First Half of FY2018(Ended September 30, 2017)

Financial Results Presentation

November 9, 2017
Keihan Holdings Co., Ltd.
(Tokyo Stock Exchange 1st / Securities Code: 9045 http:// www. keihan-holdings.co.jp/)

Table of Contents

Overview of the First Half of FY2018 Financial Results… 1

FY2018 Forecasts…11

Progress Status of Keihan Group’s Medium-Term
Management Plan “Bravely Pursuing Creation”…16◆Notes on forecasts◆
Descriptions of business forecasts and future prospects are based on current information and certain assumptions about factors that
may affect future business.
Actual results may differ due to various factors that may arise in the future.

Overview of the First Half of FY2018
Financial Results

Consolidated Statements of Income
Overview of the First
Half of FY2018(year-on-yearcomparison)

Both revenue and profits increased thanks to the strong passenger revenue of Keihan Electric
Railway Co., Ltd. in the transportation business and contributions from the consolidation of Zero
Corporation in the real estate business.
(Millions of yen)

Operating revenue
Operating income

1H FY2017
Results

1H FY2018
Results

141,157

143,752

ChangeMain factors of changes

2,594(1.8%)-1,575(-9.1%)

17,316

15,740

891

962

70

1,904

1,848

-55

16,303

14,854-1,449(-8.9%)

1,162

3,858

2,695

547

418

-129

12,046

12,532486(4.0%)

Depreciation

8,861

9,298

437

EBITDA

26,17725,039-1,138(-4.3%)

Non-operating
incomeNon-operating
expenses
Ordinary income
Extraordinary
incomeExtraordinary
lossesProfit attributable toowners of parent

1H FY2018(projections
released in
April)

138,000
Refer to Segment Information.

13,0005,752(4.2%)
2,740(21.1%)

12,0002,854(23.8%)

10,0002,532(25.3%)

Gain on the sale of affiliated shares 3,164* EBITDA: Operating income +Depreciation

Number of consolidated subsidiaries: 39 (down two companies year on year), Number of equity-method affiliates: 2 (up one company year on year)

2

ChangeSegment Information
Both revenue and profits fell for the transportation business, while revenue grew and profits
shrank for the real estate business, retail business, leisure and service business, and others.
(Millions of yen)

1H FY2017
Results

1H FY2018
Results

Total operating revenue

141,157

143,752

2,594

1.8%

Total operating income

17,316

15,740-1,575-9.1%

Operating revenue

47,356

46,595

-760

-1.6%

Operating income

6,541

5,993

-547

-8.4%

Operating revenue

37,39140,026

2,635

7.0%

Operating income

6,422

6,230

-191

-3.0%

Retaildistribution

Operating revenue

47,711

48,609897

1.9%Operating income

1,058

975

-83

-7.9%

Leisure andservice

Operating revenue

15,94915,9511

0.0%

Operating income

2,935

2,914

-20

-0.7%

Operating revenue

906

929

23

2.6%

Operating income

67

12

-55

-81.6%

Operating revenue-8,157-8,360-202－

Operating income

291

-385

-676

－

Change (%)

ChangeTransportation

Real estate

OthersAdjustments

3Segment Information (Breakdown)[Consolidated companies] 40 companies [Equity-method affiliates] 2 companies
Transportation

Keihan Electric Railway Co., Ltd., Keifuku Electric Railroad Co., Ltd., Keihan Bus Co., Ltd. and 12 other companies

Real estate

Keihan Holdings Co., Ltd., Keihan Dentetsu Real Estate Co., Ltd., Keihan Building Co., Ltd., Zero Corporation and 7
other companies

Retail distribution

Keihan Department Stores Co., Ltd., Keihan The Store Co., Ltd., Keihan Ryutsu Systems Co., Ltd.,
Biomarket Co., Ltd. and 1 another company

Leisure and service

Hotel Keihan Co., Ltd., Keihan Hotels & Resorts, Biwako Kisen Steamship Co., Ltd. and 5 other companies

OthersKeihan Card Co., Ltd.

<Operating revenue by segment><Operating income by segment>

Others
JPY0.9 billion (0.6%)

Others
JPY0.0 billion (0.1%)

Leisure andService
JPY15.9 billion (10.5%)

Retail distribution
JPY48.6 billion (32.0%)

Transportation
JPY46.5 billion (30.6%)

Leisure andService
JPY2.9 billion(18.1%)

Retail distribution
JPY0.9 billion (6.0%)

Real estate
JPY40.0 billion (26.3%)

Real estate
JPY6.2 billion (38.6%)

Note: Breakdown of operating revenue and operating income by segment, including intersegment transactions.

4

Transportation
JPY5.9 billion(37.2%)

Segment Information (Transportation)
Railway businessKeihan Electric Railway’s transportation revenue increased due to the commencement of the Premium Car service in August as well as
an increase in the number of commuter pass passengers and the number of tourists to the Kyoto area. However, overall revenue fell dueto the significant impact of the revenue decrease caused by the assignment of shares of Keihan Life Support Co., Ltd. Profits also
declined reflecting factors such as an increase in depreciation costs at Keihan Electric Railway.
Bus business
Revenue shrank due to reductions in income from chartered bus and regular passenger bus services resulting from business downsizing.
In addition, profits slid due to factors such as rises in fuel, oil and fat expenses.
(Millions of yen)

Operating revenue

Operating income

1H FY2017
Results

1H FY2018
Results

Railway

38,914

38,151-762

Bus

13,486

13,478Elimination-5,045

Transportation total

47,356

Change(%)

Change(%)

1H FY2017
Results

1H FY2018
Results

-2.0%

5,588

5,228

-359

-6.4%

-8

-0.1%

938

760

-178

-19.0%-5,035

10

－

14

4

-9

－

46,595

-760

-1.6%

6,541

5,993

-547

-8.4%

ChangeChange<< Operating results for transportation (Keihan Electric Railway) >>Number of passengers (Thousands of people)

Passenger transportation revenue (Millions of yen)

1H FY2017
Results

1H FY2018
Results

ChangeChange(%)

1H FY2017
Results

1H FY2018
Results

ChangeChange(%)

Non-commuter
passesCommuter passes

75,29475,603308

0.4

17,387

17,47083

0.5

72,12673,241

1,114

1.5

8,288

8,418

130

1.6

Total

147,421

148,845

1,423

1.0

25,67525,888213

0.8* Major factors affecting passenger revenue (estimates)
Increase in commuter pass revenue thanks to the improved employment situation and the like (+JPY130 million); increase in the number of tourists to the
Kyoto area (+JPY124 million); and increase in revenue due to the launch of the Premium Car service (+JPY52 million).

