Ichigo Inc. · TSE:2337

Ichigo — Q3 FY2023/2 Earnings Presentation

93 slides from Ichigo's earnings presentation, Jan 12, 2023

1. Slide 1: FY23/2 Q3 Corporate Presentation

   FY23/2 Q3 Corporate Presentation January 13, 2023 January 12, 2023 Ichigo (2337) © Ichigo Inc. All rights reserved. www.ichigo.gr.jp/en

2. Slide 2: Condolences message

   We would like to express our deepest condolences to all those affected by the global Covid pandemic and by the war and humanitarian crisis in Ukraine, along with our heartfelt wish for the immediate cessation of hostilities and the earliest and fullest possible recovery for all. Take care, be safe.

3. Slide 3: Make The World More Sustainable

   Make The World More Sustainable © Ichigo Inc. All rights reserved.

4. Slide 4: © Ichigo Inc. All rights reserved.

   © Ichigo Inc. All rights reserved.

5. Slide 5: © Ichigo Inc. All rights reserved.

   © Ichigo Inc. All rights reserved.

6. Slide 6: Contents

   Contents FY23/2 Q3 Earnings Sustainable Growth as a Sustainable ‒ FY23/2 Q3 Summary Infrastructure Company ‒ FY23/2 Full-Year Forecast Upward Revision ‒ Sustainable Real Estate: Selective on Acquisitions & Sales ‒ All-In Disclosure to Increase Earnings Transparency ‒ Ichigo Owners: Robust Demand Dri

7. Slide 7: FY23/2 Q3 Earnings

   FY23/2 Q3 Earnings © Ichigo Inc. All rights reserved. 7

8. Slide 8: FY23/2 Q3 Summary

   FY23/2 Q3 Summary – Full-Year Forecast Upward Revision  Operating Profit: JPY11.9B (Initial Forecast: JPY 9.7B – JPY 10.6B) Net Income: JPY 9B (Initial Forecast: JPY 6.5B – JPY 8.5B)  Strong Hotel Recovery – Q3 RevPAR (3M): +92% YOY, Recovered to Pre-Covid Level – Q3 RevPAR (9M): +77% YOY, -27% vs

9. Slide 9: FY23/2 Q3 Summary

   FY23/2 Q3 Summary Durable Earnings Model Robust Stock Earnings ■ FY22/2 Q3 Stock Earnings/Fixed Expenses ■ FY23/2 Q3 189% 0% (JPY million) Sustainable Asset Clean Fixed Real Estate Management Energy Flow Earnings Expenses (SRE) (AM) (CE) JPY 11.0B JPY 6.0B -2% Cash Earnings 11,260 11,261 JPY 22.2B +

10. Slide 10: FY23/2 Full-Year Forecast Upward Revision (1)

    FY23/2 Full-Year Forecast Upward Revision (1) (JPY million) FY23/2 FY23/2 FY22/2 Initial Forecast Revised YOY Actual Bottom of Top of Forecast Range Range Operating Profit 10,018 11,900 +18.8% 9,700 – 10,600 All-In Operating Profit 13,266 16,300 +22.9% 12,700 – 15,600 Recurring Profit 7,471 10,000 +

11. Slide 11: FY23/2 Full-Year Forecast Upward Revision (2)

    FY23/2 Full-Year Forecast Upward Revision (2) Strength in Both Stock & Flow Earnings – Stock Earnings: Strong Recovery in Hotel Revenues & Hotel Operator Earnings – Flow Earnings: Ichigo Office Performance Fee (JPY 1.6B) in Q4  Ichigo’s REITs Are the Only J-REITs with a No Fixed Fee, Performance Fe

12. Slide 12: All-In Disclosure for Increased Earnings Transparency

    All-In Disclosure for Increased Earnings Transparency – All-In disclosure allows for transparent tracking of full profitability contribution of Sustainable Real Estate (SRE) – SRE is a core business, and Ichigo executes value-add on SRE assets regardless of whether they are classified in accounting

13. Slide 13: All-In OP +167%, Cash EPS +99% (YOY)

    All-In OP +167%, Cash EPS +99% (YOY) − Upward Earnings Revision on Strong Asset Sales & Hotel Recovery − Cash Earnings Significantly Exceed Accounting Earnings Due to Ichigo’s Focus on Maximizing Long-Term Cash Flows for Shareholders − Cash EPS = 1.4X EPS (JPY million) FY23/2 FY22/2 Q3 FY23/2 Q3 YOY

