Slide 1: FY24/2 Full-Year Corporate Presentation
FY24/2 Full-Year Corporate Presentation January 13, April 15, 2023 2024 Ichigo (2337) © Ichigo Inc. All rights reserved. www.ichigo.gr.jp/en
Slide 2: Condolences for the January 1, 2024 Ishikawa earthquake
We would like to express our deepest condolences to all those impacted by the January 1, 2024 earthquake in Ishikawa Prefecture, and our wishes for the earliest and fullest possible recovery for all. © Ichigo Inc. All rights reserved. 2
Slide 3: Make The World More Sustainable
Make The World More Sustainable © Ichigo Inc. All rights reserved.
Slide 4: © Ichigo Inc. All rights reserved.
© Ichigo Inc. All rights reserved.
Slide 5: © Ichigo Inc. All rights reserved.
© Ichigo Inc. All rights reserved.
Slide 6: Contents
Contents FY24/2 Summary ‒ CE: Environmental Contribution & Long-Term Growth ‒ Shareholder Returns: Ongoing Share Buybacks & Treasury FY24/2 Earnings Share Cancellation ‒ All-In Disclosure for Increased Earnings Transparency ‒ Shareholder Returns: Share Buybacks – 7th Consecutive ‒ All-In OP +25%, Ca
Slide 7: FY24/2 Summary
FY24/2 Summary YOY Earnings Up Across-the-Board – All-In Operating Profit JPY 21.1B (+25%), Cash Net Income JPY 17.8B (+17%) – EPS JPY 26.89 (+32%), Cash EPS JPY 39.70 (+19%) – Record Stock Earnings on Hotel Business Growth Driving Shareholder Value via Growth Investments & Share Buybacks – Asset Ac
Slide 8: FY24/2 Summary
FY24/2 Summary Durable Earnings Model Robust Stock Earnings ■ FY23/2 ■ FY24/2 Stock Earnings/Fixed Expenses 214% +24% (JPY million) Fixed Sustainable Asset Clean Expenses Real Estate Management Energy JPY 9.1B (SRE) (AM) (CE) Flow +40% Earnings JPY 14.3B Cash Earnings 19,417 JPY 33.7B 15,598 12,566
Slide 9: FY24/2 Earnings
FY24/2 Earnings © Ichigo Inc. All rights reserved. 9
Slide 10: 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 11: All-In OP +25%, Cash EPS +19% (YOY)
All-In OP +25%, Cash EPS +19% (YOY) – Cash Earnings Significantly Exceed Accounting Earnings Due to Ichigo’s Focus on Maximizing Long-Term Cash Flows for Shareholders – Cash EPS = 1.5X EPS, Cash ROE 17.2% (JPY million) FY24/2 FY24/2 FY23/2 FY24/2 YOY Revised Initial Forecast Forecast Operating Profi
Slide 12: Segment Earnings Details
Segment Earnings Details – AM: Base AM Fees Increase on Back of Strong Hotel Demand – SRE Stock Earnings: Rental Growth Across All Asset Types – SRE Flow Earnings: Multi-Asset & Ichigo Owners Strong, Sold Non-Core Self-Storage Business after Ichigo Value-Add – CE: Large Plant Online from Jan – Full-
Slide 13: Powerful Value-Add Business Model & Sustainability Focus
Powerful Value-Add Business Model & Sustainability Focus © Ichigo Inc. All rights reserved. 13
Slide 14: Stock + Flow Earnings
Stock + Flow Earnings Cash Earnings ■ Flow Earnings ■ Stock Earnings 37,016 33,733 28,970 18,567 24,705 14,315 20,915 13,371 9,793 5,850 19,417 18,450 Record 15,065 14,912 15,598 High FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 © Ichigo Inc. All rights reserved. 14
Slide 15: Durable Stock Earnings
Durable Stock Earnings Record FY24/2 Stock Earnings: Strong Hotel Demand Driving Growth in Rental Income, Operator Revenues, & AM Fees Stock Earnings by Segment (JPY million) ■ SRE (Primarily Rental Income) ■ Clean Energy ■ Asset Management Fees ■ Hotel Operator + PROPERA Revenues 19,417 18,450 15,0
Slide 16: Embedded Forward Earnings
