Key Performance Indicators

Earnings Per Share (EPS)

EPS is an important metric that reflects corporate profitability for shareholders. It is used in the denominator of the price-earning ratio (PER). When a company’s PER reaches a certain level, an increase in EPS becomes a key driver of share prices, thus contributing to improved shareholder value.

Net income ÷ Number of shares outstanding

Ichigo 2030 Vision KPIs

As a sustainable infrastructure company, Ichigo is growing and expanding its core real estate and clean energy capabilities into new areas. In Ichigo 2030, Ichigo will work to grow both earnings and earnings stability, expanding beyond real estate to generate new earnings streams that are less sensitive to changes in real estate market conditions.
The KPIs set forth in Ichigo 2030 is as follows:

High Capital Productivity

Cash ROE >18%
Return On Equity (ROE) ROE >15%

ROE is a measure of profitability that calculates how effectively a company is able to generate earnings with its shareholders' equity. METI's Ito Review states that as an integral element of shareholder value creation, Japanese companies should commit to achieving an ROE of at least 8% and should strive to achieve higher levels than this minimum.
Ichigo is focused on maximizing long-term cash flows for shareholders. It continues to strengthen this commitment to generating the highest possible economic earnings (cash earnings) for shareholders, and has set Cash ROE as a new KPI in April 2024. Ichigo is targeting Cash ROE greater than 18% and ROE greater than 15% by 2030 under Ichigo 2030.
Although Ichigo’s growth investments in IT and new businesses will initially lower ROE, Ichigo believes these investments will increase long-term ROE by driving higher capital productivity and earnings stability. Ichigo is focused on growing long-term EPS as a key driver of shareholder value.

Earnings per share (EPS) ÷ Book-value per share (BPS)

High Cash Flow Generation

Continuous Economic Operating Cash Flow* > Net Income

Ichigo’s robust cash flows fund both growth investments and shareholder returns, so growing these cash flows is an important business priority. Ichigo is therefore setting a target of its annual Economic Operating Cash Flow exceeding its annual Net Income for the entire Ichigo 2030 period (11 years).
* Economic Operating Cash Flow = Cash Flows from Operations +/- any changes in Real Estate and Power Plants for Sale

High Earnings Stability

FY30/2 Stock Earnings Ratio >60%
Stock Earnings/Fixed Expenses Ratio >200%

Ichigo is targeting increasing its Stock Earnings ratio from 53% in FY19/2 to 60% in FY30/2. In addition, to further strengthen the sustainability and durability of its earnings, Ichigo has established its stock earnings/fixed expenses ratio as a new KPI in April 2024. It is also working to increase and diversify its Flow Earnings in order to reduce the weighting of profits from Value-Add real estate sales, which can be sensitive to changes in the real estate market. As a result, Ichigo expects to significantly increase both its earnings and its earnings stability over the Ichigo 2030 period.

Shareholder Return Policy

Ichigo will work to drive long-term shareholder value with a shareholder return policy that focuses on 1) dividend stability, transparency, and growth, and 2) flexible share buybacks.

Progressive Dividend Policy

Ichigo will continue its progressive dividend policy, originally adopted in FY17/2, in Ichigo 2030. Ichigo’s progressive dividend policy underscores its commitment to driving continued organic earnings and dividend growth for shareholders. Under this policy, the previous year’s dividend becomes the floor for the current year’s dividend. The dividend will be raised (or kept flat) but not cut, providing shareholders downside protection.

DOE >4%

Ichigo believes that the combination of a progressive dividend and a DOE-based payout policy will significantly increase the growth, durability, and certainty of its dividend to the benefit of Ichigo’s shareholders. In April 2024, Ichigo is strengthened its shareholder returns and raised its DOE (Dividend on Equity) target from 3% to 4%.

Flexible Deployment Of Share Buybacks

In addition to the above dividend policies, Ichigo is newly adopting a policy to flexibly conduct share buybacks to optimize its capital structure and drive shareholder value.

Work for a Sustainable Planet

Ichigo Climate Positive: CO2 Reduction > Emissions
RE100: 100% Renewable Electricity Across All Operations by 2025
CDP Leadership Levels: Climate Change: A, Water Security: A

Ichigo believes that companies exist to serve society and need to address critical social issues. Therefore, Ichigo set new KPIs that address Ichigo’s contribution to a sustainable planet in April 2024. Ichigo Climate Positive aims to increase total CO2 reduction via Ichigo and Ichigo Green (9282) clean energy power production exceeding total CO2 emissions across Ichigo, Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green.