14. Slide 14: Segment Earnings Details

    Segment Earnings Details − Asset Management: Strong Ichigo Hotel (3463) Demand & AM Fee Recovery Ichigo Office Performance Fee (JPY 1.6B) in Q4 − SRE Stock Earnings: Strong Hotel Demand Recovery & Inbound Growth − SRE Flow Earnings: Multi-Asset & Ichigo Owners Sales Up YOY − Clean Energy: Continuing

15. Slide 15: Powerful Value-Add Business Model & Sustainability Focus Drives Sustainable Growth

    Powerful Value-Add Business Model & Sustainability Focus Drives Sustainable Growth © Ichigo Inc. All rights reserved. 15

16. Slide 16: Stock + Flow Earnings

    Stock + Flow Earnings Stock Earnings (Primarily Rental Income, Power Generation Revenues, Base AM Fees, & Non-Cash Expenses (e.g., Depreciation)) Flow Earnings (Primarily Gains on Value-Add Real Estate Sales ) Fixed Expenses (Fixed SG&A + Interest Expenses) Cash Earnings 37,016 (JPY million) 33,759

17. Slide 17: Stable Stock Earnings

    Stable Stock Earnings Stock Earnings by Segment ■ Asset Management ■ Sustainable Real Estate ■ Clean Energy (JPY million) (Stock Earnings/ 18,485 18,450 Fixed Expenses, %) (261%) (234%) 2,057 2,062 15,065 14,912 14,995 (195%) (191%) (183%) 1,832 2,091 1,969 11,261 (189%) 1,492 13,451 13,331 9,402 8,

18. Slide 18: Embedded Forward Earnings

    Embedded Forward Earnings Full Economic Earnings From Value-Add Exceed Accounting Earnings – Value-Add Thus Generates Significant Unrealized Gains That Are an Earnings Bank for Future Periods (JPY billion) 63.9 65.3 56.2 50.9 45.4 FY18/2 FY19/2 FY20/2 FY21/2 FY22/2 Third-Party Appraisal Value-Based

19. Slide 19: Value-Add Drives Durable Value Growth

    Value-Add Drives Durable Value Growth 2.8X Appraisal Value-Based Unrealized Gains 2.5X Real Estate Gains on Sales 1.9X 2.0X JPY 17.1B JPY 15.0B 1.9X JPY 10.8B JPY 9.4B JPY 6.1B JPY 5.9B JPY 5.7B JPY 5.8B JPY 4.7B JPY 3.0B FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 Q3 Real Estate Gains on Sales = Gross Profi

20. Slide 20: Robust Cash Generation

    Robust Cash Generation Economic Operating Cash Flow Exceeds Net Income (JPY billion) Net Income 3.6X Economic Operating Cash Flow 1.7X 1.2X 29.5 25.5 1.9X 2.1X 16.7 15.4 14.0 10.4 12.4 8.2 6.5 5.0 FY18/2 FY19/2 FY20/2 FY21/2 FY22/2 Note: Economic Operating Cash Flow = Cash Flows from Operations excl

21. Slide 21: Strong Financial Base

    Strong Financial Base Weighted Average Loan Period Average Interest Rate & Loan Term Weighted Average Remaining Loan Maturity (Interest Rate) Weighted Average Interest Rate (Loan Term, Years) 2.5% 12 10.8 years 10.3 years 10.2 years 10.0 years 10.0 years 10.1 years 10.1 years 9.6 years 2.0% 8.3 year

22. Slide 22: ESG Finance

    ESG Finance Ichigo’s ESG Execution Driving Attractive ESG Financing Terms ESG Loans as % of Total Borrowings ESG Loans ■ ESG loans & green bonds ■ ESG loans & green bonds ■ Remaining ESG commitment line ■ Remaining ESG commitment line ■ Other corporate loans & bonds (excludes short-term loans) (JPY

23. Slide 23: Ichigo Climate Positive: CO2 Reduction > Emissions

    Ichigo Climate Positive: CO2 Reduction > Emissions Ongoing Ichigo Clean Energy Production Growth & Renewable Energy Transition CO2 Reduction vs. CO2 Emissions (tons p.a.) ■ Total Ichigo Power Plant CO2 Reduction ■ Total Ichigo CO2 Emissions (Scope1+2) 2.5X 137,848 115,884 Continuing Reduction of 97,

