March 19, 2019 To whom it may concern:
Company Name: Kyushu Railway Company Name of Representative: Toshihiko Aoyagi, President and CEO Securities Code: 9142 Tokyo Stock Exchange (First Section) and Fukuoka Stock Exchange Inquiries: Public Relations Department Tel.: +81-92-474-2541
Notice Regarding JR Kyushu Group Medium-Term Business Plan 2019-2021
Kyushu Railway Company (hereinafter, JR Kyushu) announces that, at a Board of Directors meeting held today, it has resolved to implement the JR Kyushu Group Medium-Term Business Plan 2019-2021, as described in the accompanying materials.
JR Kyushu Group Medium-Term Business Plan 2019‒2021 Toward the Next Growth Stage Contents
1 Formulation of the New Medium-Term Business Plan
Review of the Medium-Term Business Plan 2016‒2018 ・・・・・・P2 Changes in the Operating Environment ・・・・・・P4
2 2030 Long-Term Vision
Management Plan Framework and 2030 Long-Term Vision ・・・・・・P5
3 Medium-Term Business Plan 2019‒2021
JR Kyushu Group Medium-Term Business Plan 2019‒2021: Positioning and Priority Initiatives ・・・・・・P6
Further Strengthen Our Management Foundation ・・・・・・P7 Build Sustainable Railway Services by Improving Earnings ・・・・・・P9 Implement Strategic City-Building in our business area ・・・・・・P12 Growth and Evolution in New Business Areas ・・・・・・P18
Target Management Indicators (Consolidated) ・・・・・・P20 Sources/Uses of Funds and Shareholder Return Policy ・・・・・・P21
4 The JR Kyushu Group's Corporate Culture
ESG ・・・・・・P22 Safety and Service ・・・・・・P23 Development of Human Resources ・・・・・・P25
1 01. Review of the Medium-Term Business Plan 2016‒2018
In addition to issues related to the three key strategies under the previous medium-term business plan, the Formulation issues in the new plan include the recognition of JR Kyushu as a listed company. On that basis, we will of the New implement the new plan in a focused manner. Medium-Term The Medium-Term Business Plan 2016‒2018 New issues for JR Kyushu Business Plan as a listed company
Three Key Strategies Priority Items Ongoing Issues
■Improve transportation services ■Address the end of special tax Strengthen Group management (information on train operating treatment and increased depreciation Build robust expense conditions, etc.) ■Further strengthen governance railways that ■Response to frequent natural disasters ■Increase Shinkansen revenues by and pursue effective segment provide the expanding online sales and diversify -Disaster recovery expenses: ¥14.3 management foundation for rail pass sales channels billion*2 ■Address the aging of facilities/rolling stock ■Manage the Group in an agile all our businesses ■Expand SSS*1 (3 train lines) ■Introduce energy-saving rolling stock ■Address technical advancement in IoT, and flexible manner Formulation of the New (DENCHA, etc.) AI, etc. 01. Medium-Term Business Plan
■Open JRJP Hakata Building and ■Enhance development capabilities using ●Review of the Medium-Term Ropponmatsu 421 our strengths and collaboration with Business Plan 2016‒2018 Financial Strategy Actively promote ■Achieve steady growth in core other companies ●Changes in the Operating Environment city-building businesses (station buildings, ■Consider and advance development ■Work to achieve both condominiums, rental apartments, and projects for 2022 onward financial soundness and in the Kyushu area hotels) capital efficiency with a 02. 2030 Long-Term Vision focus on sustained growth in the Group's corporate value
03. Medium-Term Business Plan ■Consolidate Caterpillar Kyushu, Ltd. ■Bolster our core business and move 2019‒2021 Take on the ■Open of JR Kyushu Hotel Blossom ahead with M&A and new businesses challenges of Naha in order to generate synergies ESG Initiatives new businesses ■Launch businesses in Thailand The JR KyushuGroup's and expand (serviced apartments, hotels, and ■Bolster ESG initiatives to 04. Corporate Culture outside the condominiums) support long-term growth Kyushu area
*1 SSS = Smart Support Station *2 Extraordinary losses, total estimate for the period from FY17.3 to FY19.3 Issues to be addressed under the Medium-Term Business Plan
2 01. Review of the Medium-Term Business Plan 2016‒2018
Due to favorable results in revenues from railway transportation and in the construction segment, we Formulation expect to surpass the financial targets (operating revenues and EBITDA) in the previous medium-term of the New business plan. Medium-Term ［Reference］Capital investment will surpass the initial plan of ¥190.0 billion due to growth investment mostly in the rental apartment business, the hotel business, and overseas projects Business Plan
Operating revenues*1 EBITDA*1 ［Reference］Capital Investment*2
Revenues from railway transportation Revenues from non-railway transportation
(Billions of yen) (Billions of yen) (Billions of yen) 500 100 250 239.0 438.5 Formulation of the New 83.0 01. 400.0 Medium-Term Business Plan 400 377.9 80 78.0 200 190.0
Growth 133.7 ●Review of the Medium-Term Investment Business Plan 2016‒2018 65.5％ Growth 300 60 58.0 150 Investment 80.0 ●Changes in the Operating Environment More 60.3％ than 62%
02. 2030 Long-Term Vision 200 40 100 Maintenance and Maintenance and Upgrade Investment Upgrade Investment
Medium-Term Business Plan 100 20 50 03. 2019‒2021 Railway Safety 67.2 Railway Safety 65.0 Investment Investment
The JR KyushuGroup's 0 0 0 04. Corporate Culture 16.3 19.3 19.3 16.3 19.3 19.3 Total capital investment Figures announced in (Medium-term business plan target) (Medium-term business plan target) over three-year period medium-term business plan (FY) (FY)
*1 Figures for FY19.3 are the most recent performance forecasts (announced February 4, 2019) *2 For the total capital investment over three-year period, the amount for FY19.3 is the planned amount at the beginning of FY19.3
3 01. Changes in the Operating Environment
We believe that a long-term vision is essential because we anticipate a dramatic change in the environment Formulation including technical innovation and the emergence of new business models, in which we manage the company of the New in the future. Medium-Term Opportunities Threats Increasing populations in urban areas Fluctuations in real estate market conditions Business Plan （Fukuoka City, etc.） Market contraction due to declining population Technical innovation, such as Ongoing increase in self-driving vehicles and AI Decrease in the working population due to inbound tourism demand declining birth rate and aging population
Emergence of new business models, Frequent occurrence / Activities related to the enhancement of *1 urban functions（deregulation, etc.） such as the sharing economy and MaaS increased severity of natural disasters
Formulation of the New 01. Medium-Term Business Plan With consideration for opportunities and threats, we will:
●Review of the Medium-Term • Approach businesses from new perspectives that are not simply Business Plan 2016‒2018 ●Changes in the Operating Environment extensions of current approaches • Develop countermeasures to ensure business sustainability
2030 Long-Term Vision 02. Expected increase in number of inbound overseas Declining population in Kyushu, where the pace of the Expected increase in population of Fukuoka City tourists visiting Kyushu*2 decline exceeds that in the nationwide population Increasing natural disasters in Kyushu
Source: Future estimated population of Fukuoka City Source: Internal investigation Source: Estimated population nationwide and Average annual number of incidents with 80 mm or more of precipitation in one hour in Kyushu Medium-Term Business Plan (National Institute of Population and Social Security Research) IIndexndex in the 7 prefectures of Kyushu (times) Source: Meteorological Agency (20(201515 = 110000) (National Institute of Population and Social Security Research) 20 03. Index IIndexndex 2019‒2021 (2015 = 100) 200 ((20152015 = 100) 108.4 Effect of runway 15 110 110 Fukuoka City 180 increase at 23 wards of Tokyo Fukuoka Airport 10 105 The JR KyushuGroup's 105 160 161.0 04. 104.9 100.0 Corporate Culture 5 100 140 100 100.0 98.8 0 Total for 1976-1985 1986-1995 1996-2005 2006-2015 95 120 95 93.7 ordinance-designated Nationwide ((year)year) cities 100.0 July 2012: Heavy rain in northern Kyushu 92.2 Kyushu Natural phenomena 90 100 90 April 2016: Kumamoto earthquakes causing notable 2015 2020 2025 2030 July 2017: Heavy rain in northern Kyushu 2015 2020 2025 2030 2015 2020 2025 2030 damage in recent years (year) ((year)year) ((year)year) July 2018: Heavy rain
*1 Maas = Mobility as a Service. A new concept regarding seamless mobility in which ICT is used to leverage the cloud and mobility through all modes of transportation other than privately owned cars is addressed as a single service. *2 Estimates based on statistics from the Policy Research Institute for Land, Infrastructure, Transport and Tourism regarding inbound tourism demand for all of Japan. Assumes that the recent trend in the percentage of inbound travelers who visit Kyushu will remain the same in the future. 4 02. Management Plan Framework and 2030 Long-Term Vision
We created the 2030 Long-Term Vision to achieve“What the JR Kyushu Group aims to be” in a 2030 Long-Term Vision management environment undergoing dramatic change.
