Shionogi & Co (4507) Investor presentation summary

Management strategy and capital efficiency

• Focus on high drug discovery capabilities to support strong royalty and infectious disease businesses, maintaining high ROE while aiming to improve PER and PBR through enhanced corporate communication and future growth messaging.

• Portfolio strategy targets material issues and leverages strengths to achieve long-term goals, including the STS2030 Revision, with stepwise financial targets and expansion into growth fields.

• Business model evolution includes expanding overseas operations, diversifying into OTC, CDMO, and vaccine businesses, and developing new platform services for infectious and QOL diseases.

Financial strategy and shareholder returns

• Cash allocation prioritizes growth investments, R&D, and flexible shareholder returns, with a focus on maintaining financial discipline and early return to a net cash position.

• R&D investments are promoted at record scale, with efficiency gains through CROs, innovative clinical trial design, and government funding.

• Shareholder return policy includes a DOE target of 4% or higher, 15 consecutive years of dividend increases, and flexible share buybacks.

Foundation and governance enhancements

• Strengthening management foundation through global HR, IT, and supply chain systems, relocation of headquarters, and establishment of a new code of conduct.

• HR reforms include competitive compensation, mid-career recruitment, and reskilling, while DX transformation is driven by AI-powered systems and digital initiatives.

• Governance structure emphasizes transparency, diversity, and monitoring, with a majority of outside directors, increased female and foreign representation, and enhanced board effectiveness.

• Officers' compensation is balanced among base, performance-linked, and stock-based remuneration, tied to achievement of STS2030 targets and ESG factors.