FY20/2 Q1 Corporate Presentation
January
2019
July 11,11,
2019

Ichigo (2337)© Ichigo Inc. All rights reserved.

www.ichigo.gr.jp/en

Make The World
More Sustainable© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

Contents
FY20/2 Q1 Earnings‒ FY20/2 Q1 Summary‒ Operating Profit +43%, Net Income +34%, EPS +37% (YOY)‒ Segment Earnings Details

Powerful Value-Add Business Model Underpins Growth‒ Business Model (1) Stock + Flow Earnings‒ Business Model (2) Embedded Forward Earnings‒ Business Model (3) Value-Add Drives Durable Value Growth‒ Business Model (4) Robust Cash Generation‒ Strong Financial Base
‒ New Uncollateralized 10 Year Commitment Line

Sustainable Growth as a Sustainable Infrastructure
Company‒ AM: Growth Support for TSE REITs & YieldCo‒ SRE: Selective on Acquisitions & Sales‒ SRE: Retail Asset Sold in Q1‒ SRE: Hotel Asset Sold in Q1‒ SRE: Incorporating Global Value-Add Best Practices‒ CE: FY18/2 – FY20/2 New Plant Development‒ CE: Scaling Rapidly (In-Development Plants +94%)© Ichigo Inc. All rights reserved.

‒ New Business Entry Hotel Operator Market Entry: Hakata Hotels
 Ichigo Animation Establishment – Anime + Real Estate
Synergies Real-World Augmented Reality (AR) Game TSUBASA+‒ Share Buyback

Ichigo’s Commitment to ESG‒ Ichigo Sustainability Policy‒ Ichigo ESG – Environmental‒ Ichigo ESG – Social‒ Ichigo ESG – GovernanceAppendicesFinancial & Real Estate Data
Power Up 2019 Mid-Term Plan Achievement
Ichigo 2030: Ichigo as a Sustainable Infrastructure
Company‒ Go for Growth‒ Go Beyond Real Estate to Address Broad Needs‒ KPI Targets‒ Shareholder Return Policy‒ FY20/2 Initiatives

5

FY20/2 Q1 Earnings© Ichigo Inc. All rights reserved.

6

FY20/2 Q1 Summary
Durable Earnings Model
Stock Earnings/Fixed Expenses

214%

Stock Earnings Growth(Gross Profit: JPY M)

AssetManagement (AM)+5%

Sustainable
Real Estate (SRE)

+5%

Clean
Energy (CE)
-3%*

+9%

3,990

4,171

Gross Profit
JPY 10.3B

504

FY19/2 Q1

FY20/2 Q1

546

FY19/2 Q1 FY20/2 Q1

2,925

3,070

FY19/2 Q1 FY20/2 Q1

571

555

FY19/2 Q1 FY20/2 Q1* Due to increased tax burden from full-year operation of Showamura plant

Strong SRE Flow Earnings

Share Buyback– Q1 Asset Sales: JPY 19.6B– Amount: JPY 3B (maximum)– Gains on Sales: +66% YOY; 2.9X
Unrealized Gains– Number of Shares: 10,000,000(maximum)– GPM: 29%– Buyback Period: July 12, 2019 –October 11, 2019

© Ichigo Inc. All rights reserved.

Anime + Real Estate– New anime series written anddirected by Mamoru Oshii (Ghost in
the Shell) and co-directed by Junji
Nishimura– Increase value of AKIBA CULTURES
ZONE, Ichigo’s major retail asset in
Akihabara, by embedding it in new
anime series– New non-asset earnings stream via
sales of anime-related goods
7

Operating Profit +43%, Net Income +34%, EPS +37% (YOY)
Significant Increases YOY – On Track to Achieve Full-Year Forecast(JPY million)

FY20/2 Q1Operating Profit

5,992

8,537

+42.5%

26,500Recurring Profit

5,217

7,607

+45.8%

22,800Net Income

3,547

4,768

+34.4%

15,000JPY 7.15

JPY 9.76+36.5%

JPY 30.39

EPS© Ichigo Inc. All rights reserved.