≪Management Plan Framework≫ What we aim to be Our conduct A corporate group that invigorates Kyushu, Japan, Integrity / Growth and Evolution / and Greater Asia with safety Local Community Invigoration and service as its foundation
• Contribute to the sustainable development of Holding fast to our view Kyushu and working to invigorate Kyushu What we aim to be by creating enriched lifestyles for of what we aim to be and our conduct customers and local community members. • Enhance businesses in the rest of Japan and our conduct and Asia and bringing them to Kyushu Formulation of the New • Expand businesses with established strengths 01. Medium-Term Business Plan from our core business area of Kyushu to the rest of Japan and Asia
02. 2030 Long-Term Vision 2030 Long-Term Vision ●Management Plan Framework Newly formulated and 2030 Long-Term Vision Long-term vision We will contribute to the sustainable development
Medium-Term Business Plan of Kyushu through city-building initiatives that leverage 03. 2019‒2021 the distinctive characteristics of local communities, centered on safe and secure mobility services. Medium-Term Business Plan 04. The JR KyushuGroup's Corporate Culture 2019‒2021 • As a corporate group providing mobility services in Kyushu, taking steps to respond to population decline, natural disasters, and other threats. To that end, taking on the challenge of establishing sustainable mobility services based on a foundation of safety and security by utilizing new technologies and implementing cooperation with other companies. ̶ page 19
Annual business policies • Contribute to a Kyushu where people want to live, work, and visit through city-building initiatives（page 26） centered on mobility services （expanding the resident and nonresident populations and creating employment）
5 03. Position and Priority Initiatives of the JR Kyushu Group Medium-Term Business Plan 2019‒2021
With consideration for the issues carried over from the previous medium-term business plan and for Medium-Term backcasting from the long-term vision, the following three points have been positioned as priority initiatives Business Plan under the new medium-term business plan. JR Kyushu Group Medium-Term Business Plan 2019‒2021 2030 Long-Term Vision 2019‒2021 Toward the Next Growth Stage We will contribute to the sustainable Priority initiative development of Kyushu through 1 Further strengthen our management foundation/pages 7,8 city-building initiatives that leverage JR Kyushu Group the distinctive characteristics Medium-Term Business Plan of local communities, 2016 - 2018 Priority centered on safe and initiative 2 Further strengthen our earnings power in key businesses secure mobility services.
Aim to be a kind and robust Build sustainable railway services by improving earnings corporate group involved Formulation of the New Pursue further earnings opportunities/page 9 in comprehensive city-building 01. Medium-Term Business Plan Enhance productivity/page 10 Strengthen our management foundation by leveraging 02. 2030 Long-Term Vision the opportunities provided Implement strategic city-building initiatives in the regions around our business areas by our stock exchange listing. Implement active business development in the Fukuoka Metropolitan Area / pages 13, 14 Ensure the sustainability of businesses that Medium-Term Business Plan Continue to move forward Increase regional value and creating communities through address population decline, 03. 2019‒2021 with building robust railways the development of areas surrounding stations /pages 15, 16 natural disasters, and other threats and actively participating in city-building ●JR Kyushu Group Medium-Term Accelerate initiatives Business Plan 2019‒2021: in the areas of new technologies Positioning and Priority Initiatives Take the next step beyond and new businesses ・Further Strengthen Our Management Foundation the stage of taking on the challenges Priority initiative ・Build Sustainable Railway Services by Improving Earnings of new businesses and expanding outside the Kyushu area 3 ・Implement Strategic City-Building in our business area Growth and evolution in new areas ・Growth and Evolution in New Business Areas Steadily capture opportunities, Leverage strengths developed in Kyushu / page 18 such as growing populations ●Target Management Indicators Stock exchange listing in urban areas, （Consolidated） （October 2016） Advance businesses that leverage technical innovation / page 19 inbound tourism demand, and deregulation ●Sources/Uses of Funds and Shareholder Return Policy
The JR KyushuGroup's 04. Corporate Culture The JR Kyushu Group's corporate culture ESG / page 22 Safety and Service / page 23、24 Development of Human Resources / page 25
6 03. Further Strengthen Our Management Foundation ̶ Strengthen Group Management We will work to strengthen Group management by bolstering governance and implementing efficient Medium-Term segment management.
Business Plan Segment management 2019‒2021 Establish intermediate holding companies in the station building business and hotel business（planned for April 1, 2019） Establish intermediate holding companies in order to strengthen governance and to facilitate decision-making and operational execution that are more agile and flexible (page 8) Change segment classifications, etc. (planned for April 1, 2019) Change segment classifications and revenue/expense classifications in order to handle revenues and profits for segments, etc., in a more practical manner.
