Business Plan

Medium-term Management Plan (2019-2021)

The number of deaths in Japan is forecast to increase every year until 2040 because of the rapid aging of the population. At the same time, the number of children is decreasing. As a result, Japan’s population is declining and older people are steadily increasing as a percentage of the population due to a decrease of young people who will define the future.
These ongoing changes in the structure of the population are altering the values of the people of Japan. One result is the diversification of funerals to include traditional family funerals as well as non-religious funerals, one-day funerals and other formats. There is also a trend toward smaller funerals, which is reducing the average cost of funerals.
Competition in the funeral market is increasing. Two reasons are the growing number of funeral halls operated by funeral companies and the emergence of internet-based services that direct people to funeral companies.

To continue to grow in this difficult business climate, we have established a three-year medium-term management plan that ends in March 2022.

  • Earnings Target

    (billion yen, %)

    FY3/2019
    Results
    FY3/2020
    Plan
    FY3/2021
    Plan
    FY3/2022
    Plan
    Operating revenue 207.6 213.0 221.0 229.0
    Operating profit 29.4 28.1 29.0 30.3
    Operating margin 14.2% 13.2% 13.1% 13.2%

    We are planning on steady growth of operating revenue as many more funeral halls are opened. There will be substantial expenses for opening these locations, expanding and strengthening our workforce, launching new businesses, and other activities. Despite these expenses, we are planning on operating profit of 3 billion yen in the fiscal year ending in March 2022. Furthermore, our goal is to maintain an operating margin of at least 13% during all three years of the medium-term plan.

    Note: In prior years, we used the ordinary profit to net sales ratio as a performance indicator. In the new medium-term plan, we have switched to the operating profit to net sales ratio (operating margin). The operating margin more accurately represents the profitability of business operations by eliminating the effect of non-operating items such as financial expenses, which are small because of the financial structure of SAN HOLDINGS.

  • Capital efficiency target

    The target for the return on assets (ROA) is at least 8.5% in the fiscal year ending in March 2022, the final year of the current medium-term plan. The basic stance for shareholder distributions is a steady dividend increase while taking into account our consolidated results of operations, financial position and the need for strategic investments for the medium to long-term growth of our businesses.

    Note: Business profit = Operating profit + Non-operating income (Financial income and all other non-operating items)

  • Priorities
    • (1) Firmly establish the new corporate philosophy

      We have created a new corporate philosophy that goes beyond funeral services by embodying the goal of becoming an organization that provides total support for the final stage of life. This philosophy represents a unified goal and mindset for the people of the SAN HOLDINGS Group, who cover a broad spectrum of values. We will use many activities to give everyone a firm understanding and commitment to this philosophy.

    • (2) Create a more powerful workforce

      We plan to use many activities to upgrade the skills of our people, who are critical to our ability to remain competitive. Recognizing that identifying and training people who can drive our growth is our highest priority, we have established the Personnel and Education Division. We also revised the human resource systems that support this training. Our goal is to create the next-generation of leaders who can create and execute successful strategies.

    • (3) Improve the quality of services

      Differentiating our services from those of our competitors will require the ability to provide services with outstanding quality and substantial added value. This is why we have a strong commitment to upgrading the quality of our services in every way.

    • (4) Increase operating efficiency,

      To improve productivity, we are reexamining our business processes and the roles of our activities and using IT and other measures for raising efficiency.

    • (5) Broaden the lineup of end-of-life support

      We plan to continue increasing the number and types of services that we offer in order to become an organization that provides total support for the final stage of life.

    • (6) Make new businesses more profitable

      We will continue to take on the challenge of creating businesses that can become additional profit centers of our group. At the same time, we will work on making businesses we have already started more profitable.

    • (7) Extend the funeral business to more areas of Japan

      We plan to open new funeral halls even faster, primarily in large metropolitan areas in Eastern and Western Japan, in locations with good prospects for a sound return on our investment. As we increase the pace of network expansion and cover more areas of Japan, we will continue to adhere to our strict standards for site selections and profitability. During the current medium-term plan, our group’s funeral companies plan to add a total of 13 funeral halls.

      New funeral halls during the previous medium-term plan (actual) Funeral halls as of March 31, 2019 (actual) New funeral halls during the current medium-term plan (plan) Funeral halls as of March 31, 2022 (plan)
      10 67 13 80
    • (8) Upgrade risk management

      We are constantly working on ways to upgrade risk management. Our goals are sustained growth and the medium to long-term growth of corporate value based on management decisions for an appropriate level of risk exposure in order to adapt to changes in our markets.