Embedded Forward Earnings Full Economic Earnings From Value-Add Exceed Accounting Earnings – Value-Add Thus Generates Significant Unrealized Gains That Are (JPY billion) an Earnings Bank for Future Periods 72.5 Record 67.8 63.9 65.2 High 56.2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Third-Party Appraisal
Slide 17: Value-Add Drives Durable Value Growth
Value-Add Drives Durable Value Growth Third-Party Appraisal Value-Based Unrealized Gains Actual Gains on Sales 2.8X 1.8X 2.1X 2.0X JPY 17.1B 1.9X JPY 11.6B JPY JPY 9.4B 10.1B JPY 6.1B JPY 5.7B JPY 6.3B JPY JPY 4.7B JPY 3.0B 4.7B FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Note: Self-storage assets sold in FY
Slide 18: Robust Cash Generation
Robust Cash Generation Economic Operating Cash Flow Exceeds Net Income Net Income Economic Operating Cash Flow 3.6X (JPY billion) 2.1X 2.4X 1.5X 29.5 2.2X 25.3 15.6 14.4 11.1 12.1 8.2 9.4 5.0 6.5 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Note: Economic Operating Cash Flow = Cash Flows from Operations, excl
Slide 19: 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 10.0 years 10.0 years 10.1 years 10.0 years 9.3 years 8.9 years 2.0% 9 7.6 years 7.2 years 6.5 years
Slide 20: Significant Benefits from Sustainable/ESG Financing
Significant Benefits from Sustainable/ESG Financing Ichigo’s Sustainability 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
Slide 21: Driving Sustainable Growth
Driving Sustainable Growth © Ichigo Inc. All rights reserved. 21
Slide 22: Selective on Acquisitions & Sales (1)
Sustainable Real Estate Selective on Acquisitions & Sales (1) Acquisitions: JPY 69.5B (+37% YOY) – Multi-Asset: JPY 26.2B – 2 Hotels (JPY 17.8B, Ichigo’s OneFive will be Operator) – Owners: JPY 43.2B – Sales Channel Expansion Increasing Competitive Advantage Sales: JPY 69.6B (+26% YOY) – Multi-Asset
Slide 23: Selective on Acquisitions & Sales (2)
Sustainable Real Estate Selective on Acquisitions & Sales (2) Sales & Acquisitions Exceeding Pre-Covid on Multi-Asset & Owners Growth – Acquisitions: Multi-Asset: Offices & Hotels Expanding REIT Pipeline Owners: Sales Channel Expansion Supporting Residential Growth – Sales: Increase in Sales where I
Slide 24: Record Hotel Stock Earnings
Sustainable Real Estate: Hotels Record Hotel Stock Earnings Value-Add Acquisitions, Ichigo Brand Hotels, & One Five Operator Business Driving Growth Hotel Stock Earnings ■ Ichigo Hotel Base AM Fees (JPY million) ■ Rental Income JPY 11,718 ■ One Five Operator & PROPERA Revenues (1.4X Pre-Covid) RevPA
Slide 25: Delivering Increased Tradepia Odaiba Occupancy (1)
Sustainable Real Estate: Offices Delivering Increased Tradepia Odaiba Occupancy (1) FY24/2 Occupancy Increased to 73% – FY25/2 Forecast: 85% – Addressing Tenant Demand for 50~100 tsubo Spaces (165~330 m2) Tradepia Odaiba Occupancy 97% 85% 73% 54% Addressing Tenant Needs 50% amidst Japanese Post-Covi
Slide 26: Delivering Increased Tradepia Odaiba Occupancy (2)
Sustainable Real Estate: Offices Delivering Increased Tradepia Odaiba Occupancy (2) Driving Tenant Satisfaction – New Tenant Café, Lounge, & Meeting Spaces – Multi-Purpose Spaces to Cater to Tenant Needs – Meet The Neighbors Community Building for Tenants & Local Businesses Tenant Lounge: Bay Villag
Slide 27: Strong Growth via Meeting Clients' Diverse Needs
Sustainable Real Estate: Ichigo Owners Strong Growth via Meeting Clients’ Diverse Needs Accelerated Sales Channel Expansion via Ichigo Residence Tokens – Record Acquisitions & Sales – 2 Token Launches (JPY 15.8B) in FY24/2 – Total AUM JPY 20.9B Ichigo Owners Acquisitions & Sales (JPY B) ■ Acquisitio