Implement measures to rearrange businesses and reorganize the Group Formulation of the New 01. Medium-Term Business Plan Consider and implement measures to rearrange businesses and reorganize the Group in order to pursue flexible and efficient segment management Revise monitoring systems and processes（to be considered and implemented during the period of this plan） 2030 Long-Term Vision 02. Consider and implement the revision of monitoring systems/processes and KPIs, etc., in order to enhance the driving force of segment management
Medium-Term Business Plan Strengthen governance 03. 2019‒2021 Strengthen business portfolio management system ●JR Kyushu Group Medium-Term Business Plan 2019‒2021: Work to achieve appropriate management resource allocation by clarifying the position of CFO, Positioning and Priority Initiatives etc., in order to form a strategic business portfolio while leveraging M&A, etc. ・Further Strengthen Our Management Foundation ・Build Sustainable Railway Services by Improving Earnings Revise officer compensation system ・Implement Strategic City-Building in our business area ・Growth and Evolution in New Business Areas Consider the introduction of stock compensation plan in order to enhance value shared with shareholders ●Target Management Indicators （Consolidated） ●Sources/Uses of Funds and Establish and utilizing the Nomination and Compensation Advisory Committee Shareholder Return Policy Establish the Nomination and Compensation Advisory Committee (March 19, 2019), centered on outside directors, and working to increase the objectivity and transparency of procedures The JR KyushuGroup's related to officer nomination, compensation, etc. 04. Corporate Culture
7 03. Further Strengthen Our Management Foundation ̶ Implement Segment Classification Changes, etc. We will steadily advance segment management by establishing intermediate holding companies in the station Medium-Term building business and the hotel business, changing segment classifications, etc. Business Plan 2019‒2021 Overview of segment classification changes, etc.（planned for April 1, 2019） Points of change
【Former segments】 【New segments】 Transportation Transportation Establish intermediate holding companies 1 2 JR Kyushu Service Support Co., Ltd. JR Kyushu Service Support Co., Ltd. in the station building and hotel business JR Kyushu Bus Company,JR Kyushu Jet Ferry Inc. JR Kyushu Bus Company,JR Kyushu Jet Ferry Inc. JR Kyushu Linen Co., Ltd.,etc. JR Kyushu Linen Co., Ltd.,etc. （planned for April 1, 2019）
JR Kyushu-Rent-A-Car & Parking Co., Ltd. 2 Strengthen governance and achieve agile and flexible decision-making Construction and operational execution through business management based on intermediate holding companies (JR Kyushu Hotels And Resorts Holdings KYUTETSU CORPORATION,JR Kyushu Engineering, Ltd. Sanki Construction Co., Ltd., Inc., JR Kyushu Ekibiru Holdings Inc.) Construction Kyushu Electric System Company,etc. Formulation of the New KYUTETSU CORPORATION,JR Kyushu Engineering, Ltd. 01. Medium-Term Business Plan Sanki Construction Co., Ltd.,Kyushu Electric System Company,etc. Change segment classifications and revenue/ Real Estate and Hotels expense classifications（planned for April 1, 2019） Real Estate 1 【Real Estate】 [Segment classification changes, etc.] 02. 2030 Long-Term Vision JR Hakata City Co., Ltd. JR Kyushu Ekibiru Holdings Inc. 1 Kokura Terminal Building Inc. Real Estate segment → Real Estate and Hotels segment Nagasaki Terminal Building Inc. 1 JR Oita City, Inc. Segment name changed in conjunction with the segment 【Hotels】 Medium-Term Business Plan Kagoshima Terminal Building Inc. classification changes in order to seamlessly strengthen the real 03. JR Kyushu Building Management Co., Ltd. JR Kyushu Hotels And Resorts Holdings Inc. estate and hotel businesses 2019‒2021 Oyama Yumekobo, Inc. ,etc. 2 JR Kyushu-Rent-A-Car & Parking Co., Ltd. ●JR Kyushu Group Medium-Term Aim for further growth in the core parking lot business by JR Kyushu Senior Life Support, Inc. Business Plan 2019‒2021: Retail and Restaurant strengthening collaboration with the real estate business Positioning and Priority Initiatives JR Kyushu Retail, Inc.,JR KYUSHU DRUG ELEVEN CO., LTD. JR Kyushu Food Service Inc.,etc. ・Further Strengthen Our Management Foundation JR Kyushu-Rent-A-Car & Parking Co., Ltd. 3 Hotel business and JR Kyushu Senior Life Support, Inc. ・Build Sustainable Railway Services by Improving Earnings Revise the practice under which multiple segments record ・Implement Strategic City-Building in our business area Other ,etc. revenues, etc., from the hotel business and the seniors business, ・Growth and Evolution in New Business Areas which are aiming for further growth by strengthening collaboration with the real estate business. Shift the hotel business and the JR Kyushu Station Hotel Kokura Inc. ●Target Management Indicators Retail and Restaurant seniors business to the Real Estate and Hotels segment. JR Kyushu Huis Ten Bosch Hotel Co., Ltd. （Consolidated） JR Kyushu Retail, Inc.,JR KYUSHU DRUG ELEVEN CO., LTD. JR Kyushu Hotels Inc. 2 3 JR Kyushu Food Service Inc.,etc. [ ] ●Sources/Uses of Funds and Oyama Yumekobo, Inc. Change in revenue/expense classification Shareholder Return Policy We will recognize business profit/loss more practically, through JR Kyushu Senior Life Support, Inc. 3 Other changing allocation criteria for station building rent (revenue) and The JR KyushuGroup's fixed asset tax (expense) between the Transportation segment and JR Kyushu Trading Co., Ltd. 04. Corporate Culture JR Kyushu Trading Co., Ltd. the Real Estate and Hotels segment JR Kyushu Financial Management Company,etc. JR Kyushu Financial Management Company,etc.
8 03. Building Sustainable Railway Services through Improvement in Earnings ̶ Pursuing Further Earnings Opportunities We will pursue further earnings opportunities by capturing/generating transportation demand to increase our Medium-Term earnings power in key fields, implementing city-building initiatives that leverage the appeal of railways, etc. Business Plan Enhance earnings power in key fields Implement city-building initiatives 2019‒2021 that leverage the appeal of railways
• Increase online sales ratio*1 by • Discover additional tourism resources that utilize new enhancing convenience of online train Design & Story trains reservation system • Enhance the value of the Kyushu brand by further • Bolster yield management through improving Seven Stars in Kyushu trains and Design & online-sales customer data Story trains management, etc. • Implement active tie-ups with local governments and private-sector companies（tourism campaigns, JR Kyushu Shinkansen • Consider the use of the Shinkansen in Walking, use of station buildings, etc.） the logistics business Formulation of the New • Strengthen cooperation with companies 01. Medium-Term Business Plan in other transportation-related areas （parking lots, taxi services, car sharing, Prepare for the opening of the Nagasaki etc.） route of the Kyushu Shinkansen 02. 2030 Long-Term Vision • Maximize synergies with development • Cooperate with communities, etc., to promote tourism in of areas around our railway lines, etc. the western Kyushu area Medium-Term Business Plan Urban • Cooperate with development initiatives • C onsider facilities, schedules, etc., to increase 03. 2019‒2021 area i n areas around Miyazaki Station, convenience Kumamoto Station, etc. demand • Make the most of the effects of various ●JR Kyushu Group Medium-Term events Business Plan 2019‒2021: Target Management Indicators Positioning and Priority Initiatives ・Further Strengthen Our Management Foundation • Expand sales routes for JR Kyushu * ・Build Sustainable Railway Services by Improving Earnings FY19.3 FY22.3 Rail Pass in cooperation with overseas ・Implement Strategic City-Building in our business area Inbound Revenues from ・Growth and Evolution in New Business Areas travel agents and airlines railway transportation ¥151.5 billion ¥154.0 billion tourism • Increase convenience of exclusive ●Target Management Indicators reservation website Shinkansen ¥55.0 billion ¥56.7 billion （Consolidated） demand • Actively provide information to ●Sources/Uses of Funds and inbound overseas tourists Conventional lines ¥96.5 billion ¥97.3 billion Shareholder Return Policy
The JR KyushuGroup's 04. Corporate Culture * Figures for FY19.3 are the most recent performance forecasts (Announced February 4, 2019)
9 03. Build Sustainable Railway Services through Improvement in Earnings ̶ Improve Productivity ̶ We will work to increase future productivity by promoting efficiency and workforce reductions through the Medium-Term aggressive utilization of new technologies.
