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Investor RelationsManagement's Message

20180622

 

 

 

 

 

 

 

 

 

  

 

 

Record high income posted for five consecutive years
Continuing to aim for sustainable growth by creating new business under a new management team

We will implement initiatives from medium- and long-term perspectives by taking advantage of our core competency.

   We are seeing steady progress in the Fourth Mid-Term Management Plan, which is aimed at achieving sustainable growth with our sights set on the period in 2020 and beyond, when we expect to see major changes in the business environment. Our consolidated net sales in FY2017 stood at 2,159.3 billion yen, and profit attributable to owners of parent was 133.2 billion yen. Operating income also exceeded the plan, marking a record high for five consecutive years. ROE was 11.6%, having remained stable at a level above 10%.

   These figures prove that we have produced a result in each of the four core businesses that have supported the growth of the Sekisui House Group, namely the Built-to-Order Business, Supplied Housing Business, Development Business, and Overseas Business, and that our initiatives for “building the foundation for the ‘residential’-related business toward BEYOND 2020,” the basic policy of the Mid-Term Management Plan, are making steady progress. Above all, sales from the Overseas Business exceeded 300 billion yen, with steady progress in the handovers of condominium units in Australia and sales of properties in the multifamily rental housing development in the United States. Operating income also grew significantly, approaching 30 billion yen. The Overseas Business has thus grown so far as to contribute to strengthening our financial standing. At Sekisui House, we will continue to reinforce our policy of “break-even point management” and link achievements from the mid-term management plan for the period until FY2019 to leap further forward from 2020 onward, in addition to striving to achieve the mid-term management plan. This is what our new management team is promising shareholders and investors once again. The key words are “sustainable growth.”

   This will be driven by our technical capabilities, customer base, and construction capabilities, which are our core competencies in medium- and long-term business promotion and the greatest strengths of Sekisui House. With respect to technical capabilities, the Flexible β system, a new construction method of 3- and 4-story houses, has joined our unique technologies that support our brand vision SLOW & SMART, including environmental technologies, SHEQAS, Airkis, and our original exterior walls. This has increased our design adaptability and strengthened our capability for proposing spaces, and is demonstrating high market competitiveness in non-residential fields that match the needs of the times, such as nurseries, medical facilities, and hotels that cater to the demand from inbound tourists.

   Most importantly, the cumulative total number of houses we have constructed is 2.38 million. Based on this global No.1 track record and customer base, we will step up our cooperation further within the group in our efforts to expand the Supplied Housing Business. Regarding the improvement of construction capabilities, we are focusing our efforts on the development of human resources as next-generation leaders to avoid being affected by the shortage of manpower as a social situation.

Housing construction in the era of the 100-year human life.
Providing new value from a new perspective

   This is a longevity society, and it is not too much to say that we are in the era of the 100-year life. In such a situation, Sekisui House believes that providing new value in some form or other is the mission that the housing industry will be expected to fulfill.At Sekisui House, we have been providing safety, security, and comfort by using advanced technologies. We believe that the value we will provide in the future will be fulfillment in terms of intangible aspects, with the keywords “family” and “health.” We will need to evolve our measures regarding after-sales services further and tackle the challenge for health and happiness in the era of the 100-year life head-on.In the future, this should leadto the creation of new functions and new value, such as residences based on preventive medicine and houses that create good health.

   Innovations related to IoT, AI, robots, and others will be based on the concept of “What people require of technologies” instead of “What technologies can do.” The view point of providing intangible value by using IoT, AI, and other technologies and equipment must be reflected in housing construction hereafter. We are sure that we will be able to propose ideal next-generation residences that are unique to Sekisui House by proceeding to the new stage of housing construction by taking full advantage of our customer base and accumulated expertise.

We will continue working to maximize shareholder value by having a stronger awareness of ESG factors.

   We see the acceleration of moves to place emphasis on ESG factors (environmental management, improvement of social value, and governance), in addition to financial information, as the criteria for selecting investment destinations and measuring corporate value. This means that the protection of the social environment will be the basic premise for the pursuit of profit and the improvement of corporate value. Sekisui House was selected as a constituent of all three ESG Indices used by the Government Pension Investment Fund (GPIF) when the GPIF commenced ESG investment. In addition, Sekisui House was selected for the Gold Class honor for three years running at the RobecoSAM Sustainability Awards 2018. Gold Class is the highest rank in the Homebuilding category of the Awards, which are hosted by RobecoSAM AG, a world-class assessor of socially responsible investment (SRI) in Switzerland. To keep working in a way that deserves this evaluation, we will promote management with a strong awareness of ESG factors.

   With respect to environmental management, we will promote zero energy houses (ZEHs) (Green First Zero of the Company), which accounts for nearly 80% of newly constructed detached houses. The ratio of ZEH at Sekisui House is overwhelmingly higher than other companies and attracted attention at COP23, which was held in Bonn in November last year.

   In terms of social value improvement, we are focusing our efforts on work style reforms. In 2017, Sekisui House won the Minister of State for Special Missions Award in the Award for Advanced Enterprises in which Women Shine for FY2017, for the first time in the construction industry. Moving forward, we will improve productivity by applying information technologies, promote measures for developing and retaining human resources, and promote diversity of human resources under the slogan “Creating an exciting workplace.”

   Concerning governance, we will of course strive to establish systems and mechanisms by following the Basic Policy on Corporate Governance that we formulated in 2016. In addition, we are determined to overcome challenges by taking comprehensive measures to reinforce our self-governance from the inside.

   Sekisui House regards the maximization of shareholder value as one of its most important management issues. This basic stance remains unchanged under the new management setup. We will strengthen our financial standing further by improving cash flow. We will seek to operate more quickly and achieve further growth by making investments and achieving returns on investments in a well-balanced manner. We regard the achievement of performance targets and management objectives and shareholder returns as inseparable and increase EPS in our efforts to increase shareholder return.

   Times are changing and evolving rapidly. Digitalization is expected to be a keyword for growth in house marketing strategies as well.

   Sekisui House changed its representative directors as of February 1, 2018. We implemented a generational change in our top management with the aim of responding more promptly and appropriately to the turbulent market environment and achieving the sustainable growth of our businesses. We will also start working on organizational reforms, which will create the driving force for sustainable growth.

   The future is bright for Sekisui House, which has embarked on a new chapter youthfully and powerfully. We would appreciate your continued support.