Ichigo Inc. · TSE:2337
Ichigo — Q1 FY24/2 Earnings Presentation
97 slides from Ichigo's earnings presentation, Jul 13, 2023
Slide 1: FY24/2 Q1 Corporate Presentation
FY24/2 Q1 Corporate Presentation January July 13,13, 2023 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 Q1 Earnings ‒ SRE: Broadening & Diversifying Hotel Earnings ‒ FY24/2 Q1 Summary ‒ SRE: Robust Value-Add of Akihabara Retail Assets ‒ All-In Disclosure to Increase Earnings Transparency ‒ SRE: Ichigo Owners Robust Demand Driving Growth ‒ All-In OP -1%, Cash EPS +23% (YOY) ‒ SRE: New I
Slide 6: FY24/2 Q1 Earnings
FY24/2 Q1 Earnings © Ichigo Inc. All rights reserved. 6
Slide 7: FY24/2 Q1 Summary
FY24/2 Q1 Summary – Stock Earnings JPY 5.1B (+44% vs. FY23/2 Q1) Stock Earnings/Fixed Expenses Ratio: 245% (+52% vs. FY23/2-end) SRE: Strong Hotel Revenue Recovery, RevPAR +28% vs. Pre-Covid – Rapid Growth on Back of Significant Increase in Inbound Travel – Capturing Growing Hotel Demand Despite I
Slide 8: FY24/2 Q1 Summary
FY24/2 Q1 Summary Durable Earnings Model Robust Stock Earnings ■ FY23/2 Q1 Stock Earnings/Fixed Expenses ■ FY24/2 Q1 245% Flow +44% (JPY million) Earnings Sustainable Asset Clean JPY 0.57B Fixed Real Estate Management Energy Expenses (SRE) (AM) (CE) JPY 2.1B +86% Cash Earnings 5,123 JPY 5.7B 3,547 3
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 -1%, Cash EPS +23% (YOY)
All-In OP -1%, Cash EPS +23% (YOY) Cash Earnings 2.4X Accounting Earnings Due to Ichigo’s Focus on Maximizing Long-Term Cash Flows for Shareholders (JPY million) FY24/2 FY23/2 Q1 FY24/2 Q1 YOY Forecast Operating Profit 2,723 2,445 -10.2% 9,500 All-In Operating Profit 2,723 2,691 -1.2% 18,000 Recurri
Slide 11: Segment Earnings Details
Segment Earnings Details − Asset Management: Office Increase Due to NOI Growth on 4 Asset Acquisitions, Hotel Increase on Hotel NOI Growth − SRE Stock Earnings: Hotel RevPAR +28% vs. Pre-Covid − SRE Flow Earnings: Q1 Light, Asset Sales Accelerate from Q2 − Clean Energy: Lower on One-Off Plant Mainte
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, & Non-Cash Expenses (e.g., 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
Slide 14: Stable Stock Earnings
Stable Stock Earnings Stock Earnings by Segment ■ Asset Management ■ Sustainable Real Estate ■ Clean Energy (JPY million) 18,450 (Stock Earnings/ (234%) Fixed Expenses, %) 16,985 2,062 (188%) 15,065 15,598 14,912 (193%) (195%) (191%) 1,900 1,832 2,066 2,091 13,331 10,726 8,989 9,402 8,477 5,123 (245
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 JPY 17.1B 1.9X JPY 11.6B JPY 9.4B JPY 6.1B JPY 5.7B JPY 6.3B JPY 4.7B JPY 3.0B 1.2X JPY 0.4B JPY 0.5B FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Q1 © Ichigo Inc. All rights reserved. 16
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 2.4X 2.2X 1.5X 29.5 25.5 15.4 15.6 11.1 14.4 8.2 9.4 6.5 5.0 FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 Note: Economic Operating Cash Flow = Cash Flows from Operations, excl
Slide 18: 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 10.2 years 10.3 years 10.0 years 10.0 years 10.1 years 10.0 years 9.9 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: 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 21: Renewable Energy Transition Towards a Sustainable Society
Renewable Energy Transition Towards a Sustainable Society Ichigo RE100 Progress (as of FY24/2 Q1) 100% FY24/2 Renewable Energy Transition Impact RE100 Target: 2025 85% CO2 Reduction 35,000 tons p.a. FY24/2 Target Renewable CO2 Emissions Energy of Cars Switch 71% 49% × 15,200 cars p.a. 22% Non-Fossil
Slide 22: Sustainable Growth as a Sustainable Infrastructure Company
Sustainable Growth as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 22
Slide 23: Selective on Acquisitions & Sales
Sustainable Real Estate Selective on Acquisitions & Sales Acquisitions: JPY 17.7B (JPY 35.7B Including Contracted, Pre-Settlement) − Multi-Asset: JPY 2.7B, 1 Office Asset, Strengthening Ichigo Office Acquisition Pipeline − Owners: JPY 14.9B, Broadening of Sales Channels Supporting Proactive Acquisit
Slide 24: RevPAR Exceeds Pre-Covid (+28%)
