Message from the Management
-- To all our shareholders and investors --

The Group's net sales and operating income both set new records for the fiscal year ended March 31, 2020 (the first year of our 6th Medium-Term Management Plan)

We have formulated the three-year Daiwa House Group 6th Medium-Term Management Plan (covering the FY2019–2021 period). Under the 6th Medium-Term Management Plan, we are giving priority to reinforce our corporate governance system and to leverage our wide-ranging business operations to achieve sustained growth.

During FY2019, we saw firm performance from the Commercial Facilities Business and the Logistics, Business & Corporate Facilities Business in the Business Segment. We also sold off development properties to continue and strengthen real estate investments in line with the basic policy of the 6th plan. Thanks to this, total net sales came to 4 trillion 380.2 billion yen and operating income to 381.1 billion yen, while net income attributable to owners of the parent amounted to 233.6 billion yen.

Formulation of 6th Medium-Term Management Plan

We intend to press forward with updating the infrastructure of our Single-Family Houses Business and Rental Housing Business, aiming at renewed growth, and to focus efforts on expanding our operations in the fields of Commercial Facilities Business and Logistics, Business & Corporate Facilities Business. Also, we will strengthen our system for supervision of overseas business while making continuous investments in business operations. In addition to investment in growth, including in real estate development, we are also investing in the reinforcement of our technology base.

Turning to the Group's capital policy, we position return on equity (ROE) as one of our top-priority management indicators, and under the 6th Medium-Term Management Plan we have set the ROE target level at 13 percent or higher. As the debt-equity (D/E) ratio is an important indicator of financial stability, we are targeting a ratio of approximately 0.5. By setting and reaching these two targets, we aim to strike a good balance between enhancing enterprise value and maintaining financial discipline, while striving to make investment decisions that are simultaneously positive and carefully considered.

With regard to the return of profits to shareholders, our fundamental policy is to conduct investment in areas essential to growth – including real estate development, overseas projects, M&As, research and development, and production capacity – thereby raising earnings per share (EPS), so as to enhance the Group's shareholder value. We have set the dividend payout ratio at 30 percent or higher, and aim to maintain a stable dividend while returning profit that is linked to business performance. In addition, flexible acquisition of own shares is under consideration.

Going forward, in line with the Corporate Governance Guidelines, we will continue working to achieve a sustainable improvement in enterprise value, as well as enhanced shareholder value.
We look forward to the continued support and encouragement of our shareholders, investors, and all other stakeholders.

Keiichi Yoshii President, CEO and COO Takeshi Kosokabe Executive Vice President, CFO

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