P.19 Message from the CFO (2)

Message from the CFO

Medium-Term Business Plan 2026 First, while our previous MTBP focused primarily on indi- cators related to the income statement, we aim to undertake a comprehensive reform of the balance sheet in order to advance ROIC management. Starting with the asset side, for current assets, we will ana- lyze working capital turnover by business to drive efficiency. For non-current assets, we plan to accelerate growth by reshaping our portfolio through “selection and concentration.” At the same time, we view this update, in preparation for the next MTBP, as a phase in which we begin to improve the right-hand side of the balance sheet—that is, the financing side. By setting an appropriate WACC (Weighted Average Cost of Capital) for each segment based on its ROIC, we will shift toward more active use of debt financing, where appropriate. With regard to net assets, particularly shareholders’ equity, our foremost objective is to exercise disciplined capital control with a clear understanding of the current situation, including the market value appreciation of our cross-shareholdings. The second policy is to increase the granularity of ROIC management at the segment level. As noted above, in the next MTBP, we will disclose ROIC, WACC, and the ROIC spread for each segment, thereby clarify- ing the path toward achieving our Group-wide target of 5% ROIC by FY2030. As part of this initiative, effective April 1, 2026, TBS Broadcast Center was transferred from TBS TELEVISION, INC. to TBS HOLDINGS, INC. Previously, the majority of the Broadcast Center was the asset of the Media and Content business. Following the trans- fer, it will be managed as invested capital of the Real Estate and Other businesses. The Media and Content business will establish revenue targets based on bearing an appropriate amount of rent, while the Real Estate and Other businesses will establish revenue targets based on its invested capital. This will clarify each segment’s target management. Comprehensive Balance Sheet Reform Reduction through improved working Current capital turnover assets Liabilities Active use of debt financing to improve the cost of capital while maintaining an appropriate level of cash flow from operations Toward Disclosure of ROIC Spreads by Segment Mainly EDGE/Growth Areas Mainly Real Estate and Other Segment Increase operating profit by proactively investing in growth to create a cycle of expanding cash flow from operations Reduce the cost of capital by increasing the use of debt financing Utilize cash on hand Reshaping the portfolio through continuous review to accelerate growth Non-current assets Net assets Build a leaner overall balance sheet Pursuing an appropriate level of shareholders’ equity and exercising disciplined capital control to improve ROE. Taking approaches to manage the portion of retained earnings that is within our control Profit Invested Capital Review invested capital in the Media and Content segment in preparation for segment-based ROIC management Mainly Media and Content Segment Strengthen shareholder returns, including dividends and share buybacks, to achieve an optimum capital structure Overall B/S 19