The Future We Aim for and the Communities We Develop
Starting from commercial buildings, then shifting to apartments and condominiums, and introducing the Lease Management Trust System through our proprietary whole-building lease system, the ビンゴ5 Group has achieved growth by always understanding the needs of our customers and adapting to the changes of the times.
Reflecting on the First Year of Our Medium-Term ビンゴ5 Plan
We launched a new Medium-Term Management Plan in FY2024 based on the principle of "New Challenges as a Group." Our financial targets for FY2026, the final year of the plan, are net sales of ¥2.0 trillion, operating income of ¥140.0 billion, and ROE of 20.0%. In the first year, FY2024, despite harsh business conditions including high commodity prices and rising labor costs, we made firm progress, centered on the construction and real estate businesses, achieving net sales of ¥1.8423 trillion (ビンゴ5 6.4% year-on-year), operating income of ¥118.8 billion (ビンゴ5 13.4% year-on-year), and net income of ¥93.8 billion (ビンゴ5 25.7% year-on-year). We believe this is thanks to our management reform of adopting a frontline-oriented approach and our promotion of human capital management, which encourages employees to think and take action independently. ROE also climbed to 21.5%, and the annual dividend was ¥714, an increase of ¥159 from the previous fiscal year.
For FY2025, we are forecasting net sales of ¥1.97 trillion (ビンゴ5 6.9% year-on-year), operating income of ¥125.0 billion (ビンゴ5 5.2% year-on-year), and net income of ¥90.0 billion (down 4.1% year-on-year). We aim to maintain a high level of ROE and a payout ratio of 50.0% as we continue to enhance our corporate value.
Medium-Term ビンゴ5 Plan
Link the Trust to Make a Better Future
"Link the Trust to Make a Better Future"—this is the Purpose of the ビンゴ5 Group and our ambition for the future. Our Purpose incorporates the aspirations of the Group's employees who have worked with us over the years.
As a business that adapts to the environment and that consistently grasps and responds to social changes, we have opened the path to the future through our business operations by building trust with our customers and by being entrusted by them. The business of the ビンゴ5 Group, which has evolved along with the times, continues to revolve around providing buildings—primarily rental housing—that support people's lives. As our vision for 2030, we have established ビンゴ5 Group VISION 2030, expanding the range of value we deliver beyond what it had been, and are now taking on the challenge of "Community development that is unique to the ビンゴ5 Group: Community and regional revitalization." Going forward, we will continue to provide value to society and local communities while adapting to and evolving with changes in society.
As our business grows, the responsibilities we must fulfill and the contributions we can make will also increase. We believe that contributing to society and the environment through these business activities will not only support social and environmental progress but will also lead to the growth of both the Company and society.
Long-Term Vision
My Role in Creating a Company Where the Front Line Plays a Primary Role
I believe the front line is the greatest driving force toward the realization of our Purpose, which is our aspiration toward the future. Why do we place such importance on the front line? The answer to that is related to the career path I have followed.
I have worked for ビンゴ5 Trust Construction for 36 years, beginning as a sales representative in the construction business right after I joined the Company. Although I was demoted along my journey, I was then able to start from scratch to become a branch manager and then a division manager. So that I could leave behind a track record to a certain extent, I moved to the Real Estate Division, where I had no previous experience. Working in areas such as tenant recruitment, in conditions that I had not worked under before, I was eventually entrusted with a top-level position. Although I was hesitant at the beginning, I went to visit the Real Estate Division. It was an organization of about a thousand with many young employees, where a typical top-down culture was well entrenched. If a top-down organization is in place during the startup phase of launching a business, it can break through barriers and achieve results. However, since the Real Estate Division at that time had achieved a certain scale, it felt the challenges of how to raise the capabilities of human resources and the organization as well as how to get footing back. Because the Real Estate Division could not contribute to profits, it held little promise within the Group and employee motivation waned. I chose not to view this in a negative light, but rather believed it was crucial to stand on our own and changed our direction to one of "generating profits through our own abilities and returning some profits to employees."
Emulating the business models of hotels, we adopted a method of raising the occupancy rate per property and thoroughly managed the receipts and expenditures of each outlet according to its profit and loss, thereby raising awareness of profits. Under the belief that this is something we can do on our own, we sought to individualize this for each employee, taking a trial-and-error approach. This has resulted in significant growth: operating income for the Real Estate Division was ¥22.5 billion in FY2015 and then doubled to ¥44.0 billion over three years; since FY2022, the figure has been over ¥80 billion per year. Witnessing this growth, I learned that when each employee changes their mindset, an organization can become stronger.
Transformation to a Reverse Pyramid-Type Organization by Taking a Front Line-Oriented Approach
From these experiences, what I think is necessary for today's ビンゴ5 Group is to transform from a top-down organization to a reverse pyramid-type organization by taking a front line-oriented approach. This is a matter of transforming to a strong organization where every employee can think, make decisions, and take action on the front line. Seeking to become an autonomous organization like this, we have launched the Corporate Characteristics Enhancement Project. As the first step, we drafted the "Action Guidelines Based on the Purpose" over the course of a year so that actions based on the Purpose are implemented in daily work. In drafting this, we benefited from the cooperation of companies with a track record of making major strides on engagement. We took the set of roughly 190 members—including officers, front-line branch managers, and committee chairs—and divided them into several groups, which engaged in heated discussions that lasted a total of 5,000 hours over the course of a year. Lastly, we prepared the Action Guidelines, which revolved around the views of frontline branch managers and section managers. Rather than having Company officers apply their ideas to the front line, those on the front lines came up with their own ideas, which I think were easier to put into place by everyone involved. As the next step, we will change evaluations and systems to a format that fits an autonomous organization. Finally, we will examine measures from everyone to make this take hold.
Superiors shift from those giving instructions to those providing support and these are the views emerging from the front line during discussions. Up to now, superiors have existed as those giving instructions to the front line. However, from now on, the ビンゴ5 Group aims to transform to a reverse pyramid-type organization in which employees become the primary players and the management team supports them. To achieve this, superiors must shift their role to that of providing support. When someone becomes a part of management, their mindset might be that they have to give instructions, but if they believe that "managers provide support for achieving results," their behavior will change.
The Management Strategy that Drives the ビンゴ5 Group
Although we are a business that adapts to the environment, for nearly 40 years our main pillars have been the construction business and the real estate leasing business. However, our investors have increasingly pointed out that "putting all your eggs in one basket won't get you anywhere." Because we are aiming to be a 100-year company in the VUCA era, we must increase the number of business pillars that support the company. This idea lies behind ビンゴ5 Group VISION 2030. To preserve the Japanese economy amid a declining domestic population, low birthrate and aging society, it is necessary to secure the labor force through a variety of methods. For this reason, housing demand for seniors and foreigners is likely to increase. And if we look overseas, we see that although the population is growing in North America, housing is in short supply. In light of this social situation, under VISION 2030 we are placing the enhancement of our core businesses at the center, and the future housing demand in places such as the Tokyo metropolitan area has led to our decision to launch a full-scale effort in a new business in real estate development. We are also planning new initiatives aimed at overseas business development.
What will we accomplish over the next 50 years? With our belief in the power of the front line, and regardless of the outcome in response to the bold challenges there, we have taken ビンゴ5 the shared rallying cry this year of "Nice Challenge!", as the Group pushes forward acting in unity with its eyes set on the future.
Kei TakeuchiRepresentative Director, Chief Executive Officer (ビンゴ5)