5

Segment Information (Real Estate)
Real estate sales business
Revenue grew overall thanks to the sale of the apartment units Fine City Oji-Kamiya River & Forest, combined with the contribution
from Zero Corporation, which became a consolidated subsidiary. However, profits shrank due to the reaction to the highly profitablesale of detached properties in the same half-term of the previous year.
Real estate leasing business
Both revenue and profits grew due to the acquisition of the JCB Sapporo Higashi Building and the greater revenue from Keihan Yodo
Logistics Yard.
Construction business
Both revenue and profits rose on the back of the strong performance in the construction materials sales business in the logistics facility
construction work of Keihan Sangyo Co., Ltd.

(Millions of yen)

Operating revenue

Operating income

1H FY2017
Results

1H FY2018
Results

31,30632,628

1,322

Real estate sales

19,053

20,396

Real estateleasing service

10,395

Other businesses

Change(%)

Change(%)

1H FY2017
Results

1H FY2018
Results

4.2%

6,662

6,497

-165

-2.5%

1,342

7.0%

1,568

1,195

-373

-23.8%

10,543

147

1.4%

4,784

4,999

215

4.5%

1,857

1,689

-168

-9.0%

309

301

-7

-2.5%

Construction

8,124

9,558

1,434

17.7%

-249

-127

121

－

Elimination-2,039-2,160

-121

－

8

-138

-147

－

Real estate total

37,39140,026

2,635

7.0％

6,422

6,230

-191

-3.0％

Real estate

Change6

ChangeSegment Information (Retail distribution)
Department stores
Both revenue and profits fell due to the weak results of fresh foods, dairy foods, and women’s apparel and sundries, in addition to thereaction to the large orders placed in sales to outside customers in the previous year.
Stores
Revenue grew due to the full-term contribution from the FREST Nagao Store, which opened in March this year, and the impact of the
opening of the SWEETS BOX Shapo Funabashi store. Profits, however, were almost unchanged from the same half-term of theprevious year due to the opening costs of new stores.
Shopping mall management
Revenue increased due to the reopening of the Keihan Mall following its upgrade in March this year and the opening of KYOTO
TOWER SANDO in April. Profits, however, were almost unchanged from the same half-term of the previous year due partly to anincrease in rents following the new mall openings.
(Millions of yen)

Operating revenue

Operating income
Change(%)

1H FY2017
Results

1H FY2018
Results

Department store

23,29523,079

-216

Store

14,386

15,797

Shopping mall
management

6,896

OthersChange(%)

1H FY2017
Results

1H FY2018
Results

Change

-0.9%

-242

-308

-66

－

1,411

9.8%

440

439

-1

-0.3%

7,397

500

7.3%

856

857

0

0.0%

4,548

4,487

-60

-1.3％

28

-17

-46

－

Elimination-1,414-2,152

-737

－

-25

5

31

－

Retail distribution
total

47,711

48,609

897

1.9%

1,058

975

-83

-7.9%

Change<<Department Stores: Sales by store>>(Millions of yen)Moriguchi Store

Hirakata Store

Kyobashi Store

Kuzuha Store

Suminodo Store

1H FY2018 Results

9,681

4,354

2,095

9,947

3,064
3,163

3,579

1H FY2017 Results

3,297

4,426

2,162

Change

-265

-99

281

-71

-66

7

Segment Information (Leisure & Service)
Hotel businessDespite the opening of Hotel Keihan Yodoyabashi in July, both revenue and profits shrank due to the significant impact of
the fall in revenue following the partial renovation work of Kyoto Century Hotel.
(Millions of yen)

Operating revenue

Operating income
Change(%)

1H FY2017
Results

1H FY2018
Results

Hotel
LeisureElimination

13,7562,283-90

13,701
2,337
-87

-54
54
2

Leisure & Service
total

15,94915,951

1

Change1H FY2018
Results

-0.4%
2.4%
－

2,685
295
-45

2,483
419
10

-201
124
56

-7.5
42.2
－

0.0%

2,935

2,914

-20

-0.7

Kyoto Grande

Kyobashi Grande

Change<< Hotel occupancy rates >>Hotel Keihan
Tenmabashi

SapporoAsakusa

Yodoyabashi

1H FY2018 Results

98.2%

97.8%

98.0%

95.5%

99.3%

98.6%

1H FY2017 Results

96.0%

97.6%

96.9%

96.8%

97.5%

Change(Reference)
Number of rooms

2.2pt

0.2pt

1.1pt

－%
－pt

2.5pt

1.1pt

315

200

178

210

320

214

Hotel Keihan

Keihan Hotels & Resorts
Kyoto Century
Hotel
96.1%
92.3%

1H FY2018 Results

97.4%

97.0%

Kyoto Tower
Hotel
98.5%

1H FY2017 Results

93.0%

95.3%

97.4%

98.1%

94.3%

80.8%

Change(Reference)
Number of rooms

4.4pt

1.7pt

1.1pt

-2.0pt-2.0pt13.1pt

641

330

162

126

219

171

Universal Tower

Universal City

* Hotel Keihan Yodoyabashi opened on July 28, 2017.

