Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

SAN HOLDINGS, INC.
Results of Operations(First Half of the Fiscal Year Ending March 31, 2024)
November 20, 2023

Tokyo Stock Exchange, Prime Market
Stock code: 9628

Contents
I

First Half of FY3/24 Financial Overview …………….……….……….. P 02

II Funerals and Funeral Revenue at KOEKISHAIII SOU-SEN and TARUI Financial Highlights….……….……….. P 11………….……….……….. P 17

IV FY3/24 Forecasts (Revenue and Earnings/Dividends) ..….. P 20
V Progress in Medium-term Management Plan
VI Human Resource Management at the
SAN HOLDINGS GroupVII Medium-term Management Plan
Shareholder Distribution Policy….……….……….P 23.…….…….…………….……….P 35.…………………….……….………...P 38

2First Half of FY3/24 Financial Overview

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

Executive Summary3

 1H revenue up and earnings down YoY as initially announced
 Revenue up mainly because of higher revenue per ordinary funeral and an increase in sales of
products and services associated with funerals

1H FY3/24
Results

 The pct. of small, simple funerals slightly increased and there was an increase in average revenue per ordinary funeral.
 Sales of products and services associated with funerals increased.
 The trend toward smaller funerals caused by the pandemic slowed.

 SG&A expenses increased mainly due to expenses for growth in the future.
 Higher personnel and recruiting expenses to increase the number of funerals for the opening of new funeral halls andto strengthen the workforce in preparation for sales growth Higher building and land leasing expenses due to the opening of new funeral halls
 Higher advertising expenses as up-front investment
 An increase in depreciation expenses of software due to the start of operations of a core IT system

 As a result, operating profit decreased 6.2%.
Earnings
Forecasts

Dividend
Forecast Forecast higher revenue and lower earnings with no revisions to the initial forecast

 Up-front expenses for adding funeral halls as planned
 Increases in personnel and recruiting expenses to hire people required for expected growth in the number of funerals
 The pandemic is no longer a significant risk concerning results of operations.

 No changes to the initial dividend forecast: interim dividend of 23.0 yen per share and year-end
dividend of 11.5 yen (after the stock split) Plan to pay an annual dividend of 34.5 yen (after the stock split), up 2 yen per share (dividend
increase for the 8th consecutive year)*Calculated based on the number of treasury shares as of March 31, 2023.
Expected dividend payout ratio: 21.4%

4

1H FY3/24 Revenue and Earnings• Operating revenue increased 3.2% YoY and operating profit decreased 6.2% (as initially announced).
The operating margin decreased 1.6 percentage points to 16.1% but is still higher than the medium-term plan target of 15.5%.
• Revenue increased mainly because of higher revenue per ordinary funeral and an increase in sales of products and services
associated with funerals.
• Operating expenses increased because of higher personnel and recruiting expenses as planned to increase the number offunerals for the opening of new funeral halls and to strengthen the workforce in preparation for sales growth, higher building
and land leasing expenses due to the opening of new funeral halls, and higher up-front advertising expenses.
• In SG&A expenses, depreciation expenses of software increased due to the start of operations of a core IT system.
(Millions of yen)

Operating revenue
Operating expenses
SG&A expenses
Operating profit
Operating margin

Ordinary profit
Profit attributable toowners of parent

Net income per share (Yen)YoY change

FY3/23

FY3/24

1H

1H%

10,083
7,602
697
1,782
17.7%
1,763
1,218
57.48

10,407
7,991
744
1,671
16.1%
1,684
1,085
52.32

3.2%
5.1%
6.7%
-6.2%
-1.6pt-4.5%-10.9%-9.0%

Initial forecast(Announced on May 11, 2023)

AmountFiscal year

323
388
46
-110
-79
-133
-5.16

Results vs. Fct.

22,700

45.8%

3,570
15.7%
3,560
2,270
109.37

46.8%
47.3%
47.8%
47.8%

5

Quarterly Revenue and Earnings• 2Q revenue was up and earnings were down just as in the 1Q.
• The number of funerals and revenue per funeral in the 2Q were higher than in the 1Q.
• The 2Q operating margin was higher than in the 1Q.

(Millions of yen)

Operating revenue
Operating expenses
SG&A expenses
Operating profit
Operating margin
Ordinary profit
Profit attributable owners ofparentFY3/23

FY3/24

YoY change

FY3/23

FY3/24

YoY change

1Q

1Q

%

2Q

2Q

%

4,856
3,667
349
838
17.3%
825

5,081
3,948
370
761
15.0%
766

4.6%
7.7%
6.0%
-9.2%
-2.3pt
-7.2%

5,227
3,934
348
943
18.1%
937

5,325
4,042
373
910
17.1%
918

1.9%
2.7%
7.2%
-3.6%
-1.0pt
-2.1%

526

497

-5.5%

692

588

-15.0%

6

Quarterly Revenue and Earnings• Record-high 1H revenue, surpassing 1H FY3/20, which was before the pandemic.
• 1H operating profit was the second highest ever, below one year earlier due to planned up-front investments for
社会情勢の変化
growth in the following years.
(Millions of yen)

Quarterly operating revenue(Millions of yen)
4,000

25,00021,281
20,0005,166

20,001
18,865
4,914

5,328

21,663

5,739

3,000

5,955

5,347

10,000

5,160

5,625

3,868
3,376

3,500

4Q
3Q
2Q
1Q

15,00010,407

3,091
585

2,550

2,500
2,000

1,018

5,000

4,984
FY3/204,548
4,055
FY3/21

4,595

5,227

5,325

4,917

4,856

5,081

FY3/22

FY3/231,000

FY3/24

500
0

898

589
FY3/20

899

801

787

4Q
3Q
2Q
1Q

1,186
970

1,500

5,390

-

Quarterly operating profit

1,671

987

670

943

513

934

838

761

FY3/22

FY3/23

FY3/24910

262
FY3/21

7

Funerals and Funeral Revenue at Group Companies• The number of funerals was about the same as in 1H FY3/23, the result of no change in the number of deaths in Japan,
a big decline in the number of pandemic death funerals, and an increase due to opening new funeral halls.
• 1H funeral revenue increased mainly because of an increase in average revenue per ordinary funeral.