YOY

Full-Year
Forecast

FY19/2 Q1

8

Segment Earnings Details− Asset Management: Base AM Fees +9% YOY− Sustainable Real Estate: Rental Income +5% YOY
Gains on Sale +66% YOY− Clean Energy: Power Generation Gross Profit -3% on Increased Tax
Burden from Full-Year Operation of Showamura Power Plant(JPY million)

Operating Profit
Segment

Asset Management (AM)FY19/2 Q1(Actual)

FY20/2 Q1(Actual)Earnings Drivers(Parentheses show YOY change in
Gross Profit)

Full-Year
Forecast

YOY

Base AM Fees 522 (+41)
Acquisition/Disposition Fees 11 (-31)
Ichigo Office Cash Flow Performance Fees 67 (+67)
Ichigo Green Operator Fees 13 (-1)

454

519

+14.4%

1,821

5,105

7,644

+49.7%

23,312

Rental Income 3,070 (+145)
Gains on Sales 5,678 (+2,267)
Gains on Overseas Sales 373 (+373)

Clean Energy (CE)

421

377

-10.3%

1,367

Power Generation Revenue 555 (-16)

Adjustment (including offsets ofcross-segment transactions)

11

-5

–

–

5,992

8,537

+42.5%

26,500

Sustainable Real Estate (SRE)

Total© Ichigo Inc. All rights reserved.

9

Powerful Value-Add Business Model Underpins Growth© Ichigo Inc. All rights reserved.

10

Business Model (1) Stock + Flow Earnings
33.8

Stock Earnings (Primarily Rental Income, Base AM Fees, and Power Generation Revenues)
32.1
Flow Earnings (Primarily Gains on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expenses)

Gross Profit

27.9

27.0

(JPY billion)

18.0

15.2

20.8

14.1

13.0

9.0

12.9
10.3
4.6
16.9

8.2
6.0

11.8

0.9
5.0

8.3
5.6
4.1

FY13/2

14.0

13.8

2.6

15.8

6.1

4.2

FY14/2

5.1
FY15/25.8

FY16/2

6.5

FY17/2

6.4

FY18/2

8.2

7.1
4.2
FY19/2

1.9

FY20/2 Q1

Note: From FY19/2, SPC-related non-recourse loan interest expenses are accounted as Fixed Non-Operating Expenses rather than COGS.
Data from FY13/2 to FY18/2 has been restated using this new accounting treatment to facilitate accurate YOY comparisons.
© Ichigo Inc. All rights reserved.

FY20/2(Forecast)11

Business Model (2) Embedded Forward Earnings
Full Economic Earnings From Value-Add Exceed Accounting Earnings
Value-Add Thus Generates Significant Unrealized Gains that are an“Earnings Bank” for Future Periods(JPY billion)

50.9
36.8

45.4

28.1
19.6
12.3
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

Appraisal Value-Based Unrealized Gains© Ichigo Inc. All rights reserved.

12

Business Model (3) Value-Add Drives Durable Value Growth
2.5X

Gains on Sales Consistently Exceed
Appraisal Value-Based Unrealized Gains
Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

GPM
26%

4.4X
GPM
34%

1.6X
GPM
14%

GPM = Gross Profit Margin

2.2X
GPM
23%

Unrealized
Gains
vs. Book Value
9%

JPY 12.0B
Unrealized
Gains
vs. Book Value
12%

2.9X

Unrealized
JPY 15.0B
Gains
vs. Book Value
14%

GPM
29%

JPY 10.5B

JPY 7.2B

JPY 6.4B

JPY 3.3B

FY16/2© Ichigo Inc. All rights reserved.

