A Message to Shareholders

We remain committed to developing and providing
high-value-added services that anticipate social change andenhancing productivity and profitability across the SECOM Group
with the aim of growing together with society.

Our mission and SECOM’s Philosophy
We see our mission as helping to achieve a society freesociety as a whole. The SECOM Group Code of Employee

from concerns. Guiding our efforts to fulfill this mission

Conduct is a compilation of standards developed based on

are SECOM’s Philosophy, which has been handed downbusiness management know-how accumulated throughsince our establishment and provides an essential spiritualinteraction with a diverse range of customers over our history

anchor for Group employees and the entire SECOM Group,that must be observed by all SECOM Group employees

and the SECOM Group Code of Employee Conduct, which

regardless of job or rank.

governs the actions of employees around the world.

Consolidated operating results

adherence to the SECOM Group Code of Employee Conduct,with the status quo and a commitment to doing what is

we continue striving to foster a corporate climate andIn the fiscal year ended March 31, 2020, the Japanesegeospatial information services, BPO and ICT services, andappropriate. The first element of the philosophy expresses

culture, as well as to motivate employees and encourage

economy remained on a moderate upswing, underpinned

real estate and other services businesses. Thanks to increases

our determination to offer innovative services and systems

them to approach their jobs in a manner that is consistentby favorable corporate earnings and improved employment

in all segments, consolidated net sales and operatingby challenging accepted norms, while the second calls forwith our commitment to doing what is appropriate. Throughlevels. Nonetheless, uncertainties persisted regarding therevenue in the period under review advanced 4.4%, or

judging the legitimacy of our actions by examining whether

such efforts, we aim to ensure our ability to grow together

trade war between the United States and the People’s¥49.1 billion, to ¥1,160.7 billion. Despite the impact of

they are just, fair and beneficial not only to SECOM but towith society and further enhance our corporate value.

Republic of China (PRC), fluctuations in global financial andforward-looking investments to reinforce the Company’s

capital markets, and the impact of natural disasters and an

operating foundation with the aim of ensuring sustainable

increase in Japan’s consumption tax rate. In recent months,

growth, operating income rose 5.5%, or ¥6.9 billion, to

the COVID-19 pandemic has further complicated the¥130.6 billion, bolstered by operating income growth insituation, inflicting significant damage on economies acrossthe fire protection services, BPO and ICT services, geospatial

the globe.

information services, real estate and other services, andMegatrends such as demographic change, technologicalpromising human resources in the fiscal years ended March

Against this backdrop, we pressed forward with ongoing

Megatrends, the evolution of social imperatives and initiatives to promote future growth

medical services segments, as well as by a smaller operating

evolution, increasingly severe environmental issues, and31, 2019 and 2020, with the resulting increase in costs

efforts to realize our Social System Industry vision, in line

loss in the insurance services segment. Nonetheless, owing to

the shift of the global economic center and urbanizationand expenses expected to have an impact on income ofwith our goal of providing safety and peace of mind, as wella ¥139 million loss on private equity investments, compared

continue to drive the evolution of social imperatives, as wellapproximately ¥10 billion annually.

as making life more comfortable and convenient, wheneverwith a ¥4.7 billion gain on such investments in the fiscal

as to amplify uncertainties in our operating environment.

and wherever necessary, for anyone and everyone. We

year ended March 31, 2019, together with an increase in

Accordingly, we are working to create the ANSHIN Platform, asecurity service core systems, as well as on introducing artifi-

continued to concentrate on extending high-grade services

income taxes that reflected a larger reversal of the valuation

service infrastructure designed to provide services that delivercial intelligence (AI), the Internet of Things (IoT) and robotic

and systems optimized to meet the increasingly diverse andallowance in the preceding period, net income attributableseamless peace of mind to anyone and everyone, wheneverprocess automation (RPA). By developing new systems

sophisticated needs of customers in our security services,

to SECOM CO., LTD., decreased 2.8%, or ¥2.6 billion, toand wherever necessary, guided by the SECOM Group’s

through such investments, we will seek to boost operationalfire protection services, medical services, insurance services,¥87.1 billion.

