KEIHAN GROUPI N T E G R A T E D
2023

R E P O R TManagement Principles

Spirit of the founder of the Keihan GroupThe Keihan Group will create a comfortable living

A business should fulfill both “morality,”
which is responsible for the prosperityof the nation and the whole of humanity,and “economy,” which is the pursuit ofcorporate profit

environment and contribute to society by establishinga network of dreams, hope, and trust.
About the Keihan Group’s Management Principles
With the aim of being a corporate group that continues to shine and prosper in the 21st century, the Keihan Group established theManagement Principles in July 1998 in order to clearly communicate to stakeholders within and outside the group its social mission andresponsibilities. While the Management Principles serve as the overarching concept, we have also established the charter of conduct

Eiichi Shibusawa(Photo: Shibusawa Memorial Museum)as a basic policy for putting the Management Principles into practice in one’s day-to-day conduct, the management philosophy as thebasic premise for management decision-making to increase our corporate value, and the environmental philosophy that outlines ourapproach to becoming an environmentally friendly company.

“Harmony between morality and economy,” a doctrine passed down across generations

Also, to give tangible shape and form to each of the aforementioned components of the Management Principles, we established the
Keihan Holdings Co., Ltd. (formerly Keihan Electric Railway Co., Ltd.) was established in 1906 by the so-called father of Japanese

conduct guidelines, management vision, and environmental policy.

capitalism, Eiichi Shibusawa, as the chairman of the organization committee. Shibusawa was also instrumental in the establishmentof various enterprises that contributed to the modernization of Japan, including Japan’s first bank, the First National Bank, as well as

Management Principles Systemcompanies in the electricity, gas, shipping, cement, and shipbuilding sectors. Shibusawa was enthusiastic about the establishmentof railway companies essential for the modernization of Japan. All up, he was involved in the founding of around 50 companies. Of
these, our company was founded based on the noble idea of laying a railway to link the 1,000-year-old ancient capital “Kyoto” with theManagement Principles

commercial center “Osaka” through the towns and villages along the former Kyokaido (a main road), aiming not only to generate profits
for the Company, but also to contribute to the development of local communities.
Influenced by the ideas in the Analects of Confucius that he avidly read in his childhood, Shibusawa advocated the doctrine of “harmony

Charter of conduct

P.77

Management philosophy

Environmental philosophy

P.55

between morality and economy,” in which the main duty of business is not simply the pursuit of personal gain, but also efforts that arededicated to the interests of the public. Throughout his life, he made it the cornerstone of his management philosophy. He believed thatany business should fulfill both “morality,” which is responsible for the prosperity of the nation and the whole of humanity, and “economy,”

Conduct guidelines

Management vision

P.29

Environmental policy

P.55

which is the pursuit of corporate profit. In a sense, this thinking could be considered a precursor to today’s ESG principles and aphilosophy that continues to be inherited by the Keihan Group.

Keihan Group brand management
Brand concept

Our brand concept, Good Taste of Life: Care for other persons, and create pleasant “communities and lifestyles” together, represents
the value provided by the Keihan Group and is a promise to our customers. It also symbolizes our Management Principles. The businessgoals are what each business in the group pursues in order to realize the Keihan brand, while the nine values offered are for every
employee to understand and reflect in their actions. This creates a positive cycle in which customers choose Keihan as their first choice,leading to an even stronger brand power.

Good Taste of Life
Care for other persons,and create pleasant“communities and lifestyles” together

Business goals

Keihan Group logomark
The letter K in Keihan is used as a motif with the orange triangle on top representing a flag evoking an image of warmth andattractiveness, while the blue-gray triangle below symbolizes the foundation of the Keihan Group: safety and security, kindness, andthoughtfulness. The fluttering flag and the foundation together represents our brand concept: Care for other persons, and create
pleasant “communities and lifestyles” together.

Pursuit of comfort and convenience.
Building attractive communities.
Support for the attainment of fulfilling lives.

1

KEIHAN GROUP INTEGRATED REPORT 2023

to be focused on
Incorporate
Witty and progressive spirit
into each
Touch of sophisticated taste and culturebusiness

New suggestion
Value offered

BIOSTYLE

Keihan Group slogan — Cocoromachi Tsukuro (Creating communities of heartful living)
The words of the Keihan Group slogan clearly express our brand concept. Used in conjunction with the logo, they express ourdetermination to create with our customers a corporate group that people can count upon and communities in which people canconnect emotionally.

“Characteristics unique to Keihan”

Transportation

Functional valueCore value

Emotional value

ComfortConvenience
Usefulness

Safety and security
KindnessThoughtfulness

Closeness
Sincerity
AttractivenessReal estate

Retail distribution

Compassionate feeling that colors
everyday life

Leisure & service

Management principles and slogans of each group company

KEIHAN GROUP INTEGRATED REPORT 2023

2

CONTENTS

Keihan Group INTRODUCTION

Keihan Group INTRODUCTION

Achieving sustainable growth5

History of value creation

48

7

At a glanceMaterial issue 1: Creating businesses that contribute to solvingsocial issues

9

Domestic business area

49

KEIHAN BIOSTYLE PROJECT

11

Financial and non-financial highlights

51

BIOSTYLE initiatives

13

Value creation process

53

Keihan’s flagship facility for BIOSTYLE

15

Four key themes (material issues) and promotion ofsustainability

55

Material issue 2: Operations that consider the environmentand social factors

63

Material issue 3: Organization and human resources that
continue to grow

67

Material issue 4: Sustainable and robust management base

Management message
18

COO message

23

Discussion: CEO + Outside director

Foundations supporting value creation
Corporate governance

Strategies for value creation
29

Overview of long-term management strategy and 		
medium-term management plan “BIOSTYLE: Deepening
and Challenge”

71

Basic approach

71

Corporate governance system

72

Evaluation of effectiveness of Board of Directors

72

Corporate officer compensation system

33

Long-term management strategy:
Overview of main strategies

73

Corporate officers

76

Executive officers

36

Special feature
Long-term management strategy
Redevelop Keihan areas

77

Compliance

79

Risk management

79

Dialogue with shareholders and investors

37

Business overview and medium-term management plan
strategies

DATA

37 Transportation
39 Real estate45

41 Retail distribution

81

11-year summary of financial and non-financial data

43 Leisure & service

83

Financial statements

Medium-term management plan:
Strategy for GOOD NATURE STATION / Strengthening
the management base85

Group companies / ESG evaluation / Information disclosuresystem86

Corporate data / Stock information

5 History of value creation
7 At a glance
9 Domestic business area

Editorial policy
The Keihan Group has published its first Integrated
Report in order to communicate its story of mediumto long-term growth potential and value creation
to all stakeholders, including investors. This reportcomprehensively introduces not only the history andbusiness details of the Keihan Group but also theGroup’s vision and value creation model, long-term
management strategy for the fiscal year 2030, andnon-financial information such as human capital andthe environment.

3

KEIHAN GROUP INTEGRATED REPORT 2023

CoverageCompanies in the Keihan Group

PeriodFY2023 (April 1, 2022 to March 31, 2023)* Contains some information not included in the above period.

Month of issue

December 2023
* The next issue is scheduled to be released in autumn 2024.

Guidelines referenced This report references the IFRS Foundation’s International
Integrated Reporting Framework, the Ministry of Economy,
Trade and Industry’s Guidance for Collaborative Value
Creation, and the GRI Standards for sustainability reporting.

11 Financial and non-financial highlights
13 Value creation process
15 Four key themes (material issues) andpromotion of sustainability4

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Keihan Group INTRODUCTION

History of value creation
Spirit of the founder passed down throughout the ages
Keihan Holdings Co., Ltd. (formerly Keihan Electric Railway Co., Ltd.) was founded in 1906 by the

2017

1998

so-called father of Japanese capitalism, Eiichi Shibusawa, as the chairman of the organizationcommittee. Shibusawa advocated that the main duty of business should not simply be the pursuitof personal gain, but also efforts dedicated to the interests of the public. The project to build arailroad between the 1,000-year-old ancient capital “Kyoto” and the commercial city “Osaka” viaFounder’s spirit
For public
interest andcommon good

the towns and villages along the former Kyokaido (a main road) not only contributed significantly
to the economic aspects of the business, but it also played an integral role in the developmentof local communities. Over the course of the company’s history, the spirit of the founder has

Eiichi Shibusawa(Photo: Shibusawa Memorial Museum)

been handed down, driving development together with society. This spirit is currently sharedthroughout the group as our Management Principles. We will continue to provide value to society

1968

Keihan Electric Railway Co., Ltd.
established.

2008

Keihan Electric Railway services started(between Temmabashi Station in Osakaand Gojo Station in Kyoto).

1926

First Chrysanthemum
Figure Exhibition heldat Korien.

1979

1985

GOOD NATURE STATION opened.

Hotel Keihan Osaka (now Temmabashi)
opened.

30,000

Toward another 100 years

Nakanoshima Line services started (between Temmabashi
Station and Nakanoshima Station).

Keihan Department Store (Moriguchi Store)
opened.

Business diversification in support of post-war economic growthFounding and active business management
We started operating a railway line between
Temmabashi in Osaka and Gojo in Kyoto to resolve
the problem of insufficient transportation capacity
between the two cities and to contribute to regional
development. We worked to bring greater convenienceand safety by introducing express trains and an
automated three-position color light signaling system.
We also organized the first Chrysanthemum Figure
Exhibition as part of our efforts to attract morepassengers. With a view to developing the areas along
the railway line, we invited the establishment of schools
and the Naritasan-Fudoson Temple. We also entered
the bus transportation business, among other projects,
and worked to diversify our operations and actively
expand our geographical presence.

Longstandingknow-howof railway
development

Lake Biwa cruise boat Michigan
commissioned.

In 2016 we transitioned to a holding company systemwith the aim of being a corporate group that cancontinue to achieve growth even in a challenging
operating environment characterized by population
decline and other factors. In addition to strengthening
our four core businesses, we have worked toenhance the value of the areas along our railway lines(our point of origin), tap into the burgeoning inboundtourism market, and create content to enhance the life
value of our customers. In May 2018 we formulated a
new management vision for 2050. Even in the midstof drastic changes in society, we will continue tochallenge ourselves to achieve further growth as acorporate group valued by society.

Business restructuring for renewed growthEntered the bus transportation business.

The challengeof undertaking
various businessendeavors
Enterprising spirit

THE THOUSAND KYOTO opened.

KUZUHA MALL opened.

First-stage lot sales of Kuzuha Rose Town
started.

40,000

2019

1982

1910

50,0002005

Premium Car (reserved seat carriages) introduced.

on the basis of the founder’s spirit and aim to achieve sustainable development in the future.

1906(Ten thousandpeople)Lot sales of condominium Fine Garden started in Keihan East
Rose Town.

In responding to demand for transportation and housing along our railway lines
where the population was rapidly increasing, we stepped up efforts to bolster railway
transportation capacity and develop housing. By extending the Keihan Main Line to
Yodoyabashi, we successfully improved access to the city center of Osaka. We also
entered the leased building business in earnest. Moreover, we began operating businesshotels and department stores and improved leisure facilities by commissioning cruiseboats. By diversifying our business portfolio in this way, we supported Japan’s rapid
economic growth during this period.

In response to drastic changes in the business climate,including the economic downturn when Japan’s bubble
economy burst, we restructured our businesses by,for example, changing the real estate business modelwith the Keihan Group “Re-Born 21” Plan. We also
formulated the management vision, “Our Challenge to‘Keihan as First Choice’,” aiming for becoming a large,
reputable company. The opening of the Nakanoshima
Line helped revitalize the economy in the Kansai region
and, in addition to enhancing value along our railway
lines with the opening of the KUZUHA MALL, we also
expanded our business operations in areas away fromour railways by, for example, opening hotels in thegreater Tokyo area.

(Million yen)
350,000

Inheriting the spiritof the founder andactively embracing thechallenge of creating
new value

300,000
250,000
200,000
150,000

Consolidated operating revenue (RHS)

20,000

Number of passengers(Keihan Electric Railway) (LHS)

100,000

10,00050,000

0

0

1911
5

1950

KEIHAN GROUP INTEGRATED REPORT 2023

1961

1971

1981

1991

2001

2011

2023 (Fiscal year)
KEIHAN GROUP INTEGRATED REPORT 2023

6

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Keihan Group INTRODUCTION

At a glance
The Keihan Group operates four core businesses across approximately 50 companies. As stated in our Management Principles,
we will “create a comfortable living environment and contribute to society by establishing a network of dreams, hope, and trust”
through these businesses that are closely related to everyday life. This commitment is what drives our ongoing efforts.

Business operations
We manage various railway services including the Keihan Electric
Railway, which provides intercity, regional, and tourism transportation inTransportation• Eizan Electric Railway Co., Ltd.

as well as Eizan Railway and Keifuku Electric Railroad (Randen). Our• Keifuku Electric Railroad Co., Ltd.

support regional transportation, scheduled sightseeing buses, express(Million yen)

• Keihan Electric Railway Co., Ltd.

the three prefectures of Osaka, Kyoto, and Shiga in the Kansai region,
offerings also extend to bus services, such as fixed-route buses that

Operating revenue and operating income

Key operating companies• Keihan Bus Co., Ltd.

Breakdown ofoperating revenue

29.1%■Operating revenue

65,694

6,885
173(FY2023)

2021

condominiums across the Kansai and Tokyo areas, as well as major
regional cities such as Sapporo. We also engage in the sale andReal estate

2022

2023

(Fiscal year)-9,658amusement park that celebrated its 110th anniversary in 2022.

In real estate sales, we are engaged in the development of

80,927●Operating income

buses, and limousine buses. Additionally, we oversee Hirakata Park, an

Business operations

70,768Key operating companies

Operating revenue and operating income• Keihan Real Estate Co., Ltd.

(Million yen)

• Keihan Tatemono Co., Ltd.

Breakdown ofoperating revenue

43.2%

brokerage of standalone homes. Our real estate leasing businessincludes ownership of office buildings such as OMM in the Kansai area

137,495■Operating revenue

120,103110,270●Operating income

22,593
18,59017,555(FY2023)and the Keihan Otemachi Building and Keihan Yokohama Building in
the Tokyo area. Our operations also extend to landscaping, building

2021

maintenance, and construction consulting services.

Business operations
Our retail presence is significant, with five department stores primarily
along the Keihan Railway lines. We operate suburban shopping centers

Retaildistribution(Million yen)

• Keihan Department Stores Co., Ltd.
• Keihan The Store Co., Ltd.

Keihan City Mall, and various other commercial facilities, including• Keihan Ryutsu Systems Co., Ltd.

Frest supermarkets and our innovative MOYORI ICHI shops, which are

Breakdown ofoperating revenue

18.2%

83,109●Operating income

Nationally, we own and operate 21 hotels, totaling around 4,800 rooms,
in the locations along our railway lines in Osaka, Kyoto, and Shiga, as

Leisure &service• Biwako Kisen Steamship Co., Ltd.

landmark Kyoto Tower, the sightseeing boats Michigan and Bianca

Breakdown ofoperating revenue

beautiful, and brings a high quality of life. We also have our own naturalcosmetics brand, NEMOHAMO, as well as the patisserie RAU, among
other business ventures, including card services.

2023

8.2%

●Operating income

9,724

11,529-10,823-9,324

2021

2022(FY2023)-3,836
2023(Fiscal year)

Operating revenue and operating income

Key operating companies(Million yen)

• Keihan Card Co., Ltd.
• Biostyle Co., Ltd.

(Fiscal year)

22,869■Operating revenue

around the waters of Osaka.

to a recycling-oriented society by realizing a lifestyle that is healthy,2022• Hotel Keihan Co., Ltd.

on Lake Biwa, the Garden Museum Hiei, and the Aqua Liner that sails

Otherbusinesses

1,878

Operating revenue and operating income

several facilities that serve as symbols of their region, such as theconceptualized around the theme of “BIOSTYLE,” which contributes

1,776(Million yen)

• Keihan Hotels & Resorts Co., Ltd.

Our GOOD NATURE STATION is a mixed-use commercial facility

50,676

Key operating companies

well as in other areas in Tokyo and Sapporo. Additionally, we manage

Business operations

52,908

1,192
2021

Business operations(Fiscal year)■Operating revenue(FY2023)

located mainly inside and outside stations.

2023

Operating revenue and operating income

Key operating companies

like KUZUHA MALL, the urban shopping centers Keihan Mall and2022

Breakdown ofoperating revenue

1.3%(FY2023)

3,660

3,061

3,169

-1,401-1,393-1,230

2021

2022

2023

■Operating revenue●Operating income(Fiscal year)* The figures provided for each business include adjustments for intercompany transactions.

7

KEIHAN GROUP INTEGRATED REPORT 2023

KEIHAN GROUP INTEGRATED REPORT 2023

8

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Keihan Group INTRODUCTION

Domestic business area

Garden Museum Hiei

Kinki area railway lines and bases

Kuramacommunities, thereby expanding our business area and creating value. We will continue to present new value through our business

KYOTO

Keihan Otemachi Bldg.
Intage Akihabara Bldg.
● Toranomon Hills Business Tower● Eastern Bldg.
● Passaggio Nishiarai(property management)● Hotel Keihan Tsukiji Ginza GrandeMatsudo Toyo
Bldg.

●

●

●
●

Hotel Keihan Asakusa
Hotel Keihan Tokyo Yotsuya

Fukuoka
Toho Hotel
Zonk Hakata

Keihan Yokohama Bldg.
Yokohama Excellent III

Cafetel Kyoto Sanjo
for Ladies

Kyoto Tower &Kyoto Tower Hotel

THE THOUSAND KYOTO
Kyoto Century Hotel

Hotel Keihan
Kyoto Ekiminami

Keihan Nagoya
Sakae-minami Bldg.
● Resora Obu Shopping Terrace(property management)● Hotel Keihan Nagoya●

Hotel Keihan
Kyoto Grande
Hotel Keihan
Kyoto Hachijoguchi

彩都西

●

Aichi

●

GOOD NATURESTATION

KuzuhaOkinawa●

Shichijo

梅小路へ
Kyoto Station❷ Area around JR

Kanagawa●❷

Tambabashi

Subway Tozai LineSHIGA

Chushojima

Kumamoto
TechnoPlaza

Biwako Hotel

Gion-shijo
Shijo-Omiya

Iwashimizu-hachimangu

Kumamoto

L'Hotel de Hiei

Ishiyamadera●

Michigan Cruise
Biwako-hamaotsu

Blumer HAT Kobe
(property
management)●

UzumasaTenjingawa

Lake Biwa

Sakamoto-hieizanguchi

Misasagi

●

Tokyo
Chiba

Sakamoto
Cable
Railway

Yase-Hieizanguchi

Hyogo

Keifuku Railway

SubwayTozai Line

Shijo-Omiya

Hotel Keihan Sendai

UzumasaTenjingawa

Arashiyama

Takaragaike

Demachiyanagi

Arashiyama

Miyagi●

Katabiranotsuji

Arashiyama

JCB Sapporo Higashi Bldg.
● Hotel Keihan Sapporo●❶

KitanoHakubaicho

Hokkaido

Katabiranotsuji❶ Area along the Randen lines

Kitano-Hakubaicho

activities in close association with local communities, and achieve sustainable development with the communities and society.

Main locations in Japan

Eizan Railway

and convenience, while promoting urban development and community building around our railway stations and connecting local

Eizan Ropeway

Eizan Cable Car

The Keihan Group offers transportation networks that support the foundation of values such as safety and security, comfort

Keihan Yodo
Logistics Yard

Uji

Iwashimizu-hachimangusando-cable

Keihan Naha
Shin-Toshin Bldg.

Keihan Railway(Keihan Line)OSAKAKUZUHA MALL

Hirakatashi

Tokyo bases

Keihan East Rose Town
Frest Matsui-yamate Shop

Keihan Railway
Eizan Railway, Randen,
Sakamoto Cable
Airport Limousine Bus/
Direct Express Kyoto/
Station Loop Bus
Shinkansen
JR
Other trains

Frest Nagao Shop

Passaggio Nishiarai(property management)

KisaichiHotel Keihan Asakusa

Hirakata Park

Intage Akihabara Bldg.
Hotel Keihan Tokyo Yotsuya

Hotel Keihan Tsukiji Ginza Grande

KeihanDepartment
Store Moriguchi

Keihan Otemachi Bldg.

Toranomon Hills Business Tower
Eastern Bldg.

Hotel Keihan
Kyobashi Grande
Keihan City Mall❸

KyobashiTemmabashi

Kitahama

Nakanoshima

Yodoyabashi

Santa Maria
Cruise❸ Downtown Osaka City

Keihan Department
Store Suminodo

Keihan Mall
KiKi Kyobashi
Aqua-Liner
OMM

Hotel Keihan
Yodoyabashi

Hotel Keihan Temmabashi
Hotel Keihan Tenmabashi Ekimae

As of October 31, 2023

9

KEIHAN GROUP INTEGRATED REPORT 2023

KEIHAN GROUP INTEGRATED REPORT 2023

10

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Keihan Group INTRODUCTION

Financial and non-financial highlights
Financial highlights * Since the start of FY2022, we have been implementing the Accounting Standard for Revenue Recognition and other standards.
Operating revenue

Operating income/operating margin(Million yen)

(Million yen)

400,000

40,000326,159

317,103

300,000

253,419 258,118 260,070

299,000

30,000
10.3

20,000200,000

2019

2020

2021

2022

2023

2024 (Fiscal year)

CO2 emissions

Energy usage

(%)

(t)

(kl)

15

300,000

10

200,000

5

100,0000031,50031,123
20,491
9.8

13,40810,000100,000
0

33,715

Non-financial highlights

10.5

5.2

-0.5

(Forecast)

2019

2020

2021

2022

2023

200,000
221,932

191,960

192,690

178,633

137,203139,255

2019

2020

125,290

119,413

2021

2022

2023 (Fiscal year)

119,975

100,000

7.9-1,265

0253,327

2019

2020

2021

2022

0

2023 (Fiscal year)

2024 (Fiscal year)(Forecast)■Operating income (left axis) ●Operating margin (right axis)

Net interest-bearing debt/EBITDA multiple

Capital expenditure

Keihan Railway passengers transported

Customer Satisfaction Index*(Times)(Million yen)(People)(%)

20

50,000400,000

16.3

43,63140,000

15
9.5

10

6.0

5.9

29,32430,0008.033,261

29,712

2019

2020

2021

2022

2023 (Fiscal year)

208,198

219,23580

243,608

0

2019

2020

2021

2022

0

2023 (Fiscal year)

73.7

73.0

74.3

73.1

70.8

2019

2020

2021

2022

2023 (Fiscal year)60
40

100,000

10,0000293,104

200,000

17,19320,0005

300,000

100
295,099

20

2019

2020

2021

2022

0

2023 (Fiscal year)* This is part of Japan’s largest customer satisfaction survey conducted by SPRING(Service PRoductivity & INnovation for Growth), part of the Japan Productivity Center.
The data is specific to Keihan Railway.

Profit attributable to owners of parent/ROE
Free cash flow

(Million yen)

(Million yen)

50,00010,000

9.4

(%)

6.8

40,000

5,670

4,032

5,000

3,822

30,00021,48020,0000-5,000-15,000

2019

2020

2021

2022

24,50017,621

2

2019

2020

2021

20

-2

2022

2023

2024 (Fiscal year)(Forecast)

Total assets/ROA

50(Million yen)

1,000,000

10

5,000

750,000
500,000

731,750
4.7

732,824764,247

737,261 774,849

6

4.3
1.8

250,000
0

2019

2020

-0.2
2021

2022

■Total assets (left axis) ●ROA (right axis)

11

8

KEIHAN GROUP INTEGRATED REPORT 2023

2.7

4

4,000

3,751

2,000
1,000

0

0

3,216
2,679

3,000

2

2023 (Fiscal year)

3,751

35

2019

35

2020

25

2021

3,751

2,679
25

2022

30

2023

35

(Forecast)

100

38.5

40

90

13

13

5

5

2020

2021

14

14

14

30

80

6

6

7

20

70

10

60

2022

2023

0

50

2024 (Fiscal year)■Number of Directors (left axis) ■Outside Directors included in total (left axis)

98

100 100

100 100

97

2019

98

100 100

97

2020

2021

2022

2023 (Fiscal year)■Board of Directors meetings ●Audit & Supervisory Committee meetings

Number of women in leadership positions*

Number and ratio of female employees*(Yen)(People)(People)

100

20

10

75

15

50

10

25

5

0

0

2024 (Fiscal year)■Total annual dividend (left axis) ●Annual dividend per share (right axis)

(%)

50

42.9

●Ratio of Outside Directors (right axis)

Shareholder returns
(%)

38.5

15

■Profit attributable to owners of parent (left axis) ●ROE (right axis)(Million yen)

42.9

10

(%)

50.0

(People)0-1.92023 (Fiscal year)

6
4-4,574-4,574-10,000-9,658

10
8

9,589
9,589

0
-11,586

3.9

20,121

10,000-10,000

8.8

8.3

Outside Director attendance rate at Board of Directors
meetings/Audit & Supervisory Committee meetings

Number of Directors and ratio of Outside Directors

14

14

15

18

17

8
6

(%)

46.7
37.5

37.5

6

6

50
38.5

7

30.0
5

4

3

2020

2021

2022

2023 (Fiscal year)* Leadership positions refers to the Assistant Director level and above* Pertains to Keihan Holdings Co., Ltd.

0

30
20
10

2

2019

40

2019

2020

2021

2022

0

2023 (Fiscal year)■Number of female employees (left axis) ●Ratio of female employees (right axis)* Pertains to general positions at Keihan Holdings Co., Ltd.

KEIHAN GROUP INTEGRATED REPORT 2023

12

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Keihan Group INTRODUCTION

Value creation process
Management
Under its Management Principles, the Keihan Group isadvancing a long-term management strategy (targeting
FY2031) centered around the theme of “promoting

The Keihan Group will create a comfortableby establishing a network‘BIOSTYLE Management’ that generates both socialand economic value.” This strategy is aimed at achieving
our management vision (Vision for 2050). Through this,the Keihan Group strives to be a corporate group that

Principles
living environment and contribute to societyof dreams, hope, and trust.

Management vision(Vision for 2050)

Be the beautiful Keihan areas

and the global Keihan Group

Achieving a Sustainable,

Recycling-oriented SocietyLong-term management

strategy (Target: FY2031)

continues to grow sustainably into the future while
contributing to the creation of a sustainable, recyclingoriented society.

Opportunities and risks
Opportunities
Increasing demand for products and services
that contribute to the solution of social issues

With BIOSTYLE (Keihan’s SDGs)* as the pivotal
we aim to generate bothaxis of our management and business operations,social and economic value.