Sustainable Real Estate: Hotels RevPAR Exceeds Pre-Covid (+28%) Further RevPAR Growth Expected on Back of Continued Growth Inbound Tourism Still Just c. 70% of Pre-Covid (2019) Hotel RevPAR RevPAR +28% JPY 11,004 JPY 8,565 (16 Hotels) (16 Hotels) JPY 7,256 (16 Hotels) JPY 3,807 JPY 2,530 (19 Hotels)
Slide 25: Capturing Rapidly Growing Hotel Demand
Sustainable Real Estate: Hotels Capturing Rapidly Growing Hotel Demand Expanded Hotel Business During Covid to Position for Long-Term Growth Ichigo’s Hotel Operator: OneFive Hotels Maintained c. 90% occupancy throughout Covid, focused on hiring and employee training, & supported vendor supply chain
Slide 26: Broadening & Diversifying Hotel Earnings
Sustainable Real Estate: Hotels Broadening & Diversifying Hotel Earnings Fee Business Driving Further Earnings Opportunities in Addition to Operating Income & Gains on Sales Hotel operator achieving high efficiency via diverse Hotel Operations employee skill sets Automatically sets optimal room AI R
Slide 27: Robust Value-Add of Akihabara Retail Assets
Sustainable Real Estate：Retail Robust Value-Add of Akihabara Retail Assets Successful in Attracting Major Tenants during Covid Retail Asset in Front of Akihabara Station Retail Asset in Front of Akihabara Station Rent +46% Rent +35% Leased to Sofmap, a leading Leased to Bandai Namco for its first el
Slide 28: Ichigo Owners: Robust Demand Driving Growth
Ichigo Owners Ichigo Owners: Robust Demand Driving Growth FY24/2 Sales: JPY 2.1B (JPY 9.8B Including Pre-Settlement) FY24/2 Acquisitions: JPY 14.9B (JPY 32.9B Including Pre-Settlement) 4.2 (JPY billion) Ichigo Owners Residential Acquisitions & Sales ■ Sales 3.8 3.5 ■ Acquisitions 50.0 2.1 Operating
Slide 29: New Investment Products Addressing Diverse Client Needs
Ichigo Owners New Investment Products Addressing Diverse Client Needs Ichigo Owners Co-Ownership Business Ichigo Residence Token (Security Tokens1) – Offering diversified, small-scale investments － Leverages highly secure security tokens on responding to asset management, asset transfer, a blockchai
Slide 30: Growth & ESG Support for Ichigo REITs & Ichigo Green (1)
Asset Management Growth & ESG Support for Ichigo REITs & Ichigo Green (1) ・ Ichigo Office acquired 2 assets (JPY 6.2B) of 4 assets in Ichigo-created Ichigo Office bridge fund with preferential negotiation right, free of charge to Ichigo Office (8975) ・ Added Ichigo Office assets to Ichigo’s disaster
Slide 31: Growth & ESG Support for Ichigo REITs & Ichigo Green (2)
Asset Management Growth & ESG Support for Ichigo REITs & Ichigo Green (2) Ichigo Office & Ichigo Hotel Share Purchases by Ichigo as Sponsor − Further underscores Ichigo’s commitment to drive Ichigo Office & Ichigo Hotel shareholder value Total Purchase Amount: JPY 3B Ichigo Office Purchase Period: U
Slide 32: All Ichigo Office Proposals Approved at EGM
Ichigo Office: Track Record of Growth All Ichigo Office Proposals Approved at EGM Ichigo Office’s Shareholders Overwhelmingly Reconfirmed Their Support for Ichigo Office’s Track Record of Strong Governance & Outperformance For EGM Proposals Result Votes % Amendment to the Articles of Incorporation (
Slide 33: Significant Long-Term Outperformance vs. TSE REIT Index
Ichigo Office: Track Record of Growth Significant Long-Term Outperformance vs. TSE REIT Index Ichigo Office Total Returns 1-Year 3-Year 10-Year Total Returns +9.73% +46.97% +129.23% Outperformance vs. TSE REIT Index +13.11% +17.16% +62.52% Total Returns: Change in share price + dividends (reinvested
Slide 34: Robust Dividend Growth
Ichigo Office: Track Record of Growth Robust Dividend Growth (JPY) 4,224 2,508 2,230 2,255 2,163 2,150 2,185 2,132 2,014 2,052 1,904 1,923 1,930 1,964 1,706 1,740 1,603 1,537 1,541 1,547 1,494 1,387 1,219 1,031 * 979* 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Apr Oct Apr Oct A
Slide 35: Robust NAV Per Share Growth
Ichigo Office: Track Record of Growth Robust NAV Per Share Growth (JPY) 97,079 96,660 95,053 91,618 93,193 92,787 92,874 92,958 87,934 85,957 84,076 81,155 78,336 76,400 73,493 70,117 63,140 58,170 59,694 56,376 55,510 54,711 56,598 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Apr Oct
