Ichigo Inc. · TSE:2337

Ichigo — Q3 2014 Earnings Presentation

35 slides from Ichigo's earnings presentation, Jan 16, 2014

Slide 1: Corporate Presentation Q3 FY2014
February 2014 Q3 (March – November 2013) Corporate Presentation January 16, 2014 Ichigo Group Holdings Co., Co Ltd. Ltd (2337) © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. www.ichigo-holdings.co.jp/english
Slide 4: Creating peace of mind through honest and committed management
Creating peace of mind through honest and committed management. management © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved.
Slide 5: Transformational Growth
Transformational Growth Shift Up Strategy & Execution Driving Growth ‒ Shift Up: Operating Profit 2 2.7X, 7X Net Profit 3 3.9X 9X Year Year-on-Year on Year ‒ Shift Up: Accelerated Growth Investments ‒ Shift Up: Low-Cost, Long-Term Leverage for Capital Efficiency ‒ Shift Up: FY14 Full-Year Full Year
Slide 7: Shift-Up: Operating Profit 2.7X, Net Profit 3.9X Year-on-Year
Shift-Up: Operating Profit 2.7X, Net Profit 3.9X Year-on-Year (Million yen) (Reference) Feb 13 Q3 Feb 14 Q3 Growth Feb 13 Full-Year Cumulative Cumulative Actual R Revenues 11 585 11,585 28 685 28,685 2 5X 2.5X 16 397 16,397 Operating Profit 1,173 3,199 2.7X 1,844 Recurring Profit 1,074 3,051 2.8X 1,
Slide 8: Shift-Up: Accelerated Growth Investments
Shift-Up: Accelerated Growth Investments ‒ JPY 50 billion investments through FY14 Q3 (+27 billion, +115% vs. Full-Year FY13)  Real Estate: JPY 47 billion (including JPY 7 billion sold into Ichigo REIT)  Megasolar: JPY 3 billion © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 8
Slide 9: Shift-Up: Low-Cost, Long-Term Leverage for Capital Efficiency
Shift-Up: Low-Cost, Long-Term Leverage for Capital Efficiency ‒ Refinancing with Megabanks in size ‒ Rapidly reducing borrowing costs ‒ Extending E t di debt d bt maturities: t iti G Getting tti lloans d done att 15 15–30 30 years Megabank Loan Ratio Megabank borrowing Nov 2012 up p 1.8X YOY Nov 201
Slide 10: Shift-Up: FY14 Full-Year Forecast Upward Revision
Shift-Up: FY14 Full-Year Forecast Upward Revision ‒ Operating Profit 2.1X, Net Profit 2.4X vs. FY13 (Million yen) Feb 14 Full- Feb 14 Full- (Reference) Feb Year Initial Year Revised Change Change% 13 Full-Year Forecast Forecast Actual Revenues 26,000 35,000 +9,000 +34.6% 16,397 Operating Profit 3,00
Slide 12: IGH + Ichigo REIT Simultaneous PO
IGH + Ichigo REIT Simultaneous PO ‒ Successfully conducted Japan’s first Double PO  Simultaneous PO of IGH and Ichigo REIT  Raised R i d JPY 22 billi billion (I (Ichigo hi G Group: JPY 17 billi billion, IIchigo hi REIT REIT: JPY 5 billion) ‒ Significance g of Double PO  Increase Ichigo REIT’s eco
Slide 13: Increase IGH EPS, ROE, & Shareholder Value
Increase IGH EPS, ROE, & Shareholder Value ‒ Accelerate growth  Expand Tokyo real estate investments and earnings into the 2020 Olympics  Accretively A ti l grow Ichigo I hi REIT to t increase i stable t bl assett managementt fees f  Significantly increase EPS and ROE ‒ Expand p Ichigo’s g megaso
Slide 14: Megasolar Business Expansion
6 billion yen Megasolar Business Expansion investment in FY14 & FY15 ‒ Currently developing 17 megasolar projects worth 30 MW that qualify for a 20-year fixed tariff of 42 yen/kWh  Diversified portfolio of primarily 1 1-2 2 MW projects Ichigo ECO Motomonbetsu Power Plant (Hokkaido), online in Janua
Slide 15: Ichigo REIT's Accretive Growth Cycle
6 billion yen Ichigo REIT’s Accretive Growth Cycle investment in FY14 & FY15 ‒ Second Ichigo REIT PO of 2013 completed in December ‒ Stable and Secure AM Fee Revenue Stream for IGH Ichigo REIT 1st PO Grow Raise Share Dividends Price Enhance Ichigo REIT Launch Ichigo REIT 2nd PO Profitability PO Grow
Slide 16: Ichigo REIT: No. 1 J-REIT for Continuous Dividend Growth
Ichigo REIT: No. 1 J-REIT for Continuous Dividend Growth ‒ 7 Consecutive Periods of Dividend Growth >2X Dividend in 3 years 1,494 , 1,537 1,387 1 387 yen yen 1,219 yen 1,031 yen 979 yen yen 899 yen (*) ((*)) (*) 737 yen (*) April 2010 October 2010 April 2011 October 2011 April 2012 October 2012 Apri
Slide 17: Grow Value-Add & Prime Location Real Estate
