Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Message from the Officer in Charge of the Overseas Business

Our Dedication to the Overseas Business—a Growth Driver for Sekisui House

major initiatives. The first is to expand our sales area in the United States
through M&A to secure new platforms. Specifically, we aim to expand fromthe west coast and southern regions where we currently operate into thesoutheastern United States. The second is to roll out our SHAWOOD
wooden-frame housing. Due to global climate change, demands for housing performance are changing year by year. Of our detached houses in ourdomestic business, 93% are ZEH, and our technical capabilities developedin Japan for withstanding increasingly severe natural disasters, such asresilient foundations and external walls, will serve as a valuable cornerstone

Toru Ishii
Director of the Board
Senior Managing OfficerIn charge of Division ofDevelopment Businessfor the overseas business going forward. A pilot project for the SHAWOOD
brand that we implemented in Las Vegas was well received by the market,
reaffirming our confidence that our efforts are on the right track. Following

SHAWOOD pilot project in Las Vegas

this success, in 2023, we are commencing a project of more than 50 new   Global SHAWOODSHAWOOD houses in the Sommers Bend community in California.

aim to establish business foundations through M&A.

Leveraging strengths in safety, comfort and design, we will establish a mar-In this way, we will continue implementing aggressive growth strategies

The Overseas Business, operating in the United States and other countries,

ket advantage with SHAWOOD, primarily in areas with high volumes offor the homebuilding business to develop the overseas business portfolio

has grown to account for approximately 18% of total net sales in FY2022.

high-price new home closings.

from its previous focus on the development business into a dual-pillar

In the past, our business in the United States was mainly in development,

In the U.S. multifamily business, we aim to diversify our partnerships andbut we have been expanding the homebuilding business; in addition tobuild a structure for collaboration to promote new development and imple-Sixth Mid-Term Management Plan,

Woodside Homes, we welcomed Holt Homes to the Group in December

ment diversified investment and recovery aligned with each business area.

we aim for the overseas businessstructure of development and homebuilding. In FY2025, the final year of the2021 and Chesmar Homes in July 2022. Our collaborative efforts withIn Australia, we are engaged in the condominium development businessto account for approximately 25%

these three U.S.-based companies have been successful, driving businessand homebuilding business. By implementing area strategies and establish-of net sales and approximately

performance. We have set and are working toward the target of supplying

ing our brands, we aim to further expand our business in Australia into a

30% of operating profit. We will

10,000 homes in the overseas business annually by FY2025, the final year

second pillar of the overseas business, following to the United States. In

continue advancing the overseasof the Sixth Mid-Term Management Plan.

Singapore, we will work to strengthen relationships with local partners Far

business as a growth driver sup-East Organization and Frasers Property, while in the United Kingdom, weporting the Sekisui House Group.

Under the Sixth Mid-Term Management Plan, we will implement two70

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating ValueBusiness Strategy

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social71

Overseas Business Regions and Major Projects

Overseas Business

United KingdomTehalehWashington©2022 Steven J MagnerPhotography, LLC

China

The Merian
California

We sell detached houses and residential land and develop condominiums for sale or rent andNevada

United Statesother properties in the United States, Australia and elsewhere. Using the Sekisui House technologies we have cultivated in our domestic businesses in areas including safety, peace ofWest Village
Brisbane

provide new value in housing to maximize the happiness of our customers and society.
   Sekisui House Global site

Texas

Singaporemind and comfort, we will help resolve social issues in each country and conduct initiatives toOne Holland Village
Holland Village

Ingleburn Centre
Near Sydney

Review of the Fifth Mid-Term Management Plan and Strategies Going Forward

Australia

Gledswood Hills
SydneyUtahWashington

Net sales / Operating Profit / Operating Margin(%)(Billions of yen)

Under the Sixth Mid-Term Management Plan, we will advance business

1,000

ness by transferring Sekisui House technologies internationally and integrat-with a focus on aggressive expansion. In the development business, by800

ing the housing technologies the Group has cultivated in Japan with lifestyleworking with new partners, we aim to expand our business areas from their600

design proposals and services.

current location along the U.S. west coast into cities in the sun belt and400 370.6
10.7
200

