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Management Plans & Strategy

Toward achieving sustainable and dynamic growth over the future, we newly established the long-term target level, “Challenge Target”, and drafted and released a three-year plan serving as a road map FY2017 - FY2019 Seibu Group's Medium-Term Management Plan.
In the plan, we will expand existing business fields and create new business areas to realize “Challenge Target”.

  • Schematic diagram of the Seibu Group's strategy, with definitions
  • Long-term strategy
  • Next long-term target level
  • Basic policies and theme of Medium-Term Management Plan

1. Schematic diagram of the Seibu Group's strategy, with definitions

[ Group Vision ]
Our management policies and philosophy. Our guidelines for employee behavior.
[ Long-Term Strategy ]
Basic concept for realizing our Vision. Our strategy and direction for the next ten years.
[ Medium-Term Management Plan ]
3-year Management Plan based on our Long-Term Strategy, addressing to the market environment and other changes.

2. Long-Term Strategy

Basic Policies

1. We will make the best use of our management resources (people, assets, funds) to maximize the Seibu Group's corporate value.

(1) People: Personnel Strategy
We will hire able personnel and leverage their skills with training to maximize the value of our human resources. We will place people where they fit best in the Group to make them more effective and strategically valuable. This will improve employee motivation, allowing us to strengthen our foundation of committed employees.
(2) Assets: Asset Strategy
We will focus our assets on three tasks: enhancement of the value of existing aseets, portfolio re-building, and concentration on management resources on core businesses. In these ways, we will aim to maximize our corporate value from each viewpoint.
(3) Funds: Financial Strategy
The pillars of our financial strategy are investment management, fund procurement management, and investor relations (IR) activities. Choosing the ideal balance of rewards for stakeholders (customers, shareholders, lenders, employees, and others) and investment in growth will allow us to improve the Seibu Group's earning power and maintain a sound financial standing.

2. Each business will aim to be the top in its field and support its customers' lives.

By combining diverse services from the entire Seibu Group, we will enrich the range of services we can offer.

Basic Policies of the Three Core Businesses
(1) Urban Transportation and Regional Business (Role: The sources of improvememt of corporate value)
Seibu Railway makes it happen
To be a desired railway line, clarify the image of areas along the line
To encourage the inflow of people to areas served by Seibu Railway, establish an easy way to buy/sell houses
To encourage the inflow of people, develop neighborhoods with different characteristics
To encourage railway use, give people a reason to use the railway for sightseeing
Continue to pursue safety
(2) Hotel and Leisure Business (Role: The motive power to drive corporate value even higher)
Establish a position as the industry's number-one* hotel and leisure group.
*Number one in sales, profitability, customer gratification and global development capabilities
Secure an unrivaled share of the MICE* market
*"MICE" takes its four letters from "meetings" (largely held by companies), “incentive travel” (which covers travel as a reward and for training), “conventions” (usually held by international bodies, associations, and academic groups), and "exhibitions and events" (which cover exhibitions, trade fairs, and others). MICE business tends to attract large numbers of people and generate a great deal of interaction.
Provide travel that fulfills the psychological needs
Disseminate Japanese hospitality around the world
(3) Real Estate Business (Role: The key to improving corporate value)
Realize potential profitability by making effective use of the Group's assets
Based on our asset strategy, expand earning opportunities, exchange old assets for new ones, and make effective use of under-utilized or unutilized land
Make effective use of real estate in core areas to realize potential profitability
Anticipate qualitative and quantitative changes in populations living along our railway lines and develop businesses that raise value along those lines
Strengthen portfolio management

3. Next long-term target level

Challenge Target (Next long-term target level)

Toward Challenge Target

Expand existing business fields

  • Make effective use of the Seibu Group's assets, which are its greatest strength
  • Grow by utilizing the characteristics of each business to rebalance the business portfolio

Create new business areas

Seibu Laboratory was established within Seibu Holdings as a specialist department for creating new business areas through free ideas. The entire Group will aim to achieve the “Challenge Target.”

Challenge Target (Long-term target level)

4. Basic policies and theme of Medium-Term Management Plan

- A three-year plan serving as a road map to the “Challenge Target” -

Theme

“Sustainability & Dynamism”
Toward sustainable, dynamic growth

Basic policies

  • Pursue innovations, from a new viewpoint and with speed
  • Establish a growth platform from a long-term perspective

key issues

To realize sustainable, dynamic growth, we need to focus on addressing the key issues of “create new business areas” and “expand existing business fields” based on our basic policies.