4 billion yen Grow Value-Add & Prime Location Real Estate investment in FY14 & FY15 ‒ 2020 Tokyo Olympics = real estate demand- and value-driver for Tokyo ‒ Continue expansion of Ichigo Estate business, which is generating an ongoing ROI of 37 37.5% 5% (10 asset portfolio portfolio,12.5 12 5 billion
Slide 19: 2X EPS in 2 Years
2X EPS in 2 Years ‒ Key Performance Indicators (KPI) (Million yen) February 2013 February 2014 February 2015 February 2016 (Actual) (Forecast) (Plan) (Plan) Gross Profit 4,974 7,400 11,500 15,500 Operating Profit 1,844 3,900 7,700 11,400 Net Profit 1,637 4,000 6,040 9,050 EPS (yen) 3.66 8.69 12.17 1
Slide 20: 2X EPS in 2 Years (2)
2X EPS in 2 Years (2) Net Profit Accelerated EPS 9.0B Building Growth Rate St t l Structural Growth Stage 50% Profitability Shift Up p Net Profit 6.0B Growth Investment x Speed x Market Environment Net Profit EPS 4 0B 4.0B Growth Rate 40% Net Profit Net Profit 1.7B 1.6B 100% Expense Coverage Ratio S
Slide 22: Pro Forma Disclosures
Pro Forma Disclosures ‒ Under Japanese accounting rules, SPCs in which Ichigo Group Holdings (“IGH”) ( IGH ) is a greater than 50% investor or SPCs for which IGH is the asset manager and no single equity investor holds more than 50% of the total investment must be consolidated lid t d onto t IGH’ IG
Slide 23: Balance Sheet (Pro Forma)
Balance Sheet (Pro Forma) (Million yen) Feb 13 Feb 14 Q1 Feb 14 Q2 Feb 14 Q3 Change (QoQ) Total Assets 38,565 47,964 52,931 64,981 12,050 Cash and Cash Equivalents 5,744 5,892 7,709 6,098 -1,611 Investment (Real Estate) 10,256 12,444 10,929 11,297 368 Investment (Domestic companies) 696 499 464 510
Slide 24: P&L (Pro Forma)
P&L (Pro Forma) (Million yen) Breakdown (Million yen) Feb 14 Q3 Feb 13 Feb 14 Q1 Feb 14 Q2 Feb 14 Q3 Feb 14 Q3 Cumulative Cumulative Revenues 13,341 2,636 4,243 2,737 9,617 Revenues 9,617 Cost of Revenues 8,486 1,035 1,939 812 3,786 Real Estate Management g Fees 2 261 2,261 Advisory Fees 15 Gross Pr
Slide 25: Significant Unrealized Gains on Balance Sheet
Significant Unrealized Gains on Balance Sheet (Million yen) Book Value Appraisal Value Acquisition Value Unrealized Gain (As of Nov 13) (As of Feb 13) Directly Owned on B/S 34,922 31,045 34,168 +3,123 Investment in IGH Funds 14,682 9,648 17,187 +7,539 Total 49,604 40,693 51,355 +10,662 © 2014 Ichigo
Slide 27: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) (Million yen) Feb 13 Feb 14 Q1 Feb 14 Q2 Feb 14 Q3 QoQ change Total Assets 80,428 81,884 88,085 96,650 8,565 Cash and Cash Equivalents 9,713 9,391 11,517 9,813 -1,704 Operating Investments in Securities 4,271 5,476 3,919 3,853 -66 Real Estate Held for Sale 46,176 41,598
Slide 28: P&L (Consolidated)
P&L (Consolidated) Breakdown (Milli yen)) (Million (Milli yen)) (Million Full-Year Full-Year Feb 14 Q3 vs. Feb 14 Q3 vs. Rev ised Feb 13 Feb 14 Q1 Feb 14 Q2 Feb 14 Q3 Rev ised Cumulative Forecast Cumulative Forecast Forecast Forecast Revenues 28,685 35,000 82.0% Revenues 16,397 11,023 9,562 8,098 28
Slide 30: Real Estate Portfolio
Real Estate Portfolio AUM by Type # of Properties by Type (As of November 2013) (Unit: # of buildings) (Unit: # of buildings) Land with Ground Lease AUM by y Location 2% Other Other 9 Sendai 3% Other 2% Residential 6% 19% Office Kanto 8% Office Land with 60 51% Ground Lease Nagoya Mixed Mi d 53 10%
Slide 31: Real Estate Cap Rates
Real Estate Cap Rates ‒ Conservative assessment of cap rates vis-à-vis market cap rates ‒ Continually mark assets to market ‒ Unrealized U li d gains i iin b both th client li t and d IGH assets t (As of November 2013) Real Estate Investments held by Ichigo Funds (SPCs) (Million yen) Book Value NOI
Slide 32: Stock Split to Promote Share Ownership & Liquidity
Stock Split to Promote Share Ownership & Liquidity Ichigo conducted a stock split to increase liquidity and promote share ownership by reducing the minimum trading amount ‒ 1 share h split lit iinto t 200 shares h ‒ Minimum Trading Lot: 100 shares ‒ Effective Date: September 1, 2013 ‒ Total shares o
Slide 35: Disclaimer
These materials were prepared to explain the Company’s businesses and are not for the purpose of soliciting investment in marketable securities issued by the Company. The Company does not guarantee the accuracy g y of the figures, g , information,, estimates or other statements included herein,, and

