Tokyu : Summary of Results for the year ended March, 2024 (Main questions and answers)

Conference Call on FY2023 Financial Results - Main Questions

and Answers

May 13, 2024

TOKYU CORPORATION

• Please note in advance that this is not a transcription of the entire Q&A session, but a brief summary prepared by the Company.

Q1. The Hotel business of the Company had been included in the Real Estate Business until FY2023, but it was moved to the Hotel and Resort Business in FY2024. What impact does this have? Excluding the impact of this transfer, do you expect to see profit decrease in both the Hotel and Resort Business and Real Estate Leasing Business in FY2024 compared to FY2023?

A1. To describe the impact of the segment classification change, the operating profit (approx. 3.7 billion yen) of the Hotel business of the Company, which had been included in the Real Estate Business, has been transferred, and it is a factor in the increase in the profit of the Hotel and Resort Business. On the other hand, the rent payments (approx. 2.2 billion yen) to the Real Estate Leasing business need to be made because it is now intersegmental transaction, so the total effect on the profit of the Hotel and Resort Business becomes an increase of approx. 1.5 billion yen.

If the impact of the segment transfer of the Hotel business of the Company, which had been included in the Real Estate Business, is corrected, the actual operating profit in FY2023 is 2.3 billion yen and in FY2024 it will be 2.0 billion yen, down 0.3 billion yen. While we expect increases in occupancy rate and average daily rate (ADR) and the absence of the opening expenses of the new hotels in Kabukicho and Sapporo which were posted in FY2023, we forecast a slight decline in profit in total due to an increase in labor costs and a profit decrease resulting from facility renovation.

Regarding the real estate leasing, the operating profit is expected to increase 1.2 billion yen compared to the FY2023. If the rent from the Hotel and Resort Business (2.2 billion yen) is excluded, however, it would be a decrease of around 1.0 billion yen. This is because we expect cost increases to achieve our future growth scenario, including the internal growth set in the medium-term management plan, while the business environment will remain favorable, as, for example, vacancy rates are expected to remain low.

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Q2. In the financial forecasts for FY2024, operating profit has been revised upward around 4.0 billion yen from the figure in the medium-term management plan. Is it correct to understand that the upward revision for FY2024 forecast reflects the revenue increases in FY2023, rather than the expected decrease in expenses?

A2. That is correct. We revised the forecast for FY2024 to reflect the increases in revenue. For the Real Estate Business, we reflected only the increase in revenue in the profit increase in FY2024 forecast, as there is an increase in revenue from commission rents, etc. as well as a decrease in expenses such as repair costs.

End

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