Hankyu Hanshin Holdings Group
Results Briefing Materials for Fiscal 2017
(fiscal year ended 31st March 2017)

May 19, 2017
Hankyu Hanshin Holdings, Inc.
9042 http://www.hankyu-hanshin.co.jp/en/

Contents
Key Points

･････

2

Ⅰ. Performance Highlights forFiscal 2017
(fiscal year ended 31st March 2017) ･････

3

Ⅱ. Long-term management vision for 2025 (fiscal 2026) ･････ 22
Ⅲ. Revision of the medium-term management plan･････ 42

Ⅳ. Specific Projects･････ 50

Ⅴ. Forecast for fiscal 2018 (fiscal year ending 31st March2018) and outlook for each business segment･････ 76
Ⅵ. Referential Materials･････ 92

Business forecasts and other projections herein are based on information available at present and logical assessments and do not
represent any promise by the Company. The actual results may differ significantly from these projections due to various factors.

1

Key Points• FY2017– While the Company met its profit targets, income and revenue declined overall. Thiswas because the Real Estate Business segment sold off its commercial-use land in theprevious fiscal year. Also, yen-equivalent value reduced following exchange fluctuations,
negatively affecting the International Transportation Business segment.
– On the other hand, operating income and ordinary income were second only tothe previous fiscal year, while net income attributable to owners of parent
exceeded all past records.

• Long-term management vision– We outlined the kind of company we hope to be, as well as the strategic approachnecessary for achieving this vision, in a document titled ‘Hankyu Hanshin HoldingsGroup’s Long-term Vision for 2025 (fiscal 2026)’.
– The Company has established four business strategies for pursuing sustainable growth.
These strategies are based on the twin perspectives of business area and businessmodel.

• Medium-term management plan（～FY2019）– In view of its current management condition, the progress of its projects, and otherfactors, the Company has increased profit projections.
– In view of its basic approach for its long-term management vision, the Company hasraised the level of strategic investment (cumulative figure for FY2016-2019) from thelevel of the previous plan.
– From fiscal 2018 onward, the Company will raise the amount of annual dividend
to ¥40 per share, and the total payout ratio to 30%.

2

Ⅰ．Performance Highlights for fiscal 2017
(fiscal year ending 31st March 2017)3

Consolidated Statements of Income(Summary)
FY2017 Results

Consolidated Subsidiaries
Equity-Method Affiliates
Total

FY2016 Results

Change93 companies 93 companies ±0(2 companies increase, 2 companies decrease)
11 companies 10 companies +1(1 company increase)104 companies 103 companies +1(2 companies increase, 1 company decrease)(¥ million)

FY2017
Results

FY2016
Results

Revenues from operations※

736,763746,792 -10,029(-1.3%)

Operating income

104,058

110,293 -6,234(-5.7%)

Non-operating income

11,7899,158 +2,630

Non-operating expenses

15,24014,972 +268

100,607

104,479 -3,872(-3.7%)

Ordinary income

ChangeRemarks
For details,
please see next page
Equity in income of affiliates+2,881

Extraordinary income

4,255

38,802 -34,547

Gain on contributions forconstruction -35,705

Extraordinary loss

4,057

47,194 -43,137

Loss on reduction of noncurrent
assets -35,638

Net income attributable to
Record 71,302
owners of the parent

69,971 +1,331(+1.9%)※As of fiscal 2017, the presentation of revenues from operations of the International Transportation Business has changed
from net to gross amounts. This change does not affect operating income.

（Reference）

FY2017 Results

FY2016 Results

ChangeDepreciation and amortisation

52,80053,701-901

Financial balance ① - ②-10,074-11,381+1,307

Interest and dividend income①

1,092

1,124

-32

Interest expense②

11,166

12,506-1,3394

Consolidated Statements of Income (Breakdown for each business segment)[Key results in current period]
While the Company met its profit targets, income and revenue declined overall. This was
because the Real Estate Business segment sold off its commercial-use land in theprevious fiscal year. Also, yen-equivalent value reduced following exchange fluctuations,
negatively affecting the International Transportation Business segment(¥ million)

Revenues from operations

Segment income

FY2017
Results

FY2016
Results

Urban Transportation

237,136

239,544-2,40742,237

41,270+967

Real Estate

215,709

220,923-5,213

41,97049,851-7,881Entertainment andCommunications

115,193

112,490+2,703

15,65515,301+354

Travel29,93830,502

-563

637

680

-43

International
Transportation

71,67076,092-4,422

1,587

1,788

-200

Hotels65,64068,042-2,401

2,795

3,298

-502

Other

42,64638,859+3,787

1,340

967

+372

Adjustment-41,172-39,660-1,512-2,167-2,866

+698

Total

736,763746,792-10,029

104,058

110,293-6,234

ChangeFY2017
Results

FY2016
Results

Change※As of fiscal 2017, the presentation of revenues from operations of the International Transportation Business has changed fromnet to gross amounts. This change does not affect operating income.

5

Urban Transportation results[Railway]
Income and profits increased, with the Hankyu and Hanshin lines performing well andbenefitting from a decrease in power costs.

[Automobile]
Hanshin Bus achieved an increase in revenues from operations after assuming all
municipal bus routes from the Amagasaki Municipal Transportation Bureau in March2016. Operating income was at the level of the previous fiscal year.
(¥ million)

FY2017
Results

FY2016
Results

Change%Revenues from operations

237,136

239,544-2,407-1.0%

Operating income

42,237

41,270

+967

+2.3%

[Breakdown by type of business](¥ billion)
Revenues from operations

FY2017
Results

Y on Y

Railway

149.9

+0.4

Automobile

48.9

+1.9

Retailing

32.9

-4.6

Advertising

8.5

-0.1

Others9.1+1.0

It is the influence that Iina dining Co.,Ltd.
presenting Home-meal replacement businessbecame the equity-method affiliate from theconsolidated subsidiary.(About ¥-3.0 billion)*Includes head office expenses /adjustments.
6

[Urban Transportation] Railway Performance results
Hankyu Corporation

Fare revenues (¥ million)*
FY2017
Results

FY2016
Results

ChangePassenger volumes (Thousands)*
FY2017
Results

FY2016
Results

ChangeCommuter pass

32,62832,272+355(+1.1%)

329,305

325,540 +3,764(+1.2%)

Workers

28,13827,790+347(+1.2%)

230,010

226,852 +3,157(+1.4%)

Students

4,489

4,481

+8(+0.2%)

99,29598,688+606(+0.6%)

Other tickets

62,72062,920-199(-0.3%)

318,064

319,023-958(-0.3%)

Total

95,34895,192+156(+0.2%)

647,369

644,563 +2,805(+0.4%)

Hanshin Electric Railway
Fare revenues (¥ million)*
FY2017
Results

FY2016
Results

ChangePassenger volumes (Thousands)*
FY2017
Results

FY2016
Results

ChangeCommuter pass

11,563

11,372+190(+1.7%)

119,768

117,786 +1,982(+1.7%)

Workers

10,356

10,193+163(+1.6%)

94,47993,131 +1,348(+1.4%)

Students

1,206

1,179

+26(+2.3%)

25,28924,655+634(+2.6%)

Other tickets

21,136

21,035+101(+0.5%)

116,998

116,440+557(+0.5%)

Total

32,69932,407+291(+0.9%)

236,766

234,226 +2,540(+1.1%)＊ Revenue amounts less than one million yen, and numbers of passengers less than one thousand, are omitted.
For Hankyu Railway, “other ticket revenue/ridership” includes revenue/ridership associated with the PiTaPa usage sections.
Sum of tier 1 and tier 2 railway operators for both Hankyu and Hanshin

7

[Urban Transportation] Transportation revenue (Factors of YoY Change)《Hankyu Corporation》《Hanshin Electric Railway》

Transportation revenue (tier 1 + tier 2)

Transportation revenue (tier 1 + tier 2)(¥ million)(¥ million)
Totals forcommuter passes
and other tickets

1Ｑ

2Ｑ

3Q

4Q

Total

Totals forcommuter passes
and other tickets

1Ｑ

2Ｑ

3Q

4Q

Total

FY2017 Results

24,194 23,656 24,097 23,399 95,348

FY2017 Results

8,284

8,440

8,004

7,970 32,699

FY2016 Results

24,011 23,748 24,066 23,366 95,192

FY2016 Results

8,153

8,460

7,933

7,861 32,407

Change

+131

-19

+70

(%)

+1.6％

Change

+183

(%)

+0.8％

-92

+31

+33

+156

-0.4％ +0.1% +0.1% +0.2%

Factors of YoY Change (estimated)
・Reactionary drop from the surge in visitors following the opening of
Expocity last year-¥83million
・Reactionary drop from last year’s leap year-related surge-¥144million
・Other factors (e.g. increase in line-side areas populations, andincrease in inbound demand)+¥383million

+109

+291

-0.2％ +0.9% +1.4% +0.9%

Factors of YoY Change (estimated)
・Increase in visitors to USJ＋¥71million
・Reactionary drop from last year’s leap year-related surge-¥51million
・Other factors (e.g. the strong performance of the Hanshin Namba
Line, increase in line-side areas populations, and increase in
inbound demand)＋¥272million

8Real Estate results[Real estate leasing]
Income and revenue increased, with rental buildings in the Umeda area performing well.

[Real estate sales and Others]
In the condominium business, despite lower unit sales, operating income and ordinary
income remained at the same level as the previous fiscal year. On the other hand,revenues from operations and operating income declined due to factors such as theselloff in the previous period of the segment’s commercial-use land in the central area ofInternational Culture Park ‘Saito’ (Ibaraki City, Osaka Prefecture).
(¥ million)

FY2017
Results

FY2016
Results

Change%Revenues from operations

215,709

220,923-5,213-2.4%

Operating income

41,97049,851-7,881-15.8%[Breakdown by type of business](¥ billion)
Revenues from operations

FY2017
Results

Y on Y

Real estate leasing

104.1

+1.1

Real estate sales and Others

128.7

-5.8

*Includes head office expenses /adjustments.

Condominium sales: down 215 (1,087 units; previous year = 1,302 units)*Figures include units in shared buildings that the Group partly owns.
9Entertainment and Communications results[Sports]
Income and revenue increased thanks to strong food, drink, and merchandise sales inHanshin Koshien Stadium, and also because the segment commenced a live sports
streaming[Stage]Income and revenue increased with the stage business benefitting from the popularity ofshows such as Cosmos Troup’s ‘Elisabeth’ and the musical ‘Biohazard: Voice of Gaia’[Communication, media and Others]
The information services business reported higher revenue after achieving strong orders
for system development and performing well in e-commerce website construction andmaintenance services. However, profit remained the same.
(¥ million)

FY2017
Results

FY2016
Results

Change%Revenues from operations

115,193

112,490+2,703+2.4%

Operating income

15,65515,301

+354

+2.3%

[Breakdown by type of business](¥ billion)
Revenues from operations

FY2017
Results

Y on YSports

33.9

+0.6

Stage

32.9

+0.3

Comunication, media and Others

49.3

+1.9

Includes head office expenses /adjustments.
10

Travel results
Profits and revenue declined. The overseas travel business performed less well than lastyear because of a decrease in the number of overseas visitors, particularly to Europe,
reflecting the deteriorating international situation. As for the domestic travel business,there was strong turnout for topical tourist activities, such as going on the Shikoku
pilgrimage in the reverse order, but the effect was offset by a decline in visitors to
Kyushu following the Kumamoto Earthquake of 2016.
(¥ million)

FY2017
Results

Revenues from operations

Operating income[Performance Highlights for Fiscal 2017]◆Overseas travel billings : Ranking 3(※)
Billings： ￥186.9billion（Y on Y -7.1%)◆Domestic travel billings : Ranking 6(※)
Billings： ￥129.0billion（Y on Y -2.7%)◆Total travel billings : Ranking 6(※)
Billings： ￥318.7billion（Y on Y -5.1%)

FY2016
Results

Change%29,93830,502

-563

-1.8%

637

680

-43

-6.4%

【Overseas travel】
Sales volume was lower than the level of the previous fiscal
year. While the numbers of visitors to Oceania and Asia
remained high, a spate of terrorist incidents in Europe
prompted a significant decline in the number of visitors toEurope.

【Domestic travel】

The number of visitors to the Shikoku area was high, withmany people doing the Shikoku pilgrimage in the reverse
Source: Sales volume indicates the aggregated volume for April to March. The order (“Gyaku-uchi”) because of the traditional belief thatvalues for industry ranking are based on aggregated results from April to January.doing so during a leap year offers greater profits. However,Source: Japan Tourism Agency, ‘Bulletin on Sales Volumes among the Major
the Kumamoto Earthquake of April 2016 resulted in a
Travel Agents’ (Shuyō ryokō-sha no ryokō toriatsukai jōkyō sokuhō)significant drop in visitors to Kyushu. Despite efforts to※ The above figures indicate the aggregated results for Hankyu Travel
mitigate the loss by offering ‘reconstruction discounts’, sales
International, Hankyu Hanshin Business Travel, and Hanshin Travel International
volume declined YoY.
(intercompany transactions offset)
11International Transportation results
While air and ocean transport businesses in East Asia and ASEAN countries performed
well, overseas businesses generally experienced lower income and revenue due to a
reduction in yen-equivalent value following exchange fluctuations, and a slump in airtransport in the United States and Europe.
(¥ million)

FY2017
Results

FY2016
Results

Change%Revenues from operations

71,67076,092-4,422-5.8%

Operating income

1,587

1,788

-200

-11.2%※As of fiscal 2017, the presentation of revenues from operations of the International Transportation Business has changed from net to gross amounts. Asof fiscal 2017, the presentation of revenues from the export cargo-related operations of the International Transportation Business has changed from net
to gross amounts. This change does not affect operating income.

【 Performance Highlights for Fiscal 2017 】【Japan】

・Ocean exports were strong, reflecting increased sales volume and reduced costs.
・Air exports performed less well compared to the previous fiscal year owing to a decline in profitability, which
offset an increase sales volume.
・Imports were sluggish due to the continued slump in the air and ocean transport markets.

【Overseas】

・Transport businesses in Europe and America performed less well compared to the previous fiscal year due tofactors such as an increase in personnel expenses and other expenses.
・Transport businesses in East Asia performed better than the previous fiscal year, with the Hong Kong businessachieving particularly strong results. However, ASEAN-based businesses performed less well owing to theSingapore business performing poorly and also because of a general rise in expenses.
・Income and revenue among overseas businesses as a whole declined YoY owing to a reduction in yen-equivalentvalue following exchange fluctuations.

