Tokyu : Presentation for Investors for the year ended March, 2024 (Transcript)

Presentation for Investors for
	the year ended March, 2024
May 14, 2024	9005	https://www.tokyu.co.jp/

Contents

Ⅰ.	Executive Summary	3
Ⅱ. Financial Strategy / Shareholders Return	14
Ⅲ. Topics of each business	17
Ⅳ. Initiatives to Enhance the Value of Tokyu	26
Ⅴ. Key Performance Indicators for Each Business	37
Ⅵ. Details of Financial Results for FY2023	44
Ⅶ. Details of Financial Forecasts for FY2024	57
Ⅷ. Our Business Model and Competitive Advantage	71
Ⅸ.	ESG information	82

© 2024 T OKYU CORPORATION All Rights Reserved.

2

Ⅰ . Executive Summary
© 2024 T OKYU CORPORATION All Rights Reserved.	3

FY2023 Main Points in the Results (1)

▎Comparison with the previous fiscal year

• Operating revenue and operating profit both increased mainly due to fare revisions in Tokyu Railways and Increase in condominium sales in the Real estate business, in addition to recovery of demand in Railway and Hotel business.
• Profit attributable to owners of parent rose chiefly due to an increase in share of profit of entities accounted for using equity method in addition to increased operating profit.

	FY2022	FY2023	YoY
(Unit : Billion yen)	Results	Results	Comparison

Operating Revenue	931.2	1,037.8	+106.5
（+11.4%）
Operating Profit	44.6	94.9	+50.3
（+112.8%）

FY2023	Comparison with
Feb. Forecast	Feb. Forecast

1,041.4 -3.5

（-0.3%）

90.0 +4.9

（+5.5%）

Real Estate Sales Operating Profit	6.6	+10.9
17.6

17.8

-0.2

（+165.7%）

（-1.5%）

Operating Profit excluding	37.9	+39.3
	77.2

72.1

+5.1

Real Estate Sales			（+103.5%）
Business Profit*	45.2	95.5	+50.3
（+111.3%）
Recurring Profit	47.3	99.2	+51.9
（+109.6%）
Profit attributable to	25.9	63.7	+37.7
owners of parent	（+145.3%）

（+7.2%）

90.3 +5.2

（+5.7%）

93.8 +5.4

（+5.9%）

60.0 +3.7

（+6.3%）

• Business Profit = Operating Profit + Investment gains (loss) from equity method (excl. listed companies) + Dividend Income related to Real Estate Business, etc.

© 2024 T OKYU CORPORATION All Rights Reserved.

4

〇This slide shows main points in the results for FY2023.

〇Operating revenue stood at 1,037.8 billion yen, operating profit was 94.9 billion yen, and profit attributable to owners of parent amounted to 63.7 billion yen.

〇 Compared to the previous fiscal year, operating revenue

increased by 106.5 billion yen and operating profit increased by

50.3 billion yen, reflecting a recovery in the number of passengers and guests in the Transportation Business and the Hotel and Resort Business, as well as an increase in condominium sales and railway fare revisions.

〇Profit attributable to owners of parent increased by 37.7 billion yen, principally because of an increase in equity in income of equity-method affiliates.

〇Compared to the February forecast, operating profit increased by 4.9 billion yen and profit attributable to owners of parent increased by 3.7 billion yen, mainly due to an increase in commission rent from real estate leasing.

FY2023 Main Points in the Results (2)

【Medium-Term Management Plan Management Indicators】

FY2022 FY2023 Results Results

YoY FY2023

Comparison

Feb. Forecast

Comparison with

Feb. Forecast

EPS	(Yen)	42.94	105.84	+62.90
（Earnings Per Share）
ROE	(%)	3.6	8.3	+4.7
（Return on Equity）
ROA	(%)	1.7	3.6	+1.9
（Business Profit ROA*）

1. +6.24

1. +0.4

3.4 +0.2

TOKYU EBITDA*	(Billion	144.6	203.6	+58.9
yen)

198.6

+5.0

（+40.7%）

（+2.5%）

EBITDA	(Billion	127.5	181.6	+54.1
yen)

177.8

+3.8

				（+42.4%）
Interest bearing debt/	(Times)	8.9	6.2	-2.7
Tokyu EBITDA multiple
Net Interest bearing debt/	(Times)	9.5	6.7	-2.8

EBITDA multiple

（+2.1%）

6.4 -0.2

6.9 -0.2

• Business Profit = Operating Profit + Investment gains (loss) from equity method (excl. listed companies) + Dividend Income related to Real Estate Business, etc.
• TOKYU EBITDA = Operating profit + Depreciation + Amortization of goodwill + Disposal cost of fixed assets + Interest and dividend income +

Investment gains (loss) from equity method

© 2024 T OKYU CORPORATION All Rights Reserved.

