Promotion of Tobu Group Medium-Term Business Plan

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Promotion of Tobu Group Medium-Term Business Plan Promotion of Tobu Group Medium-Term Business Plan November 16, 2018 TOBU RAILWAY CO., LTD. Promotion of Tobu Group Medium-Term Business Plan Status of Progress on Medium-Term Business Plan 1. Tobu Group Management Strategy ・・・・・・・・・・・・・・ P2 2. Three Pillars of Management Strategy ・・・・・・・・・・・・・・ P3 – 5 3. Progress on Medium-Term Business Plan • Initiatives in Asakusa-Skytree area ・・・・・・・・・・・・・・ P6 – 7 • Acquisition of TOBU STORE shares ・・・・・・・・・・・・・・ P8 • Enhancement of Group Point Service ・・・・・・・・・・・・・・ P9 • Initiatives in each business ・・・・・・・・・・・・・ P10 – 20 All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 1 Promotion of Tobu Group Medium-Term Business Plan Tobu Group Growth Strategy ◆ Maximization of revenue through focused investment in key areas Tobu Expand revenue by focusing investments in Asakusa/TOKYO Group SKYTREE, Nikko/Kinugawa, Ikebukuro and Policy Ginza/Yaesu/Coastal areas. Long-Term Management ◆ Improvement of value along railway lines through Framework further cultivation of businesses along railway lines Raise value along railway lines by strengthening the railway Long-Term network and improving convenience of life to increase the population along railway lines. Management Vision ◆ Promotion of new businesses outside of railway lines Accurately capture market demand and changes in the Business Strategies environment and seek new growth and increased recognition Growth Maintenance of Further in areas outside of railway lines to expand the business. enhancement of strategy financial strength ◆ Inbound initiatives shareholder return Promote attraction of foreign tourists and play a role in making Japan a travel destination while working on inbound Phase1 Phase2 Phase3 businesses in new fields. Medium-Term Medium-Term Medium-Term Business Plan Business Plan Business Plan 2017-2020 2021- Phase1 • Promotion of growth investment for the next stage Positioning of Medium-Term • Planting/cultivation of business seeds anticipating Tokyo Olympics and Paralympics and thereafter Business Plan 2017-2020 • Increased revenue through incorporation of rapidly growing inbound demand All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 2 Promotion of Tobu Group Medium-Term Business Plan Progress on Investment Plan 2013-2016 2017-2020 Total capital Total capital expenditures expenditures ¥237 billion ¥320 billion (plan) (excluding acquisition of beneficial interests) Total strategic investments for growth Strategic Approx. ¥59 billion investments (approx. ¥29 billion in 1H FY2018) for growth ¥ 107.0 billion Main 1H investments Growth investment • TOBU STORE Share acquisition ¥45.2 billion • TOBU TOWER SKYTREE Share acquisition • Acquisition of new land/buildings (4 properties, including in Asakusa) Ongoing Ongoing investment in investment in updates and updates and safety measures safety measures ¥191.8 billion ¥213.0 billion All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 3 Promotion of Tobu Group Medium-Term Business Plan Maintenance of Financial Strength Maintain financial strength while working on growth investment and further enhancement of shareholder return Interest-bearing debt/EBITDA multiple [Medium-Term Business Plan 2017-2020] Shareholders equity ratio Interest-bearing debt balance Interest-bearing debt/EBITDA (Billion yen) Interest-bearing debt balance (Plan) multiple of around 6.5x-7x 8,500 850.0 Interest-bearing debt balance (Medium-Term Business Plan) 27.6% 27.8% 7.9x 26.4% 8,000800.0 7.0x 7.0x 23.5% 6.6x 6.6x 24.6% 6.5x ¥830.0 ¥823.5 ¥799.7 ¥790.3 ¥789.9 ¥819.9 ¥794.6 billion billion billion billion billion billion billion 7,500750.0 FY2014 FY2015 FY2016 FY2017 2Q FY2018 FY2020 FY2018 full-year Medium-Term forecast Business Plan All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 4 Promotion of Tobu Group Medium-Term Business Plan 2018年度実施の資産管理事業再編に Further Enhancement of Shareholder Return かかる減損損失は除外した利益に Establish a total return ration of around 30% for the period average of the Medium-Term 基づき配当を実施予定 Business Plan while keeping a basic policy of providing steady dividends [Medium-Term Business Plan (2017-2020)] 18,000 Amount of treasury shares acquired 16,000 Total annual dividend 配当の基準となる利益には 14,000 ¥10 2018.9に実施した事業再編にかかる Dividend per share 12,000 billion 減損損失を除外する 10,000 8,000 2018.9に実施した事業再編にかかる 減損損失を除外した利益に基づき 6,000 ¥32.5 ¥35.0 ¥35.0 期間平均30%を目安とする 4,000 ¥30.0 ¥30.0 2,000 ¥6.4 billion ¥6.4 billion ¥7.0 billion ¥7.4 billion ¥7.4 billion 0 2014FY2014年度 2015FY2015年度 2016FY2016年度 2017FY2017年度 FY20182018年度予想 forecast 【 自 己 株 式 取 得 の 内 容 】 * Dividend per share reflects the impact of the reverse stock split (5 for 1 basis, ordinary shares) implemented on October 1, 2017. てを消却 All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 5 Promotion of Tobu Group Medium-Term Business Plan Becoming No. 1 hub in east area of Tokyo centered on two adjoining terminal stations ■ Creating lively and attractive area where people come and go from Asakusa to Skytree 2018–2020 Create biggest tourist area in Tokyo unifying Asakusa and Skytree areas by working on elevation at Skytree Station and promoting development of space where waterfront space, public park and commercial facilities are near to each other through public-private collaboration. 