Good afternoon. This is Kurobe, CFO. Thank you indeed for your precious time despite your busy schedule to join our briefing on the financial results for fiscal year 2025. Without further ado, I would like to walk you through the details of our financial results for the FY 2025. Please turn to page three. For the fiscal year under review, consolidated net sales increased 5% year-on-year to JPY 1,805,000,000,000 . Non-GAAP operating profit, excluding M&A-related and other expenses, was down 3.5% year-on-year to JPY 94.1 billion. Compared with the revised forecast announced at the time of the interim results, non-GAAP operating profit fell short by approximately JPY 3 billion.
The main factors behind the shortfall were sluggish demand for the packaging materials in the North American lifestyle segment and the impact of reduced operating rates for FC-BGA production in the electronic segment, although the information segment outperformed the plan. As for ROE, which we positioned as a key measurement indicator in our Medium Term Plan, we achieved 5.4% on a non-GAAP basis and 4.9% on a GAAP basis, generally meeting our target of 5%. Regarding an acquisition of treasury stocks, we executed the share repurchases totaling JPY 30 billion as planned. As for dividend, we will increase the annual dividend by JPY 2 from the previous fiscal year to JPY 58 per share. Next, please turn to page four. I will explain the year-on-year changes in non-GAAP operating profit. Beginning in the second half of the current fiscal year, Tekscend Photomask became an equity method affiliate.
Accordingly, we use JPY 84.5 billion as the starting point, excluding JPY 13.1 billion in profit from the photomask business recorded in the second half of the previous fiscal year. There were negative impacts of JPY 5.4 billion from the unification of the bonus accrual period and JPY 300 million from the infrastructure development cost. Among the growth businesses, Erhoeht-X contributed a +JPY 5.3 billion, while domestic SX and overseas lifestyle businesses contributed +JPY 14 billion. In contrast, semiconductor-related business posted a negative impact of JPY 5.4 billion. Cyclical businesses recorded a negative impact JPY 4.7 billion, while existing businesses contributed a +JPY 6 billion due to the effects of structural reforms. As a result of these factors, non-GAAP operating profit came to JPY 94.1 billion. Next, I would like to explain the performance of each segment. Please turn to page five.
In the information and communication segment, net sales were flat year-on-year at JPY 923.2 billion, while non-GAAP operating profit increased 3.2% to JPY 53.4 billion. For the segment as a whole, non-GAAP operating profit exceeded the revised forecast of JPY 49.7 billion announced at the interim results stage. All sub-segments except digital business outperformed the revised plan. Looking at each sub-segment, digital business achieved revenue growth driven by the newly consolidated HID and dzcard businesses in overseas secure operations, contributions from government IT-related projects, and growth in domestic secure solutions and marketing DX. Profit also increased in line with higher sales across the businesses. In BPO, sales declined due to the impact of large-scale projects recorded in the previous year. However, excluding one-off factors, sales increased thanks to the efforts to secure recurring projects in the financial and public sectors.
Overall profit declined, but it returned to growth in the second half of the year. In secure media, sales increased due to the strong performance in IC cards and DPS. Profit also increased, supported by the higher sales and improved profitability in DPS. In communication media, net sales declined due to the continued contraction of the commercial publishing print market and cyclical impacts in textbook printing. Although structural reforms in commercial publishing printing improved profitability, overall profit declined due to the textbook-related impact. Page six summarizes the performance of Erhoeht-X for reference. For the full year result, overall sales increased significantly, driven by growth in the marketing DX and secure businesses. Profit also increased across the board as scale expansion progressed steadily, with the categories posting profit growth on a n on-GAAP basis. I would like to move on to the lifestyle and industry segment.
Please turn to page seven. In the lifestyle and industry segment, net sales increased 31.4% year-over-year to JPY 723 billion, while non-GAAP operating profit was 30.5% to JPY 50.8 billion. Both the packaging and the core materials businesses fell short of the revised plan. In the packaging business, overseas sales increased due to the newly consolidated TFP business of Sonoco and IRPLAST as well as the solid performance in films in Asian and barrier films in Europe. Profit declined due to sluggish food packaging demand in North America caused by inflation, delays in the full-scale adoption of SX packaging by European customers, as well as the recording of one-time M&A-related expenses. In Japan, sales increased as SX packaging remained strong, but profit was flat due in part to equipment troubles in the first half of the year.
