September 30, 2025
"Reform Action Plan" September Update Briefing Summary of President's Remarks
Based on the "Reform Action Plan" announced on May 16 2025, we have been taking proactive steps to enhance awareness of human rights and compliance, and strengthen our governance structure. At the same time, we have been undertaking concrete considerations for further growth while implementing initiatives for business reform and capital optimization under the new management structure. In light of these steps, we made the decision to update the Plan.
Our deliberations for this update have been based on dialogues with our stakeholders, including shareholders, investors, analysts, and the media. In today's briefing, we will cover three points, namely progress made in reforms since May, the key points of this update, and our future plans.
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Progress in reforms since May
In "human capital-driven management," we revised the Group Human Rights Policy to further enhance awareness of human rights and compliance awareness and strengthen governance structure. We also began operation of the FMH Group Whistleblowing Hotline and established a framework for performance-linked compensation, which includes criteria such as the promotion of human capital-driven management.
In "proactive business transformation," we undertook fundamental reforms of Fuji TV's organization, in light of strong calls for its rebuilding and growth. Specifically, we restructured the organization to accelerate the maximization of investment efficiency of individual content, creation of high-performing IP and maximization of LTV, strengthening of content sales in Japan and overseas, and expansion of global market sales channels.
We also made decisions on the merger of IT-related subsidiaries to improve overall profitability, including that of Group companies.
We made the most progress in these past five months in the "capital optimization for value creation." In the divestment of strategic shareholdings, of the total target of more than
100 billion yen by FY2027, we achieved a reduction of around 50.0 billion yen in six months (19.5 billion yen in the 1st quarter and 29.9 billion yen in the 2nd quarter). The ratio of strategic shareholdings to net assets now stands at around 22%, down from 26.6% in March 2025.
We also began concrete deliberations on the timing and scale of share buybacks, following the recovery of advertising revenue.
In "transition to governance-focused management," since the transition to the new management structure, we have established a Nomination and Compensation Committee in June. As well as linking executive compensation to nonfinancial criteria such as the promotion of human capital-driven management, we will raise the ratio of stock remuneration.
We also established a Risk Policy Committee. Its four members, including external experts, oversee critical management risks such as human rights risks with the aims of enhancing corporate value and regaining the trust of society and our stakeholders.
- Key Points of Update
The first key point is the "Future Direction of the Group." The Group's aim is to contribute, through the creation of highly engaging and original content and experience spaces, to the creation of a rich society where everyone can experience joy and a sense of connection.
In terms of the "Future Direction of the Group's Business Portfolio," we will aim to achieve high profitability and growth while ensuring risk control across the entire Group.
Our business domains will be organized into two segments: "stable and profitable segments" that generate consistent earnings and "new and growth driver segments" that, while more volatile, are expected to deliver high profitability and significant
growth. To achieve this, we will clearly indicate our business implementation processes from the perspectives of consumers and users and clarify our focus areas and approaches, including IP creation and acquisition, M&A, functional integration and business restructuring, asset sales, new business development, and growth investments.
On that basis, in our approach to "Achieving ROE of 8%," we aim to achieve an ROE of 8% in the future by attaining approximately 75.0 billion yen in operating profit and around
650.0 billion yen in shareholders' equity.
To achieve this, we will reorganize and streamline low-profit businesses and divisions and consider the restructuring and sale of owned assets based on profitability and capital efficiency perspectives. Using the funds generated through these measures, we will undertake bolder proactive investments in high-growth business areas and reductions of equity capital.
We have summed up our "Capital Allocation" efforts into four key points, namely the reduction of strategic shareholdings, review of business and assets, growth investments, and share buybacks.
First, regarding "Strategic Shareholdings," we will execute sales totaling over 100 billion yen at the earliest timing possible by FY2027 and continue reducing these holdings thereafter.
In "Business and Assets," we will restructure and divest selective assets to transform our revenue model and raise profitability.
In "Growth Investments," envisioning investments totaling 250 billion yen over five years, we will consider establishing a cumulative investment quota of 400 billion yen in the future.
Regarding "Share Buybacks," we will raise our share buyback target from over 100 billion yen to 250 billion yen by FY2029.
In these ways, we will reduce equity capital, focusing on capital efficiency and financial soundness, while raising profit levels through creation of IP and contents, effective utilization of intangible owned assets, structural reforms,
and proactive investments in new and growth domains.
In doing so, in the short term, we will achieve operating profit of around 60.0 billion yen and shareholders' equity of around 650.0 billion yen, raising ROE to about 5-6%. Subsequently, as previously explained, our future vision is to increase ROE to 8% or higher by maintaining shareholders' equity at the same level and lifting operating profit to around 75 billion yen.
- Future Plans
When we announce our financial results for the 2nd quarter in November, we will also announce a revised version of the "Reform Action Plan" that will reflect further deliberations. We will also pursue reforms with the aim of announcing our next "Medium-term Group Vision" in May 2026.
As this briefing indicates, we will engage steadily in these initiatives in the further pursuit of reforms, so that we may meet your expectations.