Ichigo Inc. · TSE:2337

Ichigo — Q1 FY2015 Earnings Presentation

39 slides from Ichigo's earnings presentation, Jul 17, 2014

1. Slide 1: Corporate Presentation Q1 FY2015/2

   February 2015 Q1 (March 2014 – May 2014) Corporate Presentation April 23, 2014 July 17, 2014 Ichigo Group Holdings Co., Co Ltd. Ltd (2337) © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. www.ichigo-holdings.co.jp/english

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

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

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

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

4. 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.

5. Slide 5: Shift Up 2016 Mid-Term Plan agenda

   Shift Up 2016 Mid-Term Plan Commitment: 100% Shift Up 2016 Achievement ‒ JPX-Nikkei JPX Nikk i 400 Entry E t as Additional Additi l Shift Up U 2016 Goal G l ‒ Q1 Operating Profit 2.9X, Net Profit 1.4X Year-on-Year ‒ Segment Breakdown ‒ Long-Term Long Term Debt Structure Full-Service Real Estate ‒ Ic

6. Slide 6: Shift Up 2016 Mid-Term Plan KPIs

   Shift Up 2016 Mid-Term Plan Key Performance Indicators (KPI) – 100% Achievement in FY14/2 (Million yen) Feb 13 Feb 14 Feb 14 Feb 15 Feb 16 (Actual) (Plan) (Actual) (Plan) (Plan) Revenues 4,974 7,400 7,435 11,500 15,500 Operating Profit 1,844 3,900 3,912 7,700 11,400 Net Profit 1,637 4,000 4,526 6,04

7. Slide 7: Commitment: 100% Shift Up 2016 Achievement

   Commitment: 100% Shift Up 2016 Achievement © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 7

8. Slide 8: JPX-Nikkei 400 Entry as Additional Shift Up 2016 Goal

   JPX-Nikkei 400 Entry as Additional Shift Up 2016 Goal ‒ Further materialize Ichigo’s commitment to shareholders by b becomingi one off Japan’s J ’ top t 400 companies i iin terms t off capital it l efficiency and shareholder performance ‒ 3-year y averageg ROE ((40% weighting), g g), 3-year y total

9. Slide 9: Q1 Operating Profit 2.9X, Net Profit 1.4X Year-on-Year

   Q1 Operating Profit 2.9X, Net Profit 1.4X Year-on-Year ‒ High Value-Add sales drive profits despite lower revenues  FY14/2 Q1 JPY 8B Real Estate & Value-Add sales, JPY 270M gross profit  FY15/2 Q1 JPY 3 3.5B 5B Real R lE Estate t t & Value-Add V l Add sales, l JPY 1 1.6B 6B gross profit fit  Feb

10. Slide 10: Segment Breakdown

    Segment Breakdown ‒ Growth Investments Driving Operating Profit in Real Estate and Value-Add ‒ Newly Operational Solar Plants in Clean Energy (Million yen) Revenues Operating Profit Segment Feb 15 Feb 15 Earnings Drivers Feb 2014 Q1 Feb 15 Q1 Change (YoY) Full-Year Vs. Forecast Feb 2014 Q1 Feb 15 Q1

11. Slide 11: Long-Term Debt Structure

    Long-Term Debt Structure ‒ 92% of debt is now long-term (vs. 61% FY14/2 Q1) ‒ Lengthened average debt tenure by 2.4 years YOY ■ Corporate Debt Average Borrowing Period Weighted Average Interest Rate 2.08% 7 2 years 7.2 -23bpt Weighted Average Interest Rate Average g Borrowing g 1.85% Period ●.●●% 4.

12. Slide 12: Full-Service Real Estate

    Full-Service Real Estate © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 12

13. Slide 13: Ichigo REIT Growth

    Asset Management Ichigo REIT Growth ‒ Increased Property Acquisition Capacity through Public Offering  Expanded bridge funds for Ichigo REIT  FY15/2 YTD IGH real estate acquisitions of JPY 28B include potential Ichigo REIT assets ‒ Strengthening g g Leasingg via Real Estate Services Division  Dir

14. Slide 14: Asset Acquisitions Ahead of Plan

    Real Estate & Value-Add Asset Acquisitions Ahead of Plan JPY 45B of acquisitions in 6 months since public offering ‒ Vs. planned JPY 80B of acquisitions for full-year FY15/2 (real estate JPY 69B, megasolar JPY 11B)  Already acquired JPY28B in real estate  Additional JPY16 billion in current real e

