Ichigo Inc. · TSE:2337
Ichigo — H1 FY2024 Earnings Presentation
99 slides from Ichigo's earnings presentation, Oct 12, 2023
Slide 1: FY24/2 H1 Corporate Presentation
FY24/2 H1 Corporate Presentation January 13, 2023 October 12, 2023 Ichigo (2337) © Ichigo Inc. All rights reserved. www.ichigo.gr.jp/en
Slide 2: Make The World More Sustainable
Make The World More Sustainable © Ichigo Inc. All rights reserved.
Slide 3: © Ichigo Inc. All rights reserved.
© Ichigo Inc. All rights reserved.
Slide 4: © Ichigo Inc. All rights reserved.
© Ichigo Inc. All rights reserved.
Slide 5: Contents
Contents FY24/2 H1 Earnings ‒ Hotels: Driving Ichigo Hotel (3464) Shareholder Value ‒ FY24/2 H1 Summary ‒ AM: Growth Support for Ichigo REITs ‒ All-In Disclosure to Increased Earnings Transparency ‒ SRE: Ichigo Owners – Growing Business via Meeting ‒ All-In OP +124%, Cash EPS +132% (YOY) Clients’ Di
Slide 6: FY24/2 H1 Earnings
FY24/2 H1 Earnings © Ichigo Inc. All rights reserved. 6
Slide 7: FY24/2 H1 Summary
FY24/2 H1 Summary – All-In Operating Profit +124%, Cash EPS +132% YOY Hotel Earnings Major Growth Driver – RevPAR +25% vs. Pre-Covid Stock Earnings/Fixed Expenses Ratio: 231% Doubled Self-Storage Business & Sold, Generating Gains on Sale of JPY 3.9B Launched 2nd Ichigo Residence Token (5 Ass
Slide 8: FY24/2 H1 Summary
FY24/2 H1 Summary Durable Earnings Model Robust Stock Earnings ■ FY23/2 H1 Stock Earnings/Fixed Expenses ■ FY24/2 H1 231% +34% (JPY million) Fixed Sustainable Asset Clean Expenses Real Estate Management Energy JPY 4.4B (SRE) (AM) (CE) Flow +65% Earnings JPY 9.9B Cash Earnings 10,098 JPY 20.0B 7,535
Slide 9: 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
Slide 10: All-In OP +124%, Cash EPS +132% (YOY)
All-In OP +124%, Cash EPS +132% (YOY) (JPY million) FY24/2 FY23/2 H1 FY24/2 H1 YOY Forecast Operating Profit 5,082 5,483 +7.9% 9,500 All-In Operating Profit 6,177 13,815 +123.7% 18,000 Recurring Profit 4,166 4,087 -1.9% 6,000 All-In Recurring Profit 5,261 12,420 +136.1% 14,500 Net Income 3,429 8,503
Slide 11: Segment Earnings Details
Segment Earnings Details − AM: Hotel Base AM Fees Forecast to Recover to Pre-Covid Levels − SRE Stock Earnings: Forecast Record Hotel Earnings − SRE Flow Earnings: Sold Self-Storage Business & 5 Hotels to Ichigo Hotel − CE: Lower on One-Off Plant Maintenance (JPY million) All-In Operating Profit All
Slide 12: 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. 12
Slide 13: Stock + Flow Earnings
Stock + Flow Earnings Stock Earnings (Primarily Rental Income, Power Generation Revenues, Base AM Fees, & Depreciation) Flow Earnings (Primarily Gains on Value-Add Real Estate Sales ) Fixed Expenses (Fixed SG&A + Interest Expenses) 37,016 Cash Earnings (JPY million) 30,467 28,970 18,567 24,705 13,48
Slide 14: Stable Stock Earnings
Stable Stock Earnings Stock Earnings by Segment ■ Asset Management ■ Sustainable Real Estate ■ Clean Energy (JPY million) (Stock Earnings/ 18,450 Fixed Expenses, %) (234%) 16,985 15,598 (188%) 2,062 15,065 14,912 (193%) (195%) (191%) 1,900 1,832 2,066 2,091 10,098 (231%) 13,331 1,164 10,726 8,477 8,
Slide 15: 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) 65.3 67.8 63.9 56.2 50.9 FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 Third-Party Appraisal Value-Based
Slide 16: Value-Add Drives Durable Value Growth
Value-Add Drives Durable Value Growth 2.8X Appraisal Value-Based Unrealized Gains Actual Gains on Sales 1.8X 2.0X 2.2X JPY 17.1B 1.9X JPY 11.6B JPY 9.4B JPY 9.7B JPY 6.1B JPY 5.7B JPY 6.3B JPY 4.7B JPY 4.5B JPY 3.0B FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 H1 Note: Self-storage assets sold in FY24/2 (36 a
Slide 17: Robust Cash Generation