12Hotels results
Income and revenue declined. This result is attributable to the segment’s withdrawal
from the management of certain non-hotel restaurants, and a YoY decline in sales
among the Hotels Business segment and parties business.
(¥ million)

FY2017
Results

FY2016
Results

Change%Revenues from operations

65,64068,042-2,401-3.5%

Operating income

2,795

3,298

-502

-15.2%[Performance Highlights for Fiscal 2017]

Occupancy rates of Hankyu Hanshin Hotels
Total 92.6％(+0.4 points from previous year, +2.2 points from year before previous year)
Kansai area 94.3%(+0.4 points from previous year, +2.1 points from year before previous year)
Tokyo metropolitan area 90.8%(+0.3 points from previous year, +2.2 points from year before previous year)

Average daily rates (ADR) of Hankyu Hanshin Hotels
Total ¥14,448 (-¥473 from previous year, +¥1,945 from year before previous year)
Kansai area ¥14,140 (-¥479 from previous year, +¥2,524 from year before previous year)
Tokyo metropolitan area ¥16,665 (-¥556 from previous year, +¥812 from year before previous year)【Hotels business】
・While the hotels maintained high occupancy rates, ADR was down compared to the previous fiscal year, which saw asurge in inbound demand.
【Parties business and Restaurants business】
・While the restaurants maintained the revenue level of the previous fiscal year, the parties business reported a decline
in revenue following a contraction in the wedding business in some areas.
【Others】
・The withdrawal from the management of certain non-hotel restaurants resulted in significantly lower revenue
compared to the previous fiscal year.
13Consolidated Statements of Income(Non-operating profit and loss)(¥ million)

FY2017
Results

FY2016
Results

Operating income

104,058

110,293-6,234Non-operating income

11,789

9,158+2,630

8,630

5,748

+2,881

15,24014,972+268

11,166

12,506-1,339100,607

104,479-3,872Equity in income of affiliates

Non-operating expenses
Interest expenses

Ordinary income

Change14

Consolidated Statements of Income(Extraordinary profit and loss)(¥ million)

FY2017
Results

Extraordinary profit and loss

FY2016
Results

Change197-8,391+8,5894,255

38,802-34,547

Gain on contributions for construction

2,114

37,820-35,705

Gain on sales of noncurrent assets

453

126

+326

Gain on valuation of investment securities

872

33

+838

Other

815

822

-6

4,057

47,194-43,137

Loss on reduction of noncurrent assets

2,180

37,818-35,638

Loss on retirement of noncurrent assets

546

951

-404

Loss on impairment of fixed assets

901

2,692

-1,791

Other

429

5,732

-5,302Extraordinary income

Extraordinary loss:

15

Consolidated Statements of Income(Net income attributable to owners of the parent)(¥ million)

FY2017
Results

Income before income taxes

100,805

96,087+4,717

Total income taxes

27,931

24,538+3,392

Income taxes—current

26,081

20,495+5,585

Income taxes—deferred

1,850

4,043

-2,192

Net income

72,87371,549+1,324

Net income attributable to noncontrolling interests

1,570

1,577

-7

Net income attributable to ownersof the parent

71,302

69,971+1,331FY2016
Results

Change16

Consolidated Balance Sheets
FY2017
Results

Net assets

Liabilities

Assets(¥ million)

FY2016
Results

Current assets

269,992

255,535

Noncurrent assets

2,079,839

2,026,644

Total assets

ChangeRemarks+14,456
property and equipment and+53,194 intangible assets:+34,408

Investment securities:+19,882

2,349,831 2,282,180 +67,650

FY2017
Results

FY2016
Results

Debt

788,931795,010-6,078102,000

112,000-10,000

8,591

9,559

-968

899,523

916,570-17,046

Current liabilities

419,291

456,134-36,843

Long-term liabilities

1,125,879

1,101,807+24,071

Bonds

1,545,171 1,557,942-12,771

Interest-bearing debt

Total liabilities

Net income attributable to owners of theparent:+71,302+73,180 Impact of changes in accounting policy:+15,281
Payment dividend:-8,803
Less treasury stock, at cost:-5,247 etc.

Shareholders’ equity

759,875

686,695

Accumulated othercomprehensive income

27,074

20,639Subscription rights to shares

496

424

+72

Non-controlling interests

17,213

16,478+735

Total net assets

804,659

Lease obligations

ChangeValuation difference on available-for-sale+6,434 securities:+4,861

724,237 +80,422

17Consolidated Statements of Cash Flows(¥ million)

FY2017
Results

FY2016
Results

Cash flows from operating activities

115,633

124,838

52,800-22,71453,701-29,656

Cash flows from investing activities-84,845-78,843

Purchases of noncurrent assets-92,767
2,186-11,527
13,973-92,686
5,064-14,228
20,623-30,595-47,278-5,271-8,803-17,046-3,779-8,227-39,258

-673
-480

-694
-1,97822,363648
22,53023,497844
22,363

Depreciation and amortisation
Income taxes (paid) refunded

Proceeds from sales of noncurrent assets
Purchases of investment securities
Receipt of contributions for construction

Cash flows from financing activities
Purchase of treasury stock

Dividends paid
Decrease (increase) in interest-bearing debt

Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at end of year18

《Reference》 Consolidated Statements of Income(¥ billion)[Upper table] Revenues from operations[Lower table] Operating income

Total

FY2017
Results①

FY2017
forecasts(As of Oct.)①

FY2017FY2016
Change Forecasts Change
ChangeResults
(As
of
May.)
①-②
①-③
①-④
④
③

736.8

740.0

-3.2

760.0

-23.2

746.8

-10.0

104.1

97.0

+7.1

95.0

+9.1

110.3

-6.2

237.1

237.9

-0.8

243.2

-6.1

239.5

-2.4

42.2

40.4

+1.8

39.8

+2.4

41.3

+1.0

215.7

220.2

-4.5

223.6

-7.9

220.9

-5.2

42.0

39.2

+2.8

38.2

+3.8

49.9

-7.9

115.2

113.3

+1.9

110.3

+4.9

112.5

+2.7

15.7

13.4

+2.3

12.6

+3.1

15.3

+0.4

29.9

30.1

-0.2

32.0

-2.1

30.5

-0.6

0.6

0.5

+0.1

1.5

-0.9

0.7

-0.0

71.7

71.7

-0.0

80.3

-8.6

76.1

-4.4

1.6

1.8

-0.2

2.2

-0.6

1.8

-0.2

65.6

66.4

-0.8

67.8

-2.2

68.0

-2.4

2.8

3.0

-0.2

3.5

-0.7

3.3

-0.5

(Breakdown for each business segment)

Urban Transportation
Real EstateEntertainment andCommunications
TravelInternational
Transportation
Hotels19

《Reference》 Consolidated Statements of capital expenditure(¥ billion)

FY2017
Results①

FY2017
forecasts

FY2017
Change Forecasts Change FY2016 Change
Results①-②①-③①-④(As of Oct.)(As of May.)
④
②

③

86.2

95.0

-8.8

83.1

+3.1

66.6 +19.6

Urban Transportation

31.2

35.6

-4.4

39.8

-8.6

28.0

+3.2

Real Estate

43.1

47.2

-4.1

31.0

+12.1

28.3

+14.9

Entertainment and Communications

7.4

9.9

-2.5

10.0

-2.6

5.9

+1.5

Travel

0.5

0.5

+0.0

0.8

-0.3

0.5

+0.0

International Transportation

0.4

0.4

-0.0

0.6

-0.2

1.0

-0.7

Hotels

3.2

3.4

-0.2

3.5

-0.3

2.2

+0.9

Total capital expenditure(Breakdown for each business segment)

20

《Reference》 Consolidated Statements of Depreciation and amortisation, EBITDA(¥ billion)

FY2017
Results①

Total Depreciation andamortisation

FY2017
forecasts

FY2017
Change Forecasts Change FY2016 Change
Results①-②①-③①-④(As of Oct.)(As of May.)
④
②

③

52.8

53.7

-0.9

54.6

-1.8

53.7

-0.9

Urban Transportation

25.9

26.6

-0.7

27.6

-1.7

25.7

+0.2

Real Estate

16.8

17.0

-0.2

17.0

-0.2

17.9

-1.1

Entertainment and Communications

6.7

6.9

-0.2

7.1

-0.4

6.7

+0.1

Travel

0.7

0.8

-0.1

0.7

+0.0

0.8

-0.0

International Transportation

0.7

0.7

-0.0

0.7

-0.0

0.7

-0.0

Hotels

1.9

1.9

-0.0

1.9

-0.0

1.8

+0.0

159.3

153.0

+6.3

152.0

+7.3

166.5

-7.2

Urban Transportation

68.2

67.0

+1.2

67.4

+0.8

67.0

+1.2

Real Estate

58.8

56.2

+2.6

55.2

+3.6

67.8

-9.0

Entertainment and Communications

22.6

20.4

+2.2

19.9

+2.7

22.2

+0.4

Travel

1.4

1.3

+0.1

2.2

-0.8

1.5

-0.1

International Transportation

2.3

2.5

-0.2

2.9

-0.6

2.5

-0.3

Hotels

4.7

4.9

-0.2

5.4

-0.7

5.1

-0.5

(Breakdown for each business segment)

Total EBITDA(Breakdown for each business segment)

21

Ⅱ．Long-term management vision
for 2025 (fiscal 2026)

22

23

Summary of Hankyu Hanshin Holdings’ First 10 Years
・Since commencing operations 10 years ago, we have pooled the energies of Hankyu and Hanshin to
increase the competitiveness of our businesses, and channelled investment into large scale projects toincrease the Group’s overall revenue and profits.
・Alongside these efforts, the Company has cut back its interest-bearing liabilities and steadilystrengthened its financial standing.
【Major large-scale projects】 Hankyu Nishinomiya Gardens Development, Rebuilding of Umeda Hankyu Building, Extension of
Hanshin Namba Line, Renovation of Hanshin Koshien Stadium etc.

Trends in Management Indicators（¥billion）
※2

684

752

653

682

650

639

679

110.3
104.1

First of the major private railways topass the ¥100 billion mark

90.7

87.9
77.8

70.1

74.9
57.4

0.6
※1

20.6

91.8 94.0

73.8

50.4

46.5

104.5

1,282.6
1,251.7
1,275.6
1,271.1
1,209.4

100.6

85.6

64.7
65.4

707

686

Interest-bearing debt
Interest-bearing debt /EBITDA ratio

737

74.9

39.3 39.7

81.2

46.4

1,183.6
1,126.6

9.8times

70.0 71.3

54.2

10.8 18.1

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

1,032.3955.8
9.6times 8.9times
9.4times
916.6
899.5
7.8times
8.8times
8.3times
6.9times
6.4times 5.6

times
Third place among the major private railways

5.5times
FY07FY08FY09FY10FY11 FY12FY13FY14FY15FY16FY17※1 Includes Department Store Business (consolidated up to the first half of fiscal 2008).

※2 As of fiscal 2017, the presentation of revenues from operations of the International Transportation Business has changed from net togross amounts

24Breakdown by Business Area and Business Model
Umeda and line-side stock businesses make up 2/3 of the Group’s overall operating
income. When combined with flow businesses, they make up around 90%.
Tokyo metropolitan area
and overseas markets

Tokyo metropolitan area
and overseas markets x
stock businesses

flow businesses

Warehouse possession(Logistics)

International
Transportation

Real estateleasing

Stage

Real estatesales

HotelsSportsCM(information
services )TravelUmeda and line-side
areas

Urban
Transportation

Stage

Real estate
salesSportsCM(information
services )CATVTravelUmeda and line-side areas x
stock businesses

Stock(Use assets)

Tokyo metropolitan
area and overseas
markets x
stock businesses

Tokyo metropolitan
area and overseas
markets x
flow businesses

Umeda and line-side
areas x flow businesses

FY2017¥104.1 Billion
Umeda and line-side
areas x stock businesses

Real estateleasing

Hotels【Breakdown of operating income by businessarea and business model】

Flow(non-assets)

2/3 of the Group’s
overall operating
income【stock businesses】
Businesses that hold or use stock (property
and other fixed assets)【flow businesses】
Businesses that, instead of holding largescale stock, use business know-how,human resources, brand assets, and otherintangible assets
25

Anticipated Changes in the External Environment (threats)
Japan’s population is set to decline rapidly, particularly from 2025, andpopulation aging will continue apace for the next 25 years.
National Institute of Population and Social Security Research,‘Regional Population Projection for Japan’ [Nihon no chi’iki
betsu shōrai suikei jinkō]
Based on middle trends of ‘Population Estimates (2012)’

Population Projections for 2025 and2040 (as compared to 2015)(year)
Total population
Working-age population(age 15 to 64）

people over 65 years old

Kansai area※1

Tokyo metropolitan
area※2

2025

2040

2025

2040

2025

2040

-5％

-16％

-2％

-10％

-5％

-15％

-7％

-25％

-4％

-21％

-8％

-25％

＋6％

＋13％

＋10％

＋29％

＋8％

＋14％

The population level will decline from its present
level of over 18 million to around 15 million.

Japan※1:Comprises the prefectures of Osaka, Kyoto, Hyogo, and Nara
※2:Comprises the Tokyo metropolitan area and the prefectures of
Kanagawa, Saitama, and Chiba

 There will be fewer consumers of the Group’s
products and services (shrinking market).
 With more women and elderly people working,there will be shorter consumption times (leisure times).
 The tightening labour market will makeit harder to secure a workforce.

→ Decline in sales→ Increase in costs

The Group’s various businesses will not escape the impacts of these changes.
26

Anticipated Changes in the External Environment (opportunities)
Potential ofline-side areas

Our line-side areas are in a relatively advantageous position compared to other line-side areas
in Kansai as they are relatively close to Shin-Osaka Station and the international gateways(Kansai International Airport, Osaka International Airport, and Kobe Airport). Also, new rail
links are being planned and motorways are being developed.

Greater inbounddemandThe government aims to attract 40 million foreign visitors a year by 2020, and 60 million ayear by 2030, with the hope that they will spend ¥15 trillion annually by 2030 (four times thefigure for 2015).

Concentration of
population into
urban areas

Tokyo’s five central business districts (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya) areprojected to retain their population levels as far into the future as the 2040s.

Growth in Asia

In ASEAN countries, population growth and high economic development are projected tocontinue.

Technologicalinnovation

There will be large leaps forward in artificial intelligence (AI), the Internet of Things (IoT), andother technologies, all of which have the possibility to significantly transform society.

These changes present new business opportunities
 There are new opportunities for line-side areas and Umeda in particular. Until
now, Umeda has been regarded as the centre of Kansai. With the growth of
ASEAN countries, Umeda has the potential to become the centre of Asia.
 There are opportunities for the Tokyo metropolitan area and overseas markets.
The Company can further strengthen the line-side businesses it has built up overmany years and develop its know-how.
 By proactively utilizing AI, IoT, and other new technologies in its businesses, we
can control costs, resolve personnel shortages, and replace existing businessmodels, leading to new growth opportunities.

27

The Company’s Long-term Management Vision
Mission : What we try to achieve
By delivering “Safety and Comfort” and “Dreams and Excitement” ,we create satisfaction among our customers and contribute to society.

Values : What is important to us
Everything we do is for the customer. That’s where it all
starts.
Sincerity
Gain customers’ confidence by always being sincere.
Foresight &With our pioneer spirit and flexible thinking, we create a new
Creativity
value.
Respect for People Everyone is absolutely invaluable to the Group.
Customers FirstGroupManagement
Philosophy

Long-term
Vision（Newly formulated）

Medium-Term
Management
Plan

To clarify the kind of company we hope to be as well as thebasic approach and strategies for achieving this vision, we
have formulated a vision for 2025 (fiscal 2026).
This is the year when stable operations are set to commence inthe Umeda 1-1 Project (construction to be completed in spring2022), a project that we are pursuing as a symbol ofmanagement integration. The vision also includes an outlook forthe 2040s, when demographic changes will have had a major
impact on business.
The medium-term management plan sets out specificaction plans for medium-term projects.
(Please see pages 42 to 49 for details on the new medium-term
management plan)
28

The company we hope to be in the long-term (overall vision)
The slogan for the Hankyu Hanshin Holdings Group’s Long-term Management Vision for 2025 (fiscal 2026) is:‘Enhancing line-side areas and expanding fields’
Sustainably enhance corporate value
Enhance daily life
(customer) value
Regarding these socioculturalchanges as business
opportunities, we will provide
innovative products and services
through our business operations.