15. Slide 15: Asset Acquisition Breakdown

    Real Estate & Value-Add Asset Acquisition Breakdown ‒ June 2014: 16 assets, JPY28B (Real Estate JPY9B, Value-Add JPY19B) ‒ Net JPY 16B increase in Real Estate for Sale on B/S ■ Real Estate Asset Type Location Building Age Acquisition Price Date of Acquisition Retail Fukuoka 8 1-2 billion yen 2014/04

16. Slide 16: Value-Add Sample Earnings Model

    Value-Add Sample Earnings Model ‒ 5.5% NOI, JPY 2B purchase, LTV 70%, 1.5% interest rate, JPY 50M capex, 20% increase in NOI, 3-year holding period ‒ Upgrade tenants, aesthetic improvement, remedy building code violations, earthquake retrofit, etc. 【At Acquisition】 ・(110 million yen NOI/year) － (21

17. Slide 17: Value-Add Case – Tokyo Central Office

    Value-Add Case – Tokyo Central Office Property Summary Address Mita, Minato-ku, Tokyo Zoning Commercial Land Area 181 tsubo (598㎡) Building Area 1,046 tsubo (3,458㎡) Rentable Area 717 tsubo (2,370㎡) Structure 14 floors, reinforced concrete Use By Floor Offices (2F-11F), Residence (12F-14F) Y Year Bu

18. Slide 18: Clean Energy

    Clean Energy © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 18

19. Slide 19: Expansion on Track

    Expansion on Track ‒ As of June 2014, 9 Megasolar Plants (11MW) Online  Total operating and in-development plants: 24 projects, 83MW ((Feed-in tariff 40 y yen: 20 projects, p j , 34MW;; 36yen: y 4 projects, p j , 49MW))  Of 15 in-development plants, 9 currently under construction ■ Total Megasolar

20. Slide 20: Plant Construction Visuals

    Plant Construction Visuals Ichigo Toyokoro Sasadamachi ECO Power Plant Ichigo Betsukai Kawakamicho ECO Power Plant Ichigo Nago Futami ECO Power Plant Ichigo Nakashibetsu Midorigaoka ECO Power Plant © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 20

21. Slide 21: Plant Comprehensive Certification (2nd in Japan)

    Plant Comprehensive Certification (2nd in Japan) Ichigo Kiryu Okuzawa ECO Power Plant recently received a domestic and international certification from third party inspection agency TÜV Rheinland Japan Ltd.  Thorough on-site plant inspections throughout construction and operation  Already widespre

22. Slide 22: NOI Forecast & Power Generation vs. Plan

    NOI Forecast & Power Generation vs. Plan Post-depreciation P td i ti NOI ffrom 24 P Projects j t (83MW) F Forecastt to t Reach R h JPY 1.6B/Year ■ NOI Forecast F t 1.6 Long-Term Long Term Stable Earnings Stream (Billion yen) 1.6 (Note) Revenue forecast assumes current operating and in-development 1.

23. Slide 23: Appendix: Financial & Real Estate Data

    Appendix: Financial & Real Estate Data © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 23

24. Slide 24: New: Fuller Consolidated and Asset Disclosure

    New: Fuller Consolidated and Asset Disclosure From this quarter, we are increasing our disclosure with respect to our statutory consolidated financials and assets, including risk- based disclosure of our balance sheet that separates out client and non-recourse assets and liabilities, and discontinui

25. Slide 25: Corporate Structure and Earnings Segments

    Corporate Structure and Earnings Segments ‒ Asset Management, Real Estate, Value-Add, Clean Energy, Other Full-Service Real Estate Clean Other Asset Energy Real Estate Value-Add Management Ichigo Real Estate Investment Advisors Co., Ltd. (S b idi ) (Subsidiary) ○ ○ ○ Ichigo Estate Co., Ltd. (Subsidi

26. Slide 26: Consolidated Balance Sheet

    Consolidated Balance Sheet (Million yen) Feb 14 Feb 15 Q1 Change (YoY) Total Assets 114,944 136,407 21,463 Cash and Cash Equivalents 24,991 20,493 - 4,498 Operational Investments in Loans 1,100 2,100 1,000 Operational Investments in Securities 3,583 2,247 - 1,336 Real Estate Held for Sale 54,084 70,

27. Slide 27: Assets: Segment Breakdown

    Assets: Segment Breakdown (Million yen) Feb 2014 Feb 2015 Q1 Change (YoY) Market Value Unrealized Gain Cash and Cash Equivalents 24,991 20,493 -4,498 20,493 0 Operational Investments in Securities 1,100 2,100 1,000 2,100 0 Real Estate 1,100 1,100 0 1,100 0 Value-Add 0 1,000 1,000 1,000 0 Operational

