フロンティア･マネジメント株式会社

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MEDIUM-TERM MANAGEMENT PLAN

Medium-Term Management Plan
FY2024-2026

At Frontier Management, we have established and announced our Medium-Term Management Plan, new management guidelines for the three years beginning from the fiscal year ending December 31, 2024.

Frontier Management’s Vision

Mission

Contributions to the benefit of clients
We work for the benefit of our clients by enhancing corporate value.
Contributions to the benefit of stakeholders
By offering well balanced solutions, we work for the benefit of business owners and managers, employees, business partners, customers, creditors, and other stakeholders.
Contributions to society
We contribute to society by raising the value (goods & services) provided by our client companies.

Vision and Values

Frontier Management’s Vision
Global independent professional firm that provides optimal services according to the business characteristics of clients and supports the delivery of results that will enhance corporate value
Frontier Management’s Values
  • Pursuing the essence
  • Committed to the delivery of results
  • Leveraging diversity
  • Seeing the broader picture

Outline of Growth Strategy

Improve corporate value by strengthening and nurturing the value creation capabilities of our clients’ management resources and delivering results in the form of the creation of new growth businesses

Business Strategies and Strengthening of Organization

Consulting and M&A advisory business:
Focus on solutions for strengthening and nurturing the value creation capabilities of management resources
  • Provide fully integrated support for the formulation of business portfolio strategies, M&A activities, and PMI
  • Improve productivity through hands-on support for digitalization
  • Develop full-spec support capabilities for revitalization projects spanning revitalization plan formulation, hands-on support, investment and dispatch of CxO
  • Strengthen the global competitiveness of clients through fully integrated support for mid-cap cross-border M&A deals and PMI
  • Support the formation of a leadership team and the development of executives to drive future growth in accordance with management strategies
Investment business (FCI): Step up investment and establish new funds
  • Strengthen investment business that will increase involvement in the delivery of results
  • FCI: Step up investment in local core companies to realize dramatic growth of investees while also contributing to expanding the Group through consolidated investment
  • Establish new funds (revitalization fund, venture fund, etc.)
Strengthening of organization: Achieve discontinuous growth through quantitative expansion, improvement of productivity and M&A
  • Hire 200 additional employees over the 3-year period (non-consolidated basis). Diversify recruiting methods and achieve both quantitative expansion and greater efficiency
  • Significantly improve operational productivity through sophistication of knowledge DB, generative AI, and BPO
  • Actively undertake M&A/alliances with companies with potential synergies

Targets in the Medium-Term Management Plan

We plan to achieve net sales of JPY 16.0 billion and ordinary income of JPY 3.2 billion, excluding FCI, by FY2026. FCI’s consolidated investment projects will also contribute to profit, and the ordinary income of the entire Group will expand to JPY 3.5 billion.

[Assumptions]
  • ・Entire Group means consolidated income or loss of all Group companies including FCI and its consolidated investees. Excluding FCI means consolidated income or loss excluding FCI and its consolidated investees.
  • ・FCI is assumed to make one consolidated investment in FY2024. FCI will consider consolidated investments in FY2025 and FY2026 as well, but these are not included in the plan.
  • ・With respect to Athema, in which we hold a 40% stake, we have the option to acquire an additional 20% stake but our income projections do not reflect exercise of this option

Main KPI (FY2026) and Shareholder Return Policy

  • Entire Group's ordinary income JPY 3.5 billion or more

  • Consolidated ordinary income margin excluding FCI 20% or more

  • ROE*1 Maintain at least 35% Reference: WACC*2 was 8% at the end of 2023

  • Number of consolidated employees (excluding FCI’s consolidated investments) 620 or more

  • Investment business
    Number of investments and amount of investment     8 cases over three years (2 consolidated investments) JPY 15.0 billion * While the goal is two consolidated investments, only one is factored into the numerical plan targets

  • Number of CxOs dispatched 50 or more/year

  • *1 ROE = Net income attributable to owners of parent ÷ Shareholders’ equity (average)
  • *2 WACC is our weighted average cost of capital. It is calculated based on a risk free rate of 0.75% and market risk premium of 6% and assuming our beta value is 1.2 and we have zero interest-bearing debt
[Shareholder Return Policy]
  • ・Our basic policy is to continue to pay stable dividends, while securing the retained earnings necessary to expand our future business and strengthen our management structure.
  • ・Our dividend payout ratio is targeted at 40% of net income attributable to owners of parent and we determine dividends based on cash-backed gains and losses excluding gains and losses on FCI that do not involve cash flows and the impact of unrealized losses on investment securities