Robust Cash Generation Economic Operating Cash Flow Exceeds Net Income (JPY billion) Net Income Economic Operating Cash Flow 3.6X 1.7X 2.0X 2.4X 1.5X 29.5 25.5 2.2X 15.6 16.8 15.4 14.4 11.1 8.2 9.4 8.5 5.0 6.5 FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 H1 Note: Economic Operating Cash Flow = Cash Flo
Slide 18: Strong Financial Base
Strong Financial Base Weighted Average Loan Period Average Interest Rate & Loan Term Weighted Average Remaining Loan Maturity Weighted Average Interest Rate (Interest Rate) (Loan Term, Years) 2.5% 12 10.2 years 10.3 years 10.1 years 10.0 years 10.0 years 10.0 years 9.5 years 2.0% 8.3 years 9 7.6 yea
Slide 19: Sustainable/ESG Finance
Sustainable/ESG Finance Ichigo’s ESG Execution Driving Attractive Financing Terms Strengthening Financial Base via Diversified Borrowing ESG Loans as % of Total Borrowings ESG Loans (JPY billion) ■ ESG loans (including green bonds) ■ ESG loans (including green bonds) ■ Remaining ESG commitment line
Slide 20: Sustainable Growth as a Sustainable Infrastructure Company
Sustainable Growth as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 20
Slide 21: Selective on Acquisitions & Sales
Sustainable Real Estate Selective on Acquisitions & Sales Acquisitions: JPY 26.1B (JPY 46.3B Including Contracted, Pre-Settlement) − Owners: JPY 23.4B (JPY 43.6B Including Contracted, Pre-Settlement) − Multi-Asset: JPY 2.7B – Acquisitions to Accelerate in H2 Sales: JPY 27.6B − Sold 5 Hotels to Ichig
Slide 22: Capturing Demand via Strong Hotel Operations
Hotels Capturing Demand via Strong Hotel Operations Ichigo’s Hotel Operator OneFive Hotels Became Operator of 7 More Hotels During Covid & Maintained High Occupancy by Deploying PROPERA & Robust Operational Management in Anticipation of Economic Recovery Name changed from Hakata Hotels on May 31, 20
Slide 23: Ichigo Value-Add, Ichigo Hotel Brands, Ichigo Hotel Operations
Hotels Ichigo Value-Add, Ichigo Hotel Brands, Ichigo Hotel Operations Ichigo’s Strengths in Hotels ̶ Value-Add: Focus on guest functionality, comfort, satisfaction, & sustainability ̶ Hotel Operations (OneFive Hotels): Quick response to guest needs based on direct dialogue with guests, provision of
Slide 24: Stock Earnings Forecast to Significantly Exceed Pre-Covid
Hotels Stock Earnings Forecast to Significantly Exceed Pre-Covid RevPAR +25% vs. Pre-Covid, Continuing to Grow on Inbound Demand (JPY million) Hotel Stock Earnings JPY 10,714 Forecast to RevPAR Exceed (Ichigo- JPY 8,565 Pre-Covid owned JPY 7,256 Hotels) JPY 3,807 JPY 2,531 JPY 3,994 JPY 2,681 JPY 2,
Slide 25: Ichigo Brand Hotel Value-Add
Hotels Ichigo Brand Hotel Value-Add The OneFive Villa Fukuoka THE KNOT TOKYO Shinjuku The OneFive Terrace Fukuoka Converted Group Tour Hotel to Boutique Hotel Redesigned & Rebranded 35-Year Old Hotel Introduced Ichigo’s Boutique Hotel Brand THE KNOT Japanese Hospitality & Services Uniquely Positione
Slide 26: Hotel Il Palazzo
Hotels Hotel Il Palazzo Re-Envisioned and Re-Opened Japan’s Most Important Landmark Hotel − Brought original hotel concept up-to-date with today’s needs − Increased guest rooms from 62 to 77 − Located in downtown Fukuoka serving broad array of guests Extraordinary Architecture & Design A Landmark Ho
Slide 27: Driving Ichigo Hotel (3463) Shareholder Value
Hotels Driving Ichigo Hotel (3463) Shareholder Value Sold 5 Hotels, Including 2 THE KNOT Boutique Hotels, to Capture Growing Hotel Demand for High-Quality Hotels Sold Assets THE KNOT SAPPORO HOTEL THE KNOT YOKOHAMA Ichigo Hotel Upward Earnings Forecast Revision on New Hotel Acquisitions January 2024
Slide 28: Growth Support for Ichigo REITs
Asset Management Growth Support for Ichigo REITs − Provided 5 High-Quality Hotel Assets (JPY 15B) to Ichigo Hotel − Supported Ichigo Hotel Third-Party Share Issuance (JPY 1.5B) Fund Growth, Minimize Share Price Impact, & Eliminate Public Offering Costs − Strengthening Sponsor/Shareholder Alignment