Business Plan Completed during To be completed between Category Policy Measures 2019‒2021 FY19.3 FY20.3 and FY22.3 Expansion of the Smart Support Station Service Promote efficient business operations by updating station systems Introduction of Assist Mars
Promote efficient and automated operations Experiment with new train control systems Operations utilizing evolving technologies Experimentations involving automatic driving systems
Maintenance and inspections utilizing drones and robots Drastically reduce maintenance by Formulation of the New migrating toward Condition Based 01. Medium-Term Business Plan Maintenance Scheduled removal of unnecessary assets Maintenance (CBM)* and scaling back equipment Monitoring of railways for trains in operation 02. 2030 Long-Term Vision Development and introduction of energy-saving train cars Energy Promote efficient use of energy Medium-Term Business Plan Utilization of storage battery technology 03. 2019‒2021 Facilitate efficient technical succession of Human resource development employees responsible for the next generation Utilization of VR and experience-based training equipment ●JR Kyushu Group Medium-Term * CBM = Condition Based Maintenance Business Plan 2019‒2021: Positioning and Priority Initiatives ・Further Strengthen Our Management Foundation ・Build Sustainable Railway Services by Improving Earnings ・Implement Strategic City-Building in our business area Operating Income Image ・Growth and Evolution in New Business Areas in the Transportation Segment Establish ●Target Management Indicators sustainable （Consolidated） The JR Kyushu Group is working to increase earning mobility power and productivity and to establish sustainable ●Sources/Uses of Funds and services Shareholder Return Policy mobility services that support the lifestyles of members of local communities. In this way, JR Kyushu will work to fulfill its social responsibilities as a corporate group that The JR KyushuGroup's provides mobility services in Kyushu. 19.3 20.3 21.33 222.32.3 31.3 (FY) 04. Corporate Culture
10 03. Target Management Indicators in the Transportation Segment We will aim for operating revenues of ¥184.0 billion (revenues from railway transportation of ¥154.0 billion) Medium-Term and operating income of ¥21.0 billion in FY22.3 Operating income is expected to decline due to higher expenses resulting from the elimination of special tax Business Plan measures, higher depreciation, etc. However, we will implement a variety of measures to improve profitability. 2019‒2021
Operating revenues*1 Operating income*1 ［Reference］Amount of capital investment*2
(Billions of yen) (Billions of yen) (Billions of yen) 200 30 120 184.0 181.9 108.0 26.1 ▲4.8 Growth Other 8.0 investment Formulation of the New 30.4 30.0 revenues 100 01. Medium-Term Business Plan 90.8 150 ▲7.9 ＋3.0 21.0 Maintenance 100.0 and upgrade 02. 2030 Long-Term Vision 20 80 investment ＋4.6
Medium-Term Business Plan 03. 2019‒2021 100 60
Revenues ●JR Kyushu Group Medium-Term from 151.5 154.0 railway Business Plan 2019‒2021: transportation 40 Positioning and Priority Initiatives 10 Of which, Of which, ・Further Strengthen Our Management Foundation 67.2 safety 70.0 safety ・Build Sustainable Railway Services by Improving Earnings 50 investment investment Numerical Management Targets in the Transportation Segment ・Implement Strategic City-Building in our business area ・Growth and Evolution in New Business Areas 20 ●Target Management Indicators （Consolidated） ●Sources/Uses of Funds and 0 0 Shareholder Return Policy 0 19.3 22.3 （FY） 19.3 Elimination Increase in Changes in Increases 22.3 3-year total 3-year total （FY） of special depreciation revenues/ in earning （FY） for previous for current tax measures expenses power and medium-term medium-term The JR KyushuGroup's classification productivity business plan business plan (page 8) 04. Corporate Culture (FY17.3‒FY19.3) （FY20.3‒FY22.3）
*1 For the FY19.3 figures, the most recent performance forecasts (announced February 4, 2019) have been reclassified in accordance with the new segment categories. *2 The amount of capital investment does not include investment related to the Nagasaki route of the Kyushu Shinkansen. 11 03. Implement Strategic City-Building Initiatives in the Regions Around our Bases ̶ Projects that Will be Opened during the Period of the Medium-Term Business Plan, etc.
