Nankai Electric Railway Company Profile 2016
Corporate Philosophy Based on our Corporate Philosophy, which we have adapted to the latest social trends, and the message of our corporate symbol, the Company considers itself a comprehensive lifestyle provider centered on railway operations. As such, we aim to help build prosperity and contribute to society through broad-based businesses that support every aspect of people’s lifestyles. Corporate Philosophy (Drawn up April 1, 1993)
With expertise and dynamism, forging the way to the future ◆ Contribution to the Community Justifying public trust as an all-round lifestyle provider and building a better society
◆ Putting the Customer First
Providing excellent services for the customer and bringing living comfort and cultural enrichment
◆ Future Challenges
Meeting the needs of coming generations with bold energy and creativity
◆ A Dynamic Workplace
Creating a workplace brimming with vitality and harnessing the expertise and personal strengths of every employee
Corporate Symbol Our logo symbolizes our striving for the future as a comprehensive lifestyle company. It features two wings, one vivid red and one bright orange. The red, like the sun shining on the southern seas, represents our passion, and the orange the optimism of the human heart.
Message from the Management 2
Contents
Business Area
3
Route Map
4
Segment Information 5 Transportation 7 Real Estate 9 Retail 11 Leisure and Services 13 Construction and Other 13 Corporate Social Responsibility 14
The 3-Year Management Plan —“Shinten 133 Plan” Strengthen Semboku-related business Expand the Kansai International Airport and inbound tourism business Increase the drawing power of the Namba area Creating attractive areas along our railway lines
15 17 19 21 24
Financial Data
25
Investor Information
30
1 Nankai Electric Railway Company Profile 2016
Messag e f ro m t h e Ma n a g e m e n t
President and CEO
Teruhiko Achikita
station. In addition, the Group operates the Higashiosaka and Kitaosaka logistics centers, and develops and promotes the reorganization and advanced-use planning of these facilities, aiming to expand the operations of the logistics business. To “expand the Kansai International Airport and inbound tourism business,” we are working to ensure we capture the influx of inbound tourists, which continues to grow. This includes meeting demand for a wider selection of railway tickets, providing multilingual signage at stations and on passenger cars, and continuing our efforts in both infrastructure and services to put in place a structure for handling growing demand. With the April 1, 2016 transfer of management of Kansai International Airport to a private operator in which Nankai Group has an equity stake, we also aim to maintain and increase income opportunities from our a irport-related businesses. To “increase the drawing power of the Namba area,” we are working to ensure steady progress with the new construction to transform the New Nankai Kaikan Building (tentative name), a project that was started in September of 2015 and represents the culmination of our efforts to increase the value of the Namba area. We will also ramp up efforts to attract new tenants, with the goal of making this building a new core of the Namba area, equipped with a variety of functions. Further, we are taking aggressive steps to enhance the brand image of the Nankai Group and its business areas, aimed at making the locations along our railway lines more attractive and working to establish a solid business base that is not dependent solely on inbound tourism demand. By advancing these and other initiatives, all of us at the Nankai Group will work together to enhance corporate value. We appreciate the continued support and encouragement of all of our shareholders in this effort.
Founded in 1885, the Nankai Electric Railway Co., Ltd. was the first railway company in Japan to be established purely by private capital. It currently operates three main lines from its landmark terminal in Namba, Osaka: the Nankai Line to Wakayama, the Koya Line to the Koyasan (Mount Koya) World Heritage Site and a line running to the Kansai International Airport. While focused mainly on railway, bus and other transportation operations, the Nankai Group is also involved in real estate (rental office space and residential developments), retail (shopping center management), amusement park and golf course management, office building maintenance and other leisure and service businesses, as well as construction and other operations. Through quantitative growth (revenue growth) and qualitative improvement (improved financial soundness), the “Shinten 133 Plan,” our medium-term management plan for the three year period beginning in fiscal 2015, is intended to further strengthen our business foundation. Under the three basic policies (our priority items) laid out in that plan, we have been working on a variety of measures to accomplish that goal. In fiscal 2015, the first year of the plan, these efforts resulted in our reaching the numerical targets for the final year of the plan in terms of operating income and balance of interest-bearing debt to EBITDA ratio. With an emphasis on returning profits to our shareholders, we also established a fiscal year-end dividend of ¥6.0 per share (for a total of ¥6.0 yen for the year, as no interim dividend was issued). Reviewing the progress made with our initiatives under the Shinten 133 Plan, our efforts to “strengthen the Semboku-related business” have focused on working together with Semboku Rapid Railway Co., Ltd., which was made a subsidiary of the Nankai Group in July 2014, in order to improve the convenience and amenities provided by our transport services in the Semboku area. This is intended to increase market share for the Nankai Group, while making the Semboku area as a whole more attractive through renovation of Izumigaoka Station, at the heart of the area, and through revitalization projects in the district fronting the
June 2016
Teruhiko Achikita President and CEO
2 Nankai Electric Railway Company Profile 2016
Business Area
Main Business Area
Osaka
Wakayama
Tokyo
Population
GDP
Japan
127
¥500,000
Nankai Business Area (Osaka + Wakayama Prefectures)
9.8
¥41,000
7.7%
8.2%
million
million
Ratio
billion
billion
Source: Population figures were announced by the Statistics Bureau of the Ministry of Internal Affairs and Communications. GDP is the nominal GDP announced by the Cabinet Office. Both are the latest figures as of October 2016.
3 Nankai Electric Railway Company Profile 2016
Rou te M ap
Osaka (Umeda)
Nankai Line Koya Line Airport Line Nankai Ferry Route JR Semboku Line Lines Owned by Other Companies
Namba Tennoji Shin Imamiya Tengachaya Nankai Terminal Building
Sakaihigashi Nakamozu
Sakai
Osaka Bay
Awaji Island
Izumigaoka
Nankai Line Kansai International Airport Kansai International Airport Courtesy of Kansai International Airport Land Development Co., Ltd.
Izumiotsu
Airport Line
Koya Line
Semboku Rapid Railway Izumi-chuo
Izumisano
Rinku Town
Misaki Park
Rinkan Den-entoshi
Osaka Prefecture Wakayama Prefecture
Hashimoto
Tokushima Prefecture Wakayamashi
Wakayama
Nankai Shikoku Route
Koya-san
The World Heritage Site Koya-san
Wakayama Castle
Koya-san
4 Nankai Electric Railway Company Profile 2016
Segment Inf o rma t io n
The Nankai Group at a Glance The Nankai Group is one of the major railway operators in Japan, and a commercial developer based in the southern Osaka area. The prosperity of this area was formerly based on textile industries. Now, it is being revitalized with the development of advanced distribution facilities. The Nankai Group’s businesses fall into six segments: Transportation, Real Estate, Retail, Leisure and Services, Construction, and Other.
We are developing our business in each of these segments by pursuing greater efficiency and the expansion and growth of business. The main pillars of our operations are the railway business and our real estate operations: rental businesses around the Namba terminal area, one of the two major railway terminals in Osaka, and residential development projects in the southern Osaka area.