Slide 36: Environmental Contribution & Long-Term Growth
Clean Energy Environmental Contribution & Long-Term Growth 1 New Plant (13.9MW) to be Online in FY24/2; Stock Earnings to be Down Slightly on One-Off Maintenance Costs Green Biomass and Non-FIT Solar Power Plants in Pipeline (Capex JPY 15.7B) Growth Drivers Ichigo Clean Energy Stock Earnings (JPY B)
Slide 37: 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 (76,000 shareholders in t
Slide 38: Appendix: Ichigo's Sustainability Commitment (ESG)
Appendix: Ichigo’s Sustainability Commitment (ESG) © Ichigo Inc. All rights reserved. 38
Slide 39: 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
Slide 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: Appendix: Financial & Operational Data
Appendix: Financial & Operational Data © Ichigo Inc. All rights reserved. 46
Slide 47: 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 48: 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 May 31, 2023 (A) (B) (B)/(A) (C) (C) - (A) Tokyo 89,001 5,353 6.0% 125,252 +36,251 Outside Tokyo 98,103 6,598 6.7% 126,322
Slide 49: Risk-Based Balance Sheet
Risk-Based Balance Sheet Mark-to-Market Consolidated Balance Sheet: JPY 424.4B (Book Value JPY 355.1B + Unrealized Gains JPY 69.2B) Cash & Cash Equivalents Non-Recourse Loans & Related Liabilities JPY 31.5B JPY 45.1B Risk-Based Consolidated Balance Sheet: JPY 347.6B Non-Recourse Loans & (Book Value
Slide 50: 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 51: 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 52: 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 53: Consolidated Balance Sheet: Segment Breakdown
Consolidated Balance Sheet: Segment Breakdown (JPY million) Operational Operational Cash and Cash Real Estate Intangible Securities Other Segment Loan Securities Fixed Assets Total Assets Equivalents for Sale Assets Investments Assets Investments Investments Asset Management (AM) – – – – – 543 126 2
Slide 54: Consolidated P&L: Segment Breakdown
Consolidated P&L: Segment Breakdown (JPY million) All-In Gross Profit All-In Operating Profit Segment FY23/2 Q1 FY24/2 Q1 YOY FY23/2 Q1 FY24/2 Q1 YOY FY24/2 Forecast Asset Management (AM) 471 618 +31.3% 322 386 +19.7% 1,000 Base AM Fees 471 573 +21.7% – – – – Acquisition/Disposition Fees – 45 – – –
Slide 55: Appendix: Sustainable Real Estate Details
Appendix: Sustainable Real Estate Details © Ichigo Inc. All rights reserved. 55
Slide 56: 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 57: 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
Slide 58: 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 59: 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 60: 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 Q1 GPM (vs. Revenue) 28.3% 13.9% 20.6% 21.1% 16.3% GPM (vs. Book Value) 39.5% 16.2% 26.2% 27.1% 20.1% Revenue (JPY M) 60,601 41,430 45,830 55,166 3,259 Gross P
Slide 61: Ichigo-Owned Real Estate Portfolio
Ichigo-Owned Real Estate Portfolio By Asset Type By Location (JPY billion) Sendai Ground Lease Hokkaido 2% Other 3% 1% Other 2% 3% Hokkaido Logistics Nagoya 3% 9.1 1% Osaka 4% Office Tokyo Residential 28% Metro Tokyo 24% Tokyo 12% 55% 146.2 Fukuoka Hotel Retail 18% Sendai 22% 22% 5.0 *Ex-Tokyo By As
Slide 62: Sustainable Real Estate Asset Breakdown (1)
Sustainable Real Estate Asset Breakdown (1) 187 Assets, JPY 261.9B, Annual NOI JPY 11.9B (6.4% 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 63: 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 64: 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 68 Retail Fixed Asset Shibuya-ku, Tokyo <JPY 1B 2015/04 21 years JPY 48M JPY 79M –
Slide 65: 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 145 Hotel Fixed Asset Fukuoka >JPY 3B 2018/03 5 years JPY 194M JPY 301M – – 147 Ho
Slide 66: 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 67: 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) 53 Assets JPY 59,676M +JPY 13,860M JPY 2,336M JPY 15,713M – – B Ichigo Owners (Other) 3 Assets J