Quarterly number of funerals(Funeral)
18,00015,99416,00014,256
12,000

4,069

10,000
8,000
6,000

3,779

3,457

4,000
2,000
0

18,00016,226

3,984

3,385

4,567

3,894

4,494

14,000

4,221
7,455

3,569

Quarterly funeral revenue
17,007
15,336

16,00014,73814,0003,606(Millions ofyen)

3,998

3,852

4Q
3Q
2Q
1Q

4,111
3,985

16,3204,332

17,554
4,807

12,00010,000

4,650
4,407

4,217

4,572
8,243

8,000
6,000

4,287

3,655

3,708

4,186

4,214

4,061

3,988

4,029

FY3/22

FY3/23

FY3/24

4,000

3,414

3,300

FY3/20FY3/21

3,964

3,513

3,603

FY3/22

FY3/23

FY3/24

2,000
0

3,958
FY3/203,288
FY3/21

4Q
3Q
2Q
1Q

8

Analysis of Changes in Operating Profit
Operating profit benefited from higher revenue, mostly at the three funeral companies. However, operating profit was downbecause of higher personnel, funeral hall opening and advertising expenses (up-front investments for future growth), higher
building and land leasing expenses due to the opening of new funeral halls (at the holding company), and higher software
depreciation expenses due to the start of operations of a core IT system (at the holding company).
(Millions of yen)

Analysis of Changes in Operating profit

1,950
1,900
1,850
1,800

1,782

44

35

35

21

91
87

1,750

57

1,700

1,671
36

1,650

25

Positive factor

1,600

Negative factor

1,550
1,500

1H FY3/24 Operating profit

Others[Holding company]
Higher depreciation expenses[Holding company]
Higher fixed expenses[KOEKISHA]
Higher expenses[KOEKISHA]
Higher personnel expenses[TARUI] Higher sales[SOU-SEN] Higher sales[KOEKISHA]
Higher sales at Tokyo Area

[KOEKISHA]
Higher sales at Kansai Area

1H FY3/23 Operating profit

Changes in Assets in the Balance Sheet

9• Assets decreased ¥190 million.
• Property, plant and equipment decreased ¥27 million due partly to capital expenditures of ¥380 million for new funeralhalls and renovations and depreciation of ¥400 million.
Intangible assets were up ¥29 million because of additional software for the new core IT system.
• Cash and deposits decreased ¥255 million due to expenditures for these investments and for distributions to shareholders.
(Millions of yen)March 31, 2023

Current assets
Cash and deposits
Trade accounts receivableand contract assets

Non-current assets
Property, plant and equipment
Buildings and structures
Construction in progress

Intangible assets
Investments and other assets
Total assets

September 30, 2023

Change11,039
9,192

10,854
8,937

-184
-255

919

982

63

25,18922,483
9,840
14
398
2,308
36,22925,18422,456
9,604
217
428
2,299
36,038

-5
-27
-235
203
29
-8
-190

Reference:
Capital expenditures on PP&E: ¥182 million (1H FY3/24)(excluding construction in progress)
Depreciation expenses of PP&E: ¥400 million (1H FY3/24)

Note: Only major accounts are shown.
Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

Changes in Liabilities and Net Assets in the Balance Sheet

10• Current liabilities decreased mainly due to decreases in trade accounts payable and income taxes payable.
• In shareholders’ equity, retained earnings increased despite stock repurchases of ¥310 million in 1H FY3/24.
The equity ratio increased 2.1 percentage points from the end of the previous fiscal year to 89.3%.
(Millions of yen)March 31, 2023

September 30, 2023

ChangeTotal liabilities

3,559
993
666
1,054
174
64
4,613

2,821
827
457
1,026
182
7
3,847

-738
-165
-208
-28
8
-56
-766

Total net assets

31,61525,153(1,594)
31,61532,19025,994(1,877)32,190

575
841
-282
575

36,22987.3%

36,038
89.3%

-190
2.1pt

Current liabilities
Trade accounts payable
Income taxes payableNon-current liabilities
Lease obligations
Long-term accounts payable-other

Shareholders’ equity
Retained earnings
Treasury shares

Total liabilities and net assets
Equity ratio
Note: Only major accounts are shown.