34
Transportation
Companies (Millions of yen)
(Millions of yen)
Sales by Segment 100,000
93,574
Operating Income by Segment
98,729
20,000
16,500 12,937
39.0%
50,000
50.0%
0
10,000
0
FY2014 FY2015
Railways Tramway Buses
Ferries
Nankai Electric Railway Semboku Rapid Railway Hankai Tramway Nankai Bus Wakayama Bus KANSAI AIRPORT TRANSPORTATION ENTERPRISE Kumano Kotsu Tokushima Bus
Freight Transportation Rolling Stock Maintenance
FY2014 FY2015
Nankai Ferry Southern Transport Services Nankai Express Nankai Vehicles Service Engineering 22 Other Companies As of March 31, 2016
5
Real Estate
Companies (Millions of yen)
(Millions of yen)
Sales by Segment 40,000
13.3%
Operating Income by Segment 10,000
32,323 33,744
20,000
28.5%
0
Sales
Nankai Electric Railway Semboku Rapid Railway
5,000
0
FY2014 FY2015
Rentals
8,983 9,379
FY2014 FY2015
Nankai Electric Railway Nankai Fudosan 2 Other Companies As of March 31, 2016
5 Nankai Electric Railway Company Profile 2016
11
Retail
Companies (Millions of yen)
(Millions of yen)
Sales by Segment 40,000
13.9%
Operating Income by Segment 4,000
33,856 35,200
20,000
3,386 3,163
9.6%
0
2,000
0
FY2014 FY2015
Management of Shopping Centers
Station Premises Business
Nankai Electric Railway Panjo
FY2014 FY2015
Nankai Shoji 8 Other Companies As of March 31, 2016
22
Leisure and Services
Companies (Millions of yen)
(Millions of yen)
Sales by Segment 40,000
15.4%
Operating Income by Segment
37,019 38,863
20,000
2,000
5.6%
0
1,000
0
FY2014 FY2015
Amusement Travel Hotels Rental of Motorboat Racing Facilities
Building Maintenance Funeral Business
Nankai Electric Railway NANKAI TRAVEL INTERNATIONAL Hotel Nakanoshima
FY2014 FY2015
Nankai Building Service Nankai Grief Support 16 Other Companies As of March 31, 2016
Suminoe Kougyou
6
Construction
Companies (Millions of yen)
(Millions of yen)
Sales by Segment 50,000
39,113
17.7%
Operating Income by Segment
25,000
1,946
2,000
44,830
5.9%
0
1,000
1,081
0
FY2014 FY2015
Construction
1,817 1,841
FY2014 FY2015
Nankai Tatsumura Construction Nichiden Shokai
4 Other Companies As of March 31, 2016
4
Other
Companies (Millions of yen)
(Millions of yen)
Sales by Segment 2,000
Operating Income by Segment
1,939 1,825
200
182
123
0.7%
1,000
0.4%
0
0
FY2014 FY2015
Information System
100
Nankai Management Service
FY2014 FY2015
3 Other Companies As of March 31, 2016
6 Nankai Electric Railway Company Profile 2016
S e g ment Inf ormati on
Segment business operations Railways Tramway Buses
Transportation
Ferries Freight Transportation Rolling Stock Maintenance
The Transportation segment consists of the Group’s core railway business and its tramway, bus and ferry operations, through which we provide convenient and popular public transportation services to the community. Railway Business
Operating revenue (FY2015): ¥66,361 million
The railway business is based in Namba, one of the two major terminal stations in Osaka along with Umeda. From here, our main line serves Wakayama, the administrative center of Wakayama Prefecture, while the Koya Line terminates at the Koya-san World Heritage Site. A branch line gives direct access from Namba to Kansai International Airport. This network covers a wide area south of Osaka, and is used for work and school commuting, as well as leisure and tourist travel. With a total of eight main and branch
lines, we operate a total track length of 154.8 km. We manage a total of 100 stations including Namba Station, which has around 250,000 passengers per day, as well as around 700 items of rolling stock. As a public transportation service provider, passenger safety is of course our main priority. Rigorous safety measures are in place for rolling stock, amenities and facilities, and personnel attend strict training programs. In further measures to provide high-quality services, we are making our entire network barrier-free.
Revenue from Railway Passengers and Passengers Carried (Nankai Electric Railway)
Revenue from Airport Line Passengers and Passengers Carried Revenue (Millions of yen) Passengers (Thousands)
Revenue (Millions of yen) Passengers (Thousands) 228,862 53,532
227,031 53,473
12,085 7,699
233,301 55,911 5,596
FY2013
FY2014
FY2015
9,119
FY2013
7 Nankai Electric Railway Company Profile 2016
6,272
10,076
FY2014
FY2015
S e g m e nt I nf o r ma ti o n
Limited Express
Rapi t
Southern
Koya
The Nankai Group’s railway network further expanded with the addition of Semboku Rapid Railway as a consolidated subsidiary in July 2014. Semboku Rapid Railway had previously engaged in mutual direct operation with the Koya Line and has played a role in linking Osaka’s city center with Semboku New Town, a suburban housing area straddling the communities of Sakai and Izumi. These
Rinkan
services play the role of a vitally important regional transportation artery. Looking ahead, we will cooperate with Nankai Group companies to increase convenience and revitalize the areas along our railway lines.
Bus Operations
Semboku Rapid Railway
Operating revenue (FY2015): ¥26,502 million
Our well-established bus route network covers Osaka Prefecture (south), Wakayama Prefecture and Tokushima Prefecture on neighboring Shikoku Island. We also operate high-speed routes linking our service areas with major cities throughout Japan, giving us a very broad-based network. A limousine bus also connects major cities in the Kansai region with Kansai International Airport. Nankai Bus
Ferry Operations and Other We provide convenient ferry connections between Kansai and Shikoku, through services linking Wakayama with Tokushima, the nearest major port on the island.
Other transportation-related service businesses run by Group companies include tramway operation in populous Osaka and Sakai, freight transportation, and rolling stock and vehicle maintenance primarily for the Group.
Nankai Ferry
Nankai Express
8 Nankai Electric Railway Company Profile 2016
Nankai Vehicles Service Engineering
S e g m e nt I nf o r ma ti o n
Segment business operations Rentals Sales
Real Estate
Our real estate operations help to create a fulfilling living environment for residents along our lines. With two pillars, rentals and sales, this segment constitutes a major component of the Group’s total operations. Rentals
Operating revenue (FY2015): ¥25,128 million
The Nankai Group’s real estate business goes back to 1932 when the Nankai Building housing Namba Station and its integrated concourse was opened. It remains a much-loved landmark, with key tenants including Takashimaya Co., Ltd., one of Japan’s leading department store operators, and various financial institutions. It is one of the principal terminals of Osaka. Our rental business is centered in the Namba area of the city. We also own the Nankai Kaikan Building, which we plan to finish rebuilding in 2018, and the PARKS Tower office annex of the NAMBA PARKS mall. Additionally, at major terminals along our railway lines, we lease out Company-owned land, buildings and rental spaces within the structures supporting overhead railways. These operations, combined with the department stores and banks forming our key rental tenants, contribute to the prosperity of communities along our lines, while leveraging the characteristics of these areas. PARKS Tower
In addition, Semboku Rapid Railway operates the Higashiosaka and Kitaosaka logistics centers—located within the strategically important transport areas of Higashiosaka and Ibaraki. These logistics centers provide truck terminal facilities and warehouses, which serve as logistic nodes, to logistics service companies. These centers have become preeminent among logistics facilities in Osaka Prefecture.
Higashiosaka logistics center
9 Nankai Electric Railway Company Profile 2016
S e g m e nt I nf o r ma ti o n
• Major Leasing Facilities Facility Name
Nankai Building Nankai Kaikan Building Swissôtel Nankai Osaka WINS Namba PARKS Tower Fraser Residence Nankai Osaka Nankai Sakai Station Building Nankai Sakai Higashi Building Nankai Wakayama Building Nankai Tokyo Building Kitaosaka logistics center Higashiosaka logistics center
Location
Rentable Area (m2)
Namba, Osaka Namba, Osaka Namba, Osaka Namba, Osaka Namba, Osaka Namba, Osaka Sakai, Osaka Sakai, Osaka Wakayama Ginza, Tokyo Ibaraki, Osaka Higashiosaka, Osaka
50,172 48,585 (plan) 71,622 22,985 36,500 7,332 9,474 78,157 11,137 12,115 272,017 187,935
Amenities
Takashimaya, banks, shops, etc. Now under reconstruction (planned to open in September 2018) Hotel and shops Japan Racing Association Offices and shops Serviced apartments Banks, offices, shops, station facilities, etc. Takashimaya, banks, shops, station facilities, etc. Banks, offices, shops, station facilities, etc. Offices and shops Logistics leasing facility (Truck terminal, distribution warehouse) Logistics leasing facility (Truck terminal, distribution warehouse)
Note: The rental areas indicated include areas used by the Nankai Group.