8

Change(%)

1H FY2017
Results

Kyoto Tower
Hotel Annex

Biwako Hotel
93.9%

Consolidated Balance Sheets(Millions of yen)

FY2017
Results

1H FY2018
Results

ChangeMain factors of changes

Current assets

157,655

171,819

14,164

Land and buildings for sale
Expenses on uncompleted construction
Notes and accounts receivable+11,098+6,217-3,664Non-current assets

521,976

519,932-2,044

Property, plant and equipment
Intangible assets-4,414+1,434

679,631

691,752

12,120Current liabilities

136,217

144,410

8,192

Current portion of bonds
Short-term loans payable
Accounts payable+10,000+6,604-10,726

Long-term liabilities

339,959

332,254-7,704Bonds
Long-term loans payable-10,032+4,516

Total liabilities

476,176

476,664488

Net assets

203,455

215,087

11,632Retained earnings* Equity capital ratio 30.6% (+1.1pt)+10,420

Total liabilities and net assets

679,631

691,752

12,120Interest-bearing debt at endof fiscal period

314,539

326,627

12,087Loans payable
Short-term bonds
Bonds+11,120+1,000-32

Total assets* Interest-bearing debt: Loans payable + bonds + short-term bonds

9

Consolidated Statements of Cash Flows(Millions of yen)

1H FY2017
Results

1H FY2018
Results

ChangeMain factors of changes

Cash flows from operating activities

10,717

6,607-4,110

Increase in expenses due to an increase in inventories-2,846
Decrease in income due to the collection of
accounts receivable-1,460Cash flows from investing activities-13,831-11,559

2,271

Increase in income due to the sale ofsubsidiary shares

13,846

Decrease in the repayment amount ofinterest-bearing liabilities
Decrease in the acquisition amount oftreasury shares

Cash flows from financing activities-11,325

2,520

Net increase (decrease) in cash andcash equivalents-14,439-2,432

12,007

Cash and cash equivalents at beginningof interim period

29,372

18,324-11,048

Cash and cash equivalents at end ofinterim period

14,933

15,892958

10+2,826+9,426+4,350FY2018 Forecasts

Consolidated Statement of Income(Performance Forecast)
Overview of full-year
performance forecasts for
FY2018 (compared withthe forecasts released in
April 2017)

The retail business is projected to show weak results, including poor results anticipated for department stores. On
the other hand, in the real estate business, a larger number of apartment units than initially projected is expected tobe sold, in addition to the contribution from Zero Corporation, which became a new consolidated subsidiary.
Furthermore, the transportation business is producing steady results helped by the Premium Car service. Reflecting
these situations, performance forecasts are revised upward from the forecasts released in April.
Operating revenue is expected to reach a record high, and profit attributable to owners of parent is projected to beat the same level as that of the previous year, which marked the highest level ever.
(Millions of yen)

New FY2018
FY2018 fullyear forecasts
full-year
released in April
forecasts

ChangeChange(%)

FY2017
Results

ChangeChange(%)

Operating revenue

300,000

315,000

15,0005.0%

302,917

12,082

4.0%

Operating income

27,00030,000

3,000

11.1%

32,343-2,343-7.2%

Ordinary income

24,50028,000

3,500

14.3%

30,335-2,335-7.7%

Profit attributable toowners of parent

19,00022,000

3,000

15.8%

22,636

-636

-2.8%

Capital expenditure

60,80058,700-2,100-3.5%

39,173

19,52649.8%

Depreciation

19,00019,100100

0.5%

18,074

1,025

5.7%

EBITDA

46,00049,100

3,100

6.7%

50,418-1,318-2.6%Interest-bearing debt

329,000

327,000-2,000-0.6%

314,539

12,460

4.0%Interest-bearing debt/
EBITDA multiple (Times)

7.15

6.66

-0.49

－

6.24

0.42

－

Net interest-bearing debt/
EBITDA multiple (Times)

6.76

6.33

-0.43

－

5.87

0.46

－

12

Segment Information(Performance Forecasts)■ Operating Revenue/Operating Income(Millions of yen)

FY2018 fullyear forecasts New FY2018
full-year
released inforecasts
April

ChangeMain factors of changes

FY2017
Results

ChangeTotal operating revenue

300,000

315,000

15,000302,917

12,082

Total operating income

27,00030,0003,000

32,343-2,343

94,404-1,904

9,976

-776

• Consolidation of Zero Corporation in
the real estate sales business and anincrease in the number of apartment
units sold, among others.

94,014

11,685

14,491-91• Weak sales of fresh foods, dairy foods,
and women’s apparel and sundries indepartment stores, among others.

98,493

2,506

2,636

163

30,801

198

4,755

-55

Transportation

Real estate

Retaildistribution
Leisure andservice

OthersAdjustments

Operating revenue

92,10092,500400

Operating income

8,500

9,200

700

Operating revenue

88,500105,700

17,200Operating income

12,50014,4001,900Operating revenue

103,600

101,000-2,600Operating income

3,000

2,800

-200

• Increase in the passenger transportation
revenue in the railway business due toan increase in the number of commuter
pass passengers and an increase in thenumber of tourists to the Kyoto area,
among others.
• Fall in power expenses in the railway
business• Strong performance of the Hotel
Keihan Universal Tower in the hotelbusiness, among others.
• Cost reduction following a review of
personnel and other expenses.