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

11

Funerals and Funeral Revenue at KOEKISHA

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

KOEKISHA: Number of Funerals and Revenue

12• (Number of deaths) There was a higher than usual number of deaths in 2022 and early in 2023, but from the
beginning of FY3/24, the number of deaths started returning to normal and is mostly the same as FY3/23.
• (Number of funerals) Down 1.7% YoY but up 1.5% after excluding pandemic death funerals• (Funeral revenue) A small increase because of higher revenue per ordinary funeral(Funerals)

Quarterly number of funerals

14,00012,00013,083
11,584
2,935

3,070

13,05014,000

3,582
12,000

3,290

8,000

3,158

5,959

6,000

4,000

2,000

0

2,793

2,930
2,781

2,786

2,650

FY3/20FY3/21

4Q
3Q
2Q
1Q

3,403

3,274

Quarterly funeral revenue

16,00011,995
3,727

10,000(Millions of yen)

14,084
12,6403,360

13,6103,576

14,526
3,961
4Q
3Q
2Q
1Q

3,226
10,000

3,848
8,000

3,681

3,526

3,793

6,774

6,000

3,223

3,537

3,060

3,047

4,000

3,268

2,842

2,899

FY3/22

FY3/23

FY3/24

2,000

0

3,337

FY3/202,685
FY3/21

3,105

3,449

3,450

3,402

3,321

3,324

FY3/22

FY3/23

FY3/24

13

KOEKISHA: Increase/Decrease in Number of Funerals and Revenue• Kansai area ordinary funerals decreased mainly because of fewer pandemic death funerals. The effect on revenue wassmall in relation to the change in the number of funerals.
• The Tokyo area was mainly responsible for higher ordinary funeral revenue.
• Large funeral revenue decreased primarily because of lower revenue per funeral due to large funerals with very highrevenue one year earlier.

Top: Number of funerals
Large funerals
Bottom: Revenue (Millions of yen) (More than ¥5 million)

Tokyo area

Kansai area

Total

(3)

Ordinary funerals

13
(93)

4

10
59

(120)
35

1

(33)
(116)

1
(107)

(58)

Total

37
(106)

61

3

14

KOEKISHA: Large Funeral Revenue• In FY3/21, company funerals, farewell events and other large funeral (more than ¥5 million) revenue fell to well under halfof the pre-pandemic level. But revenue recovered starting in FY3/23.
• 1H revenue was down 7.3% because of lower revenue per funeral, while the number of funerals increased by 1 from one
year earlier.

Large funeral revenue(Millions of yen)
2,000

1,820
1,665
1,500

1,421

490

444
500

1,626

1,632

258

361

437

1,244

505

375

256

432
683

612
370

453

439

322
314

0

1,601

406

341
1,000

357

355
429

445

386

393

326

93

199
36

333
328

4Q

398

3Q

739

373

423

2Q
1Q

392
346

FY3/17 FY3/18 FY3/19 FY3/20
FY3/21 FY3/22 FY3/23 FY3/24
Average level for
FY3/17 to FY3/20

15

KOEKISHA: Tokyo and Kansai Area Funerals and Revenue
At KOEKISHA, the number of funerals decreased 1.7% but revenue per funeral increased 1.8%.
Regional performance
・Lower revenue per funeral in the Tokyo area
The number of ordinary funerals (less than ¥5 million) in the Tokyo area increased and revenue per funeral was
higher. But revenue per funeral for all funerals in this area decreased due to a decline in the large funeral category.
・Decrease in the number of funerals but higher revenue per funeral in the Kansai area
The number of ordinary funerals (less than ¥5 million) decreased 2.6% mainly because of fewer pandemic deathfunerals. Revenue increased in this area due to higher revenue per funeral.

Top: Number of funerals
Bottom: Revenue (Thousands of yen)

All

Tokyo area

1H FY3/23 1H FY3/24
KOEKISHA
funerals

6,065
1,116

5,959
1,136

Change-1.7%
1.8%

1H FY3/23 1H FY3/24

1,678
1,397

1,688
1,369

Kansai area
Change0.6%-2.0%

1H FY3/23 1H FY3/24

4,387
1,008

4,271
1,044

Change-2.6%
3.6%

KOEKISHA: Estimated Market Share (Based on comparison of percentage change from the previous period)

16Market share estimates are based on comparisons of the rate of changes in numbers of deaths and funerals.
(Kansai area) Market share is declining as competitors open new locations and the number of pandemic death funerals
decreases. After excluding pandemic funerals, market share is higher because of a 1.9% increase in the numberof funerals.
(Tokyo area) Mainly due to the addition of more funeral halls, market share is increasing even as the number of deaths declines.
20.0%

15.0%

Kansai関西圏 area

10.0%

5.0%

Tokyo
首都圏area

6.9%
4.3%

合Total
計-10.0%

Tokyo
area
首都圏

Total
合
計

8.5%
5.2%

死亡者数
Number of deaths
Number of funerals at KOEKISHA
公益社件数

0.6%

0.2%

0.0%

-5.0%

Kansai
area
関西圏

-2.1%

-2.6%

-0.8%

-0.2%

-1.7%

-5.7%
April 2022 to September 2022

April 2023 to September 2023

Note: In the second half of FY3/22, there were a large number of extra deaths from pandemic or non-pandemic causes in Tokyo, Kanagawa
and Osaka prefectures. In the first half of FY3/23, there were a large number of extra deaths as well, but this time due only to thepandemic. (Data compiled by SAN HOLDINGS based on the “Japan Excess and Below Expected Mortality Dashboard” of the National
Institute of Infectious Diseases)

17

SOU-SEN and TARUI Financial Highlights

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SOU-SEN Financial Highlights

18• Revenue per funeral increased due to rising number of mourners.
• Revenue increased 11.1% YoY.
• Much higher earnings offset increases in personnel, operating and fixed expenses.

1H FY3/23

1H FY3/24

Change

YoY

721

720

-1

-0.1%

829

910

81

9.7%

Operating revenue(Millions of yen)

689

766

77

11.1%

Operating profit(Millions of yen)

45

63

18

37.7%

Number of funerals
Average price of funerals(Thousands of yen)

Notes: 1. Operating revenue and operating profit are based on segment information.
2. Operating profit is before the allocation of parent company expenses.