24. Slide 24: RE100 by 2025 On Track

    RE100 by 2025 On Track Ichigo RE100 Progress FY23/2 Renewable Energy Transition Impact CO2 Reduction 35,815 tons p.a. FY23/2 H1 Renewable Energy % Reduction 47.2% Ratio 60% CO2 Emissions of Cars (+7pts vs. FY22/2 Q4) × 15,572 Note: % Reduction = Amount of CO2 reduction vs. 75,890 tons (FY20/2 actual

25. Slide 25: CDP: Ichigo Recognized as Highest Leadership Level

    CDP: Ichigo Recognized as Highest Leadership Level A- Scores in Both Climate Change &Water Security Assessments − “A” Level Recognizes Companies with Best Practice Environmental Initiatives 2022 Climate Change Assessment Score: A- (2nd Year in a Row) Information disclosure system relating to climate

26. Slide 26: Sustainable Growth as a Sustainable Infrastructure Company

    Sustainable Growth as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 26

27. Slide 27: Sustainable Real Estate: Selective on Acquisitions & Sales

    Sustainable Real Estate Selective on Acquisitions & Sales Acquisitions: Q3 YTD JPY 37.3B, Full-Year Forecast JPY 44.7B − Multi-Asset: Strengthening Ichigo Office Acquisition Pipeline − Owners: Expanding Customer Base via New Digital Real Estate & Small- Lot Investment Products, FY23/2 Forecast JPY 3

28. Slide 28: Ichigo Owners: Robust Demand Driving Growth

    Sustainable Real Estate Ichigo Owners: Robust Demand Driving Growth FY23/2 Sales: JPY 28.0B (+55% YOY) FY23/2 Acquisitions: JPY 32.7B (+22% YOY) 3.6 (Initial Ichigo Owners Residential Acquisitions & Sales Forecast (JPY billion) ■ Sales 3.8 2.9) ■ Acquisitions Q4 5.9 Settlement 2.1 1.4 30.6 28.0 28.0

29. Slide 29: New Ichigo Residence Token Digital Real Estate Business

    Sustainable Real Estate New Ichigo Residence Token Digital Real Estate Business Driving Growth with Investment Products Meeting Diverse Needs – First Ichigo Residence Token (Azabu, Shirokane, & Nihonbashi) Sold Out Immediately – AUM JPY 5.2B (3 Assets), Security Token Issue Amount JPY 1.5B – Expect

30. Slide 30: Growth Support for Ichigo REITs & Ichigo Green

    Asset Management Growth Support for Ichigo REITs & Ichigo Green Ichigo Office 8975 Ichigo Hotel 3463 Ichigo Green 9282 Portfolio JPY 205.9B (86 Assets) JPY 54.7B (25 Hotels) JPY 11.4B (15 Solar Plants) Dividend Yield (as of January 10, 2023) 7.2% 2.6% 5.7% ・ Entered FTSE Global REIT Index, ・ Geograp

31. Slide 31: Ichigo Office Acquisitions & Sales Driving Shareholder Value

    Asset Management Ichigo Office Acquisitions & Sales Driving Shareholder Value Ichigo’s REITs Are the Only J-REITs with a No Fixed Fee, Performance Fee- Only Structure to Maximize Alignment with Positive Shareholder Outcomes Acquired Assets with Ichigo Value-Add Upside Ichigo Office Bridge Fund JPY 1

32. Slide 32: Clean Energy: Scaling Rapidly

    Clean Energy Scaling Rapidly 3 New Plants (Total 5.1MW) Online in FY23/2, Growing Stable Earnings Ichigo 4.4 46.9 Operating Plants: JPY 38.8B (144.8MW) (Forecast) (+21%) In-Pipeline Plants: JPY 8.1B (20.9MW) 4.3 Ichigo Green (9282) 38.8 8.1 Operating Plants: 29.4MW 3.8 (+2%) 3.0 2.9 Stock Earnings (

33. Slide 33: Share Buybacks – 6th Consecutive Year (FY23/2: JPY 4.5B)

    Share Buybacks – 6th Consecutive Year (FY23/2: JPY 4.5B) Continued Flexible Deployment of Share Buybacks Share Buybacks Number of Shares Average Purchase Purchased Amount Price (% of Shares Outstanding) 9,448,400 FY23/2 Aug~Nov JPY 317 JPY 3 billion (1.9%) 5,103,800 FY23/2 Apr~Jun JPY 293 JPY 1.5 bi

34. Slide 34: Ichigo J.League Shareholder Program

    Ichigo J.League Shareholder Program Represents Two Firsts for a Shareholder Program in Japan − First Japanese company to include not just its own shareholders, but also the shareholders of the REITs and listed solar power producer that it manages, in its shareholder program (70,000 shareholders in t