Vision for 2030, which is to be a company that is capable ofquality and efficiency, as well as to improve capital efficiency.

delivering enduring peace of mind in an ever-changing society

At the same time, we are also pursuing a strategy of collabo-

by keeping abreast or where possible ahead of the times. In

ration, which emphasizes working with partner companies

May 2018, we devised the SECOM Group Road Map 2022 to

who share our philosophy. Initiatives such as SECOM Openclarify the principal challenges we must address by the fiscal

Lab enable us to capitalize on proposals for technologicalyear ending March 31, 2023, to achieve this vision, namely,

development and business collaboration from partner com-technological advances and a declining labor force.

panies in Japan and overseas in the development of various

Enhancing returns to shareholders

4

By encouraging awareness of SECOM’s Philosophy and

SECOM’s Philosophy emphasizes a refusal to be content

Investment in systems centers on building next-generation

Seeing the provision of fair returns to shareholders as a

distribution of profits. At the Ordinary General Meeting

crucial management task, we determine our consolidatedof Shareholders on June 25, 2020, the payment of a year-

dividend payout ratio and internal reserves based on an

end dividend of ¥85.00 per share was approved. As aforward-looking investments in systems and humanlished the SECOM DESIGN FACTORY brand, which will beoverall assessment of efforts to expand our businesses

consequence, dividends for the full term—the record dates

resources, that is, in initiatives aimed at leveraging advanced

used for collaborative projects that seek to accelerate growth

and trends in our consolidated operating performance,

for which fall in the period under review—amounted totechnologies and ensuring SECOM remains the choice ofand the creation of customer and social value.

in line with our policy of ensuring a consistent and stable¥170.00, up ¥5.00 from the previous fiscal year.

SECOM REPORT 2020

The SECOM Group Road Map 2022 calls for focused,

SECOM products and services. In December 2019, we estab-

SECOM REPORT 2020

5

A Message to Shareholders

Investments in human resources centers on active efforts toour recruitment of frontline staff, as well as to raise employee

first of these was to launch projects in the PRC and Thailand

secure individuals with the high-level technical skills necessary

satisfaction, including through the creation of positive work

aimed at developing systems suited to local needs thattools by upgrading our administrative IT systems andto work in IT, which will be key to our future growth, as wellenvironments, to bolster our competitiveness in the security

incorporate advanced technologies. In the PRC, we establishedreviewing diverse business processes to raise operating

as individuals with the skills necessary to propel the expansion

services and other businesses.

an innovation center in Shanghai where young employees

efficiency and optimize costs. We have formulated anplay a central role in advancing the creation of new services,

investment and execution plan under which we are graduallyworking in collaboration with local companies. In Thailand,

introducing new systems and achieving greater operational

we launched home security services and are formulating

efficiency. This effort is spearheaded by our newly integrated

growth strategies based on meticulous market research. Going

and fortified corporate headquarters’ information systems

forward, we will explore ways to effectively apply know-

department. Reviews of business processes are conducted

how gained through these projects to efforts to expand ourby managers in each department, who are tasked with

operations in other countries and territories.

identifying issues and taking ownership thereof, therebyof our overseas businesses. We are also investing to reinforce

Initiatives in the period under review and ongoing investments in growth
To achieve the goals of the SECOM Group Road Map 2022,

To improve productivity, we are advancing initiatives that

improving employee awareness.

we continue to actively take advantage of new technologies

utilizes AI, IoT and other information technologies (IT)—and know-how to create and provide high-value-added

we sought to enhance our services to accommodate

reflect our belief that for SECOM digital transformation (DX)services. In the fiscal year ended March 31, 2020, our efforts

increasingly diverse data center needs. To this end,means leveraging data and digital technologies to resolve

administration of SECOM Group companies. Having

centered on expanding remote monitoring services that assist

we opened new data centers in Japan’s Kansai region.

issues challenging companies and society at large. Theseestablished solid communications with individual CEOs andwith care for seniors living alone, reinforcing our BPO andAnticipating that many companies will accelerate efforts

include capitalizing on AI and fifth-generation (5G) mobile

managers, we are promoting the delegation of authority

ICT services business, strengthening our overseas operations

to make use of cloud-based and other external systems,

communications technologies to increase customer value andfor day-to-day management, respecting each company’s

and improving productivity, making significant strides on all

we also resolved to enlarge our data center in Tokyo,

promote the active development and provision of innovative

strategies while facilitating agile, effective management

four fronts.

with new facilities scheduled to come online in 2025.

services and products that enhance the efficiency of frontlineof the Group as a whole. In addition, we are promoting

We are also working to improve productivity in the

Recognizing that needs for assistance with care for seniors

We will continue to expand our data center business,business processes. We are also introducing programs that

personnel exchanges within the SECOM Group and otherliving alone vary depending on age group and family structure,recognizing the importance of disaster-resistant data

make use of virtual reality (VR) technologies into in-houseinitiatives aimed at strengthening efforts to improve

we added a number of new selections to our lineup of remote

centers as key components of a robust, resilient social

training for frontline staff to improve safety and skills.