Recovery and expansion of tourism demand

Acceleration of community building by theprivate sector through the utilization of public
spaces, etc.
Increasing demand for new products andservices due to changing lifestyles andtechnological innovations such as AI and IoT

Priority themes

Risks

Creation of businesses
that contribute to thesolution of social issues

Suspension of operations and losses due tointense disasters
Decreasing number of customers and labor
shortage due to a declining population

Local economy shrinkage or its acceleration

Impact of changes in lifestyles and work
styles on existing business models

Changes in the external
environment
Increasing awareness of sustainability
Increasing intensity and frequency of natural
disasters

Operation inconsideration of theenvironment andsociety
Organization andhuman resources that
continue to growSustainable andstrong managementfoundation

Promoting BIOSTYLE

Creatingsocial value

Mainstrategies
for FY2031(solving social issues)

Strategy foreach business
Strengthening
the managementfoundation

Theme

Mission of the Keihan Group

Redevelop
Keihan areas

Improving the value of the areas along therailway lines through urban development
and area management

Co-createexperiencevalue

Improving the value of Kyoto and the
Mt. Hiei/Lake Biwa area by offering tourist
experiences

Conserve
the global
environment

Contributing to the solution of climate change
and other environmental issues

Transportation
LeisureAdvancing toward achieving
the management vision

Management

Real estate& service

Management vision
Be the beautiful Keihan areas and the global Keihan Group

Creating
economic value(profit growth)Contributing to the achievement of the SDGs

Retail distribution
Other businesses

DX (digital transformation)
Human resources strategy* What is BIOSTYLE?
A Keihan Group initiative that aims not only to enhance the value of people’s lifestyles, but also develop
products, services, and businesses that help solve social issues.

Aging and declining population
Economic and social shrinkage in the areas
along the railway lines
Diversification of human resources and work
stylesGrowing needs for a safe and secure society

13

KEIHAN GROUP INTEGRATED REPORT 2023

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14

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Keihan Group INTRODUCTION

Four key themes (material issues) and promotion of sustainability
Four key themes (material issues)

Sustainability promotion system

Upon analyzing changes in the external environment the Keihan Group finds itself in, we identified opportunities and risks for
management going forward. These formed the basis for the establishment of our four key management themes (material issues). For
our long-term management strategy and medium-term management plan, we have formulated core strategies and business-specificstrategies based on these four themes.

Board of Directors
14 Directors (including 7 Outside Directors)

With the aim of enhancing the Keihan Group’s corporate
value in the medium to long term, we have established

Reportthe Sustainability Committee to deliberate and decide on

Sustainability Committee

important policies and measures related to sustainability,
manage their progress, and organize internal control andrisk management systems. The Sustainability Committee is

Sustainability within the Keihan Groupchaired by the Representative Director & President, COO, andIn line with our Management Principles, we believe that sustainability management for the Keihan Group involves addressing social

for the transportation, real estate, retail distribution, andincludes Directors who are the General Managers responsible

issues through our businesses and aiming for sustainable development alongside society. To promote sustainability management, wehave set key activity goals (issues) for the time being in non-financial areas based on the four key themes (material issues).

Changes in the external environment

sustainability

the discussions are regularly presented (put on the agenda orreported) to the Board of Directors.

Opportunities and risksof natural disasters

Aging and declining
population

Technical
committee on
environmental
management

Technical
committee on
information
security

Human
Resources
Strategy
Committee

Business segments (Transportation, real estate, retail distribution, leisure & service)

Material issues
Four key themes(material issues)

Key activity goals related to sustainability* Including issues

As described inthis report• Increasing demand for products and services that
contribute to the solution of social issues
Promoting BIOSTYLE PROJECT• Recovery and expansion of tourism demand• Acceleration of community building by the private sector
through the utilization of public spaces, etc.

Increasing intensity and frequency

Technical
committee oncomplianceand crisis/riskmanagement

leisure & service businesses, among others. The details ofOpportunities
Increasing awareness ofInternal Control
Committee

S

Four priority themes
have been establishedbased on changes in theexternal environment andopportunities/risks

Creation of businesses
that contribute to thesolution of social issues• Increasing demand for new products and services due
to changing lifestyles and technological innovations
such as AI and IoT

E

P.48 – 54

Promoting social contribution activities that
contribute to regional revitalization and strengthening
communication with communities

P.52

Reduction of greenhouse gases

P.55 – 62

Reduction of waste and effective use of water
resources

P.58 – 59

Operation in considerationof the environment andsociety

Economic and social shrinkage in
the areas along the railway lines

Risks
Diversification of human resources
and work styles• Suspension of operations and losses due to intense
disasters• Decreasing number of customers and labor shortagedue to a declining population

Organization and humanS

resources that continue togrowMaximizing individual ability and performance
Fostering a culture of taking on challenges andcreating transformation

P.63 – 66• Local economy shrinkage or its acceleration
Growing needs for a safe andsecure society

15

KEIHAN GROUP INTEGRATED REPORT 2023

• Impact of changes in lifestyles and work styles on
existing business models

S

Sustainable and strongGmanagement foundation

P.67 – 69

Pursuing improved safety and security
P.77 – 79

KEIHAN GROUP INTEGRATED REPORT 2023

16

COO message

Management message

Steering the Company towards
a renewed growth trajectorywith BIOSTYLE managementthat creates both social andeconomic value

Masahiro Ishimaru
Representative Director & President, COO
Keihan Holdings Co., Ltd.

18 COO message
23 Discussion: CEO + Outside director

17

KEIHAN GROUP INTEGRATED REPORT 2023

18

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Management message

COO message

Responding to COVID-19 and earnings recovery
Under Japanese legislation, COVID-19 has been downgraded toa Class 5 disease, the same category as seasonal influenza. As aresult, the COVID-19 prevention measures implemented in Japan,
which significantly impacted people’s movements, have reached aturning point and social and economic activities are now gradually
returning to normal. Nevertheless, Japan’s population continues todecline owing to a low birthrate and the aging of society, and theregional economy along the Keihan Railway lines will inevitably shrink
if we sit idly by. Addressing this issue has been, and will continue tobe, our biggest challenge.
In 2018 we announced a long-term strategic concept for the KeihanGroup. In keeping with our management vision for 2050, “Be thebeautiful Keihan areas and the global Keihan group,” we employed abackcasting approach to formulate a long-term management strategy
anchored by the main strategies of “Redevelop Keihan areas,” “Cocreate tourism opportunity,” and “Create relatable content.” We also
set about implementing our three-year medium-term management
plan, “Create Living, Community, and Excitement.”
Even though this plan was progressing smoothly and yielding
favorable results, the onset of the COVID-19 pandemic led to very
few people in the streets and various changes were occurring rightbefore our eyes. Such a situation forced us to prematurely terminate
the plan. That is why, starting from the middle of FY2021, we decided
that for the time being we would assess the future business direction
and rebuild our management base. The first thing we did was todouble down on “Safety & Security,” including our response to thepandemic. On top of that, we swiftly carried out “Structural Reforms,”
such as establishing a business management system capable ofwithstanding dramatic changes in the operating environment. At
the same time, we looked ahead to the with/post-COVID-19 era

off a new long-term management strategy and medium-termalong Osaka’s east-west axis will be completed. In Nakanoshima,management plan.

the construction of an international hub for future healthcare will

In our new long-term management strategy, we are targeting

be completed, while in Midosuji, the area’s tallest office building

FY2031, with the main theme being the promotion of what we callincorporating the latest environmentally friendly technology will

“BIOSTYLE management” that creates both social and economic

open its doors. Also, the long-awaited redevelopment project invalue. BIOSTYLE, a term that we have been using since 2014, is thethe Hirakatashi Station area is slated for completion in FY2025,

Keihan Group’s value proposition to create products, services, andintegrating a large commercial facility, offices, a hotel, and a rental

businesses that are good for health, the mind, communities, society,residential tower with the station building.

and the earth. And especially in light of the heightened awareness ofFurthermore, the Osaka IR (integrated resort) is scheduled toenvironmental issues following the COVID-19 pandemic, we added

open in 2030, so the areas along the Keihan Railway lines will nota strategy of “Conserve the global environment” to our other main

only welcome tourists from around the world, but they have thestrategies of “Redevelop Keihan areas” and “Co-create experience

potential to offer new employment opportunities and attract foreignvalue.” Moreover, our medium-term management plan “BIOSTYLE:

companies. We certainly hope to make the most of this opportunity

Deepening and Challenge” (FY2024–2026) based on this long-term

to put into practice our management vision of “Be the beautiful

strategy aims to deepen and challenge the BIOSTYLE concept.

Keihan areas and the global Keihan group.”

Our businesses have strong connections to daily life and align very
closely with BIOSTYLE, which is why we intend to incorporate its
elements into all of our operations in a bid to generate higher added
value in existing businesses and create new ones.
Keihan Electric Railway, the original business of the KeihanGroup, was established in 1906 by the so-called father of Japanese
capitalism, Eiichi Shibusawa, as the chairman of the organizationcommittee. The cornerstone of Shibusawa’s management
philosophy was that any business should fulfill both “morality” asa responsibility for the prosperity of the nation and the whole ofhumanity, and “economy,” or the pursuit of corporate profit. Thisphilosophy has been ingrained in our DNA since the time of our
founding and by practicing BIOSTYLE management, we seek tocreate both social and economic value.

3 main strategies underpinning BIOSTYLE• Co-creating experience value
In our second main strategy—co-creating experience value—wewill look to jointly create captivating experiences together with local
communities, promote sustainable tourism, and focus our efforts ondeveloping theme-based tourism to deliver narrative-driven tourist
experiences with the overall aim of increasing visitors and repeat
visitors from both within Japan and overseas.
For example, we plan to establish a so-called “golden route” forsightseeing in Kyoto, starting in the popular Rakuhoku district andcontinuing through Higashiyama to Fushimi and Uji. This route has
no shortage of appealing assets, such as traditional industries,
art, cuisine, history, and nature. We hope to create experiential
value unique to the Keihan Group. As part of this initiative, we areparticipating in a project spearheaded by teamLab Inc. in an area
southeast of Kyoto Station, which involves the opening of a cultural-

Balanced business portfolio
When I joined the Company, the Keihan Group was in the processof diversifying its businesses, but the railway business was still
capturing the large share of revenue, to the extent that in extreme
terms, the other businesses were nothing more than supplementary
to railway operations. However today, even though the railway
business is still at the core of the Keihan Group, we have built
a well-balanced business portfolio that benefits from synergies
between businesses because the transportation, real estate, retail
distribution, and leisure & service businesses have all grown andbecome more independent. The real estate and hotel businesses
are expanding their operations not only along the Keihan Railway
lines, but also nationwide, guided by the brand image of “Safety& Security” forged by the railway business since the time of our
founding. With the stable cash flow from the railway business, plus

• Redeveloping Keihan areas

arts complex in FY2025 designed to connect the local community

Here, I would like to touch upon our new main strategies. The

with the world through art. Also, in the run-up to the World Expofirst—redeveloping Keihan areas—involves urban development

2025 in Osaka, the utilization of mobility as a service (MaaS) willthat leverages the local attributes of an area with stations as theenable visitors to explore the Kansai region conveniently and

Despite COVID-19 wreaking havoc over the past three years or so,

focal point, as well as pursuing area management in collaboration

comfortably, so we intend to thoroughly communicate the charm ofBusiness-specific strategies

our employees paid meticulous attention to preventing the spread ofwith the community. By connecting everything through thethe tourist resources along the Keihan Railway lines during this time.

Next, I would like to discuss our initiatives in each business. In

infection and did everything in their power to keep our businesses

transportation network, our strategy aims to enhance the value

and sought to implement various measures to align with changes incustomer values and lifestyle. As a result of our efforts to consciously
tackle issues in anticipation of the future, we managed to getearnings back on track to a certain extent in FY2023.

the revenue generated from real estate and other businesses, weare now getting ready to allocate capital to new growth investments.

the transportation business, we will further hone our commitmentof areas along our lines and attract more residents and visitors.

• Conserving the global environment

to “Safety & Security”—the foundation of our existence. We

The Keihan Group has long played a part in modernizing andOur third main strategy—conserving the global environment—isare collaborating with the government on a continuous grade

contributing to the prosperity of the communities along its railway

particularly focused on measures to fight global warming. Moreseparation project on the Keihan Main Line between Neyagawa

lines by connecting the towns of traditional thoroughfares.

specifically, we are endeavoring to reduce our energy consumption

City Station and Hirakata City Station. These works will eliminate

However, the time has now come to redevelop and revitalize theby accelerating the adoption of energy-efficient train cars and electric

21 railroad crossings, prevent accidents and traffic congestion,areas along the lines that were opened up during Japan’s post-war

buses and by acquiring environmental certifications and the like forand improve the safety and comfort of stations for passengers.

economic growth period. As a young boy myself, I was impressed

newly developed buildings. We have also started to generate our own

At the same time, we plan to make effective use of the spaceby the sight of rapid transformation in my neighborhood, especiallyenergy and procure renewable energy with the use of solar power

under the elevated railway tracks. In addition, we have plans to

the train tracks being built overhead and the establishment of new

generation equipment. The GOOD NATURE STATION, a commercial

install platform screen doors at four stations, including Hirakata

shopping malls. I am confident that all of the projects currently

complex in Kyoto, has already been operating essentially with 100%

CIty, by 2025. Meanwhile, with the aim of generating fresh

As we have largely completed the establishment of a management

underway will generate plenty of excitement and smiles in the

renewable energy since FY2024. Even when developing our products

demand, we plan to increase the number of Premium Cars thatsystem for the future, we have positioned FY2024 as the turning

community—something I am eagerly looking forward to seeing.

and services, we will continue to think about what aligns with aoffer a high-quality travel experience. To attract overseas tourists,

decarbonized society and provide solutions in step with the times.

we will make an effort to improve convenience mainly by utilizing

running on the frontlines and in the office. I am exceptionally proudof the fact that, thanks to the dedicated efforts of our employees, theentire Keihan Group has been able to fulfill its mission of supporting
the local community. It also gave me a renewed appreciation of how
the mindset of wanting to contribute to society and enhance social
value is well entrenched in each and every employee.

Transitioning to a renewed growth trajectory
phase from FY2024

point towards a renewed growth trajectory phase and kicked
19

KEIHAN GROUP INTEGRATED REPORT 2023

From FY2024 through FY2026, a series of large-scale projects

KEIHAN GROUP INTEGRATED REPORT 2023

20

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Management message

COO message

only serves as a base for business trips and sightseeing, but it
also offers concept rooms in which guests can relax like theywould in their own home. Also, at THE THOUSAND KYOTO
and Biwako Hotel, we are taking steps to provide more added
value by offering special accommodation plans that contributeto the SDGs, as well as various other memorable experiences.
In addition, by adopting smart technology in our hotels, we are
actively seeking to improve convenience, strengthen digitalmarketing, and streamline/automate operations.
In other businesses, we will aim to raise awareness andexpand sales channels of such brands as GOOD NATURESTAT I O N w h i c h e m b o d i e s o u r B I OST Y L E c o n c e pt, th e
NEMOHAMO line of organic cosmetics, and the patisserie brand
RAU. At the same time, we will drive new product development
and store openings. In November 2023, we opened the flagshipstore for the NEMOHAMO brand in Tokyo’s Marunouchi district.
MaaS and introducing QR code-based tickets.
on the Keihan Railway lines, we are now stepping up its

Developing workplace environments where
employees can work actively

expansion beyond those areas. Capitalizing on the sense of

So that we can continue to create new value, it is imperative

security and trust becoming of a railway company group, wethat we ma ximize the potential of our diverse work force,

add value to properties acquired at fair price and we havedevelop workplace environments in which employees can play

accumulated the know-how of recouping investment capital inan active role, and foster a culture conducive to challenges

We forecast inbound tourist demand to surpass pre-COVID levels

a relatively short period of time. Going forward, we will expand

and innovation. We therefore established a Human Resources

ahead of the World Expo 2025 in Osaka. We therefore have ourour business areas beyond the three major metropolitan

Strategy Committee in July 2022 to discuss the topics of worksights set on posting record-high operating income of 34 billion yen

regions of Japan to regional urban areas, such as Sapporo, andengagement and the utilization of a diverse workforce with a viewin FY2026, the final year of the current medium-term management

pursue the acquisition of land for built-for-sale condominiums

to enhancing the value of human capital. The outcomes of thoseplan, by advancing the main strategies I just mentioned. Also,and detached houses, as well as rental properties. Moreover,discussions have been incorporated into the current medium-a sound financial position is essential for effectively executing

we are diversifying this business by actively undertaking theterm management plan as a human resources strategy and will

investments for sustained growth. For the purpose of implementing

development and acquisition of non-residential real estate

be promoted as one aspect of a stronger management base.

Whereas the focus of the real estate business was previously

Targeting record-high profit in FY2026

Our businesses and personnel are much more resilient now thanduring the period from FY2021 through FY2023 when we bore thebrunt of the pandemic, and considering the return of customers,
including overseas tourists, our intention is to set about achieving
the aforementioned quantitative targets ahead of schedule. The
FY2031 ROE of 8% can be considered our minimum target.

a management style geared towards maintaining financial

Be the beautiful Keihan areas and the global
Keihan groupassets like hotels, office buildings, and logistics facilities. For

Particularly when it comes to the pursuit of realizing oursoundness and improving capital efficiency, we aim to achieve

I believe the areas along the Keihan Railway lines are treasureinstance, we have acquired an office building in Kumamoto.

management vision, we have long upheld the basic policy of

EBITDA (operating income + depreciation) of 58 billion yen, a net

troves of world-class history, culture, and scenery. It is for thisAlso, to complement our land rezoning projects and large-scale

ensuring “safety and challenges.” Our employees already haveinterest-bearing debt/EBITDA ratio of 6.0 level, and ROE of 7%.

reason that I have a particularly strong desire to maximize the value

condominium redevelopments, we are considering expanding

a strong awareness of safety and security, therefore, what we

In our rough estimate for the allocation of funds, we assumeof the towns and sights in this region, with the hope that many

our operations overseas. Given that we have steadily built up

want to see from them now is an enterprising spirit, or in othera three-year operating cash flow of 130 billion yen. We plan topeople will visit, live in, and invigorate the area. I want to create aa track record in the real estate business and our profile has

words, boldly taking on new challenges with a broader vision.

allocate a total of 100 billion yen to growth investments, broken

virtuous cycle in which the energy of the Keihan Railway makes

increased outside the Kansai region, I sense that momentum forThat said, it will be important to not just encourage employees

down as 70 billion yen to our main strategies and 30 billion yen

everyone happy, ultimately increasing the corporate value of thefurther business growth is building.

to take on challenges, but to ensure that the initiatives in eachto such areas as demand creation in the railway business, theKeihan Group. I also want the Keihan Group to welcome manyIn the retail distribution business, we will focus on providing

business and division are genuinely challenging. For example,

development and acquisition of real estate, strengthening the retailoverseas visitors, connect with the world, and become a corporate

new consumer experiences tailored to diversifying lifestyles. For

redevelopment projects that hinge on the involvement of a

distribution business, and enhancing the added value of hotels.

group that expands its operations worldwide. This vision remains

instance, we are gradually transforming our in-station conveniencevariety of stakeholders could be considered challenging in terms

In addition, we have earmarked 40 billion yen for M&As, alliances,utterly unchanged from before the onset of the pandemic.

store “Anthree” into new-style food market that offers unique andof each undertaking. Moreover, introducing pioneering services,and other strategic investments, and 60 billion yen for investment

Of all the industries in Japan, the Keihan Group’s industry

quality food called “Moyori-ichi.” In fact, our in-house made bento

such as our Premium Cars, and communicating to the world ourin maintenance and renewal. Our basic shareholder returns policy

sectors faced some of the most challenging situations during theboxed lunches and bread products have earned rave reviews

BIOSTYLE concept from GOOD NATURE STATION in the Shijo

is to keep paying a stable dividend in accordance with financial

pandemic, but thanks to the dedicated efforts of our employees

already. We will also look to broaden revenue opportunities

district of Kyoto, are major challenges for the future of the Keihan

results. For the fiscal year ending March 31, 2024, we plan to pay

and the support of our business partners and numerous otherprimarily by developing health-oriented products, expanding mobile

Group. As for enhancing the value of human capital, I believe it isa dividend of 35 yen per share (pre-COVID-19 level). We will aim to

stakeholders, we were able to overcome this unprecedented crisis

supermarket service, and establishing tourism commerce in the

crucial for employees to act on their own initiative and participate

pay dividends at or above this level in the future.

quickly and move towards a phase of renewed growth. On thisKyoto area, as well as around Mount Hiei and Lake Biwa.

in challenging projects with an attitude of moving one step,Also, our FY2031 quantitative targets are operating income ofoccasion I would like to express my heartfelt gratitude to everyone.

In the leisure & service business, we are working to open

or even half a step, ahead. I feel encouraged by the fact thatat least 43 billion yen, profit attributable to owners of parent of 30

I hope all stakeholders have strong expectations for the growth of

new hotels and enhance the added value of existing hotels. The

enthusiasm among employees for taking on challenges is muchbillion yen or higher, EBITDA of at least 70 billion yen, a net interest-

the Keihan Group and I look forward to their continued support in

Hotel Keihan Namba Grande, which opened in March 2023, notstronger than in the past.

bearing debt/EBITDA ratio of 6.0 level, and an ROE of around 8%.

the future.

21

KEIHAN GROUP INTEGRATED REPORT 2023

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22

Discussion: CEO + Outside director
What are the key points in realizing our longterm vision for 2050?
Kato Ever since I became President in 2011, there is somethingthat I have been continually saying, that is: “safet y andchallenges.” It may seem contradictory at first glance, but giventhat our founding business is the railway, safety is an eternal
topic that we can never compromise on, and something that wewill always prioritize before anything else. On top of that, in orderto achieve sustained growth, we have continued to diversify ourbusinesses with the aim of being a large, reputable company andbecoming “Keihan as First Choice.”
However, Japan’s birth rate is declining and the population
is aging and shrinking at an unprecedented speed. Moreover,the innovation of digital technology is dramatically transforming
people’s values and lifestyles. To achieve sustained growth of

Deepening
the BIOSTYLE concept

the Keihan Group in the face of this operating environment, I
believe competing on substance by, for example, enhancing
the added value of our businesses, is far more important thanpursuing quantitative growth. And if we are to compete basedon substance, it is critical that we do not passively respond to

based onchange, but instead create value ourselves in anticipation of“safety and challenges”“Keihan as First Choice” also reflects a passive mindset. If wechange.
In that sense, upon closer consideration, the idea of becoming
do nothing, the current market is inevitably going to shrink. I
therefore believe that unless we take matters into our own hands

Yoshifumi Kato

Kazutoshi Murao

Representative Director & Chairman,

Director

CEO, Chairman of the Board

Keihan Holdings Co., Ltd.

Keihan Holdings Co., Ltd.

and adopt an aggressive approach, we will have no future. Still,
I think my repeated calls for employees to challenge themselves
have proved worthwhile because I get the feeling that a change
in mindset towards proactively creating value has really takenroot in the Company.
Murao The Keihan Group’s operations are based in areas thatcan be aptly described as the treasure trove of Japan; Osaka is abustling mercantile city, Kyoto is steeped in history and traditions,and Shiga Prefecture and Lake Biwa are rich in natural beauty.
The Company has formulated a long-term vision to provide newvalue to the region’s residents and visitors, and by backcastingf ro m th at v i s i o n, i t h a s a l s o d eve l o p e d a n a p p ro p r i ate
management strategy. It also has the brilliant BIOSTYLE concept
to help solve social issues—an approach to value creation thatgets full marks from me.
In particular, attracting more overseas tourists will be key to thedevelopment of the Kansai region economy, and by extension,
the Japanese economy, and because the Keihan Group’s
contribution impact in this regard can be really significant, I
hope it will continue to actively create value for the local areas
and tourism along the Keihan Railway lines and communicate
the value to the world. In other words, I want to see the groupenhance its corporate value in a sustained manner in line withthe management vision of “Be the beautiful Keihan areas and theglobal Keihan group.”

23

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24

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Management message

Discussion: CEO + Outside director

What is your view of the Keihan Group’s value
creation?

create products, services, and businesses that can increase
people’s life value and solve social issues at the same time. In
order to promote it, we have established some action guidelines
to question whether our projects are good for health, the mind,

Kato Again, “Safety & Security” is at the root of the Keihan

communities, society, and the earth. You could say they are aGroup’s value creation, so our approach is to respond firmly

simple representation of the Keihan Group’s values. Based on

to the demands of society, for example to help prevent global

these guidelines and the criteria of whether a project is goodwarming, while at the same time maximizing the value of mainlyfor Keihan brand and good for Keihan business, we actively

the Keihan Railway lines. In that context, what Mr. Murao justengaged in discussions about whether our current and future

mentioned about enhancing the appeal of the Keihan Railway

undertakings can truly be considered good businesses andlines from a global perspective and welcoming many inboundwhether employees can resonate with the BIOSTYLE concept

visitors from around the world is a major growth driver forand proactively take action.

the Keihan Group. That is why it is important that we dare toembrace unprecedented challenges that are not just extensions

Murao Partly because of my background in telecommunicationsof past endeavors in order to create new impressions and, inand the fact that I currently serve as the chair of the Kansai

a good sense, new surprises. Fortunately, I think there is more

Economic Federation’s Digital Transformation Committee,

than enough potential for this along the Keihan Railway lines dueto the rich tapestry of history, culture, and scenery.
On the other hand, the group’s core railway business is an
inseparable part of the local community, which is why the
Keihan Group tends to be seen as a very domestic corporategroup. However, the various businesses that have evolved from

Please briefly summarize the initiatives
implemented during the so-called emergency
response period.

during the discussions about how to deepen the BIOSTYLE
concept, I made various comments particularly about the“smartification” of businesses. For instance, I proposed theadoption of a metaverse for a planned shopping mall renovation
and a mechanism to guide customers from a virtual shopping

However, we are not satisfied with this alone. We areconsidering how to further utilize the station to create value.
In actual fact, we have been examining how to effectively use
company-owned land for more than 30 years now and wealways wanted to build a facility that would become the face

Kato In 2018 we announced our management vision and also kickedmall to brick-and-mortar stores. In addition, I provided advice on

off the previous medium-term management plan, “Create Living,a system for the Hotel Keihan Namba Grande, which opened inCommunity, and Excitement,” as part of the long-term management

March 2023, to enable guests to complete hotel check-in, check-strategy that we formulated at that time. We made smooth progressout, and other services entirely on a smartphone in anticipationon the plan up until FY2020, including the opening of our flagship hotel,

of demand from overseas visitors for consecutive night stays.

