently keep our ROE above 8.0%, wesituation, however, the Group’s business maintained thewill need to continue with the implementation of thesame strength that it achieved in the previous fiscal year,

strategies of the medium-term management plan, increasing

thanks to the growth of new products and even greater

profitability while improving capital efficiency throughefforts to reduce costs. As a result, we achieved record net

appropriate capital allocation. The Group will maintain asales of ¥60,461 million. We were also able to meet ourbalance of investing in growth and improving capitalprofitability targets with operating profit of ¥5,108 million

efficiency as we strive to enhance our corporate value.

results and continuously improving our corporate value.

FY2022 Actual

FY2023 Forecast

FY2025 Targets

dividends while considering necessary management60,46162,00070,000

5,108

5,400

5,600

Financial and Capital Strategy KPIs
Net sales (Millions of yen)
Operating profit (Millions of yen)
Profitability

Operating profit margin (%)
Profit attributable to owners of parent(Millions of yen)
Earnings per share (EPS) (Yen)

8.4
4,238
150.088.7
4,400
155.81

8.0——

Capitalefficiency

Profit attributable to owners of parent/
Equity (ROE) (%)

8.2

Financialsoundness

D/E ratio (Interest-bearing debt ratio) (%)

0.23

—

—

Equity ratio (%)

62.6

—

—

—

8.0

Policy for Returns to Shareholders
The Group regards the return of profits to shareholders as

continue to meet the expectations of our shareholders by

an important management issue. We aim to return

improving capital efficiency and strengthening our financial

appropriate profits to our shareholders by achieving strong

base to enhance corporate value sustainably.

Our basic policy regarding dividends is to maintain stable
resources such as internal reserves for long-term businessdevelopment and future funding needs. In the most recent
fiscal year, FY2022, we raised our annual dividend by ¥1per share to ¥16. For FY2023, in light of our businessperformance, we expect to pay an annual dividend of ¥20（億円） Dividends per Share

188 億Includes ¥3 dividendfor commemorationof 100th anniversary¥20¥1774.0%¥14¥15

Year-end¥8

per share (interim dividend and year-end dividend: ¥10 pershare). On the other hand, we are also fully aware of theimportance of ensuring that the return of profits is properlyaligned with earnings. We also plan to consider theacquisition of treasury shares in a flexible manner in
response to changes in the business environment. We will

¥1614.6%

5.3%*

2019

2020

2021

InterimYear-end

Payout ratio

Interim¥810.7%2022

Year-end¥10Interim¥1012.8%2023 (FY)(Forecast)＊The interim dividend for FY2021 is excluded from the calculation of thepayout ratio as it is derived from other capital surplus.

Note: Amounts are rounded down to the nearest million yen.

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ASKA HD REPORT 2023

ASKA HD REPORT 2023

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