Slide 28: Driving Diversified Growth via Sales Channel Expansion
Sustainable Real Estate: Ichigo Owners Driving Diversified Growth via Sales Channel Expansion Breaking New Ground in Japan’s Real Estate Security Token Market – Delivering Prime Real Estate Assets in Innovative Ways to New Customer Segments Ichigo Owners Clients by Category ■ Individuals, Business O
Slide 29: Growth & ESG Support for Ichigo REITs & Ichigo Green (1)
Asset Management Growth & ESG Support for Ichigo REITs & Ichigo Green (1) Shareholder-Focused Asset Management & Sponsor Support Grow REIT Shareholder Value Increase NOI Ichigo Ichigo Office Increase Dividend Ichigo Hotel Increase NAV REIT Growth & Ichigo AM Business Growth © Ichigo Inc. All rights
Slide 30: Growth & ESG Support for Ichigo REITs & Ichigo Green (2)
Asset Management Growth & ESG Support for Ichigo REITs & Ichigo Green (2) Strengthening REIT Support as Sponsor & Driving AM Growth – Growth Support – Ichigo Hotel: Sold Ichigo Hotel 5 hotels, Including 2 THE KNOT hotels (JPY 15B) Participated in Share Allotment to Finance Hotel Acquisitions (JPY 1.
Slide 31: Second Largest Ichigo Plant Began Operation – FIT JPY 40
Clean Energy Second Largest Ichigo Plant Began Operation – FIT JPY 40 Ichigo Ebino Suenaga Plant – Full-Year Earnings Contribution in FY25/2 – Online from January 2024 – Total Capex JPY 4.0B – Panel Output 14MW Ichigo Clean Energy ■ Green Biomass (In-Pipeline/FIT JPY 40) ■ Non-FIT Solar Plants (In-P
Slide 32: Environmental Contribution & Long-Term Growth
Clean Energy Environmental Contribution & Long-Term Growth Ichigo Biomass Plant Development Approved by METI – 1.1MW Plant in Tokushima Prefecture – FIT JPY 40, 20 Years (Capex JPY 1.2B) – Sustainable Infrastructure Contributing to: • Japanese forest conservation & revitalization using only domestic
Slide 33: Ongoing Share Buybacks & Treasury Share Cancellation
Shareholder Returns Ongoing Share Buybacks & Treasury Share Cancellation 7th Consecutive Year of Share Buybacks – 2 Share Buybacks in FY24/2 – Total JPY 6B (JPY 5.3B Completed) – 1st Buyback: JPY 3B – 2nd Buyback (In Progress): JPY 3B Total, JPY 1.7B Completed Treasury Share Cancellation – 12% of To
Slide 34: Share Buybacks – 7th Consecutive Year
Shareholder Returns Share Buybacks – 7th Consecutive Year Share Buyback Amount JPY 6B JPY 0.7B In Progress 2nd JPY 2.3B (Completed) JPY 4.5B 1st JPY 3B JPY 3B JPY 3B JPY 3B JPY 3B (Completed) JPY 1.5B FY18/2 FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 © Ichigo Inc. All rights reserved. 34
Slide 35: Raising Dividend – FY24/2 JPY 9, FY25/2 JPY 10
Shareholder Returns Raising Dividend – FY24/2 JPY 9, FY25/2 JPY 10 3 Years of Consecutive Dividend Increases – DOE (Dividend on Equity) 3.8% – Total Payout Ratio (Dividends + Buybacks as a Percentage of Net Income) 72% – Dividend Approvals at Ichigo AGMs from FY24/2 to Increase Shareholder Input on
Slide 36: Ichigo J.League Shareholder Program
Shareholder Returns 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 (81,0
Slide 37: Working to Protect Our Global Environment
Working to Protect Our Global Environment © Ichigo Inc. All rights reserved. 37
Slide 38: Ichigo CO2 Reduction = 5X CO2 Emissions
Ichigo Climate Positive: CO2 Reduction vs. Emissions (1) Ichigo CO2 Reduction = 5X CO2 Emissions CO2 Reduction CO2 Emissions 101,217 21,000 tons tons CO2 Reduction due to Ichigo & Ichigo Green Clean Energy Scope 1+2 Emissions Power Plant Production (Ichigo + Ichigo Office + Ichigo Hotel + Ichigo Gre