Groupwide competitiveness.

monitoring services. In addition to our mainstay SECOM

infrastructure.

Home Security and SECOM My Doctor Watch, available asAs Japan’s labor force continues to decline, the need toan option to SECOM Home Security subscribers, we beganrealize meaningful work style reforms and improve employee

offering the SECOM Senior Care Phone Service, an emergency

productivity will remain common themes for companies in all

monitoring service that combines emergency medical alert,

industries. Against this backdrop, we expect our BPO services

health consultation and safety confirmation functions, andbusiness to continue seeing stable growth. Accordingly, we

We continue to operate in an environment rocked by the

succeeded in minimizing the impact on our provision

Mago Channel with SECOM, a new service that encourages

are stepping up the use of advanced technologies with theevolution of social imperatives, driven by megatrends andof services. That said, the current crisis has given us acommunication with parents living apart while providing

objective of offering distinctively SECOM BPO services that

increasing uncertainties. Conditions have been further

renewed awareness and we have embarked on a review of

unstructured monitoring. Looking ahead, we will further

deliver safety and peace of mind and in so doing respondcomplicated by COVID-19, which has brought fundamental

measures implemented with the aim of achieving further

cultivate demand from individual subscribers by creating andto demand arising from the need to rely on others, helping

changes to society, including business practices, consumer

improvements. For example, our sales efforts center on

introducing innovative services that make use of domestic andcustomers implement work style reforms and address the

behavior and work styles. With many of these changes likely

face-to-face interaction and close personal attention to

overseas technologies.

challenges of a shrinking labor force.

to remain even after the pandemic has eased, companies

customers; however, once a state of emergency had beenmust respond effectively to survive and thrive in what isdeclared in Japan we had no choice but to refrain fromemerging as a “new normal.”face-to-face contact. This experience has prompted us to

To reinforce our BPO and ICT services business, we actively

6

expanded use of financial technology (“fintech”), which

On another front, we are advancing the use of digital

Unlike in Japan, the population of which is expected toThriving in a new normal

proposed such services to security services subscribers in line

continue shrinking, we expect our businesses in overseas

with our abiding resolve to extend distinctly SECOM services

markets to see high growth. We are thus taking strategicthat deliver safety and peace of mind. With the increased use

steps to strengthen our overseas operations with the goal of

security systems and other recurring revenue–based

promoting the development of products that do not rely onof advanced digital technologies and cloud-based services—boosting business in overseas markets to 10% of consolidated

businesses, the impact of COVID-19 on revenue overface-to-face sales and building an organized, proposal-based

as evidenced by, for example, the financial services industry’s

revenue, up from the current level of approximately 4%. The

the short term has been relatively minor. We have also

sales configuration that makes effective use of IT. We are also

SECOM REPORT 2020

Because our business portfolio is dominated by on-line

seek ways to create an even more stable business model by

SECOM REPORT 2020

7

A Message to Shareholders

leveraging experience gained through the promotion ofcloud-based services that ensure safe and secure operations.

independently. To this end, we seek to maximize employees’

long-term targets for the reduction of greenhouse gas

teleworking and efforts to upgrade and further digitize our

These include employee attendance management andcapabilities and encourage them to fulfill their potential byemissions. These initiatives earned designation by the Tokyoadministrative IT system.

safety confirmation services, services that fortify information

creating a virtuous circle rooted in employee job satisfaction

prefectural government as a business demonstrating particu-

security and services that facilitate the digitization ofand stepping up the promotion of initiatives in line with ourlar excellence in the implementation of initiatives to counterdocumentation.

Tri-ion initiative, which seeks to ensure that SECOM’s

global warming. Seeking to further our goal of helping toPhilosophy fully penetrates every aspect of our operations.

achieve sustainability for society, in July 2019 we announced

At the same time, new business practices and consumer
behavior are creating new market needs and opportunities
for us to contribute to society. For example, the need for

In medical services, we saw the launch of online

security for offices has risen, owing to increases in the

diagnostics, an idea that had somewhat stalled for several

number of hours during which offices are empty or only

years. We expect the expansion of telemedicine using

recognize the importance of governance, of each and every

Climate-related Financial Disclosures (TCFD), pledging tominimally staffed because of efforts to rotate work schedules

advanced ICT to contribute substantially to society in theemployee discharging his or her duties in good faith andadhere to the TCFD’s framework for companies to discloseand disperse staff over multiple locations. In addition, withyears ahead.