We will work to help build a Kyushu where“people want to live, work, and visit” by implementing Medium-Term development in areas surrounding stations in line with the characteristics of communities. Business Plan By FY22.3 2019‒2021 A leading city in Asia and Japan’s most vibrant community Fukuoka Metropolitan Area ̶ pages 13, 14 FY23.3 and thereafter
Work to maximize city value through business development that takes advantage of all Revitalize the core of Mojiko Retro, opportunities a symbol of tourism in northern Kyushu Mojiko Station restoration Mojiko Station restoration A station city welcoming the world by leveraging the opportunities of the Shinkansen opening ■/Overview Station building restoration, opening of Development in the area around Nagasaki Station “Mikado Shokudo by Formulation of the New NARISAWA,” etc. 01. Integrated development Medium-Term Business Plan ■ Overview / ■/Timing of opening March 2019 incorporating commercial facilities, hotels, offices, etc. 02. 2030 Long-Term Vision Leverage recruitment initiatives as business opportunities A station city that is the new center of Kumamoto and promote further growth of the station city
Medium-Term Business Plan Development in the area Development in the Oita Station Area 03. 2019‒2021 around Kumamoto Station ̶ page 15 ■/Overview Integrated development incorporating commercial facilities, condominiums, ■/Overview Integrated development ●JR Kyushu Group Medium-Term etc., with the station building as a incorporating commercial facilities, base Business Plan 2019‒2021: offices, hotels, condominiums,and Positioning and Priority Initiatives parking lots ・Further Strengthen Our Management Foundation ■/Timing of opening Spring 2021（station building） ・Build Sustainable Railway Services by Improving Earnings ■/Total floor space 109,000m2（station building only） ・Implement Strategic City-Building in our business area A station city built jointly with local companies ・Growth and Evolution in New Business Areas Miyazaki Station west entrance development ̶ page 15 ●Target Management Indicators （Consolidated） A station city built through cooperation with local communities ■/Overview ntegrated development incorporating commercial facilities, offices, parking ●Sources/Uses of Funds and Development at the west entrance of lots, and condominiums Shareholder Return Policy Kagoshima-Chuo Station ■/Timing of opening Fall 2020（JR Miyakoh Twin Building） The JR KyushuGroup's ■/Overview Integrated development incorporating ■/Total floor space 37,700 m2（JR Miyakoh Twin Building only） 04. commercial facilities, offices, and Corporate Culture condominiums
12 03. Implement strategic city-building initiatives in the regions around our business areas ̶ Implement Active Business Development in the Fukuoka Metropolitan Area
In the Fukuoka, which aims to be one of the leading cities in Asia,we will work to maximize city value by Medium-Term leveraging a wide range of business opportunities and aggressively implementing business development Business Plan initiatives, centered on Hakata, which is the gateway to Kyushu and Asia. 2019‒2021 Major future business opportunities in the Fukuoka Metropolitan Area Initiatives to leverage business opportunities
We will leverage all of the opportunities Fukuoka City, which continues to record growth, is planning deregulation provided by government deregulation initiatives and large-scale development projects in order to enhance urban initiatives, etc., and work to advance development through a variety of methods. functions, such as the“Tenjin Big Bang Project” and“Hakata Connected” In －Maximize value of assets addition,, pplans call for measures to enhance the transportationp infrastructure,, （Plan for utilizing the space above the tracks ssuchuch as the extension of Fukuoka City Subway Line 3 to Hakata StStation.ation. at Hakata Station, page 14） －Real estate acquisition and development （rental apartments, condominiums, commercial facilities, offices, etc.） －Recruitment initiative projects Formulation of the New 《Hakata Eki-mae 2-chome integrated development》 01. Medium-Term Business Plan Development of the former site of Kyushu University’s Hakozaki Campus Address the wide-ranging needs of domestic and overseas tourists as a facility that supports the Hakata Bay "City of international Exchange" initiative of 02. 2030 Long-Term Vision Fukuoka City ■/Overview Hotels, commercial facilities, other community facilities Medium-Term Business Plan ■/Timing of opening Fall 2019 03. 2019‒2021 ■/Total floor space 15,299 m2 Waterfront development ■/Hotel guest rooms 238 rooms
●JR Kyushu Group Medium-Term Hakata Connected Business Plan 2019‒2021: TenTTeennnjinjinji Positioning and Priority Initiatives FuFuukkuokauoka AirpAirporto HakataHaakkatakataatata SSttatiatationa ioonn ・Further Strengthen Our Management Foundation Tenjin Big Bang Project PPrivate-sectorrivate-secvate-sec management ・Build Sustainable Railway Services by Improving Earnings of FukuFukuoka Airport ・Implement Strategic City-Building in our business area Extension of Fukuoka City ・Growth and Evolution in New Business Areas RoRoppopoonmastumaaas Subway Line 3 to Hakata Station ●Target Management Indicators （Consolidated） ●Sources/Uses of Funds and Shareholder Return Policy Shinkansen Conventional lineses The JR KyushuGroup's Fukuoka City Subway Line 04. Corporate Culture Fukuoka City Subway Line （Under Construction）
13 03. Implement strategic city-building initiatives in the regions around our business areas ̶ Plan for Utilizing the Space Above the Tracks at Hakata Station
Leveraging“ Hakata Connected” and other business opportunities, we will create“ a new city” that Medium-Term utilizes the space above the Hakata Station tracks in a three-dimensional manner and serves as a Business Plan new symbol of Fukuoka, Japan's most vibrant community. 2019‒2021 Plan for utilizing the space above the tracks at Hakata Station 〈Hakata Connected〉
A program of Fukuoka City focused on the area within a 500-meter radius around Hakata Station. Through cooperation between the government sector and the private sector, the replacement of buildings within the area will be promoted and the dynamism and lively atmosphere of Hakata Station will be extended to the Formulation of the New surrounding area. 01. Medium-Term Business Plan
02. 2030 Long-Term Vision ・ In support of the "Hakata Connected" initiative, working together with owners of land in the area around Hakata Station to establish the Hakata Station Area Development Council (provisional name) Medium-Term Business Plan ・C ontinue to work together with the Hakata City-Building Promotion 03. 2019‒2021 Council and strive to contribute to city-building initiatives in Fukuoka in both tangible and intangible ways
●JR Kyushu Group Medium-Term Business Plan 2019‒2021: Positioning and Priority Initiatives The JR Kyushu Group will also promote the "Hakata Connected" ・Further Strengthen Our Management Foundation ・Build Sustainable Railway Services by Improving Earnings initiative while cooperating with Fukuoka City, ・Implement Strategic City-Building in our business area owners of land in the surrounding area, etc. ・Growth and Evolution in New Business Areas ●Target Management Indicators （Consolidated） ●Sources/Uses of Funds and Shareholder Return Policy We will position the plan for utilizing the space above the tracks at Hakata Station as a major growth opportunity for the JR Kyushu Group. Targeting the realization of the plan, The JR KyushuGroup's we will focus on the comprehensive strengths of the Group and advance this project. 04. Corporate Culture
14 03. Implement strategic city-building initiatives in the regions around our business areas ̶ Increase City Value with Stations as Bases
Moving forward, the JR Kyushu Group will work to foster lively atmospheres while leveraging its development Medium-Term know-how and implementing new city-building initiatives that draw on the characteristics of stations as bases. Business Plan 2019‒2021 《Development in the area around condominiums Kumamoto Station》
hotels Kumamoto Station With stations as bases, we will offices implement new city-building initiatives to create communities that offer a wide range of functions ̶ such as station buildings, offices, hotels, condominiums ̶ and which are places where people want to live, Formulation of the New work, and visit. 01. Medium-Term Business Plan For the station building, drawing on Commercial facilities the nature of Kumamoto as a theme, we will build a“3D garden of water and greenery and a rooftop terrace,” 02. 2030 Long-Term Vision which will be the symbol of the community.
Medium-Term Business Plan 03. 2019‒2021 《Miyazaki Station west ●JR Kyushu Group Medium-Term JR Miyakoh Twin Building Offices Business Plan 2019‒2021: entrance development》 Positioning and Priority Initiatives Commercial facilities ・Further Strengthen Our Management Foundation We will implement joint development of the (Amu Plaza Miyazaki) ・Build Sustainable Railway Services by Improving Earnings station building together with the Miyakoh ・Implement Strategic City-Building in our business area Miyazaki group, implement large-scale renovation ・Growth and Evolution in New Business Areas Station underneath the elevated tracks at the station, ●Target Management Indicators and enhance the station square in cooperation （Consolidated） with government initiatives. In this way, we will ●Sources/Uses of Funds and strive to help create a new lively atmosphere Shareholder Return Policy with Miyazaki Station as a base. In cooperation with people in the local community, we will extend the lively The JR KyushuGroup's Commercial facilities (under elevated railway tracks) 04. Corporate Culture atmosphere around the new station to the greater community.
