Tokyu Fudosan Holdings Corp. · TSE:3289
Tokyu Fudosan — Q3 FY2021 Earnings Presentation
63 slides from Tokyu Fudosan's earnings presentation, February 2022
Slide 1: Financial Highlights FY2021 Third Quarter
Securities Code : 3289 WE ARE GREEN Create Value for the Future Financial Highlights FY2021 Third Quarter (First Nine Months) Ended December 31, 2021 @ TOKYU FUDOSAN HOLDINGS
Slide 2: Forward-looking statements
The forecasts and other forward-looking statements in this report are based on currently available information and certain assumptions determined as rational. Consequently, any statements herein do not constitute assurances regarding actual results by the Group. Actual performance may significantly
Slide 3: Contents
| Contents | * Results of the FY2021 Q3 seers 3 ¢ Reference cee ee 32 © TOKYU FUDOSAN HOLDINGS CORPORATION 2 SESS
Slide 4: Results of the FY2021 Q3
Results of the FY2021 Q3 © TOKYU FUDOSAN HOLDINGS CORPORATION
Slide 5: (No change from November disclosure)
(No change from November disclosure)
Slide 6: FY2021 Q3 (First Nine Months) Operating Results
| FY2021 Q3 (First Nine Months) Operating Results | Both revenue and profit increased compared to the same period of the previous year, and various KPIs improved Q3 Q3 Forecast** last year Operating Revenue 592.6 634.1 41.5 907.7 1,010.0 62.8% Operating profit 30.1 53.2 23.2 56.5 80.0 66.5% Non-oper
Slide 7: FY2021 Q3 Summary of balance sheets
| FY2021 Q3 (First Nine Months) Summary of balance sheets | Increase in real estate for sale due to progress in investments FY2020 FY2021 FY2020 FY2021 ¥ billion As of Dec 31 ¥ billion As of Dec 31 (¥ billion) Asof Mar 3h So} beee » @ampenitzan (¥ billion) Asof Mar 31 Soh eee » Gampenizem Cash and d
Slide 8: FY2021 Q3 and Forecast Segment performance
| FY2021 Q3 (First Nine Months) and Forecast Segment performance | Profit increased in all segments compared to the same period of the previous fiscal year, and asset sales progressed steadily. FY202 FY2021 (¥ n) ompar Q3 Q3 Fy2020 FY2021 | Comparison Forecast | (FY2020) compared to the same period
Slide 9: FY2021 Q3 Analysis of segment performance
| FY2021 Q3 (First Nine Months) Analysis of segment performance | +23.2 billion yen compared to the same period last year, +28.3 billion yen before transfer of loss on COVID-19 + Property Management business +2.0 billion yen: +2.9* billion + Increase in real estate sales agent sales due to COVID-19
Slide 10: FY2021 Earnings Forecasts Analysis of segment performance
| FY2021 Earnings Forecasts Analysis of segment performance (No change from November disclosure) | +23.5 billion yen compared to FY2020, +28.6 billion yen before transfer of loss on COVID-19 + Property Management business +3.8 billion yen: +4.6* billion + Wellness business +4.7 billion yen: +6.1* bi
Slide 11: Urban Development FY2021 Q3
| Urban Development @ FY2021 Q3(First Nine Months) | Increases in revenue and profit mainly due to sales of office buildings and commercial facilities = Compared to the same period last year Operating revenue 193.0 [Operating profit] Leasing (Office buildings) 32.8 Newly operated +5.8 Lost revenue f
Slide 12: Urban Development Vacancy Rate and Rent
| Urban Development @ Vacancy Rate and Rent | As of December 31, 2021, Average office rent 28,380 yen (Month/Tsubo) Vacancy rate 1.4% (Tenants actually moving in and out, including Office buildings and Commercial facilities) Vacancy Rate Rent (¥/Month/Tsubo) Wi Tsubo = 3.3ni ¥30,000 10% ¥25,000 8% ¥
Slide 13: Major project timeline
FY2020 Or Before FY2021 FY2022 FY2023 After FY2024 Jingumae 6-chome Block Urban Redevelopment Project
Slide 14: Urban Development Major projects (Greater Shibuya area)
| Urban Development @ Major projects (Greater Shibuya area) | Several projects are ongoing in the Greater Shibuya area. Harajuku © Redevelopment Project © Commercial facility © Office building © Properties owned by ActiviaProperties nc. © Properties joint capital investment with Norges Bank Redevelo
Slide 15: Urban Development Initiatives in COVID-19 (GREEN WORK STYLE)