Operating revenue

30,90031,000100

Operating income

3,900

4,700

800

Operating revenue

1,800

1,800

－

1,792

7

Operating income

0

0

－

74

-74

Operating revenue-16,900-17,000-100-16,588-411

Operating income-900-1,100-200

408-1,50813

Segment Information(Performance Forecasts)■ Capital Expenditure(Millions of yen)

FY2018 full-year
forecasts releasedin April

New FY2018
full-year
forecasts

Transportation

16,80018,3001,500

17,690609

Real estate

18,40021,1002,700

16,553

4,546

Retail distribution

2,400

2,200

-200

2,341

-141

Leisure and service

2,800

2,200

-600

1,877

322

0

0

－

34

-34

Administration of entire
company and others

20,40014,900-5,500675

14,224

Total capital expenditure

60,80058,700-2,10039,173

19,526

Others

FY2017
Results

ChangeChange■ EBITDA(Millions of yen)

FY2018 full-year
forecasts releasedin April

New FY2018
full-year
forecasts

Transportation

19,80020,500700

20,699-199

Real estate

17,40019,4002,000

19,224

175

Retail distribution

4,400

4,200

-200

3,913

286

Leisure and service

5,000

5,800

800

5,857

-57

0

0

－

104

-104

-600

-800

-200

618

-1,41846,00049,1003,100

50,418-1,318OthersAdministration of entire
company and others
Total EBITDA

14FY2017
Results

ChangeChangeOperating Results for Transportation(Performance Forecasts)<< Forecast of operating results for transportation (Keihan Electric Railway) >>■ Number of passengers
FY2018 fullNew FY2018
year forecasts
full-year
released inforecasts
April

ChangeChange (%)

FY2017
Results

ChangeChange (%)(Thousands ofpeople)(Thousands ofpeople)(Thousands ofpeople)％(Thousands ofpeople)(Thousands ofpeople)％Non-commuter
passes150,575

152,157

1,582

1.1

150,735

1,421

0.9

Commuter passes

140,784

142,530

1,746

1.2

140,351

2,178

1.6

Total

291,359

294,687

3,328

1.1

291,087

3,599

1.2

■ Passenger transportation revenue
FY2018 fullNew FY2018
year forecasts
full-year
released inforecasts
April

ChangeChange (%)

FY2017
Results

ChangeChange (%)(Millions ofyen)(Millions ofyen)(Millions ofyen)％(Millions ofyen)(Millions ofyen)％

Non-commuter
passes35,02035,235215

0.6

34,853381

1.1

Commuter passes

16,36016,565205

1.3

16,307

257

1.6

Total

51,38051,800420

0.851,160

639

1.3

15

Progress Status of KeihanGroup’s Medium-Term
Management Plan
“Bravely Pursuing Creation”

Keihan Group’s Medium-Term Management Plan
(FY2016 – FY2018)

Basic Policy
Keihan Group’s Determination to Take on
Challenges at the “Second Foundation Stage”– Bravely Pursuing Creation –Main Strategies

Strengthen
the Management Foundation

Achieve new growth through the creation ofsightseeing opportunities
Revitalize the areas along the Keihan Railway
lines—efforts to redesign the areas along the
Keihan Railway lines
Create contents to enhance the “value ofliving”
Establish a “steadfast group management”
styleContinuous measures to revitalize railway
transportation toward regaining the glory ofrailway transportation
Real estate business as the engine of thegroup’s growth
Retail distribution business to enhance thevalue of “community” and “living”
Hotel and leisure businesses to createsightseeing opportunities

Quantitative Targets
Consolidated operating income: JPY22 billion or more; consolidated EBITDA: JPY41 billion or more; net
consolidated interest-bearing liabilities-to-EBITDA ratio: 8.5x or less17

Overview of Keihan Group’s Medium-Term
Management Plan (Main Actions Taken)
Qualitative goals
Achieve new growth throughthe creation ofsightseeing opportunities

Main
Strategies

Revitalize the areas along the
Keihan Railway lines—efforts
to redesign the areas along the
Keihan Railway lines
Create contents to enhance the“value of living”

Main actions taken

•
•

•
•

•

New hotel project in front of Kyoto Station
Renovation of Kyoto Century Hotel
Starting the construction of a new hotel••

Redevelopment of Hirakatashi Station and its surrounding areas
Make proposals to Hirakata City to promptly build and revitalize a community and promote settlement.
Participation in the Hirakatashi Station area revitalization council and conclusion of a triparty agreement for prompt
implementation of the redevelopment of the areas around Hirakatashi Station(Keihan Holdings Co., Ltd., Hirakata City and SO-TWO Inc.)
Creation of contents under the theme, BIOSTYLE
BIOSTYLE Project: Started the construction of a commercial complex in Shijo-Kawaramachi, Kyoto.

Establish a “steadfast groupmanagement” style•

Transition to a holding company system

Continuous measures torevitalize railway
transportation towardregaining the glory of railway
transportation•••

Introduced a new ATS(automatic train stop).
Upgraded Gion-shijo Station.
Improvement of the connection between Randen Sai
Station and Hankyu Saiin Station•

Real estate business as theengine of the group’s growth•

Made Osaka Merchandise Mart Corporation (currently
Keihan Building) a wholly-owned subsidiary.
Opened Keihan Yodo Logistics Yard.

••

Strengthen theManagement
Foundation•

Development of Kyoto Tower as a global base for tourism
Opening of Kansai Tourist Information Center Kyoto
Opening of KYOTO TOWER SANDO•

Introduced the next-generation, comprehensive search portal,
Keihan Group Bus NaviIntroduction of Premium Cars—special carriages withreserved seats•

Established Keihan Private REIT, Inc.
Acquisition of buildings (JCB Sapporo Higashi Building and
Keihan Yokohama Building)Acquisition of Zero Corporation as a consolidated subsidiary

Retail distribution business toenhance the value of“community” and “living”••

Upgraded Keihan Department Store Hirakata.
Opened a new Shin-Naniwa Daishokudo food hall aspart of the development project of in-station facilities ofShin-Osaka Station.

•••

Acquisition of cafe co. as a subsidiary
Upgraded the Keihan Mall.
Opened FREST Nagao Store.

Hotel and leisure businesses
to create sightseeing
opportunities••

Renovated hotels.
Introduced “Grande", a new brand of Hotel Keihan.

