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Medium-Term Management Plan 2020
Unceasing Challenge for New Value Creation



Overview

Growth Strategy

Growth strategy
1
Increase Value
of Existing
Business
  • Further reinforcing of existing earnings pillars
  • Seeking to unlock the full potential of businesses
  • Speedy response to changes in the business environment
Growth strategy
2
Create Next-
generation Business
JPY300 billion “Strategic Investment Fund” to three growth areas over three years
  • Technology × Innovation (the fourth industrial revolution fields)
  • Healthcare
  • Social infrastructure
Growth strategy
3
Leverage
Business Platforms
Creating new value through hybridization of multiple businesses and cross-organizational collaboration

Business Support Functions

Biz-Dev Support Full Potential Plan Asset Cycle Management Digital Transformation

Management Base Enhancement

Management Base Enhancement 1
Corporate Governance
  • Reinforcement of monitoring functions of Board of Directors and Management Council
  • Reinforcing Sumitomo Corporation Group governance
Management Base Enhancement 2
Human Resources Strategy
  • Diversity & Inclusion
    ~Making diverse strengths a source of competitiveness~

    “Acknowledging, respecting and accepting individual differences”
    “Encouraging individuals to rise to the challenge, grow their strengths, and make good use of their strengths”
Enhancement of management bases 3
Financial Soundness
  • Continue to focus on cash flow management
  • Securing an incremental ¥200 billion or more in three-year total post-dividends FCF, and allocating to repayment of interest-bearing liabilities
  • Maintaining a balance of
    [Core Risk Buffer] ≧ [Risk-adjusted assets]
  • Basic profit cash flow = Basic profit - Share of profit (loss) of investments accounted for using the equity method + Dividend from investments accounted for using the equity method
    Basic profit = (Gross profit + Selling, general and administrative expenses (excluding provision for doubtful receivables) + Interest expense, net of interest income + Dividends) × (1-Tax rate) + Share of profit (loss) of investments accounted for using the equity method

Quantitative Targets

(Billions of yen) FY2017 Results FY2018 Targets Financial indicators
Profit for the year
(attributable to owners of the parent)
308.5 320.0 • ROA  4% or more
• ROE 10% or more
Basic profit(*) 323.7 340.0

Dividend Policy

Basic policy To increase dividends by achieving mid-long term earnings growth while adhering to the Company’s fundamental policy of paying shareholders a stable dividend over the long term
“Medium-Term Management Plan 2020” dividend policy We will decide the dividend amount in view of the situations regarding basic profit and cash flow, with a consolidated payout ratio of 30% as a guideline
FY2018
dividends
JPY75/share (plan) (interim JPY37/share, year-end JPY38/share)
  • Cautionary Statement Concerning Forward-Looking Statements
    This report includes forward-looking statements relating to our future plans, forecasts, objectives, expectations and intentions. The forward-looking statements reflect management's current assumptions and expectations of future events, and accordingly, they are inherently susceptible to uncertainties and changes in circumstances and are not guarantees of future performance. Actual results may differ materially, for a wide range of possible reasons, including general industry and market conditions and general international economic conditions. In light of the many risks and uncertainties, you are advised not to put undue reliance on these statements. The management forecasts included in this report are not projections, and do not represent management’s current estimates of future performance. Rather, they represent forecasts that management strives to achieve through the successful implementation of the Company’s business strategies. The Company may be unsuccessful in implementing its business strategies, and management may fail to achieve its forecasts.
    The Company is under no obligation -- and expressly disclaims any such obligation -- to update or alter its forward-looking statements.
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