15 03. Implement strategic city-building initiatives in the regions around our business areas ̶ Increasing City Value with Stations as Bases
In the station building business, we will work to bolster our marketing capabilities and increase management efficiency by Medium-Term establishing an intermediate holding company ̶ JR Kyushu Ekibiru Holdings Inc. ̶ and leveraging economies of scale. Moving forward, we will continue working to establish lively atmospheres through the implementation of strategic renewals, Business Plan the use of station squares, etc. In these ways, we will aim to achieve sustainable growth with station buildings that are 2019‒2021 deeply rooted in local communities.
Growth in station building tenant sales*1, *2 Examples of large-scale station building renovations
• First large-scale renewal of City Dining Kooten (Hakata) FY18.3：¥195.8 billion • Revision of overall station building zones and opening“ side street 30 steps （Vs. FY13.3 : 142%） from the station” (Kokura) (Billions of yen) • Large-scale renovation in conjunction with 15 year anniversary (Kagoshima), etc. 250 Development accompanying revision of space for travel service centers, etc., at major stations Average annual growth rate Formulation of the New （FY16.3-FY18.3） 01. Medium-Term Business Plan ＋3.1％ Examples of the creation of lively atmospheres through the utilization of station squares, etc. 200 02. 2030 Long-Term Vision
150 Medium-Term Business Plan 03. 2019‒2021
●JR Kyushu Group Medium-Term 100 Business Plan 2019‒2021: Positioning and Priority Initiatives Illumination lighting ceremonies Hakata Summer Festival Hakata Farmer’s Market ・Further Strengthen Our Management Foundation ・Build Sustainable Railway Services by Improving Earnings 50 ・Implement Strategic City-Building in our business area ・Growth and Evolution in New Business Areas ●Target Management Indicators （Consolidated） 0 ●Sources/Uses of Funds and 13.3 14.3 15.3 16.3 17.3 18.3 Shareholder Return Policy （FY）
The JR KyushuGroup's Kamome Hiroba (Nagasaki) City Rooftop Square (Oita) Amuran Ferris Wheel (Kagoshima) 04. Corporate Culture *1 Total for Hakata, Kokura, Nagasaki, Oita, Kagoshima *2 JR Oita City opened in FY16.3
16 03. Target Management Indicators in the Real Estate and Hotels Segment
We will aim for operating revenues of ¥113,0 billion and operating income of ¥24.0 billion in FY22.3 by Medium-Term advancing development in the area around Kumamoto Station and at the west entrance of Miyazaki Station. Business Plan
2019‒2021 Operating revenues*1*2 Operating income*1*2 ［Reference］Amount of capital investment*2
(Billions of yen) (Billions of yen) (Billions of yen) 200.0 120 30 200 113.0
25.4 ▲4.6 100 ＋4.7 24.0 Formulation of the New 89.9 01. Medium-Term Business Plan 150 ▲1.5
80 20 123.8 02. 2030 Long-Term Vision
Growth 190.0 Investment 60 100 Medium-Term Business Plan 03. 2019‒2021
●JR Kyushu Group Medium-Term 40 10 Business Plan 2019‒2021: Positioning and Priority Initiatives 50 ・Further Strengthen Our Management Foundation ・Build Sustainable Railway Services by Improving Earnings ・Implement Strategic City-Building in our business area 20 Numerical Management Targets in the Real Estate and Hotels Segment Maintenance ・Growth and Evolution in New Business Areas and upgrade 10.0 investment ●Target Management Indicators 0 0 0 （Consolidated） 19.3 22.3 （FY） 19.3 Changes in Non-recurring Increasing 22.3 3-year total for 3-year total for （FY） revenue/ expenses, etc., earning power by （FY） ●Sources/Uses of Funds and expense accompanying advancing asset previous medium-term the medium-term classifications development growth and business plan business plan Shareholder Return Policy (page 8) new development （FY17.3‒FY19.3） （FY20.3 ‒FY22.3） The JR KyushuGroup's 04. Corporate Culture *1 For the FY19.3 figures, the most recent performance forecasts (announced February 4, 2019) have been reclassified in accordance with the new segment categories. *2. Figures also include the business activities of the relevant segments outside of Kyushu
17 03. Growth and Evolution in New Regions ̶ Leveraging Strengths Developed in Kyushu
In business areas in which we have cultivated strengths in Kyushu and expect to be sufficiently competitive, Medium-Term we will actively work to implement business development initiatives in Japan and overseas. Business Plan Approach to business development initiatives Major initiatives 2019‒2021 outside the Kyushu area
Japan Overseas Business development Advance development by taking on challenges Generate revenues by focusing on areas initiatives leveraging in rolling out new hotel brands and in luxury with high growth potential, cooperate with strengths cultivated hotels, etc., and by leveraging our results in strong partners, and implement rigorous risk in Kyushu condominium sales and our planning management. capabilities, which are in the top rank in the Kyushu market New value Formulation of the New 01. Medium-Term Business Plan Utilize within Kyushu the new technologies Hotel business and know-how that we have obtained 2030 Long-Term Vision 02. outside of Kyushu
Aloft Bangkok Medium-Term Business Plan Major results to date Sukhumvit 11 03. 2019‒2021 THE BLOSSOM (Marriott International 【Inclusion in the Michelin Guide】 HIBIYA Group hotel brand, （opening planned operations started Michelin Guide Tokyo 2016 for August 2019） in November 2018) ●JR Kyushu Group Medium-Term Business Plan 2019‒2021: JR Kyushu Hotel Blossom Shinjuku Positioning and Priority Initiatives Michelin Guide Kumamoto-Oita 2018 Special Edition JR Kyushu Hotel Blossom Oita Condominium business ・Further Strengthen Our Management Foundation ・Build Sustainable Railway Services by Improving Earnings Beppu Onsen ‐ Bamboo and Camellia Inn ‐ Hana Beppu ・Implement Strategic City-Building in our business area Okuhida Onsen Umehibiki ・Growth and Evolution in New Business Areas 【J.D. Power】 ●Target Management Indicators （Consolidated） 2017 Japan Hotel Lodging Guest Satisfaction Survey
18 03. Growth and Evolution in New Areas ― Advance Businesses that Leverage Technical Innovation
With a focus on the long-term trend in technical innovation, we will target sustainable business growth and Medium-Term further dramatic advancement for the next stage. Business Plan 2019‒2021 Take on the challenge of new mobility services（MaaS） Leverage new technologies
・S tart verification testing of new services in • Promote labor-saving and safety through the cooperation with taxi companies utilization of IoT technologies ・A pply MaaS concepts to city-building Take on the • Realize self-driving trains initiatives by utilizing such assets as challenges of • Introduce new train control systems parking lots connected to stations and Urban-style a future-focused • Use AI in train operation control rolling stock and by implementing MaaS railway business • Establish next-generation rolling stock ・new initiatives that leverage the knowledge inspection bases of venture companies, etc. (with additional
venture investment as needed)
Formulation of the New 01. Medium-Term Business Plan • Introduce reduced-workforce facilities in the ・S tart to consider the applicability of MaaS as a retail and restaurant businesses and Regional-style sustainable mobility service, with the future state Investment accepting mobile payments MaaS of regional transportation as the basic theme in laborsaving • Advance laborsaving and workforce 02. 2030 Long-Term Vision and workforce reductions in the construction business reductions through the use of 5G ・B uild models for the revitalization of areas around • Expand the use of robotic process automation Medium-Term Business Plan Tourism-style our railway lines through collaboration with (RPA) in all businesses 03. 2019‒2021 MaaS tourism facilities, commercial facilities, etc.
