To Our Stakeholders

Fiscal 2017 Business Results Outlook In fiscal 2017, the year ending 31st March 2017, we expect
revenues from operations to increase 7.4%, or ¥52.6 billion,year on year, to ¥760.0 billion, and year-on-year decreases of13.9%, or ¥15.3 billion, in operating income, to ¥95.0 billion,and 14.3%, or ¥10.0 billion, in net income attributable toowners of the parent, to ¥60.0 billion. We are projecting lower

earnings due to the absence of the sale of land for facilities
that the Real Estate Business recorded in fiscal 2016 and anexpected increase in depreciation and amortisation in theUrban Transportation Business. However, we will raise theunderlying level of earnings by continuing to lift the basic performance level of each business.

Fiscal 2017 management indicators outlook
FY2016 result

Revenues from operations

1¥707.4 billion

FY2017 estimate¥760.0 billion

Operating income¥110.3 billion¥95.0 billion

EBITDA¥166.5 billion¥152.0 billion

Interest-bearing debt

¥916.6 billion¥930.0 billion

Interest-bearing debt/EBITDA ratio

5.5 times

6.1 times

D/E ratio

1.3 times

1.2 times¥70.0 billion¥60.0 billion

10.3%

8.0%

¥892.3 billion¥905.0 billion

5.4 times

6.0 times

Net income attributable to owners of the parent
ROE(Reference)

Net interest-bearing debt2
Net interest-bearing debt/EBITDA ratio

1. As of fiscal 2017, the presentation of revenues from operations of the International Transportation Business has changed from net togross amounts.
2. Amount of interest-bearing debt less cash and deposits

Fiscal 2017 Outlook

Urban Transportation
In the railway business, railway operation revenue is likely to grow asincrease in revenues from operations, to ¥243.2 billion. However,increases in line-side area populations and overseas visitors to Japan

mainly due to construction costs of elevated railway tracks andoffset the absence of the rush demand had been anticipated prior tohigher depreciation and amortisation accompanying investment in

a consumption tax rise that was previously scheduled for April 2017.

the manufacture of rolling stock, we expect operating income toConsequently, we anticipate a 1.5%, or ¥3.7 billion, year-on-year

decline 3.6%, or ¥1.5 billion, year on year, to ¥39.8 billion.

Hankyu Corporation and Hanshin Electric Railway:
Performance forecasts (fiscal 2017)

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

Fare revenues (¥ million)*

HankyuHanshin

FY2017FY2016

Change%96,586

95,192

1,393

1.5

32,77432,407366

1.1

Passenger volumes (Thousands)*

HankyuHanshin

FY2017FY2016

Change%654,981644,563

10,4171.6

237,013234,2262,786

1.2(¥ billion)

50

233.4

40

38.6

239.5

243.2

250

41.3

39.8

200

30

150

20100

1050002015* Sum of tier 1 and tier 2 railway operators for both Hankyu and Hanshin
Operating income

20162017(Est.)(FY)

Revenues from operations (right axis)

Real Estate
We expect revenues from operations to grow 1.2%, or ¥2.7 billion,
year on year, to ¥223.6 billion, as a result of higher earnings from salesof condominiums. However, we anticipate a 23.4%, or ¥11.7 billion,

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

year-on-year decrease in operating income, to ¥38.2 billion, due tothe absence of fiscal 2016’s one-time factor: the sale of land for facilities in the centre of Saito (Ibaraki, Osaka Prefecture).

(¥ billion)

604836206.4

220.9

223.6

250
200

49.9
38.2

37.2

150

24100

1250002015
Operating income

2016

2017
(Est.)(FY)

Revenues from operations (right axis)

Entertainment and Communications
In the stage businesses, we expect the high level of capacity utilisation that has continued since the Takarazuka Revue’s centenary toedge down and a decline in sales of related products. Also, we antici-

Entertainment and Communications Business:
Outlook for revenues from operations and operating income(¥ billion)

112.6

112.5

1515.015.3

pate fewer performances because of work to renew the Tokyo
Takarazuka Theatre’s stage machinery. Regarding the sports busi-(¥ billion)

20120

90

12.6

ness, earnings are likely to decline because the Hanshin Tigers willplay fewer official games. As a result of the above, in fiscal 2017,

110.3

1060

530

ending 31st March 2017, the Entertainment and Communications
Business is forecast to record year-on-year decreases of 2.0%, or¥2.2 billion, in revenues from operations, to ¥110.3 billion, and 17.5%,or ¥2.7 billion, in operating income, to ¥12.6 billion.

002015
Operating income

2016

2017
(Est.)

Revenues from operations (right axis)(FY)

TravelWe expect higher demand for travel to various overseas regions withthe exception of Europe. Also, we intend to leverage topical tourist
resources to boost sales of domestic travel products. Consequently,

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

we anticipate year-on-year increases of 4.9%, or ¥1.5 billion, in revenues from operations, to ¥32.0 billion, and 114.3%, or ¥0.8 billion, in(¥ billion)

2.040

32.0

30.5

1.5operating income, to ¥1.5 billion.

32.030

1.5

1.2
1.020

0.7
0.5

10002015
Operating income

2016

2017
(Est.)(FY)

Revenues from operations (right axis)

International Transportation
Given our expectation that subsidiaries in Japan will increase handlingvolume and improve profitability while overseas subsidiaries develop
businesses in promising markets and capture further demand forInternational Transportation Business:
Outlook for revenues from operations and operating income(¥ billion)

(¥ billion)

4100

logistics services in Asia, we anticipate revenues from operations of¥80.3 billion (a year-on-year increase of 6.0%, or ¥2.2 billion, on a net

33.180.3basis). We also anticipate an increase of 22.2%, or ¥0.4 billion, in2.22operating income, to ¥2.2 billion.

75

39.4

1.850

36.7

(net: 38.9)

125002015

2016

2017
(Est.)(FY)

Operating income
Revenues from operations (right axis)
Note: A s of fiscal 2017, revenues from operations will be presented on a gross basis
rather than a net basis (total transactions net of freight costs).

HotelsAlthough we envisage continued favourable trends in the accommo-

we anticipate a 6.0%, or ¥0.2 billion, year-on-year rise in operating

dation area, we expect that withdrawal from the management of cer-income, to ¥3.5 billion, because more overseas visitors to Japan andtain non-hotel restaurants will cause revenues from operations tofirm domestic demand are likely to counteract costs and depreciationedge down 0.3%, or ¥0.2 billion, year on year, to ¥67.8 billion. However,and amortisation arising from the opening of REMM Roppongi.

(%)

Hotel Business:
Outlook for revenues from operations and operating income40.0(¥ billion)

Visitors to Japan(Millions of people)

20

19.7

15

33.8
6.2

10.4
33.3

8.4
32.6

2.1

2.7

3.5

20112012

2013(¥ billion)

4100

3

35.7

63.0

35.0
2

7.9
4.8

32.5
10

3.5

3.3

37.5

13.4

105

40.0

75

67.8

68.0

50

1.2

250

2014

2015

(CY)

Nationwide
Kansai area
Percentage visiting Kansai area (right axis)
Source: “Consumption Trend Survey for Foreigners Visiting Japan,” Japan National
Tourism Organization (JNTO), Japan Tourism Agency

00

2015
Operating income

2016

2017
(Est.)

Revenues from operations (right axis)(FY)