In the decor materials business, overseas sales increased due to the strong demand for decorative sheets in Europe and South America. Profit also increased thanks to the cost reduction and the effects of structural reforms. In Japan, both sales and profit increased due to the higher market share in decorative sheets and growth in the special design business. Please turn to page eight. This page shows the regional sales for the overall packaging business and SX packaging. On the left-hand side, for the overall packaging business, the overseas sales ratio increased from approximately 35% to the mid-50% range, driven by the newly consolidated TFP business of Sonoco in the Americas, the newly consolidated IRPLAST business in Italy, and growing overseas demand for barrier films. On the right-hand side, for SX packaging, demand has been particularly strong overseas, especially in Europe and Asia, driving sales expansion for SX packaging.
Going forward, we will continue to position the global market as a key growth area and expand our business centered on SX packaging, where we possess a competitive advantage. I would like to move on to the electronics segment. Please turn to page nine. Net sales in the electronics segment decreased 34.2% year-over-year to JPY 186.3 billion. Non-GAAP operating profit also declined 36.1% to JPY 34.1 billion, falling short of the plan. In addition, foreign exchange had a negative impact of approximately JPY 700 million on profit, mainly in the semiconductor business. In semiconductor-related business, both sales and profit declined overall due to the deconsolidation of Tekscend Photomask, and the revised plan was not achieved. Comparing the fourth quarter with the third quarter performance, sales increased 17%. Operating profit rose 25%, indicating a steady recovery trend.
As for our core FC-BGA business, with the increased proportion of high-value added products such as AI-related applications, both sales and profit in the fourth quarter exceeded the levels recorded in the same period of the previous year. Regarding the slower-than-expected production operation that we mentioned in the previous earnings briefing, corrective measures have already been implemented, and conditions are steadily improving. We now have a clear path toward restoring full production by June. Currently, customer inquiries remain at a high level, and we will continue working diligently in order to meet customers' demand. Meanwhile, in displays, though both sales and profit declined, we achieved our revised plan. Sales fell significantly following our withdrawal from the TFT-LCD, the front-end process business. However, profitability improved as a result of structural reforms in the display solutions business. Please turn to page 10. This page presents our quarterly performance excluding Tekscend Photomask.
As you can see, performance in semiconductor-related business, particularly FCBGA, has been steadily recovering since it hit the bottom in the first quarter. This concludes my explanation of performance by segment. Next, please turn to page 11. I will now explain the key points of the income statement. The gross profit margin deteriorated by 0.5 percentage points for the full year. This was mainly due to the deconsolidation of the Tekscend Photomask, the delayed recovery in FC-BGA, and the sluggish demand for food packaging in North America. As seen on SG&A, expense ratio increased by 0.7 percentage points, mainly due to the impact of newly consolidated subsidiaries. Non-operating profit improved significantly, with ordinary profit increasing from a + JPY 4.5 billion in the previous fiscal year to + JPY 8.6 billion.
The main factor was a JPY 5.8 billion increase in equity method investment gains associated with the transaction of Tekscend Photomask to an equity method affiliate. Please turn to page 12. This is a consolidated balance sheet as of the end of March 2026. The main factors for change were the acquisition of the Sonoco TFP business and Tekscend Photomask becoming the equity method associate. There have been no significant changes since the Q3 results briefing, so I will omit detailed explanation. Please turn to page 13. Regarding strategic shareholdings, as a result of proceeding with divestments as planned, the ratio to consolidated net assets was 12.3% as of the end of March 2026, achieving the Medium Term Plan target of less than 15%. We will continue divestments and improve asset efficiency.
In the new Medium Term Plan starting this fiscal year, we aim to achieve less than 7% at the end of March 2029. This concludes the explanation of fiscal 2025 results. Next, I will explain the full-year results guidance for fiscal 2026. Please turn to page 15. For the full year, net sales are forecast to grow 6.6% year-on-year to JPY 1,925 billion, non-GAAP operating profit to grow 7.3% to JPY 101 billion, non-GAAP net profit to grow 5.2% to JPY 75 billion, and non-GAAP ROE to be 5.7%. As we made timely disclosure today, we will conduct treasury share purchases of JPY 50 billion this fiscal year. The segment forecast. Please turn to page 16. For information solutions, net sales are forecast to grow 4.6% year-on-year to JPY 966 billion, and non-GAAP operating profit to grow 14.2% to JPY 61 billion.