●JR Kyushu Group Medium-Term Business Plan 2019‒2021: Initiatives in digital areas Positioning and Priority Initiatives ・Further Strengthen Our Management Foundation • Initiatives involving the JR KYUPO consolidated membership base, ・Build Sustainable Railway Services by Improving Earnings ・Implement Strategic City-Building in our business area which has surpassed 250,000 members, as an asset ・Growth and Evolution in New Business Areas ‒ Cultivate premium customers by introducing apps, using machine ●Target Management Indicators learning, etc. （Consolidated） • Implement Groupwide digital transformation ●Sources/Uses of Funds and Shareholder Return Policy Target Total number of members : 500,000 The JR KyushuGroup's Management Sales revenues from members : ¥35.0 billion 04. Corporate Culture Indicators
19 03. Target Management Indicators（Consolidated） *1
Medium-Term Operating revenues Operating income Business Plan (Billions of yen) (Billions of yen) 500 70 2019‒2021 480.0 61.9 60 57.0 450 438.5 50
400 40
0 0 19.3 20.3 21.3 22.3 （FY） 19.3 20.3 21.3 22.3 （FY）
Formulation of the New ［Reference］Consolidated operating cash flow ［Reference］ROE 01. Medium-Term Business Plan ¥160.0 billion ¥220.0 billion 12.2％ More than 8% 02. 2030 Long-Term Vision （Total Amounts for FY17.3-FY19.3） （Total Amounts for FY20.3-FY22.3） （FY19.3） （FY22.3）
Unit: Billion; figures in parentheses show change vs. FY19.3 03. Medium-Term Business Plan 2019‒2021 Operating revenues*1 Operating income*2 Segment name Major factors FY19.3 FY22.3 FY19.3 FY22.3 ●JR Kyushu Group Medium-Term Business Plan 2019‒2021: Higher revenues due to increase in revenues from railway transportation Positioning and Priority Initiatives Transportation 181.9 184.0（+2.1） 26.1 21.0（▲5.1） Lower profit due to higher expenses accompanying elimination of special tax measures, increase in depreciation, etc. ●Target Management Indicators （Consolidated） Construction 93.1 98.0（+4.9） 5.9 6.0（+0.1） Higher revenue and profit due to Shinkansen-related construction work, etc.
●Sources/Uses of Funds and Higher revenues due to operating of Kumamoto Station Building,Miyazaki Station Building Shareholder Return Policy Real Estate and Hotels 89.9 113.0（+23.1） 25.4 24.0（▲1.4） Lower profits due to increase in expenses accompanying revision of revenue/expense classification The JR KyushuGroup's Retail and Restaurant 104.0 115.0（+11.0） 3.2 4.0（+0.8） Higher revenues and profits due to new store openings 04. Corporate Culture
Other 70.9 76.0（+5.1） 2.2 2.5（+0.3） Higher revenues and profit due to higher sales outside the Group, etc.
Total 438.5 480.0（+41.5） 61.9 57.0（▲4.9）
*1 Figures for FY19.3 are the most recent performance forecasts (Announced February 4, 2019).In regard to segments, the figures have been reclassified in accordance with the new segment categories. *2. Segment operating revenues and operating income are prior to elimination of inter-segment transactions. 20 03. Sources/Uses of Funds and Shareholder Return Policy
Over the period of the medium-term business plan, we will aim for capital investment of ¥340.0 billion, which will Medium-Term exceed our cumulative consolidated operating cash flow. We will take a flexible approach to investment Business Plan opportunities and work to realize growth by issuing corporate bonds and borrowings.
2019‒2021 《Financing》 《Uses of funds》 Steadily advance investment that contributes to ・D raw on our debt capacity to growth during the period of the medium-term business increase in order to offset plan and thereafter insufficient free cash flow Principal targets of growth investment ・M aintain financial soundness to Corporate Bonds address future changes in the [Railway] ・Design & Story trains and borrowing, etc. business environment Growth [Non-railway] Kyushu： investment: ・Development in the area around Kumamoto Station ・Miyazaki Station west entrance development ¥210.0 billion ・Hakata Eki-mae 2-chome integrated development （including M&A activities） Formulation of the New ・Implement sell/redeem financial Sell/redeem of financial assets Outside of Kyushu： ・T HE BLOSSOM HIBIYA 01. Medium-Term Business Plan assets for allocation to capital investments in the railway ・RJR Sakaisuji Hommachi Tower business* 02. 2030 Long-Term Vision Maintenance and upgrade While establishing sustainable railway services Consolidated investment: through improvement in earnings, position our primary ・I mplement maintenance and upgrade mission of safety as our highest priority and take steps Medium-Term Business Plan investment, certain portions of operating ¥130.0 billion to address issues such as frequent natural disasters 03. 2019‒2021 growth investment, and profit cash flow: and aging railway facilities and rolling stock distribution for shareholders, in ¥220.0 billion Safety investment: principle within the limits of ●JR Kyushu Group Medium-Term operating cash flow, to support ¥70.0 billion Business Plan 2019‒2021: sustainable management and Continue to provide stable returns to shareholders, Positioning and Priority Initiatives growth despite the expected impact from the end of special Profit distribution ●Target Management Indicators tax treatment, etc. （Consolidated） for shareholders
●Sources/Uses of Funds and * ¥87.2 billion of funds directed to the Management Stabilization Fund will be allocated to capital investment in assets for use in the railway business that contribute Shareholder Return Policy to the maintenance and enhancement of the railway network. Funds will be allocated within the five years from FY17.3.
