Basic Policy for Capital Strategy

The Eisai Group's capital policy is to improve shareholder value based on “medium- to long-term Return on Equity (ROE) management”, “sustainable and stable shareholder returns” and “value-creative investment criteria for growth”, while maintaining the integrity of its finances.

The Eisai Group believes that ROE is an important indicator of the sustainable creation of value for shareholders. In terms of medium- to long-term ROE management, the Company aims for an ROE that exceeds the cost of capital (creation of a positive equity spread^*1) by constantly improving profit margins, financial leverage and asset turnover in the medium- to long-term.

In terms of shareholder returns, profits are returned to all shareholders in a sustainable and stable way based on factors such as a healthy balance sheet and comprehensive consideration of the consolidated financial results, Dividends on Equity (DOE^*2 ) and free cash flow, as well as taking into consideration the signaling effect. Because DOE indicates the ratio of dividends to consolidated net assets, the Eisai Group has positioned it as an indicator that reflects balance sheet management, and, consequently, capital policy. Acquisition of treasury stock will be carried out appropriately after factors such as the market environment and capital efficiency are taken into account. The Eisai Group uses the ratio of equity attributable to owners of the parent and net debt equity ratio as indicators to measure a healthy balance sheet.

To ensure that strategic investments create shareholder value, the Eisai Group invests selectively using its Value-Creative Investment Criteria based on Net Present Value and the Internal Rate of Return spread using a risk-adjusted hurdle rate.

Based on the basic policy described above aiming to provide sustainable and stable dividends to its shareholders, the Company has set the year-end dividend for FY2022 at ¥80 per share. With the interim dividend of ¥80 per share, the Company intends to pay the total dividend of ¥160 per share for the year (the same amount as the previous fiscal year).