Latest medium-term management plan

Significance of the Heiwa Group’s Vision and Medium-Term Management Plan

Management Targets (Group-Wide)

Actively invest and aim for EBITDA greater than 100 billion yen while maintaining a balance with financial soundness

Management Targets (by Segment)

Business Strategy: Golf Business

Theme: Implement an all-round strategy and demonstrate synergy as a leading company

How we see the current circumstances
・Long term, the number of participants is trending downward. However, strong demand for play has persisted since the Covid-19 pandemic and is expected to continue for the foreseeable future.
・Inbound golf tourism demand is on the rise.
・Creating synergy between PGM and Accordia Golf will strengthen our earning power.

Basic strategy and actions

① Integrate PGM and Accordia Golf

・As a leading company, strengthen initiatives to broaden the reach of golf

・Build a golf course portfolio meeting all types of needs, from high-end to casual

→ Increase visitor count: Offer customers play choices by building a golf course portfolio meeting all types of needs
→ Optimize revenue per customer: Offer prices commensurate with golf course value, practice thorough revenue management, and use AI to forecast demand and set prices

② Get new customers

・Work to capture inbound demand

→ Offer multilingual websites
→ Strengthen sales
→ Enhance PR

・Expand female and young customer base

→ Actively invest: offer “Night Golf” and “Cool Carts,” renovate clubhouses, etc.

・Strengthen hotel operations

→ PGM Hotel Resort Okinawa to open in 2026

③ Pursue synergy of integration

・Share operating know-how and put it into practice

・Use economies of scale to lower costs

→ Centrally purchase fertilizers, foodstuffs, etc.

・Mutually use management resources

→ Integrate systems, mutually use personnel, integrate head office functions, etc.

Business Strategy: Pachinko and Pachislot Machine Business

Theme: Transform into a high-profit structure

How we see the current circumstances
・The participating population and number of pachinko halls continue to decline and the trend toward market contraction continues.
・Pachinko halls are extremely cautious about buying new machines, but there is high interest in pachinko and pachislot machines with new functions and game features.

Basic strategy and actions

① Create machines that will be a hit

・Be fastest to launch attractive specs and game features

→ Create attractive specs by combining player needs initiatives (market-in) and uniqueness (product-out)
→ Use BI tools to analyze data
→ Strengthen specs research (start a dedicated team)

・Establish flexible development systems

→ Demonstrate in-house production capabilities to be fastest to launch to market

② Increase efficiency

・Reduce excess inventory by optimizing quantities of parts and materials ordered

→ Optimize demand forecasts and quantities of parts and materials ordered
→ Increase precision of demand forecasts
→ Visualize inventory
→ Build a cross-sectional monitoring system

③ Strengthen personnel management

・Develop and maintain the type of personnel we aim to have

→ Build training systems
→ Review evaluation system
→ Improve the internal environment so that it promotes employee growth and helps increase job satisfaction

Financial Strategy: Return on Capital

Aim for ROE of 11% or more by optimizing capital structure while implementing the Medium-Term Management Plan to increase profitability

Financial Strategy: Cash Allocation

Cumulative cash inflows for the three-year period are expected to total 184 billion yen.
It will be allocated mainly to growth investments and reducing interest-bearing debt.

Financial Strategy: Financial Soundness

Aim for a net interest-bearing debt/EBITDA ratio of at least 4x to ensure financial soundness

Financial Strategy: Shareholder Returns

The basis for our shareholder returns is to pay stable dividends of ¥80 per share, while maintaining a balance between growth investment and financial soundness.