| Urban Development © Initiatives in COVID-19 (GREEN WORK STYLE) | Provide tenants with a one-stop service that leverages the Group's business domain to meet diverse office needs Multiple workplaces Environmental Initiatives Provide multiple and flexible workplaces to suit diverse work styles Suppor
Slide 16: Urban Development Condominium index
| Urban Development © Condominium index | Contract ratio at the end of third quarter compared with condominium sales forecast in the fiscal year ending March 2022: 101% No. of units sold 1,680 1,777 2,082 Contract obtaining rate 54% 66% 82% 90% 50% 257% 76% 393% 54% 68% 89% 101% (Beginning-of-year>1
Slide 17: Strategic Investment FY2021 Q3
| Strategic Investment @ FY2021 Q3(First Nine Months) | Increases in both revenue and profit due to increase in dividends from property sales in overseas operation business, despite the absence of dividends from property sales in the infrastructure & industry business Third Qua FY2020 FY2021 : . Com
Slide 18: Strategic Investment Renewable energy business
| Strategic Investment @ Renewable energy business | The number of operating properties has increased, and it has grown to make a stable contribution to earnings Projects acquired (As of December 31, 2021) Portfolio (As of December 31, 2021) Properties in operation: 61 (solar: 58, wind power: 3) Pro
Slide 19: Strategic Investment Expansion of renewable energy business
| Strategic Investment @ Expansion of renewable energy business | Achieve further expansion with solid business promotion for committed properties and active acquisition of new projects Investment amount and operating property transition R e E N E >»>- MXbillion] taalnvestments in properties in oper
Slide 20: Assets expansion involved in renewable energy business
| Strategic Investment @ Assets expansion involved in renewable energy business | Aim to acquire know-how, expand assets, and diversify revenue sources through various partnerships Sponsorship Support > Acquire sale opportunities Asset Management RU Investment Co, Ltd. Share AM know-how * The invest
Slide 21: Strategic Investment Logistics facilities business
| Strategic Investment © Logistics facilities business | lili LOGV’'Q Cyclical reinvestments will be executed aggressively with a series of development projects starting operation Projects acquired (As of December 31, 2021) Major projects Properties in operation: 5 Projects under development: 9 LOGI
Slide 22: Strategic Investment Overseas operations in the United States
| Strategic Investment © Overseas operations 16 projects are in progress in the United States. a My Portland(1) é Los Angeles(2) °e e *the figures are as of September 30, 2021 New York(1) Washington DC(1) : Charlotte(1) Y Atlanta(2) Participating projects in urban regions @ Rental housing @ Office /
Slide 23: Property Management & Operation FY2021 Q3
| Property Management & Operation @ FY2021 Q3(First Nine Months) | Both revenue and profit increased as the impact COVID-19 was limited in each business compared to the previous fiscal year Third Quarter FY2020 FY2021 4 ‘ (¥ billion) | 3 | 3 | omparison Compared to the same period last year Operatin
Slide 24: Property Management & Operation Stock of properties
| Property Management & Operation @ Stock of properties | The expansion of management stock and the rearrangement of unprofitable projects will be advanced (Trend in stock of comprehensive condominium management and facility management in number of units) m Under comprehensive management m Under fac
Slide 25: Property Management & Operation Main projects and Operating ratio
| Property Management & Operation @ Main projects and Operating ratio | First commercialization of "In" type Harvest Club, which is a membership resort in some of the selected hotels operated by other companies Tokyu Harvest Club VIALA Kinugawa Keisui Membership resort hotel Open in December 2022 (p
Slide 26: Property Management & Operation New Initiatives in COVID-19