Sales
Operating revenue (FY2015): ¥9,666 million
The main focus of the Group’s real estate sales business is large-scale residential projects. We are developing largescale, line-side residential zones and single-family home subdivisions in Nankai Hashimoto Rinkan Den-entoshi in Wakayama Prefecture and Nankai Kumatori Tsubasagaoka in Osaka Prefecture. Both developments have helped to increase value along our lines thanks to our careful attention to creating a rich, natural living environment while providing the convenience of urban amenities. We have also recently taken measures to attract business facilities to our area, including introduction of fully equipped office zones, in efforts to create balanced, broad-based communities where people can live and work. We also market condominiums, principally in areas around our stations. Recent condominium construction and subdivision projects are underway in downtown Osaka, Sakai, Kobe and Muko in Kyoto Prefecture, where the Nankai Group is involved in independent projects and a joint development and subdivision project with a major condominium building developer.
Aya No Dai residential project in Nankai Hashimoto Rinkan Den-entoshi
Nankai Kumatori Tsubasagaoka
VERITE Kawachinagano
BRANZ VERITE Sakai Shichido
• Major Large-Scale Residential Development Projects Residential Land Name
Nankai Hashimoto Rinkan Den-entoshi Nankai Kumatori Tsubasagaoka
Location
Hashimoto, Wakayama Kumatori, Sennan, Osaka
Planned Area (ha)
Planned Number of Lots
Planned Population
398.7 64.0
6,350 1,300
23,400 4,800
10 Nankai Electric Railway Company Profile 2016
S e g m e nt I nf o r ma ti o n
Segment business operations Management of Shopping Centers Station Premises Business Other Retail Operations
Retail
The Retail segment comprises shopping center management and merchandise sales at station premises. Management of Shopping Centers The principal shopping centers operated by the Company are the NAMBA PARKS and NAMBA CITY malls in the famous Namba c ommercial area of Osaka, as well as PLATPLAT in Sakai and other upmarket shopping centers. The Shop Nankai chain has outlets in our stations and in the structures supporting overhead railways.
Operating revenue (FY2015): ¥14,465 million
PLATPLAT
NAMBA CITY
NAMBA PARKS NAMBA PARKS Shops&Diners, which opened for business in 2007, is a shopping complex comprising some 254 f ashion, home appliance and accessory stores and restaurants. On the roof of the building, we have created the 11,500 m2 Parks Garden, surrounded by some 70,000 trees and flowers of some 300 different species. Parks Garden offers a restful space as an urban oasis to shoppers and other visitors. In addition, this development contributes to alleviating the heat island effect, saving energy, and reducing CO2 emissions. It has been well evaluated for its consideration of the environment, and won numerous awards. In 2015, CNN, the U.S. TV network, judged NAMBA PARKS Parks Garden to be one of the 10 most beautiful sky gardens in the world. In March 2015, we renovated the entire building, a first since opening. Since the building was first opened, we have been making progress in realizing each floor’s concept while continuing to make improvements. We have c reated an environment in which it is easy to shop, and enhanced shops and services to accommodate the young-family segment of customers that lives in the center of town.
NAMBA PARKS Shops&Diners
11 Nankai Electric Railway Company Profile 2016
S e g m e nt I nf o r ma ti o n
NAMBA CITY NAMBA CITY is one of Osaka’s leading shopping malls, with about 260 famous specialty shops located on the seven floors of the Main and South buildings. The mall has a prime location, directly connected to Nankai Namba Station, and is used by customers drawn from a wide area that includes the Nankai railway lines, Osaka City, and out towards Nara. The second basement level of the Main Building was renewed in March 2016, and the South Building was renewed in April 2016. The South Building’s renewal was the largest such renovation since the opening of the entire building in 1980, and has been very well received by our customers.
NAMBA CITY South Building
SEMBOKU AREA In 2014, we acquired and now run Panjo and Izumigaoka HIROBA Shops & Restaurants (formerly Shop Town Izumigaoka), two shopping centers in front of Izumigaoka Station, a major station on the Semboku Rapid Railway. Leveraging know-how fostered in the Group’s real estate and commercial development business, we will redevelop the area in front of Izumigaoka Station in an integrated manner.
Panjo
Station Premises Business
Operating revenue (FY2015): ¥21,283 million
We operate merchandise retailing and food and drink outlets within station premises and around stations, as well as convenience stores at Namba terminal and other stations along our lines. In addition, we have recently developed commercial facilities under the ekimo brand name within three stations on the Osaka Municipal Transportation Bureau’s Midosuji
Line—Tennoji, Namba, and Umeda. In April 2013, we opened ekimo Tennoji, followed by ekimo Namba in October 2013 and ekimo Umeda in April 2014. In this way, we will continue to strengthen our operation of commercial facilities inside stations along railway lines other than those operated by the Nankai Group itself.
The Ansulee convenience store
The nasco+ station kiosk
ekimo Umeda 12
Nankai Electric Railway Company Profile 2016
S e g m e nt I nf o r ma ti o n
Leisure and Services
Segment business operations Amusement Travel Hotels
Rental of MotorboatRacing Facilities B uilding Maintenance F uneral Business O ther Services
The Leisure and Services segment includes operation of the Misaki Park amusement park, travel agency services, and hotel and Japanese-style guesthouse operations, as well as motorboat-racing stadium rental, building management and maintenance services, funeral services and golf course management. Through these businesses, we provide our customers with a more fulfilling daily lifestyle. Building Management and Maintenance Business
Operating revenue (FY2015): ¥23,942 million
We have expanded our integrated building management and maintenance, which covers equipment management, security and cleaning of various facilities, from Tokyo to Shikoku, as well as in Osaka. Equipment maintenance inspection
Monitoring at a disaster prevention center
Construction and Other The Construction segment comprises the construction and maintenance of apartment buildings and residential and other facilities. The Other segment includes the Information System business. 13 Nankai Electric Railway Company Profile 2016
Cor p o rate S o c i al R e spo n s ibil it y CSR Initiatives communities, offering information related to environmental management, and enhancing our structure for promoting environmental management.
Improving Safety The Company regards the rigorous provision of safety and reliability in our Nankai railway and all other businesses as its topmost priority in earning the full trust of the communities we serve and offering customers the best possible services. In the Nankai railway business, in addition to creating a Safety Policy for all of our business activities and alerting every employee of the Company from the President down to the importance of safety, we are ensuring safe transportation through comprehensive measures covering our railway facilities, rolling stock and employees.
* Nankai Group Environmental Principles * The Nankai Group regards the protection of the global environment as one of its missions. We always consider the environmental impact of our business activities, and work to foster a society that treasures the environment.
Specific Initiatives In March 2010, we acquired ISO 14001 certification for the Chiyoda Workshops. Then, in March 2012, we acquired ISO 14001 certification for the Nankai Headquarters. We are also working aggressively to reduce CO2 emissions. By introducing energy-saving vehicles and through energy conservation in office buildings and other measures, we succeeded in significantly exceeding our target for reducing CO2 emissions for the four year period between fiscal 2011 and fiscal 2014. For many years, we have also cultivated forestland through our Nankai no Mori project, and as part of our carbon offset efforts, in 2013 we obtained certification from the Ministry of the Environment for offset credits (J-VER) based on the amount of CO2 absorbed through that forestland. Through cooperation with municipal governments and others along our railway lines, including the signing of a Green Partner Accord with Osaka Prefecture in 2009, we hold a variety of citizen participation type environmental events, and work together with our communities to carry out local environmental preservation activities.
* Safety Policy * 1. Safety is the Company’s overriding priority; we shall prevent accidents by working together 2. As a company and in our work tasks, we will strictly comply with all laws and regulations related to transport safety 3. The Company will enforce rigid checks and undertake the safest methods at work 4. In the event of an accident or a disaster, saving human lives takes priority over everything and the Company shall implement appropriate safety measures without delay 5. The Safety Management System shall be implemented in an appropriate manner and the Company will constantly look to improve the system (revised June 26, 2009)
Total Amount Invested in Safety in the Nankai Railway Business
7,942
(Millions of yen)
7,026
Compliance
6,091
FY2013
FY2014
For the Nankai Group to fulfill its social responsibilities, it must fully justify the trust of its many stakeholders. It goes without saying that this is conditional on observance of laws and social norms. In 2001, the Company compiled its Code of Business Ethics to uphold and promote compliance-based management as a means of entrenching corporate ethics within the organization. To consolidate our corporate ethics framework, we also compiled a compliance manual, laid down guidelines for conduct by executives and all employees and provided ongoing training. Through these measures we foster awareness of compliance issues.