For Living and Industry, net sales are forecast to grow 14.4% to JPY 827 billion, and non-GAAP operating profit to grow 26% to JPY 64 billion. For Electronics, net sales are forecast to fall 13% to JPY 162 billion and non-GAAP operating profit to fall 29.6% to JPY 24 billion. Please turn to page 17. This shows the year-on-year changes in operating profit starting from JPY 81.1 billion. After excluding the impact of TPC's transition to an equity method associate, there will be a positive impact of JPY 5.4 billion from the standardization of the bonus provision period. By business, we expect a +JPY 4.3 billion from information solutions. For living and industry, there will be a +JPY 3 billion due to the elimination of the one-time M&A related costs.
For electronics, there will be a negative impact of JPY 7.2 billion from development costs for advanced semiconductor packaging. Other than that, we expect a +JPY 9.2 billion from growth in electronics centered on semiconductors. For adjustment cost, we expect a total negative impact of JPY 4.1 billion, including a -JPY 2.5 billion from the reclassification of costs with the information solutions segment from the integration of the three companies. As a result of these factors, non-GAAP operating profit is forecast to be JPY 101 billion. Please turn to page 18. Before explaining information solutions, I would first like to explain the redefinition of its sub-segments. Until the previous fiscal year, the sub-segments were as shown on the left. From this fiscal year, communication media will be changed to seven sub-segments: security, IoT solutions, marketing, BPO, securities and business printing, information printing, and information other.
The segment name has been changed to information solutions. Along with this, the businesses within each sub-segment have also been reclassified based on the new definitions. Please refer to this page for the main businesses that have been reclassified. I will explain the forecast for each segment. Page 19. As shown in the sales and profit figures by sub-segment at the bottom left, we will offset the decline in profit from information printing through growth in the other sub-segments. I will focus on the segments where we expect significant growth in non-GAAP operating profit. In security overseas, we will leverage our global infrastructure to expand revenue in the government ID business. In Japan, we will continue to grow digital services and secure stable contracts for smart cards and DPS.
For marketing, we will grow sales of high added-value contracts based on solving clients' business challenges and enhance profit margins through AI utilization. For securities and business printing, we expect revenue growth through IPO related printing and U.S. election solutions. For information printing, while strategically selecting orders to improve profitability, we will continue to optimize production equipment and consider site consolidation. Please turn to page 20. This is a full year forecast for living and industry. As shown in the table at the top right, we expect both revenue and profit to grow for both packaging and decor materials. For packaging, sales are expected to increase due to the full year contribution from the TFP business and IRPLAST, expanded production at the Czech plant for European barrier films, and organic growth in Asia. We also expect continued expansion of SX packaging.
Profit is expected to increase due to the reduction of JPY 7.8 billion in one-time M&A-related costs recorded in the previous fiscal year, as well as profit growth associated with higher sales. For decor materials, we expect improved profitability through overseas sales growth due to gradual market recovery in Europe and U.S., along with continued cost reducing measures such as bringing ink manufacturing in-house. Page 21. This is the forecast for electronics. As shown on the right, both semiconductor-related and display-related businesses are expected to see lower revenue and profit. For semiconductor-related business, the main factors behind the lower revenue and profit are the deconsolidation of Tekscend Photomask and higher development costs for advanced semiconductor packaging. On the other hand, FC-BGAs are expected to achieve significant growth in both sales and profit due to contributions from the new Niigata production line and higher production of AI-related products.
For display-related business, anti-reflective film is expected to achieve higher revenue and profit due to the installation of line one. Color filters are expected to see lower revenue and profit due to business downsizing. This concludes the explanation of the full-year forecast for fiscal 2026. Finally, I'd like to explain the impact of the Middle East situation. Page 22. The largest impact is on the living and industry segment. But company-wide, we will minimize the impact through price pass-throughs and procurement of alternative products. Our policy is to pass through all cost increases to mitigate the impact of our businesses. As part of our current initiatives, we are reviewing prices monthly and negotiating with customers in a timely manner. Negotiations are generally progressing smoothly. As for supply concerns, although we have generally secured enough inventory for Q1, the status for Q2 and beyond remains uncertain.
