The SECOM Group’s Vision for 2030
To accelerate the realization of our Social System Industry vision, in May 2017 we announced theSECOM Group’s Vision for 2030, which positions 2030 as an important milestone and furtherdefines our direction going forward. One year later, in May 2018, we formulated the SECOM
Group Road Map 2022 to clarify the challenges we must address over the next five years toachieve this vision.

Conceptual framework of the ANSHIN Platform
As part of our vision, we are working tocreate the ANSHIN Platform, a service infrastructure through which we are striving toprovide tailored services that deliver enduring peace of mind. Created in collaboration
with partners in industry, government andacademia who share our mission to help
achieve a society free from concerns andhave diverse technologies and expertise,
this infrastructure is designed to provide
peace of mind to people in their everyday
lives, as well as to society as a whole. TheANSHIN Platform centers on three features,summarized as “peace of mind, wheneverand wherever necessary,” “peace of mind,for anyone and everyone” and “peace ofmind, seamlessly.”

The sort of ordinary, uneventful life wetend to think of as natural depends onsafety and peace of mind. In other words,
safety and peace of mind are essential to
everyday life for all people. Crimes, accidents, disasters and illnesses happen whenleast expected. Making sure that you will beokay even in the event of misfortune is key
to peace of mind. This is where the SECOMANSHIN Flow comes in.
When an unanticipated crime or disasteroccurs, the daily rhythm is interrupted. Thisis true for both companies and individuals.
For companies, productivity can fall sharply.
The greater the damage is, the longer ittakes to restore operations. Society faces
significant risks associated with crimes,accidents, cyber attacks, natural disasters,
illnesses and aging. In addition to recognizing the importance of routine advance
preparation, we provide comprehensive
services designed to address potential risks
by helping companies accurately grasp
conditions, minimize impact and achieve
restoration. These four steps comprise
the SECOM ANSHIN Flow, enabling us toprovide enduring peace of mind.

stomers and society
lationships with cuECOM’s reSgnicr
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ALL SECOMSECOM Annual Report 2018

We are currently promoting initiatives inline with four core strategies with the goalof creating the ANSHIN Platform. The “ALLSECOM” strategy focuses on rallying SECOM
Group strengths to maximize synergies,
while our “collaboration” strategy, throughwhich we seek to integrate business ideas

and technologies of various partners whoshare our mission. Our “connection” strategyemphasizes strengthening our relationship with our customers and society byleveraging Big Data analysis, which makes
use of up-to-date information, to respondto latent needs, while our “enhanced value”

strategy focuses on addressing everyday
concerns by adding greater value toservices that make life more comfortable
and convenient.

Targeting sustainable growth: Devising the SECOM Group Road Map 2022
We have identified technological advances
and a declining labor force as priority
issues in achieving the SECOM Group’s
Vision for 2030. For businesses and society,these issues can become threats if notaddressed appropriately. We believe that
anticipating evolving needs arising fromthese two issues will lead to major business
opportunities, allowing us to contribute toimproved social productivity. In this environment, we will seek to secure the latest
technologies, as well as to ensure that we
remain the first choice of talented humanresources through forward-looking, focusedinvestments in people and systems withthe goal of creating a strong foundation,
believing that doing so is the most effective way to accelerate growth as we work
toward achievement of the SECOM Group’sVision for 2030. Accordingly, in May 2018 weused backcasting* to devise the SECOM
Group Road Map 2022 with the intention ofclarifying challenges we must address overthe next five years to achieve our vision. We
have thus positioned the road map as acornerstone of the SECOM Group’s Vision
for 2030.
* Backcasting is a planning method that starts withenvisioning a desirable future and working backwardfrom there to identify steps necessary to attainthat future.

Collaboration

16Strategies for creating the ANSHIN Platform

J Addressing market needs arisingfrom technological advances
Rapid technological advances in recent
years has brought an increase in the varietyof connected devices. This is driving a variety of profound changes, including the realization of connected vehicles, the expanded
use of drones and robots, moves toward
unattended retail facilities and a cashlesssociety, and the increasing popularity ofsmart homes, that is, homes equipped withwireless smart locks and smart speakers,
among others. In an environment characterized by technological advances such asthese, safety and peace of mind are criticalissue and are expected to push up demand
related to the need for security in a connected society, which involves the fusion ofphysical and cyber security.
J Responding to market needs arisingfrom a declining labor force
The other priority issue for many
companies is a declining labor force, aconsequence of efforts to bolster competitiveness by reducing labor requirements
and promoting unattended facilities. With
companies increasing the outsourcing of
noncore functions, we are seeing risingdemand underpinned by companies’ need
to be able to rely on others. In such a scenario, the impact of unexpected incident
at a firm to which noncore functions havebeen commissioned can extend as far ascore operations. Needs for commissioned
firms that deliver safety and peace of mind
are thus expanding.
A declining labor force is also leading
to an increase in needs related to care forchildren and seniors attributable to factors
such as falling birthrates, the graying ofJapanese society and the increasing prevalence of families in which both parents
work outside the home.
We are capitalizing on our accumulated
know-how in the provision of high-grade
around-the-clock security systems and ourhighly secure data center, cyber security
and cloud-based services. In October 2017,
we welcomed TMJ to the SECOM Group,
reinforcing our infrastructure for providing
safe and secure BPO services. Recognizing
growing demand related to the need to
be able to rely on others as an importantbusiness opportunity, we will continue
working to extend distinctive services that
contribute to a significant improvement ofsocial productivity.
J SECOM-Transformation

Embracing the challenge of selftransformation—which we have dubbed“SECOM-Transformation”—we will embark
on initiatives designed to leverage thelatest technologies to derive maximum
benefits with the goal of building