Enhance social value
Build relationships of trustwith various stakeholders,meet their expectations, andcontribute to society.

Enhance economicvalue
We will strive to maintain andimprove our profitability andfinancial soundness as a topclass private railways
operator.

Tokyo metropolitan area and overseas
markets x stock businesses

Umeda and line-side areas
x stock businesses

flow businesses

Strengthen competitiveness by
Construct a stable revenue base in thoroughly pursuing brandthe Tokyo metropolitan area andoptimisation and differentiation.
overseas markets.

Make our railway theabsolute best among the
Kansai networks.

Strategy①(diversify the portfolio, which is currently
concentrated in Umeda and line-side areas).

Strategy③

Strategy②Groupwide initiatives,
new business fields, etc.

Make greater use of the Group’s collective strength and develop new
Strategy④business fields.
The coming age of fullscale population decline

Further technologicaladvances (AI, IoT, etc.)

Economic growthin Asia

Declining birth rate
and aging population

Crumbling infrastructure

Improvements to public transport
Growing numbers of infrastructure (airports, rail andmotorway networks)
overseas visitors

Tightening oflabour market
Concentration of
population into
urban areas

Opportunity for Kansai to develop its position as gateway for Asia and the wider world
29

The company we hope to be in the long-term(Umeda and line-side areas x stock businesses)

The company we hope to be

Make our railway the absolute best among the Kansai networks.
We aim to increase the resident and non-resident population of line-side areas.
To this end, we will channel into these areas the dynamism of the TokyoStrategy
Nagoya-Osaka axis and the power of Asia and other regions of the world,①
attract new industries and cutting-edge technologies ahead of othercompanies, and support efforts to develop thriving local communities.
Business environment analysis• Umeda and line-side areas will remain the Group’s most important revenue base.
• Given that the numbers of overseas visitors are set to rise, there is an urgent need to channel the
dynamism of the Tokyo-Nagoya-Osaka axis and the power of overseas regions into the line-side
areas.
• There are medical and industrial clusters with potential to develop, including KOBE Biomedical
Innovation Cluster, Umekita Phase II Development Project, and Nakanoshima (hub for globalising
regenerative medicine).

Measures the Company will pursue
 We want Umeda to become an area that capitalises on the economic growth of ASEAN countries
and inbound demand, attracts new industries, and connects to and from the Tokyo-Nagoya-Osakaaxis and international airports. To this end, we will pursue plans for rail links (including a ShinOsaka rail link) and strategic rebuilding projects in the area (including the Umeda 1-1 Project).
 Focusing on the compact city concept, we will leverage innovative technology and the know-how
of our partners to introduce highly convenient services into line-side areas, making these areas
attractive places to live in. We will also help develop communities that are safe, secure, and havethriving educational and cultural facilities. In connection with these efforts, we will also redevelop
and renovate our key line-side bases.
30

The company we hope to be in the long-term(Umeda and line-side areas x stock businesses)
Umeda 1-1 Project

Hotel strategy for
the Umeda area

Priority policy

Improve the value ofthe Umeda area

Redevelop existing
properties• Establish market
dominance in the
Umeda area

Strengthen tourism
business Capitalise on the dynamism of
the Tokyo-Nagoya-Osaka axis
and the power of overseas
regions
 Contribute to new industrial
development by linking Kobe,
Umekita, Nakanoshima, andKeihanna Research-Complex

Make our railway
the absolute best
among the Kansai
networks.

Priority policy

Construct new rail links
to improve thetransport network
Construct ShinOsaka rail link
Extend Kita-Osaka
Kyuko Railway Line

World Expo 2025
bid and integrated
resort plan
Improvements topublic transport
infrastructure(airports, rail andmotorway
networks)

World Expo 2025
bid and integrated
resort plan
Improvements topublic transport
infrastructure(airports, rail andmotorway
networks)• Accumulate content,
convert stalls into
tourist information
centresPriority policy

Redevelop andrenovate key lineside bases
Develop new
stations
Pursue stationcentred community
development

Redevelop key
line-side bases• Sannomiya• Hanshin Nishinomiya• Noda, etc.

• Follow the compact city
concept

31

The company we hope to be in the long-term(Umeda and line-side areas x stock businesses)

Kansaiarea

Osaka

Osaka International
AirportSannomiya

Shin-Osaka

Hyogo

Construct Shin-Osaka
rail link

Juso

Umeda
Namba

Kobe
AirportYumeshima(World Expo 2025 bid and integrated resort plan)

Kansai International
AirportHankyu Kobe Line
Hankyu Takarazuka Line
Hankyu Kyoto Line
Hanshin Line
Kobe Rapid Transit Railway Line32

The company we hope to be in the long-term(Umeda and line-side areas x stock businesses)• Main initiatives for enhancing
Umeda’s value– Keeping in mind the useful economic
lifespan of large buildings, we willconduct long-term rebuilding projects toincrease the value of our assets.
– To increase the value of the area as awhole, we will conduct area
management activities, contribute tocity promotion efforts, and develop andoperate bases for creating new
industries.
＜The leasable area of the Group’s properties in the
Umeda area＞

End of fiscal 2017

Approx.
800 thousand㎡

Projection for2025 (fiscal 2026)

Approx.

950 thousand㎡［Umeda 1-1 Project］［Full rebuilding of Osaka Nikko
Building and Umeda OS Building］

33

The company we hope to be in the long-term(Tokyo metropolitan area and overseas markets x stock businesses)

The company we hope to be
Construct a stable revenue base in the Tokyo metropolitan area and overseas markets(diversify the portfolio, which is currently concentrated in Umeda and line-side areas).

Our property portfolio is currently concentrated in Umea and line-side areas.
Strategy To compensate for downsizing in the Kansai area, we will diversify our②property profile by acquiring additional assets including rental property inTokyo’s large market and in overseas markets that are set to grow.
Business environment analysis• Currently, our stock is primarily in the Umeda and line-side areas. Given the potential for
demographic fluctuations, we must duly consider the risks associated with such a concentrated
portfolio.
• Tokyo’s five central business districts will remain largely unaffected by the population decline as far
into the future as the 2040s.
• The world population is expected to increase significantly, particularly in Asia.

Measures the Company will pursue
 In the Tokyo metropolitan area, we will steadily accumulate stock in the centre of the capital(generally speaking, the five central business districts) while monitoring market conditions.
(Target: Real estate leasing business to acquire an asset size of approximately ¥200 billion)
 Regarding overseas stock (real estate), our basic policy is to capitalise on economic growth in
ASEAN countries. Accordingly, we will focus primarily on developing logistics centres in ASEAN. At
the same time, we will develop commercial facilities on a trial basis and ascertain the potential foraccumulating stock.

34

The company we hope to be in the long-term(Tokyo metropolitan area and overseas markets x stock businesses)• Initiatives for expanding business scalein the Tokyo metropolitan area
– In the Tokyo metropolitan area, we will
steadily accumulate stock in the five
central business districts while
monitoring market conditions. We will
aim for the real estate leasing businessto acquire an asset size of approximately¥200 billion.

Tokyo metropolitan area

［Redevelopment Project for Area
in Front of JR Yotsuya Station］

Tokyo’s five central
business districts
Shinjuku
ward

Shibuyaward＜Asset size of the real estate leasing
business in the Tokyo metropolitan area＞

End of FY2017
Approx.

¥45 billion

Chiyoda
Chuo
ward
ward

Minatoward

Targeted figure forthe end of FY2026
Approx.

¥200 billion［remm Roppongi］（Opened on 30 March,
2017）［2-6 Kyobashi
Redevelopment Plan］（Rebuilding of Hanshin
Green Building）※remm expected to
become tenant［Ginza 3-chome project］© Craft MAP

35

The company we hope to be in the long-term(flow businesses)

The company we hope to beStrengthen competitiveness by thoroughly pursuing brand optimisation and differentiation.
Thoroughly optimise the Hankyu Hanshin brand value and differentiate theStrategy
products and services from the competition so as to strengthen competitive③
edge and achieve further business expansion.
Business environment analysis••

The entertainment businesses (sports and stage) have content that is unique to the Group andhigh brand value.
Flow businesses such as real estate sales, communication and media (information services),travel, and international transportation are exposed to competition because the barriers toentry are low.

Measures the Company will pursue

 In the highly competitive entertainment businesses, we will engage in new challenges andinitiatives with a view to further refining and elevating brand value.
 In the real estate sales business, we will gradually expand operations in the Tokyo metropolitan area
and overseas markets.
(we aim to raise condominium and detached house sales in the Tokyo metropolitan area to the level of
those in the Kinki area [condominiums: approximately 800 units a year; detached houses:
approximately 100 units a year].) In flow businesses such as communication and media (information services), travel, andinternational transportation, we will monitor competitiveness and strengthen business operations
with a view to differentiating ourselves from the competition (this may entail expanding businessscale or revising the business portfolio or model, etc.)
36

The company we hope to be in the long-term(flow businesses)

entertainment
businesses［Sports・Stage］

Flow-type realestatebusinesses[for-profit realestate]communicationand media［information services］• Optimise (further refine and elevate) the
Hanshin Tigers and Takarazuka RevuebrandsOverseas• Expand scale of real estate sales business in theTokyo metropolitan area and overseas markets• Explore potential of a short-term returns realestate business＜Condominium sales＞
FY2017

1,087 units

Targeted figure
for FY2026

Approx.

1,600 units
Kinki area
Approx.800 units
Tokyo metropolitan area
Approx.800 units• Expand share in key markets, including
building maintenance, transport services,
Internet, etc.
• Use technological innovations as anopportunity to expand business field

Travel• Strengthen competitiveness of core brandtravel packages• Establish a second pillar

International
Transportation• Shift toward a more balanced business portfolio(strengthen ocean transportation and logistics
operations)• Promote Asia-centred business development(shift away from the focus on Japan as
origin/destination for shipments)• Expand investments in growing markets (e.g.
Africa)Bangkok, Thailand
real estate sales(condominium)

Takarazuka Revue
performance in
TaiwanHo Chi Minh, Vietnam
real estate sales(condominium)

Logistics centre in Singapore[Combine with overseas stock]

Jakarta, Indonesia
real estate sales(detached housing)logistics centre inIndonesia[Combine with overseas stock]

37

The company we hope to be in the long-term(Group-wide initiatives, new business fields, etc.)

The company we hope to be
Make greater use of the Group’s collective strength and develop new business fields.
In addition to pursuing Group-wide initiatives, we will introduce cutting-edge
Strategy technologies into existing businesses, venture into new business fields, andthereby provide culturally enriched and innovative lifestyle options.
④
・In this increasingly competitive business environment, we cannot beat the competition andachieve growth without leveraging the Group’s collective strength.
・Amid the changing social environment, we must seize the opportunities for developing new
business fields.
Changes in the social environment(demographic change, technological innovation, lifestyle changes, diversification of values, etc.)(1) Use existing resources to pursue Groupwide initiatives[e.g. credit and point card measures, development of overseas logistic
centres by International Transportation and Real Estate core companies]

stockbusinesses

flowbusinesses(2) Rejuvenate Group assets and utilise human resources[develop the domestic logistics and real estate businesses in tandem with thedevelopment of public transport infrastructure, introduce the proposal
systems for new businesses into the Group as a whole](3) Explore the potential for utilising cutting-edge
technologies throughout the Group[use IoT sensor technology to save labour in site inspection processes]
38

The company we hope to be in the long-term(Management Indicators)

We will pursue the four strategies with a view to achieving the following targets as of2025 (fiscal 2026). Achieving these targets will keep us on course for maintaining atleast the current levels of operating income in the 2040s, when demographic changes
will have had a major impact on business.

Profitability

Financialsoundness

Management
Indicators

Targeted figurefor 2025(FY2026)

operatingincome¥120 billion

EBITDA
Interestbearing debt
/EBITDA ratio<Reference> Results andMedium－Term Management Plan
FY2017(Results)

FY2018(Forecasts)

FY2019(Forecasts)¥104.1billion¥96.0
billion¥98.0
billion¥200 billion¥159.3billion¥152.0billion¥157.0billionBetween5 and 6 times

5.6
times

6.0
times

5.9
times

・Ensure that we will be one of the most profitable private railway operators
in 2025 (fiscal 2026).
・While accelerating growth investment, ensure that we remain one of themost financially sound private railways operators.
39

Organisational Improvements for Achieving the Long-term Vision
We will implement the following organisational improvements to help the Grouppursue the strategies and measures necessary for achieving our long-term vision.
①Integrate Hankyu Corporation (HC) and Hanshin Electric Railway (HER)’s business-field
exploration efforts into the Group as a whole (to be implemented in April 2017) As part of our long-term vision, we aim to make greater use of the Group’s collective strengthand develop new business fields. To this end, we will develop a harmonised framework forplanning new business ventures on a Groupwide basis so as to streamline the process ofdeveloping new businesses.
②Consolidate HC and HER’s real estate business divisions with a view to establishing a realestate-oriented core company (April 2018 is tentatively proposed as the date for implementation)
 As part of our long-term vision, we aim to strengthen and expand the real estate leasing
business in all areas and thoroughly differentiate the real estate sales businesses and otherbusinesses. To this end, we will consolidate the Real Estate core business (including HC & HER’s
real estate divisions) into a new real estate core company, capitalise on the Group’s collective
real estate prowess, and pursue growth-oriented initiatives faster and more effectively.

〈Reference〉 Post-reorganisation schema
Hankyu Hanshin Holdings
HankyuCorporation

Hanshin Electric
Railway

Real estate-oriented
core company

Hankyu Travel
International

Hankyu Hanshin
Express

Hankyu Hanshin
Hotels40

41

Ⅲ．Revision of the medium-term
management plan

42

Framework of the Medium-term Management Plan (business strategies)
Previousplan

Define the period from fiscal 2017-2019 as a ‘period for developing foundations for
medium-to-long-term growth’.
The following two strategies will take time to bear fruit. Instead of chasing after
business
quick results, we will implement the strategies steadily over the next 10 or 20 years.
strategies
Strategy②
Strategy①
Develop new markets with a view toEnhance the value of the Umeda areaachieving medium-to-long term growthand line-side areas

Combine business strategies① and ②
Capture burgeoning demand from non-Japanese tourists

Current plan
In addition to developing foundations for medium-to-long-term growth, use
the period to take the first steps toward achieving the long-term vision.
business strategies ～Business strategies related to the long-term vision～①Further strengthen the stock businesses in the Umeda and line-side areas(e.g. railways, real estate leasing, media and communications, hotels)②Accumulate stock in the Tokyo metropolitan area and overseas markets③Increase competitiveness of flow businesses (real estate sales, sports, stage,
information services, travel, and international transportation)④Make greater use of the Group’s collective energies and venture into new
business fields
43

Framework of the Medium-term Management Plan (financial policy)
Previous
plan

Allocate funds in a balanced manner on forward-looking investment, continuous
strengthening of financial standing, and returns to shareholders.
Forward-looking investment
Continuous strengthening ofReturns to shareholders total payout ratio of 25%
financial standing【By the end of fiscal 2019】 Reduce interest-bearing debt to less than ¥900 billion【Financial soundness targeted over the medium-to-long term】
Keep interest-bearing debt/EBITDA ratio between 5 and 6 times and D/E ratio around 1 time

Current plan
To achieve the long-term vision, we will prioritise growth investments understrategies 1 to 4 with a view to further increasing operating income and EBITDA.