FY2015
Environmental Initiatives
* Code of Business Ethics *
In its management policies, the Nankai Group places an emphasis on the environment, and together, our Group companies are working to achieve the goals of the Nankai Group Environmental Principles. These efforts include promoting environmentally friendly business practices, cooperating and communicating with local
1. Comply with laws and other social norms and ensure soundness and fairness in our business activities 2. Endeavor to maintain healthy relations with customers, business partners, shareholders and other members of society at large 3. As a good corporate citizen, contribute to the local community 4. Resolutely avoid all contact with antisocial elements and groups that pose a threat to the business activities of the Company and public order
14 Nankai Electric Railway Company Profile 2016
The 3-Year Management Plan —
“Shinten 133 Plan”
To further solidify the business foundation built thus far in terms of both quantitative growth (revenue growth) and qualitative improvement (improved financial soundness), we will push forward with the “Shinten 133 Plan,” our new medium-term management plan covering the three-year period from fiscal 2015 through fiscal 2017.
• The “Shinten 133 Plan” Concept Taking the opportunity of our 130th anniversary, we will further strengthen the business foundation we have built thus far. *The expression “shinten” in our Shinten 133 Plan denotes the activity of “deeply exploring our business foundation and developing it further.” *”133” refers to the fact that fiscal 2017, the final year of the medium-term management plan, is the 133rd year of the founding of the Nankai Electric Railway Co., Ltd.
• 3 Basic Policies in the “Shinten 133 Plan” ◆ Basic Policies
1
Having welcomed Semboku Rapid Railway and the Izumigaoka Station’s commercial facilities into the Nankai Group, we will actively work to revitalize the entire Semboku area. Moreover, we will quickly bring about synergies throughout the entire Group including the Nankai railway business while aiming to expand business opportunities and increase revenue. Further, with the newly acquired logistics center business as our core, we will expand the logistics business within the Group.
Strengthen Semboku◆ Major Initiatives related business
1. Increase the convenience and amenities of our freight transportation service 2. Make our core area (area in front of Izumigaoka Station) more attractive and able to draw more customers 3. Encourage more people to reside in or visit the Semboku area 4. Expand the revenue base of the logistics business 5. Reinforce efficiency and competitiveness
◆ Basic Policies
2
Expand the Kansai International Airport and inbound tourism business
The Nankai Group will steadily capture the increasing inbound tourism demand for the 2020 Tokyo Olympics and Paralympic Games. First, we will promptly develop a barrier-free infrastructure in hard and soft ways, including by providing information and signs in multiple languages. In the future, we will not only provide airport access, but accelerate the expansion of other income-generating opportunities. To that end, we will make the entire Kansai area more attractive and disseminate information by cooperating externally with municipal governments and others entities. We will take the initiative to establish Osaka as an inbound tourism gateway city and encourage an increase in visitors engaging in the Nankai Group’s business areas. In response to the changing environment surrounding Kansai International Airport, we will strive to maintain and expand the Group’s Kansai International Airport-related revenue base.
◆ Major Initiatives 1. Enhance information dissemination and business infrastructure and develop a comfortable operating environment 2. Encourage tourism in the Namba area and expand revenue opportunities 3. Expand Kansai International Airport access 4. Expand services at Kansai International Airport
15 Nankai Electric Railway Company Profile 2016
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
◆ Basic Policies
3
Increase the drawing power of the Namba area
The Nankai Group is pushing forward with the reconstruction plan for the New Nankai Kaikan Building ( tentative name), the culmination of the Nankai Building restoration, as the core project to meet the needs of customers and contribute to increasing the area’s potential. We will strive to raise the value and enhance the lineup of our real estate, retail and other businesses, and preserve and enhance the vigor of the Namba area to differentiate it from other areas.
◆ Major Initiatives 1. Push forward with the New Nankai Kaikan Building Reconstruction Plan 2. Enhance the value and lineup of our facilities and content 3. Promote urban development activities through area collaboration
• 2 priority items that we will continue to work on ◆ Basic Policies
1
Taking the opportunity of our 130th anniversary, we will launch a variety of promotions aimed at raising the brand image of the Nankai area and the Nankai Group. We will also create the means for our many customers to travel around the area along our railway lines, enhance our lifestyle-related services, and make the area along the Nankai Line attractive by improving the functioning of our major stations.
Creating attractive areas along our railway lines
2
◆ Major Initiatives 1. Launch a variety of promotions aimed at developing a new brand image 2. Centralize and unify information dissemination along our transport lines 3. Develop content and create tour programs 4. Push forward with our plan to enhance lifestyle-related services 5. Promote development projects around stations and improve station functioning
◆ Basic Policies
Strengthen the Group business foundation
As we invest money and personnel in future growth fields, such as inbound tourism and logistics businesses, to develop them as the next-generation pillars of our business, we will take drastic countermeasures as regards unprofitable businesses in light of current financial conditions and future changes in the business environment. Specifically, while maintaining an awareness of cash flow, we will ensure that investments and budget planning are carried out so that the balance of interest-bearing debt to EBITDA is improved. We will aggressively develop and utilize core personnel to drive Group growth and diverse personnel to be responsible for new value creation.
◆ Major Initiatives 1. Focus on growth fields 2. Drastic countermeasures as regards unprofitable businesses 3. Priority allocation of business resources 4. Rigorous cash flow management 5. Establish system for implementation
• Numerical targets for the “Shinten 133 Plan” Targets for the final year (FY2017; consolidated)
EBITDA = Operating Income + Depreciation and Amortization
❶ Operating Income: ❷ Balance of Interest-Bearing Debt/EBITDA Ratio: 16 Nankai Electric Railway Company Profile 2016
Initial Target
Revised Oct. 2016
¥30.0 billion 8–9 times
¥33.0 billion 7–8 times
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
u-related k o b m e S n Strengthe business
Acquisition of Shares of Semboku Rapid Railway Co., Ltd.
• Overview of Semboku New Town Semboku New Town
On July 1, 2014, the Nankai Group acquired the shares of Semboku Rapid Railway Co., Ltd. The Semboku Rapid Railway is a mutual through-train service that operates with the Koya Line. This railway provides commuter train services that directly link Osaka’s city center with Semboku New Town, a large suburban housing area straddling the communities of Sakai and Izumi, and these services play the role of a vitally important regional transportation artery. In making the company a subsidiary, we will work to achieve more integral timetables and greater cost efficiencies, improving convenience for our customers and aiding in the further development of areas along our railway lines. In addition, the Semboku Rapid Railway operates the Higashiosaka and Kitaosaka logistics centers, located in one of Osaka Prefecture’s key strategic transport areas, from which we offer truck terminal facilities and warehouses for use by logistics service companies. These centers have become pre-eminent among logistics facilities in Osaka Prefecture. We will work to promote efficient utilization of the distribution facilities at these two logistics centers, thereby further increasing their profitability.
Population
Time Distance
Namba ~ Izumigaoka Umeda ~ Senri-chuo 23 minutes 20 minutes
*Located in the northern part of Osaka Prefecture, this was the first of Japan’s “new towns” to be developed.