So we will secure procurement channels, including using alternatives. Based on the current situation, the impact of the Middle East situation has not been factored into the earnings forecast. We will continue to closely monitor the situation and its potential impact on future performance. That concludes my presentation. Next, President Oya will explain Medium Term Plan 2028.
I am Oya, and I assume the position of President and Representative Director of TOPPAN Holdings Inc., in April, as COO. Since taking on the role of President, I have come to appreciate even more strongly the importance of dialogue with the capital markets. Going forward, we will strive to provide even more transparent disclosure than before, while deepening constructive dialogue with all of you and further strengthening a relationship of trust. I sincerely look forward to your continued support. With that, I would now like to explain the details of our new Medium Term Plan beginning in the current fiscal year, 2026. First, I would like to review the previous Medium Term Plan. This slide shows the trends in our key management indicators over the past five years, including the three years covered by the previous MTP.
Looking first at the trend in the operating profit on the left-hand side, operating profit for FY 2025 declined on both non-GAAP and the GAAP basis due to factors including increases in goodwill and intangible assets amortization, and one-time expenses associated with the M&A, as well as the deconsolidation of the photomask business from the second half of the fiscal year. On the other hand, as shown on the right-hand side, non-GAAP ROE has steadily improved over the three years of the previous MTP. In regard to the three-year trend in our key management indicators. Operating profit in the final year fell short of the original plan shown on the right-hand side. SG&A expense ratio has been trending upward, and we recognize controlling this ratio as an important management challenge.
Regarding ROE, while we had targeted achieving a core business-based ROE of 5%, non-GAAP ROE reached 5.4%, allowing us to achieve the target. We also recognize that our current ROE level remains insufficient. I would like to review the results by segment. In the information solution segment, although we promoted a shift toward digital businesses and expanded revenue, costs related to reallocating personnel and developing solutions incurred ahead of revenue conditions, leaving profitability improvement only partially achieved. Because we focus on developing and proposing customized solutions tailored to individual customers, improving profitability remained a challenge to be fully realized. We have reviewed this strategy, and we intend to go for the results during the current Medium Term Plan. In the living and industry segment, we carried out M&A primarily in the packaging business to accelerate the expansion of SX-related operations and secured strong overseas footprint.
While the full realization of global synergies still lies ahead, non-GAAP operating profit expanded significantly. In the electronics segment, although the photomask business was deconsolidated following its IPO aimed at maximizing business value, semiconductor-related business grew substantially due to the expansion of the FCBGA market. An overall assessment of the previous MTP. Based on our review at both the company-wide and the segment levels, we have identified three key challenges. The first is to raise business profitability. The second is to control SG&A ratio. The third is to enhance capital efficiency. We have positioned these three items as key challenges, and through addressing them in the current Medium Term Plan, we like to aim to maximize our corporate value. I would like to explain the new Medium Term Plan. Let me discuss the vision that the TOPPAN Group aims to achieve as a whole.
For the six-year period covering this Medium Term Plan as well as the following one, we have newly defined our aspirational vision as True Value Transformation, optimizing businesses, human assets, and the capital to deliver true value to the world. In addition, to realize this vision, we have also redefined our materiality. Across our three segments, we will practice sustainability and driven management by delivering valuable products and services through the businesses developed under the approaches outlined here. Through these efforts, we aim to address both customers and the social challenges, while enhancing both social value and economic value. Next, I would like to explain our management indicators and the key initiatives. Under the current MTP, we are now targeting for FY 2028, the full year of the plan, non-GAAP ROE 9%, GAAP ROE 8%, non-GAAP operating profit JPY 145 billion, and GAAP operating profit JPY 130 billion.
To achieve these targets, we will pursue initiatives aimed at dramatically improving profitability and thoroughly enhancing capital efficiency. We will connect these efforts to sustainable growth beyond the current plan period, targeting by FY 2031, non-GAAP ROE 11.5%, GAAP ROE 10%, non-GAAP operating profit JPY 210 billion, and GAAP operating profit JPY 200 billion levels. To accomplish this, we have consolidated the key initiatives to be executed over the next three years into three major pillars. The first is to achieve high profitability for each segment through business portfolio transformation. The second is to control company-wide SG&A ratio through corporate reform. The last and the third one is to improve asset efficiency through the balance sheet reform. By steadily advancing these three initiatives, we like to achieve our management targets. Next, the composition of non-GAAP operating profit by segment.