・However, the financial standing will not be neglected; we will aim to maintain our financial soundness.
Regarding financial soundness benchmarks, as of the end of fiscal 2017 we achieved the previous plan’s interestbearing debt target (reduce interest-bearing debt to less than ¥900 billion by the end of fiscal 2019) ahead of time.
Since we will pursue growth investment under the four long-term strategies, we will in the future prioritise interestbearing debt/EBITDA ratio over interest-bearing debt as a benchmark for financial soundness.

・Regarding returns to shareholders, owing to the reasons stated on page 47, we plan to increase theannual dividend per share for fiscal 2018 onward from ¥35 to ¥40 (tentative), and increase the total
payout ratio from 25% to 30%.

Forward-looking investment
While striking a balance with financial
soundness, we will prioritise growthinvestment under strategies 1 to 4.

Maintaining financial soundness
Prioritise interest-bearing debt/EBITDA ratio overinterest-bearing debt as a benchmark for financial
soundness.

Returns to shareholders
For the period of the plan, we envisage atotal payout ratio of 25% for fiscal 2017,and 30% for fiscal 2018 and onward.

44Trends in Management Indicators under the Current Plan
While the results for fiscal 2017 exceeded projections in the previous plan, the future
outlook is highly uncertain. Given that business conditions are becoming harsher withintensifying competition, we will aim to keep operating income at the ¥90 billion level asin the previous plan. We will also strive to lift the basic performance level of each
(単位：億円)business with a view to achieving the targets for each fiscal year as shown below.
120
110
100

Current planPrevious plan
Results

110.3（¥billion）

104.1

94.0

90.7 ※

90
80
70

87.9

77.8
70.1

64.7

91.8

96.0 98.0¥90 billion level

73.8

60
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019※Includes Department Store Business (consolidated up to the first half of fiscal 2008).

Time-series comparison
・ Significantly lower earnings are projected for fiscal 2018 owing to an expected increase of sales
expenses in the condominium businesses and an expected increase in depreciation and amortisationin the Urban Transportation Business segment.
・ Fiscal 2019 should see higher earnings due to proceeds from the sale of some of the land forcommercial facilities.
45

Capital investment (including lending) in fiscal 2016-2019
Capital investment (including lending) in fiscal 2016-2019 is expected to total
approx. ¥390 billion (up ¥40 billion compared to the previous plan)・ In line with the basic approach for our long-term vision, the new plan will include increased
investment in Tokyo and other areas. Accordingly, we project that investment in major development
projects and new market development will increase by ¥40 billion.
・ Although we will invest in platform doors and similar safety measures, we will generally keep
investment in maintenance and renewal of existing infrastructure at the levels of the previous plan.
Strategy①
Further strengthen the stock businesses in the
Approx.
Umeda and line-side areas¥390 billion
Strategy③
Approx.
Increase competitiveness of flow businesses
Investment in major¥350 billion
development projects
and new market
development

Approx.
¥130 billion

Approx.
¥170 billion■Umeda andline-side areas

Approx.
60％
Approx.

Approx.
¥220 billion
Previous planup ¥40billioncomparedto theprevious
plan

Investment inmaintenance andrenewal of existing
infrastructure

Approx.
¥220 billion

40％■Tokyo metropolitan
area and overseas
markets

Strategy②
Accumulate stock in the Tokyo metropolitan
area and overseas markets

Current plan46

Returns to Shareholders■Shareholder Return Policy
Pay stable annual dividends and acquire treasury stock- For fiscal 2017, as with fiscal 2016, we will pay an annual dividend of ¥35 per share (total annual
dividend: ¥8.8 billion) and acquire treasury stock based on a total payout ratio of 25% (totalacquisition: ¥9.1 billion).
- The Group’s performance has been stable recently, and we have met our benchmark for financial
soundness over the medium-to-long term (interest-bearing debt/EBITDA ratio between 5 and 6
times) for two years running. Accordingly, from fiscal 2018 onwards we plan to raise the annual
fiscal dividend from ¥35 to ¥40 per share. Alongside this change, we aim to further enhance
returns to shareholders by increasing the total payout ratio from 25% to 30%.
<Reference> Formula for calculating total payout ratio※Total payout ratio of FY[N](％)=(Total dividend of FY[N])+(Acquisition of treasury stock in FY[N+1])(Net income attributable to owners of parent in FY[N])Acquisition of treasury stock

Total dividend

Dividend per share(right axis)

40(forecasts)

20
15
10
5

35

9.1

30＊

8.7

7.6

7.6

8.8

25＊

6.3

35＊
30＊

40
35

Pay dividends and acquire
treasury stock based on a
total payout ratio of 30%

8.8

0(¥billion)

× 100

30
25
20

FY2013

FY2014FY2015FY2016FY2017FY2018
forecasts

FY2019forecasts(¥)＊ The Company conducted a 1-for-5 reverse stock split with an effective date of 1st August 2016. The per-share annual
dividends for fiscal years up to and including fiscal 2016 reflect the stock split.

47

Fiscal 2019 management indicators outlook
FY2016
Results

FY2017
Results

FY2018
Forecasts

FY2019Forecasts

Operating income¥110.3billion ¥104.1billion¥96.0billion¥98.0billion

EBITDA※1¥166.5billion ¥159.3billion¥152.0billion¥157.0billion

Interest-bearing debt ¥916.6billion ¥899.5billion¥910.0billion¥920.0billion

Interest-bearing debt
/EBITDA ratio

5.5times

5.6times

6.0times

5.9times

D/E ratio※2

1.3times

1.1times

1.1times

1.1times¥70.0billion¥71.3billion¥60.0billion¥61.0billion

10.3%

9.4%

7.5%

7.2%

¥892.3billion ¥875.3billion¥885.0billion¥895.0billion

5.8times

5.7times

Net income attributableto owners of the parent

ROE(Reference)
Net interest-bearing
debt※3
Net interest-bearing
debt/EBITDA ratio

5.4times

5.5times※1 EBITDA=operating income + depreciation expenses + amortisation of goodwill※2 D/E ratio＝interest-bearing debt / equity※3 Net interest-bearing debt=interest-bearing debt - cash and deposits

48

《Reference》 Trends in operating revenues and operating income
752

Revenues fromoperations

683.7

Operating income

653.3

Ordinary income

owners of the parent

638.8

649.7

90.7

682.4

77.8
74.9

73.8
64.7

679.2

685.9

74.9

91.8

81.2

94.0

0.6
※１

FY200820.6
FY200950.4

10.8
FY2010※2 736.8

39.3

39.7

FY2012FY2013

750.0

104.5

96.0

98.0

100.6
92.0

70.0

71.3

54.2
46.5

(¥ billion)

104.1

85.6

65.4
57.4

707.4

110.3
87.9

70.1

Net income attributable to

60.0

61.0

FY2018FY201946.4

18.1
FY2011FY2014FY2015FY2016FY2017

forecasts forecasts※1 Includes Department Store Business (consolidated up to the first half of fiscal 2008).
※2 As of fiscal 2017, the presentation of revenues from operations of the International Transportation Business has changed from net togross amounts.

49

Ⅳ．Specific Projects
Strategy① Further strengthen the stock businesses in the Umeda andline-side areas
Strategy② Accumulate stock in the Tokyo metropolitan area andoverseas markets
Strategy③ Increase competitiveness of flow businesses
Strategy④ Make greater use of the Group’s collective energies andventure into new business fields

50

Schedule for the Main Projects of the Business Strategies
（FY）

2017

2018

2019

2020

2021

Fukushima 5-Chome and 7Chome joint development
project

Strategy①

Chayamachi 17-banchi
project●Complete phase I construction
Commencement of phase II●Scheduled start of service

construction(all construction to becompleted by spring 2022)●Scheduled start of service

Nishinomiya Kitaguchi
Hankyu Building (Provisional
Name) Construction Project●Scheduled start of service

Ebie 1-chomedevelopment plan●(Scheduled time of condominium completion)

Project to relocate
Takarazuka Hotel●Scheduled start of service●Completion of construction work in B zone
●Completion of construction

Project for a logistics
facilities in the easternsection of ‘Saito’

work in A zone

Strategy②

Redevelopment Projectfor Area in Front of
JR Yotsuya Sta.

●Scheduled time of construction completion

2-6 Kyobashi
Redevelopment Plan

●Scheduled start of service

Ginza 3-chome Project

remm ROPPONGI●Complete phase Ⅱ●Scheduled start of service

Project to rebuild Kobe
Hankyu Building’s east wing
and renew its west wing

Initiatives in Singapore

2023●Intended start of service

Kita-Osaka Kyuko Railway
Line Extension Project

Umeda 1-1 Project2022●Scheduled start of service●Scheduled time of construction completion●Opened in March 201751

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas①

Kita-Osaka Kyuko Railway Line Extension Project【Development plan summary】

Shin-Min- KayanoSanpeio Sta.
Bashi(provisional
name)・Extension distance:
2.5 km, from Senri-Chuo Sta. to Shin-Mino-o Sta. (provisional name)・New stations:

Approx.
1.1km

Mino-o-Semba Sta. (provisional name), Shin-Min-o Sta. (provisional name)
Act on Rail Tracks

National Route171

Shin-senba-kitabashi【Business scheme】
・Developer:

Kita-Osaka Kyuko Railway Co., Ltd. and Minoh City (development of infrastructuralcomponents between Mino-o-Semba Sta. and Shin-Mino-o Sta.)・Operator: Kita-Osaka Kyuko Railway Co., Ltd.
・Funding programme: Social capital development grant・Portion to be borne by Kita-Osaka Kyuko Railway Co., Ltd:

Mino-oSemba Sta.
(provisionalname)¥11.0 billion; Amount commensurate with profits(including the increase in demand associated with related community development)【Schedule】

Shin-senbaminamibashi

December, 2015: We have obtained a license for railway business and acharter for railway track operations

December, 2016: Commencement of construction
FY2021: Intended start of service
SenriChuo
Sta.

Approx. 1.4km
Shin-senba minamibashi

Underground section

Mino-oShin-MinApprox. 1.1km
Semba Sta.
o Sta.
(provisional(provisionalname Shin-senba-kitabashi name)

Kayano-sanpeibashi

Railway Business Act

National Route 423（Shin-midosuji）

Approx.
1.4km

SenriChuo
Sta.

・Estimated project cost: ¥65.0 billion
・Demand: 45,000 people per day

National Route 423 Elevated section National
Route 17152(Shin-midosuji）main lineStrategy①:Further strengthen the stock businesses in the Umeda and line-side areas②

Umeda 1-1 Project (Dai Hanshin Building and Shin Hankyu Building Rebuilding Project)【Project summary】
Location
1-1 Umeda, Kita-ku, Osaka
Site area
Approx. 12,200 ㎡*
Total floor space Approx. 260,000 ㎡【Conceptual illustration of the building exterior】

Number of floors 38 floors above ground and 3 below groundPurpose

Department store, offices, halls, etc.

Planned total
investment¥89.7 billion

Construction
completion

Around spring 2022

* Including 750㎡ of road between Dai Hanshin Building and Shin Hankyu Building【Schedule】
July 2015
begin phase I construction
phase I construction (Shin Hankyu
Around spring Complete
Building and Dai Hanshin Building East Wing)
2018
and partially open new department store
Around spring phase Ⅱ (Begin Dai Hanshin
Building West Wing demolition)
2018
Around spring Phase Ⅱ (begin phase Ⅱ
construction)
2019
Complete phase II construction (newArounddepartment store part) and fully open newautumn 2021 department store
Around spring Complete all construction and2022
open offices【Phase I】【Phase Ⅱ】

4
2
1

3

5

①Dai Hanshin Building East Wing(under construction)②Shin Hankyu Building(under construction)③Dai Hanshin Building West Wing(businesses operating)④Dai Hanshin Building West Wing(under construction)⑤Phase I (businesses operating)53

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas③

Fukushima 5-Chome and 7-Chome joint development project【Project summary】· Develop multipurpose facility housing hotel and supermarket by integrating the property with theadjacent land owned by West Japan Railway Company.
· The operator of the hotel facility (which will be a new-style business hotel) is expected to be Hankyu
Hanshin Hotels, and operator of the supermarket is expected to be Hankyu Oasis.

Location

5-52-1 Fukushima,Fukusima-ku,
Osaka

Site area

Approx. 2,600㎡【Conceptual illustration of the building exterior】(The Company own 1,800㎡)

Total floor space

Approx. 11,000㎡

Number of floors 12 floors above groundPurposehotel, supermarket

Scheduled opening

Around spring 2019

JR Fukushima Sta.

Plan site

Hotel
HanshinHanshin Fukushima Sta.

© OpenStreetMap contributors

JR Shin-Fukushima Sta.

54

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas④
Re-opening of Hankyu Sanban Gai
Shopping Centre【Project summary】· Re-opening of the north wing and part of the south wing
(73 stores opening, 36 of which are new stores)· New attractions opening at the same time: Hankyu BrickMuseum and Umecha Koji

Chayamachi 17-banchi project【Project summary】· Regenerate the aged building as a commercial facility toenable high-level use· Improve pedestrian access to the Hankyu Sanban Gai
Shopping Centre, NU chayamachi, and other commercial
facilities owned by the Group, create a greater buzz in the
Hankyu Umeda and Chayamachi area as a whole, and thus
enhance the value of the Umeda area.

Location

1-1-3 Shibata, Kita-ku, Osaka

Total floor space

Approx. 101,300㎡

Location17-1 Chayamachi, Kita-ku, Osaka

Number of stores

253stores (after the re-opening)

Site area

Approx. 440㎡

Date of re-opening

April 27, 2017

Total floor space

Approx. 2,800㎡

Number of floors

8 floors above ground and 1 below groundPurposeCommercial facilities (Mizuno Osaka, a

Scheduled opening

Around spring 2018

【Floor image after the re-opening】（North Wing 1F）（HANKYU BRICK MUSEUM）

store with a wide range of sports goods)（Umecha Koji)【Conceptual illustrationof the building exterior】

55

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas⑤
Project to rebuild Kobe Hankyu Building’s
east wing and renew its west wing

【Project summary】
Location
Site area
Total floor
space

Nishinomiya Kitaguchi Hankyu Building(Provisional Name) Construction Project【Project summary】

Site area

536 Takamatsucho, Nishinomiya
Approx. 3,000 ㎡(including area under elevated railway tracks)

Total floor
space

Approx. 11,600 ㎡

Approx. 32,900㎡ (East wing＋West wing)

Number offloors

10 floors above ground and 1 below ground4-2-1 Kanocho, Chuo-ku, Kobe
Approx. 7,100㎡

Number of
29 floors above ground and 3 below groundfloorsPurpose

Offices, hotel, commercial facilities, railway
stationScheduled
opening

Around spring 2021

Location

Purposefloors1～4: Restaurants, stores, financial institutions, etc.
floors5～10: Providers of educational services

Scheduled
Around autumn 2018
opening【Conceptual illustration of the building exterior】【Conceptual illustration of the building exterior】

Build a new and attractive Kobe landmark
while retaining the look of the former
Kobe Hankyu Building’s east wing56

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas⑥

Ebie 1-Chome Development Plan
【Project summary】• In fiscal 2015, we acquired a large parcelof land for development on the north side
Hanshin Noda Station, a station at which
express trains stop.
• The plan is to facilitate mixed use of theland by leasing it to commercial facilities
and condominium businesses.