19

TARUI Financial Highlights• The number of funerals increased mainly at new funeral halls for small funerals.
• Revenue per funeral decreased, mainly for ordinary funerals, but operating revenue was 2.5% higher than one year
earlier.
• Earnings decreased because of higher operating expenses, mainly personnel expenses and expenses for opening new
funeral halls.

1H FY3/23

1H FY3/24

725

776

51

7.0%

1,111

1,047

-64

-5.8%

Operating revenue(Millions of yen)

869

891

22

2.5%

Operating profit(Millions of yen)

168

159

-9

-4.9%

Number of funerals
Average price of funerals(Thousands of yen)

ChangeNotes: 1. Operating revenue and operating profit are based on segment information.
2. Operating profit is before the allocation of parent company expenses.

YoY

20

FY3/24 Forecasts(Revenue and Earnings/Dividends)

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

21

Revenue and Earnings Forecasts
FY3/24• There are no revisions to the consolidated forecast announced at the beginning of FY3/24.
Forecast lower earnings mainly because of planned up-front expenditures for future growth• Up-front expenses of ¥230 million for opening 8 funeral halls• Increase of ¥620 million in personnel and recruiting expenses to hire people required for expected growth in thenumber of funerals• One-time contribution to FY3/23 earnings of the ¥280 million gain on the sale of the land of the former Takarazuka
funeral hall(Millions of yen)

(1) FY3/24
Forecast

YoY change%

Amount(2) 1H FY3/24
Results(1)-(2)(2) vs. 2H FY3/23%

AmountOperating revenue

22,700

4.8%

1,036

10,407

12,292

6.2%

712

Operating profit

3,570

-7.7%

-298

1,671

1,898

-9.0%

-187

Operating margin

15.7%-2.1pt

16.1%

15.4%

-2.6ptOrdinary profit

3,560

-7.4%

-283

1,684

1,875

-9.8%

-204

Profit2,270-18.4%

-513

1,085

1,184

-24.3%-380

22

Dividend Forecast
FY3/24• No changes to the initial dividend forecast: interim dividend of 23.0 yen per share and year-end dividend of 11.5 yen(after the stock split)→Plan to pay an annual dividend of 34.5 yen (after the stock split), up 2 yen per share from one year earlier(dividend increase for the 8th consecutive year)• Expected dividend payout ratio: 21.4%(Yen)

FY3/19FY3/20FY3/21

FY3/22

FY3/23

Before stock split

After stock split

FY3/24

FY3/24

Annual dividend

57.00

-

33.00

38.00

44.00

46.00 (Forecast)Interim

27.00

30.00

16.00

17.00

21.00

23.00

23.00

Year-end

30.00

16.00

17.00

21.00

23.00

11.50

Payout ratio(consolidated)

23.00 (Forecast)

15.2%

18.8%

23.7%

20.3%

16.7%

21.4%

21.4%

Note 1: SAN HOLDINGS conducted a 2-for-1 common stock split on October 1, 2019.
Note 2: SAN HOLDINGS conducted a 2-for-1 common stock split on October 1, 2023.
Note 3: Forecast payout ratio for FY3/24 was calculated based on the number of treasury shares as of March 31, 2023.

(Forecast)-23

Progress in Medium-term Management Plan

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

Key Goals of the Medium-term Plan

24

Growth of the funeral business Add new funeral halls faster, mainly by using the ENDING HAUS funeral brand that was launched in
March 2023
• Plan to open 8 funeral halls during FY3/24, the second year of the current medium-term plan
The current medium-term plan
• 84 SAN HOLDINGS group funeral halls as of November 2023
The goal is 31 new locations for 3 years(KOEKISHA: 18 in Tokyo area, 40 in Kansai area/ SOU-SEN: 14/ TARUI: 12)
8 in the8 in the firstsecondyear
year

SAN HOLDINGS Group Funeral Halls

The previous medium-term plan
9 locations in 3 years(Locations)

120

TARUI
タルイ

SOU-SEN葬仙

KOEKISHA
公益社

100
80
60
40
20
0

44

45

48

51

53

15 in thethird year

54

57

63

64

67

76

71

71

48

52

84

58

41

42

45

48

12

12

12

12

12

13

14

23

24

27

28

31

33

36

13

13

13

13

12

8

8

10

12

8

10

12
9

9

10

10

10

11

11

11

12

FY3/10FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/2392

FY3/24107

FY3/25

The New Funeral Brand
Funerals handled by professionals at reasonable prices

25

26

Positioning of ENDING HAUS
High
高い

KOEKISHA
A full range of funerals with customized services foreverything from ordinary and family funerals tocorporate events in a variety of sizes, locations andformats

セミオーダーSemi-Orders

TARUI

A lineup of three pre-packaged funerals
A brand solely for family funerals
Reasonable prices and high level of services in relation to costServices possible only at an ENDING HAUS funeral hallTokyo area
首都圏

オーダー
Order

Kansaiarea
近畿圏
Operating areas
出店エリア

Other areas
首都圏・近畿圏以外

Low
安い

Customized
パッケージ
Package/
シンプル
SimplePrice
価格

Plan lineup

プラン
品揃え

Growth of the ENDING HAUS Funeral Hall Network
 Plan to open 2 ENDING HAUS funeral halls in January and February 2024.
 This will increase the number of locations to 6.
KOEKISHA in Kansai area
 ENDING HAUS Daito (Daito, Osaka) opened on March 28, 2023
 ENDING HAUS Osaka Tsurumi (Tsurumi-ku, Osaka) opened on March 28, 2023
 ENDING HAUS Nishiyodogawa (Nishiyodogawa-ku, Osaka) is scheduled to open in
January 2024
 ENDING HAUS Mito (Higashiosaka, Osaka) is scheduled to open in February 2024
KOEKISHA in Tokyo area
 ENDING HAUS Higashiyotsugi (Katsushika-ku, Tokyo) opened on March 28, 2023
 ENDING HAUS Shinkoiwa (Katsushika-ku, Tokyo) opened on March 28, 2023

