Ichigo Inc. · TSE:2337

Ichigo — H1 FY2015 Earnings Presentation

51 slides from Ichigo's earnings presentation, Oct 14, 2014

Slide 1: Corporate Presentation H1 (March 2014 – August 2014)
February 2015 H1 (March 2014 – August 2014) Corporate Presentation April 23, October 14,2014 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: New ROE Targets for Shift Up 2016
New ROE Targets for Shift Up 2016 Added ROE targets to Shift Up 2016 Mid-Term Business Plan  For many investors, ROE is the most important indicator in assessing a company’s company s value creation  In the Ito Review METI calls for a “Capital Efficiency Revolution in which ROE Exceeds the Cost of
Slide 6: Shift Up 2016 Mid-Term Plan
Shift Up 2016 Mid-Term Plan ‒ 5X EPS in 3 years ‒ Tokyo Stock Exchange First Section Listing by February 2016 ‒ Enter JPX-Nikkei Index 400 by August 2016 Progress on Key Performance Indicators (KPI) (Million yen) Feb 13 Feb 2014 Feb 2014 Feb 2015 Feb 2016 (Actual) (Plan) (Actual) (Plan) (Plan) Gross
Slide 7: Shift Up 2016 Mid-Term Business Plan agenda
Shift Up 2016 Mid-Term Business Plan ‒ New ROE Targets Commitment: 100% Shift Up 2016 Achievement ‒ H1 Operating Profit 1.4X, Recurring Profit 1.3X Year-on-Year ‒ Highly-Productive Asset Sales ‒ Segment P&L Breakdown Full-Service Real Estate ‒ Segment Asset Breakdown ‒ Asset Acquisition Detail – Fuk
Slide 9: H1 Operating Profit 1.4X, Recurring Profit 1.3X Year-on-Year
H1 Operating Profit 1.4X, Recurring Profit 1.3X Year-on-Year ‒ 32% operating margin driven by highly-productive asset sales ‒ Asset acquisitions driving higher on-going stable rental income ‒ Decline in net profit due to non-repetition of FY14/2 H1’s large extraordinary gains (JPY 673M) (Million yen
Slide 10: Highly-Productive Asset Sales
Highly-Productive Asset Sales (Million yen) Cost of goods sold Revenues 13,647 14,867 Cost of goods 31.9% Revenues sold increase 3,544 1,935 Gross p profit Gross profit 1,220 1 609 1,609 Feb 2014 H1 Feb 2015 H1 © 2014 Ichigo Group Holdings Co., Ltd. All rights reserved. 10
Slide 11: Segment P&L Breakdown
Segment P&L Breakdown ‒ Growth Investments Driving Operating Profit in Real Estate and Value-Add ‒ Newly Operational Solar Plants in Clean Energy (Million yen) Revenues Operating Profit Earnings Drivers Feb 15 Feb 15 Segment Feb 14 H1 Feb 15 H1 vs. Full-Year Feb 14 H1 Feb 15 H1 vs. Full-Year (YoY JP
Slide 13: Real Estate Segment Asset Breakdown
Real Estate Segment Asset Breakdown H1 acquired 7 assets, acquisition cost of JPY 12.3B, forecast NOI of JPY 700M Building Acquired Forecast Equity No. Asset Class Asset Type Location Acquisition Price Expected NOI/Year Depreciation IGH Investment Age Date Multiple 1 Retail Fixed Asset Minato-ku, To
Slide 14: Value-Add Segment Asset Breakdown (1)
Value-Add Segment Asset Breakdown (1) H1 acquired 14 assets, acquisition cost of JPY 22.9B, forecast NOI of JPY 1.5B Building Acquired Forecast Equity No. Asset Class Asset Type Location Age Acquisition Price Date Expected NOI/Year Depreciation IGH Investment Multiple * 1 Retail Real Estate for Sale
Slide 15: Value-Add Segment Asset Breakdown (2)
Value-Add Segment Asset Breakdown (2) Building Acquired Forecast Equity No. Asset Class yp Asset Type Location Acquisition q Price Expected p NOI/Year Depreciation p IGH Investment Multiple Age Date 24 Ground Lease Real Estate for Sale Fujisawa City, Kanagawa - JPY 1B-2B 2014/03 JPY 113M - JPY 273M
Slide 16: Asset Acquisitions Ahead of Plan
Asset Acquisitions Ahead of Plan ‒ H1 focus on new asset acquisitions to drive growth ‒ JPY42.2B real estate acquisitions completed  Another JPY 8.2B 8 2B in advanced highly likely pipeline  Of the JPY 80B target growth investment in FY15/2, JPY 70B = real estate, so 72% of full-year acquisition t
Slide 17: Asset Acquisition Detail – Fukuoka Retail
Asset Acquisition Detail – Fukuoka Retail Valie Hotel Tenjin ALBORE TENJIN ■ Area Dominant Strategy TENJIN • Acquired 5 assets (JPY 5B) in 6 months STATION in Tenjin Nishi-dori area, which is the high- end area of Kyushu’s largest commercial district, Fukuoka Tenjin • 2 additional acquisitions plann
