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Management Plan

Long-Term Management Vision for 2025

In order to become a corporate group aiming for growth even in the society changing in the future, the Group established the "Hankyu Hanshin Holdings Group Long-Term Management Vision for 2025" in 2017. In this Long-Term Management Vision, we have determined to endeavor to enhance the sustainable corporate value through following four strategiese under the slogan of "enhancing line-side areas and expanding fields".

Placement of Long-Term Management Vision

The Long-Term Management Vision plays a role as a bridge between the "Group Management Philosophy" and the "Medium-Term Management Plan" which is reviewed each fiscal year.

Group Management Philosophy, Long-Term Management Vision, Medium-Term Management Plan from top to bottom

Long-Term Management Vision (Overall Vision)

Slogan: Enhancing line-side areas and expanding fields

*1 Businesses that own or use such stock as property and other fixed assets (including the railway business, real estate leasing business, broadcast and communications business, and Hotels Business)

*2 Businesses that, instead of owning large-scale stock, use business know-how, human resources, brand assets, and other intangible assets (including the real estate sales business and other businesses, sports business, stage business, information services business, Travel Business, and International Transportation Business)

Long-Term Management Vision(Four strategies)

Strategies 1Umeda and line-side areas x stock businesses
Make our railway the absolute best among the Kansai networks.

We aim to increase the resident and non-resident population of lineside areas. To this end, we will channel into these areas the dynamism of the Tokyo-Nagoya-Osaka axis and the power of Asia and other regions of the world, attract new industries and cutting-edge technologies ahead of other companies, and support efforts to develop thriving local communities.

Strategies 2Tokyo metropolitan area and overseas markets x stock businesses
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. To compensate for downsizing in the Kansai area, we will diversify our property profile by acquiring additional assets including rental property in Tokyo’s large market and in overseas markets that are set to grow.

Strategies 3Flow business
Strengthen competitiveness by thoroughly pursuing brand optimisation and differentiation.

Thoroughly optimise the Hankyu Hanshin brand value and differentiate the products and services from the competition so as to strengthen competitive edge and achieve further business expansion.

Strategies 4Group-wide initiatives, new business fields, etc.
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 technologies into existing businesses, venture into new business fields, and thereby provide culturally enriched and innovative lifestyle options.

Management Indicators

We will pursue the four strategies with a view to achieving the following targets as of 2025 (fiscal 2026). Achieving these targets will keep us on course for maintaining at least the current levels of operating income in the 2040s, when demographic changes will have had a major impact on business. As a result, we will remain one of the most profitable and financially sound private railway company.

*3 EBITDA=operating income + depreciation expenses + amortisation of goodwill

  Management Indicators Targeted figure for 2025
(FY2026)
Profitability operating income ¥120 billion
EBITDA*3 ¥200 billion
Financial soundness Interest-bearing debt
/EBITDA ratio
Between 5 and 6 times

* Please see Hankyu Hanshin Holdings Group Results Briefing Materials for Fiscal 2019 (fiscal year ended 31st March 2019) for more details.

Summary of the Medium-Term Management Plan

Last year, we established the Medium-Term Management Plan covering the term from fiscal 2019 to fiscal 2022 as a concrete action plan to fullfill the Long-Term Manegement Vision. In this plan, we aim at becoming a corporate group capable of stably recording the operating income of ¥110 billion in fiscal 2022 as the midterm target year so that we can reach the target of the operating income of ¥120 billion in fiscal 2026 by promoting policies and measures as follows in accordance with the four strategies as set forth in the Long-Term Management Vision.

Basic Way of Thinking about Medium-Term Management Plan

The operating income recorded ¥110.3billion in fiscal 2016, ¥104.1billion in fiscal 2017, ¥105.2billion in fiscal 2018 and it has continued to be on the level of ¥100 billion/year excluding extraordinary income such as that from the sale of sites for large-scale facilities. In this plan, in order to increase the basic income level from ¥100 billion to ¥120 billion by fiscal 2026, we have determined to allot funds by attaching importance to investments for growth in accordance with the abovementioned Strategies 1 to 4 and then aim at recording the operating income of ¥110 billion as the mean amount between ¥100 billion and ¥120 billion in fiscal 2022 as the midterm target year.

Strategy 1 : Further strengthen the stock businesses in the Umeda and line side areas

Strategy 2: Accumulate stock in the Tokyo metropolitan area and overseas markets

Strategy 3 : Strengthen competitiveness of flow businesses

Strategy 4 :
Make greater use of the Group's collective energies and venture into new business fields

Strategies 1 and 2 (stock businesses) among the abovementioned four strategies require considerable periods of time from making of investments until contributing to earning income. Also, Strategy 4 (ventures into new business fields) requires considerable periods of time before such ventures can stand on their own feet as independent businesses. Therefore, we will aim at increasing the operating income by ¥10 billion mainly with efforts in accordance with Strategy 3, that is, with the flow businesses, such as the condominium businesses including those overseas, the information services business, the travel business and the international transportation business, during the term of this plan (from fiscal 2019 to fiscal 2022 as the first-half term of the Long-Term Management Vision).

Financial Policy

Financial Policy

By considering that we shall endeavor to increase the operating income and the EBITDA further in order to fulfill the Long-Term Management Vision, we will attach importance to investments for the growth in allotting funds in accordance with Strategies 1 to 4 mentioned above.

On the other hand, we will attach importance to the "interestbearing debt /EBITDA ratio" as an indicator showing the financial soundness and thus continue to keep the soundness of our financial position.

Regarding the returns to shareholders, we consider the total return ratio to be an indicator of the returns to shareholders, and our basic policy is to endeavor to stably pay dividends and acquire treasury shares. The total return ratio is planned to be 30% in this plan.

Capital investment (including lending) based on four strategies

Capital investment (including lending) in fiscal 2018-2021

*4 The plan announced on 23 May, 2018.

Returns to Shareholders

Returns to Shareholders

*5 Formula for calculating total payout ratio

*6 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.

Fiscal 2026 management indicators outlook

  FY2019
Results
FY2020
Forecasts
FY2022
Forecasts
FY2026
(The company we
hope to be)
Operating income ¥114.9billion ¥107.0billion ¥110.0billion ¥120.0billion
EBITDA ¥171.4billion ¥167.0billion ¥180.0billion ¥200.0billion
Interest-bearing debt ¥877.1billion ¥950.0billion ¥1,060.0billion -
Interest-bearing debt
/EBITDA ratio
5.1times 5.7times 5.9times between 5 and 6times
D/E ratio*7 1.0times 1.0times 1.0times -
Net income attributable
to owners of the parent
¥65.5billion ¥67.0billion ¥70.0billion -
ROE 7.6% 7.4% 7% -
(Reference)      
Net interest-bearing debt*8 ¥848.2billion ¥925.0billion ¥1,035.0billion -
Net interest-bearing debt
/EBITDA ratio
5.0times 5.5times 5.8times -

*7 D/E ratio= interest-bearing debt / equity

*8 Net interest-bearing debt= interest-bearing debt - cash and deposits