Ichigo Inc. · TSE:2337

Ichigo — Asset Managers Holdings — Q2 FY2010 Earnings Presentation

33 slides from Ichigo's earnings presentation, Oct 19, 2009

  1. Slide 1: Asset Managers Holdings

    Asset Managers Holdings Feb. 2010 Fiscal Year Q2 (June-August 2009) Corporate Presentation October 19, 2009

  2. Slide 2: Feb. 2010 Fiscal Year Q2 Summary

    ‡ Feb. 2010 Fiscal Year Q2 Summary 9 Focus on Cashflow 9 Continued Asset Dispositions 9 Repayment of Corporate Debt 9 Strengthened Balance Sheet 9 Return to Profitability 9 Adjusting Full-Year Earnings Forecasts 9 Maintaining Fully Marked-to-Market Balance Sheet ‡ View on Current Market Environment

  3. Slide 3: Feb. 2010 Fiscal Year Q2 Summary

    Feb. 2010 Fiscal Year Q2 Summary 3

  4. Slide 4: Focus on Cashflow

    Focus on Cashflow ‡ C/F and B/S = Fundamental ‡ Operating Cashflow Strongly Positive for the Last Five Quarters 9 Plus ¥30 billion over the period ‡ Dramatically Decrease Risk Profile through Slimmed B/S Quarterly Consolidated Operating Cashflow (Billion yen) FY2/10 Q2 Cumulative +4.2 ＋7.5 +3.3 +5.2

  5. Slide 5: Continued Asset Dispositions

    Continued Asset Dispositions ¥6.1 Billion Raised from H1 Asset Sales, Focused on Private Equity (7 Domestic & 8 Overseas) ¥3.3 billion ¥6.1 billion Private Equity ¥2.8 billion ¥3.3 billion Private Equity Private Equity ¥5.2 billion ¥1.9 billion Real Estate Real Estate ¥0.9 billion ¥0.9 billion FY2/1

  6. Slide 6: Repayment of Corporate Debt

    Repayment of Corporate Debt Decreased Corporate Debt by ¥8.4 billion in H1 - ¥4.4 billion Repayment: -2.4 Total borrowings 36.6 Convertible Bond Conversion: -1.9 - ¥4.0 Total borrowings (Billion yen) 32.6 - ¥4.4 Total borrowings 28.2 Short-term Debt 有利子負債・CB 15.5 ●億円 Short-term Debt 15.2 Short-term

  7. Slide 7: Strengthened Balance Sheet

    Strengthened Balance Sheet ‡ Shrank B/S through Asset Sales ‡ Net Assets Increased by ¥6.2 billion 9 Retained Earnings: ¥1.2 billion 9 CB Conversion: ¥2.9 billion 9 Some Higher Asset Values due to Market Rebound: ¥1.9 billion Equity Ratio: 17.3% 17.3% Equity Ratio: 24.5% Equity Ratio: 31.1％. - ¥1.4

  8. Slide 8: Return to Profitability

    Return to Profitability ‡ Returned to Profitability from this Fiscal Year ‡ Exceeded Initial Half-Year Profit Forecast （Million yen） Revenues (Cumulative) Net Profit / Loss (Cumulative) 50,444 Exceeded Initial Forecast 44,168 for FY2/10 H1 37,030 Net Profit Revenues Revenues Revenues 18,200 12,300 1

  9. Slide 9: Adjusting Full-Year Earnings Forecasts

    Adjusting Full-Year Earnings Forecasts （Million yen） After Revision Before Revision Change Explanations Revenues 21,100 18,200 +2,900 Asset dispositions are proceeding above forecast Operating Profit 1,100 2,200 -1,100 Write-down of an operating asset Recurring Profit 400 1,400 -1,000 Same as above

  10. Slide 10: Maintaining Fully Marked-to-Market B/S

    Maintaining Fully Marked-to-Market B/S ‡ Eliminate Any Unrealized Losses from B/S ‡ Continually Mark Assets In-line with Current Market Pricing Current Cap Rates on AMH Real Estate Assets Cap rate (at acquisition) Cap rate (current) Area NOI/acquisition value NOI/current value Tokyo 5.9% 7.6% Balanc