•

Opening of Hotel Keihan Yodoyabashi

18

Overview of Keihan Group’s Medium-Term Management
Plan (Actual Results of Quantitative Target Items)
Consolidated operating income(In 100
million yen)
400

300

294

323

315

300

200

100

Bravely Pursuing Creation
0

FY20152014年度FY2016
2015年度FY20172016年度FY20182017年度

（実績）

（実績）

（実績）

（予想）

(Actual)(Actual)(Actual)Bravely Pursuing Creation(Forecast)

19

Introduction of New Railway Services:
Premium Cars and Liners
Premium Cars: special carriages with reserved seats
Convert the sixth car of each of ten eight-car 8000 Keihan limited express trains into a PremiumCar. With guaranteed seats, which is great for commuting and sightseeing, the carriage provides ahigh-quality moving space. With a special attendant for the carriage, we offer a service that is one
level higher.
• Investment amount: Approx. JPY 1.6 billion• Service started on: August 20, 2017
• Price: 400 or 500 yen* The price will differ depending on the travel distance.
The railway fare is required separately.
• Number of seats: 40• How to purchase tickets: A Premium Car ticket can be purchased through a special website orat stations where limited express trains stop.
⇒ Since their launch, they have achieved strong results especially during weekday rush hours
and on weekends and national holidays.

Liner Train: All seats reserved during weekday morning rush hours
We introduced a liner train—a new service that guarantees every passenger a seat during
the morning rush hours.
The non-stop service to Kyobashi with reserved seats make commuting more comfortable.
• Service started on: August 21, 2017

• Price: 300 yen *The railway fare is required separately.

• Operating hours: Two trains (from Hirakatashi andKuzuha Stations) to Yodoyabashi Station
during morning rush hours on weekdays• Number of seats: Approx. 400

20• How to purchase tickets: A liner ticket can be purchased througha special website or at stations where limited
express trains stop.

Growth in Passenger Revenue
Keihan Electric Railway

Keihan Electric Railway
Transport revenue(In JPY million)
52,000Main factors causing fluctuations inpassenger revenue

51,000• Increase in the number of tourists to the Kyoto area
(Increase in the number of tourists visiting
the Kyoto area such as the Gion/Higashiyama area
and Fushimi Inari Taisha Shrine)

50,00049,000• Increase due to the Premium Car service
48,000Measures to capture inbound tourists

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018(Forecast)◆ Other Group companies(Railway companies)

Sales situation of special pass,
Sightseeing Pass

Keifuku Electric Railroad• Since its launch in August 2015,
Transport revenue
its sales have grown steadily,currently selling more than 10,000 passes each month. 120

Overseas promotion (Latest activities)• Large Business Meeting in Taiwan (Kaohsiung,
Taichung and Taipei)(September 5 to 9; Eight Keihan Group companies
participated)• VISIT JAPAN Travel & MICE Mart 2017
(September 21 to 23; Seven Keihan Group companies
participated), among others

21

Eizan Electric Railway
Transport revenue
120

110

110

100

100

90

FY2013 FY2018(Forecast)90

FY2013

FY2018(Forecast)* Based on the figures for FY2013 as 100.

Redevelopment of Hirakatashi Station and
Its Surrounding Areas
Toward the redevelopment of surrounding areas
Concentrate urban functions on a site adjacent to the station
To redesign and revitalize the areas along the Keihan Railway lines with a focus on improving the “value of living” in theareas centered on Hirakatashi Station, we will actively make proposals on the redevelopment of surrounding areas of thestation promoted by Hirakata City to facilitate the redevelopment of the entire area.
• Neatly concentrate urban functions in a site surrounded by the Keihan Main Line and Keihan Katano Line (Delta land).
• Create a hybrid and convenient facility directly connected to a station to promote the prompt implementation ofcommunity building.
• Play a part in creating an attractive community and revitalize the areas surrounding Hirakatashi Station.

Progress status• October 2016
Keihan Holdings Co., Ltd., Hirakata City and SOTWO Inc. signed an agreement for the prompt
implementation of the redevelopment of the areas
around Hirakatashi Station based on tripartite
collaboration.
• August 2017
The Kitakawachi Prefectural Residents’ Center and
the Kitaosaka Chamber of Commerce & Industry
have expressed their intention to consider relocating
to the delta land.
• Consultations are underway with Hirakata City to
implement a redevelopment plan to build a complex
that will contain businesses, offices, for-lease
housing and so forth on the delta land based on therelocation of the two entities.

22

Redevelopment of Hirakatashi Station and
Its Surrounding Areas
Make Hirakatashi Station a “station that people always want touse and want to visit once”
As part of the highest priority project of the core strategy,“revitalization of the areas along the Keihan Railway lines,” we will
revitalize Hirakatashi Station, which boasts the third highest numberof passengers on the Keihan lines, as a station that befits the face ofa core city.
In collaboration with Ryohin Keikaku Co., Ltd., we have designed
the central exit area on the second floor of Hirakatashi Station andcommercial facilities as an integral space under the concept of “astation that people always want to use and want to visit once.” On
the second floor of the Keihan Department Hirakata Store, MUJI
will open a store. In addition, new store types will be introduced tothe in-station building.
Image of the station after the upgrade• Construction work will be completed in around May 2018 for thesecond floor of the Keihan Department Store and part of theconcourse outside the ticket gates, and by the end of 2018 for theconcourse inside the ticket gates and for in-station shops.

■ Profile of Hirakata City
• Population: 404,324 (as of September 2017)• Great medical system as a healthy medicalcare city• Has a cluster of administrative organs fornorthern areas of Osaka• Five universities located in the city
• Became a core city in 2014

■ Profile of Hirakatashi Station• Number of passengers using Hirakatashi Stationeach day: 91,782 (third largest number among all
stations on the Keihan lines)• Approximately 15 minutes to Kyobashi, Osaka• Approximately 27 minutes to Gion-shijo, Kyoto

23Acquisition of Zero Corporation
as a Consolidated Subsidiary
Executed an M&A to strengthen the real estate sales business
In July 2017, we purchased all the shares of Zero
Corporation Co., Ltd., which was engaged in the built-forsale housing and order-made building business mainly in
Kyoto City, and made it our consolidated subsidiary.
The company’s strength is the housing development knowhow it has developed in Kyoto, which has many densely
built areas and strict landscape regulations. Its high-quality,
reasonably priced building services and generous after
services have garnered support from many customers.
⇒ We will enhance its detached-house business and use its
know-how to create a variety of communities reflectingchanges in the market environment and thecharacteristics of particular areas in places such as theestablished suburbs along the Keihan lines to increase
the value of areas along the Keihan lines.