By FY 2031, we aim to achieve a balanced profit composition across all segments at a comparable scale. In the electronics segment, although an overall growth appears modest by FY 2028 due to upfront investment cost for next generation semiconductor packaging development, profits excluding these upfront costs are expected to expand steadily through growth in the existing FC-BGA business. In FY 2031, the seeds planted during this MTP are expected to bear fruit, resulting in the significant expansion in electronics segment profits. In addition, as shown at the bottom of the slide, during the current MTP period, we will implement structural reforms, including business divestitures equivalent to approximately JPY 170 billion in sales and JPY 10 billion in profit, demonstrating our serious commitment to portfolio transformation. Next, this table summarizes the positioning of our key businesses within each segment.
Our overarching approach is to allocate the cash generated from businesses categorized as businesses for stable expansion, shown in the third tier from the top, toward the two upper categories, priority growth businesses and strategic focus businesses. At the same time, we will promote structural reforms focused primarily on the businesses for improvement and transformation shown at the bottom, with the goal of improving profitability and operational efficiency. Regarding the structural reforms, we will consider and execute all possible options, including internal improvements efforts and the best owner perspective. Furthermore, beginning this April, we reorganized our structure into a business axis organization with nationwide visibility. As visibility into performance and resources improves, we will further strengthen work-based business management and expand its use in the performance management investment decision-making. Next, I would like to explain our segment strategy. First, information solutions.
Our performance targets for FY 2028 are net sales of JPY 985 billion, non-GAAP operating profit JPY 78 billion, and operating margin being 8%. Profit growth over the next three years will be driven by the profit expansion of the sub-segments shown here. In terms of the business environment for the information solutions segment, we are now focusing on the advancement of AI, Japan's declining population, and expansion of the IT solutions market. In this environment, our strength lies in our ability to combine real-world products and services, such as IC cards, tags, and in-store promotional support with digital services, enabling us to design optimal business operations based on a deep understanding of on-site operations and customer challenges. Using the primary on-site data collected through these services, we will run together while providing end-to-end support, ranging from analytics, consulting, to operational assistance.
Our security and authentication technologies enable us to provide the secure infrastructure necessary for accumulating and managing data. Based on this business environment and these competitive advantages, our strategy in the information solutions segment has two major pillars. The first is to further combine real and digital services with AI to sharpen our competitive advantage and improve profitability. The second is to thoroughly improve profitability and efficiency in our existing printing businesses. I would like to explain our sub-segment strategies. In security business, we are now targeting a non-GAAP operating margin of 10% by FY 2028. Our strategy is, first, to expand government-related ID services globally, including election solutions, while leveraging our domestic track record to capture market growth in media manufacturing and issuance services, such as ID and IC cards. In Japan, we will continue capturing stable demand.
Based on the stable domestic and overseas businesses, we will establish ID infrastructure for managing IDs and credential information, including authentication, authorization, and audit trails, and further enhance profitability by providing the service packages that combine physical media with digital services. In the IoT solutions business, we aim to now achieve non-GAAP operating margin of approximately 8% by FY 2028. We position this business as a strategic focus area, with the goal of establishing the foundation for high profitability business model during the current Medium Term Plan period and achieving the full-scale earnings contributions in the following plan period. Our strategy is to establish a recurring revenue model through the integrated provision of IoT devices, such as RFID and operational services for ID management systems. We aim to now establish this revenue model across the four areas shown here, while also pursuing global expansion. The marketing business is next.
We are targeting a non-GAAP operating margin of 10% by FY 2028. Our strategy is to establish a differentiated market position by implementing marketing services that integrate real and digital experiences. In a society where AI becomes commonplace, we believe the value of real-world experiences will become even more important. We have accumulated extensive expertise and operational know-how in promotional support at real-world customer touchpoints, such as retail stores. Based on this foundation, we believe we can establish unique competitive position unmatched by our competitors. Through integrated proposals based on customers' management challenges, we would like to increase the transaction value per client. We would like to improve profitability through greater in-house production and cost reductions driven by AI utilization. In the BPO business, we aim to achieve a non-GAAP operating margin of about 6% by FY 2028.