Slide 39: Ichigo Climate Positive: CO2 Reduction vs. Emissions (2)
Ichigo Climate Positive: CO2 Reduction vs. Emissions (2) Ongoing Ichigo Clean Energy Production Growth (CO2 Reduction Increase) & Renewable Energy Transition & Carbon Offsets (CO2 Emissions Reduction) CO2 Reduction/Reduction Impact/CO2 Emissions ■ Total Ichigo Power Plant CO2 Reduction ■ Total Ichig
Slide 40: RE100: Continued Renewable Energy Transition
RE100: Continued Renewable Energy Transition RE100 Progress: 90%, Exceeds FY24/2 Target Targeting Full Group-Wide 100% Renewable Energy Transition in FY25/2 – Ichigo Office & Ichigo Hotel Have Completed Transition to 100% Renewable Energy RE100 Progress RE100 Target: 2025 85% FY24/2 Target 90% Non-F
Slide 41: 3rd Party Assessment: No. 1 in Nikkei GX500 Ranking
3rd Party Assessment: No. 1 in Nikkei GX500 Ranking 2023 Nikkei GX (Green Transformation) 500 Ranking − Ichigo ranked No.1 in Emissions Management & Reduction and Information Disclosure assessment categories out of 899 leading Japanese listed & non-listed companies Ichigo Sakae Building Ichigo Origi
Slide 42: 3rd Party Assessment: CDP 2023 Leadership
3rd Party Assessment: CDP 2023 Leadership Selected for the A List in the 2023 Climate Change Assessment – Selected as a company leading the way in environmental transparency and performance on climate change Selected as a Supplier Engagement Leader in the 2023 Supplier Engagement Assessment – Recogn
Slide 43: ZEB (Net Zero Energy Building) Certification
ZEB (Net Zero Energy Building) Certification Continuing Value-Add Activity to Increase Buildings’ Environmental Performance & Reduce Environmental Impacts − Received ZEB Oriented Certification for Ichigo Kakyoin Building in Sendai Ichigo Kakyoin Building (Sendai City, Miyagi) Total Floor Area: 11,46
Slide 44: FY25/2 Forecasts
FY25/2 Forecasts © Ichigo Inc. All rights reserved. 44
Slide 45: FY25/2 Forecast: All-In OP +13%, Cash EPS +7% (YOY)
FY25/2 Forecast: All-In OP +13%, Cash EPS +7% (YOY) Stock Earnings Driving Growth (JPY million) FY25/2 FY24/2 YOY Forecast Operating Profit 12,960 16,000 +23.5% All-In Operating Profit 21,194 24,000 +13.2% Recurring Profit 10,391 12,000 +15.5% All-In Operating Profit 18,626 20,000 +7.4% Net Income 1
Slide 46: FY25/2 Forecast: Earnings Growth Across All Segments
FY25/2 Forecast: Earnings Growth Across All Segments – AM: Security Token & Hotel Growth – SRE Stock Earnings: Hotel Growth – SRE Flow Earnings: Sales Channel Expansion Supporting Growth – Clean Energy: Ichigo Ebino Plant Full-Year Earnings Contribution (JPY million) All-In Operating Profit Segment
Slide 47: FY25/2 Forecast: Record Stock Earnings
FY25/2 Forecast: Record Stock Earnings – Hotel Value-Add Acquisitions, Ichigo Brand Hotels, & Operator Business to Drive Further Growth – Ichigo Ebino Plant Full-Year Earnings Contribution Cash Earnings ■ Flow Earnings ■ Stock Earnings 37,016 37,222 33,733 28,970 18,567 15,879 24,705 14,315 20,915 1
Slide 48: Updated Ichigo 2030 KPIs
Updated Ichigo 2030 KPIs © Ichigo Inc. All rights reserved. 48
Slide 49: KPI Update Summary
KPI Update Summary Strengthening Commitment to Ichigo 2030 Vision & Drive Sustainable Growth in Shareholder Value High Capital Productivity New KPIs Grow Shareholder Value High Cash Flow Generation High Earnings Stability New KPIs Shareholder Return Policy Raise DOE from 3% to 4% Work for a Sustaina
Slide 50: Updated KPIs (1)