【Map】
Plan site【Schedule】• Around summer 2017

Commencement of condominium construction• Around autumn 2019

Scheduled time of condominium completion

1-1-9 Ebie, Fukushima-ku, Osaka
1-1-30 Ebie, Fukushima-ku, Osaka

Site area Approx. 27,900㎡

Hanshin Noda Sta.
SubwayNodahanshin
Sta.

Location

National
Route 2

To/form
Umeda

57

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas⑦

Project to relocate Takarazuka Hotel【Project summary】【Conceptual illustration of the building exterior】• To help ensure that Takarazuka Hotelcontinues to enjoy patronage for the next
100 years, we will relocate Takarazuka
Hotel to the west flank of the Takarazuka
Grand Theatre.
• The relocated hotel will retain the existing
hotel’s look with a classical and warmhearted design, while also blending wellinto the scenic views from Hana no Michiand Mukogawa.
Location

1-chome Sakaemachi, Takarazuka

Site area

Approx. 12,300㎡

Total floor
space

Approx. 23,000㎡

Number offloors

5 floors above ground and 1
below groundPurposeRooms (Approx. 200rooms)
Party hall (4 halls)
Restaurant (4 facilities)

Scheduled
opening

Around spring 2020

※行政等との協議により、今後変更の可能性があります。

【Map】
Hana-no-Michi

Takarazuka
Hotelmulti-storey car park
（under construction）

Takarazuka Grandtheater
Takarazuka Bow Hall

Mukogawa River58

Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas⑧

Project for a logistics facilities in the Sanroku Line area of theeastern section of International Culture Park ‘Saito’【Project summary】【Map】· In collaboration with Mitsubishi Estate, we will develop andoperate logistics facilities in the facilities deployment zone
(Sanroku Line area of the eastern section) of International Culture
Park ‘Saito’.

FY2020
FY2021
FY2022Completion of land forming work, commencement ofconstruction of main body of building
Completion of construction work in B zone
(BTS※ logistics facility)
Completion of construction work in A zone
(multitenant logistics facility)

Saito

Eastern
area

Centralarea
Westernarea
Saito Nishi Sta.

【Conceptual illustration of the building exterior】 ※2 The section between Takatsuki junction and Kobe
junction is scheduled to open in fiscal 2019.
The full opening is scheduled for fiscal 2024.

Ａ zone（multitenant logistics facility）
Ｂ zone（BTS logistics facility）

Type
A zoneB zoneMultitenant※

BTS

Total floor space

Site area

Approx. 125,000㎡ Approx. 51,000㎡
Approx. 32,000㎡ Approx. 16,000㎡※A BTS (build to suit) facility is a facility built to suit the tenant’s specifications.

［Land use plan for the Sanroku Linearea］

Ａ zoneＢ zoneProjectareas

59Strategy①:Further strengthen the stock businesses in the Umeda and line-side areas⑨

Local broadband wireless access※1 services ※1:high-speed wireless data transmission
Local broadband wireless access：A wireless telecommunications system that enables operation on the 2500 MHz band so as to【Project summary】 narrow the digital divide between urban and rural areas and facilitate local public welfare
services.

・With the reform of the radio wave system, general operators can now access Long-Term Evolution (LTE), a broadly
used form of communication for mobile phones.
・With the demand for high-speed wireless communication set to rise, we identified a business opportunity, swiftly
obtained a wireless license, and constructed a communications infrastructure.

【Present situation】（Please see below figure）①We developed a high-speed wireless internet service for personal use, and we have progressively opened basestations※2 (approximately 70 completed as of the end of fiscal 2017).
②We have opened communications centres※3 for leasing to telecommunications carriers (e.g. local cable tv providers)across Japan.
③We have developed services for local governments. Itami City is now using the services as the communications
backbone for its security cameras.
※2 Facilities that are responsible for terminals and wireless transmissions.

【Future plans】※3 Facilities that are responsible for controlling communications to and fromterminals.

・Further expand the communications centre leasing operations.
・Develop solutions services that play to the advantages of local broadband wireless access services (wireless, highspeed, flexible service).
・Expand sales of high-speed wireless internet service for personal use in Osaka City and other areas.

Antenna① Terminal

BasestationLinesecuritycameras③

communications
centres②
WiFi

Transceiver

Base station

Inside the group
Telecommunications
carriers outside the Group 60

Strategy②:Accumulate stock in the Tokyo metropolitan area and overseas markets①

Redevelopment Project for area in front of JR Yotsuya Sta.
【Project summary】· Participate with Mitsubishi Estate and Taiyo Life Insurance
Company as designated constructors in the Urban
Renaissance Agency’s type 1 redevelopment project for
the area in front of JR Yotsuya Sta.

【Conceptual illustration of thebuilding exterior※】(HC is participating by investing in a special purpose company)

Type 1 redevelopment project for area in front of JR
Yotsuya Sta.
Location

1-chome Yotsuya, Shinjuku, Tokyo

Site area

Approx. 17,900㎡

Total floor space

Approx. 139,600㎡

Number of floors
Purpose
Executor

31 floors above ground and 3 below
groundoffice, commercial facilities, residence,educational services, public good, parking
Urban Renaissance Agency

Mitsubishi Estate,Fifth MEC Special Purpose
Company for Urban Development※
Construction partners※contributors:(designated constructors)

Mitsubishi Estate, Hankyu Corporation, Taiyo Life
Insurance Company【Schedule】
September 2016

Commencement of construction

Around winter 2019

Scheduled time of construction
completion※September 2016
Urban Renaissance Agency present

61

Strategy②:Accumulate stock in the Tokyo metropolitan area and overseas markets②

2-6 Kyobashi Redevelopment Plan

Ginza 3-chome Project【Project summary】【Project summary】

Location

2-6 Kyobashi, Chuo-ku, Tokyo

Location

Site area

Approx. 1,450㎡

Site area Approx. 310㎡

Total floor
space

Approx. 17,000㎡

Number of 14 floors above ground and 1 below
floorsgroundPurposeHotel(remm expected to become
tenant), office, commercial facilities

Scheduled
Around spring 2019
opening【Conceptual illustration of the building exterior】

3-3-13 Ginza, Chuo-ku, Tokyo

Purposecommercial facilities

neareststationSubway・Marunouchi Line
1min. walk from Ginza Sta.
・Ginza Line, Hibiya Line
2min. walk from Ginza Sta.

【Purpose of acquiring commercial-use land】· In accordance with the Group’s businessstrategies, we acquired in August 2016 newcommercial-use land in Ginza, one of Japan’s
foremost commercial areas, to help expand
our real estate leasing business.
· Going forward, we will develop a flagshipcommercial facility and lease and operate it
over the long-term.

62

Strategy②:Accumulate stock in the Tokyo metropolitan area and overseas markets③

Acquire new functioning property in the Tokyo metropolitan area
【Strategy for acquire property】· Expand business primarily among areas in front of key stations in central Tokyo based on athreefold approach: 1. Acquire functioning property; 2. Rebuild held assets; and 3. Acquire oldbuildings as a foothold for new development and participate in redevelopment projects.

【Acquire new functioning property】[Nihonseimei-Akabanebashi Bldg.] [M-Bldg. JingumaeⅠ]
Location

3-48-39 Shiba,
Minato-ku, Tokyo

Location

6-15-5 Jingumae,
Shibuya-ku, Tokyo[Kita-aoyama OFJ Bidg.』
Location

3-47-9 Kita-aoyama,
Minato-ku, Tokyo

Site area Approx. 900㎡

Site area Approx. 60㎡

Site area Approx. 250㎡

Total floor
Approx. 5,000㎡
space
Number of 9 floors above groundfloorsand 1 below groundTotal floor
Approx. 110㎡
space
Number of
3 floors above groundfloorsTotal floor
Approx. 400㎡
space
Number of 3 floors above groundfloorsand 1 below groundPurpose OfficePurpose Commercial facilities

Purpose Commercial facilities

Date ofacquisition

Date ofacquisition

Date ofacquisition

March, 2017

April, 2017

April, 201763

Strategy②:Accumulate stock in the Tokyo metropolitan area and overseas markets④

Overseas logistics centre businesses· Explore business possibilities primarily in the countries that Hankyu Hanshin Express (HEX)
has targeted for expansion. To this end, hire survey firms to pinpoint the areas for expansion,consider the method for expansion, and gather customer information.
【 Initiatives in Singapore】【Initiatives in Indonesia】· HC and HER jointly established logistics centre· Logistics centre holder and operator, Hankyu
holder, Hankyu Hanshin Properties Singapore Pte.
Hanshin Logistics Indonesia, was established inAugust 2014 through a joint investment by Hankyu Ltd., in Singapore, which is one of the foremost hubs
Corporation (HC), Hanshin Electric Railway (HER), in the international logistics network.
and HEX.
· Construction was completed in May 2017 and the· Construction was completed in November 2015 and opening ceremony will be held in June. Hankyu
Hanshin Express Singapore Pte. Ltd. will rent part ofoperations commenced in April 2016. Hankyu
the logistics centre and provide high value-added
Hanshin Logistics Indonesia is currently operating
logistics services focusing on goods related to
together with an existing local forwarder with aview to further improving the logistics network and Singapore’s key industries, including electronic
components, medical equipment, and pharmaceuticalproviding high-quality logistics services.
products.

【Logistics centre in Indonesia】【Logistics centre in Singapore】

64

Strategy②:Accumulate stock in the Tokyo metropolitan area and overseas markets⑤
Remm Roppongi opened and future plans for introducing new-style business hotels【Project summary】· On 30th March 2017, remm opened its fifth newstyle business hotel chain in Roppongi
Location

7-14-4 Roppongi, Minato-ku, Tokyo(Approximately 50 m from RoppongiIntersection and Roppongi Station)

Rental area

Hotel area ：11,081.52 ㎡
Restaurant ：376.68 ㎡

Number of floors

20 floors above ground and 1 below ground【Rendering of a room and view of hotel from outside】(Floors 1-3: Dining facilities, floors 4-20: hotel)※remm will take up floors 4-20
Number of rooms

400 rooms(Single：320 rooms, twin：80 rooms)

Scheduled opening

30 March, 2017

The premises are owned by a special purpose company (SPC)
whose parent is Kenedix, Inc.

＜Reference＞Existing remm hotels
remm
Hibiyaremm
Akihabara【Future plans for introducing
new-style business hotels】

remm
remm
Kagoshima Shin-Osaka ・Around spring 2019

Kyobashi, Tokyo [Please see pages 62]
Number
255 rooms 260 rooms 251 rooms 255 roomsof rooms
・Around spring 2019
Fukushima, Osaka [Please see pages 54]
Opening November,
April,
October, September,
day
2007
2008
2011
2012
・Around spring 2021
Sannomiya, Kobe [Please see pages 56]

65

Strategy③:Increase competitiveness of flow businesses①

Real estate sales business in domestic markets【Real estate sales[lands and housing] 】· Continue to develop and strengthen the urban detached house business asa pillar of the residential real estate sales business.
· In addition to sales performance, make efforts to enable steady businessexpansion in the Tokyo metropolitan area.
· Focus long-term residential development efforts on Takarazuka Yamatedai［Hapia Garden Tsukaguchi［Hapia Garden Izumi
district and International Culture Park ‘Saito’.
Tamagawa］

Tomatsucho］【 Real estate sales[condominium] 】(Houses on sale from March 2017)(Scheduled to be Sold in March, 2018)· Continue to use strict criteria for selecting properties to acquire. Advance business steadily while carefully monitoring
the impacts of the consumption tax hike and the high level of construction expenses.
· In the Tokyo metropolitan area, strengthen the system for acquiring land and gradually expand business, bringing thenumber detached house sales to the level of those in the Kinki area (approximately 800 units a year).
· Leveraging existing planning and proposal capacities, engage additionally in medium-to-long term large-scale projects(such as urban redevelopment projects).

Total number of units FY 2008
Number of units※1

1,141

FY 2009

FY 2010

FY 2011

FY 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

916

1,064

680

1,210

1,548

1,356

1,374

1,302

1,087

※1：Figures include units in shared buildings that the Group partly owns.

FY 2018
forecasts
Approx.

1,200

Major properties sold in fiscal 2017 (including projected sales)※2・Geo Takatsuki Muse Resis（Takatsuki, Osaka）244 units
・Geo Senri Chuo The Residence（Toyonaka, Osaka）218units
・Geo Tama Center（Tama, Tokyo）300 units

Major properties to be sold in fiscal 2018 (including projected sales)※2・Geo Tenroku Twin Towers (Kita-ku, Osaka）358units
・Geo Fukagawasumiyoshi (Koutou-ku, Tokyo)190units
・Geo Yotsuya-arakicho (Shinjuku-ku, Tokyo)131units※2：Figures indicate total number of units.

［Geo Tama Center］(Condominiums on sale from March 2017)［Geo Tenroku Twin Towers］(Scheduled to be sold in March 2018)66

Strategy③:Increase competitiveness of flow businesses②

Real estate sales business in overseas markets· We completed and sold all units in FLORA -ANH DAO-, a Ho Chi Minh City-based business project inwhich we participated. FUJI RESIDENCE and FLORA -KIKYO- are performing well, and in MIZUKI PARK,
we have started developing a large residential plot, the total development area of which is 26ha.
· Regarding the Bumi Serpong Damai residential land lot project in Jakarta, Indonesia, in which we areparticipating, the sale and development work is scheduled to commence in fiscal 2018.
· We also got the go-ahead to participate in project in Bangkok, Thailand.
· In addition to the above initiatives, we are exploring the potential for expanding into a number ofcountries (such as Philippines and Malaysia) over a number of years. We will continue to gather
information, ascertain local conditions, and accumulate business knowhow with respect to residential
developments in ASEAN countries.
[Thailand: condominium］
・Joint project by Sena Co.
(Total Approx. 800 units)[Indonesia: house］
・Bumi Serpong Damai residential
land lot project(house): Total 900 units(business loft: Total 150 units)[Vietnam: condominium and house]
・FLORA -ANH DAO-(condominium): Total 500 units
・FUJI RESIDENCE (condominium): Total 789units(house): Total 84 units

・FLORA -KIKYO- (condominium): Total 234 units
・MIZUKI PARK (condominium): Total 4,670 units over(house): Total 100 units over(Townhouse): Total 60 units over67

Strategy③:Increase competitiveness of flow businesses③
Initiatives for travel business's growth· In the Travel Business segment, we have until now achieved steady earnings with a lineup centred on core
brand travel packages. However, recent changes in the environment (e.g. global instability, natural
disasters, and the deterioration in the travel product procurement environment associated with the risingnumbers of overseas visitors to Japan) are having a significant impact on business, and we expect thatcompetition will intensify in the years ahead.
· Therefore, we will reform the business structure with the intention to establish as early as possible a second
pillar—future-oriented business—alongside the first pillar of core brand travel packages.

Never resting on our laurels, we will continue to embrace change andPrinciple improve our products even further to create travel products thatreflect customer feedback and ensure we are a company society needs.