In the overseas business, we are focusing on creating value through happi-

Under the Fifth Mid-Term Management Plan, we focused on enhancing

east coast gateway regions. By diversifying our portfolio in terms of part-quality. In cooperation with Woodside Homes, we worked to transfer

ners, business areas and products, we seek to enhance business stability

Sekisui House technologies by, for example, applying the Company’sand scale. In the homebuilding business, we will implement M&A targeting

4020202021

builders to horizontally expand our successful business model. At the sameStates. These efforts were well received locally and have become a strengthtime, we will focus on reinforcing Group governance, aiming to expand

for Woodside Homes. In addition, we steadily advanced preparations forbusiness in an orderly and controlled manner. In addition, we will transfer

launching general sales of SHAWOOD homes in the United States. In orderSekisui House technologies to the two recently acquired Group builders

Net Sales by Country

to expand the successful homebuilding business model that we have pio-and builders acquired going forward, elevating lifestyle design proposals

China

neered with Woodside Homes, we conducted further M&A in 2021andinto a strength of all Group builders. We also aim to stably expand theAmerican customers. In Australia, we will strengthen systems aimed at fur-and share our dream of realizing this vision in the United States. In the multi-

ther business expansion, while in the United Kingdom, we aim to securefamily business, we worked to strengthen cooperative relationships with anopportunities for new initiatives. By thus reinforcing businesses and pursu-outstanding local partner. In select cities where growth is expected, weing new initiatives in each country where we operate, we will strive todeveloped and leased high-added-value rental housing, steadily advancing

expand the overseas business portfolio and secure greater stability.

sales of such properties at optimal times to maximize profit.

8.7

49.0
2023

10.0
93.0

54.7
2024

2025

100
(FY)

(Plan)areas of the United States we have not yet entered and acquire additional

these companies resonated with our Corporate Philosophy and global vision

2010.273.8
2022

30482.5

14.2

50.1

39.7

0

ucts based on the two-by-four housing construction common in the United

SHAWOOD business to provide new value in the form of happiness to630.6

521.1
388.9
12.9

strengths in lifestyle design proposals to customer engagement and prod-2022, welcoming Holt Homes and Chesmar Homes into the Group. Both of50927.0

Net sales
Operating profit (Left scale)Operating margin (Right scale)

5%Australia

15%

Australia

12%

FY2022
Net sales¥521.1 billion

United States

83%

FY2025Net sales plan
¥927.0 billion

United States85%

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Overseas Business

U.S. (Homebuilding business, master-planned community business)

HighlightBusiness Policy

Expanding our sales area through M&A and comprehensively promoting the transfer of technologies,including product and lifestyle proposals

Strategy

2 Technology transfer
1 Builders M&A    —Strengthening governance for the Group’s builders    —Transferring Sekisui House technologies    —Proactively promoting intragroup collaboration    —Expanding our own brand (SHAWOOD)    —Entering the southeastern United States through M&A

Entering the southeastern U.S. through M&A

Technology Transfer and Expansion of SHAWOOD
As we work to develop markets through Woodside Homes, Holt Homes andChesmar Homes, we are advancing the transfer of Sekisui House technologies with an eye to launching lifestyle proposal products, promoting customer

West
Woodside Homes
Holt Homes

approaches based on data analysis and engraining brand loyalty. At the sameExpand
into Southtime, we will roll out SHAWOOD, our brand of houses that features outstanding safety, comfort and design, mainly in areas with high volume closings ofSouthhigh-priced new houses, such as California, Nevada, Arizona and Utah.

Texas
Chesmar Homes

Rollout of SHAWOOD

OR2023
Launched prototype
sales in Sommers Bend,California

Western U.S.

Housing sales

Roughly 25% share of theU.S. market

Roughly 60% share of theU.S. market

High-end homes above $750K

High-end homes above $500K

Approx. 36,000

Approx. 122,000

Housing sales: Approx. 150,000 (FY2022)
High-end market: 24% of homes are
priced above $750k
Harbor and transport: Easy marinetransport, short land-travel distance

Housing sales: Approx. 394,000 (FY2022)
High-end market: 31% of homes are priced
above $500K
Harbor and transport: Easy marine transport,
SHAWOOD business also feasible

Data source: U.S. Census
Because data on homes priced above $750,000 was not available for the southern United States for2022 onward, figures for homes priced above $500,000 are shown.