Unrealized
Gains
vs. Book Value
14%

JPY 5.9B

JPY 2.7B

FY17/2

FY18/2

Unrealized
Gains
vs. Book Value
14%

JPY 5.6B

JPY 1.9B
FY19/2

FY20/2 Q1
13

Business Model (4) Robust Cash Generation
Economic Operating Cash Flow Exceeds Net Income(JPY billion)

Net Income
Economic Operating Cash Flow

+66%
+44%

+32%

+19%

25.5
21.5
17.1
12.9

14.9

14.0

16.7

15.4

FY16/2
FY17/2
FY18/2
FY19/2
Note: Economic Operating Cash Flow = Cash Flows from Operations excluding net investment in Real Estate and Power Plants for Sale
© Ichigo Inc. All rights reserved.

14

Strong Financial Base
Average Interest Rate and Loan Term

Weighted Average Loan Period
Weighted Average Remaining Loan Maturity
Weighted Average Interest Rate

(Interest Rate)(Loan Term, Years)

2.5%

12
10.8 years

2.0%

10.3 years

9.8 years

8.7 years

9.0 years

1.96%

10.2 years

9

9.6 years
8.3 years
5.9 years

8.3 years

7.8 years

7.6 years

1.71%

7.5 years

1.5%6
5.5 years

1.41%
1.24%

1.04%

1.0%

0.97%

3
0.91%

0.5%

0
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2 Q1

Term Structure of Loans
Short-Term

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

10% (JPY 15.2B)

86%(JPY 26.1B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

90%(JPY 134.0B)

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2 Q1

14% (JPY 4.1B)

Long-Term© Ichigo Inc. All rights reserved.

15

New Uncollateralized 10 Year Commitment Line
New JPY 10B Mizuho Bank-Led 10 Year Commitment Line
− Total JPY 20B, including JPY 10B Mizuho Bank line initiated lastSeptember− Ongoing, revolving credit line
− Enables Ichigo to flexibly and repeatedly borrow within the commitmentline amount
Lenders
Commitment Line Amount
Use of Proceeds
Drawdown Period
Loan Final Repayment Date

© Ichigo Inc. All rights reserved.

Mizuho Bank-led syndicate
JPY 10B
Real estate acquisitions
June 28, 2019 to June 30, 2022 (3 years)
June 29, 2029 (10 years)

16

Sustainable Growth as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

17

Asset Management

Growth Support for TSE REITs & YieldCo
OfficeHotel

Ichigo Office(8975)

Green Infrastructure

Ichigo Hotel(3463)

Ichigo Green(9282)

IPO

IPO

IPO

October 12, 2005

November 30, 2015

December 1, 2016

Portfolio

Portfolio

Portfolio

85 Assets JPY 203.2B

22 Hotels JPY 52.9B

15 Plants JPY 11.4B

Dividend Yield (as of 2019/7/5)

Dividend Yield (as of 2019/7/5)

Dividend Yield (as of 2019/7/5)

4.1%

4.8%

5.7%

Characteristics

Characteristics

Characteristics

・ Specialized Office REIT focused on midsize offices driving stable earnings growth
and tenant satisfaction

・ Specialized Hotel REIT focused on stayonly hotels, a hotel type that is in highdemand and has earnings potential, todrive income stability and earnings growth・ Solar YieldCo focused on driving
shareholder value via income stability andearnings growth and contributing toJapan’s self-sufficiency in clean energy

・ First (and only) J-REIT to adopt a no
fixed-fee, performance fee-only structure

・ Japan’s first 10-year earnings forecast

Growth Support

Growth Support

Growth Support

Provided a high-quality Hakata office asset

Provided a hotel to support increased NOI
and diversify portfolio

Operating all plants and providing ongoing
performance guarantee

・18 consecutive periods of dividend growth,
No. 1 among all J-REITs© Ichigo Inc. All rights reserved.