27

New KOEKISHA Funeral Halls
 Plan to open 2 KOEKISHA funeral halls in January and February 2024.
 This will increase the number of locations to 56.
KOEKISHA in Kansai area
 KOEKISHA Hall in Minoh (Minoh, Osaka) is scheduled to open in January
2024

KOEKISHA in Tokyo area
 Mizonokuchi Hall of KOEKISHA (Takatsu-ku, Kawasaki) is scheduled toopen in February 2024

28

The New 10-Year Vision
Two Initiatives: Funeral Halls in All Areas of Japan29

 To be a source of services that satisfy a broad spectrum of customers, we will expand our operations
from the Kansai/Tokyo/San-in areas to all areas of Japan.

Result(FY3/22)First-year result for
medium-term plan
(FY3/23)

Third-year plan for
medium-term plan
(FY3/25)

After 10 years(FY3/32)210 locations
Funeral Business
Number of Halls

76 locations 84 locations

107 locations

Key Goals of the Medium-term Plan
Growth of the End-of-life Support Business
1. A growing selection of products and services
provided by the end-of-life portal site for seniors

Continuing to add partner companies

2. A growing selection of support services before
and after a funeralStarted a real estate brokerage service30
3. Rehabilitation day-care facilities serving alarge number of people

4 locations, including POSSIBLE Takarazuka Nakayamadera(Hyogo prefecture), which opened in June 2023

4. Meal services for more senior care facilities(Tokyo area in addition to Kansai area)

Meals provided to 8 facilities,
including 2 recently added locations

The New 10-Year Vision
Two Initiatives: Growth of the End-of-life Support Business31

 To contribute to improving our customers’ quality of life, we continue expanding our end-of-life
support business and use the final stage of life for the provision of an even larger range of value by
creating new businesses and services.

Result(FY3/22)First-year result for
medium-term plan
(FY3/23)

Third-year plan for
medium-term plan
(FY3/25)

After 10 years(FY3/32)¥10.0 billion

Sales of End-of-Life
Support Business¥1.5 billion¥1.8 billion¥3.0 billion

32

Key Goals of the Medium-term Plan ESG Management

ESG and the Sustainable Development Goals
Environment

SocialGovernance■Continue to step up CSR activities• Use business operations to play a role in dealing with social issues and other problems.
• Grief care, natural disaster responses and other types of support■Activities to protect the environment• Building a business infrastructure with measures to lower energy use• Activities to help create a sustainable societyKey Goals of the Medium-term Plan ESG Management Social

33

SocialEnhancement of grief care

• Hidamari Club meetings for grief care are a place where family members canreceive support from many sources following a funeral.
Started in December 2003, the Hidamari Club has reached its 20th anniversary andhas more than 1,000 members.

Embalming• Embalming can often return the appearance of the deceased to an almost life-likestate to facilitate a better experience for saying farewell.
• Embalming was performed for may pandemic deaths. (Started in Osaka in November
2022 and in Tokyo in June 2023)

On-site services fornatural disasters• Some employees, including embalmers, are qualified as reserve military
personnel who are called for assistance following a natural disaster. These
individuals help transport people who died during the disaster and provide otherassistance.

International transport• Assistance for dealing with the complex procedures required for theinternational transport of the deceased(1) Transport of the deceased from another country to Japan(2)Transport of the deceased from Japan to another country

Key Goals of the Medium-term Plan ESG Management Environment/Governance 34
Environment
TCFD compliance• Statement of support submitted in October 2022

Use of environmentally
responsible products• Started selling a new eco-coffin in November 2022
• Expanding the product lineup

Use of recyclable materials and • Paper bags, envelopes and other items use recyclable materials
packagingStarted in August 2022
Reduction of GHG emissions• Use of hybrid hearses and transport vehicles; goal is about 80% share in 2024 vs. 30%
in 2021• Increasing use of embalming is lowering the use of dry ice

Energy conservation• Installation of solar panels at 2 funeral halls• Installation of LED lights when building new funeral halls and renovating existing
locations: 15 funeral halls

GovernanceCompliance with internal
controls• Internal audits, compliance training programs

Established effective risk
management system• Risk management activities all year based on a FY action plan

35

Human Resource Management
at the SAN HOLDINGS GroupBe a dependable end-of-life partner by emphasizing with thesenior generation and their family members

36

Basic Concept of Human Resource Management
 SAN HOLDINGS uses human resource management to accomplish its purpose:
Be a dependable end-of-life partner by emphasizing with the senior
generation and their family members.
Growth of corporate value
Higher customer satisfaction
Organizational culture of always
taking on new challenges
Teams that support
ム
self-reliant
actions
Growth as anindividual

Desirable characteristics
Self-reliance

Able to takeactions

Dedication to hospitality
Ability to foster mutual respect

Social value

Economic value

Solve issues involving
Japan’s aging population

Business
growth/Earnings growth

Be a dependable end-of-life partner byemphasizing with the senior generationand their family members

37

The Human Resources Strategy Story
 Accomplishing our purpose by maintaining a culture of always taking on new challenges
IN (Business strategies)

PROCESS (Strategy for human resources)