5

〇Performance indicators for the fiscal year ending March 31, 2024.

〇In the upper row, earnings per share was 105.84 yen, the ROE was 8.3%, and business profit ROA was 3.6%.

〇The interest-bearing debt/TOKYU EBITDA multiple was 6.2 times, achieving all the targets set forth in the previous medium- term management plan.

FY2023 Operating Profit by Segment: Financial Results Key Points

Tokyu Hotels, etc. +4.0

(Hotel and Resort：

Increase in profit due to lower energy costs +1.3)

Real Estate Sales +10.9

Real Estate Leasing +3.8

Hotel business of the Company +3.7

(Real Estate： Increase in profit due to lower energy costs +0.0)

Tokyu Railways, etc. +20.7
Tokyu Bus・Tokyu Transses +1.0	+4.8
(Transportation：	+19.8

Increase in profit due to lower energy costs +0.1)

(Billion yen)

Retail +1.2

‒ Tokyu Store Chain +1.3

‒ Tokyu DepartmentStore -0.5

(Retail：Increase in profit due to lower energy costs +0.6)

ICT and Media +0.8

( ICT and Media ：Decrease in profit due to higher energy costs -0.1)

+2.0 ±0.0 94.9

+23.5

44.6

Increase in profit due to lower energy costs +1.9

© 2024 T OKYU CORPORATION All Rights Reserved.

6

〇These are the key points of our financial results by segment.

I will explain comparison with the previous fiscal year.

〇Operating profit of the Transportation Business increased by +23.5

billion yen. In addition to an increase in the number of passengers carried due to a demand recovery at Tokyu Railways and the effect of the fare revision, we saw a recovery in each of our businesses, including Tokyu Bus Corporation.

〇Real Estate Business posted a profit increase of 19.8 billion yen.

In addition to a large increase in profit in the Real Estate Sales Business associated with an increase in the number of condominiums delivered, the real estate leasing and hotels in mixed-use properties, such as The Capitol Hotel Tokyu and Cerulean Tower Tokyu Hotel, performed well.

〇The Hotel and Resort Business posted a profit increase of 4.8 billion yen due to an increase in the average daily rate, resulting from a recovery in demand and value-added activities, despite the opening expenses for new hotels in Shinjuku and Sapporo.

〇In the Life Service Business, both Retail business and the ICT and Media business increased profits, for a total of +2.0 billion yen.

FY2023 Operating Profit by Segment: Forecast as of February
Retail +0.9	(Billion yen)
Tokyu Railways, etc. +0.8
‒ Tokyu Store Chain +1.0

(Retail: Decrease in profit due to higher energy costs -0.0)

ICT and Media +0.5

‒ Tokyu Power Supply +0.7

(Transportation:Increase in profit due to lower energy costs +0.3)

(ICT and Media : Increase in profit due to lower energy costs +0.0)

Tokyu Hotels, etc. +0.2

(Hotel and Resort: Increase in profit due to lower energy costs +0.1)

Real Estate Leasing +2.4

Hotel business of the Company +0.3

(Real Estate:

Increase in profit due to lower energy costs +0.1)

+0.3

+0.594.9

+1.5-0.2

+2.7

90.0

Increase in profit due to lower energy costs +0.6

© 2024 T OKYU CORPORATION All Rights Reserved.

7

〇It shows a comparison with the forecasts that were revised upward in February.

〇Operating profit increased by 4.9 billion yen due to better-than- expected results, mainly in the Real Estate Business and Life Service Business.

Consolidated Financial Results for FY2023

• Operating profit continued to exceed pre-COVID levels as a result of the progress of structural reforms in each business in addition to the gradual recovery of the business environment from the COVID crisis.

Consolidated Operating Revenue and Operating Profit Trends

1,345.0 (Billion yen)

1,164.2		Operating Revenue		Operating Profit	165
1,145.0						1,037.8
		935.9	879.1	931.2
945.0
						115
745.0						94.9
68.7
545.0
						65
					44.6
345.0				31.5
145.0						15
-55.0
-255.0						-35
		-31.6
	FY2019	FY2020	FY2021	FY2022	FY2023

© 2024 T OKYU CORPORATION All Rights Reserved.

8

〇The graph shows trends in operating revenue and operating profit from FY2019.

〇Thanks in part to the effects of structural reforms and value- added creation that have been undertaken since the Covid-19 pandemic, operating profit for FY2023 reached a record high.

〇Please refer to the next page for the changes by segment.