18

Sustainable Real Estate

Selective on Acquisitions and Sales− Continuing Sellers’ Market – FY20/2 Q1 Gross Profit Margin: 29%− Ichigo Owners
Acquisitions: JPY 8.91B (43% of total); Sales: JPY 377M (2%)(Sales Seasonality due to Client Acquisition Activity Concentrated in H2)
FY20/2 Q1 Net Acquisitions of JPY 1B(JPY million)

Acquisitions

Sales

Difference(A) - (B)No. of Assets

Book Value (A)No. of Assets

Sale Price (B)Office

3

6,131

4

6,040

+91

Hotel

–

–

3

4,994

-4,994Retail

–

–

2

7,182

-7,182

Residence

14

10,704

4

1,178+9,526

Logistics

1

2,374

–

–

+2,374Ground Lease

1

69

1

159

-90

Other

3

1,274

–

–

+1,274

Total

22

20,55314

19,553+1,000Note: Book value of sold assets is JPY 13,892 million.
© Ichigo Inc. All rights reserved.

19

Sustainable Real Estate

Retail Asset Sold in Q1
Holding Period
Location

5 years
Retail district near Harajuku Station
Located along side street, resulting in lack of visibility
Acquired & fully leased up vacant building following departureof its sole tenant
Executed fixed-term leases with new tenants to create flexibility to
re-tenantValue-Add

Gain on Sale > Unrealized Gains

GPM 52%
3.1X

JPY
383M
Appraisal-Based Unrealized Gains© Ichigo Inc. All rights reserved.

JPY
1.2B

Gross Profit on Sale
20

Sustainable Real Estate

Hotel Asset Sold in Q1
Holding Period
Location
Value-Addc. 3.5 years
Kumamoto CBD with both business & tourist demand
Improvements to increase quality of guest experience & drive
higher ADR (higher quality & higher efficiency HVAC & water
systems)
Installed LED lighting to reduce electricity consumption & costs

ADR (Average Daily Rate) Growth

NOI GrowthGain on Sale > Unrealized Gains

GPM 29%
+20%

JPY
4,871
Occupancy
86%

At Acquisition

+31%

JPY
5,840
Occupancy
87%

JPY
117M

At SaleAt Acquisition© Ichigo Inc. All rights reserved.

1.6X

JPY
153M

At SaleJPY
398M
Appraisal-Based
Unrealized Gains

JPY
653M

Gross Profit
on Sale21

Sustainable Real Estate

Incorporating Global Value-Add Best Practices
US Hotel Investment (April 2018 – May 2019)
Mezzanine finance to IPO bridge fund used to research US hotel value-add– Investment: JPY 529M
– Return: JPY 373M (IRR 67.5%)

Global Expansion of Self-Storage Business
Acquired equity stake in Easy Storage Taiwan, a Taiwanese
self-storage operator– 49% of outstanding shares– 7 assets, c. 1,300 units– Objectives:
 Establish presence in East Asia amidst growing demand Provide cross-border services to growing number oftourists and business travelers
 Investigate opening multi-purpose facilities in Taiwan,
similar to Baluko Laundry Place Enoshima© Ichigo Inc. All rights reserved.

Ocean View from Baluko
Laundry Place Enoshima

22

Clean Energy

FY18/2 – FY20/2 New Plant Development
Minimal FY20/2 Power Generation Growth due to FY20/2 Plants Primarily Coming
Online in H2 – New Plants Will Drive FY21/2 Growth
Solar Power Plant

FY18/2

FY19/2

FY20/2

FIT

Panel Output Panel Output
(MW)

(MW)

