We are dedicated to being a dependable end-of-life partner by moving even closer to the senior generation and their family members. By providing Japan's best services that achieve outstanding customer satisfaction, we are determined to continue growing as we play a role in a society where people live to age 100.
We plan to use the following activities in order to accomplish these goals.
We want to use our position as the leader in Japan’s funeral industry to provide services that can meet the expectations of an even broader range of customers. We will expand the opening of new funeral halls to all areas of Japan with the goal of 550 funeral halls in the SAN HOLDINGS Group by the end of March 2032.
Our goal is to help improve the quality of life of many seniors and their family members. We will further enlarge the end-of-life support business in order to use the final stage of life of seniors for the provision of many types of value. Our goal is to increase end-of-life support business sales to ¥10 billion by the end of March 2032, which will make this another core business of the SAN HOLDINGS Group.
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This business contributes to society as a source of services and products needed for people to enjoy a fulfilling life style with confidence during the final stage of life. Activities include support for daily activities, preparations for this final stage and a variety of other support.
Background to the Revision of the Numerical Targets in the 10-Year Vision
Recently, in addition to other companies in the same industry, new entrants from other industries have been entering the end-of-life care industry, and with the declining population and the significant aging of society, the values and needs of customers are changing significantly. In light of these changes in the business environment, the Company formulated its "10-Year Vision" in 2022 as its future vision leading up to 2032, the 100th anniversary of its founding. This vision sets forth the following two key policies: (1) strengthening our business foundation by expanding our nationwide network of stores, and (2) realizing new value through the expansion of our end-of-life support business. Specifically, we aim to establish a network of 210 funeral halls as a Group by FY2031, while expanding services that contribute to improving the quality of life for senior citizens and their families in our end-of-life support business, with sales expected to reach 10 billion yen in the same fiscal year.
In the fiscal year 2024, in addition to opening our own funeral halls, we acquired Kizuna Holdings Corp. through a tender offer, resulting in a total of 267 funeral halls operated by the Group, thereby achieving our expansion target for the funeral business ahead of schedule. Based on these achievements, we have set a new goal of increasing the total number of funeral halls to 550 and will continue to strive for further expansion.
Outline of the Medium-Term Management Plan (FY2025–FY2027)
Based on the results of achieving the target of expanding the funeral business, we have formulated the Medium-Term Management Plan (FY2025–FY2027) as the next step toward realizing our "10-Year Vision," starting in FY2025. Under the policy of "Take the next step toward realizing our 10-Year Vision! Take on new challenges without fear of change!", we will continue to strengthen our efforts to further enhance corporate value and achieve further growth, with the aim of steadily realizing our 10-Year Vision.
In the Medium-term Management Plan (FY2025–FY2027), we will focus on the following four priority themes.
1. Growth
We will continue to actively promote the opening of stores in major cities across Japan in order to expand our business foundation. In terms of measures to increase the number of stores, we will accelerate our in-house expansion centered on the family funeral brands "ENDING HAUS" and "Famille Corp.," while also utilizing M&A and partnerships with other businesses to achieve growth for the Group as a whole. In addition, in the end-of-life support business, we will promote sales growth and business expansion through the development of new services, the expansion of existing businesses, and the expansion of grief care support activities.
2. Quality
We will strengthen our quality management system to provide high-quality, high-value-added services that are the source of our corporate value, and further refine the quality of our services, which is one of our strengths. We will also work to enhance measures for the early development of human resources who provide funeral services and ensure quality, with the aim of improving our service provision capabilities. We will continue to strive to provide the most satisfying and memorable services in Japan, thereby differentiating ourselves from our competitors and establishing a sustainable competitive advantage.
3. Change
As part of our efforts to transform our business, we will promote post-merger integration (PMI) with Kizuna Holdings Corp., and proceed with the sharing of functions and expertise, as well as the integration and optimization of overlapping functions. This will improve management efficiency and further enhance the governance structure of the Group as a whole. Furthermore, with the integration of Kizuna Holdings Corp., we will change our accounting period, which is currently during the busiest time of the year (end of March), to the end of August, thereby mitigating the impact of seasonal fluctuations on operating revenue and improving operational efficiency.
