Ichigo Inc. · TSE:2337

Ichigo — H1 FY2014 Earnings Presentation

31 slides from Ichigo's earnings presentation, Oct 16, 2013

  1. Slide 1: Corporate Presentation H1 FY2014

    February 2014 H1 (March – August 2013) Corporate Presentation October 16, 2013 Ichigo Group Holdings Co., Co Ltd. Ltd (2337) © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. www.ichigo-holdings.co.jp/english

  2. Slide 2: © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

    © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

  3. Slide 3: © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

    © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

  4. Slide 4: Creating peace of mind through honest and committed management

    Creating peace of mind through honest and committed management. management © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

  5. Slide 5: Transformational Growth

    Transformational Growth ‒ Shift Up Strategy Shift-Up ‒ Shift-Up: Operating Profit 3.2X, Net Profit 5.1X Year-on-Year ‒ Shift-Up: FY14 Full-Year Forecast Upward Revision ‒ Shift Up: Accelerated Growth Investments Shift-Up: ‒ Shift-Up: Low-Cost, Long-Term Leverage for Capital Efficiency ‒ Shift-Up: Si

  6. Slide 6: Transformational Growth

    Transformational Growth © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 6

  7. Slide 7: Shift-Up Strategy: Accelerated Growth

    Shift-Up Strategy Capitalizing on Market Dynamics to Radically Accelerate Growth Shift-Up Building Accele ■ Progress through FY14 H1 ・ Accelerated Growth Investments g Structu erated Growth ・ Build-up Ichigo REIT Investing for Growth x Speed ・ Megasolar Business Expansion x Market Environment ・ Incr

  8. Slide 8: Shift-Up: Operating Profit 3.2X, Net Profit 5.1X Year-on-Year

    Shift-Up: Operating Profit 3.2X, Net Profit 5.1X Year-on-Year Feb 14 Full Full- (Reference) Feb 13 H1 Feb 14 H1 vs. Initial Growth Year Initial Feb 13 Full- Cumulative Cumulative Forecast Forecast Year Actual Revenues 7 637 7,637 20 586 20,586 2 7X 2.7X 26 000 26,000 79 2% 79.2% 16 397 16,397 Operat

  9. Slide 9: Shift-Up: FY14 Full-Year Forecast Upward Revision

    Shift-Up: FY14 Full-Year Forecast Upward Revision Conservative Forecast – For Asset Dispositions, Only Incorporates Q3 Plan (Million yen) Feb 14 Full- Feb 14 Full- Feb 13 Full- Year Initial Year Revised Change Change % Year Actual Forecast Forecast Revenues 26,000 30,000 +4,000 +15.4% 16,397 Operati

  10. Slide 10: Shift-Up: Accelerated Growth Investments

    Shift-Up: Accelerated Growth Investments JPY 47B Investments & Acquisitions in H1 (vs. JPY 24B for Full-Year FY13) ‒ Real estate: JPY 45 billion  Includes JPY 19 billion of transactions highly probable to close and JPY 3 billion that has already been disposed via sale to Ichigo REIT ‒ Megasolar: JP

  11. Slide 11: Shift-Up: Low-Cost, Long-Term Leverage for Capital Efficiency

    Shift-Up: Low-Cost, Long-Term Leverage for Capital Efficiency Funding Growth Investments via Strong Balance Sheet Shareholder Equity Ratio 58.9% (Billion yen) IInterest-Bearing t t B i DebtD bt Grew Interest-Bearing Interest Bearing Liabilities 16.7 Debt 2.4X vs. FY13 to (+9.8 vs. Feb 13) 21.7 Fund

  12. Slide 12: Shift-Up: Significantly Lowered Borrowing Costs

    Shift-Up: Significantly Lowered Borrowing Costs Rapidly Reducing Borrowing Costs by Refinancing with Megabanks and Financing New Acquisitions at Lower Rates Portfolio Weighted Average Debt Cost In Just Six Months, 2.5X Increase in P Proportion ti off Total T t l Debt Funded at <2% Less than 2% 23 4%

  13. Slide 13: Shift-Up: Recycling and Reinvesting Capital for Growth

    Shift-Up: Recycling and Reinvesting Capital for Growth Accelerated Asset Sales in FY14 H1 ‒ Generated JPY 1.6B in profits via real estate asset sales ‒ Generated JPY 350M in profits via legacy private equity asset sales JPY 5B in FY14 H1 Asset Sales Private P i t Equity JPY 1B Recycle & Reinvest Rea

  14. Slide 14: Shift-Up: Ichigo REIT Growth Cycle

    Shift-Up: Ichigo REIT Growth Cycle First Ichigo REIT Public Offering (PO) under Ichigo Group Sponsorship ‒ Accretive PO that Increased Ichigo REIT Dividend Grow Raise Share Dividends Price New Ichigo REIT Assets Enhance Launch Profitability Ichigo REIT PO Improve Increase Portfolio AUM © 2013 Ichigo

  15. Slide 15: Shift-Up: Megasolar Business Expansion

    Shift-Up: Megasolar Business Expansion Two Ichigo Megasolar Plants Currently Online & Producing Power ‒ Ichigo ECO Tokushima Higashi-Okinosu Megasolar Plant (Tokushima) 2.5MW ‒ Ichigo ECO Kiryu Okuzawa Megasolar Plant (Gunma) 1 1.3MW 3MW Ichigo ECO Tokushima Higashi-Okinosu Megasolar Plant Ichigo EC

