FUTURE LANDSCAPE -
CELEBRATING THE JOYS OF LIFE.
Creating the fundamental societal infrastructure and lifestyle culture rooted in regeneration, ensuring a world where we live together in harmony embracing the Joys of Life
FY2023 2Q
Presentation on Management Policies
November 13, 2023
Daiwa House Industry Co., Ltd. Code No: 1925 (Prime market of the Tokyo Stock Exchange)
© 2023 Daiwa House Industry Co., Ltd. All rights reserved.
Index
-
Performance Highlights
-Current Business Conditions
• FY2023 2nd Quarter Results | P.4 | |
• | FY2023 Full-Year Plan | P.5 |
• The Progress of the 7th Medium-Term | P.6 | |
Management Plan | ||
• Capital Policy and Shareholder Return | P.7 | |
• | Portfolio Optimization | P.8 |
- Progress of 7th Medium-Term Management Plan
• Expand Our Circular Value Chain | P.10-12 | |
• Accelerating Growth Through Overseas | P.13-16 | |
Business | P.17 | |
• | Carbon-Neutral Strategy | |
• Business Development From the | P.18-20 | |
Perspective of Social Issues | P.21 | |
• Strengthen Cost Competitiveness and | ||
Establish a Stable Supply System | ||
• | Digital Transformation | P.22 |
• Improving the Value of Human Capital | P.23 | |
• Response to the "2024 Problem" | P.24 |
- Appendix1
Progress of the Strategies by Business Segments - Single-FamilyHouses Business
- Rental Housing Business
- Condominiums Business
- Commercial Facilities Business
- Logistics, Business & Corporate Facilities Business
- Environment & Energy Business
- Appendix2 Carbon Neutral Indicators
Human Capital Indicators
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 2 |
Performance Highlights
Current Business Conditions
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 3 |
FY2023 2nd Quarter Results
FY2023 2nd quarter results were record high with sales of 2,544.8 billion yen (+12.5% YOY)
and net income* of 154.4 billion yen (+45.8% YOY).
Operating income also increased sharply to 191.1 billion yen, up 36.5 billion yen YOY(+23.6% YOY).
:Net sales
Topics
Steady progress of sale of development |
2,544.8
FY2023 2Q Results
:Operating income
:Net income*
(billion yen)
1,809.7
properties |
Recovery of hotel business affected by |
COVID-19 |
Steady progress of US Single-Family |
Houses Business |
Sale of shares of Daiwa Resort Co., Ltd. |
2,179.3
2,042.1
1,983.31,966.4
2,261.3
(billion yen) | Net sales |
Single-Family | 442.7 |
Houses |
Rental Housing 609.2
Condominiums 217.8
Commercial
Facilities 581.9
Logistics, Business& Corporate Facilities 643.4
Environment | 73.5 |
and Energy |
(YOY)
(+5.9%)
(+5.1%)
(+25.1%)
(+10.6%)
(+29.6%)
(-15.8%)
Operating Income (YOY)
14.2 (-29.8%)
60.1 (+13.1%)
16.6 (+84.1%)
71.8 (+14.8%)
57.2 (+48.7%)
6.3 (+169.3%)
180.4 | 189.5 | 209.3 | 160.3 | 191.1 | |||
156.0 | 154.6 | ||||||
123.5 | 131.4 | 147.3 | 91.3 | 107.5 | 105.9 | 154.4 | |
FY17 2Q | FY18 2Q | FY19 2Q | FY20 2Q | FY21 2Q | FY22 2Q | FY23 2Q |
Other | 38.6 |
Total | 2,544.8 |
(-3.8%)
(+12.5%)
0.8 (-68.1%)
191.1 (+23.6%)
*Attributable to owners of the parent
Confidential
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 4 |
FY2023 Full-Year Plan
FY2023 full-yearsales plan was revised up by 100 billion yen from the previous plan, increasing significantly to 5.02 trillion yen. Operating income was revised to 385 billion yen (+4.4% YOY) and net income was revised to 263 billion yen (+9.5% YOY)*1.
