Medium-term Management Plan

Tokyu Corporation (the “Company”) hereby announces the development of a Three-Year Medium-Term Management Plan (period covered: fiscal 2021 to fiscal 2023; the “Plan”) that begins in fiscal 2021.

Under the previous Three-Year Medium-Term Management Plan that started in April 2018, the Company and its consolidated subsidiaries (the “Group”) steadily executed and completed key measures, including large development projects, such as the Shibuya Scramble Square East building and Minami-machida Grandberry Park, and safety investments, such as the installation of railway platform doors at the rate of 100%. However, the Group failed to achieve the numerical targets set out in that plan due to the strong impact of the COVID-19 pandemic.

Significant changes have also occurred in operating conditions surrounding the Company, including issues that have emerged as a result of COVID-19’s spread. The Company recognizes the need to map out strategies based on its awareness of the signs of medium- and long-term paradigm shifts, grasping changes in actions, demands and other aspects of society, including a trend toward a lower birth rate and an aging population, population decline, workstyle changes, and the evolution of digital technologies.

In the Plan, the Company adheres to a policy of sustainable management for addressing essential sustainability themes, and helping to solve social issues while achieving business growth through a long-term resource-recycling business model under the Group slogan, Toward a Beautiful Age. The Company additionally adopts “変革(Henkaku)” for revenue recovery and growth in response to changes in the operating environment as another basic policy in the Plan. The Company seeks to restore its revenue level by dealing with the latest changes in the business environment and advancing measures for realizing structural reforms. At the same time, the Company aims at achieving sustainable growth by enforcing key strategies in the period under the Plan, which is positioned as a turning point for new growth.

The overview of the Plan is as presented in the Attachment.

Overview of the Three-Year Medium-Term Management Plan

1. Execution period
Three years from fiscal 2021 (fiscal 2021 to fiscal 2023)
2. Basic policies
“変革(Henkaku)”: Revenue recovery and growth by responding to changes in the operating environment
3. Key strategies
(1) Strengthen business structure in the transportation infrastructure business
Pursue safety and security, aim to achieve both public benefit and profitability at high levels, and reform operations using technology to strengthen the business structure.

(2) Respond to new values in the real estate business
Implement Tokyu’s unique urban development that will create social values, which will play a central role in consolidated business profit, and raise profitability to drive profit growth.

(3) Change business and services corresponding to new lifestyles
Raise the competitiveness of each business by providing services corresponding to environmental changes, and contribute to consolidated profit.
(i) Grow profit by meeting demand in lifestyle infrastructure business, etc.
(ii) Upgrade Tokyu area services to meet customers’ needs and current demand.

(4) Implement structural reform in each business
Promote structural reforms in businesses that have been facing issues since before COVID-19, redevelop strategies for the Group’s businesses, and improve consolidated business management.

4. Fiscal 2021 arrival levels (quantitative indicators)

(Unit: billion yen)

quantitative indicators FY2020
TOKYU EBITDA* 74.7 118.7
Operating profit -31.6 20.0
Interest-bearing Debt/
TOKYU EBITDA Multiple (times)
15.8 10.3

*Operating profit + Depreciation + Amortization of goodwill + Disposal cost of fixed assets
+ Interest and dividend income + Investment gains (loss) from the equity method

5. Reference
Attachment: Three-Year Medium-Term Management Plan (FY2021 to FY2023)

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