Our strategy is to focus resources on highly complex and sophisticated operations that simply cannot be fully implemented by AI alone. We also would like to implement AI into our operational infrastructure to automate workflows and provide higher added value through AI operational assurance. In addition, we would like to improve profitability by consolidating overlapping functions across our nationwide BPO sites. Next are the securities and the business printing business and the information printing business. By FY 2028, we aim to achieve a non-GAAP operating margin of 10% for the securities and business printing business, and 4% for the information printing business. The strategic direction for both businesses is fundamentally the same. As the domestic market is expected to continue shrinking, we will thoroughly promote selective order acceptance and improve transaction conditions in order to enhance profitability.
In the securities and business printing business, we would like to apply TOPPAN's management methods to the former TOPPAN Edge operations and strengthen profit management in order to improve margins. We also would like to implement further structural reforms, including reducing the number of the production facilities and reorganizing business locations, thereby reducing fixed costs and optimize capital investment. Next, I would like to explain the strategy for the living and industry segment. Our performance targets for this segment in FY 2028 are net sales JPY 915 billion, non-GAAP operating profit JPY 86 billion, and operating margin being 9%. Profit growth over the next three years will be driven primarily by the expansion of overseas businesses, as shown here. In terms of the business environment for the living and industry segment, we are focusing on the advancement of the circular economy, both in mainstream markets and geopolitical risks.
While current geopolitical developments, such as the Middle East situation, create risks indicating higher raw materials cost and procurement concerns, they also create opportunities for SX expansion, such as increasing demand for solvent-free technologies. Within this business environment, our strengths include our ability to develop differentiated SX products that contribute to solving environmental challenges, our global supply structure that enables worldwide deployment of competitively advanced products, and our global network that mitigates procurement risks. Leveraging this strength, we aim to build a business segment that simultaneously enhances both social value and economic value. Based on the business environment and our competitive advantages, the key strategic pillar for the living and industry segment are strengthening profitability through the promotion of SX strategies, capturing a stable demand, and creating synergies through global collaboration. Next are the strategies for each sub-segment.
In the packaging business, we aim to achieve non-GAAP operating margin of about 9% by FY 2028. Our strategy is to secure stable earnings growth through organic expansion centered on the Asia Pacific region, where economic growth and population growth are expected, as well as the Americas, where on a customer basis have been strengthened through large-scale M&A. On top of this stable earnings foundation, we will further enhance profitability by developing and globally supplying high value-added SX packaging through a vertically integrated strategy combining film coding and barrier technologies. We'll also improve margins through the cost synergies generated by global raw materials, procurement, and higher in-house film production ratio.
Decor materials aims to achieve a non-GAAP operating profit margin of about 9% in fiscal 2028. Our strategy is to expand market share by strengthening quality and design and launching a new factory in Turkey. We will also pursue higher added value by strengthening overseas sales of film-based decorative sheets and repositioning the domestic business as a designer of spaces. We will also continue to improve profit margins through cost reductions, such as in-house ink manufacturing and deploying production technologies overseas. Next is the segment strategies for electronics. We aim for net sales of JPY 230 billion, non-GAAP operating profit of JPY 37 billion, and a profit margin of about 16% in fiscal 2028. Total profit growth over three years will appear small because of the negative profit impact of the photomask business IPO and development costs for advanced packaging.
Profit in semiconductor-related business will expand substantially due to growth in the existing FC-BGA business. For advanced semiconductor packaging, this MTP will be a strategic investment phase, and in the next MTP, it will be a major growth driver. Our focus in the business climate for electronics is semiconductor market long-term growth, rising technological and quality requirements, and FPD panel upsizing. Against that, we will develop and supply cutting-edge key devices driven by technological superiority. We will also use our strong partnerships with customers and material manufacturers who drive technology advancements and concentrate resources on the semiconductor packaging business, including advanced packaging. Our strategic direction is achieve high margins and high growth in semiconductor packaging business and restructure low profit businesses. Next, strategies by sub-segment. The semiconductor business aims to achieve non-GAAP operating profit margin of about 19% in fiscal 2028.