| Property Management & Operation @ New Initiatives in COVID-19 | Promote new initiatives based on the premise of coexistence with COVID-19 From a gym operator to a comprehensive Well-being company (TOKYU SPORTS OASIS) <weltag> Anew corporate mission, ‘ Well-being First!’ Reorganized into four busin
Slide 27: Real Estate Agents FY2021 Q3
| Real Estate Agents @ FY2021 Q3(First Nine Months) | Increase in both revenue and profit due to an increase in the number of brokerages vetien rer = "os Comparison Compared to the same period last year Operating revenue 145.4 165.1 19.7 [Operating profit] Real estate sales agent 37.8 49.6 11.9 Reta
Slide 28: Real Estate Agents Performance indicators in sales agent
| Real Estate Agents @ Performance indicators in sales agent | Number and amount of transactions increased in both retail and wholesale FY2021 Q3 Wholesale Highlights Rate of change YoY No. of transactions 20,388 808 21,196 URetail (units) +17.6% +21.5% +17.7% + Both the number of transactions and a
Slide 29: Real Estate Agents Changes in properties under management
| Real Estate Agents @ Changes in properties under management | Aim at achieving stable revenue growth by expanding management stock <Rental housing) 120 110 100 90 18/3 19/3 20/3 21/3 21/12 22/3 Plan [Units: thousand] 87 93 99 107 115 116 (Change from the end of preceding fiscal year) + 6 +6 +6 +8
Slide 30: Initiatives for the realization of a decarbonized society
| Initiatives for the realization of a decarbonized society | International Agreement Paris Agreements COP21+ CMPI1 PARIS 2015 Keep the increase in temperature to well below +2°C ON CORTE ANE SOMEONE and strive for +1.5°C (pre-industrial levels) A Support for the realization of a decarbonized societ
Slide 31: ●Selected - Not selected / No evaluation
●Selected - Not selected / No evaluation
Slide 32: Roadmap for Value Creation through DX
| Roadmap for Value Creation through Dx | By 2025, the group will promote labor-saving operations and the sophistication of customer contact, aiming for discontinuous and exponential growth by 2030 GROUP VISION 2030 Create value for the future 2021 2025 2030 Restructuring phase Resilience phase Accu
Slide 33: Reference
Reference © TOKYU FUDOSAN HOLDINGS CORPORATION 32. SESS
Slide 34: Trends in business performance
| Trends in business performance | ¥billion 100 | mms Operating profit p 20.0 ma Net income 90 | —ROE(%) | 18.0 —Debt Equity ratio 775 80.2 79.3 80.0 80 + 16.0 70 + 14.0 60 L 12.0 50 + 10.0 40 + 8.0 30 + 6.0 20 L 4.0 10 ays | 22 ) 0.0 15/3 16/3 11/3 18/3 19/3 20/3 21/3 23 Forecast * ‘Net income’ was
Slide 35: Breakdown of Results by Segment
| Breakdown of Results by Segment | Changes in operating profit by segment ¥billion 100 80 60 40 20 mm Urban Development(~2020) lm Property Management mam Wellness Mm Tokyu Hands mam Innovation business lam Real-Estate Agents mam Residential (5.7) (0.6) 15/3 eal 16/3 17/3 18/3 80.2 5.4 113.9) 8.6 (7
Slide 36: Forecast for the FY2021 (Disclosure in November)
| Forecast for the FY2021 (Disclosure in November) | Despite a downward revision of the forecast for the Management & Operation business segment to reflect the risk of a resurgence of the COVID-19 in the Wellness and Tokyu Hands businesses, operating profit is expected to be 80 billion yen, as initi
Slide 37: Recognized Conditions for Main Businesses
| Recognized Conditions for Main Businesses “the beginning of FY2021 The recovery from the effects of COVID-19 will differ from one business to another. The Group will focus on measures based on a careful look at the post-pandemic situation. No major effect on the vacancy rate and rent has been obse
Slide 38: Impact of COVID-19 on each business
| Impact of COVID-19 on each business | Impacts occurred mainly in the first quarter, but restrictions on business activities were limited compared to the previous fiscal year Segment/Business FY2020 FY2021 Urban Development Commercial facilities Temporary closure of entire building (excluding some
Slide 39: Process for Value Creation
Process for Value Creation We create unique and original business models by tackling social issues, and achieve sustainable growth by linking the value created to stakeholder satisfaction.