in keeping with the spirit of related laws. We thus viewthe financial impacts of climate changes on their businesses.

a greater number of around-the-clock convenience stores

Although many measures implemented in recent months

Our core business is security services. As such, we

compliance as an integral component of our day-to-day

Our day-to-day business activities, into which we

shifting to shorter working hours, needs for security systems

were initially designed to curb the spread of COVID-

operations. All employees are required to act in accordance

incorporate consideration for the expansion of businesswith monitoring for intruders, refrigerated storage malfunc-

19, recognition of the practicality and efficiency of new

with the SECOM Group Code of Employee Conduct and theopportunities and the reduction of business risks, aretions and fires is outpacing that for security systems designed

work arrangements has grown thanks to rapid advances

Behavioral Guidelines Based on SECOM’s Philosophy and to

structured to both facilitate sustainable growth and resolve

for stores that are always open, which center on emergency

in digitization and the use of ICT. This trend underscores

ensure compliance. Maintaining confidentiality is also critical

ESG-related issues. To phrase it another way, we believealerts and surveillance cameras. Given the higher risk of

expectations that new forms of economic and social activity

to the provision of security services. We have establishedthat increasing corporate value by expanding our business

infection with cash, cashless payment is becoming moreand new lifestyles will emerge and represents the seed of aa policy and rules for the handling of various types ofactivities directly improves our ability to address ESG-

widely accepted, another trend that we must address.

wave of significant social change that has overtaken us in

information that are applicable to all SECOM employees andrelated issues, which in turn enables us to contribute to therecent months.

promote the scrupulous protection of data and information.

achievement of the United Nations’ Sustainable Development

We work actively to reinforce our corporate governance

Goals (SDGs).

In the market for home security services, requests thatpeople refrain from traveling and other factors made it

Major disasters such as the COVID-19 pandemic can cause

difficult to visit parents and other family members living

anxiety and distress for homes, individuals, companies andsystem, recognizing that a robust configuration is crucial forapart, underpinning rising demand for services that assist

society as a whole, driving a desire for greater safety andrelated measures to have teeth. We are also taking steps

through our business activities, and the fact that judging

with care for seniors living alone. With more people working

peace of mind. Our business is built on the commitment andto increase the diversity and effectiveness of our Board of

our actions are beneficial to society is the foundation of

at home and attending online classes, we anticipate greater

efforts of each and every SECOM employee to remain close

Directors, including appointing a female outside director.

everything we do, we are committed to providing services

demand for more functional home security, as well as new

to our customers and provide services that respond to their

We believe that protecting the environment is essential

and conducting our operations in a manner that helps

demand for services that facilitate the secure online ordering,needs, an approach that continues to earn customers’ trust.

to our ability to attain our goal of delivering security andrealize a safe and secure society to pass down to ourdelivery and receipt of food and other daily necessities.

We believe that we have a mission and a responsibility tosupporting comfortable lifestyles. We thus incorporate envi-

children and grandchildren. These efforts have earned solid

In the area of BPO and ICT services, we are seeing

stand at the forefront of this wave and play a vital part inronmental conservation into all of our business activities. For

marks, evidenced by the fact that SECOM has been selected

promoting social change.

example, because we provide on-line security system equip-

as a constituent of all four ESG investment indices forment to security services subscribers on a rental basis, we are

Japanese equities used by Japan’s Government Pension

able to collect all installed equipment after use, recycle what

Investment Fund (GPIF).* Looking ahead, we will continue

can be repaired and reused, and appropriately dispose ofworking to enhance our provision of ESG- and sustainability-

what cannot, a zero–resource waste business model that

related information to our diverse stakeholders.

growing demand for contact center services. In addition,
the growing prevalence of telework is driving up needs for

Promoting environmental, social and governance (ESG)–related initiatives

dates back half a century. In our security services business,
which uses a significant number of service vehicles, we

8

our support for the recommendations of the Task Force on

Since our establishment, we have sought to fulfill ourare committed to delivering satisfaction and inspiration

largely completed the planned introduction of fuel-efficient

responsibility to society through our business activities,

that exceed customers’ expectations. To bolster employees’

vehicles. Going forward, we will upgrade to next-generation

acknowledging the importance of sustainability for

motivation, we endeavor to encourage a managerial mind-

fuel-efficient vehicles with a reduced environmental impact.

ourselves and for society. The key to our efforts to further

set, that is, to foster employees who understand our

In our data center business, which uses a considerable

enhance corporate value is having human resources who

mission and are capable of forming judgments and acting

amount of electric power, we have set medium- andSECOM REPORT 2020

In line with our basic policy of contributing to society* The four indexes used by the GPIF are the FTSE Blossom Japan Index, the MSCIJapan ESG Select Leaders Index, the MSCI Japan Empowering Women Index(WIN) and the S&P/JPX Carbon Efficient Index.

