Mitsubishi Estate Company, Limited · TSE:8802

Mitsubishi Estate — FY2023 2Q Earnings Presentation

34 slides from Mitsubishi Estate's earnings presentation, November 2023

  1. Slide 1: Mitsubishi Estate IR Presentation FY2023-2Q

    FY2023 - 2Q (The Fiscal Year Ending March 31, 2024) Mitsubishi Estate IR Presentation For details of the "Long-Term Management Plan 2030", which began from April 2020, please see to the following link. https://www.mec.co.jp/en/ir/plan2030/ Copyright @ MITSUBISHI ESTATE Co., Ltd. All Rights Reserved

  2. Slide 2: Summary

    Summary  Operating Profit down YoY due to a rebound from the earlier capital gains abroad and a decline of incentive fees（non-cash）in FY2023 Investment Management Business. 2Q Results  Progressed as planned; our forecast has already reflected that capital gains and condominium deliveries will conc

  3. Slide 3: FY2023-2Q Overview

    FY2023-2Q Overview Copyright © MITSUBISHI ESTATE Co., Ltd. All Rights Reserved. 2

  4. Slide 4: Income Statement Summary

    FY2023-2Q Overview 1. Income Statement Summary Operating Profit: ¥90.3 bn, Profit Attributable to Owners of Parent: ¥41.5 bn FY2023-2Q FY2022-2Q Millions of yen (rounded down) Change Results Results Operating revenue 587,933 594,565 (6,631) Main Factors Operating profit 90,314 142,078 (51,764) +Busi

  5. Slide 5: Financial Highlights - 2Q

    FY2023-2Q Overview 2. Financial Highlights - 2Q Income Gains proceeded in line. Capital Gains & Condos as well; their earnings are centered in 2H. Operating Profit / YoY Operating Profit / Progress vs. Forecast （ Billions of yen ） （ Billions of yen ） FY2023 Forecast (2Q progress %) 264.0 142.0 Capit

  6. Slide 6: Balance Sheet Summary

    FY2023-2Q Overview 3. Balance Sheet Summary （ Billions of yen ） As of September As of March Assets 30, 2023 31, 2023 Change Inventories 533.3 493.5 39.8 Property, plant and PPE/equity investments 4,570.4 4,416.2 154.2 equipment etc. increased due to Equity investments 836.3 716.4 119.9 progress in i

  7. Slide 7: Interest-Bearing Debt

    FY2023-2Q Overview 4. Interest-Bearing Debt (as of end of September 2023) Consolidated Interest-Bearing Debt Fixed/Floating Rates* Long/Short Terms* Yen/Foreign Currency* （ Billions of yen ） Lease Obligations 1.5 Short-term Floating Foreign currencies ¥580.5 bn Commercial paper 14.1% 9.6% （Floating

  8. Slide 8: Cash Flow Summary

    FY2023-2Q Overview 5. Cash Flow Summary Acquired investment opportunities well in Japan and overseas. Capital gains to be in 2H onward. （ Billions of yen ） Investment Progress （ Billions of yen ） Operating Cash Flow Investing Cash Flow FCF Initial 2Q YTD % Plan Act Decrease (Increase) Capital invest

  9. Slide 9: FY2023 Forecasts

    FY2023 Forecasts Copyright © MITSUBISHI ESTATE Co., Ltd. All Rights Reserved. 8

  10. Slide 10: Income Statement Forecasts - Current vs Original Forecasts

    FY2023 Forecasts １. Income Statement Forecasts - Current vs Original Forecasts (as of May 11, 2023) Revised operating profit by segment with the latest status. The total remains unchanged. FY2023 FY2023 Current Original Change Millions of yen (rounded down) Forecast Forecast Operating revenue 1,469,

  11. Slide 11: Income Statement Forecast - Current vs. FY2022 Results

    FY2023 Forecasts 2. Income Statement Forecast - Current vs. FY2022 Results Profit attributable to owners of parent is expected to hit another high for three years straight. FY2023 FY2022 Millions of yen (rounded down) Change Forecast Actual Operating revenue 1,469,000 1,377,827 91,173 Main factors O

  12. Slide 12: Cash Flow Forecast

    FY2023 Forecasts 3. Cash Flow Forecast Investments to continue for profit growth. FCF to be managed through returns for controlling balance sheet. （ Billions of yen ） Investment Operating Cash Flow Investing Cash Flow FCF assumption （ Billions of yen ） Initial Plan 投資 Capital Investments 424.0 Decre