35. Slide 35: Appendix: Ichigo's Sustainability Commitment (ESG)

    Appendix: Ichigo’s Sustainability Commitment (ESG) © Ichigo Inc. All rights reserved. 35

36. Slide 36: Ichigo Sustainability Policy

    Ichigo Sustainability Policy Harmony with the Environment Ichigo actively monitors and minimizes the environmental impact of its business operations. Energy Conservation, CO2 Reduction, and Recycling Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy consumption, extend

37. Slide 37: ESG Initiatives: Environmental

    ESG Initiatives: Environmental Climate Positive & Sustainability-Driven Preserve & Improve Real Estate Community-Based, Productive Use of Pro-Active Environmental to End Wasteful Demolition Idle Land for Clean Energy Certifications Ichigo's Sustainable Real Estate business Ichigo will not build powe

38. Slide 38: ESG Initiatives: Social

    ESG Initiatives: Social Contributing to Society Contributing to Regional Revitalization Ichigo University Sports Initiatives Ichigo works to revitalize local communities Ichigo established Ichigo University in May As a top partner of the J.League and promote regional economic 2013 to support employe

39. Slide 39: ESG Initiatives: Governance

    ESG Initiatives: Governance Global Best Practice Governance Early Adopter of Global Best Practice Majority Independent Director Board Annual Board of Directors Corporate Governance Structure Underpins Strong Governance Evaluation All Directors on Ichigo’s Board of Directors Of 10 members of Ichigo’s

40. Slide 40: Sustainability Initiatives

    Sustainability Initiatives Joining Third-Party Initiatives to Accelerate Ichigo’s Sustainability Activities (1) (2) (3) (4) (5) UN Global Compact UN Global Compact is a global sustainability initiative that calls for companies and organizations to take leadership and take actions as members of socie

41. Slide 41: Accelerated RE100 Target Years From 2040 to 2025

    Accelerated RE100 Target 15 Years From 2040 to 2025 Further Lowering Energy Impacts as a Sustainable Infrastructure Company Ichigo RE100 Target 100% Renewable Electricity by 2025 Ichigo is committed to sourcing 100% renewable electricity across its operations, including Ichigo Office (8975) and Ichi

42. Slide 42: Rich ESG Content

    Rich ESG Content ICHIGO Sustainable City Ichigo Sustainability Report Promoting Awareness of Ichigo’s Sustainability Introducing Ichigo’s Vision for Society’s Future Initiatives via Ichigo Sustainability Report Sustainable Infrastructure Sports Senior Management Message Sustainable Business Manageme

43. Slide 43: Appendix: Financial & Operational Data

    Appendix: Financial & Operational Data © Ichigo Inc. All rights reserved. 43

44. Slide 44: Business Segments

    Business Segments Asset Management (AM) generates fee income via management of Asset Management Ichigo Office (8975), Ichigo Hotel (3463), Ichigo Green (9282), and private real estate funds. Sustainable Real Estate (SRE) preserves and improves real estate. Sustainable Ichigo receives rental income d

45. Slide 45: Significant Unrealized Gains on Balance Sheet

    Significant Unrealized Gains on Balance Sheet Real Estate Directly Held by Ichigo (JPY million) Book Value as of Appraisal NOI Cap Rate Appraisal Value Unrealized Gains Location Novem ber 30, 2022 (A) (B) (B)/(A) (C) (C) - (A) Tokyo 86,825 5,271 6.1% 119,722 +32,897 Outside Tokyo 95,135 6,400 6.7% 1

46. Slide 46: Risk-Based Balance Sheet

    Risk-Based Balance Sheet Mark-to-Market Consolidated Balance Sheet: JPY 399.6B (Book Value JPY 336.0B + Unrealized Gains JPY 63.6B) Cash & Cash Equivalents Non-Recourse Loans & Related Liabilities JPY 40.3B JPY 46.1B Risk-Based Consolidated Balance Sheet: JPY 313.2B Non-Recourse Loans & (Book Value

47. Slide 47: Cash Flow Maximization

    Cash Flow Maximization Maximal Use of Depreciation to Increase Cash Flow Real Estate for Sale & Fixed Assets Fixed Assets (SRE) Fixed Asset Ratio Real Estate for Sale (SRE) 30.1% 84.4% 84.4% 15.2% 84.7% (JPY billion) 12.8% 32.0 30.9 Reclassification of 29.5 Sustainable Real Estate Assets to Fixed As