  16. Slide 16: Shift-Up: Megasolar Business Expansion (2)

    Shift-Up: Megasolar Business Expansion (2) Current Projects & Pipeline ‒ 17 confirmed projects totaling 30MW (includes 3.9MW currently operating) ‒ 14 pipeline projects totaling 43MW Ichigo Megasolar Near-Term Rollout – 11MW expected production by Feb 14 Current FY Feb 2014 FY Feb 2015 Operating 2 p

  17. Slide 17: Appendix: Pro Forma Financial Data

    Appendix: Pro Forma Financial Data © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 17

  18. Slide 18: Pro Forma Disclosure to Improve Transparency

    Pro Forma Disclosure to Improve Transparency • Under Japanese accounting rules, SPCs in which Ichigo Group Holdings (“IGH”) is a greater than 50% investor or SPCs for which IGH is the asset manager and no single equity investor holds more than 50% of the total investment must be consolidated onto IG

  19. Slide 19: Balance Sheet (Pro Forma)

    Balance Sheet (Pro Forma) (Million yen) Feb 13 F b 14 Q1 Feb F b 14 H1 Feb Ch Change (QoQ) (Q Q) Total Assets 38,565 47,964 52,931 4,967 Cash and Cash Equivalents 5,744 5,892 7,709 1,817 Real Estate Investments/Securities 10 256 10,256 12 444 12,444 10 929 10,929 -1,515 1 515 Domestic Corporate Inve

  20. Slide 20: P&L (Pro Forma)

    P&L (Pro Forma) (Million yen) Breakdown (Million yen) Feb 14 H1 Feb 13 Feb 14 Q1 Feb 14 Q2 Feb 14 H1 Cumulative Cumulative Revenues 13,341 2,636 4,243 6,880 Revenues 6,880 C t off Revenues Cost R 8 486 8,486 1 035 1,035 1 939 1,939 2 974 2,974 Real Estate Management Fees 1 398 1,398 Advisory Fees 15

  21. Slide 21: Significant Unrealized Gains on Balance Sheet

    Significant Unrealized Gains on Balance Sheet (Million yen) Book Value Appraisal Value Acquisition Value Unrealized Gain (As of Aug 13) (As of Feb 13) Directly Owned on B/S 23 422 23,422 19 636 19,636 21 845 21,845 +2 210 +2,210 Investment in IGH Funds 14,394 8,981 16,615 +7,634 Total 37,817 28,617

  22. Slide 22: Appendix: Consolidated Financial Data

    Appendix： Consolidated Financial Data © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 22

  23. Slide 23: Balance Sheet (Consolidated)

    Balance Sheet (Consolidated) (Million yen) Feb 13 Feb 14 Q1 Feb 14 H1 QoQ change Total Assets 80,428 81,884 88,085 6,201 Cash and Cash Equivalents 9,713 9,391 11,517 2,126 Operating Investments in Securities 4,271 5,476 3,919 -1,557 R lE Real Estate t t Held H ld ffor S Sale l 46 176 46,176 41 598 4

  24. Slide 24: Breakdown of Assets (Consolidated)

    Breakdown of Assets (Consolidated) (Million yen) Feb 13 Feb 14 Q1 Feb 14 H1 QoQ Change Outside The Outside The Outside The in the Amount Investors' Company's Amount Investors' Company's Amount Investors' Company's Com pany's Interests Interests Interests Interests Interests Interests Interests Cash

  25. Slide 25: P&L (Consolidated)

    P&L (Consolidated) Breakdown (Million yen) Full-Year Feb 14 H1 vs. Full-Year vs. Feb 13 Feb 14 Q1 Feb 14 Q2 Rev ised Feb 14 H1 Rev ised Cumulative Forecast Forecast Forecast Forecast Revenues 20,586 30,000 68.6% Revenues 16,397 11,023 9,562 20,586 30,000 68.6% Real Estate Management Fees 1,063 1,640

  26. Slide 26: Appendix: Real Estate Data

    Appendix： Real Estate Data © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 26

  27. Slide 27: Real Estate Portfolio

    Real Estate Portfolio AUM by Type # of Properties by Type (As of August 2013) (Unit: # of buildings) (Unit: # of buildings) Land with AUM by y Location Ground Lease Other 2% 9 Sendai Other Other 2% 3% 6% Residential Office Kanto 61 7% 22% Land with Office Ground Lease Fukuoka 51% 55 7% Development M

  28. Slide 28: Real Estate Cap Rates

    Real Estate Cap Rates • Conservative assessment of cap rates vis-à-vis market cap rates • Continually mark assets to market • Unrealized gains in both client and IGH assets (As of August 2013) Real Estate Investments held by Ichigo Funds (SPCs) (Million yen) Book Value NOI Cap rate (at Acquisition)

  29. Slide 29: Stock Split to Promote Share Ownership & Liquidity

    Stock Split to Promote Share Ownership & Liquidity Ichigo conducted a stock split to increase liquidity and promote share ownership by reducing the minimum trading amount ‒ 1 share h split lit iinto t 200 shares h ‒ Minimum Trading Lot: 100 shares ‒ Effective Date: September 1, 2013 ‒ Total shares o

  30. Slide 30: MEMO

    MEMO © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 30

  31. Slide 31: These materials were prepared to explain the Company’s businesses and are not for the

    These materials were prepared to explain the Company’s businesses and are not for the purpose of soliciting investment in marketable securities issued by the Company. The Company does not guarantee the accuracy g y of the figures, g , information,, estimates or other statements included herein,, and

Ichigo Group Holdings — H1 FY2014 Earnings Presentation on 6ix