  13. Slide 13: Strategy and Progress

    Strategy and Progress For details of the "Long-Term Management Plan 2030", please refer to the following link. https://www.mec.co.jp/en/ir/plan2030/ Copyright © MITSUBISHI ESTATE Co., Ltd. All Rights Reserved. 12

  14. Slide 14: Environment Analysis and Our Strengths

    Strategy and Progress Environment Analysis and Our Strengths Environment Changes Surging construction cost Japan Overseas Inflation Higher energy cost Rising interest rates Financial Env. Anticipated pay/rent increases The impact on Real Estate market Monetary Policy Anxiety over the policy change O

  15. Slide 15: Domestic Asset: Operating Profit

    Strategy and Progress(Domestic Asset Business) 1. Domestic Asset : Operating Profit Advancing Marunouchi Redevelopment/ Rental Profit Operating Profit Vacancy Rate of +¥50.0bn Redeveloped New Projects* Marunouchi / Office Goals of 2030 （ Billions of yen ） 19buildings /35 in total 1.1~1.3million ㎡ 2.

  16. Slide 16: Domestic Asset: Vacancy Rates

    Strategy and Progress (Domestic Asset Business) 2. Domestic Asset : Vacancy Rates Tokyo Central 5 Wards（Market） vs. Marunouchi Offices (MEC standalone) 10.0% 9.19% 9.04% Marunouchi Offices (MEC standalone) 9.0% 8.75% 8.56% Tokyo central 5 wards (Market average) 8.0% 6.70% 7.0% 6.37% 6.47% 6.41% 6.48

  17. Slide 17: Domestic Asset: Growth in Income Gain

    Strategy and Progress (Domestic Asset Business) 3. Domestic Asset︓Growth in Income Gain NEW Rental Profit etc. (Income Gain) Rental Profit （ Billions of yen ） Approx. +¥40.0bn 190 180 170 160 150 140 130 120 145.6 143.1 139.0 137.0 110 100 FY2020 FY2021 FY2022 FY2023(F) FY2030(F) Upcoming Projects F

  18. Slide 18: Domestic Asset: Capital Recycling Business

    Strategy and Progress (Domestic Asset Business) 4. Domestic Asset︓Capital Recycling Business (Capital Gains) Commercial Property’s Non-operating Capital Recycling Asset︓ Assets ¥1.035 tn 34% Office Hotel 54% Operating 2% NOI Yield Assets 66% 7% * Domestic rental etc. real estate excluding Retail Mar

  19. Slide 19: Domestic Asset: Capital Gain Results

    Strategy and Progress (Domestic Asset Business) 5. Domestic Asset︓Capital Gain Results Capital Gain by Asset Performance (Major properties sold) （ Billions of yen ） Office Logistics Residential FY2022 ¥66 bn 66.0 ■the ARGYLE aoyama Usage︓Office / Total floor area︓23,100㎡ ■Logista・Logicross Ibaraki S

  20. Slide 20: Domestic Asset: Rental Apartments, etc.

    Strategy and Progress (Domestic Asset Business) 6. Domestic Asset︓Rental Apartments, etc. (Capital Gain) Capital Gain in Residential Business Assets （ Billions of yen ） Rental Apartments Other Income Property (Assisted living residence, student apartment) 25 20 Under development 39% Under developmen

  21. Slide 21: International Asset: Business Strategies

    Strategy and Progress (International Asset Business) 1. International Asset : Business Strategies NEW BS / PL Outline Late 2020s Results over last 3 yrs. Aims to reach 2030 target faster （FY’20-FY’22 average） As of the release of LT Management Plan 27% 51% Operating Profit Business Profit Operating

  22. Slide 22: International Asset: Operating Profit

    Strategy and Progress (International Asset Business) 2. International Asset : Operating Profit NEW Operating Profit Capital Gains +¥50.0bn （ Billions of yen ） Goals of 2030 US Europe Asia Logistics, Rental 89.4 Offices Focus on investment 90 apartments Rental apartments efficiency 80 Size of ¥20 bn

  23. Slide 23: International Asset: Growth in Rental Profit

    Strategy and Progress (International Asset Business) 3. International Asset︓Growth in Rental Profit（Income Gain） NEW Rental Profit Forecasts of Major Properties to Be Held Long-Term Rental Profit （ Billions of yen ）*Rounded down 35 approx. +¥10.0 bn 30 25 20 15 10 21.0 23.0 18.0 19.0 5 0 FY2020 FY20