Slide 68: Appendix: Asset Management Details
Appendix: Asset Management Details © Ichigo Inc. All rights reserved. 68
Slide 69: 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 54.7B (25 Hotels) JPY 11.4B (15 Solar Plants) Dividend Yield (as of July 11, 2023) 4.5% 3.4% 5.7% ・ Entered FTSE Global REIT Index, ・ Geographically diversified ・
Slide 70: Asset Management AUM Detail
Asset Management AUM Detail FY19/2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Q1 (12M) (12M) (12M) (12M) (12M) (3M) 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 (Actual) JPY 1,426M JPY 1,436M JPY 1,524M JPY 1,725M JPY 1
Slide 71: Appendix: Clean Energy Details
Appendix: Clean Energy Details © Ichigo Inc. All rights reserved. 71
Slide 72: 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 73: 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 74: 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 75: 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 76: 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 77: Green Biomass Entry
Green Biomass Entry Fully Local Green Biomass as Ichigo’s 3rd Renewable Energy Business − 4 Plants In Development (5.8MW, JPY 7.4B in Total Business Expenses) − Diversify & stabilize power production − Procure biomass feedstock via Ichigo’s relationships with local government Weather Characteristics
Slide 78: Appendix: Financial Statements
Appendix: Financial Statements © Ichigo Inc. All rights reserved. 78
Slide 79: Consolidated Balance Sheet: Assets
Consolidated Balance Sheet: Assets (JPY million) FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Q1 vs. FY23/2 Assets Current Assets Cash and cash equivalents 41,067 50,832 46,458 40,536 37,865 -2,671 Trade notes and accounts receivable 2,308 1,382 1,819 3,866 4,813 +947 Operational loan investments 1,324 1,324
Slide 80: 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 vs. FY23/2 Liabilities Current Liabilities Short-term loans 3,086 4,879 2,382 962 3,500 +2,538 Bonds (due within one year) 274 274 274 364 364 – Long-term loans (due within one year) 12,277 9,751
Slide 81: Consolidated P&L
Consolidated P&L (JPY million) FY24/2 FY20/2 FY21/2 FY22/2 FY23/2 FY24/2 Q1 FY23/2 Q1 Change vs. Full-Year (12M) (12M) (12M) (12M) (3M) (3M) (YOY) Forecast Forecast Revenue 87,360 61,368 56,934 68,093 10,152 16,638 -6,486 – – Cost of Goods Sold 52,851 45,776 40,757 48,674 5,915 12,320 -6,405 – – Gro
Slide 82: Consolidated Cash Flows: Operations
Consolidated Cash Flows: Operations (JPY million) FY20/2 (12M) FY21/2 (12M) FY22/2 (12M) FY23/2 (12M) FY24/2 Q1 (3M) Cash Flows from Operations Pre-tax income 16,545 7,610 9,595 14,234 2,175 Depreciation 2,630 4,797 5,644 5,339 1,267 Share-based compensation expenses 194 21 73 – – Amortization of go
Slide 83: 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 Q1 (3M) 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 84: Ichigo 2030: Ichigo as a Sustainable Infrastructure Company
Ichigo 2030: Ichigo as a Sustainable Infrastructure Company © Ichigo Inc. All rights reserved. 84
Slide 85: 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 86: Addressing Diverse Needs of Individuals & Communities
Addressing Diverse Needs of Individuals & Communities © Ichigo Inc. All rights reserved. 86
Slide 87: 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 88: 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 89: Ichigo 2030: New Initiatives
Ichigo 2030: New Initiatives © Ichigo Inc. All rights reserved. 89
Slide 90: 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 91: 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 92: 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 93: 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 94: 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 95: Hakata Hotels: Hotel Operations
Real Estate x Tourism Hakata 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 − PROPERA deployment at hotels (generating 10 to 40% revenue increases p.a.) Ope
Slide 96: 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 97: 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