Slide 29: Growing Business via Meeting Clients' Diverse Needs
Sustainable Real Estate: Ichigo Owners Growing Business via Meeting Clients’ Diverse Needs Sales: JPY 10.5B Acquisitions: JPY 23.4B (JPY 43.6B Including Contracted, Pre-Settlement) 4.2 (JPY billion) Ichigo Owners Residential Acquisitions & Sales ■ Sales ■ Acquisitions 3.8 3.5 50.0 2.1 Operating 1.4
Slide 30: Expanding Sales Channels via Ichigo Residence Tokens
Sustainable Real Estate: Ichigo Owners Expanding Sales Channels via Ichigo Residence Tokens Rapid Digital Real Estate Asset Market Growth − Strong Real Estate-Backed Returns with Professional Ichigo Management − Diversification of Sales Channels Strengthening Ichigo Earnings Base − Token Business Ge
Slide 31: Environmental Contribution & Long-Term Growth
Clean Energy Environmental Contribution & Long-Term Growth 1 New Plant (13.9MW) Online in FY24/2; Stock Earnings Down Slightly on One-Off Maintenance Costs Green Biomass and Non-FIT Solar Power Plants in Pipeline (Capex JPY 14.8B) Stock Earnings (JPY B) Growth Drivers Ichigo Clean Energy Operating P
Slide 32: Ongoing Share Buyback
Shareholder Returns Ongoing Share Buyback Share Buybacks – 7th Consecutive Year − Current Buyback: JPY 3B, Sep 1, 2023 – Feb 29, 2024 FY24/2 Total Payout Ratio Forecast: 65% (Dividends + Buybacks as % of Net Income) JPY 4.5B JPY 3B JPY 3B JPY 3B JPY 3B JPY 3B In Progress JPY 1.5B FY18/2 FY19/2 FY20/
Slide 33: Progressive Dividend Policy
Shareholder Returns Progressive Dividend Policy Ichigo Dividend Policy: Growth, Certainty, & Stability DOE (Dividend on Equity) Payout Ratio of >3% – Stable and growing dividend unaffected by short-term earnings volatility Progressive Dividend Policy – Under Ichigo’s progressive dividend policy,
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 (82,000 shareholders in t
Slide 35: Working to Protect Our Global Environment
Working to Protect Our Global Environment © Ichigo Inc. All rights reserved. 35
Slide 36: Ichigo Climate Positive: CO2 Reduction vs. Emissions
Ichigo Climate Positive: CO2 Reduction vs. Emissions Ongoing Ichigo Clean Energy Production Growth (CO2 Reduction Increase) & Renewable Energy Transition & Carbon Offsets (CO2 Emissions Reduction) CO2 Reduction vs. CO2 Emissions (tons) ■ Total Ichigo Power Plant CO2 Reduction1 ■ Total Ichigo CO2 Emi
Slide 37: Continued Renewable Energy Transition
Continued Renewable Energy Transition Ichigo RE100 Progress FY24/2 Renewable Energy Transition Impact 100% RE100 Target: 2025 85% CO2 Reduction 35,000 tons p.a. Renewable FY24/2 Energy CO2 Emissions Target Switch of Cars 72% 51% × 15,200 cars p.a. 21% Non-Fossil Certificate Tracking for Ichigo Power
Slide 38: Actively Improving Environmental Quality of Ichigo Assets
Actively Improving Environmental Quality of Ichigo Assets Received Highest S Rank CASBEE Certification for 2 Assets − Continuing Value-Add After Receiving Certifications to Reduce Environmental Impact & Drive Further Growth in Asset Value Ichigo & Ichigo Office Have Received CASBEE Certifications fo
Slide 39: Appendix: Ichigo's Sustainability Commitment (ESG)
Appendix: Ichigo’s Sustainability Commitment (ESG) © Ichigo Inc. All rights reserved. 39
Slide 40: Ichigo Sustainability Policy
Ichigo Sustainability Policy Harmony With the Environment and Recycling Ichigo actively monitors and minimizes the environmental impact of its business operations via extending the useful life of its assets, reducing water and water consumption, and recycling. Addressing Climate Change and Shift to
Slide 41: 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
Slide 42: 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