FY2022 | |
(billion yen) | Results |
Net sales | 4,908.1 |
Operating income | 465.3 |
Operating income | 368.7 |
(Excluding actuarial differences) | |
Net income*2 | 308.3 |
Net income *2 | 240.2 |
(Excluding actuarial differences) | |
Annual dividend | 130 yen |
Dividend payout ratio | 35.6% |
(Excluding actuarial differences) |
FY2023
Pre. forecasts
(YOY)
4,920.0 (+11.8)
380.0 (-85.3)
380.0 (+11.2)
- (-58.3)
- (+9.7)
135 yen (+5 yen)
35.6%
FY2023
Rev. forecasts
(vs pre. forecasts)
5,020.0 (+100.0)
385.0 (+5.0)
385.0 (+5.0)
- (+13.0)
- (+13.0)
140 yen (+5 yen)
35.0%
*1YOY excluding actuarial differences on retirement benefits *2 Attributable to owners of the parent
Confidential
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 5 |
The Progress of the 7th Medium-Term Management Plan
FY2023 sales forecast exceeds 5 trillion yen, showing steady progress
Aim to achieve sales of 5.5 trillion yen in FY2026 while striving to achieve both profit growth and
improvement of capital efficiency and profitability
:Net sales :OP income :Net income*1
(billion yen)
*1 Attributable to owners of the parent
*2 Amortization of actuarial differences in operating income
*3 Amortization of actuarial differences in net income4,908.1
*4 After taking the equity credit attributes of hybrid financing into account
*5 Excluded actuarial differences
ROE | |
14.3 | |
% | 465.3 |
96.6*2 | |
308.3 | 368.7 |
68.1*3 | |
240.2 |
5,020
Previous forecasts 4,920
385
Previous forecasts
380
263
Previous forecasts
250
5,500
ROE |
13% |
or |
higher |
500 |
340 |
FY2021 Results
Final year of 6th Plan
D/E ratio: 0.61 times*4 Dividend payout ratio: 36.6%
FY2022 Results
1st year of 7th Plan
D/E ratio: 0.72 times*4
Dividend payout ratio: 35.6%*5
FY2023 Rev. Forecasts 2nd year of 7th Plan
D/E ratio: -
Dividend payout ratio: 35%
Confidential
FY2026 Targets
Final year of 7th Plan
D/E ratio: Around 0.6 times | |
Dividend payout ratio: 35% or higher | 6 |
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. |
Capital Policy and Shareholder Return
Maintain financial stability and improve capital efficiency to achieve sustainable revenue growth
by pursuing proactive real-estate and strategic investment while improving capital turnover and profitability
Profit growth through
growth investment
Real estate development investment
2.2 trillion yen
- Build up prime assets that are a source of growth
- Implement strategic investments,such as overseas business, carbon neutral and CVC
Maintenance of
financial stability
D/E ratio around 0.6 times
- Investment precedent in the first halfof the 7th plan
- Steadily pursue returnand maintain financial discipline
Capital efficiency
improvement
ROE at least 13%
Dividend payout ratio 35% or higher
- Equity spread above cost of equity
- Achieving stable shareholder returns
Create profits from real estate development D/E ratio changes in the 7th Plan*2
investment (billion yen)
ROE transition over cost of capital
Invest-
7th plan ment
(5 years)
Return
Invest-
FY2023 Sept. ment Cumulative
results*1
Return
2,200 | |||||
1,500 | 0.72times | 0.75times | Around | ||
0.61times | 0.60 times | ||||
525.7 | Progress | Proactive | Steady | ||
23.9% | investment | return | |||
383.2 | (FY) 2021 | 2022 | 2023 | 2026 | |
Sept. | (Targets) |
15.5% | 14.3% | At least | ||||
14.1% | ||||||
11.0%11.7% | 13% | |||||
Equity | ||||||
Recognized | ||||||
Recognized | spread | |||||
cost of capital | ||||||
cost of capital | Around 7.0% | |||||
Around 6.5% | ||||||
(FY) 2018 | 2019 | 2020 | 2021 | 2022 | 2026 | |
(Targets) |
*1 Cumulative results from April 2022 to the end of September 2023 *2 After taking the equity credit attributes of hybrid financing into account
Confidential
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 7 |
Portfolio Optimization
Promote portfolio management to implement aggressive growth investments in the face of capital constraints
At the same time as responding to reconstruction business, we will focus management resources on
businesses that drive growth, such as large-scale development and overseas Single-Family Houses business.