Strengthen competitiveness ofcore brand travel packages○Strengthen areas outside Europe

・Taiwan, America, Canada, Latin America,
Domestic bus tours○Strengthen Specialised products
・Tours specialise in specific purpose(cruise, oversea and domestic hiking tour, etc.)○Expand customer base among new
demographics
・Strengthen individual-oriented products○Revise cost structure for advertisingexpenses, etc.

Establish a second pillar○Strengthen approach to nonJapanese tourists○Expand group and business travel
services and create stable source ofrevenue
・Group travel services：Strengthen services in the Tokyo metropolitan area
and increase the number of sales representatives

・Business travel services：Strengthen business among group customers,
increase number of group customers overseas, etc.
68Strategy④:Make greater use of the Group’s collective energies and venture into new
business fields①
Credit and point card strategy

Current state of S-POINT Common Point Service for the Kansai Area•

Build a member base for S-POINT and expand the number of Group and non-Groupfacilities that accept the card
Medium-term projection for S-POINT
STACIA point membership(End of FY2016)
Approx. 2 billion point
Approx. 1 million member

membership
Approx. 12 billion point
Approx. 7.5 million member(includes members who switched to an S-POINT-supporting
card from a Group point card)【S-POINT strategy】
1. Expand numbers of S-POINT-supporting stores in Group and non-Group companies
2. Improve appeal and added-value

・Work with local communities to introduce a point system for community activities (volunteer
activities, healthcare, etc.)【STACIA card strategy 】
1. Card to become the foremost card in line-side areas and to gain status as an in-house card
・Increase the card’s use amount to the top level in the area, and increase its rate of usage
among the Group
2. Achieve sustainable growth as credit and point card enterprise・Gain earnings through expanded card use, rationalise expenses, and strengthen customer
relations management based on a PDCA cycle.
69

Strategy④:Make greater use of the Group’s collective energies and venture into new
business fields②

Initiatives of raises line-side value【Theme】 The source of our brand and our greatest revenue base is the line-side value.
We will raise line-side value by providing services in the following five areas.
Fostering of thenext generation

Health andElderly

Community andCultureDevelopment of safe,
secure towns

Industrial
creation【Fostering of the next generation：After-school Kippo
To help parents who are bringing up children in areas served by our lines, we opened a private
after-school day care centre called After-school Kippo. Having already opened an After-school
Kippo in Toyonaka and Nishinomiya Kitaguchi, we opened third centre in Ikeda in April 2017.
～After-school Kippo provides another safe and fun place for kids after school～●Principle

After-school Kippo is a place of full of ‘safety and comfort’ as well as‘dreams and excitement’. It supports children who are taking their firststeps and their parents.

●Contents：Private after-school day care centre
・Safe school pickup service (covering 5 to 7 schools around the station)
・Located in the station basement making access convenient for parents on their returnfrom work
・Facilities available to use until 21:00
・A diverse range of activities that utilise the Group’s network●Number of centres and registered members（End of April, 2017）
Toyonaka (Opened in April 2015)
Nishinomiya-kitaguchi (Opened in April 2016)
Ikeda (Opened in April 2017)

membership
58
51
62
70

Strategy④:Make greater use of the Group’s collective energies and venture into new
business fields③

Initiatives of raises line-side value【Health and Elderly】
Health promotion and disease prevention
services
・Quarterly health journal depositedinstations 「Well TOKK」
・WEB site「Hankyu Hanshin line Wellness plus」
・Workshop in healthy cafe Root Cafe
・Walking and health checkups
・Services commissioned by the Ministry of
Economy, Trade and Industry

Develop multipurpose facilities that function
as fee-based elderly care homes andfacilities for local residents
Using the idle land in the Awaji area ofHigashiyodogawa-ku, we will lease a building to Charm
Care Corporation. The tenant facilities for local residents
will include a home-visit nursing station and Hanshin
Ikiiki Day Service. There will also be community services
as a public health centre.
【Rendering of construction
upon completion 】(construction to becompleted in autumn 2018)

Health promotion project (offer monitors exercise
and health improvement options and encourage
attitudinal and behavioural changes) aimed atachieving the vision of ‘line areas that extend
health life spans’【Community and Culture：line-side area communities base ‘Stajimo’】
Operated in the Hankyu Nishinomiya Gallery on the fifth floor of Hankyu Nishinomiya Gardens,
Stajimo is a place for organising activities for line-side communities and for interfacing withvarious businesses of the Group.

parent and child(Art)regional vitalization

Woman(Hand made)Elderly71

Strategy④:Make greater use of the Group’s collective energies and venture into new
business fields④

Initiatives of new business【Safety and education initiatives】●Principle behind safety and education initiatives:‘Continue providing the community with safe services that offer a little something extra’
We have developed a school commute app (an email is automatically sent when the student passes the school gate), akindergarten attendance app (used to manage number of hours in kindergarten), and a GPS tracking service (forchildren and elderly). The school commute app covers 900 schools and has gained a user base of 170,000.

●New initiatives①Safety monitoring network in Itami City
Itec Hankyu Hanshin developed a smartphone app for monitoring the safety of children and elderly people. Whenchildren or elderly people who carry a transmitter pass certain points in the town, their location is transmitted to theirparent or carer. We have set up 1,000 receivers in Itami which detect the presence of transmitters. The system
launched in April 2016.

②ProgLab

ProgLabIn April 2016, Hanshin Electric Railway started an educational programme for robot
programming in collaboration with Yomiuri Telecasting Corporation. As of the start offiscal 2018, the programme has expanded to a cumulative total of 13 schools.
Approximately 900 students have been taking part.

【Hanshin Ikiiki Day Service】●Summary A rehabilitation-oriented half-day care service run by Hanshin
Electric Railway●Concept Focusing on both the body and the mind, we help residents tocontinue living healthy and vibrant lives in the places to which
they are accustomed●Number of centres (End of April, 2017)
The service has expanded to a cumulative total of 12 locations, including Nishinomiya
and Noda, Osaka (approximately 600 individuals have signed up for the service).

72

Initiatives of ESG(Environment, Social, Governance)①
Basic approach to Group management
Build relationships of trust with various stakeholders andenhance corporate value over the medium-to-long term

Customer
Employee

If we expand the ESG initiatives and proactively fulfil thesocial responsibilities of the Group, for whom line-side areas
constitute an important revenue base, it will strengthen trustwith stakeholders leading to better corporate value over the
medium-to-long term.

HankyuHanshinHoldings
group

Supplier

Regional
community

Shareholder
Investor

Environment

In line with our Basic Environmental Policy, we have constructed an environmental system to mitigate
environmental risks and promote each group company’s environmental preservation activities, thereby
spreading awareness among our stakeholders.

■Environmental management①Upholding environmental laws

■Outside PR

In accordance with the Energy Saving Act, we strive torationalise energy use throughout the Group.

308,425

Each group company uses various advertising strategies,
including in-train posters, to raise public awareness about
We conduct various surveys on environmental laws tominimise the risk of legal oversights and to raise the level of their environmental preservation activities.
Electricity consumption during summer season
compliance with environmental laws across the Group.
(July to September)②Mitigating burden on environment③Raising awareness among employees

unit: thousand kwh

283,657

277,219262,261

281,759
We equip our employees with the knowledge and social
268,581
261,738
stance necessary for promoting environmental preservation ※The above figures exclude a portion of our domestic businesses whose electricity consumption
plans, and deepen their understanding about environmental could not be measured.
preservation.
FY2011FY2012FY2013
FY2014FY2015FY2016FY201773

Initiatives of ESG(Environment, Social, Governance)②
SocialGroup-wide social contribution activity: Hankyu Hanshin Dreams andCommunities of the Future Project (since fiscal 2010)■Purpose：To build customer loyalty and enhance value over the long-term, we will
promote the creation of towns and cities along our railway lines that people
will truly want to live in.
■Priority areas：Working with stakeholders (group companies, employees, civic organisations),
focus on two priority areas: 1. Environmentally friendly development thatenhances the appeal of line-side
communities, and 2. human capitaldevelopment aimed at fostering the next generation of customers.

Example of activity:
Hankyu Hanshin Dreams and Communities
Challenge Troop（since fiscal 2011)
・Summer educational programmes that gives elementary
school students an experience of working in a groupcompany.
・By fiscal 2017, 220 programmes were conducted, with a
total of 9,776 children taking part.
・In the 2016 MEXT awards for recognising companies that
conduct experiential activities for young people, we
received the special recognition prize.

popularity rating for our company
Customers who are aware of our Dreams andCommunities project hold higher positive opinions of
the Group.
Total number of respondents who answered that they hold apositive opinion or a fairly positive opinion of the Group.

（％）

80.0

60.0
40.0

73.4

65.8

81.7

20.0
0.0

Total

Our groupThis project
Cognitive layer Cognitive layer（n=1,000）（n=830）（n=284)

Respondents：1,000 male and female residents aged between 18 and 69 who live in oneof the 23 municipalities in line-side areas of Kyoto, Osaka, and Kobe.
Survey method：Online survey conducted among the above individuals (randomised sample)
Survey period：September 4th to 6th , 201574

Initiatives of ESG(Environment, Social, Governance)③
Governance■New Initiatives that the Company Has Outlined（extract from the June 2016 version of the Corporate Governance Report）

Evaluating the effectiveness of the Board of Directors 【Principles４-１１-３】

・Investigative reviews were conducted concerning the fiscal 2016 management of the Board of
Directors, particularly with respect to the accountability and appropriateness of the conduct ofmeetings. As a result, it was concluded at a meeting of the Board of Directors in April 2016 that theBoard of Directors was appropriately managed and effective overall. However, recommendations
included increasing the provision of information about the management of core business segments.
Accordingly, the Board of Directors organised opportunities for providing such information at its
meetings held in November and December 2016.
・In light of the above evaluation, the Company will explore ways of further enhancing the Board of
Directors’ oversight and decision-making function.

《Reference》■Basic Approach to Corporate Governance・The Company aims to remain a company that customers and other stakeholders trust. To this end, the Company isstrengthening and increasing corporate governance by heightening the transparency and soundness of business
management and ensuring appropriate, timely disclosure.
・Reflecting this basic approach, the Company has established the policies below with a view to sustaining growth andenhancing corporate value over the medium-to-long term.
（1）We shall respect shareholders’ rights and ensure equality.
（2）We shall take into consideration the interests of shareholders and other stakeholders and cooperate withstakeholders appropriately.
（3）We shall disclose corporate information appropriately and ensure transparency.
（4）We shall ensure that the Board of Directors performs its roles and duties appropriately and ensure advanced
oversight and decision making.
（5）We shall have constructive dialogue with shareholders with a view to sustaining our growth and enhancing
corporate value over the medium-to-long term.
75

Ⅴ．Forecast for fiscal 2018 (fiscal year
ending 31st March2018) and outlook foreach business segment76Consolidated Statements of Income (Summary)(¥ billion)

FY2018
Forecasts

FY2017
Results

ChangeRemarks

750.0

736.8

+13.2(+1.8%)

Operating income

96.0

104.1

-8.1(-7.7%)

Ordinary income

92.0

100.6

-8.6(-8.6%)

Net income attributable toowners of the parent

60.0

71.3

-11.3(-15.9%)

Depreciation and amortisation

53.9

52.8

+1.1

Financial balance ① - ②

-9.5

-10.1

+0.6

Interest and dividend income①

1.1

1.1

+0.0

Interest expense②

10.6

11.2

-0.6

Revenues from operations

The condominium businesswill see higher unit sales,
but also higher sales
expenses. Also, the Urban
Transport Business segment
will see an increase indepreciation andamortisation. Consequently,
revenues from operations
will increase, but operating
income will decline.

(Reference)77Consolidated Statements of Income (Breakdown for each business segment)(¥ billion)[Upper table]
Revenues from operations[Lower table]
Operating income

Total

FY2018
Forecasts

FY2017
Results

Change

750.0

736.8

+13.2

96.0

104.1

-8.1
(Fiscal 2017) The impact of Iina Dining Co., Ltd. shifting its
status from consolidated subsidiary to equity-method affiliate.

(Breakdown for each business segment)

Urban
Transportation
Real EstateEntertainment andCommunications
TravelInternational
Transportation
HotelsRemarks

234.5

237.1

-2.6

39.6

42.2

-2.6

225.5

215.7

+9.8

38.1

42.0

-3.9

115.3

115.2

+0.1

14.5

15.7

-1.2

32.3

29.9

+2.4

0.5

0.6

-0.1

73.1

71.7

+1.4

1.7

1.6

+0.1

67.9

65.6

+2.3

2.6

2.8

-0.2

Earnings will decline due to increased depreciation andamortisation in the railway business and higher fuel costs in theautomobile business.
Earnings will decline because of higher sales expenses in thecondominium business, which will offset its expected increase inunit sales.
Earnings will decline because, despite increasing revenue fromoperations, the communication and media business will fail toperform as well as in fiscal 2017, a period in which the
Takarazuka Revue had a high level of capacity utilisation.
Earnings will decline due to a rise in various expenses, which willoffset the expected increase in overseas and domestic tourists.
Operating income and revenue will increase owing to a recovery
in international logistics demand and increased handling volume.

Earnings will decline because of the increase in expenses
associated with opening hotels, which will offset higher
accommodation sales following the opening of remm Roppongi.

78

Urban Transportation
Blue : Factors of increase

Red : Factors of decrease

Main factors in the change in operating
income from FY2017 to FY2018
・Higher depreciation and amortisationaccompanying investment in the
manufacture of rolling stock・Higher railway operation revenue
accompanying an increase in line-side
population
 We anticipate that railway operation revenue will rise asa result of an increase in line-side population and otherfactors.

(¥ billion)

Revenues from operations

Operating income

234.6

38.5

233.4

38.6

239.5

41.3

237.1

42.2

234.5

39.6

 As for expenses, we anticipate higher depreciation andamortisation reflecting the investment in rolling stockand station apparatus.
 As a result of the above, in fiscal 2018, the corebusiness as a whole is forecast to record a decline inoperating income.
 Regarding the outlook for fiscal 2019, we expect that
railway operation revenue will continue at the same levelreflecting the impact of the declining birth rate andaging population. At the same time, expenses such as
depreciation and amortisation will rise. Therefore, thecore business is forecast to record a further decline inoperating income.