2021– Further enhance potential of whole area and make it No. 1 hub in east area of Tokyo by engaging in town development in collaboration with government and redevelopment utilizing company-owned land. Asakusa area (Sensoji Temple) Nakamise Sumida Park Asakusa Station Kaminarimon Tokyo Skytree Station Gate Oshiage Skytree area Station Azumabashi area Copyright(c) NTT Geospace. All Rights Reserved All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 6 Promotion of Tobu Group Medium-Term Business Plan Establishment of walkway connecting two terminals and tourist areas ■ Town development utilizing downtown alleys and communities to connect Asakusa and Skytree Development concept: LIVE to Trip People, communities and culture intermingle for living like traveling (extraordinary) and traveling like living (ordinary). Develop destination-type waterfront space where people can experience community-based downtown appeal by coming and going. Park Side Zone Hotel Zone River Side Zone Activities and Hotels with Compilation-type restaurant functions community functions themed zone linked linked with public like café lounges with docking Sumida Park parks and waterfront function environment Food, drinks, goods, services Restaurants, etc. Hotels (C)Yahoo Japan,(C)ZENRIN Asakusa Bridge Tokyo Skytree Station Genmori Kitajukken River Station To Honjo-azumabashi View from Asakusa Total area Approx. 3,500m2 (illustration) Spring 2019 Commencement of work Daytime Nighttime Spring 2020 Opening All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 7 Promotion of Tobu Group Medium-Term Business Plan TOBU STORE greatly contributing to maximization of Group synergy Strategic store openings utilizing our asset Effective utilization of TOBU STORE asset holdings, primarily inside and under stations holdings, etc. Active rollout of small stores with floor area Promote highly convenient development of around 330m2 primarily selling foodstuffs utilizing Group synergy TOBU STORE Hikifune Ekimae Complex development project in front of (tentative name) Shingashi Station Open first store with new format in conjunction Consider construction of complex consisting of with second stage of EQUiA Hikifune opening rental condominiums, stores, etc. as collaborative (To open in March 2019) project with TOBU STORE in conjunction with rebuilding of TOBU STORE Shingashi September 19, 2018 October 25, 2018 Profile of TOBU STORE Co., Ltd. Conversion to Conversion to wholly- Number of stores 58 consolidated subsidiary owned subsidiary via via takeover bid demand for sale of shares (22 in Tokyo, 23 in Saitama, 13 in Chiba) (TOB) 4 food service stores Operating revenue ¥83,661 million (Fiscal year ended Feb. 2018, consolidated basis) All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 8 Promotion of Tobu Group Medium-Term Business Plan 既存の顧客基盤 多頻度 Expansion of Group earnings by strengthening Group point service 日常利用 Made into グループポイントサービスの利便性と Strengthening of sales subsidiary and maximization of 新たな顧客 魅力を高めグループの利用促進を図る NEW earnings through Expansion to daily Tobu Group Group CRM 多頻度 shopping scene points 日常利用 Expansion of use to commuter passes/PASMO (2018) (2006–2007) グループポイント Introduction of サービスの見直し TOBU Card points (2004) グループ 間連携 ストア による 連結化 増 による All rights reserved. Copyright © TOBU RAILWAY CO.,LTD. 2018 9 増 東武ストアの完全子会社化後のグループ収益の推移(イメージ) Promotion of Tobu Group Medium-Term Business Plan Tokyo Skytree Town® building up its position as a leading shopping center in Tokyo Ongoing initiatives to expand revenue Making Skytree a symbol of Tokyo ■Holding events to attract customers ■Initiatives ahead of Tokyo Olympics/Paralympics • Sorakuro Festival: Momokuro in Tokyo Skytree • Two-year countdown ceremony • Tie-up with Where’s Wally? • Sale of Olympic/Paralympic-related merchandise • Taiwan tourism fair, etc. Momoiro Clover Z Taiwan Tourism Fair Where’s Wally? Olympic/Paralympic-related collaborative event collaborative event Day of event ©TOKYO-SKYTREE ©TOKYO-SKYTREE merchandise display ©DreamWorks Distribution Limited. All rights reserved. ■Strengthening communication/sales targeting 1H FY2018 Results overseas customers • Improved convenience with consolidated duty-free counter Tokyo Solamachi Up 3.6% sales (YoY) ■Creating new customer demand Tokyo Solamachi • Launch of
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