Salt Lake City

Northern California

Southern U.S.

Housing sales

IDWYNV
2024
Closing on 150 units,
mainly in California andNevada

2025

CACentral Valley

Southern California

Las Vegas

UT

Meet Our Group Builders—Working Together to Create Value
through Happiness
Our U.S. homebuilding business kicked off in earnest when we welcomed Woodside Homes into the Sekisui House Group in 2017. Since
then, the transition to a lifestyle proposal-based, value-oriented business tailored to customer lifestyles has proceeded smoothly, and wehave welcomed two new builders into the Group. Each of these companies differs in its corporate culture, business strategies and business area. To bring them together to advance operations as unitedmembers of the Sekisui House Group, we are building a cooperative
framework centered on SH Residential Holdings (SHRH). We haveselected a local hire—the longtime CFO of Woodside Homes—toserve as CEO of SHRH, and are working to transfer Sekisui House
technologies and enhance governance systems in order to generatevalue through happiness.

Holt Homes
Holt Homes joined the Group in December 2021 and operates in
Oregon and Washington. Holt has established a particularly strong
presence in the Portland market, where the development permitting
process is especially strict and barriers to entry are high. To expand
from its focus on first-time homebuyers,
Holt is focusing on uncovering customers beyond the entry-level and tapping
into the needs of potential customers todevelop new markets.

Chesmar Homes
AZ
PhoenixNM

Closing on 300 units in
California, Nevada, Arizonaand Utah
indicates the volume of closingsin each area of new houses forover $750,000

COChesmar Homes joined the Group in July 2022. Based in Texas,
Chesmar operates mainly in Houston, Dallas, Austin and San Antonio.
Chesmar stands out for its corporate culture that emphasizes humanhappiness as well as its high customer satisfaction and the ability of its
design experts to flexibly accommodate
customers. Chesmar is proactively
developing the high-end market andmay be part of the SHAWOOD rollout inthe future.

72

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Overseas Business

U.S. (Multifamily business)
Business Policy

Promoting new development while diversifying business areas and partnerships
1 Partnerships    —Diversifying business areas and partnerships

Strategy

2 Portfolio    —Diversified investment and recovery aligned with thebusiness area

37thparallel northMultifamily businessWe are working to expand and diversify our business area, from the west coast gateway region where we haveoperated until now, to include the sun belt and east coast gateway regions. In addition to the urban mid- tohigh-rise projects we have implemented to date, we are shifting to a project mix that includes suburban low- to
mid-rise and rural low-rise projects to diversify our investments. We will build a high-quality portfolio by maximizing profits through asset turnover while keeping a close eye on market conditions.

©2022 Steven J Magner Photography, LLC

Area of Holland
Partner Group

Target area

Australia, Singapore, and the United Kingdom
Business Policy

Aiming to secure robust business foundations and, to this end, striving to establish our brand capabilities and strengthen relationships with local partners in a way alignedwith each country’s market conditions

StrategyAustralia

Singapore

United Kingdom

Developing our operations into the second largest pillar of the overseas business throughthe execution of area strategies and the establishment of our brand presence

Securing close partnerships withprominent corporations in Asia

Executing M&A to transfer
our technologies and expand
into new business fields

We are working to develop closer partner-

We will develop businesses focused

Condominiums Development BusinessHomebuilding

We are developing condominiums, commercial facilities and complexes in

We are steadily working to acquire land for the SHAWOOD business inships with leaders in Asia’s real estate sector.

on pursuing the possibilities of pre-Sydney and Brisbane. We aim to transition to a more efficient portfolio

the high-end markets of Sydney’s suburbs (northern coasts, southern

We will advance joint business based onengineered housing while tacklingthat balances medium- to long-term large projects, in which we cancoasts and northwestern and South Coast areas) and to realize an inte-

win-win relationships that combine theirsocial issues arising from the hous-leverage our strengths, and short-turnaround projects, and to establish

grated system for processes from the receipt of inquiries to after-sales ser-strengths with ours.

ing shortage and delivering higher

brand equity via condo-

vice following closing inquality housing. We are also con-minium product planningorder to enhance brandsidering M&A with builders capable

based on analyses ofrecognition.

of embodying the core technological foundations of Sekisui House.

local needs.
   Projects USA   Projects Australia   Projects Singapore

73