  11. Slide 11: View on Current Market Environment

    View on Current Market Environment 11

  12. Slide 12: Real Estate

    Real Estate ‡ Cap Rates Appear to Have Peaked Out and Have Begun Vacancy Rates of Offices in Tokyo Five Wards Declining for Some Properties 40% New 9 Particularly Class A office and newly built residential 35% Existing 9 Real estate values have declined due to falling rents, 30% especially in office

  13. Slide 13: Investors and Lenders

    Investors and Lenders ‡ Emerging Appetite among Some Equity Investors 9 Primarily opportunistic 9 3-5 year investment horizon 9 Office buyers are looking at NCF after factoring in future rent declines 9 However, sellers are looking at current NCF, so there remains a gap between buyers and sellers ‡

  14. Slide 14: Forward Strategy

    Asset » \ Managers Solutions For The Future. Forward Strategy 14

  15. Slide 15: Q2 Developments and Framework

    Q2 Developments and Framework ‡ Q2 Developments Current Developments ・Work-in-progress. We are in discussions with a number of equity investors and lenders about new fund New Fund Launches launches, but buyer and seller views on cap rates still appear to be somewhat apart, although that gap appears

  16. Slide 16: Refinance to Preserve Existing Revenue Streams

    Refinance to Preserve Existing Revenue Streams ‡ In Cases where Equity Value Remains, Refinance to Maintain AM Fee Revenues and Preserve Potential Future Equity Upside ‡ Recent Example: Refinanced ¥12 billion for 5 Years by Merging Several Funds into a New Fund ¥12 Billion Refinancing Fund A NRL Rea

  17. Slide 17: Radically Improved Profitability Structure

    Radically Improved Profitability Structure ‡ Significant Reductions in SG&A Costs to Support Higher Profitability SG&A Costs (one-time costs such as allowance for bad debts are eliminated) - ¥2,482 million (-50%) FY2/09 Actual - ¥900 million (-36%) ¥4,982 million FY2/10 Forecast ¥2,500 million FY2/1

  18. Slide 18: Appendix: Pro Forma Financial Data

    Appendix: Pro Forma Financial Data 18

  19. Slide 19: Pro Forma Financials

    Pro Forma Financials ‡ Under Japanese accounting rules, SPCs in which AMH is a greater than 50% investor or SPCs for which AMH is the asset manager and no single equity investor holds more than 50% of the total investment must be consolidated onto AMH’s balance sheet. ‡ In order to more accurately r

  20. Slide 20: Balance Sheet (Pro Forma)

    Balance Sheet (Pro Forma) ‡ Slimmer Balance Sheet and Growing Shareholder Equity ‡ CB Conversion of ¥1.94 billion （Million yen） FY2/09 FY2/10 Q1 FY2/10 Q2 Change (QoQ) Total Assets 46,780 43,533 42,079 -1,454 Cash and Cash Equivalents 5,395 4,543 6,598 2,055 Investment (Real Estate) 10,144 10,056 10

  21. Slide 21: P&L (Pro Forma)

    P&L (Pro Forma) ‡ Return to Profitability from this Fiscal Year ‡ Significantly Lower Cost Structure （Million yen） FY2/10 Q2 FY2/09 FY2/10 Q1 FY2/10 Q2 Cumulative Revenues 10,593 2,984 3,918 6,902 Cost of Revenues 28,047 2,312 2,803 5,115 Gross Profit -17,454 672 1,115 1,787 SG&A 11,513 627 528 1,15

  22. Slide 22: P&L Breakdown (Pro Forma)

    P&L Breakdown (Pro Forma) （Million yen） FY2/10 Q2 FY2/09 FY2/10 Q1 FY2/10 Q2 Change (QoQ) Cumulative Revenues 10,593 2,984 3,918 934 6,902 Fees 3,181 534 428 -106 962 Equity Dividends 241 194 88 -106 282 Rents 730 185 194 9 380 Sales of Real Estate 5,631 935 931 -4 1,866 Sales of Equity 117 1,088 2,