Updated KPIs (1) High Capital Efficiency & High Cash Flow Generation – Cash ROE >18% (New) – ROE >15% – Economic Operating Cash Flow > Net Income High Earnings Stability – FY30/2 Stock Earnings Ratio >60% – Stock Earnings/Fixed Expenses Ratio >200% (New) © Ichigo Inc. All rights reserved. 50
Slide 51: Updated KPI Targets (2)
Updated KPI Targets (2) Ichigo Shareholder Distribution Policy: Growth, Durability, & Certainty – Progressive Dividend Policy • Ichigo’s progressive dividend policy underscores our commitment to driving ongoing earnings and dividend growth for shareholders. Under this policy, the dividend is maintai
Slide 52: Updated KPI Targets (3)
Updated KPI Targets (3) Work for a Sustainable Planet (New) Ichigo Climate Positive Ichigo CO2 reduction via clean energy power production exceeds CO2 emissions RE100 100% renewable electricity across all Ichigo operations by 2025 CDP Leadership Climate Change: A Water Security: A (Currently A-) © I
Slide 53: Appendix: Ichigo's Sustainability Commitment (ESG)
Appendix: Ichigo’s Sustainability Commitment (ESG) © Ichigo Inc. All rights reserved. 53
Slide 54: 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 55: 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 56: 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 57: 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 58: 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 59: 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 60: Appendix: Financial & Operational Data
Appendix: Financial & Operational Data © Ichigo Inc. All rights reserved. 60
Slide 61: 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 62: 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 February 29, 2024 (B) (B)/(A) (C) (C) – (A) (A) Tokyo 88,228 5,307 6.0% 126,264 +38,036 Outside Tokyo 108,855 6,874 6.3% 1
Slide 63: Risk-Based Balance Sheet
Risk-Based Balance Sheet Mark-to-Market Consolidated Balance Sheet: JPY 439.5B (Book Value JPY 367.0B + Unrealized Gains JPY 72.5B) Cash & Cash Equivalents Non-Recourse Loans & JPY 39.7B Related Liabilities JPY 44.7B Risk-Based Consolidated Balance Sheet: JPY 355.0B Non-Recourse Loans (Book Value JP
Slide 64: 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) 15.2% 30.1% 84.4% 84.4% 84.7% 84.3% 72.4% Fixed Asset Ratio (JPY billion) 32.0 30.9 29.5 29.7 56.3 Reclassification of Sustainable Rea
Slide 65: 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 66: Post-GFC Shift in Earnings Base & Financial Position
Post-GFC Shift in Earnings Base & Financial Position FY09/2 FY14/2 FY24/2 vs. GFC GFC Start of Shift Up MTP Stock Earnings/ Fixed Expenses 75% 140% 214% 2.9X Coverage Ratio 8.9 years Loan Maturity (Weighted avg., 5.6 years 5.6 years 3.2X corporate + non-recourse loans) 2.8 years 2.8 years 2.8 years
Slide 67: 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) – – – – – 498 109 9
Slide 68: 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 FY24/2 YOY FY23/2 FY24/2 YOY Forecast Asset Management (AM) 3,753 2,482 -33.9% 3,026 1,496 -50.5% 1,000 Base AM Fees 2,066 2,260 +9.4% － － － － Acquisition/Disposition Fees 1,687 222 -8
Slide 69: Appendix: Sustainable Real Estate Details
Appendix: Sustainable Real Estate Details © Ichigo Inc. All rights reserved. 69
Slide 70: 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 71: Powerful Sustainable Real Estate (SRE) Business Model
Powerful Sustainable Real Estate (SRE) 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
Slide 72: 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 73: 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 74: Ichigo Owners Deep Value-Add