Slide 18: Value-Add Detail – Kyoto Hotel
Value-Add Detail – Kyoto Hotel • Acquired hotel in great location on Kyoto Shijo-dori, conveniently accessible to major tourist spots • Rebranded and renovated all rooms and exterior and changed operator • No downtime during renovation, completed in June 100% occupancy for 3 consecutive June, months
Slide 20: Solar Expansion on Track
Solar Expansion on Track ‒ As of October 2014, 11 Ichigo Solar Plants (13MW) Online  Total operating and in-development: 24 plants, 83MW ((Feed-in tariff 40 y yen: 20 plants, p , 34MW;; 36yen: y 4 plants, p , 49MW))  Of 13 in-development plants, 9 in construction  2 new plants in operation from O
Slide 21: Two New Solar Plants Operating from October
Two New Solar Plants Operating from October ■ Ichigo Betsukai Kawakamicho ECO Power Plant ■ Ichigo Toyokoro Sasadamachi ECO Power Plant Betsukai Kawakamicho Kawakamicho, Betsukaicho Betsukaicho, Notsuke Gun Gun, Toyokoro Sasadamachi Sasadamachi, Toyokorocho Toyokorocho, Nakagawa Address Address Hokk
Slide 22: Near-Term Solar Earnings
Near-Term Solar Earnings ‒ Substantial revenue and gross profit growth ‒ Operating profit on track to turn positive next year (FY16/2) (Million yen) Feb 14 Feb 15 Q1 Feb 15 H1 Feb 15 Full-Year vs. Full-Year (12M) (3M) Cumulative (6M) Forecast (12M) Forecast Revenues 126 125 294 793 37 1% 37.1% Cost
Slide 23: Long-Term Solar Earnings
Long-Term Solar Earnings JPY 1.7B NOI by FY18/2 – actual production beating P50 forecasts ■ Revenue Forecast based on 24 Plants, 83MW 1 2B 1.72B * Revenue forecast assumes that current operating 1.68B and in-development power plants fully come into operation NOI = Net Operating Income minus Deprecia
Slide 25: Note on More Detailed Consolidated and Asset Disclosure
Note on More Detailed Consolidated and Asset Disclosure As of FY14/2 full-year financials, we have increased 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 lia
Slide 26: 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. ○ ○ ○ Ichigo Estate Co., Ltd. ○ ○ ○ Co., Ltd. Ichigo ECO Energ
Slide 27: 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 ‒ Tenant leasing, aesthetic improvement, building code violation remedy, earthquake retrofit, etc. At Acquisition NOI (JPY 110M NOI/year) － (JPY 21M int
Slide 28: Consolidated Balance Sheet
Consolidated Balance Sheet (Million yen) Feb 15 H1 Outside Quarter-on- Unrealized Feb 14 Feb 15 Q1 Market Value B/S Investors' Quarter Gain Interests Cash and Cash Equivalents 24,991 20,493 20,264 673 -229 20,264 0 Operating Loans Receivable 1,100 2,100 2,100 - 0 2,100 0 Real Estate 1,100 1,100 1,10
Slide 29: Consolidated Balance Sheet: Segment Breakdown
Consolidated Balance Sheet: Segment Breakdown (Million yen) Cash and Operating Operational Real Estate Intangible Investments Segment Cash Loans Investments in Fixed Assets Other Assets Total Assets For Sale Assets in Securities Equivalents Receivable Securities Asset Management 442 - - - 47 1,805 -
Slide 30: Consolidated Risk-Based Balance Sheet
Consolidated Risk-Based Balance Sheet Consolidated Balance Sheet Consolidated Risk-Based Balance Sheet Shareholder Equity Ratio 32.9％ Risk-Based Shareholder Equity Ratio 43.6％ Total Assets JPY 154.0B Non-Recourse Loans & Related Liabilities Non-Recourse Loan- Total Assets Related Assets JPY 37.9B JP
Slide 31: Corporate Loan Detail
Corporate Loan Detail ■ Weighted Average Interest Rate and Average Loan Period (Interest Rate) (Loan Period, Year) 3.0% 11.0 Weighted Average Interest Rate Average Loan Period 2.57% 2.56% 2.5% 9.0 2.22% 7.8 Year 2.0% 7.0 1.96% 1.81% 5.9 Year 1.5% 5.0 4.7 Year 3.6 Year 3.3 Year 1.0% 3.0 Feb FY11 Feb
Slide 32: Asset Management AUM Detail
Asset Management AUM Detail Have shrunk low-profitability private equity real estate funds to drive higher AM fee levels and profitability Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 H1 (12M) (12M) (12M) (12M) Cumulative (6M) Ichigo REIT AUM (Fiscal Year End) 114billion yen 106billion yen 104billion yen 121b
Slide 33: Consolidated P&L: Gross Profit Segment Breakdown