Operation
Start Date

Ichigo Sera Aomizu

JPY 32

2.87

Aug 11, 2017

Ichigo Showamura Ogose

JPY 36

43.34

Ichigo Memuro Nishi-Shikari

JPY 401.32

Feb 5, 2018

Ichigo Kure Yasuuracho Nakahata

JPY 36

2.90

Mar 2, 2018

Ichigo Tsu

JPY 24

2.94

Mar 6, 2018

Ichigo Kasaoka Iwanoike

JPY 24

2.64

Ichigo Toki Tsurusatocho Kakino

JPY 241.31

Apr 12, 2018

Ichigo Itoshima Iwara

JPY 36

1.48

Jan 7, 2019

Ichigo Sakahogi Fukagaya

JPY 21

2.89

May 17, 2019

Ichigo Sennan Kitsuneike

JPY 21

2.86

Jul 4, 2019

Ichigo Takashima Kutsuki

JPY 32

3.74

Ichigo Minakami Aramaki

JPY 36

12.02

Ichigo Hitachi Omiya

JPY 24

2.96

Feb 2020*

Ichigo Toki Tsurusatocho Kakino Higashi

JPY 21

1.68

Feb 2020*

47.54

11.28

26.18

Sep 2, 2017

Mar 20, 2018

Nov 2019*
Jan 2020** Expected© Ichigo Inc. All rights reserved.

23

Clean Energy

Scaling Rapidly (In-Development Plants +94%)
2 New Solar Plants Online (5.8MW) &1 New Solar Plant in Development (14MW) since FY/19/2-end
Power Generation (MW) Growth Timeline
Operating

109.8(+31%)

In-Development
IchigoOperating Plants: 89.4MW
In-Development Plants: 84.4MW (+94%)
Total: 173.8MW(Ichigo Green (9282): 29.4MW )Average FIT
Investment© Ichigo Inc. All rights reserved.

58.9
39.1

72.3
(+155%)

83.6(+16%)

20.4(Wind 14.4)

84.4(Wind 25.9)(Wind 7.4)

89.4

28.4

FY17/2
JPY 37.3
JPY 8.4B

128.5(+17%)

148.3(+15%)

173.8(+17%)

FY18/2
JPY 36.4
JPY 21.1B

FY19/2
JPY 35.3
JPY 23.6B

FY20/2
JPY 34.0
JPY 30.6B

FY21/2
JPY 32.1
JPY 36.3B

FY22/2
JPY 30.6
JPY 41.9B

FY23/2
JPY 30.8
JPY 51.5B
24

New Business Entry

Hotel Operator Market Entry: Hakata Hotels
Hotel Operator in Kyushu/Yamaguchi Region
Seeing Inbound Tourism Growth– Started operations at 3 hotels on June 1; expect
to be operating 7 hotels by August-end

Deploying Propera, Ichigo’s AI-based Hotel
Revenue Management System– Increasing employee productivity via IT
systems to automate administrative tasks so
employees can focus on hospitality & service– Sales of Propera to non-Ichigo hotel operators
expected to drive Ichigo non-asset revenue
streamIchigo's Hotel Il Palazzo in Fukuoka was the first building outside theU.S. to win an American Institute of Architects Honor Award in 1991

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

The Hakata Hotels logo features hakata-ori woven silk textiles that are a local Fukuoka
craft, including the koukou shima weaving pattern in which a thick vertical line issurrounded by thin vertical lines. The thin lines represent children, and the thick lines
parents, expressing the sense of care shown within families. The multiple colors reflect
Ichigo’s values of respect for diversity. The values represented in the logo are also
resonant with Ichigo’s philosophy of Ichigo Ichie, literally meaning “One lifetime, one
encounter.”© Ichigo Inc. All rights reserved.

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsCultureEnergyOther

25

New Business Entry

Ichigo Animation – Anime + Real Estate Synergies
Production of New Anime Series VLADLOVE Written &Directed by Mamoru Oshii, with Co-Director Junji Nishimura– Established Ichigo Animation in April– Introducing tenant collaboration initiatives that go beyond
typical owner/tenant, hands-off leasing relationships– Collaborating across multiple industries to drive new synergies
with Ichigo’s existing businesses

New Earnings via Anime Content Streaming & Sales ofDVDs, CDs, and Goods
Promote Ichigo’s AKIBA CULTURES ZONE as a Global
Anime Landmark– Increase AKIBA CULTURES ZONES’ value by
integrating anime content & events (anime, dance,music, entertainment, retail, tourism, etc.)
 Anime-related & fan events with the VLADLOVE
Series Ambassador idol group at AKIBA CULTURESZONE will drive both customer traffic & higher earnings

AKIBA CULTURES ZONE
Responding
to Diverse
Nursing Care
Needs

Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsCulture© Ichigo Inc. All rights reserved.