FY2014FY2015 FY2016

FY2017 FY2018
forecasts
79

[Urban Transportation] Railway Performance results
Hankyu Corporation

Fare revenues (¥ million)*
FY2018
forecasts

FY2017
Results

ChangePassenger volumes (Thousands)*
FY2018
forecasts

FY2017
Results

ChangeCommuter pass

33,00632,628+377(+1.2%)

332,324

329,305 +3,019(+0.9%)

Workers

28,49428,138+355(+1.3%)

232,713230,010 +2,703(+1.2%)

Students

4,512

4,489

+22(+0.5%)

99,61099,295+315(+0.3%)

Other tickets

62,64362,720-76(-0.1%)

317,787

318,064-276(-0.1%)

Total

95,64995,348+300(+0.3%)

650,112647,369 +2,742(+0.4%)

Hanshin Electric Railway
Fare revenues (¥ million)*
FY2018
forecasts

FY2017
Results

ChangePassenger volumes (Thousands)*
FY2018
forecasts

FY2017
Results

ChangeCommuter pass

11,69011,563+127(+1.1%)

121,028

119,768 +1,259(+1.1%)

Workers

10,46810,356+111(+1.1%)

95,387

94,479+907(+1.0%)

Students

1,222

1,206

+15(+1.3%)

25,641

25,289+351(+1.4%)

Other tickets

21,016

21,136-120(-0.6%)

116,588

116,998-410(-0.4%)

Total

32,70732,699+7(+0.0%)

237,616

236,766+849(+0.4%)＊ Revenue amounts less than one million yen, and numbers of passengers less than one thousand, are omitted.
For Hankyu Railway, “other ticket revenue/ridership” includes revenue/ridership associated with the PiTaPa usage sections.
Sum of tier 1 and tier 2 railway operators for both Hankyu and Hanshin

80[Urban Transportation] Referential information
Hankyu Line: Transportation revenue (tier 1 + tier 2)(¥ million)

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Commuter passes
Other tickets
Total

31,92260,01091,932

31,88060,08791,967

31,126
58,582
89,70829,48460,00089,48529,92260,26890,19130,39160,74991,141

31,29961,63092,92931,54960,91092,45932,272
62,92095,192

32,62862,72095,34833,006
62,64396,649105%

FY2008＝100%(FY) 2008

FY2018
forecasts

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

forecasts

Hanshin Line: Transportation revenue (tier 1 + tier 2)
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Commuter passes
Other tickets
Total

8,783
16,09524,878

8,913
16,31625,2309,642
18,39628,038

10,126
18,89929,025

10,623
19,42230,045

10,74019,66930,41011,00820,26031,269

11,107
20,286
31,394

11,372
21,03532,407

11,563
21,13632,699FY2018
forecasts

11,69021,01632,707131%
FY2008＝100%★ Opening of Hanshin Namba Line(March, 2009）(FY) 2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

forecasts81

Real Estate
Red : Factors of decrease

Main factors in the change in operating
income from FY2017 to FY2018
・Higher sales expenses in the condominium

Revenues from operations

business

Operating income

 In the leasing business, we expect that continued highoperating levels in offices coupled with efforts to improvecommercial facilities by attracting new tenants andrenewing the facilities will result in higher revenue.
However, given the higher expenses accompanying repair
and renewal work, we anticipate lower earnings.
 In the real estate sales business, we expect higher unit
sales, but also higher sales expenses; therefore, we
anticipate lower earnings.
 As a result of the above, in fiscal 2018, the core businessas a whole is forecast to record a decline in operating
income.
 Regarding the outlook for fiscal 2019, while thecondominium business will achieve even lower earnings
owing to declining profitability, we expect that the corebusiness as a whole will increase its earnings after
accounting for the sell-off of some of the commercial-use
land.

208.6

220.9
206.4

(¥ billion)

215.7

225.5

49.9
42.0

38.0

37.2

FY2014FY2015 FY2016

38.1

FY2017 FY2018
forecasts
82

Entertainment and Communications
Red : Factors of decrease

Main factors in the change in operating
income from FY2017 to FY2018
・Decline in the stage’s level of capacity
utilisation and lower sales of related
merchandise In the sports business, we expect that sales promotion
measures and other efforts will continue to attract
strong audiences resulting in income on the same level
as the previous year.
 In the stage business, the high level of the stage’s
capacity utilisation will decline from its high level. Also,
there will be lower sales of related merchandise,including DVD and blu-ray discs. Therefore, we
anticipate that income will edge down from its current
level.
 In the communication and media business, despite
efforts to sustainably develop information services andpromote local broadband wireless access, we expectthat income will largely remain at the previous year’slevel owing to the rising costs accompanying businessexpansion.
 As a result of the above, in fiscal 2018, the corebusiness as a whole is forecast to record a decline inoperating income.
 Regarding the outlook for fiscal 2019, the core businessis expected to record the same level of operating income
as in fiscal 2018.

Revenues from operations
Operating income

110.4

14.2

FY2014

112.6

112.5

15.0

15.3

FY2015 FY2016(¥ billion)

115.2

15.7

115.3

14.5

FY2017 FY2018
forecasts83

TravelBlue : Factors of increase

Red : Factors of decrease

Main factors in the change in operating
income from FY2017 to FY2018
・Higher costs associated with structuralreform・Higher demand for travel to overseas
regions other than Europe(¥ billion)

Revenues from operations
Operating income

33.0 Considering that demand for travel to Europe is
expected to recover to some extent, and given theefforts to promote tourism in areas outside Europe(including inside Japan) and strengthen specialised
products and individual-oriented products, we expectthat revenues from operations will increase.

32.0

32.3

30.5

29.9

0.7

0.6

 On the other hand, we expect higher costs associatedwith the structural reforms that the business is pursuing
to prepare for the future.
 As a result of the above, in fiscal 2018, the corebusiness as a whole is forecast to record the same levelof operating income as in fiscal 2017.
 Regarding the outlook for fiscal 2019, the core businessis expected to record the same level of operating income
as in fiscal 2018.

1.2

FY2014

1.2

FY2015 FY2016

0.5

FY2017 FY2018
forecasts
84

[Travel] Referential information
Billings
Domestic travel

Overseas travel(¥ billion)

450.0
400.0
350.0

132.4

139.7
137.4

300.0

135.5

128.5

111.9

146.3

136.8
132.5

250.0

129.0

200.0
150.0

284.5

100.0

246.3

245.3

255.3

270.9

290.1

261.6

234.7

201.1

186.9

FY2016FY201750.0
0.0
FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015※Figures for 2007 to 2014 (fiscal 2008 to fiscal 2015) represent the simple aggregate amounts from
Hankyu Travel International and Hankyu Hanshin Business Travel.
The figures from fiscal 2016 and onwards represent the aggregate amounts from the two companies
as well as from Hanshin Travel International (offsetting intercompany transactions).

85International Transportation
Blue : Factors of increase

Red : Factors of decrease

Main factors in the change in operating
income from FY2017 to FY2018
・Higher handling volume amongsubsidiaries in Japan・Higher costs in the Singapore subsidiary
accompanying the opening of a newlogistics centre(¥ billion)

Revenues from operations

Operating income

 Among subsidiaries in Japan, we expect that efforts toachieve a balanced business portfolio will lead to
improved revenues from operations, particularly among
ocean transportation and logistics operations.

(37.7)(36.7)

71.7

73.1【Reference】
Figures in parentheses
indicate net amounts.

3.1

 As for overseas subsidiaries, while efforts are being
made to increase income in Asia, we anticipate a
temporary increase in expenses associated with longterm growth investments.
 As a result of the above, in fiscal 2018, the corebusiness as a whole is forecast to record the same levelof operating income as in fiscal 2017.

(39.4)

76.1

2.1

1.8

1.6

1.7

 Regarding the outlook for fiscal 2019, considering theefforts to expand handling volume both in exports andimports, we project an increase in operating income.

FY2014FY2015 FY2016

FY2017 FY2018
forecasts＊ As of fiscal 2017, the presentation of revenues from operations of the International
86
Transportation Business has changed from net to gross amounts.

[International Transportation] Referential information
Air export consolidated freight weight (from Japan)
80,00072,18270,00058,24960,00062,71366,64962,47861,09349,74750,000（unit：ton）

55,01557,16562,22540,00030,00020,00010,00002007
FY2008300,000

2008
FY20092009
FY20102010
FY20112011
FY20122012
FY20132013
FY20142014
FY2015Air import transactions amount (to Japan)

2015
FY20162016
FY2017（unit：shipments）

256,059
250,000

229,315

218,284

236,279
215,385

203,949

203,985

200,000

187,073

170,698

170,4902015
FY20162016
FY2017150,000
100,000
50,00002007
FY20082008
FY20092009
FY20102010
FY20112011
FY20122012
FY20132013
FY20142014
FY201587

Hotels
Blue : Factors of increase

Red : Factors of decrease

Main factors in the change in operating
income from FY2017 to FY2018
・Higher revenue among existing hotels,
primarily from accommodation operations
・Higher outsourcing expenses accompanying
increase in cleaning prices
・Higher repair expenses accompanying
renovation and maintenance work
・Higher amortisation burden associated withremm Roppongi

Operating income

 As a result of the above, in fiscal 2018, the corebusiness as a whole is forecast to record a decline inoperating income.
 Regarding the outlook for fiscal 2019, the core businessis expected to record the same level of operating income
as in fiscal 2018.

67.9

68.0
65.6

63.7

63.0
3.3
2.8

 We anticipate higher revenues, particularly fromaccommodation operations, owing to the impact of the
opening of remm Roppongi and the renovation of guest
rooms in the Ritz-Carlton, Osaka, as well as efforts tosteadily capture the growing inbound demand.
 On the other hand, we also anticipate rising expenses,
including depreciation and amortisation accompanying
the renovation of guest rooms and the opening of remm
Roppongi, and rising personnel and outsourcing costs.

(¥ billion)

Revenues from operations

2.6

1.2
0.8

FY2014FY2015 FY2016

FY2017 FY2018
forecasts
88

[Hotels] Referential information
Average daily rates (ADR) and occupancy rates of Hankyu Hanshin Hotels in the Tokyo metropolitan area and Kinki area
Tokyo metropolitan area ADR ※1
Tokyo metropolitan area occupancy rate (right axis) ※1

20,00017,500

89.7%

86.9%

83.3%

80.9%

82.4%

83.7%

12,50010,00010,902
9,859

7,500
5,000
（¥）

14,287

14,046

FY2009FY2010

83.3%

79.7%

15,00015,804

92.2%

89.9%

FY2011

14,2889,521

FY2013

10,210Tokyo metropolitan area※1

14,14011,616FY2014FY2015

31.4%
16.4%

40.0%

FY2016FY20170.0%(％)

Kinki area ※2

30.0%

10.0%

60.0%

38.6%

16.3%

16,665

20.0%

40.0%

20.0%

80.0%

15,210Non-Japanese guests as a percentage of overnight-stay guests
50.0%

100.0%

14,6199,407

FY2012

17,221

15,853

13,520

9,489

Kinki area ADR ※2
Kinki area occupancy rate (right axis) ※2
94.3%
93.9%
92.6%
92.2%
90.5%
90.8%
88.6%
86.6%

36.9%

38.1%
37.0%

22.7%
13.1%

11.7%

12.7%

10.0%

FY2010FY2011FY2012

25.0%

14.9%
12.3%

The total figures for FY2017 is 37.3％(+0.2 points from previous year, +11.2
points from year before previous year

17.3%

0.0%
FY2013

FY2014FY2015FY2016FY2017※1 Directly managed Hanshin Hankyu hotels, hotels in the Tokyo area (excluding HOTEL new HANKYU TOKYO,. including remm Roppongi, which opened in
March 2017)※2 Directly managed Hanshin Hankyu hotels, hotels in the Kinki area (including remm Shin-Osaka, which opened in September 2012)89《Reference》 Consolidated Statements of capital expenditure(¥ billion)

FY2018
Forecasts

Remarks

FY2017
Results

Remarks

Change
①-②

①

②

94.0

86.2

+7.8

Urban Transportation

Building of new rollingstock and improvement ofexisting rolling stock,
38.5 upgrade of Hanshin Umeda
Station, installation of
platform doors

Building of new rollingstock and improvement31.2 of existing rolling stock,
upgrade of Hanshin
Umeda Station+7.3

Real Estate

Umeda 1-1 Project, Project
to rebuild Kobe Hankyu
Building’s east wing and44.1 renew its west wing, 2-6
Kyobashi RedevelopmentPlan43.1 Umeda 1-1 Project

Total capital expenditure(Breakdown for each business segment)

Ginza 3-chome Project,+1.0Entertainment and Communications

Broadcast andcommunications, renewalof transition lines of main
9.8 lines, construction of amulti-storey carpark on thenorth side of Takarazuka
Grand Theatre

Broadcast andcommunications,renewal of transition
7.4 lines of main lines,
renewal of the Tokyo
Takarazuka Theatre’s
stage machinery+2.4

Travel

0.9

0.5

+0.4

International Transportation

0.7

0.4

+0.3

Hotels

3.1

3.2

-0.1
90

《Reference》 Consolidated Statements of Depreciation and amortisation, EBITDA(¥ billion)
Total Depreciation and amortisation

FY2018
forecasts①

FY2017
results②

Change
①-②

53.9

52.8

+1.1

Urban Transportation

26.9

25.9

+1.0

Real Estate

16.7

16.8

-0.1

Entertainment and Communications

7.2

6.7

+0.5

Travel

0.7

0.7

-0.0

International Transportation

0.8

0.7

+0.1

Hotels

2.1

1.9

+0.2

152.0

159.3

-7.3

Urban Transportation

66.6

68.2

-1.6

Real Estate

54.8

58.8

-4.0

Entertainment and Communications

21.8

22.6

-0.8

Travel

1.2

1.4

-0.2

International Transportation

2.5

2.3

+0.2

Hotels

4.7

4.7

+0.0

(Breakdown for each business segment)

Total EBITDA(Breakdown for each business segment)91

Ⅵ．Referential Materials

92Consolidated Subsidiaries(As of March 31, 2017)
Urban Transportation
Railway
Hankyu Corporation
operations
Hanshin Electric Railway
Nosé Electric Railway
Kita-Osaka Kyuko Railway
Hokushin Kyuko Railway
Kobe Rapid Transit Railway
Hankyu Hanshin Railway Technology

Automobile

Hankyu Hanshin Electric System
Hankyu Railway Service
Hankyu Bus
Hanshin Bus
Hankyu Kanko Bus
Osaka Airport Transport
Hankyu Denen Bus
Hankyu Taxi
Hanshin Taxi
Osaka Hanshin Taxi
Hankyu Hanshin Motor Technology
Hankyu Driving School Hattori Ryokuchi

Haks Hanshin
Retailing
Advertising
Other

Eki Retail Service Hankyu Hanshin

Hankyu Style Labels
Hankyu Advertising Agency
Alna Sharyo
Hankyu Sekkei Consultant
Hanshin Station Net
Hanshin Sharyo MaintenanceReal Estate
Real estate

Hankyu Corporationleasing and sales Hanshin Electric Railway
Hankyu Realty
Hanshin Real Estate
Osaka Diamond Chikagai
Hankyu Hanshin Building Management
Other
Hankyu Hanshin High Security Service

Hankyu Hanshin Clean Service
Hankyu REIT Asset Management
Hankyu Investment Partners
Hankyu Housing Support
Entertainment and Communications
SportsHanshin Electric Railway
Hanshin Tigers Baseball Club
Hanshin Contents Link Corporation

Wellness Hanshin
P & P Hamamatsu
Stage
Hankyu Corporation
Takarazuka Creative Arts
Takarazuka Stage
Umeda Arts TheaterCommunication Bay Communications
and media Himeji Cable Television
Leisure, etc.
Itec Hankyu Hanshin
System Giken
Mt. Rokko Cable Car & Tourism
YMIRLINK
Himeji Cable Television
RworksTravelTravel agency

Hankyu Travel International
Hankyu Hanshin Business Travel
Hankyu Travel Support
International Transportation
International
Hankyu Hanshin Express
transportation Hankyu Hanshin Logipartners
HANKYU HANSHIN EXPRESS(USA, UK, NETHERLANDS, SINGAPORE
DEUTSCHLAND,HONG KONG,
THAILAND,PHILIPPINES, MALAYSIA,VIETNAM,SHANGHAI,GUANGZHOU,BEIJING,TAIWAN, KOREA,INDIA,
INDONESIA, Southeast Asia, HANKYU
INTERNATIONAL LOGISTICS SHANGHAI,:19Companies）
HotelsHotel
Hankyu Hanshin Hotels
management Hanshin Hotel Systems
Hankyu Hanshin Restaurants
Arima View Hotel
Amanohashidate Hotel
Kure Hankyu Hotel【Legend】
Name of segment
Name of
Name of consolidated subsidiary(Only listed companies that are
sub-segment
managed as segment)