Slide 43: 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 9 members of Ichigo’s
Slide 44: Sustainability Initiatives
Sustainability Initiatives Joining Third-Party Initiatives to Accelerate Ichigo’s Sustainability Activities 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 society to implement univ
Slide 45: Ichigo RE100 Initiative
Ichigo RE100 Initiative 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 Ichigo Hotel (3463) RE100 A glob
Slide 46: 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
Slide 47: Appendix: Financial & Operational Data
Appendix: Financial & Operational Data © Ichigo Inc. All rights reserved. 47
Slide 48: 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
Slide 49: 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 August 31, 2023 (B) (B)/(A) (C) (C) – (A) (A) Tokyo 88,091 5,308 6.0% 124,315 +36,224 Outside 86,915 5,767 6.6% 111,836 +2
Slide 50: Risk-Based Balance Sheet
Risk-Based Balance Sheet Mark-to-Market Consolidated Balance Sheet: JPY 422.2B (Book Value JPY 356.3B + Unrealized Gains JPY 65.9B) Cash & Cash Equivalents Non-Recourse Loans & Related Liabilities Risk-Based Consolidated Balance Sheet: JPY 336.2B JPY 41.6B JPY 44.3B (Book Value JPY 270.3B + Unrealiz
Slide 51: Cash Flow Maximization
Cash Flow Maximization Maximal Use of Depreciation Allowances to Increase Cash Flow Real Estate for Sale & Fixed Assets Fixed Assets (SRE) Real Estate for Sale (SRE) Fixed Asset Ratio 30.1% 84.4% 84.4% 84.7% 84.3% 15.2% (JPY billion) 32.0 30.9 29.7 Reclassification of 29.5 Sustainable Real Estate As
Slide 52: 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 depreciation allowances to lower accounting earnings & increase cash flow − Majority of cash earnings are Stock Earnings − Maintained high Stock Earnings/Fixed Expenses Rati
Slide 53: Post-GFC Shift in Earnings Base & Financial Position
Post-GFC Shift in Earnings Base & Financial Position FY09/2 FY14/2 FY23/2 vs. GFC GFC Start of Shift Up MTP Stock Earnings/ Fixed Expenses 75% 140% 193% 2.6X Coverage Ratio 10.0 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
Slide 54: Consolidated Balance Sheet: Segment Breakdown
Consolidated Balance Sheet: Segment Breakdown (JPY million) Cash Operational Operational Real Estate Fixed Intangible Securities Other Total Segment and Cash Loan Securities for Sale Assets Assets Investments Assets Assets Equivalents Investments Investments Asset Management (AM) – – – – – 525 125 8
Slide 55: Consolidated P&L: Segment Breakdown
Consolidated P&L: Segment Breakdown (JPY million) All-In Gross Profit All-In Operating Profit Segment FY24/2 FY23/2 H1 FY24/2 H1 YOY FY23/2 H1 FY24/2 H1 YOY Forecast Asset Management (AM) 997 1,278 +28.2% 681 814 +19.6% 1,000 Base AM Fees 997 1,164 +16.7% － － － － Acquisition/Disposition Fees － 113 －
Slide 56: Appendix: Sustainable Real Estate Details
Appendix: Sustainable Real Estate Details © Ichigo Inc. All rights reserved. 56
Slide 57: 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
Slide 58: Sustainable Value-Add
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
Slide 59: 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
Slide 60: 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
Slide 61: Sustainable Real Estate: Gross Profit Margin (GPM)
Sustainable Real Estate: Gross Profit Margin (GPM) Ichigo Sustainable Value-Add Supports Ongoing High GPM FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 H1 GPM 28.3% 13.9% 20.6% 21.1% 20.9% (vs. Revenue) GPM 39.5% 16.2% 26.2% 27.1% 26.5% (vs. Book Value) Revenue 60,601 41,430 45,830 55,166 27,698 (JPY M) Gross
Slide 62: Ichigo-Owned Real Estate Portfolio