•O verview of the Semboku Rapid Railway (railway business) Semboku Rapid Railway Nankai Electric Railway Passengers (A) (thousand)
49,135
233,301
Businesskilometers (B)
14.3 km
154.8 km
3,436/km
1,507/km
A/B (thousand)
Chugoku Expressway
Meishin Expressway Second Keihan Highway
Hanshin Expressway Route 13 Higashiosaka Line
Kitaosaka Logistics Center Higashiosaka Logistics Center
Namba Hanshin Expressway Route 5 Bayshore Line
Nakamozu
Semboku Rapid Railway Hanwa Expressway
Nankai Line
• Kitaosaka Logistics Center
Kinki Expressway
Osaka Bay
Airport Line
Site area
Senri New Town*
Semboku New Town 136,444 98,282 Tri-vert Izumi 18,022
• Higashiosaka Logistics Center
174,607 m
2
Site area
Operations rate 98.4%
163,479 m2
Operations rate 100%
17 Nankai Electric Railway Company Profile 2016
Koya Line
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
Urban Development Facing Izumigaoka Station
Property Overview • Izumigaoka HIROBA Shops & Restaurants Specialty Shop Building (South) Site area: 12,000 m2 (Commercial facilities) Total floor area: 9,000 m2
Simultaneous to our acquisition of the shares of Semboku Rapid Railway on July 1, 2014, the Nankai Group also purchased land adjacent to Izumigaoka Station, a major stop on the Semboku Rapid Railway line, for use in the construction of large-scale commercial facilities. The property in question is situated in an area with a heavy concentration of urban facilities, including Panjo, a shopping center operated by the Semboku Rapid Railway Group, as well as large-scale public facilities. Following renovations, in 2016 the property was re-opened as the Izumigaoka HIROBA Shops & Restaurants. In 2023, the Kindai University Faculty of Medicine, along with Kindai University Hospital, plan to relocate to Izumigaoka, a move which is expected to increase the area’s nonresident population. Utilizing the expertise accumulated through our real estate and commercial development businesses, and working with government and other related institutions, the Nankai Group will work to revitalize Izumigaoka and the rest of the Semboku area.
Central Building Site area: 8,000 m2 (Commercial facilities, partially Total floor area: 10,000 m2 used as business offices) Parking Building Site area: 34,000 m2 (Part of the premises is included in Total floor area: 34,000 m2 the Central Building) Capacity: 1,785 parking spaces
Izumigaoka HIROBA Shops & Restaurants
• Panjo Shop/Restaurant area Key tenant
Izumigaoka HIROBA Shops & Restaurants
Potential relocation site for Kindai University Faculty of Medicine, etc. (Approx. 10 ha)
Izumigaoka Station
Parking Building No.4 Parking Building No.5
Central Building
Parking Building No.3 Panjo Specialty Shop Building (South)
Panjo
18 Nankai Electric Railway Company Profile 2016
Approx. 4,000 m2 Semboku Takashimaya
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
l ternationa ess In i a s n a K Expand thebound tourism busin in Airport and Expanding Options for Access to Kansai International Airport The Nankai Group operates both railway and limousine bus services, and these act as valuable transportation options linking Osaka and other Kansai regions with Kansai International Airport, and contribute to its development. The Limited Express Rapi:t connects Namba with the Kansai International Airport in as little as 34 minutes, offering free WiFi and other on-board services and meeting travelers’ needs for both speed and comfort. As the least expensive option for getting into Osaka, our Airport Express is often chosen by travelers looking for reasonably priced transportation. We have also improved convenience Limousine bus stop for passengers using Kansai International Airport through timetable revisions made in 2015 and through a more frequent Limited Express service. Our limousine bus service runs between Kansai International Airport and the Kansai region, including Umeda, Kyoto, Kobe, Nara and Universal Studios Japan. With the increase in flights by low-cost carriers, we have also worked to accommodate passengers who arrive very early or very late.
• Change in number of foreign visitors to Japan and government targets
Capturing Business from Foreign Visitors to Japan
(Unit: thousand)
The Nankai Group is focusing on efforts to enable visitors to purchase our tickets prior to their arrival in Japan. These efforts have been highly effective, and include working with travel agencies outside Japan to have them offer discounted tickets exclusively for foreign visitors to Japan; partnering with low-cost carriers worldwide, including Peach Aviation Limited and the Jetstar Group, for in-flight sales of discounted railway tickets; and introducing a system for purchasing discounted railway tickets in advance over the Internet. We are also able to counter JR, with its wide-ranging railway network, by partnering with Osaka’s subway system and other private railways to sell discounted tickets for travel between Kansai International Airport and various Kansai destinations, including Osaka, Kyoto, Nara and Kobe.
60,000
40,000
19,737 10,364 6,219 8,358
13,413
2011 2012 2013 2014 2015
2020
2030
(Source: Japan Tourism Agency website)
• Targets for arrivals and number of passengers at Kansai International Airport 2014 Results Number of arrivals (thousand) Number of passengers (thousand people) Source: ORIX Corporation website
19 Nankai Electric Railway Company Profile 2016
Fiscal 2059 targets
145
255
20,046
41,530
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
Tourist Services The Nankai Group is also working to make our services easier for foreign visitors to use. On our railway facilities, these steps include multilingual signage and announcements at stations and on our trains, tourist information interpretation services using iPads, and offering free WiFi access at major stations. In our retail facilities, we have set up service counters to provide one-stop reimbursement of taxes on duty free purchases, introduced separate prayer rooms for Muslim visitors, and are working to provide halal menus and other accommodations. In 2016, we opened a Nankai Ticket Information booth exclusively for Nankai Ticket Information inbound passengers at our Kansai International Airport Station. Multilingual staff offer information on tourist sites, help visitors with transportation options and the purchasing of railway tickets to their destinations, and sell tickets tailored to the needs of each visitor.
Public Relations Targeting Foreign Tourists In March 2013, we completely redesigned and updated our global website (http://www.howto-osaka.com/). The website is now available in English, Chinese (traditional and simplified characters), and Korean, providing tourist information to foreign visitors. By publicizing the tourism resources of the Nankai Group, we will strive to encourage even more customers to use the Nankai Group’s products and services. In February 2015, we created the promotional character “rapi:tldier,” who actively participates in events held in Japan and overseas and exhorts everyone to use the Limited Express Rapi:t for travel to Osaka.
(Plan for September as of the release of the summer schedule) (Flights/week) (%) 400 33.3 35
29.8 t in
cre
ase
30
can
300
25
nifi
Kansai International Airport originally commenced operations in 1994 as an offshore airport located in Osaka Bay, 5 km from shore. In August 2007, the airport opened a second runway and became the first airport in Japan to boast two long runways and operate fully 24 hours a day. The annual total of arrivals and departures (international and domestic) has risen to over 160,000, and the number of passengers passing through annually stands at 24 million. Serving 86 destination cities in 24 countries and connecting Kansai with Asia and rest of the world, Kansai International Airport has a nearly 26% share of the market for international passengers in Japan, and is second only to Narita International Airport in size. With the increase in LCC flights in recent years, passenger numbers have grown significantly, and plans are to open a third terminal dedicated to LCC use. In 2016, the Nankai Group also invested in establishing Kansai Airports, which has taken over the right to operate Kansai International Airport, together with ORIX Corporation, VINCI Airports S.A.S. of France, and others in the Kansai business community. Expectations are for even greater growth as these stakeholders bring their expertise to the airport operations.
Change in number of international LCC flights at Kansai International Airport
21.9
Sig
Kansai International Airport
The promotional character “rapi:tldier”
200
Ratio of LCC flights as a percentage of all planned passenger flights
20
17.1
371
14.5 100
7.4 12 17 ’08
’09
104
119
170 5
42 43 ’10
’11
’12
’13
’14
(Source: Kansai International Airport website)
20 Nankai Electric Railway Company Profile 2016
15 10
7.1 2.0 2.8
0
308
’15
’16 Plan
0
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f g power o in w a r d e Increase th Namba area the Osaka’s Landmark Terminal, Namba Eight railway lines feed into the Namba area, carrying approximately 800,000 passengers a day. Namba is one of the leading railway terminals in western Japan, and is the counterpart to Umeda terminal in central Osaka. For the Nankai Group, Namba is the birthplace of our business. Furthermore, it has always been our largest business base, with facilities that extend over 550,000 m2. We regard it as our mission to develop the Namba area, which is linked with the outside world through Kansai International Airport, into an even more attractive city-center space. In the pursuit of this objective, the Nankai Group owns and operates assets such as Namba Station, NAMBA CITY and NAMBA PARKS, and has sought to enhance the functions of the Namba area by attracting major tenants, such as the Takashimaya Osaka Department Store and the Swissôtel Nankai Osaka, to its properties. As of fiscal 2015, about 30% of foreign visitors to Japan visit Namba and the adjacent Shinsaibashi area, resulting in the area experiencing the largest influx of foreign tourists of any major tourist destination in Kansai.* In both name and reality, Namba has established itself as a gateway city for Osaka. * According to a survey by the Mitsubishi Research Institute.