THE THOUSAND KYOTO, in front of Kyoto Station. We also achieved

I also recommended that the Company should look to collaborate

most of our earnings targets. However, we were forced to bringwith startups and other companies that have innovative ideas

the medium-term management plan to an end in FY2021 because

instead of going it alone on such ideas and technologies. These

opportunity.

people’s movements decreased significantly owing to the impact ofproposals of mine have been reflected into the medium-term

the COVID-19 pandemic, which also triggered sudden changes inmanagement plan.

provide rental apartments instead of built-for-sale condominiums.

Murao Even along the Keihan Railway lines the population is in

consumer behavior. We therefore designated the period from mid-

Which key elements of this medium-term
management plan are you particularly focused on?

the project if we would sell the apartments in lots, we were

the railway are now leveraging their know-how even in otherregions and contributing to business growth beyond the Keihan
Railway lines. For instance, the real estate business has alreadyestablished a presence in not only the Kanto region, but alsoin Sapporo, Nagoya, and Okinawa, and it is even expanding
overseas in the US and Asia. While our background is certainly
domestic, we are not necessarily limited to certain regions,so for that reason we are seizing on every possible businessdecline, and earnings will taper off if the group continues to rely
solely on the railway business, which is why the Keihan Groupis significantly transforming itself by focusing on the three main
strategies of “Redevelop Keihan areas,” “Co-create tourism
opportunity,” and “Create relatable content.” To be honest,
before I assumed my position as an outside director, I had an
impression that the Keihan Group was dependent on the railway
business for the majority of its revenue. However, the fact isthat the transportation business accounts for around 25% of
operating income, while the real estate business is close to 50%.
Despite this, the Keihan Group does not hesitate to invest insafety measures and improvements to convenience in the railway
business. It is also leveraging the consideration for people andsociety, as well as the meticulous standard of service, honed in
the railway business and turning them into strengths to further

FY2021 through to FY2023 as a time to urgently respond to the rapidchanges occurring in the operating environment. During the period, in
addition to “Safety & Security,” we narrowed down our projects andof Hirakata, a city with a population of 400,000. This led to the
proposal of a redevelopment project from Hirakata City, and as
a result, we are now constructing a high-rise mixed use complex
with commercial, office, hotel, residential, and government
facilities on land we partially own (section 3). I am confident that
this building will be embraced as a symbol of the new Hirakata
by both local residents and visitors from around the world.
For the residential portion of the complex, our plan is toEven though we could quickly recoup the funds used to financeconcerned that the facility might be viewed as an investment
proper t y. We feel strongly about at tracting the younger
generation in the working prime of their lives to Hirakata,emphasized “Structural Reform” to adapt to people’s changing behavior.

Kato Several large-scale facilities are slated for completion by

Also, because BIOSTYLE, which we had continued to promote since2025. In particular, the redevelopment project around Hirakatashi

2014, had gained traction, we once again placed the concept at theStation scheduled for completion in 2024 is a long-awaited

center of our activities to propel various initiatives. To sum up, despite

project at the head office location on the register ever since thesome things coming to a standstill, including the postponement ofcompany’s founding. The refurbishment of Hirakatashi Station inlarge-scale projects, I believe we were able to successfully establish a2018 was the starting point of this project, underpinned by the

structure with which to launch a counteroffensive during the stage ofthinking that the station is the face of the town, and if the station

Murao I think the idea of “Community building starting fromrenewed growth in the with/post-COVID era.

changes, so too will the town. That is why we aimed to carry out

railway stations” is a depar ture from the passive stance“Community building starting from railway stations.” We therefore

mentioned earlier by Mr. Kato and a symbolic initiative throughsought to partner with Ryohin Keikaku Co., Ltd., the retailer of thewhich the Company creates value itself. On top of that, it is notglobally recognized Muji brand, which has a lot in common with thejust about attracting more people to the area to generate profits;

BIOSTYLE concept, for the design of the station renovations. The

it is about working closely with the community, building long-rebuilding was completed successfully and received widespreadterm relationships with more people, and sticking to BIOSTYLE

What discussions in particular took place when
the new long-term management strategy was
being formulated?

diversify its business portfolio. This, in my opinion, is an aspect

thereby contributing to the revitalization of the area. Rather thanrecovering capital in the near term, we want to adhere to the
BIOSTYLE concept of doing something “good for locals” andensure that people live in the apartments.

of the Keihan Group’s value creation that is worth mentioning.

Kato A significant amount of time was certainly taken up

acclaim with the integration of the station and commercial facilities

management. This project certainly has my full support andI believe that deepening this approach to further evolve theby discussions on how to incorporate BIOSTYLE into eachprojecting the BIOSTYLE image mainly through warm wood-grain

captures the essence of what long-term value creation is all

business. BIOSTYLE is an initiative of the Keihan Group to

flooring and an open skeleton structure.

about.

BIOSTYLE concept is the next stage for the group.
25

KEIHAN GROUP INTEGRATED REPORT 2023

KEIHAN GROUP INTEGRATED REPORT 2023

26

Management message

Discussion: CEO + Outside director

Mr. Murao, what do you pay particular attention
to when monitoring management from anexternal point of view?
Murao Considering that the railway business consumes a lotof electricity, efforts toward decarbonization and guaranteeing
safety are areas that cannot be overlooked.
Kato Trains are an environmentally friendly mode of transportbecause of their superior energy efficiency compared to otheroptions. However, as you mentioned, the Keihan Group operates
commercial facilities and hotels in addition to transportation
services such as railways and buses, all of which require a

Strategies for value creation

the major railway companies in the Kansai region, including
Keihan, jointly established the Kansai MaaS Council and recently
released a smartphone app called KANSAI MaaS. This app does
more than just search for train routes; it has multiple functions
to provide users with information about events and experiences
happening in different locations. As I have been mentioning, theuptake of smart technology is evolving beyond our imagination in
all facets of society, so I believe one of my most important roles
is to ensure that the Keihan Group stays abreast of these trends
by providing oversight and advice as necessary.

What do you think is most important in order tonurture employees ready to take on challenges?

substantial amount of energy. It is our responsibility to contributeto global environmental conservation, not only through the

Murao For the Keihan Group’s employees to actively embrace

adoption of energy-efficient equipment and renewable energy

the challenge of creating value, I think workplace environments

sources, but also by reducing waste and effectively utilizing

in which frontline employees can work actively are key, but at thewater resources. We therefore plan to establish concrete targets,same time, a sense of tension is also required in order to upholdincluding what to do and when to complete, to address these“Safety & Security.” This indeed is the balance of “safety andvery important issues.

challenges” that Mr. Kato mentioned early on in this conversationand in my opinion, it is highly commendable that the Keihan

Murao I also pay close attention to human rights. Violations of

29 Overview of long-term management strategy and medium-term
management plan “BIOSTYLE: Deepening and Challenge”
33 Long-term management strategy: Overview of main strategies

Group has achieved that balance.

36 Special feature

human rights are often challenging issues that do not come tothe surface so easily. This is because in many cases, people

Kato To nurture employees with a mindset for challenges,

choose to remain silent or pretend not to know. However,

the Company must first demonstrate that it is ready to take on

the reputational damage when such a culture is exposed ischallenges itself. Essentially, it means showing a willingness to

unfathomable. Given that the Keihan Group operates different

take on challenges with specific projects. In that sense, even inbusinesses with a very wide range of business partners, it mustthe Hirakata Project we discussed earlier, we engaged in a co-remain vigilant about human rights risks. Even if there is no direct

creation initiative with Ryohin Keikaku and undertook numerous

involvement, any violation of human rights being left unaddressed

other challenges. Beyond that, in all of the various projects thein the supply chain could seriously harm the Keihan brand.

Keihan Group is currently pursuing, we must clarify what kind ofThis is why I examine the entire supply chain to make sure that

future we are envisioning, what the challenges are, and for what

41 Retail distribution

audits related to human rights are being properly carried out, by

purpose. In doing so, we can nurture those that will follow in ourchecking for abnormally long working hours, for example.

footsteps by ensuring they comprehend what we are trying to do.

43 Leisure & service

In addition to this kind of risk management, owing to the rapid
pace of changes in values and technological innovation, I alsoLong-term management strategy
Redevelop Keihan areas
37 Business overview and medium-term management plan strategies
37 Transportation
39 Real estate

45 Medium-term management plan:

question whether the company’s current strategies are really

Strategy for GOOD NATURE STATION /appropriate in light of the changes in society, and if a review isStrengthening the management basenecessary. With the World Expo in Osaka approaching in 2025,

27

KEIHAN GROUP INTEGRATED REPORT 2023

28

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Overview of long-term management strategy and medium-term management plan

“BIOSTYLE: Deepening and Challenge”

With the aim of being a corporate group that can continue to grow in a sustained manner in the future even after the COVID-19 pandemic,

43.0 or higher

the Keihan Group has formulated, and is currently implementing, a long-term management strategy and medium-term management plan.
33.7

23.0
20.4

20.1

■ Operating income

13.4■ Profit attributable to owners of parent
-1.2

2016

2017

2018

2019

30.0 or higher(plan)

31.1
21.4(billions of yen)(target level)

34.0

2020

(target level)(plan)

17.6

9.5

-4.5

2021

2022

2023

2024

2025

2026

2031

2051

Long-term management strategy (target: FY2031)

Long-term management strategy (target: FY2027)(FY)

Management vision

Be the beautiful Keihan
FY2016–2018

Medium-term management plan
“Bravely Pursuing Creation”

Conversion toholding company

Mid-FY2021–2023

FY2024–2026

Medium-term management plan
“Create Living, Community, and Excitement”

Future Business Direction

Medium-term management plan
“BIOSTYLE: Deepening and Challenge”

Embracing the challenge of creating new value
during a new growth stage

Embarking on a “second foundation” stage andbravely taking a new first step

areas and the global

FY2019–2021 (terminated midway through FY2021)

Revisions to the management vision
Formulation of the Keihan Group’s long-term strategic concept

Brought the previous medium-term
management plan to an end to focus on
rebuilding the management baseEmbracing the challenge of leveraging BIOSTYLE to enhance theadded value of existing businesses and to create new ones

Keihan GroupKUZUHAMALL

COVID-19 pandemic

Background behind the formulation
May 2018: Formulation of management vision for 2050 and long-term strategic concept

March 2023: Formulation of long-term management strategy (target: FY2031) andmedium-term management plan “BIOSTYLE: Deepening and Challenge” (FY2024–2026)
The external environment surrounding the Keihan Group is growing more volatile and uncertain, mainly due to increasingly intense natural
disasters, Japan’s low birth rate coupled with a aging and shrinking population, and advancements in digitalization, not to mention the

From a long-term point of view, various changes are predicted to significantly impact people’s lifestyles and values, as well as thebusiness of the Keihan Group. For example, the saturation of the domestic market owing to population decline, intensification ofcompetition between global cities, the evolution of IoT, AI, and other technologies, and different kinds of business schemes in the Kansai
region, including the planned integrated resort. In this environment, we seek to transform ourselves into a group that can spark qualitative
innovation in our businesses, stay one step ahead of changes and seize opportunities, and take on the challenge of creating value andexpanding globally. To this end, in May 2018 we adopted a management vision for 2050, “Be the beautiful Keihan areas and the global
Keihan group,” and formulated a long-term strategic concept comprising medium- and long-term strategies for realizing the vision.

diversification of customer values and lifestyles brought about by the COVID-19 pandemic. Under these circumstances, the Keihan Group
newly established a long-term management strategy and a medium-term management plan, designating FY2024 as the turning point for
shifting from a COVID-19 emergency response phase to a renewed growth trajectory phase, in order to build a foundation for sustained
growth with a view to realizing our management vision.

Keihan Group’s long-term strategic concept (FY2024 onward)

Management vision for 2050

“Be the beautiful Keihan areas and the global Keihan Group”

Management
Principles

We will create value for towns and tourism and disseminate them to the world so that the areas along Keihan Railway
lines which are rich in history, culture, and landscape will be chosen by more people as areas where they want to live
and visit beyond countries and generations.
We will create a beautiful life cycle in areas along Keihan Railway lines that brings fulfillment to the mind and bodyand contributes to the realization of a sustainable society, thereby expanding the ring of empathy to the world.

Unchanged

Management vision(vision for 2050)

We will attract many inbound tourists to the areas along our lines and take on the challenge to expand our businessAsia-wide.

November 2020: Future Business Direction of the Keihan Group
Owing to the COVID-19 pandemic, we decided to prematurely end the medium-term management plan “Create Living, Community,and Excitement” and, for the time being, take stock of the rapidly changing business environment. We focused on rebuilding ourmanagement base by implementing measures based on “Safety & Security,” ”Structural Reform,” and “BIOSTYLE,” and pressed ahead
with the main strategies of the long-term management strategy whilst also reviewing them at the same time.
By FY2023, our structural reform efforts to establish a system capable of responding to changes in demand had been mostly
completed and we began to see signs of a normalization in social and economic activities.
29

KEIHAN GROUP INTEGRATED REPORT 2023

New

Long-term management strategy(target: FY2031)

New

Medium-term management plan (FY2024–2026)“BIOSTYLE: Deepening and Challenge”

The Keihan Group will create a comfortableliving environment and contribute to society
by establishing a network of dreams, hope,and trust.
Aiming to establish a foundation as a corporate groupthat will grow sustainably in the future, even in thehighly uncertain post-pandemic era, and achieve ourmanagement vision with the target year of FY2031, thesame as that of the SDGs
Implementing a three-year action plan, which has been
established based on the long-term management strategy,
to return to a growth trajectory
Embodying BIOSTYLE in each business and taking on thechallenge of leveraging BIOSTYLE to enhance the added
value of existing businesses and to create new ones
Pursuing profit levels higher than those of pre-pandemic
levels by steadily capturing the recovering and increasing
demand, while maintaining the results of “Structural
Reform” implemented to date

KEIHAN GROUP INTEGRATED REPORT 2023

30

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Overview of long-term management strategy and medium-term management plan
“BIOSTYLE: Deepening and Challenge”
Overview of the long-term management strategy

Capital allocation in the medium-term management plan

We will place “BIOSTYLE (Keihan version of the SDGs),” which we have been working to establish as the Keihan Group’s new brandfor the creation of a sustainable, recycling-oriented society, at the core of management and business activities, and will promote
BIOSTYLE management that creates both social and economic value.

Aggressively invest in growth that contributes to the enhancement of corporate value and the Keihan brand, centered around the threemain strategies of the long-term management strategy.
For shareholder returns, continue to pay stable dividends in line with financial results and flexibly carry out share buybacks.
*Aim for an early resumption of a dividend of 35 yen per share (pre-COVID-19 level) or higher

Take out loans and issue corporate bonds to secure funds while maintaining a balance with EBITDA.
*Targeting a net interest-bearing debt/EBITDA ratio of 6.0 level

Advancing toward achieving
the management vision

Promoting BIOSTYLE Management

Creatingsocial value

Mainstrategies
for FY2031(solving social issues)

Strategy foreach business

Theme

Mission of the Keihan Group

Redevelop
Keihan areas

Improving the value of the areas along therailway lines through urban development
and area management

Co-createexperience value

Improving the value of Kyoto and the
Mt. Hiei/Lake Biwa area by offering tourist
experiences

Conserve the global
environment

Contributing to the solution of climate change
and other environmental issues

Transportation
Leisure & service

Strengthening
the managementfoundation

Real estate(3-year total)

Management vision
Be the beautiful Keihan areas
and the global Keihan Group

Creating
economic value(profit growth)Contributing to the achievementof the SDGs

Retail distribution

Redevelop
Keihan areas

Cash flows from operating
activities

Investment for growth

Co-createexperience value

100 bn yen

130 bn yen

Other businesses

Approx.

70 bn yen

Conserve the global
environment

DX (digital transformation)

Approx.

Strategic investment capability*

Human resources strategy

Create demand for railways
Develop and acquire real estate
Strengthen the retail distribution business
Enhance added value of hotels, etc.

40 bn yen

Investment in maintenanceand renewal

Financing and recovery
of funds

30 bn yen

60 bn yen

Shareholder returns*Investment capability for M&A, alliances, etc.

Quantitative targets
What is?

BIOSTYLE is an initiative of the Keihan Group to create products, services, and businesses that can increase people’s life
value and solve social issues at the same time. We started proposing and promoting BIOSTYLE even before the SDGs were set
forth as common goals for the international community.
In 2020, we formulated a set of unique guidelines in order to promote the BIOSTYLE PROJECT throughout the group.

During the period of the medium-term management plan, we will first aim to post profit levels higher than before the COVID-19 pandemic
by reaping the benefits of mainly a recovery in domestic and inbound tourist demand, greater visitor numbers buoyed by the World Expo
in Osaka, and the opening of large-scale projects, such as the Nakanoshima, Hirakatashi, and Yodoyabashi developments. Following
that, we will aim to generate further growth with our long-term management strategy.
■Operating income■Profit attributable to owners of parent●ROE

BIOSTYLE Guidelines

70.0 bn yen

8.02

GOOD for Health

8% level

GOOD for Minds
43.0 bn yen

GOOD for Locals

or higher

GOOD for Social
GOOD for Earth■EBITDA (operating income + depreciation)●Net interest-bearing debt/EBITDA ratio

58.0 bn yen

7% level
6.8%

34.0 bn yen

30.0 bn yen

40.5 bn yen

17.6 bn yen

6.0

6.0

FY2026plan

FY2031target level

level

or higher

20.4 bn yen

or higher

level

23.0 bn yen

GOOD for KEIHAN Brands
GOOD for KEIHAN Business
FY2023
Actual31

KEIHAN GROUP INTEGRATED REPORT 2023

FY2026plan

FY2031target level

FY2023
ActualFY2026plan

FY2031target level

FY2023
ActualKEIHAN GROUP INTEGRATED REPORT 2023

32

Keihan Group INTRODUCTION

Strategies for value creation

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Hieizan Driveway
Hieizan Driveway
Oku-Kyoto

Oku-Kyoto

Hiei Sancho Hiei Sancho

Long-term management strategy: Overview of main strategies

Rakuhoku

Sanjo

We will promote the following three main strategies with a view to FY2031:(1) Redevelop Keihan areas; (2) Co-create experience value; and (3) Conserve the global environment.

Rakuhoku
Mt. Hiei

Sanjo
Lake Biwa
Higashiyama Higashiyama

Kyoto Tower

Kyoto Tower

Kyoto

Kyoto

Main
Strategy

Mt. Hiei

Co-create experience value

Lake Biwa

Basic policy
Fushimi-inari Fushimi-inari
FushimiRedevelop Keihan areas

Chushojima

Hashimoto

KuzuhaKuzuhaBasic policy
Centered around railway stations, we will promote urban
development featuring the characteristics of local history,
culture, and industries, as well as area management

Hirakatashi Hirakatashi
Hirakata-koen Hirakata-koen

involving local communities. By connecting with a traffic
network, we will revitalize attractive and beautiful areas

Kozenji

Kozenjialong the Keihan Railway lines to increase the value of,KorienKoriencontent with local communities. By utilizing these for advancing tourism-based
Route:
ism GoldenjiKyoto Tour
–Fushimi/U
igashiyama
Rakuhoku–H

Hashimoto“Kyoto Tourism Golden Route,” and co-create attractive, experience-based

Chushojima
Route:
ism GoldenjiKyoto Tour
–Fushimi/U
igashiyama
Rakuhoku–H

Main
Strategy

We will discover and improve valuable resources mainly along the so-calledFushimicommunity building and themed tourism, we will promote sustainable tourism

Uji

Uji

Uji

and increase the number of visitors, including repeat visitors, from Japan andabroad.

Uji

H Kyoto Station Southeast Area

1

Promoting urban development by taking advantage of regional
characteristics along Osaka’s east-west axis, from Kyobashi, the gateway
to Kyoto and close to Osaka Castle, through Nakanoshima, which isplanned to become a hub for regenerative medicine, to the bay area,
where the integrated resort (IR) project is underway

A1 Nakanoshima 4-chome
International Hub for Medical
Innovation Project
Completion: FY2024
Total floor area: Approx. 57,000 m2
Contributing to the industrialization and globalization of
medical innovation by developing facilities that promote
the “circulation of knowledge” where people involved in
medical innovation and cutting-edge information gather

A2 Own site development in Nakanoshima 4-chome
Considering joint development with adjacent landowners in anticipation of the openingof the Naniwasuji Line

B Joint reconstruction of Keihan
Midosuji Building and Nittochi
Yodoyabashi Building

KEIHAN GROUP INTEGRATED REPORT 2023

J Redevelopment of Kyoto Tower
Deepening discussions with an eye to the future beyond
FY2031

Renovating the facilities to make the area more
attractive to tourists

axis
axis
t-westt-west’s easOsaka Osaka Castle Osaka Castle

2

Yumeshima USJ
Yumeshima USJ

Priority measure

Community building startingfrom railway stations

Concentrating urban functions around railway stations and continuously
carrying out community building by taking advantage of regional
characteristics in cooperation with local businesses and the community
itself; bringing the station and the community together to create spaces
where people gather and new communication arises

D Type-1 urban
redevelopment projectin Hirakatashi Station
area ▶P36

Priority measure2

Establishing the Kyoto Tourism Golden Route through themed tourism

Establishing the Kyoto Tourism Golden Routeby co-creating story-based tourist experienceswith local communities under such themes
as traditional industry, art, food, history, andnature, as well as by providing comfortablearea-wide tours using MaaS and other methods
in Kyoto and surrounding areas

Opening: Around summer 2024
Total floor area: Approx. 94,000 m2

Kyoto Tourism Golden Route:Rakuhoku–Higashiyama–Fushimi/Uji

Oku-Kyoto

Rakuhoku

Mt. Hiei
Lake
Biwa

Higashiyama

FushimiCopyright © 2022 Hirakatashi Station Area Urban Redevelopment
Association All Rights Reserved

Participating in projects such as theredevelopment of Kadoma Plaza, acommercial facility in front of Kadomashi
Station, and the development of Kadoma
City’s first high-rise condominium, acommercial facility, and a large plaza open
to the community on city-owned land
north of Furukawabashi Station

Deepening discussions with a view to 2030 and beyond

33’s easOsaka

Building a high-standard office building, the highest
in the area at 150 meters high, in Yodoyabashi, thegateway to Midosuji, with advanced eco-friendly
technology

Redevelopment of the Temmabashi Station area andextension of the Nakanoshima Line

Developing a complex facility in front of Sanjo Station
to serve as a tourist base in Higashiyama and promote
Japanese culture and the like

K Renovating facilities at the top of Mt. Hiei

E Redevelopment of the areas in front of Kadomashi Station and

C Redevelopment of the Kyobashi Station area

area

Participating in an Limited Liability Partnership (LLP)
led by teamLab Inc. to establish and operate a culturalcomplex that connects the area with the world with afocus on art
Opening: FY2025
Total floor area: Approx. 10,000 m2

Nakanoshima Nakanoshima

Opening: Summer 2025
Total floor area: Approx. 73,000 m2

Advancing discussions of the launch of development as a critical area for revitalizing
Osaka’s east-west axis

I Redevelopment of the Sanjo Station

Project

FurukawabashiFurukawabashi
Kadomashi Kadomashi
Kyobashi
KyobashiTemmabashi Temmabashi
Yodoyabashi Yodoyabashi

Revitalizing Osaka’s east-west axis

Developing new tourist bases

Developing tourist bases that will provide new options for visitors to Kyoto in the area southeast of
Kyoto Station and the Sanjo area near tourist attractions in Higashiyama, among other areas

and attract more residents and visitors to, these areas.

Priority measure1

Priority measurenorth of Furukawabashi Station

F Station area development along with the continuous grade

Priority measure3

Uji

Co-creating tourist experiences with local communities ineach area
Higashiyama–Kyoto Station Area
Theme: Traditional industry and art
Fushimi/Uji Area
Theme: Food and food-related tradition and culture
Mt. Hiei/Lake Biwa/Oku-Kyoto Area
Theme: History and nature

Creating tourism content that connects Kyoto and Osaka

Creating tourism content that links Kyoto with Osaka, such as the oldwaterways called “Flow of Water” used for transportation that run from Lake
Biwa to Kyoto and Osaka Bay via the Yodo River; encouraging use of the
Keihan Line by creating and promoting unique tourism content, based on thetheme of art, in cooperation with museums and other facilities in Kyoto andthe Nakanoshima district of Osaka

separation project on the Keihan Main Line (Neyagawa Cityand Hirakata City)

G Development of the Hashimoto Station area

Lake Biwa Canal

Cruise boat Himawari on the Yodo River

KEIHAN GROUP INTEGRATED REPORT 2023

34

Strategies for value creation
Special feature

Long-term management strategy: Overview of main strategies

Long-term
management strategy

Redevelop
Keihan areas

Conserve the global environment
Basic policy

Main
Strategy

To achieve our CO 2 emission reduction target, we will steadily reduce energy consumption throughthorough energy savings and adoption of new technologies and consider promoting energy creation, suchas PV power generation, and procuring renewable energy. We will also work on developing products andservices that will be chosen in a decarbonized society.

Priority measure

Promoting “BIOSTYLE Environmental Action 2030”

Promoting “BIOSTYLE Environmental Action 2030,” the Keihan Group’s medium- to long-term environmental plan announced in May 2022

Community building startingfrom railway stations

Redevelopment of
Hirakatashi Stationarea
Copyright © 2022 Hirakatashi Station Area Urban Redevelopment Association All Rights Reserved.

Course of action

Promoting the reduction of CO2 emissions and the development of products and services that will be chosen in a
decarbonized society through “thorough energy savings and adoption of new technologies,” “promotion of energy
creation,” and “procurement of renewable energy”

Reducing CO2 emissions
Thoroughenergy savings

CO2 emission reduction target*2

and adoption of newtechnologies％ by FY2031 (compared to FY2014),
Reducing CO2 emissions bywith the goal of achieving net-zero CO2 emissions by FY2051

46*2 Applies to nine companies (Scope 1 & Scope 2)

Promotion ofenergycreation*1

Procurement of

renewableenergyDeveloping products and services that will bechosen in a decarbonized society*1 Introduction of PV power generation equipment, etc.

*Other initiatives: Information disclosure measures
Promotion of a circular economy

Schedule of main strategies

Period of the medium-term management plan(fiscal year)
Nakanoshima 4-chome International Hub for Medical
Innovation Project

2024

2025

2026

Completion●

Own site development in Nakanoshima 4-chome

Under consideration and deliberations

Joint reconstruction of Keihan Midosuji Bldg. and Nittochi
Yodoyabashi Bldg.