Ichigo-Owned Real Estate Portfolio Actively Acquiring Mid-Size Assets with Value-Add Potential, Including Retail Assets Near Stations, Offices, Retail, & Hotels in Tokyo & Major Cities By Asset Type Hokkaido By Location 2% Sendai Total Ichigo-Owned Assets: JPY 253.0B Ground Lease 1% Other 1% Logisti
Slide 63: Sustainable Real Estate Asset Breakdown (1)
Sustainable Real Estate Asset Breakdown (1) 143 Assets, JPY 247.2B, Annual NOI JPY 11B (6.3% Yield) Acquisition Acquisition Building Forecast 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 Matsu
Slide 64: Sustainable Real Estate Asset Breakdown (2)
Sustainable Real Estate Asset Breakdown (2) Acquisition Acquisition Building Forecast 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
Slide 65: Sustainable Real Estate Asset Breakdown (3)
Sustainable Real Estate Asset Breakdown (3) Acquisition Acquisition Building Forecast Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 71 Retail Fixed Asset Fujisawa, Kanagawa JPY 1B-2B 2015/07 8 years JPY 100M JPY 12
Slide 66: Sustainable Real Estate Asset Breakdown (4)
Sustainable Real Estate Asset Breakdown (4) Acquisition Acquisition Building Forecast Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location 1 2 3 Price Date Age NOI/Year Investment Multiple IRR 159 Retail Fixed Asset Shibuya-ku, Tokyo JPY 2B-3B 2019/05 43 years JPY 123M JPY 2
Slide 67: Sustainable Real Estate Asset Breakdown (5)
Sustainable Real Estate Asset Breakdown (5) Acquisition Acquisition Building Forecast 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 60 years JPY 120M
Slide 68: Sustainable Real Estate Asset Breakdown (6)
Sustainable Real Estate Asset Breakdown (6) Acquisition Forecast Ichigo Equity Forecast Equity Forecast No. Asset Type vs. FY23/2 Q4 1 Price NOI/Year Investment Multiple IRR A Ichigo Owners (Residential) 52 Assets JPY 60,820M +JPY 15,005M JPY 2,379M JPY 15,079M – – B Ichigo Owners (Other) 3 Assets J
Slide 69: Appendix: Asset Management Details
Appendix: Asset Management Details © Ichigo Inc. All rights reserved. 69
Slide 70: Ichigo REITs & Ichigo Green
Asset Management Ichigo REITs & Ichigo Green Ichigo Office 8975 Ichigo Hotel 3463 Ichigo Green 9282 Portfolio JPY 212.1B (88 Assets) JPY 69.8B (30 Hotels) JPY 11.4B (15 Solar Plants) Dividend Yield (as of October 10, 2023) 4.8% 4.5% 5.7% ・ Entered FTSE Global REIT Index, ・ Geographically diversified
Slide 71: Growth & ESG Support for Ichigo REITs & Ichigo Green
Asset Management Growth & ESG Support for Ichigo REITs & Ichigo Green ・ Ichigo Office acquired 2 assets (JPY 6.2B) of 4 assets in Ichigo-created bridge fund Ichigo Office ・ Ichigo Office share purchase (JPY 9.5B) (8975) ・ Added Ichigo Office assets to Ichigo’s disaster management system to enable ra
Slide 72: Asset Management AUM Detail
Asset Management AUM Detail FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 (12M) (12M) (12M) (12M) (12M)） (6M) Ichigo Office AUM (Fiscal Year End) JPY 203.0B JPY 203.2B JPY 206.1B JPY 205.4B JPY 212.1B JPY 212.1B (8975) Base AM Fee Gross Profit JPY 1,426M JPY 1,436M JPY 1,524M JPY 1,725M JPY 1,517M JPY 7
Slide 73: Appendix: Clean Energy Details
Appendix: Clean Energy Details © Ichigo Inc. All rights reserved. 73
Slide 74: 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% Tohoku <1 year In 3% 1% JPY 18 Pipeline Kyushu 11% JPY 40 9% 13% JP
Slide 75: 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
Slide 76: 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
Slide 77: 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 Ichigo Solar & Wind Power Plant (Operating/In-Pipeline) Total: 49 Plants 158.8MW Reference: Ja
Slide 78: 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
Slide 79: Green Biomass Entry
