Our Corporate Philosophy/Strategy

Published: April 2015

TOHO Co., Ltd. Business Principles

Ichizo Kobayashi built TOHO group with the mission of "presenting delightful entertainment to the mass of the people". Since then, we have created entertainment in various forms, primarily as motion pictures and theatrical productions, providing joy and dreams to a wide range of customers.

We also value Ichizo Kobayashi's other credo, "Our happiness is a gift from our customers", along with his dictum, "With Vivacity, Modesty, Fairness and Grace", as corporate mottos. Kobayashi's philosophy has led us to produce an honest and ethical way of doing business in our three main segments: motion pictures, theatrical productions and real estate management.

TOHO will maintain a customer-driven culture supported by the principles above, to present extraordinary and contemporary entertainment content to our customers, and increase our corporate value.

Medium-Term Management Strategy: TOHO VISION 2018

The domestic market for our key businesses is maturing, as the birth rate declines and the population ages. Moreover, across the industry, technological innovation is changing viewing styles by giving viewers more ways of enjoying digital content, and competition among media formats is intensifying.

Such challenging market conditions made us realize the importance of clearly stating our medium-term management strategy to drive sustainable value for customers and shareholders. This resulted in our releasing the TOHO VISION 2018 in April 2015.

Under the medium-term management strategy, we will seek to strengthen further our competitive advantages within the three core businesses: movies, theatrical productions, and real estate. To meet the challenge, we specifically allocate resources toward the five growth initiatives outlined below.

Expansion of the in-house creative development and broader rights acquisition

1. Enhancing in-house content creation and copyright-related business

Growing TOHO-original content in motion pictures, dramatizations and animations is an initial priority. We will optimize internal creative resources to accelerate execution of multifaceted projects that deliver proprietary content to new opportunities. It is also vital for us to agilely discover, capture and foster new talent capable of creating exciting content to widen our portfolio.

Development of character business led by GODZILLA

2. Developing character business led by GODZILLA

GODZILLA is one of our most important characters, rebooted by the film from Hollywood in 2014, and to which our company owns all the rights. We have gathered members from different divisions and formed a project team specialized in GODZILLA to create and expand the character business actively and continuously along with future new movie releases.

Building a business model of developing overseas markets

3. Building a business model to break into global markets

TOHO aims to gain a foothold in global markets thorough versatile approaches. We aggressively promote to the world market Japan-originated projects designed by our own as well as by external resources. Creating and producing powerful content in collaboration with overseas talent and partners is one of methods we are able to initiate.

Strategic expansion of TOHO CINEMAS locationsand the addition of sophistication/high value

4. Expanding TOHO CINEMAS® value-added theater-network

TOHO CINEMAS®, the leading movie theater chain in Japan, will maintain its significant presence by expanding the full-fledged theater network in major cities and Tokyo metropolitan area. Our theater operations have encouraged industry innovation, and continue to offer distinctive services including premium sight and sound, luxurious seats in sophisticated buildings as well as tasty concessions and a variety of movie merchandise.

Reinforcement of business infrastructure and acquisitions of new properties by reorganizing our group real estate business

5. Strengthening real estate business through integrations and acquisitions

TOHO's real estate management business is a key to ensure sustainable growth with financial stability. Its competitiveness enhancement is achieved by integrating internal resources including our real estate management subsidiary. Executing projects such as invigorating Hibiya and Yurakucho area (the birthplace of TOHO), and conducting new properties acquisitions in major cities will greatly differentiate us from competitors.

TOHO group actively implement all the managerial decisions into actions as detailed in the business strategies above, and strive to accomplish a steady growth as well as corporate value improvement.

Financial targets

TOHO group emphasizes the importance of "operating profit" as a measure of the company's performance, since our sales generated from the movie business, which is the major segment, fluctuate from period to period. We aim to earn a stable operating profit, controlling sales and costs by repeating the PDCA (Plan-Do-Check-Act) cycle that applies to all aspects of TOHO group operations.

Based on TOHO VISION 2018, we expect operating profit to exceed 30 billion yen within the next three years, and to reach 35 billion yen in fiscal year 2018, the final year of the three-year period.

Capital policies

TOHO will continue its efforts to return profit to shareholders. We pay an appropriate dividend that is closely linked to our performance. While maintaining an annual dividend of 25 yen per share in fiscal year 2015 as the base, we will proactively consider additional dividends when we surpass expectations.

We will implement stock repurchases in an agile and proactive manner, paying attention to the level of free cash flow.
We will prioritize bottom-line growth by implementing the various measures under the medium-term management strategy, and in combination with the capital policy stated above, we will strive to manage the business in a way that makes the most efficient use of shareholders' capital.