Housing Company

Last Update : Sep 25, 2019

President’s Policy

Turn the expected demand decline
environment after the tax-hike
into an opportunity, accelerate
investment for growth and
produce successful results.

The Housing Company has established a unique position in Japan in new housing construction as a specialist in the Unit Construction Method, an advanced factory- built approach that enables short construction periods and delivers functions in accordance with design plans. The Company was in particular an early mover in housing with solar-power generation systems, going back to 1997 when it first scaled up such initiatives, and its cumulative sales of such residences exceeded 200,000 units as of the end of Fiscal 2018. The Company achieved another milestone in April 2012 with the release of its Smart Heim models with standard features such as built-in storage batteries and the Smart Heim Navi Home Energy Management System (HEMS). Later, in April 2019, the Company put together a lineup that caters to a broader spectrum of customers by launching sales of its higher cost performance Smart Power Station Urban.

In the Renovation business, it draws on the features of its factory-built housing products and its database of the housing stock it has constructed to offer renovation proposals best suited to the life stage of each homeowner.

In the Frontier (Domestic) business, we are also developing our management of existing home sales, leasing and management, and other housing asset management operations as well as the construction and operation of housing with support services for senior citizens. In addition, the company is expanding its new construction housing operation overseas.

Topics

Apr. 2018
New-type “Smart Power Station FR” Launched 1
May 2018
Start of SEKISUI CHEMICAL Group’s Urban Development “SEKISUI Safe & Sound Project”
June 2018
Establishment of a Joint Venture in Thailand for Housing Estate Development Business
July 2018
Launch of a new type of “Parfait”
Oct. 2018
Development and Introduction of “New SCOPE,” SEKISUI HEIM’s Next-generation CAD System
Nov. 2018
Launched Parfait-bj Style —A proposal-type product targeting dual-income families raising children—
Nov. 2018
Launch of ZEH-compliant “Letoit AZ” Rental Apartment Buildings
Apr. 2019
Launch of “Smart Power Station Urban” 2
Apr. 2019
Start of SEKISUI’s SMARTHEIM DENKI Power Trading Service

Fiscal 2018 Performance

Reported a third consecutive fiscal year of sales and profit growth. New housing orders continued to increase as renovation orders turned positive

In fiscal 2018, the Housing Company achieved sales and profit growth for the third consecutive fiscal year. Looking at the status of sales by specific business, results were mixed. While the housing and frontier businesses, which focus mainly on newly built houses, recorded an increase in sales, sales declined slightly in the renovation business. There was almost no growth in demand in the face of the consumption tax rate hike scheduled for fiscal 2019. On the earnings front, the housing business saw a decline in profits as a result of increased costs stemming from soaring material prices and from prior investments aimed at securing orders in fiscal 2019. Meanwhile, earnings turned positive in the renovation business, primarily due to reductions in fixed costs centered on the increased efficiency of indirect functions. As a result, net sales in the fiscal year under review came to ¥506.7 billion, an increase of ¥8.9 billion compared with the previous fiscal year. From a profit perspective, operating income totaled ¥39 billion, up ¥1.1 billion year on year. Cost reduction activities have also progressed smoothly, leading to a 0.1 point increase in the operating income ratio, which now stands at 7.7%.

Expanded the product lineup catering to a broader spectrum of customers, including enhancing products targeted at volume zone markets, and secured an increase in orders

Reflecting on the Housing Company’s performance by business, the housing business enhanced the draw of products targeted at a broader spectrum of customers, including those targeted at volume zone markets. This move led to an increase in both the number of units ordered and sold.

In addition, by adding to the number of model home galleries, expanding the sales force, and taking other measures to enhance sales capability, the company strengthened its framework for securing new orders during the fiscal year under review. Although the renovation business reduced fixed costs through greater efficiency in indirect functions, at the same time it also focused its energies on expanding sales of storage batteries and other strategic products. These moves led to a positive turn in orders. In terms of the domestic and overseas frontier businesses, real estate saw firm trends in its mainstay leasing business, but experienced a delay in the launch of new businesses. In addition, the Asaka Lead Town (Town and Community Development project) which has been positioned as one of the pillars of new business within the Company, began subdivision housing operations for some lots during the fiscal year under review.

Fiscal 2019 Forecasts

Aiming for a fourth consecutive fiscal year of sales and profit growth by continuing long-term strategies and working to level out construction

In fiscal 2019, the Housing Company aims for higher sales and profit, in part by linking the previous fiscal year’s order backlog in both the housing and renovation businesses to an increase in sales. Net sales are projected to reach ¥522 billion and operating income to reach ¥40.5 billion for a fourth consecutive fiscal year of sales and profit growth. At the same time, the housing business will continue to advance growth strategies, including undertaking measures that connect to a greater market share in the future. Moreover, the “leveling out” targeted in the current Medium-term Plan will be expanded to focus more energy on leveling out on-site construction in addition to leveling out production and transportation, which have been the focus thus far. Ultimately, this will help level out sales. Turing to the outlook for each business, the Company is targeting higher sales in each of the housing, renovation, and frontier businesses. From a profit perspective, despite the outlook for higher fixed costs in the housing business coinciding with hiring more personnel, additional housing sales are expected to cover these costs. Meanwhile, higher sales are also being targeted for the renovation and frontier businesses through a higher marginal profit based on increased sales.

Aiming to expand new housing orders by focusing energies on securing orders from first-time buyers

The fiscal 2019 market for new housing is expected to see demand fall 5% during the first half and 7% during the second half year on year due to the impact around the time of the consumption tax rate hike. However, demand for housing among first-time buyers is expected to remain firm and the Company aims to secure orders by attracting visitors using the additional number of model house galleries built during the previous fiscal year. At the same time, the Company has expanded its stock of ready-built houses and land since the previous fiscal year, and will increase land purchases during fiscal 2019 in aiming to lift the total number of orders for new housing.

Recovering earnings power by focusing on increasing the efficiency of indirect functions in the renovation business

In fiscal 2019, the renovation business will reinforce points of customer contact in order to increase orders per person while working to improve efficiency through the separation of periodic diagnosis and sales activities. The strategic products into which energies will be focused include strengthening proposals for storage batteries that support energy self-sufficiency in preparation for the end of the Feed-in Tariff (FIT) program. This is important given that contracts based on the FIT program for homes equipped with solar power generation systems will begin to reach the end of their terms starting in November 2019. Moreover, the Company will continue efforts to improve the efficiency of indirect functions in working to increase earnings power. In terms of Asaka Lead Town, for which sales of subdivision houses began in February, the Company plans to have half of all 130 sale lots either under contract or sold during fiscal 2019.

Contributing to the SDGs through Operations

Main Products

  • In-house production in progress inside the Housing Unit Factory
  • A housing unit being installed
  • The Smart Power Station series is aimed at enabling energy selfsufficiency
  • A large-capacity solar power generation system
  • “e-Pocket” large capacity storage battery system that fits into smaller space
  • The Company’s Smart Heim Navi Consulting HEMS
  • External walls (Eco-chante) renovation
  • Living room, dining room, and kitchen renovation
  • Housing for the elderly for which the Sekisui Heim Group is responsible, from constructing to operating
  • The housing production factory in Thailand

Performance Highlights

Housing Company and Market Data