Opening●

Redevelopment of the Kyobashi Sta. area

Redevelop
Keihan areas

Redevelopment of the Temmabashi Sta. area and extensionof the Nakanoshima Line
Type-1 urban redevelopment project in Hirakatashi Sta. area

Completion of the urban
redevelopment project ●Development of the Hashimoto Sta. area

Under consideration and deliberations

Redevelopment of the Sanjo Sta. area
Redevelopment of Kyoto Tower
Renovating facilities at the top of Mt. Hiei

35

Deepening discussions with a view to 2030 and beyond
Opening of the area directly
connected to the station ●Under consideration and deliberations

Kyoto Sta. Southeast Area Project

Co-createexperience
value

Under consideration and deliberations

Station area development along with the continuous grade
separation project on the Keihan Main Line

Redevelopment of the areas in front of Kadomashi Sta. andnorth of Furukawabashi Sta.

KEIHAN GROUP INTEGRATED REPORT 2023

2027 ・・・・・・・・・・・・・ 2031

Completion of the area north of Furukawabashi Sta.●
Opening●
Under consideration and deliberations
Deepening discussions with a view to 2030 and beyond
Under consideration and deliberations

Hirakatashi Station
Situated roughly halfway along the Keihan Line and with a population of approximately
400,000, Hirakata City is one of the designated “core” cities of Japan. Hirakatashi
Station serves as a major terminal for the northeast area of Osaka Prefecture.
Reviving the area around Hirakatashi Station is expected to have a considerable
knock-on effect on the entire railway line.

Passenger throughput of Hirakatashi Station:

3rd busiest of the Keihan Railway

No. of bus services per day arriving/departing:Approx.

Type-1 urban redevelopment project in Hirakatashi Station area

1,000

Project area zone map

In the late 1960s and early 1970s, the area around Hirakatashi Station was at the forefront
Section 1
of urban redevelopment projects and was quickly earmarked for intensive land use andSection 2
urbanization. Over the years, some buildings in the area have deteriorated posing a risk todisaster prevention. Vulnerabilities in the transportation system have also been pointed out.
Hirakatashi
StationSection 3
As Japan’s population will continue to age and shrink even further in the future, there wasa growing demand to update the urban functions of the area to accommodate changing
lifestyles and needs.
Project area
At the same time, we had been examining our own development plans for more than 30
years regarding the utilization of company-owned land around Hirakatashi Station. The aim
was to optimize the area from various perspectives so that the development would help
enhance the appeal of Hirakata City, a core city on the Keihan Main Line connecting Kyoto and Osaka.
Accordingly, we were approached by Hirakata City with a proposal on whether the area around the station, including company-owned land, could
be developed in an integrated fashion as part of an urban redevelopment project to expand the station square. That led to our involvement in theredevelopment project for the purpose of enhancing the appeal of the area.
In March 2020, the Hirakatashi Station Area Urban Redevelopment Association was formed. The Keihan Group is currently developing a complex
facility with commercial, office, hotel, residential, and government functions integrated into the station on land we own (Section 3). We commenced
construction work in Section 3 in January 2021 and aim to complete the construction of buildings sometime in FY2025.

Four functions planned for Section 3
Commercial

Residential

Work is underway to create an attractive facility that will become the newstandard for Hirakata. We will also create pleasant places to walk aroundthat are conducive to various encounters and scenes. The building will beconnected to the existing elevated railroad facility, with the second floor
leading from the east gate of the station to the Amatsu Bridge over the
Amano River.

Floors 5–29 will be a residential tower of around 200 apartments for rent,
ranging in size from 30m 2 (1 bedroom) to 80m 2 (3 bedrooms). We aim toprovide “the future of housing” to address the issue currently faced by
Hirakata City, where the population of citizens in their 20s and 30s is smaller
than the national average.

Office
The area in front of Kadomashi Sta. still
under consideration and deliberations

We a r e a i m i n g to p r o v i d e o f f i c e s p a c e s t h a t f o s te r h i g h - q u a l i t ycommunication, suppor ted mainly by the integrated design and theenhanced attractiveness of the space.

Hotel
The hotel will have 139 rooms, as well as a banquet hall and restaurant.
The top floor will feature an open-air “sky spa” bathing area. With a special
emphasis on the design aspects, we aim to build a landmark hotel together
with the local community that serves as a shining light.

Copyright © 2022 Hirakatashi Station Area Urban Redevelopment Association All Rights Reserved.

KEIHAN GROUP INTEGRATED REPORT 2023

36

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Business overview and medium-term management plan strategies
Main measures for BIOSTYLE managementin the medium-term management plan

Transportation

Promoting more eco-friendly transportation businessWe will create new demand and optimize operations while further improving “safety and security,” the foundation of the KeihanGroup, to build a strong business structure.

Driving the continuous grade separation project on the Keihan Main Line
(Neyagawa City and Hirakata City)(eliminating traffic congestion by removing railroad crossings and reducing
CO2 emissions)
Accelerating the introduction of eco-friendly 13000-series train cars at
Keihan Electric Railway Co., Ltd.
Introducing vehicles equipped with variable frequency drive (VFD) inverters
and regenerative braking, remodeling existing vehicles with regenerative
braking, and newly installing regenerative power storage equipment on
Keifuku Electric Railroad Co., Ltd.

The groundbreaking ceremony for the continuous grade separation projectIntroducing more electric buses in the bus business (Keihan Bus, etc.)
Promoting effective vehicle operation
Converting lighting to LED lighting at stations and other railway facilities

Contributing to a decarbonized society and reducing costs
while building a sustainable transportation system
Keihan Electric Railway 3000 series

Keihan Bus electric bus

Hirakata Park

Measures in the medium-term management plan

FY2023 management status
At Keihan Electric Railway Co., Ltd., we began railway construction for the Keihan Main Line (Neyagawa City, Hirakata City) continuous

Further efforts for safety and security

grade separation project. This project aims to resolve traffic congestion and railroad crossing accidents by removing 21 railroad

Keihan Electric Railway Co., Ltd.

crossings. It also aims to upgrade stations for safer and more comfortable usage. On August 5, 2022, we submitted a notification to the
Ministry of Land, Infrastructure, Transport, and Tourism regarding our fare setting and maintenance plan utilizing the barrier-free fareAccelerating the introduction and updating of platform screen
doors and other accessibility facilities

system (to be added to fares starting April 1, 2023). Going forward, we will continue to maintain and update our equipment, including
platform screen doors, to create facilities and environments that ensure our customers’ safety and comfort. Our business performance

Providing special riding experiences on Keihan Electric
Railway Co., Ltd.
Increasing the number of Premium Cars
to provide a quality travel experience
in response to customers’ changing
lifestyles and growing needs for safe andreliable travel services

showed an increase in passengers compared to the previous fiscal year. Our operating expenses were kept lower than pre-pandemic

Premium Car

levels thanks to an efficient business management system that efficiently delivers necessary services. As a result, our transportation(Index)*business operating revenue was 80,927 million yen, and our operating income was 6,885 million yen.

Operating revenue composition

Changes in operating revenue

Changes in operating income(Million yen)

(Million yen)

100,000 93,926 93,365

12,000 11,221
10,86280,92780,00065,694

Transportation

60,00029.1％

40,00070,768

8,000

6,885

173

0

Driving the continuous grade separation project on the Keihan MainLine (Neyagawa City and Hirakata City)(enhancing operational safety by removing railroad crossings)

Transforming operations through the use of digitaltechnology, etc.

-10,0002019 2020 2021 2022 2023 (Fiscal year)

Installing on board security cameras on newly built or remodeled
vehicles-9,6582019 2020

2021

2022 2023 (Fiscal year)

Encouraging the substitution and supplementation of labor through theuse of IoT, AI, robots, etc.

Keihan Electric Railway Co., Ltd.

* Since the start of FY2022, we have been implementing the AccountingStandard for Revenue Recognition and other standards.

• Considering the expansion of driver-onlyoperation

Transportation• Efficient operation of vehicles and railway
facilities

Keihan Electric Railway Co., Ltd.
Passengers:

243,608 thousand

Passenger
revenue:

43,085 million yen

100

2018

2019

2020

2021

2022

2023 (Fiscal year)* FY2018 set at 100
Considering the introduction of sightseeing trains to attract more visitors to
the areas along the railway lines

Capturing new mobility demand-5,0000200
Platform screen doors will be installed on eight tracks in four stations,
including Hirakatashi Station, by FY2026

4,000

20,000Changes in the number of Premium Car users

300

Bus business
Passengers:

77,115 thousand*Bus business• Promoting DX in maintenance operations,
including Condition Based Maintenance(CBM)• Considering the introduction of self-driving vehicles

Implementing proactive marketing measures through collaboration
between the railway and bus businesses to capture opportunities that are
expected to create new mobility demand, such as the grand opening of
the Kyoto Racecourse in FY2024, the World Expo in Osaka, Kansai to beheld in FY2026, and the Osaka IR to be opened in Yumeshima
Improving convenience for tourists by utilizing MaaS and introducing
QR code tickets, as well as by strengthening collaboration with temples,shrines, tourist facilities, and transportation services along the railway lines
in Kyoto, in order to attract inbound tourists

Examining the ideal bus office operation and routes
Examining the ideal operation of bus offices and routes of each bus
company, including the possibility of integration, with the aim of achieving
efficient, sustainable operations for the business as a whole* Keihan Bus Co., Ltd.; Kyoto Keihan Bus Co., Ltd.; Keihan Kyoto
Kotsu Co., Ltd.; Kojak Bus Co., Ltd.; Kyoto Bus Co., Ltd.

37

KEIHAN GROUP INTEGRATED REPORT 2023

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38

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Business overview and medium-term management plan strategies

Main measures for BIOSTYLE managementin the medium-term management plan

Real estate

Strengthening the housing regeneration businessWe will promote the creation of comfortable and secure communities and residences, provide new products and services that meet

Enhancing detached housing development in urban districts utilizing vacant houses and land
Contributing to the regeneration of urban districts along the railway lines that are due forrenewal/redevelopment by utilizing our technology and know-how of house building cultivatedin Kyoto, a unique city in Japancustomer needs, and expand business areas and asset types, thereby driving the Group’s growth.

Participating in condominium reconstruction projects
Accumulating rebuilding know-how by promoting apartment complex rebuilding projects
based on the Act on Facilitation of Reconstruction of Condominiums, so as to secure profits inthe future

Promoting sustainable community buildingthat circulates residents and generations
OMM

Fine Residence Hirakata Korien-cho

Keihan East Rose Town Midorigaoka
Bright Garden

Measures in the medium-term management plan

FY2023 management status

Developing products and services that meet diversifying
values and lifestyles

We began new construction on the Yodoyabashi Station East District Urban Revitalization Project as an advanced eco-friendly property.

Real estate sales

In our real estate sales business, we sold land lots and buildings such as The FINE Tower WEST COAST, Fine Residence Shin-Yurigaoka,
and Keihan East Rose Town. In real estate leasing, we acquired the Keihan Nagoya Sakae-minami Bldg. and Keihan Kumamoto Bldg.

Developing and marketing environment-conscious houses and offices,such as ZEHs and wood-frame buildings

Expanding domestic business areas and asset types in
the real estate sales and leasing businesses
Promoting the acquisition of land for development and rental properties inthe three major metropolitan areas as well as in highly advantageous corecities in other regions
Developing and acquiring non-residential real estate assets that matchthe areas and needs in anticipation of future shrinkage of the domestic
housing market(both of which were renamed following acquisition). Due to a decrease in sales from development projects in the previous fiscal year, ourreal estate business saw a reduction in operating revenue and operating income, with the former at 120,103 million yen and the latter at
17,555 million yen.

Area expansion
SapporoOperating revenue composition

Changes in operating revenue

Changes in operating income(Million yen)

(Million yen)

150,000

24,000120,000

Real estate

137,495
118,607110,228 110,270

120,103

17,468 16,906

17,555ServiceOffice W Kyoto Ekimae0

2019 2020 2021 2022 2023 (Fiscal year)

2019 2020

2021

2022 2023 (Fiscal year)

Real estate

Promoting development projects utilizing urban
development methods

Kyoto

Rakusaiguchi

Annual numberof condominiums sold

245.3 billion yen

ServiceOffice W Temmabashi

Proactively participating in urban development along the railway lines andin other areas, including land readjustment projects in Shimokoma, theYawata IC south area, and Rakusaiguchi* Since the start of FY2022, we have been implementing the AccountingStandard for Revenue Recognition and other standards.

Leasing assets

810*

Annual numberof houses sold557

Okinawa

OfficesTokyo metropolitan area
Chukyo area
Kinki area

Logistics facilities, etc.

Promoting large-scale development,
renovation, and conversion ofunused land and old or deteriorating
properties

4,000

0

Fukuoka

HotelsSendaiEffective utilization of owned properties

Gradually expanding
from the current two
locations(Kyoto Station andTemmabashi)

8,000

30,000Hiroshima

Increasing service locations in the workplace rental business

18,59012,00060,000Rendering of the “Fine City Sapporo URBANFORWARD” ZEH condominium (ZEH-M
Oriented)

Real estate leasing

22,59316,00090,00043.2％

20,000ZEH (Net Zero Energy House)

Developing and acquiring
non-residential real estate assets

Chushojima
UjiKuzuhaHirakatashi

Iwashimizu-hachimangu
Yawata IC south area
Kisaichi

Major upcoming projects• Land in Omi Maiko (Otsu City, Shiga)• Land in Deyashiki, Hirakata City
(Hirakata City, Osaka)• JCB Sapporo Higashi Bldg. (Chuoku, Sapporo City, Hokkaido)

As part of this initiative, Everglades Biwako (aglamping facility) opened in April 2021 in Omi
Maiko.
Further development will be explored andpromoted in the future.

Overseas business expansion
Investing the Group’s managerial resources in overseas projects in the realestate leasing business, etc., while assessing the business direction

Anticipated areas• Emerging countries with high economic growth potential (mainly ASEAN-5)• Europe, the U.S., and Australia, where maturity and stable growth are
expected

Shimokoma* Number based on business share

39

KEIHAN GROUP INTEGRATED REPORT 2023

KEIHAN GROUP INTEGRATED REPORT 2023

40

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Business overview and medium-term management plan strategies

Main measures for BIOSTYLE managementin the medium-term management plan

Retail distribution

Developing the project to suggest “safe, reliable, and healthy eating habits”
We will increase profits by evolving and developing commercial activities in the areas along the railway lines to respond to diversifying

Product development

lifestyles, while supplying commercial content that contributes to the main strategies and establishing tourism commerce.

Promoting the development of health-conscious products by combining the strengths of the department
store, supermarket, and organic produce sales businesses
Launch of a process center
Launching a new process center to accelerate the development of safe and reliable original products andincrease production capacity for stable supply
Mobile supermarket service
Offering a mobile supermarket service that regularly sells food and other products at condominiums, nursing care facilities, residential areas, etc. to create new
points of contact with customers and solve the regional issue of the “last mile” arising from the aging of the population and other factors

KUZUHA MALL

Frest Matsui-yamate Shop

Expanding business while encouraging customers’ healthy eating habitsin the areas along the railway lines

Moyori-ichi Kadomashi Station

Measures in the medium-term management plan

FY2023 management status
In managing the KUZUHA MALL shopping mall, we have focused on enhancing our approach to diversified lifestyles by opening andrenovating 40 stores, thereby strengthening our competitive edge and increasing the appeal of our facilities. In our stores business, we
gradually converted eight stores, including the in-station convenience store “Anthree,” into the new Moyori-ichi in-station style, which
is based on the concept of being the useful local store you always want to use. Our operating revenue decreased to 50,676 million yen
due to factors such as the closure of the Frest Korien store. However, our operating income increased to 1,878 million yen, driven by therecovery of our shopping malls, department stores, and other areas.

Operating revenue composition

Changes in operating revenue

Changes in operating income(Million yen)

(Million yen)

100,000

98,727 98,186

4,000
83,109Retail distribution

60,000

18.2％

3,000
52,908 50,676

2,923

2,000

1,776

40,000Creating and providing new consumer experiences in response tochanging customer needs through the gradual renovation of shopping
malls and other facilities
Expanding self-organized sales areas, which are unique to department
stores that offer customer-oriented, high-quality, and ahead-of-thetimes products and services, establishing a brand, and promoting its
development as tenant stores in commercial facilities, either those of theGroup or those of other companies

1,878

1,192

KUZUHA MALL

002019 2020 2021 2022 2023 (Fiscal year)

2019 2020

2021

119,000 ㎡

30,148 million yen* Combined total of KUZUHA MALL, Keihan Mall, and Keihan
City Mall* Combined total of Keihan Department Store, Frest, Anthree,and Moyori-ichi

41

KEIHAN GROUP INTEGRATED REPORT 2023

Moyori-ichi Temmabashi Sta.

Promoting community building along the railway lines
Utilizing the know-how cultivated through the operation of commercial
facilities in community building to create lively spaces that connect withthe community in public spaces, such as stations, plazas, and spaces
under elevated railway tracks, and to develop urban functions

Retail distribution
Retail* sales

Operating margin

3.7%** Consolidated subsidiaries only

Developing a tourist base that carries on Kyoto’s Higashiyama culture andcreates new tourist experiences to make it an established base in Kyoto
Promoting branding and area value enhancement through the developmentof tourism and commercial content in the Mt. Hiei/Lake Biwa area, thereby
capturing inbound and domestic tourism demand

Launching tourist-focused “Moyoriichi” stores in major tourist destinationsin Kansai, which take advantage of thecharacteristics of each area and sell local
products and original products and content
developed by the Company, in cooperation
with local companies and famous stores

Moyori-ichi Sanjo Sta. “Noren-gai”(tourist-focused store)

2022 2023 (Fiscal year)* Since the start of FY2022, we have been implementing the AccountingStandard for Revenue Recognition and other standards.

Shopping mall* store area

Promoting community building through tourism by developing story-based
experience programs and products that carry on the history and regional
characteristics of the areas along the railway lines

Strengthening “Yorozu wo Tsugumono,” an e-commerce mall that offers
special products carefully selected from all over Japan by department
store buyers

1,000

20,000Establishing tourism commerce

Providing optimal services to meet the needs of customers and thecommunity by converting the in-station convenience store “Anthree” tothe food market “Moyori-ichi” and reorganizing the station spaces

3,258

80,000Evolving and developing commercial activities in theareas along the railway lines

Promoting area management from a commercial perspective, including
the creation of a communication plaza in the public space where people
can gather and interact, in order to make the area more attractive andvaluable on a continuous basis
Promoting open innovation in commercial facilities through partnerships
and collaboration with startups

Advancing development projects
along the railway lines
Type-1 urban redevelopment project in the
Hirakatashi Station area
Forming a base for suggesting enriched
lifestyles and work styles, and developing
BIOSTYLE-based stores

Rendering of stores

Joint reconstruction of the Keihan Midosuji Building and the Nittochi
Yodoyabashi Building
Creating a commercial space on lower floors (B1–2F)

Opening an incubation facility to create a place for industry-academiagovernment interaction

KEIHAN GROUP INTEGRATED REPORT 2023

42

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Business overview and medium-term management plan strategies

Main measures for BIOSTYLE managementin the medium-term management plan

Leisure & service

Enhancing competitiveness through SDGs-oriented rebranding
We will strengthen our competitiveness by promoting branding through the provision of valuable customer experience and advancing

Developing and offering products and services that incorporate local food, culture, and experiences of living in harmony with nature

high-value-added renovations in order to capture domestic and inbound demand, which is expected to recover in the future.

THE THOUSAND KYOTO

Biwako Hotel• Rebranded in July 2022 to drive
sustainability for the entire KeihanGroup• Acting with and nurturing local communities
through projects such as “The Culinary
Colours of SATOYAMA,” which was
designed to protect local communities
through the consumption of foods
produced in Shiga• Providing comfortable and sustainable
experiences and undertaking 100
SDGs actions in one year

Hotel Keihan Tenmabashi Ekimae

THE THOUSAND KYOTO

Providing sustainable and special stay and tourism experiencesthat contribute to the SDGs

Osaka Aqua Bus “Aqua Liner”

FY2023 management status

Measures in the medium-term management plan

In the hotel business, we launched the Hotel Keihan Tenmabashi Ekimae, conveniently located within walking distance of Osaka Castle,
and the Hotel Keihan Namba Grande, situated in the center of Osaka’s Minami area. Moreover, at the Biwako Hotel, we worked to further
enhance competitiveness and facility appeal, such as by reopening the renovated Club Lounge, a dedicated space for overnight guests
featuring the Premier Luxury Floor and more. Owing partly to the bounce-back from the scaled-down operations during the previous
fiscal year’s state of emergency declaration, among other factors, our operating revenue saw a substantial increase, reaching 22,869
million yen, while our operating loss fell markedly to 3,836 million yen.

Operating revenue composition

Changes in operating revenue

Changes in operating income(Million yen)

(Million yen)

60,00012,00050,0008,000

40,000

Leisure & service

8.2％

30,0004,000
30,621 32,081

10,0000

9,724

11,529Hotel Keihan Namba Grande, which opened in March 2023, offers concept
rooms that can be used not only as bases for business trips and sightseeing,
but also as places for guests to relax as if they were at home.

1,817-3,836-10,823

THE THOUSAND KYOTO offers wine lectures by
the chef sommelier and other events.

2019 2020

2021-9,3242022 2023 (Fiscal year)

Transforming operations through the use of digitaltechnology, etc.

* Since the start of FY2022, we have been implementing the AccountingStandard for Revenue Recognition and other standards.

Transformation to smart hotels

Leisure & service

Developing smart hotels through the use of IoT, AI, robots, etc. to provide
a smooth stay experience and improve operational efficiency

Number of hotel rooms

21*

4,852

Potential areas

Bunk bed room

Creating and providing special emotional
experiences that leverage the company’s
strengths and local attractions

1,336-12,000

Number of hotels

Carefully selecting areas and locations for the new hotels whileobserving the recovery of tourism demandBusiness models-8,0002019 2020 2021 2022 2023 (Fiscal year)

Considering opening new hotels to expand the business scale• Tokyo metropolitan area, Fukuoka, other ordinance-designated cities,
tourist cities

Family room

-4,00020,000

Advancing high-value-added renovation of guest rooms and other facilities
in existing hotels to create spaces that satisfy guest needs

New hotel launch• Examining a wide range of business models, including new as well as
existing ones, and considering unique products and services that feature
attractive content specific to the area and location

0

22,869Adding value to products and services

Hotel occupancy rate

69.8％
Keihan Hotels & Resorts Co., Ltd. 59.3％

Hotel Keihan Co., Ltd.

Enhancing digital marketing
Improving and automating hotel membership management through theuse of digital tools to improve productivity and profitability

Expanding profit-earning opportunities in the ship business
Creating attractive tourism
products jointly with local
accommodation and tourist
facilities to attract new influxesof people to be brought
about by the extension of the
Hokuriku Shinkansen from
Kanazawa to Tsuruga

Tsuruga

Imazu

Nagahama

Chikubu Island
cruiseOtsu

Continuing structural reform of the business
Evolving the structural reform initiatives promoted under the COVID-19 crisis
to build an operating structure that can respond flexibly to changes in thebusiness environment

Main initiatives for structural reform• Promoting multitasking• Outsourcing restaurant operations• Utilizing hotel facilities by taking • Introducing catering robots, etc.
advantage of their geographicaladvantages* Hotel Keihan Co., Ltd., Keihan Hotels & Resorts Co., Ltd.

43

KEIHAN GROUP INTEGRATED REPORT 2023

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44

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Strategies for value creation

Medium-term management plan:
Strategy for GOOD NATURE STATION / Strengthening the management baseMedium-term management plan:
Strengthening the management baseDX (digital transformation)
While increasing the visibility and expanding the sales channels of the GOOD NATURE STATION, a commercial complex offering
sustainable experiences, and the product brands NEMOHAMO, RAU, Sachi Takagi, and GOOD NATURE MARKET, we will conduct
new product development and new store launches on a continuous basis, thereby establishing a profit base.

By utilizing digital technology in each of the Keihan Group’s businesses, we will create experience value and sophisticate theGroup’s business management by transforming our services and business model, thereby evolving into a corporate group capableof providing reliable value even in a rapidly developing digital society.

Establishing own brands
ＲＡＵ

Sachi Takagi

Promoting the Keihan Group’s digital strategy

An organic cosmetics brand that uses naturalingredients, without any petroleum-derived
ingredients

We will promote the digitalization of customer contact points, products, and services, as well as data-driven marketing, to provide

・Focusing on its marketing as a hotel amenity(expanding B2B sales channels)

optimal value to each individual customer along the railway lines.

・Opening a new flagship store in Tokyo
NEMOHAMO Shin-Marunouchi Building store
opened November 22, 2023

Patisserie brands offering sweets that areboth beautiful and delicious and that no one
has ever seen before

A food brand that develops products usingmaterials that would normally be discarded(e.g., cacao shells)

・Opening permanent stores, mainly in department
stores in the Tokyo metropolitan area

・Enhancing product development andexpanding the product lineup・Strengthening production infrastructure andthe production management system

・Expanding sales channels by focusing onwholesaling

Making GOOD NATURE STATION more attractive

Establishing multiple GOOD NATURE STATION stores

Hosting unique activities and expanding and improving experience-based content in thefacility in preparation for a full-fledged recovery of inbound tourism

Considering not only new store launches by each brand, but also developing multiplecommercial complexes consisting of restaurants, markets, stores, and hotels

1 Digitalizing customer contact points
Expanding points of contact with customers through the creation of new
digital mechanisms, attracting new customers and increasing membership・Developing the Keihan Group Digital Ticketing System
・Developing an e-commerce platform, etc.

2 Integrating customer data
Integrating the Keihan Group’s customer data to understand ourcustomers and their needs more deeply・Integrating Keihan Group Customer IDs
・Installing the Keihan Group’s customer data infrastructure

We will maximize the abilities and performance of each of our diverse humanresources, and reform the corporate culture to encourage challenges andHuman resources strategy

innovation with a view to creating an environment in which employees canplay an active role with a “BIOSTYLE mindset.”

3 Digital marketing to meet diverse customer needs
Improving information service and proposal capabilities for products
and services that accurately meet customer needs
・Restructuring the Group’s point system
・Enhancing customer approach and marketing functions

Sustainable enhancement of corporate value

4 Creating new products and services that enhance

Creating new value

the experience value of customers(both social and economic value)

Developing products and services that enhance the experience value
Developing an environment in which employees play an active role with a “BIOSTYLE mindset”

Maximizing the abilities and performance of each individual
Improving work engagement(job satisfaction)

Promoting human resources diversity

Reforming the corporate culture to encourage challenges and innovation
Developing a system that encourages
Promoting management that makes
challenges and motivates self-directed growth
the most of human resources

45

KEIHAN GROUP INTEGRATED REPORT 2023

products and services by the entire Keihan Group

5 Establishing framework to advance digital customer

strategy

Main initiatives (in the case of Keihan Holdings Co., Ltd.)
Human resource management that
Creating an environment in which each of our diverse humanencourages self-directed growth
resources can demonstrate their abilities without anxiety
・Opportunities and empowerment to・Independent and creative work style not limited by time or
promote growth and challenges
place
・Career design support in line with each ・Stimulating internal communicationindividual’s career aspirationsof customers
・Data utilization, sales promotion support, and joint planning of new

Ensuring the skills required to
execute the strategy
・Training programs that promoteand support skills development
・Experienced recruitment

Sophisticating the Group’s business management
Promoting the digitalization of business management
Real-time visualization and analysis of financial and non-financial data to enable rapid, accurate, and data-based decision-making andresponse even in a difficult-to-predict business environment

KEIHAN GROUP INTEGRATED REPORT 2023

46

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growth

Achieving sustainable growthMaterial issue 1

Creating businesses that contribute to solving social issues

What is?