Ichigo Group Holdings — Q3 2014 Earnings Presentation on 6ix

Ichigo — Q3 2014 Earnings Presentation

Slide 1: Corporate Presentation Q3 FY2014

Slide 2: © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved.

Slide 3: © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved.

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

Slide 5: Transformational Growth

Slide 6: Shift Up Strategy & Execution Driving Growth

Slide 7: Shift-Up: Operating Profit 2.7X, Net Profit 3.9X Year-on-Year

Slide 8: Shift-Up: Accelerated Growth Investments

Slide 9: Shift-Up: Low-Cost, Long-Term Leverage for Capital Efficiency

Slide 10: Shift-Up: FY14 Full-Year Forecast Upward Revision

Slide 11: Japan's First Double PO

Slide 12: IGH + Ichigo REIT Simultaneous PO

Slide 13: Increase IGH EPS, ROE, & Shareholder Value

Slide 14: Megasolar Business Expansion

Slide 15: Ichigo REIT's Accretive Growth Cycle

Slide 16: Ichigo REIT: No. 1 J-REIT for Continuous Dividend Growth

Slide 17: Grow Value-Add & Prime Location Real Estate

Slide 18: Shift Up 2016 Mid-Term Business Plan

Slide 19: 2X EPS in 2 Years

Slide 20: 2X EPS in 2 Years (2)

Slide 21: Appendix: Pro Forma Financial Data

Slide 22: Pro Forma Disclosures

Slide 23: Balance Sheet (Pro Forma)

Slide 24: P&L (Pro Forma)

Slide 25: Significant Unrealized Gains on Balance Sheet

Slide 26: Appendix: Consolidated Financial Data

Slide 27: Balance Sheet (Consolidated)

Slide 28: P&L (Consolidated)

Slide 29: Appendix: Real Estate Data

Slide 30: Real Estate Portfolio

Slide 31: Real Estate Cap Rates

Slide 32: Stock Split to Promote Share Ownership & Liquidity

Slide 33: MEMO

Slide 34: MEMO

Slide 35: Disclaimer