Business Portfolio (Image) | Major Investments |
(
Marketgrowth | External |
rate,competitive | market |
environment etc. | |
advantage, |
)
Create new businesses
Prepare for new business
Condo-
miniums
Recon-
struction Business
Single-
Family
Houses
Commercial
Facilities
Logistics,
Business &
Corporate
Facilities
Rental
Housing
Notes:
- Each dotted circle: Business direction
- Each thick arrow: Cash flow (Image)
- Bubble size: Sales
Logistics, Business &
Corporate Facilities
Scale
expan Commercial
-sion Facilities
Single-Family
Houses
Stable | Rental Housing |
growth | |
Create new businesses
Profit-
ability Condominiums
improve-
ment
Focused investment in large-scale development
Logistics facilities, data centers, redevelopment of public wholesale markets
Focused investment in large-scale development including stock business
Hotels, home centers, revitalizing for aging facilities, etc.
Focused investment in overseas Single-Family Houses mainly in US
Domestic business began fundamental restructuring
Increase investment for stable profits growth
Domestic built-for-sale business, US rental housing, etc.
Creation of new businesses through CVC fund
Specialized investments in highly profitable projects
Internal quantitative assessment
(Capital profitability, growth of sales, etc.)
Respond to reconstruction
businesses
Restraining investment, reviewing business restructuring
Confidential | © 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 8 |
Progress of 7th Medium- Term Management Plan
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 9 |
Expand Our Circular Value Chain① Company-Wide Initiatives
Leveraging a Group strength-our broad range of businesses-to build one of the sector's largest circular value chains
In company-wideengagements, we are focusing on community regeneration to local revitalization by extending to properties
built by other companies as well as ones we built, the scope of our revitalization and circular businesses.
Strategies for Expanding Our Circular Value Chain | From Community Regeneration to Local Revitalization |
Create
-Step up lifestyle infrastructure development -Real estate development investments ¥2.2 trillion
Design and construction
Planning and development
Operations
Management
Redevelopment of suburban residential |
complexes we developed (61 locations |
nationwide/over 60,000 lots) |
• "Neopolis Summit" symposiums to discuss |
the revitalization of suburban housing |
complexes with residents |
Land | ||
Foster | information | Maintenance |
Strengthen operations | After-sales | |
services | ||
and management | Increase the value of | |
through cooperation | "living infrastructure" | |
among Group companies | permanently | |
Revitalize | and | Purchase and |
resale | ||
Renovation |
Buying and reselling land from the Urban |
Renaissance Agency for community |
revitalization (52 locations/approx. 3,300 |
lots nationwide) |
Promotion of exchange between residents in |
vacation home sites we developed (14 locations |
nationwide) |
Regional revitalization through revitalization of |
aging public wholesale markets |
Expand Livness Business
redevelopment
Revitalization of local communities through |
FY2026 Sales ¥400 billion
purchasing and enhancing the value of aging |
commercial facilities operated by other companies |
© 2023 Daiwa House Industry Co., Ltd. All rights reserved. | 10 |
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Daiwa House Industry Co. Ltd. published this content on 14 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 14:01:21 UTC.