Rohto Group's Medium- to Long-Term Growth Strategy

Basic Management Policy

Our purpose is to "deliver health to people around the world through our products and services, thereby guiding all people and society around us to well-being and invigorating the world of tomorrow." With over-the-counter pharmaceuticals, our original business, at our core, we position our business scope as contributing to the realization of a well-being society, extending to the "Self-care field" of quasi-drugs, cosmetics, health foods, and food products, as well as the "professional domain" of the development of prescription drugs, medical devices, and cell therapy drugs, and the associated CDMO business. We aim to realize our purpose by strengthening our "science-based" corporate culture (a passion for uncovering the unknown) and prioritizing the long-term, sustainable resolution of unmet needs of our customers and patients.

Purpose and Management Philosophy

By delivering health to people around the world through our products and services, we aim to lead all people and society around us to "well-being" and to invigorate the world of tomorrow.

Articles of Incorporation Chapter 1 Article 2

Mid- to Long-Term Strategy Overview

We will work on three themes with the aim of refining next-generation Rohto science and expanding the circle of well-being to include professional care, with self-care at its core.

1. Strengthening business profitability

   We will develop our self-care business globally, providing innovative value in the fields of eye care and skin care, and focusing on new fields such as hair care and Feminine Care, in order to expand the business overall and improve profitability.

2. Deepening and expanding technological product capabilities

   Leveraging Rohto's unique science, we will provide a well-being lifestyle. Through collaboration with Eu Yan Sang (EYS) and phytoscience research, we will work to develop innovative supplements using plant-derived ingredients. We will also develop gastrointestinal care products and venture into prognostic care to support health during recovery, further growing Oral Medicine / Health Food Business and supporting the daily health of more customers.

3. Building a foundation for Medical business

   For Rohto, Medical business is an extremely important field, providing high-quality, high-performance products not only to itself but also to other companies. In the CDMO business, we are expanding from the small molecule and chemical fields, where Qualitech Pharma is active, to the bio and cell processing fields. In the ophthalmology field, we are strengthening collaboration between domestic and overseas group companies, and in dermatology, we are working on developing cosmetics for dermatology that utilize Regenerative medicine technology. Furthermore, in the field of prescription ophthalmic drugs, we are focusing on the development of new drugs for myopia prevention, and in the field of Regenerative medicine, we are focusing on the development of new drugs for knee cartilage regeneration and liver cirrhosis treatment, bringing hope to patients awaiting treatment.

Mid- to Long-Term Growth Strategy Basic Policy

Evolve Rohto Science and maximize profits from Core businesses.
We build a foundation for professional care, expand the circle of well-being, and create the future.

Earnings forecast

We project sales of 405 billion yen and operating profit of 51 billion yen in fiscal year 2028, three years from now, and sales of 464 billion yen and operating profit of 59.8 billion yen in fiscal year 2031, six years from now. First, we will focus on further growth in Core businesses, and expand our business by maximizing synergies with Eu Yan Sang, which we acquired in fiscal year 2024. In the following three years, we plan to create new markets through the growth of new fields such as hair care and Feminine Care, as well as expand our supplement and food businesses, and our business for ophthalmology and dermatology. From fiscal year 2031 onwards, we expect that the approval of new ophthalmic drugs and Regenerative medicine drugs will make them highly profitable growth businesses and major pillars of sales and profits. We project that the ratio of overseas sales will expand to 56% of the total in fiscal year 2031.

Mid- to Long-Term Growth Strategy Consolidated Performance Forecast

Capital measures

Over the next six years, until 2031, we will further strengthen our cash-generating capabilities, actively engage in growth investments, and continue to return value to our shareholders through stable dividends.
We project operating cash flow of 380 billion yen over the next six years, before deducting research and development expenses. We will allocate these funds to growth investments and shareholder returns, while securing appropriate funding as needed.
First, we anticipate investing 110 billion yen in capital expenditures, primarily in areas such as maintenance and improvements to existing manufacturing facilities, and the expansion of overseas production facilities to meet growing demand. We will invest 100 billion yen in research and development. This amount is aimed at being within 5% of sales and will be used to strengthen Core businesses, as well as to invest in areas that will become the next pillars of growth, such as the exploration and development of new useful ingredients like exosomes, Regenerative medicine, and medical eye drops. We plan to invest 35 billion yen in DX and IT, which will increase productivity per person and build an efficient and strong management foundation. In addition, we plan to invest 70 billion yen in M&A and investments, aiming for further business expansion by creating synergies with existing businesses and entering new fields.
We will distribute the surplus generated through these business activities as shareholder returns, thereby increasing corporate value while balancing growth investments with shareholder returns.

Capital Policy Cash Allocation

Strengthen cash generation capabilities, actively invest in growth investments, and return profits to shareholders by continuing a stable dividend policy.

(Six years from 2026 to 2031)

Shareholder returns

Regarding shareholder returns, we aim to achieve stable and continuous dividend increases, simultaneously realizing a "sound financial structure," "growth investment," and "improved shareholder returns." Furthermore, in our 2030 financial forecast, we indicated a policy of aiming for stable progressive expansion, based on the assumption of a dividend payout ratio of 30% or more and a DOE of 3.5% or more. In this latest rolling forecast, the dividend payout ratio for fiscal year 2031 is expected to be at 40% and the DOE at 4.0%.

Trends in shareholder returns

We will implement consistent and stable dividend increases, unaffected by temporary fluctuations in profits.
The dividend payout ratio is projected to reach 40% by 2030.