Taiheiyo Cement (5233) Investor presentation summary

Progress of medium-term management plan

• Achieved significant price increases in domestic cement, improving annual profits by 18.5 billion yen.

• U.S. business expanded through acquisitions and vertical integration, with growth investments exceeding 400 billion yen.

• Domestic demand declined more than expected due to labor shortages, rising costs, and industry changes, prompting a shift from quantity to profitability.

• Impairment losses recorded in the Philippines due to demand stagnation and increased imports, with focus shifting to cost reduction.

• Blended cement promotion advanced, leveraging global procurement, manufacturing, and logistics networks.

Financial performance and shareholder returns

• ROE forecast for FY2026 is 9.5%, approaching the 10% target; net sales and operating income below initial plan due to market headwinds.

• Total return ratio for FY2025 reached 42%, with annual dividends raised to 100 yen per share from FY2026.

• Agile acquisition of treasury shares and consideration of progressive dividends to enhance shareholder value.

• Asset sales, including real estate and cross-held shares, prioritized to improve capital efficiency.

Strategic initiatives for growth and efficiency

• Acquisition of Tokuyama's cement business rights to expand domestic sales base and optimize logistics.

• Full withdrawal from cement manufacturing in China, reallocating resources to more profitable regions.

• Group strategy redefined, including affiliate restructuring and IT integration for improved profitability.

• U.S. business positioned as a sustainable growth driver, leveraging regional portfolio and technological strengths.