Excluding development costs for advanced packaging, fiscal 2028 profit margin will be around 27%. Our strategy is to maintain high margin and growth in the existing FC-BGA business. We will target three key focus areas, high-end switches, AI ASICs, and server CPUs. We will significantly boost sales and profits through higher operating rate by high value-added products, including new lines in Niigata launched in fiscal 2025 and Singapore launched in fiscal 2026. We will also make strategic investments in advanced semiconductor packaging toward profit contribution in the next MTP. Specifically, these are investments in development and mass production of glass cores and interposers. The display business will aim for non-GAAP operating profit margins of about 5% in fiscal 2028. Our strategy is to expand anti-reflective film margins through investment in the ultrawide line and establish next generation displays like light control devices and QD materials.
We also plan to restructure and phase out the small and medium-sized TFT-LCD display solutions business in fiscal 2027. That concludes the segment strategies. Further details regarding the strategies for each segment will be explained again at the IR day on June 12th. Next, I will explain the investment strategy for achieving our profit targets. We plan to invest a total of JPY 500 billion over the three years of this MTP. We will actively invest in priority growth businesses and strategic focus businesses, allocating JPY 265 billion, more than half of the total amount. The breakdown of business investment and capital investment in priority growth businesses and strategic focus businesses totaling JPY 335 billion are on the right. We will make strategic investments in semiconductors, including advanced packaging and FC-BGAs, with the electronic segment accounting for 60%. Next is the second priority initiative, corporate reform.
Over the three years of this MTP, we will work to control the SG&A ratio, which has been rising. We will work to improve SG&A ratio by around 2 percentage points in three years from 19.8% in fiscal 2025. Our approach includes personnel redeployment in indirect departments of holding company and business divisions, and streamlining and consolidation of indirect departments. For the latter, we will consider consolidating personnel and operations, aiming to reduce workload by 30%. We will also reduce outsourcing costs. For that, we will promote talent management reform for optimal replacements and company-wide AI adoption to streamline and enhance operations in indirect departments. In talent management reform, we will clarify talent requirements and headcount based on business strategy, and promote optimal placement. To this end, we will introduce a talent management system and visualize skills. We are also pursuing company-wide AI adoption to streamline and enhance operations.
To this end, we will link and standardize data and processes for company-wide operations, including at holdings, and construct AI transformation network for company-wide operations. The target for improving the SG&A ratio includes not only streamlining of indirect departments, but also the effects of structural reforms, such as business developments. Next, I will explain the third priority initiative, balance sheet reform. Under this Medium Term Plan, we will thoroughly reevaluate owned assets through balance sheet reform. Specifically, we will reduce liquidity on hand, optimize the circulation of working capital, like accounts receivable and inventory assets, consolidate production bases, and downscale or withdraw from non-core businesses, and accelerate the reduction of strategic shareholdings. With these four main measures, we will work to reduce owned assets with a target of reducing total assets by 20% by fiscal 2028.
With funds stimulated by these measures and through structural reforms, we will pursue additional equity reduction and carefully manage the overall balance sheet by controlling the absolute amount of interest-bearing debt based on progress of profit plan and investment plan as a key indicator. Next is the cash allocation policy. The basic policy remains unchanged from the previous MTP. Based on the policy, during the three years of this MTP, we will target ROE of 8% in fiscal 2028 through growth investment, reevaluation of businesses, and balance sheet optimization. Three major approaches will be taken to achieve this. First, we will implement shareholder returns with a total payout ratio of 100% as a lower limit. As disclosed today, we will conduct JPY 50 billion of treasury share purchase for this fiscal year. Second, we will target 50% reduction in total assets through balance sheet reforms that I explained earlier.
Third, we will reduce strategic shareholdings to less than 7% of consolidated net assets. The three-year allocation based on these measures is shown on the right. We will use operating cash flow of over JPY 450 billion and cash generated from balance sheet optimization and allocate them to JPY 500 billion of investment and shareholder returns. That concludes initiatives for the three priority measures. I show our management targets again. By committing fully to these three priority initiatives, we aim to achieve ROE of 8% in fiscal 2028 and 10% beyond that. Next, I talk about the strengthening management foundations. First, initiatives for new business creation. In this new MTP, we will achieve early-stage business development and scaling by enhancing market development perspectives. There are three actions. First is enhancing marketing capabilities and talent in business development.