Consolidated P&L: Gross Profit Segment Breakdown (Million yen) Revenues Gross Profit YoY Feb 14 H1 Feb 15 H1 Feb 14 H1 Feb 15 H1 (Gross Profit) Change Change Cumulative Cumulative Cumulative Cumulative Asset Management 2,129 2,042 -87 1,217 930 -287 -23.6% Asset Management Fees 760 712 -48 687 652 -
Slide 34: Consolidated P&L: Segment H1 Actual vs Full-Year Forecast
Consolidated P&L: Segment H1 Actual vs Full-Year Forecast (Million yen) Feb 15 H1 Cumulative (6M) Feb 15 Full-Year Forecast (12M) Segment vs. Full-Year vs. Full-Year vs. Full-Year Revenues Gross Profit Operating Profit Revenues Gross Profit Operating Profit Forecast Forecast Forecast Asset Managemen
Slide 35: Consolidated Balance Sheet: Unrealized Gains
Consolidated Balance Sheet: Unrealized Gains 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 Appraisal Value Location NOI Unrealized Gain as of August 2014 NOI / Book Value af ter write-down as of August 2014
Slide 36: Consolidated Balance Sheet: Assets
Consolidated Balance Sheet: Assets (Million yen) Quarter-on-Quarter 2011/02 2012/02 2013/02 2014/02 2015/02 Q1 2015/02 H1 (in JPY) Assets Current Assets Cash and cash equivalents 12,343 9,791 9,713 24,991 20,493 20,264 -229 Trade notes and accounts receivable 696 1,069 548 451 597 591 -6 Operational
Slide 37: Consolidated Balance Sheet: Liabilities & Net Assets
Consolidated Balance Sheet: Liabilities & Net Assets (Milli yen)) (Million 2015/02 2Q vs 2015/02 1Q Quarter-on-Quarter 2011/02 2012/02 2013/02 2014/02 2015/02 1Q (This quarter) (increase/decrease) Liabilities Current Liabilities Trade notes and accounts payable 47 57 64 132 152 178 +26 Short-term bo
Slide 38: Consolidated P&L
Consolidated P&L (Million yen) Feb 15 H1 Feb 14 H1 Feb 15 Feb 11 Feb 12 Feb 13 Feb 14 Change vs. Cumulative Cumulative Full-Year (12M) (12M) (12M) (12M) (YoY) Forecast (6M) (6M) Forecast Revenues 12,760 18,952 16,397 35,101 9,879 20,586 -10,707 42,000 23.5% Cost of Goods Sold 8,805 15,030 11,422 27,
Slide 39: Consolidated Cash Flows from Operating Activities
Consolidated Cash Flows from Operating Activities (Milli yen)) (Million Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 H1 (12M) (12M) (12M) (12M) Cumulative (6M) Cash Flows from Operating Activities: Income before income taxes 2,889 1,976 1,693 3,933 2,715 p Depreciation 168 166 230 304 256 Share-based compensa
Slide 40: Consolidated Cash Flows from Investing & Financing Activities
Consolidated Cash Flows from Investing & Financing Activities (Milli yen)) (Million Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 H1 (12M) (12M) (12M) (12M) Cumulative (6M) Cash Flows from Investing Activities: Payments into time deposits － -352 0 0 -325 Proceeds from withdrawal of time deposits 40 － 151 －－ A
Slide 41: IGH-Owned Real Estate Portfolio
IGH-Owned Real Estate Portfolio Assets by Type Assets by Location Osaka (As of August 2014) Other Hotel 3% Sendai 2% (Billion yen) Land with 4% 5% Gro nd Lease Ground Other 5% Residential 10% 6% Mixed Office Fukuoka 8% 41% 13% Tokyo 52% Retail Kanto 32% 18% Sendai 56 Tokyo Assets by Size 565 Kanto 1
Slide 42: Reference: Real Estate AUM Accounting Treatment
Reference: Real Estate AUM Accounting Treatment (Million yen) Ichigo REIT Real Accounting 114,450 Estate Treatment AUM Total Unconsolidated Real Estate Fund Real investments Book value of IGH Real Estate for Estate Sale held by Consolidated Real AUM Estate Funds not included in IGH- Owned Real Estat
Slide 44: 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
Slide 45: 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
Slide 46: Ichigo Group Holdings Co., Ltd. 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
Slide 47: Group Structure
Group Structure ‒ Core C B Businesses i =FFull-Service ll S i R Reall E Estate t t and d Cl Clean E Energy ‒ Actively Promoting CSR through Environmental Activities and Sports Sponsorship Hiromi Miyake Full-Service Real Estate and Clean Energy Ichigo Group Holdings Co., Co Ltd. Ltd JASDAQ：2337 Real
Slide 51: 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 — H1 FY2015 Earnings Presentation on 6ix