An initiative of the Keihan Group to create products, services,and businesses that can increase people’s life value
and solve social issues at the same time

History of BIOSTYLE
The Keihan Group was proposing and promoting BIOSTYLE even before the SDGs were set forth as common goals for the international
community.
Starting in FY2024, we promote BIOSTYLE management, which creates both social and economic value, with BIOSTYLE at the coreof our management, based on our long-term management strategy.

2014

Acquire the shares of Bio Market Co., Ltd. (operator of organic vegetable “Bio Marche Home Delivery” service)2014

Announce the launch of development of BIO-Style Kyoto-Shijo-Kawaramachi Project (now GOOD NATURE STATION)

2015

Medium-term management plan “Bravely Pursuing Creation”
As a top-priority project of the main strategy of “creating content to enhance customers’ life value,” promote BIO-Style, alifestyle that is healthy, beautiful, and brings a high quality of life, and that contributes to a recycling-oriented society, andaim to establish it as a new Keihan brand next to our pledged value of safety and security.

2017

Establish Biostyle Co., Ltd. (company that operates GOOD NATURE STATION)

2018

Long-term management strategy/medium-term management plan “Creating Living, Community, and Excitement”
Work to create products, services, and businesses that contribute to solving social issues under the priority measure of
BIOSTYLE – Aim for Keihan as First Choice – as part of the main strategy of “creating relatable content.”

48 Material issue 1 : Creating businesses that contribute to solving social issues

2019

Launch GOOD NATURE STATION

49 KEIHAN BIOSTYLE PROJECT

2020

Establish the BIOSTYLE Guidelines and introduce in-house certification system

2020

Terminate the medium-term management plan due to COVID-19 pandemic and announce Future Business Direction

51 BIOSTYLE initiatives

Rebuild our management base by focusing on “Safety & Security,” “Structural Reform,” and “BIOSTYLE” as our futurebusiness direction.

53 Keihan’s flagship facility for BIOSTYLE
2022

Launch BIOSTYLE Business Certification system by revamping the in-house certification system and incorporating anevaluation of feasibility

2023

Long-term management strategy/medium-term management plan “BIOSTYLE: Deepening and Challenge”

55 Material issue 2 : Operations that consider the environment and social factors
63 Material issue 3 : Organization and human resources that continue to grow
67 Material issue 4 : Sustainable and robust management base47

With BIOSTYLE (Keihan’s version of the SDGs), which we have been working to establish as a new brand for the KeihanGroup, at the core of our management and business activities, promote BIOSTYLE management which creates bothsocial and economic value.

KEIHAN GROUP INTEGRATED REPORT 2023

48

Keihan Group INTRODUCTION

マテリアリティ 1

Management message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

社会課題の解決に寄与する事業の創出

Each group company is promoting BIOSTYLE initiatives in conformance with the guidelines. Initiatives that satisfy feasibility requirements
are internally certified (BIOSTYLE Business Certification), and outstanding examples are eligible for awards.

Keihan Group s SDGs: BIOSTYLE PROJECTBIOSTYLE initiatives of
Keihan Group companies

BIOSTYLE Business
Certification

Conformance with guidelines

Creation of both social andeconomic value

Expanded contribution to SDGs

AwardsContribution to creating
new value for the Keihan
Group

BIOSTYLE Guidelines

Promotion of
In addition to carrying out the main BIOSTYLE measures in the medium-term management plan in each business,

1

GOOD for HealthBusinesses and initiatives promoting people’s healthy lifestyles and contributing to the realization of alively society

2

GOOD for Minds

Realizing a stress-free society where people can live peacefully and comfortably and offering services
that bring happiness and satisfaction to users

3

GOOD for Locals

Businesses and initiatives contributing to regional revitalization, industrial development, andenvironmental conservation in local areas

4

GOOD for Social

Businesses and initiatives contributing to the realization of a society where every member can live
happily and of more beautiful lifestyles

5

GOOD for EarthBusinesses and initiatives contributing to global environmental conservation, such as countermeasuresagainst global warming and plastic waste issue

6

GOOD for KEIHAN Brands

Businesses and initiatives contributing to improvement of Keihan brand value

7

GOOD for KEIHAN Business Businesses and initiatives that can be established and implemented on an ongoing basis

the Keihan Group is promoting the BIOSTYLE PROJECT groupwide.

Example of BIOSTYLE PROJECT
Return the Saplings Project by Zero Corporation
Zero Corporation uses domestic timber in all of the houses it sells (through-columns,
stand columns, vertical roof struts, and pilasters), thereby contributing to theprotection of mountains and forests. Keeping up the cycle of planting trees, caring
for the mountain environment, and logging is crucial for protecting mountains and

Keihan Group s SDGs: BIOSTYLE PROJECT

forests. However, the reality is that the cycle is not functioning well due to declining
demand for domestic timber caused by competition with imported wood andthe aging of forestry workers. As such, we signed a comprehensive cooperationagreement with Miyazaki Prefecture, the Miyazaki Prefectural Federation of Forest
Owners’ Co-operative Associations, and the Miyazaki Prefectural Federation ofLumber Cooperatives in December 2020 with the aim of promoting diverse forest
development, securing and training forestry workers, promoting the cyclical use offorest resources, and establishing a more robust supply chain. Moreover, in 2021, welaunched the Return the Saplings Project, which involves returning to the mountains
the number of saplings needed for the number of pillars used in the buildingsdelivered within a year. Through this project, our support for reforestation helps
absorb CO2, contributing to a healthy natural cycle of mountains and forests.
BIOSTYLE PROJECT Guidelines
Social value
Economic value
49

KEIHAN GROUP INTEGRATED REPORT 2023

3 4 5 6 7

Forest preservation, contribution to the global environment, etc.
Maintenance of business supply chains, contribution to brand value
KEIHAN GROUP INTEGRATED REPORT 2023

50

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 1

Creating businesses that contribute to solving social issues

initiatives (Examples)

Original natural cosmetics brand NEMOHAMO

Kyoto Tower social contribution activities

The original cosmetic brand NEMOHAMO from Biostyle Co., Ltd. is produced in Ashiya Town, Fukuoka Prefecture,a scenic place facing the Genkainada Sea. The factory runs exclusively on renewable energy and engages inenvironmentally friendly manufacturing. Ingredients include various plants such as ginseng, mugwort, camellia,
rosemary, and loquat leaf. These plants are cultivated and picked on its own JAS-certified organic farm andadjacent satoyama. A proprietary low-temperature vacuum extraction method is used to carefully extract thenutrients. The roots, leaves, stems, flowers, and fruits are all used in the production process, concentrating thebeauty ingredients and generating no waste.

Since opening in 1964, Kyoto Tower has welcomed more than 33 million visitors and is a familiar landmark serving as
the gateway to Kyoto. The tower is also actively involved in social contribution activities. At the request of governments,
NPOs, and other organizations, the tower is lit up in the symbolic colors to raise awareness of social activities of a public
nature. This includes world autism awareness (blue), domestic violence prevention awareness (purple), and child abuse
prevention awareness (orange). In 2023, carbon-free electricity was introduced for the LED lighting used to illuminate
the tower, addressing the imperative for decarbonization. In addition, prompted by citizen feedback calling for children
who rarely have a chance to go up inside Kyoto Tower to be able to enjoy the view from the observation deck, we haveorganized a Christmas party every year since 1965, inviting children from child welfare facilities.

Providing an organic diet and lifestyle

Urban beekeeping in front of Kyoto Station

Bio Market Co., Ltd. has been walking hand-in-hand with organic farming since its establishment in 1983. Throughthe “Bio Marche Home Delivery” service, the Company provides 100% organic JAS-certified vegetables and 700
processed organic food items to about 8,700 members nationwide (as of March 2023). It also operates a wholesale
business and online store. The Company delivers vegetables harvested from fields all over Japan and grown in
the local climate directly to customers’ homes once a week. With the largest membership-based home delivery
service for organic agricultural products and processed organic foods in Japan, it provides safe, reliable food while
advocating for a production and distribution system that supports sustainable organic farming, aiming to reduce
environmental impact on things like water quality and biodiversity preservation.

We started urban beekeeping on the rooftop of THE THOUSAND KYOTO in May 2021. Bees play an essential role aspollinators in the ecological cycle, and beekeeping is the care and management of honey bees for honey, beeswax,
and royal jelly. By pollinating plants in urban areas, we create a cycle whereby plants that cannot pollinate themselves
are then able to grow and bear fruit, wild birds carry the seeds, increasing the surrounding greenery, and bees thencontribute again to the pollination of those plants. By starting beekeeping in the urban area in front of Kyoto Station, we
are not only promoting the greening of the area in front of Kyoto Station but also helping to revitalize the local community
through local production for local consumption. We do the latter by selling the honey we collect and offering it at our own
hotel restaurants.

Coexistence with Lake Biwa

Local production for local consumption initiatives with farmers along therailway line

With “Coexistence with Lake Biwa” as the Environmental Policy, Biwako Kisen Steamship Co., Ltd. works proactively on
environmental conservation activities at its business base, Lake Biwa. It provides hands-on environmental learning at Lake
Biwa via its sightseeing boat “megumi” and also operates “Uminoko,” an accommodation-based “floating school” boat.
The Company works to protect the Lake Biwa environment from the perspective of learning and experience. It also offers
Shiga no Megumi Cruise and Culture Cruise, where people can taste Lake Biwa’s freshwater fish and immerse themselvesin the local life, history, culture, and more. Since 2009, it has also offered the Funazushi Making Cruise. Under the “Shiga
biodiversity action certification program,” by which Shiga Prefecture recognizes businesses engaged in conservation of
biodiversity and sustainable use of natural resources, the Company received a three-star (the highest) evaluation.

Keihan Department Stores Co., Ltd. values local production for local consumption and has been working on “Agriculture
That Connects Along the Keihan Line” since November 2021. This project is designed to connect farmers and thecommunity (customers) and pass down urban agriculture along the railway line by connecting farmers and Keihan
Department Stores. Agricultural products are purchased from farmers along the railway line and sold at the Moriguchi,
Hirakata, and Kyobashi stores. Many of the farmers along the railway line are relatively young, second- or thirdgeneration farmers, but in many cases, they face difficulty in achieving mass production. We are looking into solutions
through this project.

Pursuing long-lasting wooden houses

Promoting social contribution activities for regional revitalization and better communication with local communities

Zero Corporation Co., Ltd. is pursuing safe and secure long-lasting houses. If a wooden house is constructed
correctly and regularly maintained, the framework can be expected to last 100 to 200 years. To maintain a highlevel of quality for a long period, the houses are constructed in such a way that the walls, roof, sashes, andplumbing, which need to be replaced every 30 to 50 years, can easily be replaced. Certified as excellent long-term
housing by the government, these houses are branded as “100-year housing.”

Initiatives for regional revitalization that make the best use of thes
attractiveness of each area
Flow of Water
The Keihan Group has given the name “Flow of Water” to the Yodo River System, which runs along therailway lines from Mt. Hiei to Aqua Metropolis Osaka through Lake Biwa, Kyoto, and Uji. Together with the
Otsu and Kyoto Municipal Governments, we have revived a vessel that once transited the Lake Biwa Canal(an artificial canal constructed in the Meiji era to draw water from Lake Biwa to Kyoto), a valuable industrial
heritage from 1890, as a cruise ship operated by Biwako Kisen Steamship Co., Ltd.

Art appreciation at the station
Nakanoshima is one of the most popular areas in Aqua Metropolis Osaka and is home to many cultural and art
facilities, including art and science museums. We have hosted Kite Mite Nakanoshima, an event that promotes
Nakanoshima as a place of culture and art based on the concept of widely communicating its appeal, since 2012. In
collaboration with cultural facilities and companies in the Nakanoshima area, the stations on the Nakanoshima Lineare used as museums to exhibit works of art. In addition, workshops are held with artists and partner facilities forparticipants to experience and learn history and culture. We ask kindergartens, schools, and welfare facilities along
the railway line to create artwork for the event, and artists visit the facilities to create joint works of art. In this and otherways, we are actively working to make connections with the next generation and realize an inclusive society.

The Lake Biwa Canal Cruise

Better communication with local communities
Regional revitalization through sports
In September 2021, Keihan Holdings Co., Ltd. entered apartnership agreement with Panasonic Corporation (now PanasonicSports Co., Ltd.) for the development of local communities centeredon the volleyball team Panasonic Panthers. Our goal is to revitalize
Hirakata City and the surrounding area and attract passengers.
Etiquette poster

51

KEIHAN GROUP INTEGRATED REPORT 2023

KEIHAN GROUP INTEGRATED REPORT 2023

52

Keihan’s flagship facility for
GOOD NATURE STATION, a commercial complex that embodies BIOSTYLE, opened in Shijo-

BIOSTYLE initiatives

Kawaramachi, Kyoto in 2019. Its concept is “Enjoy and taste only what you can trust. The place where

Creating businesses that contribute to solving social issues‘good natured’ things and experiences gather to energize people and the earth.” Here are some of theinitiatives at the forefront of the BIOSTYLE PROJECT.

WELL and LEED Certifications
The complex has obtained Silver level LEED Certification, which recognizes
environmentally friendly green buildings. GOOD NATURE HOTEL KYOTO is also
the first hotel in the world to obtain WELL Certification, which evaluates buildings
and indoor environments. It is the first hotel in the world to have obtained both
LEED and WELL Certification.

GOOD for Health, GOOD for Social, GOOD for Earth

100% carbon-free electric power
In FY2024, we began purchasing non-fossil fuel certificates that certify “electricity
generated by methods that do not emit carbon dioxide.” We are converting allelectric power used in all buildings, including GOOD NATURE HOTEL KYOTO, toelectric power that is 100% derived from renewable energy sources.

GOOD for Social, GOOD for Earth

4-9

F

3F
2F

GOOD NATURE HOTEL KYOTO
A hotel featuring the new concept of being comfortable
for the mind and body and friendly to the global
environment. It offers a sustainable stay with special
welcome sweets and original hands-on local tours. The
141 guest rooms are spacious and feature natural woodtoned interiors for a relaxing stay.

GOOD NATURE BEAUTY & CAFEA “beauty and relaxation spot” that recharges the body andmind. In addition to the NEMOHAMO store, which offers
original cosmetic brand products and other select cosmetics
for healthy beauty, there is a café where customers can enjoy
RAU pastries.

GOOD NATURE GASTORONOMY
A unique dining experience featuring
the finest ingredients offering ataste of the four seasons with all fivesenses. A “Premium Gastronomy
Floor” that’s the envy of the world.
Three of the restaurants are featured
in the Michelin Guide.

Organic
NEMOHAMO, an original cosmetic brand that is gentle to both skin and theenvironment, is made in Ashiya Town, Fukuoka Prefecture, a scenic place facing
the Genkainada Sea. It is made with various plants cultivated and picked on its
own organic JAS-certified farm and adjacent satoyama.

GOOD for Health, GOOD for Minds

Reducing food loss
Food waste is composted in the facility’s composting system. It is then used as
fertilizer by Omi Sonoda Farm, which is engaged in farming with a reduced amountof agricultural chemicals and organic fertilizer cultivation, to grow rice. By serving
the harvested rice at the facility, we have created a sustainable cycle of rice.

GOOD for Social, GOOD for Earth

De-plasticizing
We are working on creating stylish and environmentally friendly packaging materials
to address the challenge of reducing plastic in packaging and containers. We willcontinue our initiatives until eco-friendly packaging materials become commonplace.
This includes plastic-free butterfly cups, reusable cutlery and chopsticks made from
bioplastics, and muddlers made from tree branches.

53

Creating
economic
value

GOOD for Social, GOOD for EarthFair and sustainable trade
At RAU, chocolatiers carefully select organic Costa Rican cacao, meeting directlywith the producers, and purchase it at fair prices to realize a high-quality andsustainable supply chain.

GOOD for Health, GOOD for Social

1F

Creatingsocialvalue

Realizing
management

GOOD NATURE MARKET
Sells products from the original food brand GOOD
NATURE MARKET, certified organic agricultural products,
and other healthy and eco-friendly foods produced in
Kyoto. The sweets from RAU embody the concept of“The scenery into the shape.” Each process in making the
sweets is given its own story, vividly reflecting the chef’s
knowledge, experience, and sensibility.

KEIHAN GROUP INTEGRATED REPORT 2023

Local production for local consumption
We partner with local Kyoto-based producers of agricultural products, crafts,
and processed foods, sourcing those items for our products at the market andrestaurant ingredients. They also set up shop in the plaza on the first floor. In
addition, we are organizing hands-on tours visiting producers for on-site harvesting.

GOOD for Health, GOOD for Social, GOOD for Local

KEIHAN GROUP INTEGRATED REPORT 2023

54

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 2

Operations that consider the environment and social factors

Environmental philosophy and the Keihan Group’s environmental policy

CO2 emissions of main companies (Scope 1 and Scope 2)

Environmental philosophy

in FY2023 was reduced by 43% compared to FY2014.

Based on the recognition that global environmental conservation is one of the key common issues shared by all humankind,
the Keihan Group will contribute to the sustainable development of society by making efforts to conduct eco-friendly corporate
management and give due consideration to environmental conservation and resource protection.
The Keihan Group formulated its environmental philosophy in 2002, and has since made group-wide efforts to improve the environmentand comply with environmental laws. In September 2021, the group formulated its environmental policy, focusing on the following items:(1) Reduction of greenhouse gas emissions, (2) Reduction of waste and effective use of water resources.

CO2 emissions of the nine main companies with regard to the CO2 emissions reduction target are shown in the table below. The amount（t）

Fiscal year

2014

2019

2020

2021

2022

Transportation *1

181,698

134,299

114,791

106,595

102,3282023
89,030Real estate *2

7,716

16,78013,231

12,434

12,318

11,167Retail distribution *3

45,51039,12329,563

26,781

28,19824,303

Leisure & service *4

26,21026,94028,24818,80621,182

24,035

Total

261,134

217,142

185,833

164,616

164,026

148,535*1 Keihan Electric Railway Co., Ltd., Keihan Bus Co., Ltd. *2 Keihan Holdings Co., Ltd., Keihan Tatemono Co., Ltd.
*3 Keihan Ryutsu Systems Co., Ltd., Keihan Department Stores Co., Ltd., Keihan The Store Co., Ltd. *4 Hotel Keihan Co., Ltd., Keihan Hotels & Resorts Co., Ltd.

CO2 emissions reduction roadmap

Reducing greenhouse gas emissions（t）261,134

In May 2022, we formulated “BIOSTYLE Environmental Action 2030” and announced our goals for CO2 reduction along with measures46％

to achieve these reductions, with FY2031 as our target.

reduction

148,535

CO2 emissions of the Keihan Group

Measures for achieving our FY2031 goals
Thorough energy saving andintroduction of new technologies
Promotion of energy creation
Procurement of renewable energy

147,208
TargetThe Keihan Group works on saving energy and reducing CO 2 emissions as a group-wide effort. Energy consumption of the group

Net amount0

companies are properly managed and the results are reported to the technical committee on environmental management. The reduction
2014

status is duly monitored.

2023

2031

Energy consumption intensity

CO2 emissions and energy consumption of the entire group

Energy consumption intensity for train cars

253,327
182,473

221,932
148,765

73,16770,854

191,960

192,690

134,108

136,870

139,255

137,2032019

125,290

57,8522020

2051 (Fiscal year)

Fiscal year
178,633
118,513
119,975

119,413

0.633

Reduction rate year-over-year (%)

2.8

2022

2023

Fiscal year

2021

2022

2023

0.637

0.639

Energy consumption in office buildings
and commercial facilities* (kl) / floor area
(thousand m2)

29.24

29.05

29.95

-0.7

-0.4

Reduction rate year-over-year (%)

8.6

0.64

-3.1

* Keihan Holdings Co., Ltd., Keihan Tatemono Co., Ltd., and Keihan Ryutsu Systems Co., Ltd. facilities

60,12055,8202021

2021

Railway electricity consumption by
Keihan Electric Railway Co., Ltd. (kl) /travel distance (thousand km)

Energy consumption intensity in office buildings and commercial facilities

2022

2023

(Fiscal year)■ Scope 1 (unit: t) ■ Scope 2 (unit: t) ■ Energy consumption (unit of crude oil equivalent: kl)

CO2 reduction initiatives (Scope 1 and Scope 2)
Course of action
Promoting the reduction of CO2 emissions and the development of products and services

Breakdown of the group’s CO2 emissions by business

Breakdown of the group’s energy usage (FY2023)

that will be chosen in a decarbonized society through “thorough energy saving andThoroughenergy saving
and introduction of
new technologies

introduction of new technologies,” “promotion of energy creation,” and “procurement ofsegment (FY2023)

0.8%

renewable energy”

14%

16.0%

7%
14.5%

61.5%

7.2%

■ Transportation■ Real estate■ Retail distribution

78%

Promotionof energy
creation*1

1%■ Gasoline, fuel oil, diesel fuel, etc.
■ LPG, town gas■ Leisure & service■ Hot water, etc.

■ Other businesses■ Electricity

Procurementof renewableenergy*1 Introduction of PV power generation equipment, etc.

Thorough energy saving and introduction of new technologies
We will reduce energy consumption and CO2 emissions through capital investment and more efficient business operations.

CO2 emissions reduction target

Environmental advantages of rail transport & energy efficiency in railways

Reducing CO2 emissions by 46% by FY2031 (compared to FY2014), with the goal of achieving net-zero CO2 emissions by FY2051

Railways are considered to be more energy efficient than other modes of transportation, yet they require large amounts of electricity
for operation and produce CO2 in the process of generating electricity. Keihan Electric Railway Co., Ltd. started the “Railway electricity* The CO2 emissions reduction target applies to CO2 emissions (Scope 1 and Scope 2) of nine main companies (Keihan Holdings Co., Ltd., Keihan Electric Railway Co., Ltd., Keihan Bus Co., Ltd. Keihan
Tatemono Co., Ltd., Keihan Ryutsu Systems Co., Ltd., Keihan Department Stores Co., Ltd., Keihan The Store Co., Ltd., Hotel Keihan Co., Ltd., Keihan Hotels & Resorts Co., Ltd.) In FY2014, the total
emissions of the nine companies amounted to 261,134 tons.

consumption reduction project” in 2003 and has implemented various initiatives to save energy, including introducing energy-saving* The emissions of these nine companies comprise approximately 83% of the group’s total emissions.

train cars and LED lighting at railway facilities.

55

KEIHAN GROUP INTEGRATED REPORT 2023

KEIHAN GROUP INTEGRATED REPORT 2023

56

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growth

Operations that consider the environment and social factors

Material issue 2

CO2 emissions per transport volume (passengers)

Changes in railway electricity consumption

CO2 emission intensity: g-CO2/passenger-km (FY2022)(thousand kWh)
300,000

Private cars

132

Aircraft

250,000
200,000

124

150,000

Buses

90

Railways

100,000
50,00025

0Source: Ministry of Land, Infrastructure, Transport and Tourism “CO2emissions from the transportation sector”（kWh/car・km）
3.8

270,965
235,523 230,691 227,761 228,745 232,560 231,370 231,668 223,883

72,40063,958

2.78

61,571

2.59

198,564

2.53

59,63260,0532.58

2.49

62,36562,4792.60

2.59

61,488
2.57

57,465

202,955
53,391
2.52

2.50

193,132
50,5742.53

2.04

171,565 169,120 168,129 168,692 170,195 168,892 170,180 166,418 149,564
142,558
1.91
1.89
1.90
1.89
1.89
1.85
1.86
1.87
1.85
1.83

2004

2014

2015

2016

2017

2018

2019

2020

2021

2022

Promotion of energy creation (solar power)

Category

Company-owned land near
Hashimoto station

FIT

At the Keihan Group, we are exploring andCompany-owned land near
Chushojima station

FIT

2.8

ad va nc ing th e insta ll atio n of so l a r p owe r

KUZUHA MALL

FIT

2.3

generation systems at our owned facilities.

Keihan Yodo Logistics Yard

FITGOOD NATURE STATION

Self-consumption

THE THOUSAND KYOTO

Self-consumption

Fushimi-inari station (in planning)Self-consumption

3.3

To achieve carbon neutrality, it is essential toincrease society's renewable energy sources.

1.82023 (Fiscal year)■ Amount of incidental electricity ■ Amount of electricity for train operation● General electricity intensity ● Train operation electricity intensity* General electricity intensity = (Amount of electricity for train operation (kWh) + Amount of incidental electricity (kWh)) /total travel distance* Train operation electricity intensity = Amount of electricity for train operation (kWh) / total travel distance* Due to the COVID-19 pandemic, the decrease in passengers acrossvarious modes of transportation has resulted in higher emissions per unitof transport compared to typical years.

Installation location

Keihan Yodo Logistics Yard

Procurement of renewable energy

Introduction of energy-saving train cars
Introduction of energy-saving cars equipped with variable-frequency drive (VFD) inverters and regenerative

We are exploring the introduction of renewable energy as part of our measure to achieve FY2031 goals. At GOOD NATURE STATION,

braking is currently underway. VFD is a method of driving AC motors using semiconductor devices tostarting from FY2024, we have carbon-neutralized the entire building's electricity by purchasing non-fossil certificates.

vary the voltage and frequency to control the motor speed efficiently without using electrical resistance.
Regenerative braking uses the motor as a generator and creates a braking force by converting kinetic
energy into electrical energy when slowing down. The electricity generated is returned to the overhead

Developing products and services that will be chosen in a decarbonized societylines and used by other trains. Thus it contributes greatly to reducing electricity consumption. As of theWe will develop the new products and services that will be chosen in a decarbonized society through the promotion of energy creation

end of March 2023, 98.5% of the train cars (684 out of 694) are equipped with regenerative braking. Electricity consumption on theand the procurement of renewable energy.

latest 13000-series train cars has been reduced by approximately 35% compared to the conventional 2600-series cars.
LED lighting installed at railway facilities(FY2023)(signals)

Status of introduction of energy-saving train cars
(cars)
800

224

629
304

400

3
465

28

762

745

762

123

135

195

498

507

691

704

704

704

704

706

704

694

219

233

258

258

272

272

296

314

314

503
440

200

0

390

322

436

429

429

415

415

393

373

370

Train cars

75.0％

Environmental response for houses for sale in the real estate sales business

Interior lights

336/69448.4％

In alignment with our medium-term management plan, we are promoting the development and rollout of eco-friendly housing andHeadlights

203/229

88.6％

offices, including Zero Energy Houses (ZEH) and wooden buildings.
・For condominiums: At Fine City Sapporo URBAN FORWARD, we are developing ZEH-M Oriented condominiums.