Hana-rikyu, Saga Nison-in

Profile of Zero Corporation Co., Ltd.
• Established on: December 17, 1982
• Business: Design, building and sales of custom-made andbuilt-for-sale homes; real estate brokerage service;
renovation; and development and sale of apartment units• Business results(In JPY million)

Sales

FY2015FY2016FY2017

11,381

12,86912,157• Number of houses sold: 6,632 (cumulative total as ofAugust 2017)

Built Kobe House Kitano apartment units, which were soldby Keihan Dentetsu Real Estate.

24

Development of Area in Front of Kyoto Station
as a Global Tourism Base
New hotel project in front of Kyoto Station
As part of the highest priority project of the core strategy,“creation of sightseeing opportunities,” we will build a hotel in theformer site of Kyoto Dai-ni Tower Hotel, which closed in January
2016, and make it a flagship hotel of the Keihan Group to cater tothe global market. The hotel will be connected to the adjacent
Kyoto Century Hotel in the lower levels (first basement to third
floors) and will be opened as an integral facility.
• Name: THE THOUSAND KYOTO• Scheduled opening: January 2019
• Building size: One basement floor and nine above-ground floors• Total floor area: 22,063 square meters• Guest rooms: 222 rooms (on the third to ninth floors)• Facilities: Reception hall, restaurants/cafes, chapel, bridal salon,spa, sport gym, parking space

Hotel facade (image)

THE THOUSAND KYOTO（閉館）

Kyoto Century Hotel
Spa Suite Room

Garden Suite Room25

Overall image

Expansion of Accommodation Facilities in Kyoto

Opening a new type of accommodation facility in
Kyoto Sanjo Minami Building

Higashinotoin Dori

Hachijo Dori

Kawaramachi DoriHotel Keihan Kyoto Grande

Toji Dori26

Tofukuji
StationHotel Keihan Kyoto Hachijoguchi(provisional name)Kujo DoriKujo Station

Hotel facade (image)

Oike DoriTozai Subway Line

Kyoto Shiyakusho-mae Station
Kawaramachi DoriSanjo Station

Keihan Sanjo-minami
Building

Gion-shijo
Station
Kawaramachi Station

Hankyu Kyoto Line

BIOSTYLE
Shijo Kawaramachi Project

Guest room (image)

KeihanSanjo-kita
Building

Sanjo Dori

Kamogawa River

To diversify our hotel business, we are renovating Kyoto Sanjo Minami Building tooperate a new type of accommodation facility that combines accommodation space andcafe business. We will offer this space as a female-only accommodation facility and “aplace where people can get together and interact.”• Name:Cafetel Kyoto Sanjo for Ladies (provisional name)• Scheduled
Spring in 2018
opening:• Address:
173 Shingokencho (Yamatoojidori Sanjo Sagaru) Higashiyama-ku,
Kyoto City
Directly connected to Keihan Railway Sanjo Station• Size:Three above-ground floors with a total floor area of approx. 922 square
meters• Guest21 rooms (65 beds) (planned)
rooms:• Facility:
A cafe will be opened on the first floor.

Keihan Main Line

Tokaido Shinkansen Line

Kamogawa River

Kyoto Station

Keihan Oto Line• Guest rooms:

Kyoto Century Hotel

Tokaido Main Line

Keihan Main Line• Size:Autumn in 2018
5-1 Higashikujo Minamisannocho, Minami-ku, Kyoto City
8 minutes on foot from the Hachijo Exit of JR Kyoto Station
Five above-ground floors with a total floor area of approx.
8,360 square meters
234 rooms (scheduled)

Shiokoji Dori

Karasuma Subway Line• Scheduled opening:• Address:

Kyoto Tower Hotel
Annex
Kyoto Tower

Aburanokoji Dori

Targeting families and groups visiting Kyoto for sightseeing, the hotel will beequipped with a large bath, a tourist information corner, and parking space forlarge buses, among other facilities. We will enhance our earning power in thearea in front of Kyoto Station.

Shichijo
StationShichijo Dori

Kintetsu Kyoto Line

Opening of “Hotel Keihan Kyoto Hachijoguchi(provisional name)”

Shijo DoriCreate contents to enhance the “value of living”◆ Create contents under the theme “BIOSTYLE”
Start the construction of a commercial complex in
Shijo-Kawaramachi, Kyoto• Address: Inaricho (Kawaramachi-dori Shijo Sagaru),
Shimogyo-ku, Kyoto City
• Scheduled to open in: Spring 2019
• Building size: Nine above-ground floors; total floor area of 27, 337
square meters
1st to 2nd floors: Eat Zone (e.g., marché, restaurants)
3rd floor: Care Zone (e.g., spa, cosmetics)
4th to 9th floors: Stay Zone (a hotel with approx. 170 guest rooms)

Facility’s facade (image)

Entry to new businesses

Establishment of BIOSTYLE Co.,Ltd.