Sustainable Real Estate: Ichigo Owners Ichigo Owners Deep Value-Add Advantaged Ichigo Capabilities & Cost Competitiveness Build upon Ichigo’s Strong PASEO Residential Brand & Deep Developer Support & Synergies – Development, Marketing, & Branding Tailored to Diverse Buyer and Tenant Needs – Eliminat
Slide 75: 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 GPM 28.3% 13.9% 20.6% 21.1% 14.6% (vs. Revenue) GPM 39.5% 16.2% 26.2% 27.1% 16.8% (vs. Book Value) Revenue 60,601 41,430 45,830 55,166 69,693 (JPY M) Gross Pro
Slide 76: 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 Ground Lease By Asset Type 1% Total Ichigo-Owned Assets: JPY 256.5B Other Logistics (Including Ichigo-Managed AUM:
Slide 77: Sustainable Real Estate Asset Breakdown (1)
Sustainable Real Estate Asset Breakdown (1) 132 Assets, JPY 255.4B, Annual NOI JPY 12.1B (6.2% 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 Mat
Slide 78: 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 79: 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 Price Date Age NOI/Year Investment Multiple IRR3 110 Hotel Fixed Asset Fukuoka >JPY 3B 2016/03 38 years JPY 273M JPY 905M – – 112 Ho
Slide 80: 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 Price Date Age NOI/Year1 Investment Multiple2 IRR3 161 Hotel Fixed Asset Fukuoka >JPY 3B 2019/07 29 years JPY 354M JPY 1,636M – – 162 Ho
Slide 81: 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 82: Sustainable Real Estate Asset Breakdown (6)
Sustainable Real Estate Asset Breakdown (6) Acquisition Acquisition Building Forecast Ichigo Equity Forecast Equity Forecast No. Asset Type Classification Location Price Date Age NOI/Year1 Investment Multiple2 IRR3 181 Logistics Real Estate for Sale Sanbu-gun, Chiba JPY 1B-2B 2023/11 1 year JPY 55M
Slide 83: Appendix: Asset Management Details
Appendix: Asset Management Details © Ichigo Inc. All rights reserved. 83
Slide 84: Ichigo REITs & Ichigo Green
Asset Management Ichigo REITs & Ichigo Green Ichigo Office 8975 Ichigo Hotel 3463 Ichigo Green 9282 Portfolio JPY 212.4B (88 Assets) JPY 69.8B (30 Hotels) JPY 11.4B (15 Solar Plants) Dividend Yield (as of April 11, 2024) 5.0% 4.9% 5.3% ・ Entered FTSE Global REIT ・ Geographically diversified ・ Solar
Slide 85: Growth & ESG Support for Ichigo REITs & Ichigo Green
Asset Management Growth & ESG Support for Ichigo REITs & Ichigo Green Ichigo Office ・ Strengthening growth commitment via Ichigo Office share purchase (JPY 13B) (8975) ・ Created bridge fund (Ichigo Office acquired 2 assets of 4 assets in bridge fund) ・ Strengthening growth commitment via Ichigo Hote
Slide 86: 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)） (12M) 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
Slide 87: Appendix: Clean Energy Details
Appendix: Clean Energy Details © Ichigo Inc. All rights reserved. 87
Slide 88: 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 Hokkaido 3% Shikoku 2% JPY 14 Tohoku 2% 3% <1 year JPY 18 11% JPY 40 9% Kansai Kyushu 19% 1-3 years
Slide 89: 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 90: 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 91: 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 92: 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 93: Green Biomass Entry
Green Biomass Entry Fully Local Green Biomass as Ichigo’s 3rd Renewable Energy Business – 5 Plants In Development (5.2MW, JPY 6.0B in Total Business Expenses) – Diversify & stabilize power production – Procure biomass feedstock via Ichigo’s relationships with local government Weather Characteristics