Nankai Building
Namba Station
The Group will continue working to further increase value in the Namba area by coordinating urban planning projects that will develop the competitive edge Namba has over its neighboring rivals.
The Namba Area Expands Southward By shifting the heart of activity in Namba southwards, where many of our properties are congregated, the Nankai Group aims to create a ripple effect for NAMBA PARKS and NAMBA CITY and create an urban environment in the surrounding area that is much easier to get around. In 2010, we opened Fraser Residence Nankai Osaka (114 rooms), the first international serviced apartments to be supported by Osaka Prefecture. In April 2012, the live performance hall Zepp Namba (OSAKA) opened, and in April 2013, Osaka Prefecture University opened its new “I-site” branch. Since April 2014, we have been moving forward with our Namba EKIKAN Project, through which we are developing a series of unique, highly intriguing stores in spaces under our railway overpasses with the goal of establishing the area as a popular gathering spot for people of refined tastes. Nanba EKIKAN Project
21 Nankai Electric Railway Company Profile 2016
Fraser Residence Nankai Osaka
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
Major Railway Map of Osaka
Subway (Midosuji Line) Shinkansen
Shin Osaka
To Fukuoka
Hankyu Line
Osaka (Umeda)
To Kobe
JR Line
Hanshin Line
Yodoyabashi
Subway (Yotsubashi Line)
To Tokyo
To Kyoto
Keihan Line
Hommachi Shinsaibashi
Osaka Loop Line
JR Namba
Subway (Sennichimae Line) Kintetsu Line
Namba Tennoji
Nankai Line
Namba Area Map
To Wakayama
To Osaka (Umeda)
Yotsubashi Line Namba Station JR Namba Station
N
Midosuji
Osaka Namba Station (Hanshin Line/Kintetsu Line/ Sennichimae Line)
Nipponbashi Station (Kintetsu Line/ Sennichimae Line/ Sakaisuji Line)
Midosuji Line Namba Station Namba Marui
Nankai Building (Takashimaya) Nankai Kaikan Building
Swissôtel Nankai Osaka NAMBA CITY
Fraser Residence Nankai Osaka
Sakaisuji
Yotsubashisuji
Osaka Prefectural Gymnasium
Nankai Namba Station
PARKS Tower NAMBA PARKS The Namba Tower
YamadaDenki
Namba EKIKAN Project Zepp Namba (OSAKA) Namba Grand Masters Tower
Nankai Namba Bldg. No. 1
22 Nankai Electric Railway Company Profile 2016
To Nara
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
Nankai Kaikan Building Reconstruction Plan
• Building overview
We are reconstructing the Nankai Kaikan Building, which has been used as the building for the Head Office of Nankai Electric Railway, with the aim of promoting the sustained growth of Namba, which is the most important site of the Nankai Group. The New Nankai Kaikan Building (tentative name) will link directly to the Namba terminal, and is expected to be completed in September 2018. It will serve as a “Landmark Tower” facing the south side of Midosuji, an iconic street in Osaka. The building has a favorable central location offering access to the Kansai International Airport, Osaka International Airport, and Shin-Osaka Station by train or limousine bus without having to transfer. It also provides office functions that accommodate diverse needs with the highest standard of earthquake countermeasures as well as BCP functions. Moreover, Namba is acquiring a host of new city functions as a result of the building’s facilities such as a medical center providing advanced and preventive medical treatment, a central, urban convention center, and a variety of salons for tourists from both Japan and overseas. This building project is the cornerstone for the further stimulation of the Namba area, and will continue to serve to maximize the area’s potential.
Building applications
Offices, stores, hall, conferences rooms, medical facilities
Total floor area
Approx. 84,125 m2 31 floors above ground; 2 floors below ground; 1 rooftop structure
No. of floors Scheduled completion Total project costs Assumed balance of payments
Sept. 2018 Approx. ¥44.0 billion Revenues: Approx. ¥3.6 billion EBITDA: Approx. ¥2.8 billion
• Floor configuration (Cross-sectional view)
Overall view of Namba Terminal
Artist’s impression of the completed New Nankai Kaikan building (Viewed from Midosuji)
10th floor: Sky Lobby
23 Nankai Electric Railway Company Profile 2016
7th floor: Hall
The 3- Y e a r M a na g e m e nt Pl a n— “ S hint e n 133 P l a n ”
s active area r t t a g in t a s e Cre railway lin along our Attracting Tourists to Visit Koya-san The Nankai Group is working to attract tourists to visit the Koya-san (Mount Koya) World Heritage Site, which is the most important tourist attraction located near our railway lines. Some 1,200 years ago, Koya-san was a spiritual and physical training ground for the followers of Kukai, better known as Kobo Daishi of the Shingon sect of esoteric Buddhism in Japan. Koya-san rises 900 m above sea level. There are as many as 117 temples in the mountains, of which a notable example is Kongobuji, the main temple of Danjo Garan the Shingon sect on Koya-san. The plateau at the top, Danjo Garan, is regarded as a sacred area. Visitors will find a variety of religious halls and towers and Buddhist and mandala images. In 2004, Koya-san was registered as a World Heritage Site and included in the “Sacred sites and pilgrimage routes in the Kii mountain range.” Koya-san was awarded three stars by the Michelin Green Guide for Japan, and attracts the attention of visitors from Japan and all over the world. In 2015, for 50 days from April through May, the “Koya-san 1,200-Year Kongobuji Commemoration Ceremony” was held to celebrate the twelve-hundredth anniversary of the first building of a temple on the Koya-san site. During this period, the Commemoration Ceremony attracted around 600,000 visitors from all over Japan and overseas, and the Koya-san temple grounds had an extremely festive atmosphere.
The Tenku Tourist Trains In addition to promoting Koya-san as a destination, we are partnering with local residents to make the journey itself part of the experience, a pleasurable ride visitors will look forward to, through a project to reinvent the line as the Koya-san Hana (Flower) Railway. In July 2009, we launched our operation of the Tenku tourist trains with observation decks, running along the stretch of railway line between Hashimoto and Gokurakubashi stations, and it has been well received by our customers. Offering a “change of mode” concept, the cars are equipped with large windows along the sides, and evoke the forests with their deep green hue. Our passengers can enjoy a 180degree view of one of the country’s finest examples of mountain scenery from the “One View” seating in the observation deck car, the only such vehicle of its kind operated by a major private railway company in Japan. Tenku tourist train One View seating
Development Around Core Stations The Nankai Group is promoting development in areas along our lines, principally around our core stations, and we are working to increase the resident population in those areas. We are also moving forward with renovations to the commercial facilities in our stations, with the goal of creating attractive facilities that will be used not only by railway passengers, but by residents living near our stations. At Izumiotsu Station, we have attracted a municipally-run child care support facility that will utilize the space under the railway overpasses created by our continuous grade separation projects; we are also developing new commercial facilities in those spaces. At Wakayamashi Station, we have begun working with the city of Wakayama on joint redevelopment of the terminal building there, creating a trigger for revitalization of the surrounding community. Our goal is not only to improve transportation convenience, but to create a vibrant urban area by developing additional offices, commercial space and other facilities.