• Consider directly operating a beauty salon business• Consider independently developing, manufacturing, andselling organic skin care, hair care, and body care products,
soaps, and the like• Plan to expand content creation starting from Shijo-Kawaramachi• Established a subsidiary to promote the BIOSTYLE
Project (June 21)

Activities to spread BIOSTYLE[Outdoor event focusing on foods in the BIOSTYLE: marché’s
BIO-ICHI (market) in front of Sanjo Station—delicious market
for the soul and body]• A regular event launched in 2016
(Third event: November 11–12, 2017 Stalls: Approx. 30)

27

Activities in Each Business: Transportation Business
To offer a pleasant transport experience to many inbound tourists and others
Upgrade of Fushimi-inari Station

Installation of automatic foreign
currency exchange machines

The station is a gateway to the Fushimi Inari Taisha Shrine,
which attracts tourists as an international tourist site. Many
We installed automatic foreign currency
tourists including inbound tourists have used this station in
exchange machines as a new service forrecent years (the number of passengers using the station each
inbound tourists whose number is expected tocontinue to grow in the future.
day has risen by 72% from FY2013).
We are renovating the station• Installed in:
September 2017
building and platforms, making• Available
English, Chinese,
the toilet facilities barrier free, andlanguages:
Korean and Japanese
beautifying them under the concept• Currencies
12 currencies
that “a station that evokes an image
offered:of Senbon Torii (thousands of torii gates)(Image)• Installation
Gion-shijo Station andof Fushimi Inari Taisha Shrine.”site:
Sanjo Station• Scheduled completion: Early December 2017

Keihan Bus: Participated in a verification
experiment of driverless technology
Keihan Bus participated in a verification experimentfollowing the introduction of the “Keihanna Public
Road Experimental Platform (K-PEP)” to conduct
driving tests of driverless vehicles on public roads in
Kansai Science City (Keihanna Science City), which
extends over Kyoto, Osaka and Nara Prefectures.

Company D: Traffic monitoring system

Company A: External sensors
Company E: One-way method carsharing

Company G: Road-to-vehiclecommunication

Company F: Driver monitoring
Company B: Self-driving buses
Company C: Internal sensors

Source: “Example of verification experiments in which different companies
participate” by Public Foundation of Kansai Research institute.

* K-PEP…Keihanna Public road Experimental Platform

28

Activities in Each Business: Real Estate Business
Main condominiums to be sold in the term ended March 31, 2018 and thereafter
Property name, location, number of units for saleFine City SENRI TSUKUMODAI(Suita City, Osaka Prefecture; 250 units*)
Fine City HIRAKATA(Hirakata City, Osaka Prefecture; 203 units)
The Parkhouse Nakanoshima Tower*(Kita-ku, Osaka City; 894 units*)
Fine City Oji-Kamiya River & Forest(Adachi-ku, Tokyo; 319 units)
Fine City Higashi-Matsudo Mall & Residence(Matsudo City, Chiba Prefecture; 382 units*)
Fine City Yokohama Egasaki RENAI*(Tsurumi-ku, Yokohama City; 338 units*)
Fine City Sapporo Kotoni(Nishi-ku, Sapporo City; 84 units)
Grand Sunriant Ropponmatsu*(Chuo-ku, Fukuoka City; 52 units*)

Scheduled to bepostedin

FY 2018
FY 2018
FY 2018
FY 2018

Property name, location, number of units for sale

The Fine Tower Umeda Toyosaki*(Kita-ku, Osaka City; 312 units*)
Kitahama Mid Tower*(Chuo-ku, Osaka City; 311 units*)
Center Marks Tower*(Higashi-ku, Fukuoka City; 283 units*)
Fine Residence Sumiyoshi Yamate(Higashinada-ku, Kobe City; 22 units)

Scheduled to bepostedin

FY 2019
Fy 2019
FY 2019
FY 2019

FY 2018
FY 2018
FY 2018
FY 2018* Joint project; the number of units is the total number of units.
The number of units and the timing of posting of the above
properties may change.

The Fine Tower Umeda Toyosaki

29

Kitahama Mid Tower

Activities in Each Business: Real Estate BusinessNew development project in the real estate sales businessAs part of our efforts to expand non-apartment business, we have taken up a new
development project to renovate and sell a resort hotel in the real estate sales business.
• Property name: Hotel Karuizawa 1130 (Eleven-thirty)• Address:• Completed in:

1453-2 Kambara, Tsumagoi-mura, Agatsuma-gun, Gunma
Approx. 40 minutes by car from JR Hokuriku Shinkansen
Karuizawa Station• Building size:

1996• Guest rooms:

Three basement floors andseven above-ground floors• Total floor area: 33,940.13 square meters
233 rooms

Acquisition of new properties to strengthen the real estate leasing businessTo achieve future growth and build a stable revenue basis, our policy is to continue making strategic andproactive investments to increase business size and expand business areas. Under this policy, we acquired
two properties in the first half of FY2018.

JCB Sapporo Higashi Building• Completed in: October 1966

• Acquisition date: June 30, 2017
• Address:

1-1-1 Minami-ichijo-nishi, Chuo-ku, Sapporo City • Building size: One basement floor andseven above-ground floors
2 minutes on foot from Sapporo Municipal
Subway Tozai Line/Toho Line Odori Station• Total floor
9,062.04 square meters
area:

JCB Sapporo
Higashi Building

Keihan Yokohama Building• Acquisition date: August 9, 2017

• Completed in:

February 1982

• Address:• Building size:

Two basement floors and
11 above-ground floors

2-22 Honcho, Naka-ku, Yokohama City,
Kanagawa
3 minutes on foot from Yokohama Minatomirai
Railway Minatomirai Line Bashamichi Station
and Nihon-odori Station30• Total floor area: 16,191.4 square meters
Keihan Yokohama
Building

Activities in Each Business: Retail BusinessOpening of KYOTO TOWER SANDO
Renewed the floor design to make it more suitable for a global
base that welcomes domestic and overseas tourists as well as
local customers. The shops range from classic souvenir shops
to well-established local stores waiting to be discovered.
• Opening date:
April 14, 2017
• Number of shops: 55• Floor structure:

First basement floor: Food hallFirst floor: Kyoto’s souvenir shops
Second floor: Participation-typeworkshops⇒ Their results have steadily exceeded expectations since
the opening of the building.

Further improvement to the quality of
in-station shopping businessOpening of a special inari zushi shop,
Senbon Inari, in Fushimi-inari Station

Other new openings

The shop opened on April 5 to become a new specialty shopof Fushimi-inari, a popular spot for inbound tourists. Theirproducts have been sold at JR Kyoto Station’s Gift Kiosks
since August. Senbon Inariplans to open more shops inmajor terminal stations
mainly along the Keihan
railway lines.