28. Slide 28: Risk-Based Balance Sheet

    Risk-Based Balance Sheet Consolidated Balance Sheet Risk-Based Balance Sheet Shareholder Equity Ratio 36.6％ Risk-Based Shareholder Equity Ratio 48.7％ Net Assets 136.4 billion yen Non-Recourse Loans Non-Recourse Loan 33.9 billion yen Net Assets Related Assets 43.3 billion yen 102 4 billionyen 102.4 N

29. Slide 29: Consolidated P&L

    Consolidated P&L (Million yen) vs Full-Year Feb 14 Feb 14 Q1 Feb 15 Q1 YoY Forecast Forecast Full-Year Revenues 11,023 6,528 59% 42,000 16% 35,101 Cost of Revenues 9,385 3,270 － － － 27,666 Gross Profit 1,638 3,257 199% － － 7,435 SG&A 870 1,021 － － － 3,522 Operating Profit 767 2,236 292% 7,700 29% 3,

30. Slide 30: Consolidated P&L: Gross Profit Segment Breakdown

    Consolidated P&L: Gross Profit Segment Breakdown Note: Operating Profit Segment Breakdown on p. 10 (Million yen) Revenues Gross Profit YoY Segment Feb 14 Q1 Feb 15 Q1 Change Feb 14 Q1 Feb 15 Q1 Change (Gross Profit) Asset Management 1,149 1,095 - 54 704 559 - 145 79% Asset Management Fees 336 424 88

31. Slide 31: Consolidated P&L: Segment Q1 Actual vs Full-Year Forecast

    Consolidated P&L: Segment Q1 Actual vs Full-Year Forecast (Million yen) 2015/02 1Q Performance (3M) Full-Year Forecast Segment Gross Operating External Sales Change Gross Profit Change Operating Profit Change Revenues Profit Profit Asset Management 1,095 30% 559 34% 207 39% 3,634 1,667 536 Asset Man

32. Slide 32: Significant Unrealized Gains on Balance Sheet

    Significant Unrealized Gains on Balance Sheet Real estate directly held by IGH (either on IGH balance sheet or in SPCs where IGH is sole equity holder) (Million yen) Book Value Cap rate (at Acquisition) Cap Rate (current) Appraisal Value Location Acquisition Value (after write- NOI NOI / Book Value

33. Slide 33: IGH-Owned Real Estate Asset Breakdown

    IGH-Owned Real Estate Asset Breakdown Assets by Type Assets by Location (As of May 2014) (Billion yen) Sendai 6 Tokyo Assets by Size 47 Kanto 16 Osaka 2 Others 8 Fukuoka 12 Total Assets: JPY 91 Billion (AUM Including Ichigo-Managed Assets: 256 billion yen) © 2014 Ichigo Group Holdings Co., Ltd. All

34. Slide 34: Appendix: About Ichigo Group

    Appendix： About Ichigo Group © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 34

35. Slide 35: Full Service Real Estate & Clean Energy

    Full Service Real Estate & Clean Energy IIchigo hi comes from f an ancient i t Japanese J proverb, b Ichigo Ichie, meaning “One lifetime, one encounter” As the core company of the Ichigo Group, Ichigo Group Holdings seeks to serve the needs of society by investing in Japanese real estate. estate We

36. Slide 36: Corporate History

    Corporate History A Pioneer in the Real Estate Securitization and Fund Businesses in Japan 2000 March Establish PI Technology Co., Ltd. April Establish Asset Managers Co., Ltd. 2001 August Asset Managers arranges the securitization of assets from the Ikebukuro store of The Seibu Department Stores, L

37. Slide 37: Company Profile

    Ichigo Group Holdings Co., Ltd. Company Profile Name Ichigo Group Holdings Co., Ltd. Address The Imperial Hotel Tower, 1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011 Established Board and 8 Directors, of which 5 Independent Directors March 17, 2000 Senior Executives 12 Executive Officers Paid-in Ca

38. Slide 38: Group Structure

    Group Structure ‒ Core C B Businesses: i F Full-Service ll S i R Reall E Estate t t and d Cl Clean E Energy ‒ Launched Clean Energy Business in November 2012 ‒ Activelyy Promoting g CSR throughg Environmental Activities and Sports p Sponsorship Hiromi Miyake Full-Service Real Estate and Clean Energy

39. Slide 39: 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

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