24 Nankai Electric Railway Company Profile 2016
Rail overpass under development at Izumiotsu Station
The planned revitalization of Wakayamashi Station (Stage 1)
Fi nan c i al Dat a Consolidated Balance Sheets Thousands of U.S. dollars
Millions of yen
2016
March 31, 2016 and 2015
ASSETS Current assets: Cash and deposits Notes and accounts receivable-trade Merchandise and finished goods Work in process Raw materials and supplies Deferred tax assets Other Allowance for doubtful accounts Total current assets
Non-current assets: Property, plant and equipment: Buildings and structures, net Machinery, equipment and vehicles, net Land Construction in progress Other, net Total property, plant and equipment
Intangible assets
Investments and other assets: Investment securities Long-term loans receivable Net defined benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets
2015
2016
¥ 18,768 21,421 24,563 447 2,627 2,450 9,380 (84) 79,575
¥ 21,647 22,409 26,486 543 2,529 2,467 9,743 (99) 85,728
$ 166,566 190,109 217,994 3,970 23,315 21,750 83,252 (752) 706,208
343,299 22,100 353,214 47,357 5,858 771,830
353,046 20,657 354,433 41,344 4,893 774,374
3,046,678 196,135 3,134,672 420,283 51,990 6,849,760
9,109
9,090
80,840
24,180 153 53 2,243 9,527 (2,053) 34,105 815,045 ¥894,621
28,328 74 2,070 2,269 9,684 (2,073) 40,354 823,819 ¥909,547
214,597 1,361 474 19,910 84,555 (18,221) 302,677 7,233,278 $7,939,486
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.68 per $1, the rate prevailing at March 31, 2016.
25 Nankai Electric Railway Company Profile 2016
Fina n c i a l D a ta
Consolidated Balance Sheets Thousands of U.S. dollars
Millions of yen
2016
2015
2016
LIABILITIES Current liabilities: Notes and accounts payable-trade Short-term loans payable Current portion of bonds Income taxes payable Provision for bonuses Provisions for loss related to reconstruction Other Total current liabilities
¥ 22,827 82,364 20,000 4,204 2,424 29 61,188 193,038
¥ 21,026 116,040 — 4,063 2,321 1,151 63,090 207,693
$ 202,587 730,955 177,493 37,310 21,517 259 543,031 1,713,154
Non-current liabilities: Bonds payable Long-term loans payable Deferred tax liabilities Deferred tax liabilities for land revaluation Net defined benefit liability Other Total non-current liabilities Total liabilities
70,000 311,796 46,688 19,165 16,183 33,809 497,643 690,681
80,000 301,168 51,578 21,551 13,446 34,117 501,862 709,556
621,228 2,767,101 414,344 170,086 143,619 300,048 4,416,429 6,129,583
NET ASSETS Shareholders’ equity: Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity
72,983 28,089 58,128 (76) 159,125
72,983 28,087 46,053 (34) 147,090
647,707 249,285 515,872 (677) 1,412,187
5,602 0 31,830 (1,860) 35,572
8,395 — 33,694 2,058 44,147
49,720 0 282,490 (16,513) 315,698
9,241 203,939 ¥894,621
8,752 199,991 ¥909,547
82,017 1,809,902 $7,939,486
March 31, 2016 and 2015
Accumulated other comprehensive income: Valuation difference on available-for-sale securities Deferred gains or losses on hedges Revaluation reserve for land Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.68 per $1, the rate prevailing at March 31, 2016.
26 Nankai Electric Railway Company Profile 2016
Fina n c i a l D a ta
Consolidated Statements of Income Thousands of U.S. dollars
Millions of yen
2016
2015
2016
¥219,065
¥210,995
$1,944,135
179,680 7,065 186,746 32,318
175,544 7,333 182,877 28,118
1,594,609 62,707 1,657,317 286,817
Non-operating income: Interest income Dividend income Gain on sales of non-current assets Miscellaneous income Total non-operating income
22 670 109 467 1,269
50 564 167 534 1,316
198 5,946 972 4,151 11,268
Non-operating expenses: Interest expenses Miscellaneous expenses Total non-operating expenses Ordinary income
6,081 395 6,477 27,110
6,576 857 7,433 22,001
53,973 3,512 57,486 240,600
4,434 — 519 4,953
1,530 298 492 2,322
39,350 — 4,609 43,959
Extraordinary losses: Impairment loss Reduction entry of land contribution for construction Loss on retirement of non-current assets Other Total extraordinary losses Profit before income taxes
9,074 4,392 1,116 109 14,691 17,372
1,814 1,475 462 751 4,503 19,819
80,532 38,978 9,906 969 130,386 154,173
Income taxes: Income taxes-current Income taxes-deferred Total income taxes Profit
7,265 (3,085) 4,179 13,192
6,556 (4,816) 1,739 18,080
64,476 (27,383) 37,093 117,080
579 ¥ 12,612
612 ¥ 17,467
5,143 $ 111,936
Years ended March 31, 2016 and 2015
Operating revenue Operating expenses: Operating expenses and cost of sales of transportation Selling, general and administrative expenses Total operating expenses Operating income
Extraordinary income: Contribution for construction Reversal of allowance for doubtful accounts Other Total extraordinary income
Profit attributable to non-controlling interests Profit attributable to owners of parent
Consolidated Statements of Comprehensive Income Thousands of U.S. dollars
Millions of yen
2016
Years ended March 31, 2016 and 2015
Profit Other comprehensive income: Valuation difference on available-for-sale securities Deferred gains or losses on hedges Revaluation reserve for land Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of the parent Comprehensive income attributable to non-controlling interests
2015
2016
¥13,192
¥18,080
$117,080
(2,862) 0 1,000 (3,935) (5,797) ¥ 7,394
3,687 (0) 2,229 1,192 7,109 ¥25,190
(25,405) 0 8,878 (34,927) (51,454) $ 65,625
¥ 6,901 492
¥24,515 674
$ 61,251 4,374
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.68 per $1, the rate prevailing at March 31, 2016.
27 Nankai Electric Railway Company Profile 2016
Fina n c i a l D a ta
Consolidated Statements of Changes in Equity Millions of yen Accumulated other comprehensive income Valuation Total difference Deferred Remeasure- accumulated Total on available- gains or Revaluation ments of other NonTreasury shareholders’ for-sale losses on reserve defined comprehensive controlling shares equity securities hedges for land benefit plans income interests
Shareholders’ equity
Years ended March 31, 2016 and 2015
Balance at March 31, 2014 Cumulative effects of changes in accounting policies Restated balance Changes of items during period: Issuance of new shares Dividends of surplus Profit attributable to owners of parent Reversal of revaluation reserve for land Purchase of treasury shares Disposal of treasury shares Net changes of items other than shareholders’ equity Total changes of items during period Balance at March 31, 2015 Changes of items during period: Dividends of surplus Profit attributable to owners of parent Reversal of revaluation reserve for land Purchase of treasury shares Disposal of treasury shares Change in treasury shares of parent arising from transactions with non-controlling shareholders Net changes of items other than shareholders’ equity Total changes of items during period Balance at March 31, 2016
Capital stock
Capital surplus
Retained earnings
¥ 63,739 ¥ 18,471 63,739
18,471
9,244
9,244
¥ 34,021 ¥ (1,377) ¥ 114,854 120 34,142
(1,377)
4,759
0
875
¥ 34,155 ¥ 3,029
¥ 152,039
1 3,030
122 152,162
34,155
18,489 (2,612)
17,467
17,467
17,467
(2,943) (39) 1,754
(2,943) (39) 1,754
(39) 1,383
11,911 46,053
1,343 (34)
32,115 147,090
3,635
(0)
5,173
1,182
9,991
5,722
15,713
3,635 8,395
(0) —
5,173 33,694
1,182 2,058
9,991 44,147
5,722 8,752
47,829 199,991
(3,401)
(3,401)
(3,401)
12,612
12,612
12,612
2,863 (43) 1
2,863 (43) 1
1
1
2,863
(43) 1
0
1
(2,792) — 1 ¥72,983 ¥28,089
28,521
¥ 875
18,489 (2,612)
371
9,616 28,087
¥ 0 ¥ 28,521
(2,612)
(2,943)
9,244 72,983
120 114,975
¥ 4,759
Total net assets
12,074 (42) 12,034 ¥58,128 ¥ (76) ¥159,125
(2,792) ¥ 5,602
0
(1,863)
(3,918)
0 (1,863) ¥ 0 ¥31,830
(3,918) ¥(1,860)
(8,574)
488
(8,085)
(8,574) 488 ¥35,572 ¥9,241
3,948 ¥203,939
Thousands of U.S. dollars Accumulated other comprehensive income Valuation Total difference Deferred Remeasure- accumulated Total on available- gains or Revaluation ments of other NonTreasury shareholders’ for-sale losses on reserve defined comprehensive controlling shares equity securities hedges for land benefit plans income interests
Shareholders’ equity
Years ended March 31, 2016 and 2015
Capital stock
Capital surplus
Retained earnings
Balance at April 1, 2015 $ 647,707 $ 249,270 $ 408,711 $ (304) $ 1,305,384 $ 74,506 Changes of items during period: (30,187) (30,187) Dividends of surplus Profit attributable to 111,936 111,936 owners of parent Reversal of revaluation reserve 25,412 25,412 for land Purchase of treasury shares (382) (382) Disposal of treasury shares 2 9 12 Change in treasury shares of parent arising from transactions with non-controlling 12 12 shareholders Net changes of items other than (24,785) shareholders’ equity Total changes of items — 15 107,160 (373) 106,803 (24,785) during period Balance at March 31, 2016 $647,707 $249,285 $515,872 $(677) $1,412,187 $ 49,720
$— $ 299,024 $ 18,265
Total net assets
$ 391,795 $ 77,679 $ 1,774,859 (30,187) 111,936 25,412 (382) 12
12 0
(16,534)
(34,778)
0 (16,534) (34,778) $ 0 $282,490 $(16,513)
(76,097)
4,337
(71,760)
(76,097) 4,337 35,042 $315,698 $82,017 $1,809,902
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.68 per $1, the rate prevailing at March 31, 2016.