Ichigo — H1 FY2015 Earnings Presentation

Slide 1: Corporate Presentation H1 (March 2014 – August 2014)

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: New ROE Targets for Shift Up 2016

Slide 6: Shift Up 2016 Mid-Term Plan

Slide 7: Shift Up 2016 Mid-Term Business Plan agenda

Slide 8: Commitment: 100% Shift Up 2016 Achievement

Slide 9: H1 Operating Profit 1.4X, Recurring Profit 1.3X Year-on-Year

Slide 10: Highly-Productive Asset Sales

Slide 11: Segment P&L Breakdown

Slide 12: Full-Service Real Estate

Slide 13: Real Estate Segment Asset Breakdown

Slide 14: Value-Add Segment Asset Breakdown (1)

Slide 15: Value-Add Segment Asset Breakdown (2)

Slide 16: Asset Acquisitions Ahead of Plan

Slide 17: Asset Acquisition Detail – Fukuoka Retail

Slide 18: Value-Add Detail – Kyoto Hotel

Slide 19: Clean Energy

Slide 20: Solar Expansion on Track

Slide 21: Two New Solar Plants Operating from October

Slide 22: Near-Term Solar Earnings

Slide 23: Long-Term Solar Earnings

Slide 24: Appendix: Financial & Real Estate Data

Slide 25: Note on More Detailed Consolidated and Asset Disclosure

Slide 26: Corporate Structure and Earnings Segments

Slide 27: Value-Add Sample Earnings Model

Slide 28: Consolidated Balance Sheet

Slide 29: Consolidated Balance Sheet: Segment Breakdown

Slide 30: Consolidated Risk-Based Balance Sheet

Slide 31: Corporate Loan Detail

Slide 32: Asset Management AUM Detail

Slide 33: Consolidated P&L: Gross Profit Segment Breakdown

Slide 34: Consolidated P&L: Segment H1 Actual vs Full-Year Forecast

Slide 35: Consolidated Balance Sheet: Unrealized Gains

Slide 36: Consolidated Balance Sheet: Assets

Slide 37: Consolidated Balance Sheet: Liabilities & Net Assets

Slide 38: Consolidated P&L

Slide 39: Consolidated Cash Flows from Operating Activities

Slide 40: Consolidated Cash Flows from Investing & Financing Activities

Slide 41: IGH-Owned Real Estate Portfolio

Slide 42: Reference: Real Estate AUM Accounting Treatment

Slide 43: Appendix: About Ichigo Group

Slide 44: Full Service Real Estate & Clean Energy

Slide 45: Corporate History

Slide 46: Ichigo Group Holdings Co., Ltd. Company Profile

Slide 47: Group Structure

Slide 48: MEMO

Slide 49: MEMO

Slide 50: MEMO

Slide 51: Disclaimer