48. Slide 48: Robust Cash Flow Generation & Strong Earnings Base

    Robust Cash Flow Generation & Strong Earnings Base Key Ichigo Strength: Robust Cash Generation to Fund Growth − Maximal use of non-cash depreciation allowances − Majority of cash earnings are Stock Earnings − Stock Earnings/Fixed Expenses Ratio – even amidst Covid – is consistently c. 189% (JPY mill

49. Slide 49: Post-GFC Shift in Earnings Base & Financial Position

    Post-GFC Shift in Earnings Base & Financial Position FY09/2 FY14/2 FY22/2 vs. GFC GFC Start of Shift Up MTP Stock Earnings/ Fixed Expenses 75% 140% 191% 2.5X Coverage Ratio 10.1 years Loan Maturity (Weighted avg., 5.6 years 5.6 years 3.6X corporate + non-recourse loans) 2.8 years 2.8 years 2.8 years

50. Slide 50: Consolidated Balance Sheet: Segment Breakdown

    Consolidated Balance Sheet: Segment Breakdown (JPY million) Cash and Operational Operational Real Estate Intangible Securities Other Segment Cash Loan Securities Fixed Assets Total Assets for Sale Assets Investments Assets Equivalents Investments Investments Asset Management (AM) – – – – – 578 119 1

51. Slide 51: Expense Allocation Adjustment

    Expense Allocation Adjustment New segment forecasts from FY23/2 Q1 reflect adjusted allocation of corporate expenses to subsidiaries to more accurately reflect their use of corporate resources (JPY million) All-In Operating Profit FY23/2 FY22/2 FY23/2 Initial Forecast Revised YOY Actual Bottom of Ra

52. Slide 52: Consolidated P&L: Segment Breakdown

    Consolidated P&L: Segment Breakdown (JPY million) All-In Gross Profit All-In Operating Profit Segment YOY YOY FY23/2 FY22/2 Q3 FY23/2 Q3 FY22/2 Q3 FY23/2 Q3 Change Change Revised Forecast Asset Management (AM) 1,547 1,492 -3.6% 1,124 1,055 -6.1% 2,900 Base AM Fees 1,547 1,492 -3.6% – – – – Acquisiti

53. Slide 53: Asset Management AUM Detail

    Asset Management AUM Detail FY18/2 FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 Q3 (12M) (12M) (12M) (12M) (12M) (9M) Ichigo Office AUM (Fiscal Year End) JPY 196.9B JPY 203.0B JPY 203.2B JPY 206.1B JPY 205.4B JPY 211.0B (8975) Base AM Fee Gross Profit (Actual) JPY 1,373M JPY 1,426M JPY 1,436M JPY 1,524M JPY 1

54. Slide 54: Appendix: Sustainable Real Estate Details

    Appendix: Sustainable Real Estate Details © Ichigo Inc. All rights reserved. 54

55. Slide 55: Sustainable Infrastructure for a Sustainable Society

    Sustainable Real Estate Social Significance Sustainable Infrastructure for a Sustainable Society End Wasteful Demolishment and Embrace Sustainable Real Estate ‒ Improve quality of assets via Sustainable Value-Add ‒ Preserve and improve highly functional real estate to contribute to environmental con

56. Slide 56: Powerful Sustainable Real Estate Business Model

    Powerful Sustainable Real Estate Business Model Significant Synergies Between Ichigo’s Sustainable Real Estate & Asset Management Businesses Sustainable Real Estate Business Model Green Infrastructure Solar Plants Buy Ichigo Green (9282) Office Sell Real Third- Ichigo Office Sustainable Estate Party

57. Slide 57: Ichigo Sustainable Real Estate Earnings Model Example

    Ichigo Sustainable Real Estate Earnings Model Example 5.5% NOI Yield, JPY 2B Purchase, LTV 75%, 1.5% Interest Rate, JPY 50M Capex, 15% Increase in NOI, 3-Year Value-Add Period Value-Add Measures: Improved exterior, interior, & tenant services; seismic strengthening; increased energy efficiency; new

58. Slide 58: Value-Add Robust to Changes in Market Environment

    Sustainable Real Estate Value-Add Robust to Changes in Market Environment Multi-Asset Ichigo Owners Build strong tenant relationship NOI GPM GPM Improve assets +25% 32% 11% Improve soft services Normal Avg. Hold: Avg. Hold: Market 3.2 Years 0.8 Years Sustainable Real Estate Complete Sell (or Buy Val