  24. Slide 24: International Asset: Capital Recycling Business

    Strategy and Progress (International Asset Business) 4. International Asset︓Capital Recycling Business (Capital Gain) Investment Name (Including tentative names)*1 Size*2 Expected NOI Amount Capital Recycling Assets Trinity Tower（Indonesia・Office・Retail） 143,200㎡ Hangzhou ALPHA PARK（China・Office） 23

  25. Slide 25: International Asset: Capital Gain Results

    Strategy and Progress (International Asset Business) 5. International Asset︓Capital Gain Results Capital Gain by Area Performance FY2022 In Europe and other areas ¥61bn （ Billions of yen ） US Europe Asia 61.0 Central St. Giles Location Lonndon Hanover Location Pennsylvania 60 Usage Office Usage Logi

  26. Slide 26: Non-Asset's Progress: Operating Profit

    Strategy and Progress (Non-Asset Business) 1. Non-Asset’s Progress : Operating Profit Operating Profit （ Billions of yen ） Investment Management Business Goals of 2030 +¥50 bn Global Platform Growing AuM Japan 60 Sep. 2023 50 Europe Global US ¥5.7tn Platform As of Jan. 2020, 32.2 release of LT Plan

  27. Slide 27: Non-Asset's Progress: Investment Management

    Strategy and Progress(Non-Asset Business) 2. Non-Asset’s Progress︓Investment Management Released new targets for FY2030, AuM ¥10 trillion and Operating Profit ¥30 billion JRE MJIA US Europe Asia/Oceania Overseas Domestic 200 （ Billions of yen ） 1,100 450 Target Total Total ¥10 tn ¥ 3.1tn ¥ 5.4tn 1,1

  28. Slide 28: Non-Asset's Progress: Hotel Management

    Strategy and Progress(Non-Asset Business) 3. Non-Asset’s Progress︓Hotel Management Business Status of Royal Park Hotels and Resorts （Yen） 25,000 90.0% ADR RevPar Ocupancy Rate 74.5% 78.4% 73.8% 80.0% 74.1% 20,000 65.9% 70.0% 63.7% 61.1% 53.1% 60.0% 49.5% 49.9% 15,000 48.9% 50.0% 42.8% 40.0% 10,000 3

  29. Slide 29: Shareholders Returns

    Shareholders Returns Copyright © MITSUBISHI ESTATE Co., Ltd. All Rights Reserved. 28

  30. Slide 30: Shareholders Returns (Dividend)

    Strategy and Progress(Shareholders Returns) 1. Shareholders Returns (Dividend） Steadily raised DPS by profit growth and share buybacks. Plan to increase dividend by ¥2 （ Billion of yen ） （+5.3%) （Yen） 180 Profit Dividends per share 45 40 160 38 40 36 140 33 35 31 30 120 30 26 166.0 165.3 100 155.1 2

  31. Slide 31: Shareholders Returns (Share Buyback)

    Strategy and Progress (Shareholders Returns) 2. Shareholders Returns (Share Buyback) Visibly lifted the total return by ¥230 billion of share buybacks. Total Return Ratio (moving avg of the most recent 3 years) Over 50% （ Billion of yen ） Dividend ¥230bn 160 Share Buyback Share Buybacks 80.0% 140 To

  32. Slide 32: ROA/ROE/EPS

    Strategy and Progress (Shareholders Returns) 3. ROA/ROE/EPS FY2022 actuals: ROA 4.4%, ROE 7.9%, EPS ¥125.54 ROA* ROE 12% 10% 10% 8.5% 8.1% 7.8% 7.9% 7.7% 8% 7.6% 7.3% 6.6% 6% 5.6% 5.2% 5% 4.4% 4.4% 4.0% 4.1% 3.8% 3.8% 3.8% 4% 3.6% 3.3% 3.3% 2% 0% FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY20

  33. Slide 33: ROA/ROE/EPS

    Strategy and Progress (Shareholders Returns) 4. ROA/ROE/EPS Foreseeing 3rd straight record-high in EPS. ¥200 200 EPS 180 160 EPS ¥130.08 (3rd straight record 140 high, YoY+3.6%) 120 100 200 80 125.54 130.08 60 116.45 108.64 96.97 101.34 40 86.78 74.00 60.13 52.85 20 0 FY2014 FY2015 FY2016 FY2017 FY2

  34. Slide 34: Contact Information

    Disclaimer This material is provided for information purposes only. Nothing herein is intended to constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any specific products by Mitsubishi Estate Co., Ltd. (the Contact Information “Company”) The contents of this mater

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