SECOM REPORT 2020

9

A Message to Shareholders

The challenge of creating new value
Operating in an environment characterized by significant

We will continue working to improve corporate value by

upheaval, dramatic change and rising uncertainty,

adhering to SECOM’s Philosophy with the aim of responding

compounded by the unpredictable impact of COVID-19 on

to the expectations of our shareholders by maintaining a

global economic and business conditions, we will continue

stable dividend payout ratio of between 40% and 45%,

working to extend services that deliver seamless peace ofas set forth in the SECOM Group Road Map for 2022. In

mind. To fulfil this mission, ongoing investment will bepromoting such initiatives, we will remain aware of ourcritical. During the investment phase of the SECOM Groupultimate goals of achieving the SECOM Group’s Vision forRoad Map 2022, we actively promoted focused investment in

2030 and realizing a society free from concerns by tirelessly

systems and human resources. Currently, we have a number

pursuing innovation in our services.

of promising potential investments under consideration.

The Olympic and Paralympic Games Tokyo 2020 have

Accordingly, beginning in the fiscal year ending March 31,

officially been rescheduled and will now begin on July 23,

2021, we will explore priorities while continuing to promote

2021. We are committed to preparing ourselves even better

investments in efforts to reinforce our operating foundation,

to contribute to the success of the games next year.

as well as in growth. This will require us to secure sufficient
capital assets.

We look forward to the ongoing support and guidance ofshareholders in all of our endeavors to expand and enhancethe operations of the SECOM Group.
June 25, 2020

10

Makoto Iida

Yasuo Nakayama

Ichiro Ozeki

Founder

Chairman and
Representative Director

President andRepresentative Director

SECOM REPORT 2020

Responding to COVID-19

An effective crisis management system that protects customers and employeesWe extend our deepest sympathies to everyone who has been affected by the COVID-19 crisis and our gratitude to
medical professionals and others who are working at considerable danger to themselves to help curb the spread of
the pandemic.
The Basic Policies for Novel Coronavirus Disease Control published by Japan’s government designates our medical, security,
building maintenance, data center and insurance services, among others, as social infrastructure necessary for safety andsecurity and requested their continuation even while the country was under a state of emergency. Against this backdrop,
we believe that the greatest contribution we can make to society is to do our utmost to maintain services at the maximum
level possible while keeping the number of clerical staff and sales people working onsite to the minimum level necessary. In
addition, the doctors, nurses and other staff at our 20 partner hospitals in Japan and Sakra World Hospital in India areamong the many medical professionals who continue to work in extremely harsh conditions around the world to treat
patients and suppress transmission.
In response to the spread of COVID-19, in March 2020 we established a COVID-19 headquarters and immediately put inplace a number of measures, including taking employees’ temperatures before they began work, mandating gargling andthe wearing of masks, installing alcohol-based hand sanitizer stations, staggering commutes and introducing telework.
We have also created a Groupwide framework for ensuring business continuity under a state of emergency and taking
necessary measures to help prevent the further spread of infection, including conducting daily employee health checks andfurther expanding use of telework arrangements, placing our highest priority on ensuring the safety of our customers andour employees.
In our International Business Division and at our overseas subsidiaries, we have established the COVID-19 Risk Response
Committee with the aim of protecting the health of overseas employees, maintaining business continuity and helping
prevent the further spread of infection. To ensure the safety of employees from Japan assigned to overseas posts, we
actively gather information on the spread of the pandemic in each country and territory, including local government
measures. Where necessary, we allow these individuals to return to Japan temporarily, providing support for them during
mandatory quarantine when they enter the country and ensuring they have access to the necessary medical care. To ensurebusiness continuity overseas, we have identified critical operations and formulated business continuity plans (BCPs) tailoredto the risk level in each location. To date, this has enabled us to maintain uninterrupted services.
Although Japan’s state of emergency has been lifted, we continue to promote stringent measures to curb the spread of
COVID-19 in compliance with government guidelines. These include reducing face-to-face contact as much as possible,
providing services as appropriate given local conditions while not causing customers untoward trouble, in line with ourabiding commitment to providing services that deliver safety and peace of mind and make life more comfortable andconvenient.

SECOM REPORT 202011