We will assign highly specialized personnel to identify customer needs and promote business development. Second, we will standardize the commercialization process, increase feasibility, and accelerate early scaling. Finally, we will make company-wide assets transparent to allow for concentrated investment in promising areas. With these initiatives, we aim to scale the new business themes shown on the right in the next MTP. Next, promoting company-wide AI initiatives. Our vision is to establish AI infrastructure for operational and business transformation, and utilize it on a company-wide scale to achieve a superior high profit business model. To achieve this, we will promote two priority initiatives. The first initiative is to establish an environment that allows maximum use of data by building advanced AI infrastructure and a global governance framework. The second initiative is enabling autonomous processes across the company and creating new businesses comprised of two pillars.
One is business process re-engineering to decide focus areas and introduce data-driven sales and AI agents in SCM for dramatic productivity improvements and resource shifts in indirect departments. The other pillar is business transformation, where we utilize the resources created to improve operational quality and reduce cost in BPO with AI, and apply AI to business development processes, thereby increasing the added value of existing businesses and creating new businesses. Through these initiatives, we will realize sustainable enhancement of corporate value with AI and data as sources of competitiveness. Next, reinforcing governance. As disclosed on April 28th, we will revise the executive compensation system to strongly motivate achievement of the new MTP, and medium to long-term enhancement of corporate value and solutions to social issues. Specifically, for the Representative Director and President, the proportion of variable compensation will be raised from 30% to roughly 50%, greatly increasing the performance-linked pay.
For bonuses, which are short-term incentives, in addition to financial indicators such as non-GAAP operating profit and ROE, ESG indicators such as CO2 reduction and employee engagement will be introduced. Furthermore, for stock compensation, which is a long-term incentive, TSR, or total shareholder return, will be incorporated. Through this, we will clarify our commitment to sustainable growth from the same perspective as shareholders. Of these, revision of the performance-linked restricted stock compensation system is subject to approval at the 108th Ordinary General Meeting of Shareholders to be held in June. Next are our initiatives regarding human capital. We will promote enhancement of competitiveness through an optimal talent portfolio aligned to our business. Specifically, we will implement four priority initiatives. First is optimization of the human asset portfolio and enhancement of career autonomy.
Through formulation of personnel plans aligned with business strategies and improvement of work quality through AI utilization, we will build up and optimally deploy our talent. Second is raising talent and organizational competitiveness by pursuing the Deshika strategy. We will strengthen recruitment and development to refine our unique strengths and establish talent management essential for strategy execution. Third is strengthening talent base and governance to support sustainable growth of global business. We will accelerate development of HR infrastructure at overseas subsidiaries, and expand and develop global talent. Fourth is creating the foundations for human capital management that supports diverse working style, providing safety and peace of mind, and culture conducive to taking on challenges.
Through these four priority initiatives, we will define required talent and skills, and map employee skills to shape a talent portfolio aligned to business, raise business competitiveness by securing the talent needed for our business strategy through talent management, including recruitment, development, and deployment to ensure sustainable growth and achievement of the MTP. Finally, our initiatives regarding natural capital. For this, we will promote activities based on the TOPPAN Group Environmental Vision 2050. To contribute to decarbonization, we have set a target of net zero GHG emissions by fiscal 2050, and as an interim target for fiscal 2030, we aim to reduce emissions by 54.6% from fiscal 2017 level. For Scope 1 and 2 initiatives within our operations, we will thoroughly promote energy conservation and aggressively procure renewable energy.
For Scope 3, which covers impacts across the entire supply chain, we will further deepen collaboration with suppliers through promotion of DX and adoption of low carbon materials. We position contribution to sustainability of the global environment as our growth foundation, will accelerate decarbonization management. Next is contributing to resource circulation. We are aiming for zero waste emissions in fiscal 2050 by reducing discharge and reusing and recycling waste. For this, we have set fiscal 2030 targets for reducing final waste landfill volume and improving recycling rates for waste plastics, will promote initiatives utilizing technologies from sites in various countries. In preserving biodiversity, we will aim to increase nationally certified, sustainably managed sites at our facilities and strive to procure paper materials verified to be free from illegal logging.
For water resources, we will work from every aspect to reduce environmental impact and restore nature, including strict management of water intake restrictions and wastewater quality at high-risk sites. We will position these efforts to strengthen management foundation as an unwavering foundation for the TOPPAN Group to pioneer a sustainable future. This concludes the explanation of the Medium Term Plan. Thank you very much.