SECOM Annual Report 201817

The SECOM Group’s Vision for 2030

next-generation core systems and improving functions with a view to addressing
rising needs. In addition, we will makeinvestments to reduce labor requirements
and enhance employee capabilities withthe purpose of improving both service
quality and productivity. We will also
invest in artificial intelligence (AI), theInternet of Things (IoT) and robotic process
automation (RPA), among others, to bolster
operational quality and efficiency, as well as
to drive R&D targeting innovative services
and products that respond to needs

engendered by technological advances
and a declining labor force.
Initiatives aimed at ensuring that we
remain the first choice of talented humanresources will center on actively seeking
to attract people and to create positive
working environments. To enhance
motivation, we are planning investments
designed to help employees fulfill theirpotential, including in the enhancement ofour diverse training programs. We will also
invest actively to ensure the competitiveness of our personnel, including seeking
to attract high-mobility IT specialists andindividuals with global business skills;
reallocating employees to high-growthbusinesses in which steps have been taken
to improve efficiency and productivity;
promoting diversity; rehiring experienced
retirees; and introducing alternative
working styles, including telecommuting
arrangements and shorter working hours.
Such investments will underpin criticalcapabilities that cannot be replaced withtechnology, notably our ability to respondto change, create value and secure humanresources committed to social contribution.

will also seek to ensure a stable andconsistent return to shareholders and tomaintain ROE above a certain level. In
addition, we will promote positive engagement with investors by sharing our policies
regarding sustainable growth and theenhancement of corporate value over themedium to long term and by reinforcing
and expanding opportunities forconstructive, quality dialogue.

fundamental commitment to creating services that anticipate what society will need,rather than simply offering services thatwill sell in any market. This is why ourultimate priority will always be people andtechnology. We will continue to increase
our ability to make effective use of these
intangible assets, positioning us to drivebold service innovation and cement ourcompetitive edge.

J Targeting continuous,

sustainable growth
We place a high emphasis on the sustainability of society and businesses. We see theexpenditures targeting sustainable growth
not as a cost but rather as investments thatenable us to integrate changes in our operating environment into our operations overthe long term. We are a company that has
tirelessly pursued innovation in its services
since its establishment. This comes from ourSECOM Group Road Map 2022

Forecasts for the fiscal year ending March 31, 2023 (Japanese GAAP) (Provided for reference only)

Strategies Under the SECOM Group Road Map 2022
J Human resources andorganizational strategies
Under the SECOM Group Road Map 2022,
we will advance a variety of initiatives
to strengthen our human resources andorganization by increasing our employees’
ability to deal with change and create
value and by fortifying our organization’s
resilience and capacity for innovation. We
will also promote the focused investmentof human resources in growth areas byincreasing operational efficiency andproductivity. In addition, we will strengthen
hiring and training, reinforcing efforts tosecure and train IT specialists and individuals with global business skills. We will also
promote shared services to improve profit
margins and make more effective use ofhuman resources and build an impeccableorganization by further emphasizing
SECOM’s Philosophy to strengthen our risk
management framework and corporate
governance.

18

SECOM Annual Report 2018

J Business strategies

With the aim of creating the ANSHIN
Platform, we will expedite the implementation of measures in line with the four
strategic concepts of our vision for 2030(“ALL SECOM,” “Collaboration,” “Connection”
and “Enhanced value”). In Japan, we will
extend high-grade services that respond togrowing demand related to the need for
security in a connected society. Of note, wewill take proactive steps to advance threedimensional security, enter the area of cybersecurity, expand into areas related to connected and other self-driving vehicles, andenhance the value of our home securityservices, including linkage with AI andIoT services.
In response to a declining labor force, wewill address demand driven by the need
to be able to rely on others by making useof drones and robots, strengthening ourfacility management, building management
and supply chain management solutions
capabilities, creating services for unattended retail facilities and a cashless society,developing health care services tailored tovarious lifestyles and providing new services
for the personal monitoring market.

Overseas, we will focus on using investments to expand markets. We will also work
to secure and train individuals with global
business skills, actively hiring and expanding education and training for local staff. On
the service front, in countries and territories
where we have established a presence
we will seek to capture demand arisingfrom the outsourcing needs of financial
institutions, expand systems integration
services targeting the plant and building
construction and infrastructure investment
sectors, and expand collaboration withlocal partners to chart a full-scale entry into
the markets for residential services. In countries and territories in which we do not yet
have a presence, we will seek to establish
operations in promising markets.

1.1trillion

Consolidated
revenue: ¥155.0billion

Consolidated
operating profit: ¥ROE:

8% plusDividend
payment ratio:

40%—45%

Note: Figures do not reflect the impact of new M&As.

Investment phase
Consolidated revenue

Consolidated operating profit

Consolidated revenue ¥1.1 trillion
Consolidated operating profit ¥155.0 billion

Consolidated revenue ¥970.6 billion
Consolidated operating profit ¥135.4 billion.0%rox. 6ppA:)
profitatingrepo(CAGR: 3.09%g profit)
peratin(oRGAC2015

High-growth phase

2016

2017

2018

2019

2020

2021

2022

2023

(Years ended/ending March 31)

J Capital strategy

Our strategy for making effective use ofcapital assets includes allocating ¥200
billion for M&A over the next five years,
which we will use to invest in key growthbusiness, namely, physical security, cybersecurity, BPO and ICT services and healthcare, as well as in venture companies withadvanced technological capabilities. We

Investment phase

High-growth phaseJapanQInvest in human resources
QInvest in systems

QLeverage investments to introduce new services
QPromote more active collaboration with partners

Overseas
QExpand services in countries and territories

where SECOM has a presenceQActively establish operations in promising

new markets

SECOM Annual Report 201819