59. Slide 59: Sustainable Real Estate: Gross Profit Margin (GPM)

    Sustainable Real Estate: Gross Profit Margin (GPM) Ichigo Sustainable Value-Add Supports Ongoing High GPM FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 Q3 GPM 25.5% 28.3% 13.9% 20.6% 22.4% (vs. Revenue) GPM 34.3% 39.5% 16.2% 26.2% 29.1% (vs. Book Value) Revenue 58,693 60,601 41,430 45,830 48,632 (JPY M) Gross

60. Slide 60: Ichigo-Owned Real Estate Portfolio

    Ichigo-Owned Real Estate Portfolio By Asset Type By Location (JPY billion) Ground Sendai Other Lease Other 2% 5% Logistics 1% 2% Nagoya 3% 1% Osaka 3% Hokkaido 9.1 Hokkaido Residential 4% Office 19% Tokyo 29% Metro Tokyo Tokyo 128.7 11% 53% Retail 24% Fukuoka Sendai Hotel 19% 5.7 24% *Ex-Tokyo By As

61. Slide 61: Sustainable Real Estate Asset Breakdown (1)

    Sustainable Real Estate Asset Breakdown (1) 170 Assets, JPY 239.5B, Annual NOI JPY 11.6B (6.4% Yield) Acquisition Acquisition Building Expected Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 1 Retail Fixed Asset Mat

62. Slide 62: Sustainable Real Estate Asset Breakdown (2)

    Sustainable Real Estate Asset Breakdown (2) Acquisition Acquisition Building Expected Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 29 Ground Lease Fixed Asset Fujisawa, Kanagawa JPY 1B-2B 2014/03 – JPY 113M JPY 27

63. Slide 63: Sustainable Real Estate Asset Breakdown (3)

    Sustainable Real Estate Asset Breakdown (3) Acquisition Acquisition Building Expected Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 68 Retail Fixed Asset Shibuya-ku, Tokyo <JPY 1B 2015/04 21 years JPY 48M JPY 79M –

64. Slide 64: Sustainable Real Estate Asset Breakdown (4)

    Sustainable Real Estate Asset Breakdown (4) Acquisition Acquisition Building Expected Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 145 Hotel Fixed Asset Fukuoka >JPY 3B 2018/03 4 years JPY 194M JPY 301M – – 147 Ho

65. Slide 65: Sustainable Real Estate Asset Breakdown (5)

    Sustainable Real Estate Asset Breakdown (5) Acquisition Acquisition Building Expected Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 61 Retail Operational Loan Shinjuku-ku, Tokyo JPY 1B-2B 2014/12 59 years JPY 120M

66. Slide 66: Sustainable Real Estate Asset Breakdown (6)

    Sustainable Real Estate Asset Breakdown (6) Acquisition Expected Ichigo Equity Forecast Equity Forecast No. Asset Type vs. FY22/2 Q4 1 Price NOI/Year Investment Multiple IRR A Ichigo Owners (Residential) 39 Assets JPY 41,547M +JPY 7,122M JPY 1,648M JPY 11,863M – – B Ichigo Owners (Other) 4 Assets JP

67. Slide 67: Appendix: Clean Energy Details

    Appendix: Clean Energy Details © Ichigo Inc. All rights reserved. 67

68. Slide 68: Ichigo Solar Power Plant Portfolio

    Ichigo Solar Power Plant Portfolio Total Operating and In-Pipeline Ichigo-Owned Solar Power Plants: 48 Plants (151.4MW) By Customer (Electric Power Utility Co) By Feed-In Tariff By Years in Operation JPY 14 Hokkaido 3% Shikoku 2% 2% <1 year Tohoku 3% In 3% Pipeline JPY 18 Kyushu 11% JPY 40 9% 13% JP

69. Slide 69: Ichigo Solar Power Plant Portfolio

    Ichigo Solar Power Plant Portfolio Operating Panel Output FIT Operation No. Solar Power Plant Area (MW) (Pre-tax) Start Date 1 Ichigo Tokushima Higashi-Okinosu Shikoku 2.52 JPY 40 2013/08 2 Ichigo Fuchu Jogecho Yano Chugoku 0.99 JPY 40 2014/03 3 Ichigo Yubetsu Barou Hokkaido 0.80 JPY 40 2014/04 4 Ic