93

Revenues from Operations and Operating income as a FY2017
management composition

earnings structure(As of March 31, 2017)

Hankyu Hanshin Holdings

 The Urban Transportation and Real Estate businesses

HotelsInternational
Transportation

TravelEntertainment andCommunications

Real Estate

Urban
Transportation

generate stable cash flows and account for
approximately 60% of revenues from operations and
80% of operating income.
Revenues from operations breakdown(FY2017)
Consolidated Total

Operations¥736.8billion

Operating Income¥104.1billion

Operating income margin

Hotels
Revenues from

Revenues from Operations

Urban Transportation¥65.6billion

Operating Income¥2.8billion

Operating income
margin4.3%

International
Transportation
Hankyu Corporation

Hanshin Electric Railway

HankyuTravelInternational

HankyuHanshin
Express

HankyuHanshinHotels

Revenues fromoperations¥71.7billion

Operating income¥1.6billion

Operating income
margin2.2%¥29.9billion

Operating Income¥0.6billion

Operating income
margin2.0%

Revenues fromOperations¥237.1billion

Operating Income¥42.2billion

Operating income
margin17.8%

Real Estate

TravelRevenues fromOperations

14.1%

Revenues fromOperations¥215.7billion

Operating Income¥42.0billion

Operating income
margin19.5%

approximately

60%
Entertainment & Communications
Revenues fromOperations¥115.2billion

Operating Income¥15.7billion

Operating income
margin13.6%

94Areas served by the Hankyu and Hanshin lines①
Definition of the areas served by the Hankyu and Hanshin lines
Osaka Prefecture:
Osaka City (Fukushima, Konohana, Nishi, Naniwa, Nishi-Yodogawa, Higashi-Yodogawa,
Yodogawa, Kita and Chuo, out of a total of 24 wards); and Toyonaka, Ikeda, Suita, Takatsuki,
Ibaraki, Minoh, Settsu cities and Shimamoto town
Hyogo Prefecture:
Kobe City (Higashi-Nada, Nada, Hyogo, Nagata and Chuo, out of a total of 9 wards); andAmagasaki, Nishinomiya, Ashiya, Itami, Takarazuka and Kawanishi cities
Kyoto Prefecture:
Kyoto City (Nakagyo, Shimogyo, Ukyo, Nishikyo, out of a total of 11 wards); and Muko andNagaokakyo cities and Oyamazaki town

95

Areas served by the Hankyu and Hanshin lines②
Population Trends

Sources: Prepared by the Company based on data from “Local Economy Directory,” published by Toyo Keizai, Inc.,and “Basic Resident Register,” published by the Ministry of Internal Affairs and Communications.
108.0（k㎡） (thousand)
Area

2016

Areas served by the Hankyu/Hanshin
line

1,318

5,584

Osaka Pref. (service areas)

449

2,648

Hyogo Pref. (service areas)

471

2,270

Kyoto Pref. (service areas)

398

667

Non-Hankyu/Hanshin Service Areas

26,033

14,881

Osaka Pref. (non-service areas)

1,456

6,010

Hyogo Pref. (non-service areas

7,930

3,254

Kyoto Pref. (non-service areas)

4,214

1,855

Shiga Pref.

4,017

1,396

Nara Pref.

3,691

1,377

Wakayama Pref.

4,725

988

27,351

20,465

Total

Areas served by the Hankyu and Hanshin lines
Kansai
Osaka Pref.
Hyogo Pref.
Kyoto Pref.

106.0
104.0

（1991=100）

102.0
100.0
98.0

96.0

Survey of prospective condominium purchasers regarding
their preferred Kansai residential area, conducted in fiscal 2017
Ranking Station（Area）

Ranking Station（Area）

11

Kobe（Kobe, Hyogo Pref.）1

Nishinomiya-kitaguchi（Nishinomiya, Hyogo Pref.）2

Shukugawa（Nishinomiya, Hyogo Pref.）

12

Osaka

（Osaka, Osaka Pref.）3

Okamoto（Kobe, Hyogo Pref.）13

Tennoji（Osaka, Osaka Pref.）

4

Umeda

（Osaka, Osaka Pref.）

14

Kyoto

（Kyoto, Kyoto Pref.）5

Takarazuka（Takarazuka, Hyogo Pref.）

15

Esaka

（Suita, Osaka Pref.）6

Ashiyagawa（Ashiya, Hyogo Pref.）16

Takatsuki-shi（Takatsuki, Osaka Pref.）7

Mikage（Kobe, Hyogo Pref.）17

Kobe-sannomiya（Kobe, Hyogo Pref.）8

Senri-Chuo（Toyonaka, Osaka Pref.）

18

Minoh

（Minoh, Osaka Pref.）9

Toyonaka（Toyonaka, Osaka Pref.）19

Kuraku-enguchi（Nishinomiya, Hyogo Pref.）10

Ashiya（Ashiya, Hyogo Pref.）20

Ibaraki（Ibaraki, Osaka Pref.）Except for Tennoji (13),Kyoto (14), and Esaka(15), all of the top 20
stations are on Hankyu
or Hanshin lines (notably,
the top 10 is completely
monopolized by Hankyu
and Hanshin)

Source: A survey of prospective condominium purchasers regarding their preferredresidential area, conducted by seven major real estate developers (Sumitomo Realty& Development Co., Ltd., Daikyo Incorporated, Tokyu Land Corporation, Tokyo Tatemono Co., Ltd., Nomura Real Estate Development Co., Ltd., Mitsui Fudosan
Residential Co., Ltd., and Mitsubishi Jisho Residence Co., Ltd.) and included in a press release dated 29th September 2016.

96

Overview of Umeda area①
Major rental properties （as of March, 2017)
Property nameUmeda Hankyu Bldg.

Leasable area
(1,000㎡) ※1

Number of floors

Completed213

41 floors above groundand 2 below ground

2012

82

40 floors above groundand 5 below ground

1997

55

28 floors above groundand 4 below ground

2004

52

34 floors above groundand 3 below ground1992

Umeda Hanshin
Daiichi Bldg.
(HERBIS OSAKA)）
Umeda Hanshin Daini
Bldg.
(HERBIS ENT)
Hankyu Chayamachi
Bldg.
(Applause Tower)
Hankyu Sanban Gai
Shopping Centre
Hankyu Grand Bldg.
GRAND FRONTOSAKAHankyu Terminal
Bldg.
Hankyu Five Bldg.
(HEP FIVE) ※2
Navio Hankyu(HEP NAVIO)）

5 floors above groundand 2 below ground
32 floors above ground36
and 3 below ground
38 floors above ground28
and 3 below ground
18 floors above ground27
and 4 below ground
10 floors above ground20
and 3 below ground

40

1969
1977
2013
1972
1998

10 floors above ground1980
and 2 below ground
NU chayamachi
9 floors above ground122005
and 2 below ground※1：Leasable area does not include areas for public use※2 Jointly owned property with Hankyu REIT Asset Management
16

Developments in Umeda district(red = Hankyu Hanshin Holdings group related Projects)① Umeda 1-1 Project（Dai Hanshin Building and Shin Hankyu Building Rebuilding Project）② (Provisional Name) Yodobashi Umeda Tower-Yodobashi Camera Co., Ltd.

③ (Provisional Name) Umeda 3-chome Project- Japan Post Holdings Co. Ltd.,/Osaka Terminal Building Co., Ltd.

④ (Provisional Name) Umeda Sonezaki Projest-Sumitomo Realty & development Co., Ltd.

97

Overview of Umeda area②
Trends in rent amongsix main business districts in Osaka

Trends in average vacancy rates amongsix main business districts in Osaka（%）（¥/3.3㎡）
20,000

19.00
17.00

18,00015.00
16,000

13.00
11.00

14,0009.00

12,0007.00
10,000

5.00
3.00

2012

2013

2014

2015

Osaka business areas (all)Minamimorimachi area
Senba area
Shinosaka area

2016

2017

8,000

2012

Umeda area
Yodoyabashi-Honmachi area
Shinsaibashi-Namba area
Tokyo business areas (all)

2013

2014

2015

Osaka business areas (all)Minamimorimachi area
Senba area
Shinosaka area(¥/3.3㎡)

2012

2016

2017

Umeda area
Yodoyabashi-Honmachi area
Shinsaibashi-Namba area
Tokyo business areas (all)
2013

2014

2015

2016

2017

(%)

2012

2013

2014

2015

2016

2017

Osaka business areas (all)

10.27

11.25

9.45

8.71

6.80

4.68 Osaka business areas (all)11,437 11,307 11,213 11,132 11,101 11,107

Umeda area

7.29

11.50

9.22

7.84

5.54

3.20 Umeda area

14,414 14,295 14,262 14,118 14,207 14,366

Minamimorimachi area

9.51

10.33

8.24

6.08

5.40

6.01 Minamimorimachi area

9,686

Yodoyabashi-Honmachi area

9.66

11,234 11,132 11,005 10,993 10,898 10,861
10,101

9,642

9,658

9,414

9,408 9,314

9.63

10.64

9.94

7.51

4.58

Yodoyabashi-Honmachi area

Senba area

17.86

15.21 12.16 11.02

8.81

7.46

Senba area

Shinsaibashi-Namba area

12.29

8.31

6.35

6.06

9.07

5.95 Shinsaibashi-Namba area

12,504 12,361 12,315 12,225 12,110 11,802

Shinosaka area

9.34

8.30

7.69

6.86

5.42

4.65 Shinosaka area

10,498 10,407 10,173 10,114 10,106 10,213

Tokyo business areas (all)

8.67

7.34

5.47

5.30

4.34

3.60 Tokyo business areas (all)16,572 16,207 16,953 17,195 17,973 18,730

9,853

9,782

9,652

9,613 9,620(Comparison of average rents in March of respective years)
Source: Miki Shoji, “Office Data.”

98

Progress on the Development of International Culture Park ‘Saito’ (a new town)• Since the opening of the western area of Saito in Spring 2004, progress has been made in
developing residential facilities and attracting commercial tenants in the western area. Saito has
developed into a new town, with a residential population of 14,000 and a facility population of
2,500.
• In Spring 2016, the central area was opened up for common use. There are now several large-scale
logistics centres in the area, and construction operations are underway in other commercial lots.
• As for the eastern area, in February 2015, Ibaraki City altered the plan for prior areas (Sanroku Line
area and central-east area), and in May of the same year, the Group received permission to conduct
development operations. The Group soon became the leading organisation in the Sanroku Line area,
and it commenced construction operations in November 2015. We plan to develop the land that isallocated for large-scale commercial use, envisaging lots for distribution centres, and manufacturing
and processing facilities. We aim to open part of the area for common use in fiscal 2019.
Residential population in western area
（as of February,2017）

Saito

Minoh
City

Ibarakicity

Number ofhouseholds

1,943

2,691

4,634

Current
population

5,887

8,190

14,077

population/
Number ofhouseholds

3.03

3.04

3.03

central-east area

Sanroku Line area

Total

Size of each area

Size

Western
area

Centralarea

Easternarea

312.6ha62.5ha367.5ha99

Global network（International Transportation）【Initiatives of International Transportation Business】
・ Strengthening business development in Africa
・ Strengthening business in Asia
・ We established a base in Johannesburg and・ We constructed new logistics centres
expanded business operations through the・ We further expanded the network
Greater Europe Section (includes Dubai base)・ We advanced capabilities for global
governance by establishing Asia headquarters
and ASEAN headquarters
Number of bases: Japan=34, Overseas=113（as of April 1, 2017）◆New base in Mexico
July 2016 saw our establishment of a sales
office in the Mexican Plateau’s Bajio region,
which is continuing to expand as a major
centre of automotive manufacturing.
We are aiming to expand operations in
Mexico.

◆New logistics centres in the
ASEAN region
We completed the construction of a logistics
centre in Indonesia’s fast-growing market. It
primarily handles such products as
automotive components, medical equipment,
and electronic components.
Continuing along this line, we are building alogistics centre in Singapore. This logistics
centre will be the Group’s largest such
facility and exploit the significant advantages
that Singapore affords as an international
logistics hub.

◆Strengthening business development in East Africa
A growing number of Japanese companies are entering African markets such as Kenya and South Africa, and thesemarkets are expected to grow over the medium-to-long term. Accordingly, we aim to strengthen operations in East
Africa by focusing on these markets.

We were the only Japanese company to participate in the Japan Fair, a side event at the Tokyo International Conference on
African Development (TICAD) held in Kenya in August 2016.
In March 2017, we attended the Business Symposium organised by Kenya’s ambassador to Japan, and used the opportunity
to introduce the logistics services and initiatives we are developing in Africa.
100Hotel network of the Hankyu-Hanshin-Daiichi Hotel Group
Directly managed hotels (Hankyu Hanshin Hotels) 19Hotels 4,933 rooms
Other (franchises, etc.)

29Hotels 5,760 rooms

48Hotels
10,693 rooms（as of April 1, 2017）

・The numbers of hotels and rooms do not include the Ritz-Carlton Osaka (Kita-ku, Osaka City, 292 rooms).

Directly managed hotels
Dai-ichi Hotel Tokyo
Dai-ichi Hotel Annex
Daiichi Hotel Tokyo Seafort
Kichijoji Dai-ichi Hotelremm HIBIYA
remm AKIHABARA
remm ROPPONGIHotel Hankyu International
Hotel new Hankyu Osaka
Hotel new Hankyu Annex
Hotel Hanshin
Umeda OS hotel ※remm SHIN-OSAKA
Senri Hankyu Hotel
Hotel Hankyu Expo Park
Takarazuka Hotel
Rokkosan Hotel ※Hotel new Hankyu Kyoto
remm KAGOSHIMA

Ours Inn Hankyu
Ginza Creston
Dai-ichi Hotel Ryogoku
Dai-ichi Inn Ikebukuro
Dai-ichi Inn Shonan
Toyama Dai-ichi Hotel
Dai-ichi Inn Shinminato

Hotel Concorde Hamamatsu
Tokyo Dai-ichi Hotel Nishiki
Hotel Boston Plaza Kusatsu
Hotel Royal Hill Fukuchiyama
Amano Hashidate Hotel
Osaka Dai-ichi Hotel
Arima View Hotel urara

Kyoto,
Osaka,
京阪神
Kobe

11

1

Maniwa Riverside Hotel
Kure Hankyu Hotel
Hotel Ichibata
Tokyo Dai-ichi Hotel Shimonoseki

Takamatsu Kokusai Hotel
JR Hotel Clemant Tokushima

Other(franchises, etc.)

JR Hotel Clement Takamatsu

Tokyo Dai-ichi Hotel Iwannuma Resort

The Crown Palais New Hankyu Kochi

Tokyo Dai-ichi Hotel Tsuruoka
Tokyo Dai-ichi Hotel Yonezawa

Tokyo Dai-ichi Hotel Matsuyama

Tokyo Dai-ichi Hotel Shin-Shirakawa

Takakura Hotel Fukuoka

Imabari Kokusai Hotel※Hankyu-Hanshin Hotels are entrusted operation

Tokyo
東京地区
東京地区
・直営 7

5

・その他4

3

101