Slide 40: Business offerings and proposals
Commercial facilities Proposals for Hotels Play Styles Proposals for Golf courses Play Styles Ski resorts Proposals for Proposals for Home Styles Work Styles Condominiums Office Proposals for Proposals for Detached Home Styles Work Styles Buildings Houses * From the 2019 Integrated Report
Slide 41: Asset Control, Liability and Equity Control
Asset Control Liability and Equity Control • • • • • • • • • • •
Slide 42: Asset breakdown by segment
〈Asset breakdown by segment 〉 *As of September 30, 2021 Real Estate Agents 187.5 Property Management & Human capital Operation utilization Urban 434.7 622.2 Development 1,614.1 Total assets （Before adjustments） 2,676.7 Asset utilization 2,054.5 Strategic Investment 440.4
Slide 43: Financial Capital Strategy
| Financial Capital Strategy @ | Total Lial Ss 1,982.5billion refi . . . . Total Assets yen Promote efficient asset turnover and profit generation by closely observing trading markets. ape billion yen Met ies Hi H . billie ~ «Changes in gain on sales) < Major real estate sold > ee [¥billion] [¥billi
Slide 44: Financial Capital Strategy
| Financial Capital Strategy @ | TEAS = Maintain financial discipline by executing hybrid financing and taking other steps. Boum Netasets mam Equity mam Interest-bearing Debt pion ysty —eDebt Equity ratiio —e Debt/EBITDA ratio [¥billion] 1,600 20.0x Rating Institution: Japan Credit Rating Agency + L
Slide 45: Dividends
[Yen] [Yen] * Dividends before interim dividends for the fiscal year ended March 2014 are those paid by Tokyu Land Corporation.
Slide 46: Carrying Value (In development) Breakdown
79.7 Carrying Value (In development) Breakdown As of March 2019 ・Shibuya Solasta ・Shibuya Fukuras ・Jimbocho North Tokyu Building ・Tokyo PortCity Takeshiba (Office tower) As of March 2020 ・Tokyo PortCity Takeshiba (Office tower, Residence tower) As of March 2021 Not applicable
Slide 47: Reorganization of Business Segment
| Reorganization of Business Segment | We have been reorganized into four business segments from the previous seven business segments from the perspective of human capital and asset utilization from FY2021. Urban Development Residential Property Management Real Estate Agents Wellness Tokyu Hands Inn
Slide 48: Office portfolio by area and completed year
〈Area〉 〈Completed year〉 Metropolitan 4districts After 2011 668 thousand ㎡（90%） 44 buildings 336 thousand ㎡（45%） 9 buildings Kansai 1% -1980 2% 11 [1] 17 [6] Other metropolitan area 1% Chiyoda-ku 1981-1990 10% 7 [1] 77 [9] 11% 85 [6] 1991-1995 6% Other Tokyo districts Chuo-ku 42 [9] 8% 56 [5] 10% 73
Slide 49: Office market vacancy and rent by ward
Chiyoda-ku Chiyoda-ku 150.0 12.0 Chuo-ku Chuo-ku Minato-ku 140.0 Minato-ku 10.0 Shinjyuku-ku Shinjyuku-ku 133.6 Shibuya-ku 8.56 130.0 Shibuya-ku 8.0 125.2 6.04 120.0 122.6 6.0 5.94 118.7 5.51 116.1 4.58 110.0 4.0 2.0 100.0 0.0 90.0 12/1 13/1 14/1 15/1 16/1 17/1 18/1 19/1 20/1 21/1 12/1 13/1 14/1 15/
Slide 50: Commercial facilities
| Commercial facilities | As of the end of December 2021 Developing commercial facilities in convenient areas, primarily in the Tokyo metropolitan area and the Kansai area. (Features of our commercial facilities» Locations that are commercially busy and convenient in terms of transportation Other Ar
Slide 51: Transition in total floor area and AUM transition
| Transition in total floor area and AUM transition | Urban Development Segment: Both total floor area and AUM are expanding {Total floor area) Thousand ni 2,000 m= Commercial facilities B Office buildings 1,484 1,500 4438 1,427 1,000 500 18/3 19/3 20/3 * As of December 31, 2021 1,617 21/3 1,590 21/