4. Sustainability
In order to achieve sustainable growth and enhance corporate value over the mid- to long term, we will focus on human capital management and promote the recruitment and development of human resources with the skills and expertise necessary to achieve our vision. We will establish the "San Business Academia," an educational institution for both individuals within and outside the Group, to strengthen our human resource development foundation, and we will continue to implement measures to improve engagement and strengthen our organizational capabilities.
In addition, we will strive to enhance corporate value and achieve a PBR ratio of 1x as soon as possible through management practices that take into account capital costs and capital profitability. In addition to improving efficiency by adopting ROE as a capital profitability indicator, we will promote the disclosure of our capital allocation policy, strengthen our IR functions, and enhance shareholder returns based on a progressive dividend policy. Furthermore, through proactive ESG and SDGs initiatives, we will strive to achieve both the resolution of social issues and the enhancement of corporate value.
Through these initiatives, we will respond to changing social needs, establish our position as a leading company in the end-of-life care sector, and achieve sustainable corporate value enhancement.
Numerical targets
We will set ROE*1 as our key capital efficiency indicator and aim to achieve a stable ROE of 8% or higher over the medium to long term. Additionally, we have added EBITDA, which indicates the ability to generate cash, as a key indicator
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Adjusted ROE excluding the impact of one-time gains and losses
[Reason for adopting ROE]
Until now, we have used ROIC as a capital indicator, but in order to focus more on the efficiency of shareholders' equity from the shareholders' perspective and promote efficiency improvements, we have decided to adopt ROE as a capital indicator.
[Reason for adopting EBITDA]
As a result of M&A, goodwill amortization expenses increased, making it difficult to assess the company's earning power based on operating profit alone, so EBITDA, which indicates the ability to generate cash from operating activities, was added.
Please note that FY2025 will be an irregular 17-month accounting period
Initiatives to achieve the ROE target
By achieving the following points, we aim to realize management that is conscious of cost of capital and stock price, and maintain a stable ROE of 8% or higher over the medium to long term
1. We will continue to actively make investments for growth to drive further advancement.
Over the three-year medium-term management plan, we plan to invest 14 billion yen or more in investments for growth
Funeral business: We plan to open 130 halls (including M&A)
End-of-life support business: Promotion of investments aimed at expanding the business area (including M&A)
2. We will achieve consolidated operating profit of 5.8 billion yen in FY2027, the final year of the medium-term management plan.
By actively investing in growth, strengthening the profitability of existing halls and businesses, and post-merger integration (PMI) with Kizuna HD to improve operational efficiency, we will achieve the numerical targets for FY2027
3. We will improve shareholder returns.
Over the three-year medium-term management plan, we plan to allocate 3 billion yen or more for shareholder returns.
Dividends of surplus: We adopt a progressive dividend policy, continuously maintaining or increasing dividend payments.
Purchase of treasury shares: We will flexibly implement share buybacks, taking into account cash flow conditions and stock price trends
Capital allocation policy for the three-year medium-term management plan
Generate approximately 20 billion yen in operating cash flow over the three-year medium-term management plan
At the same time, while effectively utilizing cash and deposits on hand and interest-bearing debt, allocate over 14 billion yen to investments for growth to drive revenue expansion.
Through these efforts, we aim to enhance shareholder returns and increase shareholder value.
Change in shareholder return policy
We are aiming to enhance shareholder returns based on progressive dividends with the aim of further rewarding our shareholders.
Distributing earnings to shareholders is one of our highest priorities.
For the dividend, our policy is to maintain or increase dividends in principle without reducing them with a progressive dividend policy. Dividends reflect our consolidated performance and financial condition, the need to retain earnings for investments for medium and long-term growth, financial soundness and other applicable factors.
In addition, we will consider repurchasing stock in a flexible manner that takes into account the stock price and other applicable factors.
Retained earnings are used mainly for IT systems, M&A and other strategic investments with emphasis on constructing funeral halls. The objective is to use retained earnings for strengthening our business foundation and increasing corporate value.
Dividend per Share Scheduled dividend increase for 10 consecutive terms
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Please note that FY2025 will be an irregular 17-month accounting period.
San Holdings Group's 10-year vision and medium-term management plan
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