Child Care

EnergyOther

26

New Business Entry

Real-World Augmented Reality (AR) Game TSUBASA+
Investing in TSUBASA+, an AR Game that Uses Smartphone GPS
Japanese soccer manga, Captain Tsubasa ×avatars of world-classsoccer players

Game Features

Integrates real-world stadiums around the world
Users can play with professional soccer players
Scheduled for global release in 2020, starting in Europe, Asia, &South America
Sales royalties

Business
Opportunity

Build virtual stadiums at Ichigo assets to drive customer traffic &activity

Development by MIRAIRE Inc.

Increase value of Ichigo assets, collaborate with hotels and retailers,promote community development, & support sports

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsCulture© Ichigo Inc. All rights reserved.

EnergyOther

27

Share Buyback
Purpose: Grow Value for Ichigo’s Shareholders
Share Type
Common shares
Buyback Method
In-market purchases via trust bank
Maximum AmountJPY 3B
Maximum No. of Shares
10,000,000 (2.05% of shares
outstanding, excluding treasury shares)
Buyback Period
July 12, 2019 to October 11, 2019
Reference: 2017 & 2018 Share Buybacks
2017

2018

Number of Shares
8,436,500 (1.7%)
Average Share Price JPY 355
AmountJPY 3B

Number of Shares
7,869,700 (1.6%)
Average Share Price JPY 381
AmountJPY 3B© Ichigo Inc. All rights reserved.

28

Ichigo’s Commitment to ESG© Ichigo Inc. All rights reserved.

29

Ichigo Sustainability Policy
Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its business operations.

Energy Conservation, CO2 Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy
consumption, extending the useful life of assets, actively recycling, reducing waste
production and water consumption, and implementing green procurement measures.

Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independentlyestablished environmental rules. Ichigo also carefully monitors and complies with all applicablechanges in laws and regulations.

Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability
awareness among all Ichigo employees.

Sustainability Performance Communication and Disclosure
Ichigo communicates its Sustainability Policy and Ichigo’s sustainability initiatives to society atlarge. Ichigo also obtains certifications for its sustainability activities on an ongoing basis.

© Ichigo Inc. All rights reserved.

30

Ichigo ESG – Environmental
Sustainable Real Estate
Preserve & Enhance Existing Buildings
to End Wasteful Demolish & Rebuild

Solar and Wind Energy: Safe and Clean
Annual Power Generation
140,167,036 kWh

Annual CO2 Reduction
92,510,242 kg‒ Lengthen useful life of existing real estate‒ Shrink footprint by reducing demolition
waste and use of raw materials, energy,
and human effort for construction

DemolishLowestImpactHighestEfficiency

Equivalent to annual
CO2 emission of
40,200 cars

Equivalent to annual
energy consumption of
38,900 households
The Federation of Electric Power
Companies of Japan
Annual energy consumption per household
3,600kWh

Ministry of Environment
Annual CO2 emission per car c. 2,300kg(FY19/2 Actuals – Includes Ichigo Green)

Environmental Certifications

Environmental Certifications

No injuries or damages at any Ichigo asset or power
plant from 2018 natural disasters

Ichigo Office (8975)

Robust Assets- Real estate: continuous improvements to safety & functionality
via value-add capex- Power plants: site selection and construction based on
detailed specifications customized to local geography
Robust BCP & Realtime Response- Pre-typhoon preventative measures (water shielding,sandbags, etc.) & on-site checks- Overwhelming priority is safety of tenants: on-the-groundconfirmation & on-the-ground response- Ichigo engineering team immediate response: same day onsite safety and engineering inspections to prevent secondary
damage and losses© Ichigo Inc. All rights reserved.