70. Slide 70: Ichigo Solar Power Plant Portfolio

    Ichigo Solar Power Plant Portfolio Operating Panel Output FIT Operation No. Solar Power Plant Area (MW) (Pre-tax) Start Date 31 Ichigo Hitachiomiya Kanto 2.99 JPY 24 2020/03 32 Ichigo Hokota Aoyagi Kanto 2.48 JPY 27 2020/04 33 Ichigo Kasaoka Osakaike Chugoku 2.66 JPY 21 2020/04 34 Ichigo Minokamo Ha

71. Slide 71: Ichigo Wind Power Plant Portfolio

    Ichigo Wind Power Plant Portfolio Operating Panel Output FIT Operation No. Wind Power Plant Area (MW) (Pre-tax) Start Date 1 Ichigo Yonezawa Itaya Tohoku 7.39 JPY 22 2021/03 Total (Operating) 1 Plant 7.3MW In-Pipeline Panel Output FIT Operation No. Wind Power Plant Area (MW) (Pre-tax) Start Date 2 I

72. Slide 72: Ichigo Green (9282) Solar Plant Portfolio

    Ichigo Green (9282) Solar Plant Portfolio Operating Panel Output FIT Operation No. Solar Power Plant Area (MW) (Pre-tax) Start Date 1 Ichigo Kiryu Okuzawa Kanto 1.33 JPY 40 2013/09 2 Ichigo Motomombetsu Hokkaido 1.40 JPY 40 2014/02 3 Ichigo Muroran Hatchodaira Hokkaido 1.24 JPY 40 2014/03 4 Ichigo E

73. Slide 73: Green Biomass Entry

    Green Biomass Entry Fully Local Green Biomass as Ichigo's Third Renewable Energy Business − Diversify & stabilize power production − Procure biomass feedstock via Ichigo’s community relationships Weather Characteristics Impacts ・ Lots of potential plant site candidates, able to make effective use of

74. Slide 74: Appendix: Financial Statements

    Appendix: Financial Statements © Ichigo Inc. All rights reserved. 74

75. Slide 75: Consolidated Balance Sheet: Assets

    Consolidated Balance Sheet: Assets (JPY million) FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 H1 FY23/2 Q3 vs. FY23/2 H1 Assets Current Assets Cash and cash equivalents 50,225 41,067 50,832 46,458 41,780 46,974 +5,194 Trade notes and accounts receivable 1,344 2,308 1,382 1,819 1,659 1,980 +321 Operational loa

76. Slide 76: Consolidated Balance Sheet: Liabilities & Net Assets

    Consolidated Balance Sheet: Liabilities & Net Assets (JPY million) FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 H1 FY23/2 Q3 vs. FY23/2 H1 Liabilities Current Liabilities Short-term loans 3,275 3,086 4,879 2,382 2,887 1,925 -962 Bonds (due within one year) 112 274 274 274 290 360 +70 Long-term loans (due with

77. Slide 77: Consolidated P&L

    Consolidated P&L (JPY million) FY23/2 FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 Q3 FY22/2 Q3 Change Revised vs. (12M) (12M) (12M) (12M) (9M) (9M) (YOY) Full-Year Forecast Forecast Revenue 83,540 87,360 61,368 56,934 52,797 29,386 +23,411 – – Cost of Goods Sold 51,413 52,851 45,776 40,757 38,847 19,773 +19,

78. Slide 78: Consolidated Cash Flows: Operations

    Consolidated Cash Flows: Operations (JPY million) FY19/2 (12M) FY20/2 (12M) FY21/2 (12M) FY22/2 (12M) FY23/2 Q3 (9M) Cash Flows from Operations Pre-tax income 23,079 16,545 7,610 9,595 12,416 Depreciation 1,696 2,630 4,797 5,644 4,002 Share-based compensation expenses 213 194 21 73 – Amortization of

79. Slide 79: Consolidated Cash Flows: Investments & Financing

    Consolidated Cash Flows: Investments & Financing (JPY million) FY19/2 (12M) FY20/2 (12M) FY21/2 (12M) FY22/2 (12M) FY23/2 Q3 (9M) Cash Flows from Investments Payments into time deposits -118 -113 -7 -7 -1 Proceeds from withdrawal from time deposits 1,060 5,033 – 30 23 Payments for securities investm

80. Slide 80: Ichigo 2030: Ichigo as a Sustainable Infrastructure Company

    Ichigo 2030: Ichigo as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 80

81. Slide 81: Ichigo as a Sustainable Infrastructure Company

    Go for Growth Grow & Expand Ichigo’s Core Businesses into New Areas, Creating New Earnings Streams and Increasing Both Earnings and Earnings Stability Sustainability Infrastructure Sustainability is integral to the health and Ichigo has a direct and critically important role in development of people