31• Opening of Dean & Deluca Cafe Shin-Osaka in Osaka
Municipal Subway Midosuji Line Shin-Osaka Station(July 28)
As part of the “Midosuji Line Shin-Osaka Station Instation Business” commissioned by the Osaka Municipal
Transportation Bureau, the shop was opened as the second
shop following the opening of Shin-Naniwa Daishokudo
in March 2016.

Activities in Each Business: Hotel BusinessOpening of Hotel Keihan Yodoyabashi
Accommodation-only hotel in an excellent location with goodaccess to major spots in Osaka City and direct train routes totourist spots such as Osaka Castle and Kyoto. The occupancy ratio
has been surpassing projections.

• Opening date: July 28, 2017
• Address:
2-4-6 Kitahama, Chuo-ku, Osaka City
• Building size: 11 above-ground floors/210 rooms

Scheduled future opening
Opening of “Hotel Keihan Nagoya Sakae(provisional name)”
The first Keihan Group hotel to be opened in Nagoya. It will belocated in the “Sakae/Nishiki area,” a main district in Nagoya,with the aim of capturing demand from business customers as well
as serving as a base for sightseeing and leisure.
• Scheduled
opening:

Spring 2020

• Address:

3-2-1 Nishiki, Naka-ku, Nagoya City
3 minutes on foot from Nagoya
Municipal Subway Sakura-doriLine Marunouchi Station and
Hisaya-odori Station

Hisaya-odori Station
Marunouchi Station
TV tower

Sakae Station
Fushimi Station

Hotel Keihan Nagoya Sakae(provisional name)
Nagoya Expressway Route 2 Higashiyama Route• Building size: 13 above-ground floors• Total floor
area:

Sotobori Dori⇒ Hotel Keihan is working on increasing its hotels
mainly in locations in front of stations in major cities.
It now has a total of 12 hotels. It aims to have over
15 directly operated hotels throughout Japan by 2020.

Approx. 8,200 square meters• Guest rooms: 259 rooms (planned)
Hotel facade (image)32

Activities in Each Business: Leisure Business
Activities to create sightseeing opportunities along “waterways”
Participation in the Lake Biwa Canal Restoration Project
We began participating in the restoration project in 2014, and continue to takepart in the “Council for Creating Attractions in Areas along the Lake Biwa
Canal” established in September ahead of the full-fledged operation of thewaterway transportation service. Our group company, Biwako Kisen, iscommissioned to operate this service.
• Full-fledged operation will start in: Spring 2018 (scheduled)

Promotion to revitalize waterway transportation on the
Yodogawa River: Romantic journey on the Yodogawa River
In collaboration with the Yodogawa River Office, Regional Development Bureau
for the Kinki Region, Ministry of Land, Infrastructure, Transport and Tourism, weare promoting the revitalization of waterway transportation on the Yodogawa
River and increasing the attraction of towns alongside the river so as to attract
more visitors and facilitate exchanges. The tourist boat, Himawari (sunflower),
will connect the Tenmabashi/Hachikenya Boat Docks and the Hirakata Boat Dock.
• Period: From September; mainly on the second
Sunday of each month• Operator: Osaka Aqua Bus Ltd.

Art sightseeing boat service
In collaboration with Mr. Masao Hatayama, a budding artist from Osaka, weare trying to create a new tourism resource originating in Osaka bydecorating the Osaka Aqua Bus sightseeing ship, the Aqualiner.
• Name: HATApopLINER• Operated by: Osaka Aqua Bus Ltd.

33

Progress Status of Major Strategic
Investment Projects
Medium -Term Management Plan
“Bravely Pursuing Creation”

Main Strategies

FY2016Creation of sightseeing
opportunities

New hotel in the area in front of Kyoto Station
Upgrade of Kyoto Tower

Revitalization of areas
along the Keihan
railway lines

Redevelopment of Hirakatashi Station andsurrounding areas

Contents creation

Development of BIOSTYLE, a commercial
complex in Shijo-Kawaramachi
Premium Cars

Strengthen the Management Foundation

Transportation

Real estate

FY2017FY2019FY2018● Construction starts●(2017)
Scheduled opening of THE THOUSAND KYOTO(January 2019)● Opening of a tourism information office (June 2015)● Opening of KYOTO TOWER SANDO (April 2017)● Participation in the Hirakatashi Station area revitalization council
Conclusion of a triparty agreement (October 2016)
Hirakatashi Station upgrade●(around May and end of 2018)●
Scheduled opening(spring 2019)● Construction starts(2017)● Introduction (August 2017)

Eizan Electric Railway’s tourist train

Introduction (March 2018) ●Keifuku Arashiyama Station upgrade

Opening of First Cabin Kyoto Arashiyama ●(March 2018)

Keihan Yodo Logistics Yard

● Opening (April 2016)

Toranomon 1-chome district Type-1 Urban Area Redevelopment Project

Expansion of leasing business (acquisition ofproperties)● Construction starts (FY2017)● Scheduled opening(FY2020)● Keihan Shijo Kawaramachi Building (March 2016)● JCB Sapporo Higashi Building (June 2017)● Keihan Yokohama Building (August 2017)

FREST Nagao Store● Opening (March 2017)

Keihan Mall upgrade● Keihan Mall upgrade (March 2017)

Retail distribution
UpgradeLeisure and service

New openings/upgradesof hotels

Opening of accommodationonly and accommodationfocused hotels
Opening of new types of hotels

34● Kyoto Century Hotel/Hotel Keihan Kyoto (March 2016)● Kyoto Tower Hotel Annex (March 2017)● Hotel Keihan Yodoyabashi (July 2017)
Hotel Keihan Kyoto Hachijoguchi (autumn 2018) ●Hotel Keihan Tsukiji Ginza Grande (autumn 2018) ●Hotel Keihan Nagoya Sakae (spring 2020)
Cafetel Kyoto Sanjo for Ladies (spring 2018)●●