Each Business Performance for FY2023
Transportation	Real Estate

	Increase from the previous year due to the effect of fare revision			Increase from the previous year due to stable profit contribution
	at Tokyu Railways, etc. in addition to a recovery in the number of			from the real estate leasing business and increased
	passengers transported in the railway and bus businesses.			condominium sales in the real estate sales business
(Billion yen)	Operating Revenue	Operating Profit				(Billion yen)	Operating Revenue	Operating Profit
	213.6	213.6
											286.5
					184.0			60	300.0					90
200.0				166.5
		151.9											80
170.0								250.0			223.2	220.4
					32.0			210.1
						40
140.0	27.0					197.6		70
110.0									200.0			45.2	48.7	60
80.0								20
				8.5							50
						150.0
50.0
								29.0	28.9		28.8		40
20.0
							0	100.0			30
-10.0
			-3.9
-40.0							50.0						20
-70.0			-26.0					-20						10
								0.0						0
		FY2019	FY2020	FY2021	FY2022	FY2023
			FY2019	FY2020	FY2021	FY2022	FY2023

Life Service

Although there was an impact from the closure of the flagship

store of Tokyu Department Store, the profit increased due to a

recovery in demand in other businesses.

(Billion yen)	Operating Revenue	Operating Profit
	707.9	603.5
600.0		502.7	517.2	518.8
400.0	13.4			13.1
		11.0

200.0

6.6

0.0

-3.8

-200.0

FY2019

FY2020

FY2021

FY2022

FY2023

Hotel and Resort

Tokyu Hotels is experiencing a recovery due to a rebound in inbound demand and other factors.

(Occupancy rate in FY2023: 75.7%, YoY+5.8P)

(Billion yen)
	96.1	Operating Revenue	Operating Profit	89.8
100.0									50
3080.0						70.8				40
60.0		37.8	43.5						30
20
40.0											20
1020.0										0.7	10
0.0											0
0	-1.4
						-4.1
-20.0									-10
			-16.7
-40.0										-20
		-31.2
-10
	FY2019	FY2020	FY2021		FY2022	FY2023
					© 2024 T OKYU CORPORATION All Rights Reserved.	9

Assumptions for FY2024 Forecasts

Forecastof

theBusiness Environment

• Continued recovery of the business environment is expected, including a recovery in demand for transportation and an increase in inbound demand
• Rise in labor costs due to base salary increases and hiring increases, etc., has been factored in for each business.
• Promote business while taking into account the impact of changes in the external environment, such as soaring construction costs and interest rate trends

Forecast for

Each

Business

Tokyu Railways

Transportation	⚫ Number of passengers carried: 1,064,206 thousand people / YoY +1.1%
	⚫ Passenger Revenue: 147.2 Billion yen / YoY +1.5%

Real Estate Sales

The number of units delivered for sale is expected to decrease from the previous year, mainly due to a rebound from the high supply of domestic housing sales in the previous year.

Real Estate

⚫ Number of units sold：478units YoY -196units Real Estate Leasing

Vacancy rates are expected to remain low.（Reference March 2024 actual: Vacancy rate 1.2%）

Tokyu Department Store

⚫ YoY Changes in Store Sales: All Stores -1.1%,Existing Stores +2.3% / YoY Changes in Sales (Incl. rent): Existing Stores +2.0%

Life Services

	Tokyu Store Chain
	⚫ YoY Changes in Store Sales: All Stores +0.4%, Existing Stores(*Supermarket business only) +1.4%
	Hotel Business
Hotel and	Both occupancy rate and average daily rate (ADR) are expected to increase from the previous year due to
gradual increase in domestic travel and inbound demand, etc.
Resort
⚫ Full-year occupancy rate: 78.5% YoY +2.8P
	⚫ Average daily rate (ADR): 21,897 yen YoY +716 yen

		Other	⚫ Labor costs are expected to increase approximately +8.9 billion yen YoY.
		Topics

The forecast for FY2024 has been revised upward from

the Three-yearMedium-term Management Plan announced in March 2024.

© 2024 T OKYU CORPORATION All Rights Reserved. 10

〇I would like to explain our full-year forecast for FY2024. First, assumptions for our forecast.

〇The overall business environment is expected to remain favorable, with a continued recovery in demand for transportation and an increase in inbound demand.

〇With regard to labor costs, we will prepare for future growth

scenarios by improving employee compensation, raising wages through base increases and other means and increasing the number of hires in response to a recovery in demand.

〇In addition, soaring construction costs, rising interest rates, and other factors must be kept in mind.

〇The assumptions and main KPIs for each business are listed under the "Forecast for Each Business" section in the middle.

〇In the Real Estate Business, we expect a reactionary decline in condominium sales from FY2023, but we have factored in modest increases in the number of passengers carried in Tokyu Raiyways, and sales at retail stores, as well as occupancy rates and average daily rate in the hotel business.