82. Slide 82: Addressing Needs of Diverse Individuals & Communities

    Addressing Needs of Diverse Individuals & Communities © Ichigo Inc. All rights reserved. 82

83. Slide 83: KPI Targets

    KPI Targets 1. High Capital Efficiency − FY20/2~FY30/2 Average ROE >15%  Increase long-term ROE by driving higher capital efficiency & earnings stability  Via high ROE, grow long-term EPS as a key driver of shareholder value − Target 11 consecutive years of JPX-Nikkei 400 Index inclusion  Consecu

84. Slide 84: Shareholder Return Policy

    Shareholder Return Policy Ichigo Dividend Policy: Growth, Certainty, & Stability − Progressive Dividend Policy  Ichigo’s progressive dividend policy underscores our commitment to driving continued organic earnings and dividend growth for shareholders. Under this policy, the dividend is maintained o

85. Slide 85: Ichigo 2030: New Initiatives

    Ichigo 2030: New Initiatives © Ichigo Inc. All rights reserved. 85

86. Slide 86: Top Partner of J.League, Japan's Professional Soccer League

    Real Estate x Sports Top Partner of J.League, Japan’s Professional Soccer League Partner with J.League to Promote Community Development, Revitalize Local Economies, & Help People Enjoy Fuller and Healthier Lives J.League’s 100-Year Vision: Ichigo’s Mission: Promote Sports Development Serve Important

87. Slide 87: PROPERA: Ichigo's AI Hotel Revenue Management System

    Real Estate x IT x Tourism PROPERA: Ichigo's AI Hotel Revenue Management System − Maximizes Hotel Revenues & Increases Labor Productivity − Solves Issues Faced by Hotels and Supports Competitiveness − Developed PROPERA-Lite* Tailored to Hotels’ Needs * Provides limited information on pricing levels

88. Slide 88: PROPERA: Accelerating External Sales

    Real Estate x IT x Tourism PROPERA: Accelerating External Sales Two Key Initiatives to Increase Market Share 1. Drive Customer Growth via 2. Tightly Integrate With Site Controllers PROPERA Lite PROPERA Site Controller Integration PROPERA Lite Will Give Access to c. 18,000 Hotels ・ Price trend visual

89. Slide 89: PROPERA: Market Size & Customer Acquisition Target

    Real Estate x IT x Tourism PROPERA: Market Size & Customer Acquisition Target Customer Acquisition Target: 2,000 Hotels Within 5 Years c. 50,000 No. Of Japanese Hotels No. Of Japanese Hotels With c. 33,000 Online Booking Systems No. Of Japanese Hotels c. 20,000 Deploying Site Controllers 2,000 5-Yea

90. Slide 90: PROPERA: Ichigo's AI Hotel Revenue Management System

    PROPERA: Ichigo's AI Hotel Revenue Management System Increasing Share to Drive Non-Asset Stock Earnings Launch of Third-Party Sales Increase Market Share Drive Non-Asset Stock Earnings Earnings Upside from Participation Customer Acquisition in Hotel Earnings Growth Long-Term Earnings Growth Product

91. Slide 91: Hakata Hotels: Hotel Operations

    Real Estate x Tourism Hakata Hotels: Hotel Operations Hotel Operator in Kyushu/Yamaguchi Region Seeing Inbound Tourism Growth – Started operations at 3 hotels on June 1, 2019 & currently operating 14 hotels PROPERA Deployment – Generating 10 to 40% revenue increases p.a. – Sales of PROPERA to non-Ic

92. Slide 92: Ichigo Animation: Anime + Real Estate Synergies

    Real Estate x Entertainment x Culture x Tourism Ichigo Animation: Anime + Real Estate Synergies Released the Complete Series of New Anime VLADLOVE Written & Directed by Mamoru Oshii, with Co-Director Junji Nishimura – Established Ichigo Animation in April 2019 – Introducing tenant collaboration init

93. Slide 93: Make The World More Sustainable

    These materials were prepared to explain Ichigo’s businesses and are not for the purpose of soliciting investment in marketable securities issued by Ichigo. Ichigo does not guarantee the accuracy of the figures, information, estimates, or other statements included herein, and accepts no responsibili

Ichigo — Q3 FY2023/2 Earnings Presentation on 6ix