Corporate (Key strategies)

Strategy for human resources

OUT (Corporate value)

Our vision

Use valueadded,
highquality
services tocontributeto society

Growth of theend-of-life
supportbusiness
A stronger
infrastructure
for Japan's best
services that
achieve
outstanding
customersatisfaction

Recruiting and training

Corporate culture reforms• Recruiting and training for next
generation of senior executives forplanning/management• Recruiting and productivity ofpeople to provide services for
funerals• Recruiting and training formarketing personnel• More grief care support• Upgrade quality management forhigher quality and receipt ofcertifications for service quality• Measures for creating people and anorganization that always take on
new challenges• Workforce and working style
diversity (telework, empowermentof women, jobs for people withdisabilities, other measures)• An organization with a resolutecommitment to compliance

Awareness of and dedication to the corporate philosophy andpurpose• Town meetings for direct communications with employees

Organizational culture of always taking on new challenges(A high level of engagement for all employees)

CS strategy

Make thefuneralbusinessmorecompetitive

Desirable characteristics: Self-reliance, able to take actions,dedication to hospitality

Business
growth for
more
corporate
value

Growth of thefuneralbusiness

Be a dependable end-of-life partner by emphasizing with the senior
generation and their family members

Growth strategy

38

Medium-term Management Plan
Shareholder Distribution Policy(FY3/23-FY3/25)

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

39

Stock Split

 SAN HOLDINGS conducted a 2-for-1 stock split with a record date of September 30, 2023.
Lowering the cost of an investment unit of SAN HOLDINGS stock is expected to increase the stock’s liquidity
and make the stock accessible to a broader range of investors.
Schedule of stock split
Public notice of record date: Monday, September 4, 2023
Record date:
Saturday, September 30, 2023
Effective date:
Sunday, October 1, 2023

*Effectively Friday, September 29, 2023 as September 30 was
a business holiday of the shareholder registry administrator.

Dividend Forecast(Yen)
Annual dividendInterimYear-end
Payout ratio (consolidated)

FY3/19
57.00
27.00
30.00
15.2%

FY3/20
30.00
16.00
18.8%

FY3/21
33.00
16.00
17.00
23.7%

FY3/22
38.00
17.00
21.00
20.3%

FY3/23
44.00
21.00
23.00
16.7%

Before stock split

After stock split

FY3/24

FY3/24

46.00
23.00
23.00
21.4%

23.00
11.50
21.4%

Note: SAN HOLDINGS conducted a 2-for-1 common stock split on October 1, 2019.
Note: SAN HOLDINGS conducted a 2-for-1 common stock split on October 1, 2023. (The current split)

The FY3/24 year-end and annual dividend forecasts announced on May 11, 2023 have been adjusted due to this split,
resulting in no change in these forecasts after reflecting the split.

40

Repurchase of Stock
Our policy on stock repurchase

We position stock repurchase as one way for distributing earnings to shareholders. We will consider
repurchasing stock while taking into account the capital capacity, stock price and other applicable factors.
Repurchase of stock announced on November 9, 2023
(Third repurchase during the current medium-term plan)
Details of repurchase
Type of shares to be repurchased:
Common shares
Total number of shares to be repurchased: Up to 350,000 shares(1.69% of total number of shares outstanding, excluding treasury shares)

Total value of shares to be repurchased:
Repurchase schedule:
Method of repurchase:

Up to ¥350 million
From November 10, 2023 to April 30, 2024
Purchase on the Tokyo Stock Exchange(Previous stock repurchases during the current medium-term plan)
1st Repurchased 193,500 shares for ¥349 million between May 13 and October 18, 2022
2nd Repurchased 157,500 shares for ¥349 million between February 14 and June 13, 2023

41

Shareholder Distribution Policy
Increase distributions to shareholders based on dividend stability
Our goal is to increase the distribution of earnings to shareholders from a medium to long-term perspective.
Dividends reflect consolidated sales and earnings, cash flows, the need to retain earnings for investments for medium to long-term growth,
the need to maintain financial soundness and other factors. Our policy is to increase the dividend consistently even when the businessclimate is challenging based on dividend stability.
Furthermore, we will consider repurchasing stock while taking into account the capital capacity, stock price and other applicable factors.
(Millions of yen)
1,200

Plan to increase thetotal shareholder
distribution ratio

Dividend payout ratio and total distribution ratio
Stockrepurchase
自己株式取得額

配当額
Dividend

Total
distribution ratio (%)
総還元性向（％）

配当性向
Dividend (%)
payout ratio(%)

61.0%

1,000

70.0%

Forecast 8th consecutive
dividend increase

50.3%

49.7%
800

599
600

400

24.5%

35.0%

27.9%
23.6%

300
22.8%

18.8%

200

0

23.7%
17.9%

15.2%

18.8%

224

224

224

224

224

252

280

320

349

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20

20.3%

369

413

FY3/21

FY3/22

50.0%

387

40.0%

30.7%

30.0%

16.7%

21.4%

467

FY3/23

20.0%
10.0%

FY3/24(Forecast)

¥20.0

¥20.0

¥20.0

¥20.0

¥20.0

¥22.5

¥25.0

¥28.5

¥31.0

¥33.0

¥38.0

¥44.0

¥46.0

Dividend
payout ratio 24.5%

27.9%

23.6%

22.8%

61.0%

18.8%

17.9%

15.2%

18.8%

23.7%

20.3%

16.7%

21.4%

DPS

60.0%

0.0%

After stock split
¥34.5

42

Reference Materials

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members

Market Size in the Funeral Business43

 No prospects for significant growth of Japan’s funeral market, but the market is expected to remain relatively steady.
• Revenue per funeral is declining because of smaller funerals and the pandemic.
• The number of deaths in Japan will continue to increase.
(Billions of yen)