The JR KyushuGroup's 04. Corporate Culture Shareholder JR Kyushu places importance on the stable provision of return to shareholders over the long term. Over the period to FY22.3, we will aim for a total payout ratio of 35% while providing stable return policy dividends and implementing share repurchase depending on the situation
21 04. ESG
The three pillars forming the JR Kyushu Group code of conduct are Integrity, Growth and Evolution, and Local The JR Kyushu Community Invigoration. Moving forward, the JR Kyushu Group will continue to strengthen and advance Group's Corporate initiatives in the environment, social, and governance fields in order to make an ongoing contribution to local communities through its business activities. Culture
Environment Social Governance
Work to support conservation of Work to secure and develop human Target the realization of what the the natural environment as a sources needed to address changes JR Kyushu Group aims to be, responsible company addressing in the social structure and ongoing build a stable long-term and trust environmental issues that have an innovation, and strive to contribute relationships of with stakeholders Formulation of the New influence on business continuity t o the establishment of a 01. Medium-Term Business Plan sustainable society
Major themes Major themes Major themes 02. 2030 Long-Term Vision • Climate change: Contribute to a • Safety (page 23) • Implement rigorous compliance to low-carbon society through • Service (page 24) prevent corruption and other Medium-Term Business Plan environmentally friendly station • Utilization of human resources, job wrongdoing 03. 2019‒2021 facilities and rolling stock satisfaction (page 25) • Strengthen risk management • Resource conservation: Proactively • Contribution to local communities • Establish management transparency • Enhancement of initiatives to address and fairness The JR KyushuGroup's move activities forward 04. Corporate Culture • Pollution prevention: Strive to ensure human rights issues • Enhance communication with safety in business areas and • Strengthen supply chain management stakeholders ●ESG peripheral environments
●Safety and Service New initiatives New initiatives New initiatives ●Development of Human Resources • Strengthen the system of the Ecology ・F ormulate various policies (human rights, ・Formulate various policies (corruption Committee purchasing, human resource prevention, governance) • Formulate the JR Kyushu development) ・D isclose related data Environmental Vision ・D isclose related data
22 04. Safety and Service ― Safety is Our Most Important Mission
We are guided by the belief that“safety is something you have to make,” and we believe that safety The JR Kyushu represents our most important mission and is the source of our corporate value. Accordingly, we emphasize Group's Corporate “safety” in all of our businesses. Culture ［Reference］ Eliminate dangerous accidents/ Total safety Safety investment ¥70.0 billion objectives events leading to serious accidents over 3 years （Incidents, four major types of labor accidents, Handling error（guidance type I））
Implement investment in safety, Establishing frameworks and which is the foundation for all of our businesses developing human resources in order to foster safety
■ Measures to prevent breakdowns and transport ■ Enhance safety management systems disruptions through the use of new technologies Formulation of the New ■ Further advance safety promotion activities 01. Medium-Term Business Plan ・Increase Shinkansen reliability through bogie monitoring equipment ■ Develop human resources who will pass down ■ Address aging through the introduction of safety to the next generation 2030 Long-Term Vision next-generation rolling stock, etc. 02. ・G roupwide initiatives in design, construction, and maintenance ■ Advance barrier-free initiatives ・A ddress changes in the workforce composition （installation of platform screen doors, etc.） Medium-Term Business Plan ■ Step up initiatives for the safety of food and facilities 03. 2019‒2021 ■ Address disasters of increasing severity, such as earthquakes and heavy rains The JR KyushuGroup's 04. Corporate Culture ・ Reinforce structures to increase earthquake resistance ・ Implement Shinkansen derailment countermeasures Initiatives to increase security ●ESG
●Safety and Service ■ Implement anti-terrorism and anti-crime measures in stations and on trains ●Development of Human Resources ・I ncrease anti-crime capabilities in cooperation with related institutions
■ Enhance IT security ・I mplement cyber-terrorism countermeasures ・I mplement rigorous personal information management Platform screen doors (Chikuhi Line) Next-generation rolling stock (YC1 series)
23 04. Safety and Service ― Toward a Corporate Culture Founded on Service
We will aim to be a corporate group that continues to be chosen by customers. To that end, in line with The JR Kyushu changes in the times and the business environment, we will provide services that address diversifying needs Group's Corporate and expectations.
Culture Provide a wide range of Strengthen the service improvement cycle customer-focused services to welcome customers with smiles and greetings
Awareness and greetings Feedback from customers and employees
・Emphasize rapid awareness and taking action ・Energetically reflect feedback for customers in products and policies ・Implement energetic“greeting and support” activities ・Create a corporate culture that places importance ・Cultivate appropriate support techniques on the awareness of customers and employees Formulation of the New 01. Medium-Term Business Plan For customers from overseas Reception skills and awareness capabilities
02. 2030 Long-Term Vision ・Use tablets and other tools ・Implement practical education and training ・Introduce station numbering ・Take steps to acquire appropriate skills ・Install free Wi-Fi Medium-Term Business Plan 03. 2019‒2021 ・Take steps to facilitate cashless settlement Together with Group companies
・Share information and expand service skills The JR KyushuGroup's Implement appropriate information provision 04. Corporate Culture and know-how among Group companies ・Enhance information on train operating ●ESG conditions in abnormal situations (Web / SNS) ●Safety and Service ・Conduct timely information provision ●Development of Human Resources
24 04. Development of Human Resources ̶ Development of employees who will learn and challange
We will endeavor to create an environment in which employees can work in a happy, dynamic, and active The JR Kyushu manner and to advance the development of the employees who will form the foundation for the sustainable Group's Corporate growth of the JR Kyushu Group. Culture Corporate culture that emphasizes learning Workplace environment that fosters action
Work energetically in human resource development Link employee awareness and learning to action and through the creation of a wide range of opportunities cultivate a corporate culture that emphasizes taking for learning on challenges
Internal and external education Training at the Safety Creation Center New business proposal system（HIRAMEKI） Formulation of the New 01. Medium-Term Business Plan Manager training Training facility renovation JR Kyushu Kaizen activities Proposal of improvement idea
02. 2030 Long-Term Vision
Medium-Term Business Plan 03. 2019‒2021 Pursue environments that are easy to work in Foster job satisfaction
Implement working-style reforms and create Enhance systems, etc., so that all employees The JR KyushuGroup's 04. Corporate Culture workplace environments that enable employees can leverage their individuality and capabilities to work with peace of mind in order to and work with pride ●ESG improve work-life balance, etc.
●Safety and Service Encourage employees to ●Development of Human Resources Control long work hours take annual paid leave Improve treatment of employees Build systems to support diverse working styles
Promote diversity Foster health management Implement operational reforms （RPA,, etc.） Conduct employee attitude surveys （employment of people with disabilities, etc.）
25 【Supplementary Information】 The city-building initiatives of the JR Kyushu Group
The JR Kyushu Group will advance city-building in Kyushu through a variety of business activities. Moving forward, we will continue to contribute to the sustainable development of Kyushu through city-building initiatives.
Create community appeal Create tourism and a lively atmosphere through real estate development through business activities and events
Hotels Retail and restaurant Integrated development Station Condominiums utilization
JR Kyushu Waiking
Stations / Station buildings Office buildings
Parking lots Seven Stars in Kyushu Tourism campaigns
MaaS Design & Story trains
Buses Shinkansen Conventional lines Hydrofoil ferries
Safe and secure mobility services
Contribute to the sustainable development of Kyushu （Kyushu region where people want to live, work, and visit）
26 This document contains forward-looking statements, including future outlooks and objectives of the JR Kyushu Group. These statements are judgments made by the Company based on information, projections, and assumptions available at the time of the document’s creation. Accordingly, please be advised that actual operating results could greatly differ from the contents of this document due to the effects of the economic situation inside and outside Japan, and of the Kyushu area, real estate market conditions, the progress of respective projects, changes in laws and regulations, and a wide range of other risk factors. In addition, the purpose of this document is only to provide information. Its purpose is not to solicit transactions.