  23. Slide 23: Appendix: Consolidated Financial Data

    Appendix: Consolidated Financial Data 23

  24. Slide 24: Balance Sheet (Consolidated)

    Balance Sheet (Consolidated) ‡ Slimmer Balance Sheet and Growing Shareholder Equity ‡ CB Conversion of ¥1.94 billion （Millions yen） FY2/09 FY2/10 Q1 FY2/10 Q2 Change (QoQ) Total Assets 140,875 122,038 118,229 -3,809 Cash and Cash Equivalents 18,449 15,169 16,267 1,098 Operating Investments in Securi

  25. Slide 25: Breakdown of Assets (Consolidated)

    Breakdown of Assets (Consolidated) （Million yen） FY2/09 FY 2/10 Q1 FY2/10 Q2 Cha nge in the Outside The Outside The Outside The Company's Amount Investors' Company's Amount Investors' Company's Amount Investors' Company's Interests (B-A) Interests Interests Interests Interests (A) Interests Interest

  26. Slide 26: P&L (Consolidated)

    P&L (Consolidated) ‡ Return to Profitability from this Fiscal Year ‡ Significantly Lower Cost Structure （Million yen） FY2/10 Q2 FY2/10 H1 FY2/09 FY2/10 Q1 FY2/10 Q2 Progress Cumulative Initial Forecast Revenues 50,444 8,722 6,704 15,426 12,300 125.4% Cost of Revenues 80,408 7,547 5,794 13,342 － － Gr

  27. Slide 27: P&L Breakdown (Consolidated)

    P&L Breakdown (Consolidated) （Million yen） FY2/10 Q2 FY2/09 FY2/10 Q1 FY2/10 Q2 Change (QoQ) Cumulative Revenues 50,444 8,722 6,704 -2,018 15,426 Fees 1,623 287 240 -47 527 Equity Dividends 143 254 111 -143 365 Rents 9,178 1,835 1,773 -62 3,608 Sales of Real Estate 30,500 3,621 1,170 -2,451 4,791 Sa

  28. Slide 28: Appendix: Real Estate

    Asset » \ Managers Solutions For The Future. Appendix: Real Estate 28

  29. Slide 29: Cumulative Assets Under Management

    Cumulative Assets Under Management ‡ Historic Cumulative AUM Exceeds ¥1 trillion ‡ Strong Long-Term Track Record of Managing Real Estate for Clients (billion yen) 1,400.0 REIT Operating 1,164.5 1,171.3 Development 1,128.4 （141 funds） （141 funds） 1,200.0 （137 funds） 64.0 64.0 64.0 1,000.0 (As of Augu

  30. Slide 30: Assets Under Management

    Assets Under Management ‡ Expertise across Full Spectrum from Development to Operating Assets (As of August 2009) ‡ 90% of Current Portfolio is Comprised of Operating Assets Development (billion yen) 10% 600.0 REIT Operating 530.1 Developmen t 496.0 500.0 62.0 426.5 Operating 90% 400.0 356.2 330.6 2

  31. Slide 31: Real Estate Portfolio

    Real Estate Portfolio ‡ Mainly Office, although Significant Track Record across a Wide Variety of Asset Types ‡ Particular Experience in Managing Small & Mid-Size Assets from ¥1 – 5 billion in Tokyo AUM by Type # of Properties by Type (As of August 2009) (Unit: # of buildings) AUM by Location # of P

  32. Slide 32: AMH Real Estate Cap Rates

    AMH Real Estate Cap Rates ‡ Early Adoption of Lower of Cost or Market Rule ‡ Continually Mark Assets In-line with Current Market Pricing and Eliminate Any Unrealized Losses from B/S (As of August 2009) Real Estate Investments held by Funds (SPCs) (million yen) Book value Cap rate (at acquisition) Ca

  33. Slide 33: 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 of the figures, information, estimates or other statements included herein, and accepts n

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