To Our Stakeholders

Fiscal 2016 Business Results Outlook In fiscal 2016, the first fiscal year of our new management phase,
we expect a 2.1%, or ¥14.1 billion, year-on-year increase in revenues from operations, to ¥700 billion, and a 2.2%, or ¥2.0 billion,
decrease in operating income, to ¥92 billion. Although electricity
fees and depreciation and amortisation are likely to rise, theUrban Transportation Business is expected to perform steadily. In
addition, while the Real Estate Business will see rental income
decline as work progresses under the Umeda 1-1 Project,earnings from sales of land for facilities are expected to rise.
Meanwhile, the Entertainment and Communications Business isprojected to record lower earnings due to the absence of thebenefit of the Takarazuka Revue’s centenary year in 2014. In theReal Estate Business, although the outlook for the housing
market is uncertain, the Group will continue concerted efforts togrow earnings.

Fiscal 2016 management indicators outlook
FY2015 result

FY2016 estimate

Operating income¥94.0 billion¥92.0 billion

EBITDA¥150.1 billion¥150.0 billion

Interest-bearing debt

¥955.8 billion¥950.0 billion

Interest-bearing debt/EBITDA ratio

6.4 times

6.3 times

D/E ratio

1.4 times

1.4 times

Net income¥54.2 billion¥52.0 billion

8.6%

7.8%

¥930.2 billion¥925.0 billion

6.2 times

6.2 times

ROE(Reference)
Net interest-bearing debt*
Net interest-bearing debt/EBITDA ratio* Amount of interest-bearing debt less cash and deposits

Fiscal 2016 Outlook
In the railway business, we anticipate a pickup from fiscal 2015’sMarch 2016, we project a 2.1%, or ¥4.9 billion, year-on-year increase

decrease in revenues from operations, which resulted from thein revenues from operations, to ¥238.3 billion. However, due toabsence of fiscal 2014’s rush demand prior to the consumption tax

higher power costs and depreciation and amortization, we expect

increase. Also, population growth in line-side areas is likely to boost

operating income to decrease 10.0%, or ¥3.9 billion year on year, torailway operation revenue. Consequently, in fiscal 2016, ending 31st

¥34.7 billion.

Hankyu Corporation and Hanshin Electric Railway:
Performance forecasts (fiscal 2016)

Urban Transportation Business: Outlook for revenues fromoperations and operating income(¥ billion)

FY2016

Fare revenues (¥ million)*
FY2015
ChangeHankyu

94,37892,459

1,918

2.1%

Hanshin

31,762

31,394

368

1.2%

%

Passenger volumes (thousands)*
FY2016FY2015

Change%Hankyu640,351

627,536

12,814

2.0%

Hanshin

229,966

227,203

2,762

1.2%

* Sum of tier 1 and tier 2 operators for both Hankyu and Hanshin(¥ billion)

50

234.6

233.4

40

38.5

38.6

238.3

250
200

34.7

30

150

20100

10

50

002014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Fiscal 2016 Outlook
Earnings from sales of land for facilities are likely to compensate for adecrease in rental revenue (rental floor space) as work on the Umeda
1-1 Project progresses. As a result, in fiscal 2016, ending 31st March2016, we expect revenues from operations to increase 9.4%, or ¥19.4billion, year on year, to ¥225.8 billion. We also anticipate a 17.8%, or¥6.6 billion, year-on-year rise in operating income, to ¥43.8 billion.

Real Estate Business:
Outlook for revenues from operations and operating income(¥ billion)

(¥ billion)

60
48
36

208.6

206.4250225.8200

43.8
38.0

37.2

150241001250002014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the Entertainment andCommunications Business is projected to record year-on-year
decreases of 5.9%, or ¥6.6 billion, in revenues from operations, to¥106.0 billion, and 23.3%, or ¥3.5 billion, in operating income, to¥11.5 billion. These decreases are likely to stem from the absence ofEntertainment and Communications Business: Outlook forrevenues from operations and operating income(¥ billion)

110.4

1514.2the previous fiscal year’s increase in revenues in the sports business,
which accompanied the Hanshin Tigers advance to the Japan series,(¥ billion)

20112.6

106.0

15.0

12090

11.5
1060

530

and lower earnings in the stage business, resulting from the endingof the Takarazuka Revue’s 100th anniversary events.

002014
Operating income

2015

2016
(Est.)

Revenues from operations (right axis)(FY)

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the Travel Business is expectedto achieve increases of 1.0%, or ¥0.3 billion, in revenues from operations, to ¥32.3 billion, and 22.2%, or ¥0.3 billion, in operating income,to ¥1.5 billion. We plan to achieve these increases by attracting morecustomers for domestic travel products, which will counteract theTravel Business: Outlook for revenues from operations andoperating income(¥ billion)

(¥ billion)

2.0

40

33.0

32.0

1.2

1.2

1.5

continuing negative effect on demand for overseas travel productsof yen depreciation, security concerns, and low consumer confidence.

32.330

1.5

1.0

20

0.5

10002014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the International
Transportation Business is expected to post year-on-year decreasesof 0.3%, or ¥0.1 billion, in revenues from operations, to ¥39.3 billion,and 21.4%, or ¥0.7 billion, in operating income, to ¥2.4 billion, reflecting the absence of fiscal 2015’s special demand for air transportation

Travel Business: Outlook for revenues from operations andoperating income(¥ billion) 439.4

37.7

39.3(¥ billion)

403.1

3

and a relative decrease in yen depreciation’s positive effect on earnings.
2.12302.4201

10002014
Operating income2015

2016(Est.)(FY)

Revenues from operations (right axis)

Fiscal 2016 OutlookIn fiscal 2016, ending 31st March 2016, the Hotels Business iswill result from a favourable performance by the accommodation

expected to achieve year-on-year growth of 3.0%, or ¥1.9 billion, inarea, as respective hotels see a continuation of fiscal 2015’s upward

revenues from operations, to ¥64.9 billion, and 15.1%, or ¥0.2 billion,

trend in demand from visitors to Japan, and an increase in banquetin operating income, to ¥1.4 billion. We anticipate that this growthhall and restaurant guests.

Visitors to Japan(%)

Hotel Business: Outlook for revenues from operations andoperating income

36.0(¥ billion) 
2.0(Million people) 

16

35.7
128

34.5

13.4
33.8

8.6

4

3.0

33.0

33.3

Nationwide

2011
Kansai area

1.5

2.7
2012

63.0

3.5

2013

64.9
1.4

1.0

60

40

0.8
4.80

2010

34.5

1.2

32.6
2.1

80

63.7

10.4
8.4

6.2

(¥ billion)

2014

31.5

0.5

00(CY)

Percentage visiting Kansai area (right axis)

Source: J apan Tourism Agency. “Consumption Trend Survey for Foreigners
Visiting Japan.”

2002014
Operating income

2015

2016
(Est.)

Revenues from operations (right axis)(FY)