Green Biomass Entry Fully Local Green Biomass as Ichigo’s 3rd Renewable Energy Business − 4 Plants In Development (5.0MW, JPY 6.3B in Total Business Expenses) − Diversify & stabilize power production − Procure biomass feedstock via Ichigo’s relationships with local government Weather Characteristics
Slide 80: Appendix: Financial Statements
Appendix: Financial Statements © Ichigo Inc. All rights reserved. 80
Slide 81: Consolidated Balance Sheet: Assets
Consolidated Balance Sheet: Assets (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Q1 FY24/2 H1 vs. FY24/2 Q1 Assets Current Assets Cash and cash equivalents 41,067 50,832 46,458 40,536 37,865 47,759 +9,894 Trade notes and accounts receivable 2,308 1,382 1,819 3,866 4,813 2,434 -2,379 Operational l
Slide 82: Consolidated Balance Sheet: Liabilities & Net Assets
Consolidated Balance Sheet: Liabilities & Net Assets (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Q1 FY24/2 H1 vs. FY24/2 Q1 Liabilities Current Liabilities Short-term loans 3,086 4,879 2,382 962 3,500 5,526 +2,026 Bonds (due within one year) 274 274 274 364 364 292 -72 Long-term loans (due with
Slide 83: Consolidated P&L
Consolidated P&L (JPY million) FY24/2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 H1 FY23/2 H1 Change vs. Full-Year (12M) (12M) (12M) (12M) (6M) (6M) (YOY) Forecast Forecast Revenue 87,360 61,368 56,934 68,093 26,496 25,475 +1,021 – – Cost of Goods Sold 52,851 45,776 40,757 48,674 17,302 17,176 +126 – – Gros
Slide 84: Consolidated Cash Flows: Operations
Consolidated Cash Flows: Operations (JPY million) FY20/2 (12M) FY21/2 (12M) FY22/2 (12M) FY23/2 (12M) FY24/2 H1 (6M) Cash Flows from Operations Pre-tax income 16,545 7,610 9,595 14,234 12,479 Depreciation 2,630 4,797 5,644 5,339 2,540 Share-based compensation expenses 194 21 73 – – Amortization of g
Slide 85: Consolidated Cash Flows: Investments & Financing
Consolidated Cash Flows: Investments & Financing (JPY million) FY20/2 (12M) FY21/2 (12M) FY22/2 (12M) FY23/2 (12M) FY24/2 H1 (6M) Cash Flows from Investments Payments into time deposits -113 -7 -7 -2 – Proceeds from withdrawal from time deposits 5,033 – 30 23 – Payments for securities investments -2
Slide 86: Ichigo 2030: Ichigo as a Sustainable Infrastructure Company
Ichigo 2030: Ichigo as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 86
Slide 87: 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
Slide 88: Addressing Diverse Needs of Individuals & Communities
Addressing Diverse Needs of Individuals & Communities © Ichigo Inc. All rights reserved. 88
Slide 89: 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
Slide 90: 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
Slide 91: Ichigo 2030: New Initiatives
Ichigo 2030: New Initiatives © Ichigo Inc. All rights reserved. 91
Slide 92: 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
Slide 93: 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
Slide 94: 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 FY26/
Slide 95: 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
Slide 96: PROPERA: Ichigo's AI Hotel Revenue Management System
PROPERA: Ichigo's AI Hotel Revenue Management System Launch of Drive Non-Asset Stock Third-Party Increase Market Share Sales Earnings Earnings Upside From Participation in Long-Term Earnings Growth Hotel Earnings Growth PROPERA Business Market Turnaround ・ Strong domestic & inbound hotel demand reco
Slide 97: OneFive Hotels: Hotel Operations
Real Estate x Tourism OneFive Hotels: Hotel Operations Non-Asset Business Growth Driver − Operations and Master Leases of Third-Party Hotels − Growth Exceeding Pre-Covid Levels Without Dedicated Sales and Marketing Teams − Driving Earnings and Cost Reductions via PROPERA deployment at hotels (genera
Slide 98: 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
Slide 99: 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