28 Nankai Electric Railway Company Profile 2016
Fina n c i a l D a ta
Consolidated Statements of Cash Flows Thousands of U.S. dollars
Millions of yen
2016
Years ended March 31, 2016 and 2015
Cash flows from operating activities: Profit before income taxes Depreciation Impairment loss Amortization of goodwill Increase (decrease) in provision for bonuses Increase (decrease) in provision for loss related to reconstruction Increase (decrease) in net defined benefit liability Increase (decrease) in allowance for doubtful accounts Interest and dividend income Interest expenses Loss on retirement of non-current assets Reduction entry of land contribution for construction Proceeds from contribution for construction Decrease (increase) in notes and accounts receivable-trade Decrease (increase) in inventories Increase (decrease) in notes and accounts payable-trade Loss on valuation of inventories Increase (decrease) in accrued consumption taxes Other, net Subtotal Interest and dividend income received Interest expenses paid Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities: Decrease (increase) in short-term investment securities Purchase of non-current assets Proceeds from sales of non-current assets Proceeds from contribution received for construction Purchase of investment securities Proceeds from sales and redemption of investment securities Purchase of shares of subsidiaries Purchase of shares of subsidiaries resulting in change in scope of consolidation Decrease (increase) in short-term loans receivable Payments of long-term loans receivable Collection of long-term loans receivable Other, net Net cash provided by (used in) investing activities Cash flows from financing activities: Net increase (decrease) in short-term loans payable Proceeds from long-term loans payable Repayments of long-term loans payable Proceeds from issuance of bonds Redemption of bonds Proceeds from issuance of common shares Cash dividends paid Other, net Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period
2015
2016
¥ 17,372 25,519 9,074 436 97 (1,122) (1,004) (34) (692) 6,081 1,099 4,392 (4,434) 655 1,314 (430) 617 (1,737) (1,364) 55,839 705 (6,130) (7,202) 43,212
¥ 19,819 23,699 1,814 289 221 (81) (109) (420) (615) 6,576 850 1,475 (1,530) 3,022 (2,784) 458 824 1,633 (68) 55,074 604 (6,801) (5,864) 43,013
$ 154,173 226,478 80,532 3,871 861 (9,962) (8,913) (310) (6,145) 53,973 9,754 38,978 (39,350) 5,821 11,662 (3,820) 5,481 (15,415) (12,110) 495,561 6,260 (54,407) (63,920) 383,493
600 (34,413) 382 7,139 (828) 877 —
1,000 (29,399) 704 7,005 (238) 312 (240)
5,324 (305,405) 3,395 63,362 (7,350) 7,791 —
(2,554) 1 (11) 19 (244) (29,030)
(69,493) 0 (12) 21 22 (90,315)
(22,666) 9 (100) 170 (2,167) (257,634)
(17,330) 46,770 (52,550) 9,931 — — (3,390) (478) (17,047)
1,580 97,098 (59,318) 19,874 (25,000) 18,394 (2,603) 1,478 51,503
(153,798) 415,069 (466,367) 88,141 — — (30,089) (4,246) (151,290)
(2,865) 21,160 ¥ 18,294
4,200 16,959 ¥ 21,160
(25,431) 187,790 $ 162,359
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.68 per $1, the rate prevailing at March 31, 2016.
29 Nankai Electric Railway Company Profile 2016
I n vest o r Inf o rm a t io n Company Name Founded Registered Head Office Head Office Tokyo Office Wakayama Office Paid-In Capital Issued Shares Number of Shareholders Stock Exchange Listing
Nankai Electric Railway Co., Ltd. December 27, 1885 5-1-60, Namba, Chuo-ku, Osaka 542-8503, Japan 2-1-41, Shikitsuhigashi, Naniwa-ku, Osaka 556-8503, Japan Nankai Tokyo Bldg. 8F 5-15-1, Ginza, Chuo-ku, Tokyo 104-0061, Japan Nankai Wakayama Bldg. 4F 3-6, Higashikuramae-cho, Wakayama 640-8203, Japan ¥72,983 million 567,012,232 50,988 Tokyo
Major Shareholders (as of March 31, 2016) Name
Voting Rights (%) 7.9 2.4 2.3 1.4 1.3 1.3 1.3 1.0 1.0 0.9
Number of Shares Held (Thousands)
45,040 13,803 12,824 7,945 7,580 7,368 7,147 5,623 5,601 5,035
Japan Trustee Services Bank, Ltd. (Trust account) Nippon Life Insurance Company The Master Trust Bank of Japan, Ltd. (Trust account) The Senshu Ikeda Bank, Ltd. The Sumitomo Mitsui Trust & Banking Co., Ltd. The Bank of Tokyo-Mitsubishi UFJ, Ltd. Sumitomo Mitsui Banking Corporation Japan Trustee Services Bank, Ltd. (Trust account 7) JP MORGAN CHASE BANK 385151 Takashimaya Company, Ltd. Note: Voting rights exclude treasury stock of 150,886 shares.
Directors and Corporate Auditors Chairman of the Board of Directors
Executive Director
Director
Outside Director
Corporate Auditor
President and CEO (Representative Director)
Executive Director
Director
Outside Director
Corporate Auditor
Executive Director
Director
Standing Corporate Auditor
Corporate Auditor
Director
Outside Director
Standing Corporate Auditor
Makoto Yamanaka
Toshiyuki Takagi
Shigeru Sakata
Katsuya Kanehara
Teruhiko Achikita
Naoto Ashibe
Keiichi Iwai
Executive Director (Representative Director)
Tetsuro Kanamori
Ichiro Masukura Hitoshi Murakami
Koyo Uraji
Tsutomu Inoue
Masayuki Oku Kozo Arao
Takaichi Fujita
Mitsuaki Naito
Koji Aiba
Masafumi Katsuyama
Stock Price Stock Price (left scale)
(Yen) 700
Volume (lower scale)
Nikkei Average (right scale)
(Yen) 20,000
600
16,000
500
12,000
400
8,000
300 (Thousands of shares) 100,000
4,000
50,000
0
4
5
6
7
8
9
10
11
12
1
2
3
4
2014
5
6
7
8
2015
30 Nankai Electric Railway Company Profile 2016
9
10
11
12
1
2
2016
3
Nankai Electric Railway Co., Ltd. 2-1-41, Shikitsuhigashi, Naniwa-ku, Osaka 556-8503, JAPAN http://howto-osaka.com
Cover: Nankai Building