Approaches to the key issues

① Strengthen marketing
Paradigm shift
In order to achieve further growth, we will respond to paradigm shifts, such as demographic changes and the increase in inbound (foreign visitors to Japan).
aging population, decreasing birthrates, increasing inbounds,etc.
Inbound
Enrich service products, create tourism routes - Responding to accommodation demand
Senior
Develop Seibu CCRC
Children
Providing safe, fun, experiences (Examine Amusement park, facility using railway equipment, etc.) Providing nurseries to support young mother
Precise grasp of customer demand
Effective use and analysis of customer database and big data using ICT
② Effective use of the Group's assets
Promoting effective asset strategy
Value-up of business
  • Promote hotel renovation
  • (Tentative) Seibu Railway Ikebukuro Building
  • Tokorozawa Station East Building Plan, etc.
Re-balance portfolio
  • Takanawa and Shinagawa area
  • Membership hotels (Vacation Ownership)
  • Shibakoen area, etc.
Concentrating resources to core business
  • Diversion of Resort assets
  • Toshimaen, etc.
③ Collaboration inside and outside the Group
Expanding business alliances
Collaborating strengths and knowhows with companies outside the Seibu Group
Compensate deficient areas through external collaboration (new technologies such as AI and automated driving, human resources, etc.)
④ Rigorous and efficient capital expenditure
Investments to increase value above the hurdle rate
Apply a hurdle rate to rigorously select investments with an awareness of WACC in order to create value
⑤ Create an organization and corporate culture conducive to generating innovation
Operational reforms, new working style
Enhance decision-making and respond to risks
Working styles and platform to enable participation of diverse human resources

(1) Urban Transportation and Regional Business

Steady growth of commuter and non-commuter revenue

Long-Term Vision

Seibu Railway makes it happen

  • Ensure safety to provide comfort
  • Strengthen in & out cooperation to improve profitability
  • Challenging the best customer satisfaction
  • Drastic approach to business efficiency

Key initiatives in the planning period

  • Seat reservation service (40000 series)
  • New Limited Express service
  • Railway corridor facilities (Seibu-Chichibu Matsurinoyu Onsen spa, Tokorozawa Station East Building Plan, Metsa)
  • Responding to inbound demand
  • Strengthen promotion in railway line corridor
  • Aggressive event promotions
  • Redevelopments and town developments in Seibu railway line corridor
  • Reflecting steady employment rate and demographic statistics

Urban Transportation and Regional Business KPI* (Sales indicator)

*KPI (Key Performance Indicator)

(2) Hotel and Leisure Business

Dramatic growth in RevPAR by shifting market, CAPEX effect, and revenue management

Long-Term Vision

Establish a position as the industry's number-one hotel and leisure group

  • Shifting target to market responding to changes
  • Reinforcing continuous initiatives* (*Revenue management, MICE, improving CS, etc.)
  • Challenging new business territories in order to establish long-term business foundation that is sustainable to changing and diverse demands

Key initiatives in the planning period

  • Shift to a target market with customer sectors with a higher unit price
  • Manifestation of the effects of investments to increase value
  • Reputation management, such as improving customer satisfaction
  • Attract customers to direct channels (in-house)
  • Continue to strengthen revenue management

Hotel and Leisure Business KPI* (Sales indicator)

*KPI (Key Performance Indicator)

(3) Real estate Business

Steady development plan to increase leasing space and portfolio stabilization

Long-Term Vision

Realize potential profitability by making effective use of the Group's assets

  • Creating and expanding earning opportunities with big scale redevelopment
  • Improving profitability of existing retail facilities along the Seibu railway corridor
  • Aggressive approaches to new and growing business territories

Key initiatives in the planning period

  • (Tentative) Seibu Railway Ikebukuro Building
  • Tokorozawa Station East Building Plan
  • Emilive Saginomiya
  • (Tentative) Higashi-Nagasaki Station South Plan, etc

Real estate Business KPI* (Sales indicator)

*KPI (Key Performance Indicator)

(4) Construction Business

  • Further improvement in profit ratio through selection orders and cost control
  • Improve productivity by using i-Construction and ICT technology

(5) Hawaii Business

  • Value-up investment including large-scale renovation of existing hotels
  • New development of home owner business

(6) Other

  • Strengthening the incorporation of the inbound of the Izu Hakone and Ohmi business and making effective use of owned real estate
  • Enhance team power of Seibu Lions, increase attractiveness of MetLife Dome and strengthen attracting its events

Consolidated quantitative plans

Management Benchmarks FY2016 Result
(Fiscal yearended March 2017)
FY2019 Plan
(Fiscal year ending March 2020)
Operating revenue (Net sales) ¥ 512.0 billion ¥ 580.0 billion
Operating profit ¥ 62.4 billion ¥ 73.2 billion
EBITDA (Operating profit before depreciation) ¥ 108.1 billion ¥ 131.6 billion
 EBITDA margin 21.1% 22.7%
Net interest-bearing debt ¥ 880.0 billion ¥ 934.5 billion
Net interest-bearing debt / EBITDA multiple 8.1 times 7.1 times

Medium-term shareholder return policy

The policies for shareholder returns during this management period based on Seibu Group's financial strategy are as follows.

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