Funeral revenue in Japan fell almost 20%
because of the pandemic

1,900
1,767

1,800
1,700

1,754

1,759

1,753

1,765

1,783

1,795

1,812

1,813

After 10 years

1,705

1,695
1,617

1,600
1,506

1,500
1,400
1,300
1,200
1,100
1,000

’10
2010

’11
2011

’12
2012

’13
2013

’14
2014

’15
2015

’16
2016

’17
2017

’18
2018

’19
2019

’20
2020

Source: The Funeral Business Today and Outlook, Yano Research Institute Ltd. (2021 edition)*Funeral revenue is calculated by multiplying average revenue per funeral (including
beverages and courtesy gifts) by the number of funerals (95% of deaths).
*Excludes temple/shrine expenses, cremation, household altars and gravestones

21年
2021
(fct.)
（予測）

～

30年
2030
（予測）
(fct.)

Needs of Customers

44

 Dramatic shifts in the nature of the funeral market resulting from changes in people’s values and preferences
and the increasing speed of the growth of online services.

Changes in values

Diversifying styles for funerals and memorial services because ofchanges in society and values

New funeralformats

 Increasingly diverse views of the role of funerals
because of changes in values involving householdcomposition/relationships among relatives andreligious ceremonies
 Direct cremation; simplecremation
ceremony Same-day cremation
 Non-religious funerals, etc.

 Aging population/fewer children make grave
maintenance difficult and alter values; new viewsof memorial services will be increasing
New memorial Perpetual memorialservice/Simple
service formats
memorial service/Crypt Tree ash scattering/Scattering ofashes/Scattering of ashes in space/Balloon
ash scattering/Other formats

Changes in preferences

Increasing speed of online sector

Shift from traditional,
formal funerals to smalland simple ceremonies

Online/digital sales and marketing
activities are needed as customers use theinternet to look for information

Traditionaland formal

Customers

Shift concerning
funeral stylepreferences

Small and
simpleMarketing activities
closely linked to
specific areas(Conventional
method)Digitalmarketingactivities

Higher quality offuneralsHigher customer
satisfaction

The Competitive Landscape45

 Qualitative changes are significantly altering the competitive dynamics of Japan’s funeral market.

Change Vector 1

Faster funeral hall network expansion
and M&A activity

Large specialist companies

Mutual-aid companies

Change Vector 2More heated competition in thesmall funeral market

Intense competition

Local small/midsize
specialist companies

New competitors

Change Vector 3

Emergence of a matchingbusiness

The Senior Market Growth46

 Japan’s population of seniors is increasing steadily.
・Growth of the senior market will be fueled by the increasing number of seniors and the diversification ofseniors’ life styles.
 Household size is falling as nuclear families increase; more seniors living alone.
・The demand among seniors for support services is expected to grow.
(Thousands of(千世帯)
households)

The increasing pct. of seniors in Japan

(%)

40
35

28.80 29.10 30.00
28.14
27.25
28.44
27.74
26.65

30
25
20

23.02
20.16
12.84 13.32 13.80

15
10

9.11

14.22 14.66

14.90 15.00

17.80 19.20

19.60

36.80

20.20 21.40

8,418
7,959
7,512
6,717

7,000
6,000

5,928

4,700

5,000

Actual←→Estimate
65歳以上
Age 65+

8,963

9,000
8,000

11.08

5
0

32.80
31.20

35.30

The increasing number of single senior households

75歳以上
Age 75+2005 2010 2015 2016 2017 2018 2019 2020 2021 2025 2030 2035 2040 2045
Source: Japan Census (Sep. 15, 2021), Ministry of Internal Affairs andCommunications Estimated Future Population of Japan (as of 2017),
National Institute of Population and Social Security Research

5,075

5,122

3,808

4,000
3,201
3,000

5,045

2015

Age 65+
65歳以上
2020

2025

2030

Age 75+
75歳以上
2035

2040

Source: Japan Census (Sep. 15, 2021), Ministry of Internal Affairs andCommunications Estimated Future Population of Japan (as of 2017),
National Institute of Population and Social Security ResearchBusinesses That Leverage SAN HOLDINGS Group Strengths
We are using strengths and knowledge acquired during 90 years of operations since its inception forgrowth in the funeral and other businesses by expanding the scope of activities in the end-of-life
support business domain.
We provide the end-of-life services that seniors need to enjoy fulfilling lives with confidence as wellas to be a source of support concerning a variety of issues involving people’s lives.
(1) More than 15,000 funerals every year and 84 funeral halls (as of November 2023)
SAN HOLDINGS Group Strengths(2) 315 experienced funeral directors (as of November 2022)(3) An embalming staff of 25 (as of April 2023)(4) Total support extending from the final years to needs after a funeral(5) An end-of-life support business that draws on the extensive knowledge and experienceof the SAN HOLDINGS Group(6) One of Japan’s leaders in the company funeral and farewell event sector(7) Operation of the Hidamari Club for grief care and other support following a funeral

47

The New 10-Year Vision

Our Two Initiatives: Funeral Halls in All Areas of Japan

1. To be a source of services that satisfy a broad spectrum ofcustomers, we will expand our operations from theKansai/Tokyo/San-in areas to all areas of Japan.