Slide 52: Workplace space types
City center Suburban area Local area Exclusive space Membership space Shared space Residential space
Slide 53: Initiatives for Achieving RE100 Targets
| Initiatives for Achieving RE100 Targets | RE THE CLIMATE GROUP ¥CDP Tokyu Land Corporation moved substantially the year for achieving RE100 targets forward from 2050 to 2025 <State of initiatives in Tokyu Land Corporation) + Achieved RE100 targets for owned facilities, making the most of self gene
Slide 54: Initiatives Related to Climate Change
| Initiatives Related to Climate Change | Verify climate change risks and business opportunities and formulate 1.5 °C targets for CO2 emissions reduction Werifying multiple scenarios for climate change risks and business opportunities based on recommendations by the Task Force on Climate-related Fin
Slide 55: 10.0 billion/5% 40.0 billion /14％
70% 50% 10.0 billion/5% 40.0 billion/14％
Slide 56: Issuance of sustainability-linked bond
| Issuance of sustainability-linked bond | Issuance of sustainability-linked bond as the first step of the WE ARE GREEN Bond Policy « Outline of sustainability-linked Bond (The 26th Unsecured Corporate Bond) > Term 10-year Issue Amount 10 billion yen Interest rate 0.300% per annum (Pricing Date: Oct
Slide 57: Remuneration structure
• • • • Fixed Remuneration Variable Remuneration Item Monthly Stock-based Remuneration Bonus Compensation Basic Short-term Medium-to-long- Positioning remuneration incentive term incentive Target percentage of total remuneration 60% 30% 10% Linked to Linked to stock Approach to fluctuation performan
Slide 58: DX Case Study
| DX Case Study | Business process reform is underway Al assessment (real estate agent business) Property Property introduction , | collection and 7 (Recommendations) | consulting) 4 | Purchase Introducing Al to prospective buyers of condominiums and a oe. ™ Sel , — e » introducing Al to price and r
Slide 59: Major office buildings
| Major office buildings | As of the end of December 2021 Own 51 buildings mainly in 4 central wards of Tokyo No. of , : — Shibuya Dogenzaka Tokyu 1983 13 Unosawa Tokyu 1984 15 Shibuya Shin-Minamiguchi 2000 7 Ebisu Business Tower 2003 23 Shibuya-ku 19 Shibuya Square 2004 13 Shibuya Minami Tokyu 2005
Slide 60: Major commercial facilities
| Major commercial facilities | As of the end of December 2021 The Group operates 25 locations in the Tokyo area and 7 locations in Kansai and other regions. Area No. of Major properties ear built tal ile facilities [Commercial facilities] space* Tokyu Plaza Kamata 1968 Tokyu Plaza Akasaka 1969 41 S
Slide 61: Major renewable energy facilities
| Major renewable energy facilities | As of the end of December 2021 The Group is advancing businesses through 67 solar power generation projects, 10 wind power generation projects and 2 biomass power generation projects. Suzuran Kushirocho Kushiro-gun Kushiro-cho, Hokkai-do ReENE Aomori Shichinohe
Slide 62: Major operating facilities
| Major operating facilities | As of the end of December 2021 The Group operates 61 hotels, 8,405 rooms Name of facilities Number of ITeteshina Hakone Myojindai Urabandai Grandeco Kyoto Takagamine Katsura Madarao Nasu VIALA annex Kyoto Takagamine aso (ramansko Tateshina Annex Kyu Karuizawa Annex Nas
Slide 63: Slide 63
Tokyu Fudosan Holdings — Q3 FY2021 Earnings Presentation on 6ix