Installing LED lighting at stations (FY2023)

1984 1989 1994 1999 2004 2009 2014 2016 2017 2018 2019 2020 2021 2022 2023 (Fiscal year)

Kuzuha Station platforms, Takii
Implemented in FY2023 Station platforms, Tobakaido
Station platforms, and others■ Cars with VDF inverters ■ Conventional cars with dynamic braking

LED lighting adoption rate 43.5％

196

141

103

64

34

22

17

17

17

17

17

17

10

■ Cars with regenerative braking (excluding those with VDF inverters)

Tower, the monument lighting at THE THOUSAND KYOTO (starting FY2024), and the lighting at Biwako Hotel (starting November 2023).

612/815Signaling systems (signals)

693

Energy-saving train cars

600

614

689

Provision of carbon-free services
・Besides GOOD NATURE STATION, Keihan Hotels & Resorts Co., Ltd. has introduced CO2 emission-free electricity for illuminating Kyoto

・For houses: In Keihan East Rose Town, we sold eco-smart districts featuring a system in which we install PV power generationequipment at no initial cost to residents.

Promoting a circular economy
We contribute to the creation of a recycling-oriented society by promoting waste recycling and the effective use of water resources.

Introduction of electric buses
In December 2021, Keihan Bus Co., Ltd. introduced electric buses on the Station Loop Bus

Reducing waste and promoting recycling

route connecting Kyoto Station, Shichijo Station, and other venues (four buses introduced;

Amount of waste from the main companies (FY2023)

first case in Japan in which all vehicles on a fixed route are electric). In April 2023, we
introduced five large electric buses at the Kadoma bus station.
Energy conservation measures in commercial and office buildings

Large electric bus

We are pushing forward with energy-saving measures in existing buildings, such as upgrading to LED lighting and modernizing air

Transportation

conditioning systems. In FY2023, we undertook LED lighting and air conditioning upgrades in OMM and other office buildings, as well

We will encourage the acquisition of DBJ Green Building certification. Keihan Yodo
Logistics Yard, an inland logistics facility that opened in 2016, was awarded three

DBJ Green Building
Certificationstars as a building “with excellent environmental and social awareness.” We plan
to consider acquiring ZEH-oriented certification for new buildings in the future.

57

KEIHAN GROUP INTEGRATED REPORT 2023

LEED Certification

Keihan Yodo Logistics Yard
(three stars)
GOOD NATURE STATION(silver rank)

Keihan The Store

Industrial waste

Keihan Electric
Railway Co., Ltd.

・Conducted food drives (food donation activities for customers by Food

520

550

Bank Kyotanabe) at the Frest Matsui-yamate and Frest Nagao stores

Keihan Bus Co.,
Ltd.

122

466

1,188

188

Bio Market
・Launched the “Fuzoroi Yasai-dayori” service, which delivers nonstandard products on an irregular basis

*2

2,842

781

Collecting waste cooking oil

Leisure & service *3

1,334

421

Waste cooking oil is collected by a recycling company (currently from

Total

6,006

2,406

15 locations, totaling about 70,000 liters annually) for recycling. The

Retail distribution

Environmental accreditation for newly developed buildings

Reducing food loss

General waste

Real estate *1

as air conditioning updates in KUZUHA MALL and other shopping centers.

（t）*1 Keihan Holdings Co., Ltd., Keihan Tatemono Co., Ltd.

recycling company converts this oil into biodiesel fuel, which is then*2 Keihan Ryutsu Systems Co., Ltd., Keihan Department Stores Co., Ltd.,
Keihan The Store Co., Ltd.

used by Biwako Kisen Steamship Co., Ltd. to power Shiga Prefecture's*3 Hotel Keihan Co., Ltd., Keihan Hotels & Resorts Co., Ltd.

educational ship, Uminoko (equivalent to about 30,000 liters annually).

KEIHAN GROUP INTEGRATED REPORT 2023

58

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 2

Operations that consider the environment and social factors

Disclosure in line with TCFD recommendations

Effective use of water resources
Water consumption by business(thousand m3)

Water conservation efforts
・Keihan Electric Railway Co., Ltd. is using water efficiently and reducing water

Fiscal year

2021

2022

2023

Transportation

590

585

579

Real estate

106

158

163

Retail distribution

945

865

896

Leisure & service

455

557

812

・Hotel Keihan Co., Ltd. has implemented water-saving facilities in its directly
managed restaurants. Additionally, we are also promoting the installation of

28

31

35

2,124

2,196

2,485

Other businesses
Total

consumption at the Neyagawa and Yodo train depots when washing train cars

The Keihan Group supports the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and iscommitted to appropriate information disclosures.

by selecting the most appropriate washing method (e.g. front washing and side
washing) according to the position and amount of dirt and by controlling thewashing speed.

automatic grease trap cleaning machines to reduce wastewater discharge.

Biodiversity
Shiga biodiversity action certification program

1

Governance

Environmental management promotion system
The Sustainability Committee has been established under the Board of Directors
Committee is chaired by the Representative Director & President, COO, and its

We are committed to creating mechanisms that contribute to the conservation of satoyama. We continue to make active use of ricemembers include Directors who are General Managers of the transportation,grown in terraced rice paddies, local sake, and local ingredients. In addition, staff are engaged in pesticide-free vegetable cultivation.

real estate, retail distribution, and leisure & service businesses. In addition, aBiwako Kisen (three stars)

technical committee on environmental management was established under thein educational activities through boat trips such as the Lake Biwa environmental experience learning cruise. Moreover, businesses atthe lake station are engaged in selling local specialties and serving dishes primarily made from local produce. We are making efforts toanchor businesses within the community.

* The arrow indicates the reporting flow

Board of Directors

to promote and manage the progress of the Keihan Group’s ESG activities. The

Biwako Hotel (three stars)

We are engaged in initiatives that are considerate of the natural environment, including the conservation of Lake Biwa. We are involved[Environmental management promotion system]

Sustainability Committee. The technical committee formulates and implements
measures related to environmental issues such as global warming. Once theSustainability Committee
Chair: Representative Director & President, COO
Members: Directors serving as General Managers of eachsegment, etc.

Technical committee on environmental management

deliberations of the technical committee are discussed within the Sustainability
Committee, they are submitted (put on the agenda or reported) to the Board of
Directors twice a year in principle.

Business segments(Transportation, real estate, retail distribution, leisure & service)

Keihan Gardening: Kikutanigiku (Chrysanthemum seticuspe) reforestation and planting project
Keihan Gardening Co., Ltd., has concluded an agreement with the Kyoto City Urban Greening Association and Kyoto Bunkyo Gakuen,
the designated managers of Maruyama Park, a scenic spot in Kyoto City, to cooperate in the areas of urban development, educationand culture, and the promotion of industry and tourism, as well as to contribute to the development of local communities throughthe greenery of the park and its surrounding areas. One specific initiative includes collaborating in the reforestation and preservationof the native kikutanigiku (Chrysanthemum seticuspe) flower (an endangered species in Kyoto Prefecture and already extinct in the
Higashiyama area), which grows naturally in the backwoods of the park.

Information disclosure initiatives
Scope 3We have commenced the calculation of Scope 3 emissions (supply chain emissions). Based on data from FY2022, we conductedanalysis for 11 companies. The results revealed emissions exceeding those for Scope 1 and Scope 2, with emissions related to productprocurement being relatively high. We will continue to remain dedicated in our efforts regarding Scope 3 emissions.

Collaboration with local governments
In pursuit of a sustainable local society by promoting decarbonization and achieving SDGs, we have concluded a comprehensive partnership

2

Strategy

In line with the framework proposed by the TCFD, we used scenario analysis to predict and analyze changes in the external environment
by 2030, assessing the impact of future climate change on our business.

Identifying the scope of business to be analyzed
We focused our analysis on the transportation business (railway and bus businesses) and real estate business (real estate sales andleasing businesses), which account for approximately 70% of the group's operating revenue.

Scenario setting
World view of the envisioned 1.5°C–2°C scenario (2°C or lower scenario)
A scenario where the entire world strengthens regulations and policies to achieve carbon neutrality by 2050, climate change measuresthat exceed the current level are implemented, and the temperature increase is limited to 1.5°C–2°C above pre-industrial levels
・Increased transition risks due to tightened regulations and policies, leading to rising electricity prices from increased demand forrenewable energy-sourced power
・While an increase in physical risks is also anticipated, they are less severe than in the 4°C scenario

agreement toward a sustainable community with the Hirakata Municipal Government.

World view of the envisioned 4°C scenario

Environmental education and inspection

・Increased physical risks such as rising costs for heat countermeasures and exacerbated losses from extreme weather events

A scenario where no significant climate change measures are implemented beyond the current level, leading to a temperature rise ofaround 4°C above pre-industrial levels
・An increase in transition risks is also expected, though less severe than in the 2°C or lower scenario

To ensure strict compliance with environmental laws and regulations, we hold environmental regulatory seminars to inform our group companies
about legal amendments and other relevant information. Regular environmental inspections are also conducted to verify compliance and provide
support for improvements.
59

KEIHAN GROUP INTEGRATED REPORT 2023

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60

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 2

Operations that consider the environment and social factors

Identification of risks and opportunities

Scenario analysis results and response measures

Based on the TCFD recommendations, we identified risks and opportunities related to the group (the businesses under analysis),
assessing the timing of their manifestation and the degree of impact.
Details of risks and opportunities

Category

Policy andlegal risks

Transportation

Real estate

Carbon price[Medium term | Large]· Various costs (operations, facility management, raw material procurement, etc.) will increase due to the introduction of acarbon tax and higher energy-related tax rates.

Introduction of environmental
regulations[Medium term | Small]· In bus operations, regulatory restrictions on diesel
vehicles to reduce CO2 emissions will lead to costs for the
introduction of electric vehicles (EVs).

Market risk

Change in energy costs

Reputation
risks

Change in customer reputation[Medium term | Not assessed]· If environmental response is delayed, being perceived
as reluctant to decarbonize could lead to a decrease incustomers.

Rise in average temperature

Acute risk

Exacerbation of extreme
weather events[Medium term | Moderate]· Increased frequency of meteorological disasters, such as large typhoons, will lead to steeper losses due to facility damage
and transportation stoppages.

Energysources

Utilization of new technologies
and low-carbon energy sources[Short to medium term | Large]· Operating costs are reduced through the promotion of energy conservation and renewable energy adoption.

Development of new products
and services through R&D andinnovation[Short to medium term | Moderate]· Maintenance costs will decrease through the introduction ofhighly efficient vehicles and electric buses.
[Long term | Small]· Income will increase as ways for using public transportation
are expanded, leveraging our knowledge of seat reservation
services, etc.
· Users will increase due to improved convenience of MaaS, etc.

Change in consumer
preferences[Long term | Small]· The environmental superiority of public transportation will berecognized and the number of users will increase.

Change in stakeholder
reputation[Short to medium term | Not assessed]· Promotion of environmental response is well-received by shareholders, investors, and financial institutions.

Utilization of incentives by the
public sector[Medium to long term | Not assessed]· The subsidy programs may be expanded for promoting decarbonization.

Market3[Medium to long term | Large]· Asset value and revenue will increase by meeting thedemand for environmental and disaster response.

Metrics and targets

FY2014).
At the Keihan Group, as part of our long-term management strategy formulated and announced in March 2023, we have set “Converse(The parameters used for estimation are based on objective data from sources such as the International Energy Agency (IEA). For more details, please visit: https://www.keihan-holdings.co.jp/ir/library/tcfd/)

the global environment” as one of our main strategies. We are promoting the reduction of CO 2 emissions and the development of
products and services that will be chosen in a decarbonized society through “thorough energy conservation and the introduction of new

Financial impact of key items*2

Opportunities

mitigation, and other such measures. The details of these discussions will be submitted to the Board of Directors after deliberation by

In reducing CO2 emissions in particular, we have set a numerical target of reducing CO2 emissions by 46% by FY2031 (compared tofinancial impact, identifying key items with particularly significant financial impacts.

Physical risks

For identified climate-related risks, the technical committee on environmental management will take the lead in discussing avoidance,4

For risk and opportunity items where objective future forecast data could be obtained in the set scenario, we estimated the quantitative

Transition risks

Risk management

the Sustainability Committee. We will also periodically review climate-related risks and opportunities.

Estimation of financial impact

Policy andlegal risks

Risks include the potential for damage to owned properties due to large typhoons and meteorological disasters.
Although the impact size is smaller compared to the transportation business, we will work on building crisis management systems
in cooperation with tenants and residents, as well as continuously review and strengthen our BCPs in preparation for the increasingly
severe extreme weather events expected after 2030.

[Medium to long term | Small]· Decreased labor productivity at construction sites due tohigher temperatures will cause project delays.

*1 Short term: 0–2 years (immediate), Medium term: 3–9 years (around 2030), Long term: 10–30 years (around 2050)

Category

4℃
scenario

Real estate

Chronic risks
Physical risks

Opportunities

1.5 –2℃
scenario

Risks include increased costs due to the introduction of a carbon tax and increased energy costs resulting from changes in the energy
mix. Furthermore, the impact of increased construction and repair costs due to compliance with government targets for ZEB and ZEH
is expected to be significant, and we will consider reducing this impact by revising equipment specifications and procurement methods
That being said, the rising environmental awareness of customers and investors could be a tailwind, leading to increased rents for officeproperties and higher sales prices for residential properties due to environmental responses. We will thus utilize national subsidy programs
and other systems to promote environmental measures for buildings for sale, including making them ZEH-oriented, acquisition of DBJ
Green Building certification, and environmental measures for new buildings.

[Short to medium term | Large]· Fluctuations in electricity and fuel costs due to changes in the energy mix will lead to an increase in energy costs.

[Medium to long term | Small]· Air conditioning costs will increase due to rising temperatures.

Products andservices

4℃
scenario

Risks include the possibility of being affected by transportation stoppages and schedule disruptions due to large typhoons andmeteorological disasters, as well as property damage.
Regarding extreme weather events, we recognize that they will become increasingly severe over time from 2030, the year of
this analysis, to 2050 and the end of the century. Adopting a long-term perspective, we will work on building more robust crisis
management and BCP systems, such as implementing flood control and corrosion prevention measures for railway facilities andstrengthening vehicle evacuation systems.

Transportation[Medium term | Large]· Costs for construction and repairs will increase due tocompliance with government targets for ZEB and ZEH.
· Costs incurred for purchasing emission credits will arise forolder properties that are difficult to decarbonize.

Carbon emission targets andpolicies

Transition risks

1.5 –2℃
scenario

Risks include the expected impacts of increased costs due to the introduction of a carbon tax and increased energy costs resulting
from changes in the energy mix. To mitigate these impacts, we will promote the introduction of energy-saving vehicles and electricbuses, which are expected to have energy-saving effects. The introduction of energy-saving vehicles and electric buses is also
expected to create opportunities for maintenance cost reduction. In addition, as the environmental superiority of public transportationis recognized and the number of users increases, we identified items that are expected to have a minor impact in 2030, but that may
manifest opportunities in the long-term timeframe.

Legend: [Manifestation period*1 | Impact size]

Legend: [Manifestation period*1 | Impact size]

Details

Scenario

Various costs (operations, facility management, raw material procurement, etc.) will increase due tothe introduction of a carbon tax and higher energy-related tax rates.
Costs for construction and repairs will increase due to compliance with government targets for ZEB and ZEH.

Market risk

Fluctuations in electricity and fuel costs due to changes in the energy mix will lead to increased energy costs.

Acute risk

Increased frequency of meteorological disasters, such as large typhoons, will lead to steeper losses
due to facility damage and transportation stoppages.*3

Energysources

Operating costs are reduced through the promotion of energy conservation and renewable energy
adoption.*4

Products
andservices

Maintenance costs will decrease through the introduction of highly efficient vehicles and electric buses.
Asset value and revenue will increase by meeting the demand for environmental and disaster
response.

1.5–2℃

4℃

1.5–2℃

Financial impact estimation results for 2030
Transportation

Real estate

1,389 million yen/year

351 million yen/year—

1,543 million yen/year

225 million yen/year

193 million yen/year

119 million yen/year

28 million yen/year

904 million yen/year

38 million yen/year

146 million yen/year——

2,510 million yen/year

technologies,” “promotion of energy creation (introduction of solar power generation equipment, etc.),” and “procurement of renewableenergy.” Under this policy, we will promote initiatives to minimize risks and maximize opportunities and strive to improve our resilience.

*2 Estimated financial impact for the following businesses:
Transportation business: Keihan Electric Railway Co., Ltd., Keihan Bus Co., Ltd.; Real estate business: Keihan Holdings Co., Ltd., Keihan Real Estate Co., Ltd., Keihan Tatemono Co., Ltd., Zero Corporation Co., Ltd.
*3 Estimated increase in losses based on past cases in the event of a natural disaster*4 Estimated based on energy usage in FY2022 for existing businesses, without considering the increase in energy usage due to future business expansion

61

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62

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 3

Organization and human resources that continue to grow

Human resources strategy

Promoting human resources diversity

Human resources development policy and workplace environment development policy, including
securing diversity of human resources

Respecting human rights

We have established a human resources strategy in which we maximize the abilities and performance of each of our diverse humanin its charter of conduct. Every year, in Constitution Week in May andNumber of participants in human rights awarenessraising seminars (every May and December)resources, and reform the corporate culture to encourage challenges and innovation with a view to creating an environment in which

Human Rights Week in December, we hold awareness-raising seminars

Fiscal year

2021

2022

2023

employees can play an active role with a “BIOSTYLE mindset.” This will enable us to continue to create new value and achieve

and group-wide human rights training sessions. In addition, we regularly
publish information on human rights laws and regulations and the latest

194*

347

350

sustainable enhancement of corporate value.

Number of participants(group-wide)In our effort to maximize the abilities and performance of each individual, we aim to improve work engagement (job satisfaction) andpromote human resources diversity. Furthermore, as part of reforming the corporate culture to encourage challenges and innovation,
we are developing a system that encourages challenges and motivates self-directed growth, and promoting management that leverages

The Keihan Group has declared respect for the human rights of all people

news in our group magazine in an effort to raise awareness.

* The May session was canceled in FY2021.

Human rights policy

human resources. These initiatives form the human resources development policy and workplace environment development policy,

In line with the United Nations Human Rights Council’s Guiding Principles on Business and Human Rights, in April 2023, we establishedwhich include securing diversity of human resources.

the Keihan Group Human Rights Policy. This policy integrates respect for human rights into our corporate values and ensures the rights
of all involved in the Keihan Group’s business activities are respected.

Metrics and targets: Women’s empowerment initiatives for women’s empowerment

Efforts towards a harassment-free workplace

In order to provide products and services essential to our customers and to sustain corporate growth, we recognize the importance of

The Keihan Group has established the elimination of all forms ofdiverse perspectives in management, including women’s insights. Accordingly, our action plan under the Act on Promotion of Women’s

harassment as part of its charter of conduct. To that end, we have

Participation and Advancement in the Workplace sets targets that include having women make up over 30% of new hires in general

implemented group-wide harassment prevention regulations to enhance

positions and increasing the number of women in managerial and leadership positions by over 30% by the end of FY2026, compared

the effectiveness of our efforts. We conduct awareness and training forto the end of FY2021. We are committed to actively recruiting women, expanding their job scopes, and supporting their career

employees through programs such as basic training for new employees

development and workplace environment.

in the Keihan Group and the KEIHAN Business Seminar. We have

Additionally, we aim for a workplace where every employee, regardless of gender, finds comfort and fulfillment. Our goal is to set a

Number of harassment training attendees
Fiscal year

2021

2022

2023

Number of participants(group-wide)

1,842

747

1,387

* Total calculated based on training sessions organized by Keihan Holdings Co., Ltd.
and Keihan Electric Railway Co., Ltd., on-site training sessions for group companies
by Keihan Holdings Co., Ltd., and online training sessions

also bolstered our employee consultation system, offering training fortarget of around 30% of men to take childcare leave.

harassment consultation representatives in each group company.

Number and percentage of new female employees (Keihan Holdings Co., Ltd.)

Promotion of employment of people with disabilities
In response to society’s requirement to provide job opportunities for people with disabilities, we establishedFiscal year

2017

2018

2019

2020

2021

2022

2023

2024

New employees in general positions

11

15

16

16

15

13

10

13

by the Minister of Health, Labour and Welfare as a special subsidiary. Keihan Smile Heart Co., Ltd. has

Women included in the above

3

6

6

6

7

5

3

6

employed seven staff members with disabilities, who are engaged in office support, including cleaning

27.3%

40.0%

37.5%

37.5%

46.7%

38.5%

30.0%

46.2％

office floors, printing business cards, and disposing of documents. It also provides practical training for

Percentage of new female employees

Keihan Smile Heart Co., Ltd. to promote employment of people with disabilities. The company was granted

students at the upper-secondary department of schools for special needs education.

* As of December 1, 2023 for FY2024

The percentage of people with disabilities employed at Keihan Holdings Co., Ltd., Keihan Electric
Railway Co., Ltd., and Keihan Smile Heart Co., Ltd. was 3.16% in total as of March 2023.

Number and percentage increase of women in leadership positions (Keihan Holdings Co., Ltd.)Fiscal year

2017

2018

2019

2020

2021

2022

2023

Number of women in leadership positions

12

14

14

14

15

17

18

Percentage increase compared to theend of FY2016

20%

40%

40%

40%

50%

13%

20%

* Leadership position: Assistant Director or above. The number of women in leadership positions at the end of FY2016 was 10.
* Percentage increase from the end of FY2017 to the end of FY2021 is based on FY2016, and the percentage increase at the end of FY2022 is based on FY2021 as the base year.

Number and percentage of male employees taking childcare leave (Keihan Holdings Co., Ltd.)We are working to promote employment of people with disabilities and create a comfortable working
environment for them.

Creating an environment in which each of our diverse human resources candemonstrate their abilities without anxiety and improving work engagement
Promoting an environment for independent and creative work style

Fiscal year

2017

2018

2019

2020

2021

2022

2023

At Keihan Holdings Co., Ltd., we are creating office spaces conducive to Activity Based Working (ABW),

Number

0

1

0

3

1

6

4

a creative, efficient, and diverse workstyle that allows employees to freely use smartphones and laptops

0.0%

20.0%

0.0%

17.6%

10.0%

28.6%

33.3％

with them as they work, facilitating barrier-free interaction among departments, focused work, and effective

Percentage* This target was revised in June 2023 (from over 7% to around 30%).

communication. At the same time, we are promoting telework for productivity improvement, including
widespread use of laptops and setting up telework facilities across our group. Keihan Group companies
are also changing office layouts and introducing office hoteling. Through these efforts, we support creative,
effective, and diverse work styles for our employees.

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KEIHAN GROUP INTEGRATED REPORT 2023

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64

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 3

Organization and human resources that continue to growPromotion of health and productivity management

Implementing flexible working hours and promoting paid leave
Through initiatives such as “no overtime day,” a flextime system, and a ban (in principle) of working after 8 p.m. and holiday work,
Keihan Holdings Co., Ltd. and Keihan Electric Railway Co., Ltd. are working to reduce overtime work and make it easier to work while
encouraging a self-directed work style and allowing time for creative thinking and recuperation.

Fiscal year

Health Statement
Keihan Holdings Co., Ltd. and Keihan Electric Railway Co., Ltd. are working to enhance

Percentage of annual paid leave used (Keihan Holdings Co., Ltd., Keihan Electric Railway Co., Ltd.)

initiatives for health and productivity management with a view to advancing ESG-focused

2021

2022

2023

Keihan Holdings Co., Ltd.

61.4%

62.7%

70.6%

Keihan Electric Railway Co., Ltd.

87.2%

82.8%

83.9%

Health Statement
In order to achieve the Management Principles of the Keihan Group,

management. We established the Health Statement on October 30, 2018 to develop an

nothing is more important than to ensure that all employees maintaintheir physical and mental health and exercise their abilities to thefullest.
We are determined to further enhance our policies to maintain andpromote employees’ health, and actively support their efforts toimprove their lifestyles, aiming to create a workplace environment
where employees can work actively, energetically, beautifully andin good health.

environment and a corporate culture encouraging employees to exercise their strengths.
In 2023, Keihan Holdings Co., Ltd. was selected as a Certified Health & Productivity
Management Outstanding Organization for the fourth consecutive year.

October 30, 2018
Keihan Holdings Co., Ltd.
Keihan Electric Railway Co., Ltd.

2024 Certified Health & Productivity Management Outstanding Organization

Balancing childcare and nursing care		
Keihan Holdings Co., Ltd. and Keihan Electric Railway Co., Ltd. have developed systems to support employees who are involved inchildcare and/or nursing care for family members. In addition to relevant leave and shorter working hours, we offer a system for saving
unused annual paid holidays and using them for days leave for childcare and/or nursing care for family members. In September 2018,
we introduced a system of working from home for employees involved in childcare and/or nursing care. In this way, we reduce theLarge Enterprise Category

Keihan Holdings Co., Ltd., Keihan Electric Railway Co., Ltd.

Small and Medium-Sized
Enterprise Category (Bright 500)

Keihan Business Management Co., Ltd.

Small and Medium-Sized
Enterprise Category

Keifuku Electric Railroad Co., Ltd., Keihan Asset Management Co., Ltd., Keihan
Tatemono Co., Ltd., Zero Corporation Co., Ltd.

commuting burden and improve the working environment for employees involved in childcare and/or nursing care. As a result of these
programs, Keihan Holdings Co., Ltd. has received the Kurumin Mark, a certification from the Ministry of Health, Labour and Welfare as
a company that supports childcare five times since 2009. Additionally, in July 2023, Keihan Hotels & Resorts Co., Ltd. became the first

Expanded health checkups

Kyoto-based accommodation business to receive Platinum Kurumin Certification.

We have expanded health screenings so that our female employees can have breast cancer andNumber of employees taking childcare and/or nursing care leave (Keihan Holdings Co., Ltd., Keihan Electric Railway Co., Ltd.)CA125) at mobile health checkup venues alongside their regular checkups, and we also subsidize part

Fiscal year

gynecological screening tests (mammography, cervical cancer; cervical cytology exam, ovarian cancer;

2021

2022

2023

Male

5

6

12

Female53

６of the screening costs. In doing this, we aim to create an environment that makes it easier to undergo
screenings, facilitating early detection and treatment of breast, cervical, and ovarian cancers. We havealso established an environment for the administration of rubella and measles antibody tests, hepatitis
virus tests, and influenza vaccinations at these mobile health checkup venues alongside regular healthexaminations.

