ES-CON JAPAN

About Us

ES-CON JAPAN is a life developer that builds the settings of people’s futures, bringing ideals into reality and the future of Japan to life.

Medium-Term Management Plan

1. Background and Purpose of the Formulation of the New Medium-Term Management Plan

With challenging economic conditions continuing due to the COVID-19 pandemic and the real estate industry facing a business environment in which the future impact on the real estate market remains difficult to predict, ES-CON JAPAN decided in July 2020 to cancel IDEAL to REAL 2022, its third medium-term management plan covering the three-year period from the period ending December 2020 through the period ending December 2022.

Later, ES-CON JAPAN identified an excellent opportunity to proceed with further business expansion and enhancements to management stability, based on the finding that the impact of COVID-19 on Company business was relatively minor compared to initial expectations. ES-CON JAPAN considered various options in search of the most effective means of capitalizing on this opportunity. As a result, as noted in the separate news release “Notice of Issue of New Shares through Third-Party Allocation, Partial Amendment of Articles of Association, (Planned) Change in Parent Company, and Conclusion of Agreement on a Capital Tie-up with Chubu Electric Power Co., Inc.” issued today, ES-CON JAPAN determined it could strengthen its financial standing through a capital increase realized by becoming a consolidated subsidiary of Chubu Electric Power Co., Inc., which offers strong corporate credit. Thus, it established IDEAL to REAL 2023, a fourth medium-term management plan covering the three-year period from the period ending December 2021 through the period ending December 2023.

2. Overview of the Fourth Medium-Term Management Plan

(1) Basic Management Strategy Policies

1

Establishing business foundations able to withstand unexpected changes in economic conditions.
Establishing business and financial standings that would be sound and enable us to maintain our fund-raising abilities under any economic conditions.

2

Simultaneously changing the revenue structure and expanding business domains.
Transforming the revenue structure from one based on flows to one based on stock by strengthening the real estate leasing business while at the same time realizing business diversification and expanding business territories.

(2) Basic Policy: Transformation and Rapid Progress

Transformation

  • Proactive investment in long-term revenue-generating real estate and improving the structure of the balance sheet
  • Transforming the focus of management from flows to stock

Rapid Progress

  • Demonstrating synergies in the Chubu Electric Power Group
  • Achieving net sales of 110 billion yen and operating income of 16 billion yen (in the final fiscal year of the medium-term management plan)

(3) Management Strategies

1

Transformation to a structure of sustained and stable revenues

2

Stable growth in existing core businesses through business diversification and area strategies

3

Growing new businesses into core businesses through business diversification and area strategies

4

Taking on the challenges of new business domains

5

Enhancing synergies within the ES-CON JAPAN Group

6

Expanding facilities, primarily in the five largest urban areas

7

Enhancing synergies within the Chubu Electric Power Group

8

Promoting ESG initiatives

(4) Performance Plan

(Unit: Millions of yen)

Results in
period ended
December 2020
Projections for
period ending
December 2021
Projections for
period ending
December 2022
Projections for
period ending
December 2023
Net sales 77,308 80,000 98,000 110,000
Operating income 12,202 10,800 14,000 16,000
Stage of structural reforms to balance sheet and revenues Stage of setting new record profits Stage of further rapid progress through realizing transformation

(5) Management Targets

Results in period ended December 2020 Projections for period ending December 2021 Projections for period ending December 2022 Projections for period ending December 2023
Share of profits from leasing*1 14.2% 23.0% 24.0% 26.0%
Return on equity (ROE) 21.2% 12.0% 13.0% 13.0%
Return on invested capital (ROIC) 6.6% 4.0% 4.0% 4.0%
Equity ratio 25.8% 29.0% 26.0% 23.0%
Share of long-term earnings from real estate*2 9.5% 12.0% 14.0% 18.0%
Net assets 38.6 billion yen 61.0 billion yen 66.0 billion yen 72.0 billion yen
*1 Share of profits from leasing: Leasing segment profits/segment total profits (not including adjustments)
*2 Share of long-term earnings from real estate: Real estate generating leasing revenues recorded as noncurrent assets/net assets

3. Dividend Policy

In the press release “Notice on Review of Third Medium-Term Management Plan ‘IDEAL to REAL 2022’ and Progressive Dividend Policy,” issued July 30, 2020, ES-CON JAPAN announced a review of the progressive dividend policy (a dividend policy that sets the dividend per share (DPS) for the previous fiscal year as the lower limit and “does not decrease the dividend amount, but rather only maintains or increases the dividend amount” in principle) it had maintained since November 2016. ES-CON JAPAN has decided to maintain this progressive dividend policy from FY2020 and beyond.

During the period of this Medium-term Management Plan, ES-CON JAPAN plans to maintain dividends of at least 38 yen per share.

Results for period ended December 2016 Results for period ended December 2017 Results for period ended December 2018 Results for period ended December 2019 Results for period ended December 2020 Projections for period ended December 2021 Projections for period ended December 2022 Projections for period ended December 2023
Dividend per share 15 yen 18 yen 32 yen 36 yen 38 yen 38 yen or more 38 yen or more 38 yen or more
Payout ratio 25.5% 22.0% 30.2% 30.2% 33.9%