Investor Relations

President's Message

My name is Tatsuo Kijima, and I have recently became President, Representative Director, and Executive Officer of West Japan Railway Company.

In March 2013, the JR-West Group formulated the JR-West Group Medium-Term Management Plan 2017 and the Safety Think-and-Act Plan 2017. To make progress toward the vision "The Ideal Form for JR-West," the entire Group is working to advance priority strategies that are based on its Three Basic Strategies and Four Business Strategies. In April 2015, the Group updated the medium-term management plan to reflect a review of the initiatives carried out over the previous two years as well as changes in the operating environment. On that basis, we made revisions and additions to the initiatives that will be implemented to achieve the plan's goals. We placed particular emphasis on three specific fields — the Hokuriku Shinkansen and invigoration of the Hokuriku Region, the new LUCUA osaka, and our response to inbound visitor demand. These three fields were positioned as strategic topics that spread across business areas, and initiatives targeting these fields were prioritized accordingly. I have accepted the transfer of management duties from former President Seiji Manabe. Moving forward, we will resolutely continue the initiatives that are under way, and we will also add other necessary initiatives as we look to the future. In these ways, we will work to increase corporate value over the medium to long term.

Overview of Fiscal 2016

In fiscal 2016, the Group steadily implemented a variety of initiatives in accordance with the updated medium-term management plan.

In terms of safety, we implemented initiatives based on the Safety Think-and-Act Plan 2017, which is the core of the medium-term management plan. For example, in response to intensifying natural disasters, we took steps to improve the disaster resilience of railway belts during rainfall, centered on the Kyoto-Osaka-Kobe area. In addition, to make station platforms even safer, we began to use platform gates at the Takatsuki and Kyobashi stations.

On the other hand, many customers were adversely affected by an accident involving parts falling off of Shinkansen rolling stock during operation and injuring a passenger on board, and by an incident in which scaffolding at the site of new station construction fell over. We have reflected earnestly on these incidents, and moving forward we will work to prevent a recurrence and to further enhance safety.

On the business front, we worked in cooperation with local partners to maximize the opening effect of the Hokuriku Shinkansen. As a result, usage exceeded our initial expectations. On the Sanyo Shinkansen, we took steps to promote use of the service to the Kansai region by leveraging the opportunities presented by the campaign to commemorate the 40th anniversary of the start of operations of the Sanyo Shinkansen. In addition, the new LUCUA osaka, which opened in April 2015, was used by a wider range of customers than ever before, and OSAKA STATION CITY as a whole enjoyed crowds of customers. Both sales and the number of visitors have been strong since the opening. Moreover, to capture inbound tourism demand the Group Inbound Tourism Promotion Office was established in June and an office was opened in Singapore in July. In these ways, we worked on a Groupwide basis to establish Western Japan tourism routes, improve our ability to cater to the needs of tourists, and strengthen promotions. Consequently, results were favorable and exceeded our expectations.

As a result of these initiatives, the updated medium-term management plan got off to a favorable start, and in fiscal 2016 we recorded higher revenues and profits on a consolidated basis.

In addition, the Corporate Governance Code has been applied to listed companies since June, and in October we announced our approach and related initiatives.

Initiatives in Fiscal 2017

Looking ahead to fiscal 2017, we are entering a period in which JR-West's operations will be directly affected by the uncertain global economy and by changes in the operating environment on a global scale, such as widespread terrorism. Our operating environment in Japan will also continue to present challenges, such as the declining population and intensified competition from other modes of transportation. On the other hand, there are favorable opportunities for growth, such as the substantial increase in inbound tourists and the increasingly vigorous lifestyles of active senior citizens. We will strive to quickly leverage these growth opportunities, implement initiatives, and enhance safety and corporate value from a medium-to-long-term perspective.

In safety, we will continue to implement effective countermeasures to natural disasters, which continue to intensify. In addition, we will work to further enhance safety by implementing countermeasures while making active use of outside opinions and of third-party evaluations of the safety management structure introduced last year.

On the business front, to further heighten the opening effect of the Hokuriku Shinkansen rather than allowing it to taper off, we will work in cooperation with local partners and travel companies to bolster the lineup of travel products and enhance tourism materials. In addition, we will implement a range of initiatives, such as "early morning business trip support" campaigns. For the Sanyo Shinkansen, we will work to steadily capture demand, which is expected to record growth centered on such customer groups as senior citizens and inbound visitors. In addition, we will move ahead with preparations for the introduction of new services — seat reservations over the Internet and ticketless boarding using ICOCA and other transportation-related IC cards. In business development operations, we will continue taking steps to enhance LUCUA osaka. In addition, we will work to prepare for the opening of SUITA GREEN PLACE and lodging facilities in Tennoji and Umeda. In these ways, we will actively develop businesses in cities outside our railways in fields where we have strengths. JR-West will take steps to address inbound tourism demand, which is growing rapidly. These steps will include establishing wide-area tourism routes and expanding duty-free shops. In these ways, we will concentrate the Group's comprehensive strengths and aim to invigorate our regions of operation and to increase revenues for the entire Group.

We will strive to steadily implement these initiatives and to generate results that will place us in view of the goals slated to be achieved by the end of fiscal 2018, the final year of the medium-term management plan.

As we move forward, JR-West will continue to pursue improvements in both safety and corporate value from a medium-to-long-term perspective. We will also value relationships with shareholders by providing stable returns over the long term, conducting appropriate disclosure, and engaging in constructive dialogue.

I would like to ask our shareholders and other investors for their continued understanding and support in the years ahead.

June 2016
Tatsuo Kijima
President, Representative Director, and Executive Officer

Tatsuo Kijima