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To Our Shareholders

We are working to maximize corporate and shareholder value while promoting the fiscal 2018 to 2020 Seibu Group Medium-term Management Plan and aiming to achieve sustainable and strong growth.

Financial results for the fiscal year ending March 2018

First of all, I would like to take this opportunity to thank the Company's shareholders for their consistent support.

Following the establishment of Seibu Holdings in 2006, the Seibu Group prepared the foundations for its operations based on a strategy of concentrating on its core businesses. Following that period, the Group moved to a transitional period aimed at growth, during which we shifted our management focus to increasing cash flow by raising the value of the Group’s property portfolio, exemplified by Tokyo Garden Terrace Kioicho, through increased investment. As a result, we have been able to accelerate growth.

In fiscal 2017, revenue from the Group's hotel business grew as the Tokyo Prince Hotel and other hotels reopened following renovation work, and hotel room prices and occupancy rates increased. Rental revenue from Tokyo Garden Terrace Kioicho was also up compared with the same period of the previous fiscal year. In the railway business, revenue rose as we stepped up promotional campaigns for the Chichibu area in Saitama Prefecture and the Saitama Seibu Lions baseball team, as it competed in the pennant race. In addition, Yokohama Arena Co., Ltd., contributed to results after becoming a consolidated subsidiary. Owing to the contribution of these and other factors, consolidated operating revenue increased 3.6% to ¥530.6 billion, marking the sixth consecutive year of growth. Consolidated operating profits were also up compared with the same period of the previous fiscal year, climbing 2.9% to ¥64.2 billion—the second highest amount ever—mainly due to growth in revenue and the absence of one-time costs associated with the opening of Tokyo Garden Terrace Kioicho in the previous fiscal year.

Payment of dividends

As a basic policy, we maintain stable payments of dividends while reinforcing our financial structure by ensuring ample internal reserves, and work to raise corporate value and enhance the operational foundations of the Group as a whole.

Moreover, as part of the Seibu Group's long-term strategies, an important financial strategy is achieving an optimal balance between the return of profits to shareholders and investment in long-term growth. Accordingly, we will strive to distribute the earnings to shareholders based on a consolidated payout ratio of 15%, while actively pursuing investment that contributes immediate growth as set out in the new Medium-term Management Plan.

In consideration of the above, we decided to pay an annual dividend of ¥23 per share (including an interim dividend of ¥11.5 per share) for fiscal 2017. An annual dividend of ¥23 per share is planned for fiscal 2018.

Confident in the Seibu Group's tremendous growth potential, we will continue carrying out reforms in an effort to maximize corporate and shareholder value. As we pursue these endeavors, we ask for the understanding and support of all of our shareholders.

Takashi Goto
President
SEIBU HOLDINGS INC.

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