From the Kansai/Tokyo/San-in areas
to all areas of Japan

48

The New 10-Year Vision

Our Two Initiatives: Growth of the End-of-Life Support Business2. To contribute to improving our customers’ quality of life, we
continue expanding our end-of-life support business and use
the final stage of life for the provision of an even larger rangeof value by creating new businesses and services.
Individuals (seniors, family members)
Active stage

Pre-funeral

FuneralPost-funeral

Information about services for different stages of life
More services for a more fulfilling
life for seniors

FuneralMore services to support families
after the funeral

Business domain of
conventional funeralcompanies

The SAN HOLDINGS end-of-life support business domain

Build a business model for becoming a “senior life support partner” that no other company can match

49

The End-of-Life Support Business

50

This business contributes to society as a source of services and products needed for people to enjoy afulfilling life style with confidence during the final stage of life.
Activities include support for daily activities, preparations for this final stage and a variety of other support.
Preliminary
consultations

Information about
nursing care facilities

Help withhousehold chores

Pre-Funeral Trust
Funds

Before funeral
Funeral service seminars

End-of-life notebook

FuneralAfter funeral
Ash scattering

GravesMedium-term Plan Capital Allocation51

 Large investments are planned for business growth. During the plan’s three years, operating

cash flows are expected to be more than ¥8.8 billion. Investments involving existing facilities
will be ¥1.0 to ¥1.5 billion and investments for growth will be more than ¥4.5 billion.

Operating CF of
about ¥8.8 billion
during the
medium-term plan
(Reference)
Includes cumulative
depreciation of
about ¥3.0 billion

Investments in existing
facilities
About ¥1.0 to ¥1.5 billion

Investments for growthMore than ¥4.5 billion

Shareholder
distributions

The basic policy is to hold renovations of existing
facilities to below depreciation.

Organic growth
Rapidly open more funeral halls
Strengthen the end-of-life businessInorganic growth
M&A, alliances
Dividends
Maintain stability while aiming for dividend growth
Stock repurchases
Stock repurchase decisions will be flexibly madebased on cash flows, the stock price and otherconsiderations.

(Reference) E-Mail Service (Started on March 1, 2023)
The e-mail service provides registered users with press
releases and other corporate news, TV programs,
updates of official SAN HOLDINGS notes and otherinformation. Visit the SAN HOLDINGS website to registerfor this service.

https://www.san-hd.co.jp/

52

53

(Reference) Businesses of Five Group Companies

Funeral services /End-of-Life Support
KOEKISHA
Funeral services /End-of-Life Support

Funeral services /End-of-Life Support
TARUI

Support required for funeral services/End-of-Life Support

SAN HOLDINGSGroup

Excel Support
Service

SOU-SEN

Life Forward

Operation of a portal site that provides
information about end-of-life service
providers in all areas of Japan(Reference) Company Overview and Industry Characteristics

54

Company Overview
Name:
Established:
Capital:Listing:

SAN HOLDINGS, INC.
October 2, 1944 (Founded in August 1932)¥2,568.15 million
Tokyo Stock Exchange, Prime Market
Stock code 9628

Operating revenue: ¥21,663 million (FY3/23)

84 halls in
total

Sanin region As of November
14 halls
2023(includes 1 joint hall)

Current Areas of Operations
Tokyo area (Tokyo, Kanagawa)
Kansai area (Osaka, Hyogo, Nara)
San-in region (Tottori, Shimane)Tokyo and Kanagawa
18 halls

The Funeral Industry
Japan has no regulatory agency and no
regulations for funeral companies
Reference: There were about 1.39 million deaths in Japan in 2022
and this is expected to increase to about 1.7 million by
2040. In 2022, funeral revenue was estimated to beabout ¥1,607 billion (1.37 million deaths x ¥1,173,000).

Hyogo (west of Kobe)
12 halls

Osaka, Nara,Hyogo
40 halls(includes 1 joint hall)(Reference) The Corporate Philosophy and Purpose of the SAN HOLDINGS Group
Purpose

Corporate Philosophy

Our Mission
A partner for making people’s lives
even more fulfilling and enjoyable• Instructions for inheritance oftangible/intangible assets

Eliminating concerns
by providing support
for the last stage oflife while seniors arestill active• Consultations for a broad
range of concerns

Our Vision
An organization that is a source of joy and happiness in people's lives
by meeting their needs with sincerity
An organization capable of sustained growth by creating new forms ofvalue and offering services with substantial added value
An organization where people are highly motivated and have theinitiative to constantly take on new challenges
Our Value
Live and grow based on one's own values and initiative
Constantly tackle new challenges without fear of change andcontinue to evolve

Our purpose

Be a dependable end-of-life
partner by emphasizing with thesenior generation and theirfamily members

Funerals thatmeet allexpectations ofmourners

Total support for all issues involving thefinal stage of life

Assistance for
dealing withgrief andmoving forward• Grief care
• Consultations with family
members about many subjects• Funerals that reflect the wishes
of individuals and family
members• Support for family members ofthe deceased• Assistance for inheritancearrangements• Support for deaths resulting
from a natural disaster or
occurring outside Japan

56

Cautions

Forecasts of future performance in these materials are based on assumption
judged to be valid and information available to the management of SAN
HOLDINGS at the time the materials were prepared. Actual results may differ
materially from the forecasts.

Inquires: Corporate Planning Department, SAN HOLDINGS, INC.
TEL: +(81)6-6226-0038

November 20, 2023
Live webcasts of results of operations for the first half ofthe fiscal year ending March 31, 2024
Copyright 2023 SAN HOLDINGS, Inc. All Rights Reserved.

Be a dependable end-of-life partner by emphasizing with thesenior generation and their family members