Slide 94: Appendix: Financial Statements
Appendix: Financial Statements © Ichigo Inc. All rights reserved. 94
Slide 95: Consolidated Balance Sheet: Assets
Consolidated Balance Sheet: Assets (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 vs. FY23/2 Assets Current Assets Cash and cash equivalents 41,067 50,832 46,458 40,536 46,917 +6,381 Trade notes and accounts receivables 2,308 1,382 1,819 3,866 2,448 -1,418 Operational loan investments 1,324 1,324
Slide 96: Consolidated Balance Sheet: Liabilities & Net Assets
Consolidated Balance Sheet: Liabilities & Net Assets (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 vs. FY23/2 Liabilities Current Liabilities Short-term loans 3,086 4,879 2,382 962 16,726 +15,764 Bonds (due within one year) 274 274 274 364 3,162 +2,798 Long-term loans (due within one year) 12,277
Slide 97: Consolidated P&L
Consolidated P&L (JPY million) FY24/2 Change vs. FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Full-Year (YOY) Forecast Forecast Revenue 87,360 61,368 56,934 68,093 82,747 +14,654 － － Cost of Goods Sold 52,851 45,776 40,757 48,674 61,875 +13,201 － － Gross Profit 34,509 15,591 16,177 19,418 20,872 +1,454 － － SG
Slide 98: Consolidated Cash Flows: Operations
Consolidated Cash Flows: Operations (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Cash Flows from Operations Pre-tax income 16,545 7,610 9,595 14,234 17,962 Depreciation 2,630 4,797 5,644 5,339 4,859 Share-based compensation expenses 194 21 73 － － Amortization of goodwill 174 121 149 177 97 Incre
Slide 99: Consolidated Cash Flows: Investments & Financing
Consolidated Cash Flows: Investments & Financing (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Cash Flows from Investments Payments into time deposits -113 -7 -7 -2 -701 Proceeds from withdrawal from time deposits 5,033 － 30 23 － Payments for securities investments -2,361 -547 -606 -968 -16,567 P
Slide 100: Ichigo 2030: Ichigo as a Sustainable Infrastructure Company
Ichigo 2030: Ichigo as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 100
Slide 101: 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 102: Addressing Diverse Needs of Individuals & Communities
Addressing Diverse Needs of Individuals & Communities © Ichigo Inc. All rights reserved. 102
Slide 103: Ichigo 2030: New Initiatives
Ichigo 2030: New Initiatives © Ichigo Inc. All rights reserved. 103
Slide 104: 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 105: J.League Tegevajaro Miyazaki Acquisition
Real Estate x Sports J.League Tegevajaro Miyazaki Acquisition Working to Support Local Communities Across the Board – Acquired ownership of J.League Tegevajaro Miyazaki soccer club – Establishing community-based program to promote youth soccer development – Building strong prefecture-wide support ne
Slide 106: 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 107: PROPERA: Market Size & Customer Acquisition Target
Real Estate x IT x Tourism PROPERA: Market Size & Customer Acquisition Target Customer Acquisition Target: 2,000 Hotels 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 FY26/2 Hotels Target
Slide 108: 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 109: 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 110: 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 111: 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 112: 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