Kurumin Mark acquisition
Company name

Provision and promotion of health information

Years obtained

Number of times obtained

2009, 2011, 2013, 2018, 2021

5

We regularly disseminate useful health information to our employees through our group magazine and internal intranet, thereby raising

Keihan Electric Railway Co., Ltd.

2020

1

awareness about health.

Keihan Hotels & Resorts Co., Ltd.

2021, 2023

2

2022

1

Keihan Holdings Co., Ltd.

Zero Corporation Co., Ltd.

Through the PepUp health information service introduced by the Keihan Group Health Insurance Association, employees can accesstheir regular health checkup results, health age, medical expenses, and articles tailored to their health status at any time.
We hold seminars on general life-saving courses and cancer, as well as seminars open to all employees, regardless of gender orposition, aimed at improving knowledge about health issues specific to women.

Human resources development, skills development, and career design support		

Additionally, as we understand that breast cancer is a common health issue, we conduct breast cancer screening seminars for female
employees who reach the ages of 40, 45, and 50 to deepen their knowledge about breast cancer screening.

All new employees of the Keihan Group receive basic training to gain the knowledge and raise the awareness required in working for
the Keihan Group. The Keihan Business Seminars also offer group training for Keihan Group’s employees as necessary so that they canacquire and enhance their business skills (problem solving, logical thinking, coaching subordinates, etc.) and other knowledge related tofinancing, accounting, labor management and compliance. Starting in FY2021, in addition to conventional group training, many online
seminars and video streaming seminars have also been provided, allowing employees to take part irrespective of the time and place.
In addition to the group training, Keihan Holdings Co., Ltd. offers stratified training and training programs by outside lecturers

Establishment of an exercise regime
To prevent lifestyle-related diseases among employees and promote health, we encourage the establishment of exercise regimes. We
recommend participation in walk rallies organized by the Health Insurance Association using PepUp, encouraging employees to walk morethan 8,000 steps a day. Additionally, by conducting physical fitness tests, we aim to increase interest in health and exercise by allowing

designed to improve employees’ management and coaching skills. We support autonomous learning that is not environment-dependent

employees to assess their physical condition.

through the introduction of a learning management system. We are also proactively involved in self-improvement support, offering

Number and percentage of employees with exercise regimes (Keihan Holdings Co., Ltd., Keihan Electric Railway Co., Ltd.)subsidies for correspondence courses and qualification acquisition to improve skills in areas such as language proficiency and DX. From

FY2021

FY2023 to FY2024, we have been implementing telework management training for all management personnel in response to the shift
towards flexible work arrangements, including flextime, working from home, and teleworking.
In addition, we have introduced a mentoring system to support younger employees in career design and to foster networking. We also
hold off-site meetings focused on improving ease of work to enhance internal communication and provide the necessary follow-up.
65

KEIHAN GROUP INTEGRATED REPORT 2023

Number
Percentage

FY2022

FY2023

606

984

978

39.53%

57.98%

60.48%* Exercise regime: Walking or equivalent physical activities in daily life for at least one hour per day.

KEIHAN GROUP INTEGRATED REPORT 2023

66

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Achieving sustainable growthMaterial issue 4

Sustainable and robust management base

Efforts for safety and security

Safety management initiatives (examples)

For the Keihan Group, “safety and security” is a universal value that we provide to all our customers, and it is the foundation of our

The Safety Promotion Department, which follows the tradition of the audit departmentgroup’s existence. Through the relentless efforts of all our employees, we enhance both safety quality and efficiency, ensuring that

established in 1974, conducts regular safety audits for the railway’s operational departments.

Safety audit

these will be reliably passed on to the next generation. We will also thoroughly prepare to protect our customers from disasters.
General training center
The general training center was completed in November 2020. The train operation simulator

Safety measures at Keihan Electric Railway Co., Ltd.

not only has a driver training function, but also is newly equipped with a conductor training
function that can reproduce the state on the platform with the rear and side images of the
train using computer graphics, thereby making more practical training possible.

Basic philosophy
For the peace of mind of our customers, we will further solidify safety, and with strength, kindness, and a enterprising spirit, we willrealize a railway that is chosen.

General drills for recovery from an accident
We regularly conduct training that anticipates various situations so that we can respondquickly in the event of an accident or disaster. In October 2022, we conducted a training

Qualities expected of railway employees

exercise based on a scenario where a passenger car intruded into a level crossing and“As professionals supporting society through railways, our employees need to think and act on their own, improve themselves, andcollided with a train. The training confirmed mainly life-saving measures, evacuation

pass on our safety quality to the next generation.”

guidance, prevention of secondary disasters, and accurate information transmission, andincluded exercises for putting away the accident vehicles and restoration of tracks andBasic policy for safety
1 Safety first

overhead lines.
2 Compliance with laws

3 Continuous improvement

Measures against disasters

Under the principle of safety first, we

We comply with laws and regulations

We properly operate the safety control

We have installed weather observation equipment and steep slope monitoring cameras. In

always strive to ensure the safety ofrelated to transportation safety andsystem and aim for continuous

addition, we regulate operations by considering the strength of the embankments besidetransportation and take appropriate

faithfully perform our duties withimprovement.

safety measures.

integrity.

the tracks through a rainfall monitoring system. We are working on the introduction of fullywaterproof electric point-switch machine to ensure the continuation of railway transportationeven when the tracks are flooded due to heavy rainfall. Furthermore, to prevent water fromrivers and roads from flowing into stations and underground lines during emergencies, wehave installed flood barriers at 83 locations in 14 Keihan Line stations and 2 level crossings.

Disaster response policies
We will prepare against and respond to disasters based on the following policies.

Capital investment in FY2023(1) Prioritizing human life
We prioritize the safety of our customers and employees.

Railway facility investment:

4.4 billion yen(2) Asset protection

Of which, safety-related investment: 3.4 billion yen

We secure assets necessary for business activities.

Relocation and renewal of Neyagawa garage substation, renewal of(3) External collaboration and information dissemination

6000/7000-series train cars, update of platform emergency notification

We cooperate and collaborate with administrations and related parties, and strive to provide appropriate information to our customers.

system, seismic reinforcement work for elevated bridges, etc.

For more details, please refer to the “Safety Report” of Keihan
Electric Railway Co., Ltd.
https://www.keihan.co.jp/corporate/safety/(4) Early resumption of operations
We continue to provide passenger transportation services as much as possible and achieve early restoration of affected sections.

Safety measures at Hirakata Park

Safety goals

At the amusement park “Hirakata Park” of Keihan Electric Railway Co., Ltd., the railway

Safety goals for FY2023

technology sector verifies the safety and performs maintenance of some amusement
rides at the Neyagawa train base. Leveraging the strengths of the railway company, we• Qualitative goals to be achieved
As railway professionals supporting the safety and security of society, we always act in a way that meets societal trust.

support the safety of amusement rides with a high level of technology.

• Quantitative goals to be achieved
Results
1. Continuation of zero liability accidents

0 accidents

achieved

2. Continuation of zero incidents

2 incidents

not achieved *1

3. Transport disruptions due to internal causes below FY2022 record

7 incidents

achieved *2*1 Contact with a car due to train reversal (Keishin Line), and train entry into a level crossing with the barrier raised (Ishiyama Sakamoto Line)*2 Including transport disruptions due to external causes and natural disasters, a total of 26 incidents have occurred

67

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68

Achieving sustainable growthMaterial issue 4

Sustainable and robust management baseFoundations supporting value creation

Safety measures at Keihan Bus Co., Ltd.
Safety goals
Transportation safety goals for FY2023
Results
1. Zero fatal/serious accidents
2. Reduction of accidents for which we are responsible by 5% compared to the previous year

0 accidents

achieved

an increase of 11.5%

not achieved

Expenditure on transportation safety
FY2023299 million yen (train cars, operations, and education)

Safety management initiatives (examples)• Workplace inspections by the president and safety managers, roll-call inspections by head office employees in supervisory positions• Utilization of the onboard evaluation system “ASK System,” drive recorders, and misoperation prevention systems• Implementation of education and training, Good Driver Awards• Introduction of Emergency Driving Stop System (EDSS)

For more details, please refer to the ”Safety Management”
initiatives of Keihan Bus Co., Ltd.
https://www.keihanbus.jp/safetymanagement/

Ensuring safety and reliability of foodInitiatives in the hotel businessWe hold a committee on food safety and are advancing initiatives such as the development of manuals and training on HACCP-based
sanitary management and food labeling based on the Food Sanitation Act. In addition, we conduct internal audits to confirm thatappropriate handling is being carried out.

Keihan Group Sustainable Procurement Policy
The Keihan Group has established the “Keihan Group Sustainable Procurement Policy” as a guideline that all corporate officers andemployees of the Keihan Group should adhere to in promoting sustainable procurement. Furthermore, based on this policy, we haveformulated “Requests to Our Suppliers” as a guideline that we would like all the suppliers of Keihan Group companies to understandand practice.

Keihan Group Sustainable Procurement Policy (excerpt)(Fair business practices)• We do not engage in corrupt practices such as bribery, corruption, and inappropriate hospitality and gift-giving in our

procurement activities.
(Respect for human rights)• We do not engage in any acts that infringe on human rights, such as discrimination and harassment based on race,

nationality, creed, religion, gender, sexual orientation, presence or absence of disability, social status, etc.
• We do not engage in or allow unfair labor practices such as forced labor and child labor.
(Consideration for the environment)• We strive to implement measures to conserve energy, resources, and water, and to reduce environmental impact.

• When purchasing and procuring goods and services, we strive to select those that have as little impact on the environment

as possible.

69

KEIHAN GROUP INTEGRATED REPORT 2023

Corporate governance
71 Basic approach

73 Corporate officers

71 Corporate governance system

76 Executive officers

72 Evaluation of effectiveness of

77 Compliance

Board of Directors
72 Corporate officer compensation
system

79 Risk management
79 Dialogue with shareholders andinvestors
70

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Foundations supporting value creation

Corporate governance
Basic approach

1 Board of Directors
At the center of our management structure is the Board of Directors, which, in principle, meets once a month. It makes decision on, and oversees, management strategies and important

The Management Principles of the Keihan Group, with Keihan Holdings at its core, is to create a comfortable living environment andmatters of business execution, including those concerning group companies. From the perspective of strengthening the supervisory function of the Board, 7 of the 14 directors (13 male

contribute to society by establishing a network of dreams, hope, and trust. We will take good care of local communities, customers,

and 1 female (7.1% female director ratio)) have been appointed from outside the Company. Also, pursuant to the provisions of the Articles of Incorporation and a resolution of the Board

shareholders, and all other stakeholders of the group as we go about developing a life-stage network based primarily on thetransportation business, and also endeavor to comply with laws, regulations, and social norms and pursue efficient and sensibleof Directors, a significant portion of decisions on important matters of business execution are delegated to the Board in an effort to achieve swift decision-making in management.

2 Management meeting
A management meeting, which is typically convened once a week, has been established under the auspices of the Board of Directors to discuss group management strategies

corporate management by enhancing the supervisory function of the Board of Directors and facilitating swift decision-making.

and report on the discussion findings to the Board as required. Also, with the aim of expediting matters of business execution, executive officers have been assigned to each of thegroup’s four business segments (transportation, real estate, retail distribution, and leisure & service) and management departments.

Main corporate governance initiatives

3 Audit & Supervisory Committee

June 2007

・ Adoption of executive officer system
For the purpose of promoting efficient management by assigning roles across group strategy and business execution functions
・ Establishment of Nomination & Compensation Advisory Committee
For the purpose of enhancing the transparency of director/executive officer appointments and compensation

The Audit & Supervisory Committee meets once a month, in principle, to mainly decide on basic policies for audits, audit plans, and other important matters, and to also share

been appointed pursuant to a resolution of the Audit & Supervisory Committee. The full-time Audit & Supervisory Committee member attends the management meetings andApril 2016

・ Transition to holding company structure
For the purpose of further strengthening the competitiveness of each business, expanding the group’s businesses, creating new businesses,
enhancing the value of the areas along the Keihan Railway lines from a medium-to-long term perspective, and generating sustained growth andboosting corporate value

June 2016

・ Revisions to corporate officer compensation system (introduction of stock compensation-type stock options)

Established as an advisory body to the Board of Directors and comprising a majority of outside directors, the Nomination & Compensation Advisory Committee deliberates on

October 2016

・ Start of Board effectiveness evaluation

June 2017

・ Transition to a company with an Audit & Supervisory Committee
For the purpose of further bolstering the corporate governance system mainly by realizing quick decision-making by the Board of Directors andfurther improving the effectiveness of auditing and supervisory functions

June 2021

・ Discontinuation (abolishment) of takeover defense measures

June 2022

・ Revisions to corporate officer compensation system (introduction of restricted stock compensation)
For the purpose of providing an incentive to executive officers and directors (excluding outside directors) who are not Audit & Supervisory
Committee members for the sustained further enhancement of corporate value and to promote the sharing of value with shareholders

information about audits already carried out. 4 of the 5 directors serving as Audit & Supervisory Committee members are outside directors and every effort has been made tobolster the functions of the Audit & Supervisory Committee primarily by appointing directors with experience in transport administration and company management, corporate
accounting professionals, experts in corporate law, and specialists in cultural, academic, and tourism fields. In addition, one full-time Audit & Supervisory Committee member has
collaborates closely with the Internal Audit Department and others in a bid to make the auditing and supervisory functions of the Audit & Supervisory Committee more effective.

4 Nomination & Compensation Advisory Committee
motions and other matters related to appointments of, and compensation for, executive officers and directors who do not sit on the Audit & Supervisory Committee from theviewpoint of enhancing the transparency of such decisions. It then reports its findings to the Board of Directors.

Evaluation of effectiveness of Board of Directors
Once a year we ask all directors to complete a questionnaire about the general administration of the Board and what matters have been
discussed. The results are then reported to the Board for analysis and evaluation. The following is an overview of the evaluation of theeffectiveness of the Board of Directors in FY2023.

Items of evaluation in questionnaire
・General administration of the Board

Corporate governance system

Evaluation results
・General administration of the Board

Outline of the corporate governance system
We aim to achieve swift decision-making in management by delegating a significant portion of decisions on important matters ofbusiness execution to the Board of Directors. We also endeavor to enhance the supervisory function of the Board by leveraging theextensive experience and outstanding insight of outside directors. Moreover, we aim to strengthen auditing and supervisory functions by
having Audit & Supervisory Committee members with Board voting rights carry out audits.

Diagram of corporate governance system
Appointment &dismissal
Compensation
Advisory
Committee
4 Directors(including 3 Outside
Directors)

Appointment &dismissal

Consultation

Appointment
Appointment
Supervision& dismissal& dismissal
Representative
Representative
Director, CEO
Director, COO

Supervision
ReportStatement of
opinions, etc.

Appointment &dismissal

Audit &
supervision

ReportReport5 directors serving as Audit &Supervisory Committee Members
Cooperation(including 4 outside directors)

Complianceand Crisis/
RiskManagement
Committee

Sustainability Committee

Environmental
Management
Committee

Information
Security
Committee

Human
Resources
Strategy
Committee

ReportHow environmental issues, digital transformation, and crisis management are being addressed were raised as matters that need to be discussed in particular. The Board will
be required to continually discuss and report, in a timely manner, the progress of the company’s long-term management strategy and the medium-term management plan
(BIOSTYLE: Deepening and Challenge). Based on these opinions, the Company will continue to work towards further enhancing the effectiveness of the Board of Directors.

Pursuant to the provisions of the internal regulations, the compensation of Directors who are not Audit & Supervisory Committee Members (not including Outside
Accounting
audit

Audit & Internal
Control Office

Audit

Audit & Supervisory
Committee Office

Accounting auditor

Directors meeting

Internal
ControlCommittee

In the previous fiscal year’s effectiveness analysis and evaluation, the need for more discussions about the company’s medium- and long-term management strategies
and how ESG issues are being addressed was highlighted. However, it was assessed that plenty of opportunities to discuss both of these items had been secured. For
the former, there were a number of opportunities to engage in discussions as part of the process of formulating the new long-term management strategy and mediumterm management plan, which were approved and publicly announced in March 2023. For the latter, the formulation of the Keihan Group’s action plan on climate change,
called BIOSTYLE Environmental Action 2030, and reports on discussions from the meetings of the Sustainability Committee, were presented to the Board of Directors.

Corporate officer compensation system

dit
Au
Cooperation

2 Management meeting

・Proposal/reporting items

3 Audit & Supervisory Committee

1 Board of Directors
14 Directors (including 7 Outside Directors)

Recommendation

The Board’s overall administration and discussions were assessed to be more or less appropriate, mainly regarding the sharing of documents before meetings, thematters of discussion and the time taken to discuss them, the number of proposal and reporting items, and the content of materials.

・Going forward
Shareholders’ meeting

4 Nomination &・Proposal/reporting items ・Going forward

Directors) consists of a basic fee, a performance fee (consisting of a corporate performance fee determined pursuant to the internal regulations and based on a
combination of consolidated earnings per share and dividend, and a personal performance fee determined pursuant to the internal regulations and based on theordinary income of the businesses they are in charge of and their subsidiaries and on their achievement of personal goals), and restricted stock units. Outside
Directors who are not Audit & Supervisory Committee Members receive a fixed compensation as set out in the provisions of the internal regulations.
The Board of Directors establishes the policies for determining the compensation contents and determines specific amounts for each Director based on
the recommendations of the Nomination & Compensation Advisory Committee, of which more than half of the members are Outside Directors. Directors who
are Audit & Supervisory Committee Members receive a fixed compensation as set out in the provisions of the internal regulations determined by the Audit &Business segments (transportation, real estate, retail distribution, leisure & service)71

KEIHAN GROUP INTEGRATED REPORT 2023

Supervisory Committee. The amount is determined based on the discussion by Directors who are Audit & Supervisory Committee Members.

KEIHAN GROUP INTEGRATED REPORT 2023

72

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Foundations supporting value creation

Corporate governance●: Outside ● : Independent

Corporate
officers(As of July 1, 2023)

Position

Yoshifumi Kato

Masahiro Ishimaru

Masaya Ueno

Yoshihiro Hirakawa

Yoshihisa Domoto

Yasushi Matsushita

Representative Director & Chairman,
CEO, Chairman of the Board

Representative Director & President,
COO

Director & Senior Executive Officer

Director & Senior Executive Officer

Director & Managing Executive Officer

Director & Managing Executive Officer

General Manager, Corporate Planning Office
General Manager, Development Office around
Hirakatashi Station

General Manager (in charge of Personnel
Division), Group Management Office; AssistantGeneral Manager (in charge of Business
Promotion Group [Co-create Experience Value]),
Corporate Planning Office[General Manager of Leisure & Service Business]

Assistant General Manager (in charge ofBusiness Promotion Group [Redevelop
Keihan areas]), Corporate Planning Office[General Manager of Transportation
Business]

General Manager, Promotion Office ofDevelopment
Project along Railway Line Area; Assistant General
Manager (in charge of Management Strategy
Group [New Business]), Corporate Planning Office[General Manager of Real Estate Business]

Assistant General Manager, Corporate Planning
Office; Assistant General Manager (in chargeof Accounting and Finance Division), GroupManagement Office; Assistant General Manager,
Development Office around Hirakatashi Station[General Manager of Retail Distribution Business]

April 1975 Joined the Company
June 2005 Director, the Company
June 2007 Director & Managing Executive Officer,
the Company
June 2011 Representative Director & President,
CEO & COO, the Company
June 2017 Representative Director & Chairman,
Keihan Electric Railway Co., Ltd.
(current position)
June 2019 Representative Director & Chairman,
CEO, Chairman of the Board,
the Company (current position)
June 2019 Representative Director & Chairman,
Keihan Tatemono Co., Ltd.
(current position)

April 1985 Joined the Company
June 2013 Executive Officer, the Company
June 2017 Director & Managing Executive Officer,
the Company
June 2019 Representative Director & President,
COO, the Company (current position)

April 1982 Joined the Company
June 2013 Executive Officer, the Company
June 2017 Director & Managing Executive Officer,
the Company
June 2021 Director & Senior Executive Officer,
the Company (current position)
June 2023 Representative Director & President,
Keihan Hotels & Resorts Co., Ltd.
(current position)

April 1986 Joined the Company
June 2015 Executive Officer, the Company
June 2017 Managing Director,
Keihan Electric Railway Co., Ltd.
June 2019 Senior Managing Director,
Keihan Electric Railway Co., Ltd.
June 2021 Director & Managing Executive
Officer, the Company
June 2021 Representative Director &President, Keihan Electric Railway
Co., Ltd. (current position)
June 2023 Director & Senior Executive
Officer, the Company(current position)

April 1988 Joined the Company
June 2017 Executive Officer, the Company
June 2017 Representative Director & President,
Keihan Real Estate Co., Ltd.
(current position)
June 2021 Director & Managing Executive Officer,
the Company (current position)
July 2021 Director & Chairman, ZEROCORPORATION Co., Ltd.
(current position)

April 1987 Joined the Company
June 2017 Executive Officer, the Company
June 2019 Representative Director & President,
Keihan Ryutsu Systems Co., Ltd.
(current position)
July 2020 Representative Director & Chairman,
Keihan The Store Co., Ltd.
(current position)
June 2023 Director & Managing Executive Officer,
the Company (current position)
June 2023 Representative Director & Chairman,
Keihan Department Stores Co., Ltd.
(current position)

April 1976 Joined Nippon Telegraph andTelephone Public Corporation
June 2009 Senior Executive Vice President &Representative Director, Nippon
Telegraph and Telephone West
Corporation (NTT West)
June 2012 President, NTT West
June 2018 Senior Executive Adviser, NTT West(current position)
June 2019 Director, the Company(current position)

12/12 times

12/12 times

12/12 times

12/12 times

12/12 times—

12/12 times

12/12 times●●

Responsibilities

Brief career summary

Attendance at Board of
Directors meetings
Attendance at Audit &Supervisory Committee meetings
Nomination & Compensation
Advisory Committee
Audit & Supervisory
Committee●

Kazutoshi Murao●●

Director

Shinya Hashizume●●

Director

April 2006 Professor, Graduate School of
Literature and Human Sciences,
Osaka City University and Osaka City
University Urban Research Plaza
April 2008 Distinguished Professor, The
Industry – Academia – Government
Collaboration Organization, Osaka
Prefecture University; Director,
Research Institute for Tourism Industry
April 2017 Distinguished Professor, Organization for
Research Promotion, Osaka Prefecture
University; Director, Research Institutefor Tourism Industry of ResearchCenter for the 21st Century; Professor,
Graduate School of Economics, Osaka
Prefecture University
June 2019 Director, the Company (current position)
April 2022 Distinguished Professor, Organization for
Research Promotion at Osaka Metropolitan
University (OMU); Director, ResearchInstitute for Tourism Industry, Collaborative
Research Center, Organization for
Research Promotion at OMU; Professor,
Graduate School of Sustainable System
Sciences, OMU (current position)

Skills matrix of each
Director
Corporate management●

Transportation

●

●

●

●

●

●

Real estate/Urban development
Retail distribution

●

●

●

●

●

●
●

●

Leisure & service/Tourism●

BIOSTYLE
Finance & accounting●

Personnel & labor relations

●

●

●

Legal affairs & risk management

●

●

●

* The attendance status for the above-mentioned Board of Directors and Audit & Supervisory Committee meetings reflects the situation for FY2023 (from April 1, 2022 to March 31, 2023).
* The skills matrix above represents areas of expertise for each individual based on their experience and does not encompass all skills and experiences that they possess.

73

KEIHAN GROUP INTEGRATED REPORT 2023

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74

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Foundations supporting value creation

Corporate governance●: Outside ● : Independent

Corporate
officers

Executive officers (As of July 1, 2023)(Excluding Directors who hold concurrent positions)

Ken Chan Chien-Wei
Position●●

Director

Toshihiko Inachi

Hisashi Umezaki

Director, Full-time Audit & Supervisory
Committee Member

Director, Audit & Supervisory●●
Committee Member

Nobuyuki Tahara
Director, Audit & Supervisory●●
Committee Member

Koichi Kusao
Director, Audit & Supervisory●●
Committee Member

Kanako Hamasaki
Director, Audit & Supervisory●●
Committee Member

Responsibilities

Brief career summary

Attendance at Board of
Directors meetings
Attendance at Audit &Supervisory Committee meetings
Nomination & Compensation
Advisory Committee
Audit & Supervisory
Committee

Norio Otsuka

Toru Izumitani[Assistant General Manager of Transportation
Business][Assistant General Manager of Real EstateBusiness]

Tsukasa Eto

Norio Shirono

In charge of Management Strategy Group [PR &Advertisement], Corporate Planning Office; in chargeof IT Promotion Division, Group Management
Office; General Manager, Personnel Division, GroupManagement Office

In charge of Management Strategy Group [Overall
Group Strategy], Corporate Planning Office;General Manager in charge of Management
Strategy Group [Overall Group Strategy],
Corporate Planning Office; General Manager
of Accounting & Finance Division, GroupManagement Office

Yukio Yamada

Hiroshi Oasada

Second in charge of Business Promotion Group [Cocreate Experience Value], Corporate Planning Office;in charge of Kyoto[Assistant General Manager of Leisure & Service
Business]

General Manager, Development Office around
Hirakatashi Station; General Manager, Promotion
Office of Development Project along Railway Line
Area
[Assistant General Manager of Retail Distribution
Business]

Kinya Inoue
In charge of Management Strategy Group[Sustainability and BIOSTYLE], Corporate Planning
Office; in charge of General Administration Division,
Group Management Office; General Manager, Audit &Internal Control Office

Oct. 2000 Vice President, GIC Real Estate Pte. Ltd.
April 2006 Representative Director, GIC Real Estate
International Japan Co., Ltd. (Present: GIC
Japan Co., Ltd.)
Sept.2019 Representative Director, Patience CapitalGroup Co., Ltd. (current position)
June 2023 Director, the Company (current position)—

April 1982 Joined the Company
June 2013 Executive Officer, the Company
June 2017 Director & Managing Executive Officer,
the Company
June 2019 Director & Senior Executive Officer,
the Company
June 2023 Director, Full-time Audit & Supervisory
Committee Member, the Company(current position)

April 1966 Joined Ministry of Transport
July 1999 Administrative Vice-Minister of Transport
Jan. 2001 Advisor, Ministry of Land, Infrastructure,
Transport and Tourism
Aug. 2002 Vice President, Teito Rapid Transit
Authority
April 2004 Representative Director & President,
Tokyo Metro Co., Ltd.
June 2011 Senior Corporate Advisor, Tokyo Metro
Co., Ltd.
June 2013 Senior Executive Advisor, Tokyo Metro
Co., Ltd.
June 2014 Audit & Supervisory Board Member, theCompany
June 2017 Director, Audit & Supervisory Committee
Member, the Company(current position)
June 2017 Advisor, Tokyo Metro Co., Ltd.
June 2022 Honorary Advisor, Tokyo Metro Co., Ltd.
(current position)

Sept.1980 Certified Public Accountant(current position)
Dec. 1997 Representative Partner, Century
Audit Corporation (Present: Ernst &Young ShinNihon LLC)
June 2014 Retired ShinNihon LLC (Present:
Ernst & Young ShinNihon LLC)
June 2016 Audit & Supervisory Board Member,the Company
June 2017 Director, Audit & Supervisory
Committee Member, the Company(current position)

April 1990 Attorney at law (current position)
June 2016 Audit & Supervisory Board Member,the Company
June 2017 Director, Audit & Supervisory
Committee Member, the Company(current position)

July 2011 Representative Director, General
Incorporated Foundation Yuuhisai
Koudoukan (Present: Yuuhisai
Koudoukan Foundation); Director,
the Center of Yuuhisai Koudoukan(current position)
April 2013 Associate Professor, School ofLetters, Senshu University
March 2014 Committee member, Kyoto City
Council on Tourism and Promotion
May 2020 Committee member, Kyoto City
Council on Tourism and Promotion
April 2021 Associate Professor, Faculty of
Letters, Kyoto Prefectural University(current position)
June 2021 Director, Audit & Supervisory
Committee Member, the Company(current position)

12/12 times

12/12 times

12/12 times

12/12 times

12/12 times—

15/15 times

15/15 times

15/15 times

15/15 times

●

●

●

●

●
●

Skills matrix of each
Director
Corporate management●●

Real estate/Urban development●●

Transportation●

Retail distribution
Leisure & service/Tourism

●

●

●
●

BIOSTYLE
Finance & accounting●●

Personnel & labor relations
Legal affairs & risk management

75

KEIHAN GROUP INTEGRATED REPORT 2023●

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76

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

Foundations supporting value creation

Corporate governanceCompliance
Charter of conduct

Compliance and risk management system
We have established a technical committee on compliance andcompliance/risk standpoint as part of the internal audits carriedcrisis/risk management under the Sustainability Committee andout by the office at Keihan Holdings and each group company.

As a corporate group engaged primarily in a railway business that serves the public interest, the Keihan Group undertakes various

we have also selected compliance promotion representatives

business ventures with strong ties to the local community. In order to fulfill our corporate social responsibility and remain a trustworthy

and personnel from each division of Keihan Holdings and eachcompany in society by meeting the expectations of people around us with sincerity, we have established the following charter ofgroup company to form a compliance promotion organization.

conduct.

Sharing compliance risk information between the technicalc ommit te e a nd the c omplia nc e promotion orga niz ation

Sustainability Committee
Technical committee oncompliance and crisis/riskmanagement

Compliancesubcommittee

prevents the occurrence and recurrence of legal violations.

Participation of outside advisors

1. We will abide by laws, regulations, and social norms, uphold high ethical standards, and act responsibly.

The compliance subcommittee established under the technical

Keihan Group’s compliance promotion organization

2. We will prioritize customer safety and provide high-quality services*1 that earn the trust and satisfaction ofcustomers in a timely manner.

respond to compliance risks.

3. We will conduct fair business activities*2. We will also maintain sound and normal relationships*3 withgovernments and administrations.

committee discusses with outside advisors how to assess andAlso, this technical committee constantly collaborates with

Promotion personnel from
Keihan Holdings’ divisions
and group companies

Promotion representatives
from Keihan Holdings’ divisions
and group companies

the Audit & Internal Control Office to conduct audits from a

4. We will engage in open communication with society at large and disclose necessary information to all
stakeholders in a timely and appropriate manner.

Compliance hotline

5. We will respect the human rights of all people.

We have established a compliance hotline system for corporate officers and employees working in the Keihan Group. The Audit &6. We will strive to create a safe and comfortable workplace free of harassment and other forms of
inappropriate behavior.

inappropriate with respect to the business activities of the Keihan Group. We also have a system in place to investigate facts and take

7. We will actively endeavor to protect the environment.
8. We will handle personal information and other important information strictly and appropriately.

Internal Control Office or designated point of contact outside the Company receives reports on conduct considered to be illegal orappropriate measures. We are also extra careful about how we handle the personal information of whistleblowers. Not only is theirinformation handled appropriately, but our internal rules clearly stipulate that no whistleblower shall be treated disadvantageously formaking a report. In FY2023, 33 incidents were reported to the compliance hotline, compared to 24 in FY2022.

9. We will contribute to the local community through our business activities.
10. We will take a firm stand against anti-social forces that pose a threat to the order and safety of civil society
and work to eliminate them.
11. We will undertake business activities soundly*4 and swiftly and aim to increase corporate value over thelong term in a stable manner.
*1 Include appropriate representations and explanations of services and products.
*2 Engaging in bid-rigging, forming cartels, exploiting one's position for personal gain, providing socially inappropriate entertainment or gifts, making unjust demands leveraging the positionof an ordering party, infringing on intellectual property, conducting insider trading, and other similar activities are prohibited. We will also conduct proper accounting procedures and makeevery effort to protect intellectual property such as patents and trademarks.

Promotion of fair business practices (anti-corruption policy)
In accordance with the Keihan Group’s charter of conduct and in order to prevent acts that impede fair business practices, including
violations of Japan’s Antimonopoly Act, breach of trust, and bribery, we have established regulations on the promotion of fair businesspractices covering the entire group. These regulations set forth the obligations and code of conduct for officers and employees andthe measures to be taken when an incident arises. In addition to these regulations, we have also formulated an Antimonopoly Act
compliance manual to prescribe more specific rules of conduct, and in line with the content of the regulations, we hold training sessions
and awareness activities regarding the Antimonopoly Act for employees of not just Keihan Holdings, but group companies as well.

*3 Illegal donations or contributions in connection with political activities are prohibited.
*4 Information related to business activities must be accurately recorded and stored in accordance with the rules on handling informatio

Measures to eliminate anti-social forces
In keeping with this charter of conduct, we identified some areas that we need to pay particular attention to from a complianceIn keeping with our charter of conduct established under the framework of the Keihan Group’s Management Principles, we will take aperspective, including information leaks, insider trading, unfair business practices, bribery, elimination of anti-social forces, fair

firm stand against anti-social forces that pose a threat to the order and safety of civil society and work to eliminate them.

presentation, and harassment. We have elaborated on these topics in the Keihan Group Compliance Guidelines, which have been
distributed to all group companies to improve awareness and understanding.

More specifically, the division that takes charge of addressing anti-social forces is the General Administration Division of the GroupManagement Office and we have also appointed a representative and personnel responsible for preventing unjust demands. These
persons work to eliminate anti-social forces by collaborating with compliance promotion representatives and personnel of Keihan
Holdings’ divisions and group companies, all of whom have been appointed to form a compliance promotion organization as part of theCompliance training initiatives

technical committee on compliance and crisis/risk management.
In the event of any unjust demands from anti-social forces, the General Administration Division of the Group Management Office will, as

To raise awareness of compliance and educate our employees about our Management Principles and the Keihan Group’s social

necessary, consult with the relevant department, or the relevant group company, to discuss what measures to take. It will also collaborate

responsibilities, compliance, harassment, and various laws and regulations, we hold stratified training (for example, when entering thewith the police, lawyers, and other external specialist organizations and maintain a resolute stance in addressing the situation.

Company, upon being promoted, and upon being appointed as a corporate officer of a group company) and group training sessions.

Also, as part of our ongoing efforts to prepare against unjust demands from anti-social forces, we have established close relationships

We also publish articles about compliance in the group newsletter and provide e-learning programs and video training to employees. In

with external specialist organizations and any information obtained will be shared, as needed, with other divisions and Keihan Group

addition, we visit group companies to conduct on-site training according to the business characteristics of the Company in question.

companies. We also make every effort to raise awareness of our measures at various meetings and the like.

77

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78

Foundations supporting value creation

Corporate governance

DATA

Risk management
Crisis Management Regulations
We have established Crisis Management Regulations, the guidelines for crisis management in the Keihan Group and related matters.
They determine how we collect, manage, report and disclose crisis information as well as how we respond to an emergency. In
response to this, each division of Keihan Holdings has established its own detailed rules on the Crisis Management Regulations anddeveloped systems to deal with each specific crisis. We require all group companies to comply with the Crisis Management Regulations.
To improve crisis management skills, a crisis/risk subcommittee has been established under the technical committee on complianceand crisis/risk management. This subcommittee develops countermeasures against risks that may have a significant impact on the
Keihan Group.

Formulation of the Business Continuity Plan (BCP)
Keihan Holdings and Keihan Group companies are formulating a business continuity plan (BCP) on the assumption of a large-scaledisaster, such as a Nankai Trough earthquake or an earthquake triggered by the Uemachi Fault, as well as outbreaks of infectious
diseases, such as COVID-19. In the event of a large-scale disaster, we will look to minimize damage to business assets, yet keep
our core businesses running or restore operations at the earliest possible time. To achieve that, we have identified the functions
and key tasks that must be prioritized, analyzed the factors that could hamper business continuity and the early restoration ofoperations, and prepared for a contingency by considering strategies for replacing, recovering, scaling down, or limiting business
operations.
To respond to the outbreak of infectious diseases, we have analyzed the impact on our business activities at each stage of infection
and spread, and formulated business continuity strategies for facilities operated by group companies. We have also established ascheme to implement important operations necessary for business continuity even when employees are not able to travel to theirworkplaces.

Information security
To maintain and improve information security, the Keihan Group has established the technical committee on information security
under the Sustainability Committee and worked on risk reduction. Each group company has established private information protection
regulations to ensure proper handling and management of personal information. As part of our measures to protect and ensure
appropriate and safe management of confidential and personal information owned by the Company and to respond to information
security incidents*1, which have become more sophisticated and complex in recent years, the Keihan Group SIRT *2 was established in2017 as the group’s overall emergency response organization. In addition to formulating a BCP for our IT systems, we implement incident
response drills and other measures to enhance the functions and systems in the handling process from the occurrence to settlement of
an incident, and to minimize damage in case of an emergency. We are committed to the dissemination and improvement of knowledge
on security. We host information security study meetings on a regular basis for IT personnel of each group company to provide educationon the circumstances surrounding the recent Internet environment and legal systems related to personal information protection. We havealso distributed the Information Security Handbook to employees who use PCs in their work.
*1 Incidents that threaten the environment for safe computer usage, such as attacks on websites via the Internet or emails and computer viruses.
*2 SIRT stands for Security Incident Response Team.

81 11-year summary of financial andnon-financial data
83 Financial statements

Dialogue with shareholders and investors
IR activities
Based on our disclosure policy, we are actively disclosing the information on our business management and enhancing
communication through IR activities so that our shareholders and investors can deepen the understanding of Keihan Holdings

85 Group companies / ESG evaluation /Information disclosure system
86 Corporate data / Stock informationand the Keihan Group and evaluate the Company correctly. In FY2023, we held financial results briefings on two occasions for
institutional investors and analysts, as well as individual meetings as required.
79

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80

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

DATA

11-year summary of financial and non-financial data
(Unit: million yen)

FY

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Operating revenue

279,156

289,203294,906

300,188

302,917322,276

326,159

317,103

253,419

258,118

260,070

Transportation

89,32889,661

90,341

93,562

94,40492,262

93,926

93,36565,69470,76880,927

Real estate

78,94888,17989,45489,033

94,014

113,132

118,607110,228

110,270

137,495

120,103

Retail distribution

96,224

95,427

98,20098,87598,493

100,70998,727

98,186

83,10952,90850,676

Leisure & service

26,081

27,42329,761

31,81330,801

31,29830,621

32,081

9,724

11,52922,869Other businesses

1,487

1,637

1,707

1,755

1,792

1,824

1,843

2,908

3,061

3,169

3,660

Adjustments-12,914-13,125-14,559-14,852-16,588-16,951-17,567-19,667-18,441-17,752-18,167

Operating income

23,28925,08529,437

31,52432,34331,45833,71531,123-1,265

13,40820,491

Ordinary income

18,933

21,45727,43528,46130,33529,63032,10829,886238

16,485

20,458

Profit attributable to owners of parent

11,077

14,42017,864

22,385

22,63622,712

21,48020,121-4,574

9,589

17,621*2

653,462

671,182

664,236

670,333

679,631

698,786

731,750

732,824764,247

737,261

774,849

Net assets

158,121

169,864

190,513

191,790

203,455

223,559

238,695

254,058

248,595

255,876

273,510

Interest-bearing debt

327,880

321,044

311,010

325,714314,539

316,399

334,346

327,132

351,600

345,311

341,625

Capital expenditure

19,977

31,17915,87831,39839,17339,745

43,631

29,32433,261

17,19329,712

Depreciation

17,071

16,603

17,107

17,571

18,074

19,113

19,81920,784

21,232

20,922

20,028

Total assets

Cash flows from operating activities

43,901

29,573

21,45936,33438,56944,43836,47332,033

15,282

21,673

16,932

Cash flows from investing activities-28,489-15,132-4,473-27,750-29,597-32,603-48,059-26,363-24,940-17,641-13,109

Free cash flow

15,412

14,441

16,985

8,584

8,971

11,835-11,586

5,670-9,658

4,032

3,822

Cash flows from financing activities-11,941-11,412-16,275-5,768-20,020-9,85812,655-12,138

21,301-10,264-7,435Net Increase (decrease) in cash and cash equivalents

3,470

3,028

710

2,816

-11,048

1,976

1,069

-6,468

11,643-6,232-3,612

Cash and cash equivalents at end of period

22,802

25,831

26,552

29,372

18,32420,30021,377

14,911

26,554

20,322

16,727

Earnings per share (yen)

19.70

25.65

31.78

39.95

211.01211.87200.40187.72-42.6889.47

164.38––––211.00211.85200.36

187.68–89.44

164.34

Net assets per share (yen)*1

276.40297.08334.67349.131,870.99

2,055.87

2,193.68

2,329.94

2,279.47

2,343.97

2,502.22

Dividend per share (yen)

5.00

6.00

6.00

6.00

30.00

35.00

35.00

35.00

25.00

25.00

30.00

Return on equity (ROE) (%)

7.4

8.9

10.1

11.9

11.6

10.8

9.4

8.3

-1.9

3.9

6.8

*2

4.7

4.3

-0.2

1.8

2.7

*2

*1

Diluted earnings per share (yen)*1*1

Return on assets (ROA) (%)

3.6

3.8

4.4

4.7

4.8

4.6

Capital adequacy ratio (%)

23.8

24.9

28.3

28.2

29.5

31.5

32.1

34.1

32.0

34.1

34.6

Interest-bearing debt / EBITDA multiple (Times)

8.1

7.7

6.7

6.6

6.2

6.3

6.3

6.3

17.6

10.1

8.4

Net interest-bearing debt / EBITDA multiple (Times)

7.6

7.1

6.1

6.1

5.9

5.9

5.9

6.0

16.3

9.5

8.0

*1 Keihan Holdings Co., Ltd. has conducted a consolidation of common shares at a rate of one share for every five shares with an effective date of October 1, 2017. Earnings per share, diluted earnings
per share, net assets per share and dividend per share have been calculated as if this consolidation of shares was conducted at the beginning of the previous fiscal year.
*2 Accompanying the application of "Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan, Statement No. 28, February 16, 2018), etc. from the
beginning of FY2019, the figures for Total assets, Return on assets and Capital adequacy ratio have been restated for FY2018.
* The “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan, Statement No. 29, March 31, 2020), etc. has been applied from the beginning of FY2022.
(Unit: people)

2013

FY
Total number of employees (Consolidated)

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

6,765

6,711

6,944

6,904

6,922

6,862

6,885

7,083

6,967

6,667

6,526

4,622

4,589

4,760

4,694

4,695

4,438

4,431

4,426

4,359

4,215

4,082

Real estate

628

612

575

595

655

821

864

924

940

957

999

Retail distribution

825

821

831

850

859

870

867

873

863

760

723

Leisure & service

517

513

578

564

564

587

565

620

582

524

516

Other businesses

13

14

15

14

16

14

13

90

84

79

86

Group (Common)

160

162

185

187

133

132

145

150

139

132

120

Transportation* Figures for FY2013 are provided in accordance with the segmentation revised from FY2014.
* Figures for FY2015 are provided in accordance with the segmentation revised from FY2016.

81

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82

Keihan Group INTRODUCTIONManagement message

Strategies
for value creation

Achievingsustainable growthFoundations supporting
value creation

DATA

DATA

Financial statements
Consolidated Balance Sheet (Summary)
Item(Unit: million yen)Amount2022/3(Assets)
Current assets

AmountItem2023/32022/3(Liabilities)

FY2022

FY2023Operating revenue

258,118

260,070

Operating expenses

244,710

239,578

186,794

217,002

127,477

148,777

Operating income

13,40820,491

20,327

16,784

Notes and accounts payable - trade

10,020

10,137

Non-operating income

5,820

2,467

25,12936,058

Short-term loans payable

60,32053,608Non-operating expenses

2,742

2,500

Ordinary income

16,485

20,458Extraordinary income

4,199

9,806

Current Liabilities

126,863

147,347

Advances received

8,717

10,178Other

14,474

16,811

Other

48,41974,852550,466

557,846

Non-current liabilities

353,907352,560

Property, plant and equipment

481,726

486,638

Bonds payable

100,000

80,000

Building and structures

213,445

206,386

Long-term loans payable

174,990

188,016

Machinery, equipment and vehicles

19,553

17,163Net defined benefit liability

17,593

16,842

Land

230,941

231,271

Construction in progress

10,26718,010

Other

7,517

13,806

Other
Total liabilities

61,32367,700481,384

501,338

Intangible assets

7,218

7,476

(Net Assets)

Investments and other assets

61,521

63,731

Shareholders’ equity

210,627

225,673

Investment securities

42,00145,142

Capital stock

51,466

51,466

Deferred tax assets

5,369

4,104

Capital surplus

28,796

28,792

Net defined benefit asset

1,605

1,705

Retained earnings

152,007

166,989

Other

12,545

12,780Treasury shares-21,643-21,574

40,612

42,575

5,967

7,021

35,06035,031

Accumulated other comprehensive income
Valuation difference on available-forsale securities
Revaluation reserve for land

774,849

2,684

3,779

Profit before income taxes

18,00026,485

Income taxes - current

7,402

7,906

Income taxes - deferred

617

341

9,981

18,237

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of paren

391

615

9,589

17,621

Consolidated Statement of Cash Flows (Summary)
Item(Unit: million yen)

FY2022

FY2023-12

72

Cash flows from operating activities

21,673

16,932Remeasurements of defined benefit plans

-403

449

Cash flows from investing activities-17,641-13,109

121

121

Cash flows from financing activities-10,264-7,435

4,514

5,139

Net increase (decrease) in cash and cash equivalents-6,232-3,612

Total net assets

255,876

273,510

Cash and cash equivalents at beginning of period

26,554

20,322

Total liabilities and net assets

737,261

774,849

Cash and cash equivalents at end of period

20,322

16,727

Non-controlling interests
737,261

Extraordinary losses

Foreign currency translation adjustment
Subscription rights to shares

Total assets(Unit: million yen)Item2023/3

Cash and deposits
Notes and accounts receivable trade, and contract assets
Land and buildings for saleNon-current assets

Consolidated statement of income (Summary)

Consolidated Business Segment Information(Unit: million yen)Transportation

Real estate

Retail distribution

Leisure & service

Other businesses

Total

Adjustment

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

Amount recorded inconsolidated financial
statement
FY2022
FY2023Operating revenue
Operating revenue from external customers

69,046

79,136

123,116

105,40252,51750,166

10,92622,221

2,508

3,140

258,116

260,0662

4258,118

260,070

Intersegment operating revenue or transfers

1,722

1,790

14,37814,701

390

510

602

648

661

520

17,755

18,171-17,755-18,171

–

–

Total

70,76880,927

137,495

120,103

52,90850,676

11,52922,869

3,169

3,660

275,871

278,238-17,752-18,167

258,118

260,070

173

6,885

22,593

17,555

1,776

1,878

-9,324-3,836-1,393-1,23013,825

21,253-417-761

13,40820,491

239,448

240,100

424,309457,483

28,40828,19433,76940,835

7,477

7,885

733,412774,499

3,849

349

737,261

774,849

11,84810,853

6,449

6,640

1,061

1,053

1,143

1,189

182

159

20,68519,896237

132

20,922

20,028

6,142

9,478

9,473

13,262

826

1,496

586

5,217

46

117

17,07529,573118

139

17,19329,712

Segment income (loss)
Segment assets
Other items
Depreciation
Increase in property, plant and equipment
and intangible assets
83

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84

Keihan Group INTRODUCTION

Strategies
for value creation

Management message

Achievingsustainable growthFoundations supporting
value creation

DATA

DATA

Group companies / ESG evaluation / Information disclosure system

Corporate data / Stock information

Group companies (as of March 31, 2023)

Corporate data (as of March 31, 2023)

Status of shares (as of March 31, 2023)

Name

Keihan Holdings Co., Ltd.

Total number of authorized shares

319,177,200

Consolidated subsidiaries
Transportation

Keihan Kyoto Kotsu Co., Ltd.

Keihan Gardening Co., Ltd.

Keihan Hotels & Resorts Co., Ltd.

Keihan Electric Railway Co., Ltd.

KT Auto Industry Co., Ltd.

Keihan Sangyo Co., Ltd.

Osaka Aqua Bus Ltd.

Incorporation

November 25, 1949

Aggregate number of issued shares

113,182,703

Keifuku Electric Railroad Co., Ltd.

Kyoto Keihan Bus Co., Ltd.

Kanko Co., Ltd.

Biwako Kisen Steamship Co., Ltd.

Establishment

November 19, 1906

Number of shareholders

49,736

Eizan Electric Railway Co., Ltd.

KB Enterprise Co., Ltd.

Capital51,466,416,776 yen

Number of
employees

120

Head office

1-7-31 Otemae, Chuo-ku, Osaka, Japan

Main business

Management of the group, etc.

Kuzuha Public Golf Course Co., Ltd.

Retail distribution

Keifuku Bus Co., Ltd.

Real estate

Mikuni Kanko Sangyo Co., Ltd.

Hieizan Driveway Co., Ltd.

Keihan Department Stores Co., Ltd.

Biwako Food Service Co., Ltd.
Hieizan Railway Co., Ltd.

Keihan Engineering Service Co., Ltd.

Keihan Real Estate Co., Ltd.

Keihan Ryutsu Systems Co., Ltd.

Keihan Station Management Co., Ltd.

Keihan Tatemono Co., Ltd.

Keihan The Store Co., Ltd.

Keihan Agency Inc.

Keihan Asset Management Co., Ltd.

Bio Market Co., Ltd.

Keihan Bus Co., Ltd.

Zero Corporation Co., Ltd.

Kyoto Bus Co., Ltd.

Keihan Kind Co., Ltd.

Kojak Bus Co., Ltd.

Keihan Building Techno Service Co., Ltd.

Other businesses
Keihan Card Co., Ltd.

Leisure & service(including those seconded from other companies,
and not including those seconded to othercompanies)

Biostyle Co., Ltd.

Hotel Keihan Co., Ltd.

Major shareholders (as of March 31, 2023)

Equity-method affiliate
Transportation Nakanoshima Rapid Railway Co., Ltd.

Ownership distribution status

Real estate PANNARAI DEVELOPMENT CO., LTD.

Number of Shareholding
sharesratio

Shareholder nameESG evaluation
Morningstar
Japan ex-REIT Gender Diversity
Tilt Index
MSCI ESG Ratings AA(Industrial conglomerate)

MSCI JapanESG Select Leaders

S&P/JPX
Carbon Efficient Index* The inclusion of Keihan Holdings in any MSCI index, and the use of MSCI logos, trademarks,
service marks or index names herein, do not constitute a sponsorship, endorsement or
promotion of Keihan Holdings by MSCI or any of its affiliates. The MSCI indexes are theexclusive property of MSCI. MSCI and the MSCI index name and logos are trademarks orservice marks of MSCI or its affiliates.

Information disclosure structure
Financial information

Non-financial information
INTEGRATED REPORT・Financial results briefing

・Earnings presentation materials

・Securities report・Monthly data

・Corporate governance report(thousands)(%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

12,548

11.71

Custody Bank of Japan, Ltd. (Trust Account)

5,329

4.97

Sumitomo Mitsui Trust Bank, Limited

2,550

2.38

Sumitomo Mitsui Banking Corporation

2,000

1.87

Nippon Life Insurance Company

1,891

1.76

GOVERNMENT OF NORWAY

1,662

1.55

JP MORGAN CHASE BANK 385781

1,317

1.23

STATE STREET BANK WEST CLIENT − TREATY 505234

1,116

1.04

Custody Bank of Japan, Ltd. (Sumitomo Mitsui Trust Bank Re-trust
Portion/Hankyu Corporation Retirement Benefit Trust Account)

1,073

1.00

Taiju Life Insurance Company Limited

1,053

Individuals
and others

Financial
institutions

47.36%

30.85%

Foreigncorporations, etc.

11.88%

0.98(Notes) 1. Keihan Holdings Co., Ltd. holds 5,978,200 shares of treasury shares, which are excluded from the above major
shareholders.

Financial
instruments
business
operators

1.58%

Other
corporations

8.33%

2. The shareholding ratio is calculated excluding treasury shares.

WebsiteIR information(Japanese only)

WebsiteSustainability(Japanese only)

Stock price & trading volume trends(Thousandsof shares)(Yen)

25,000

Trading volume (left axis)

6,000

Adjusted closing price (right axis)

5,000

20,0004,000
15,000Forward-looking statements

3,000
10,0002,000

The performance forecasts and business plans contained in this report are based on our company’s judgment of forward-looking
statements and are based on information available and assumptions made at the time of preparation. Therefore, please be awarethat actual performance and other results published in the future may differ from these forward-looking statements due to uncertain
factors such as changes in economic conditions and regulations.

85

KEIHAN GROUP INTEGRATED REPORT 2023

5,000

1,000

0

0

2018
Apr.

2019
Apr.

2020
Apr.

2021
Apr.

2022
Apr.

2023
Mar.

KEIHAN GROUP INTEGRATED REPORT 2023

86Keihan Holdings Co., Ltd.
Integrated Report Editorial Office
Management Strategy Group, Corporate Planning Office
1-7-31 Otemae, Chuo-ku, Osaka 540-6591
Phone: +81-(0)6-6945-4585 Fax: +81-(0)6-6947-3724
https://www.keihan-holdings.co.jp/