Ichigo Kakyoin
Plaza

Ichigo Hakata Ichigo Hakata Meiji Green Star (Highest Ranking)Ekimae Square
Dori Building
2 years in a row

CASBEE
Rank

CASBEE
Rank

CASBEE
Rank

S

A

A

Other Certifications:
CASBEE, BELS, DBJ Green
Building Certification

31

Ichigo ESG – Social
Sports & Arts
Support Outstanding,World-Class Athletes

Support University of Miyazaki
Faculty of Medicine’s Program forChildren with Cancer‒ Weightlifting‒ Riflery‒ Track & Field

Paralym Art Sponsor‒ Support artists withdisabilities

Children’s Cancer Treatment

Weightlifting Athlete
Hiromi Miyake‒ Issued CSR bond & donated a portion ofunderwriter commission to the Cancer
Program‒ Sponsor volunteer activities in support ofchildren with cancer

Local Communities
Promote Community Development via Sponsorship of
J.League (Only Top Partner with Real Estate Expertise)Strengthen Local Communities, Create Jobs,
and Boost Rural Economies via Smart Agriculture‒ Renovate and upgrade stadiums and help local governments
reduce steep operating and maintenance costs‒ Collaborate with local farmers to increase agricultural
output, improve quality, and raise rural incomes‒ Use real estate expertise to help build stronger and healthierlocal communities‒ Increase Japan’s food self-sufficiency©J.LEAGUE© Ichigo Inc. All rights reserved.

32

Ichigo ESG – Governance
Early Adopter of Independent Three Committee (Nominating,
Audit, & Compensation) Corporate Governance Structure
–
–





Adopted in 2006 to incorporate global best practice
Exceeded legal requirements by establishing Compliance Committee
in addition to Nominating, Audit, and Compensation Committees
Nominating Committee: 5 members (3 Independent Directors)
Audit Committee: 3 members (All Independent Directors)
Compensation Committee: 5 members (3 Independent Directors)
Compliance Committee: 4 members (2 Independent Directors)

Majority Independent Director Board Underpins Strong Governance––Of 9 members of Ichigo’s Board of Directors, 5 are Independent Directors
Includes former CEOs of TSE First Section companies

FY17/2
 Takashi Kawamura (former CEO of Hitachi; stepped down from Ichigo’s board in May 2017upon appointment as Chairman of TEPCO) Masatoshi Matsuzaki (former CEO of Konica Minolta)
 Kosuke Nishimoto (former CEO of Meitec)
FY18/2 onward Masatoshi Matsuzaki (former CEO of Konica Minolta)
 Nobuhide Nakaido (former CEO of SCSK) Kosuke Nishimoto (former CEO of Meitec; stepped down from Ichigo’s board in May 2019
upon appointment as EVP of Misumi Group)© Ichigo Inc. All rights reserved.

33

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

34

Significant Unrealized Gains on Balance Sheet
JPY 52B (Appraisal Value Basis), +2.2% vs. FY19/2-end
Real Estate Directly Held by Ichigo(JPY million)

Book Value as of
May 31, 2019

Expected NOI

Cap Rate
NOI/Book Value after Write-Down

Appraisal Valueas of May 31, 2019Tokyo

136,772

7,630

5.5%

165,907+29,135

Outside Tokyo

101,881

6,836

6.7%

124,824+22,943

Total

238,653

14,466

6.0%

290,731+52,078

Location

Unrealized
Gains* Excludes assets under development (c. JPY 172 million) not generating NOI© Ichigo Inc. All rights reserved.

35

Net Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 370.2B(Book Value JPY 318.2B + Unrealized Gains JPY 52B)
Cash & Cash Equivalents

JPY 30.5B

Non-Recourse Loans &Related Liabilities

JPY 55.4B
Non-Recourse Loans &Related Assets

JPY 76.7B

Operational Loan Investments
JPY 1.3B

Corporate Loans

Operational Securities Investments
JPY 3.8B

JPY 149.2B

Net Consolidated Risk-Based Balance Sheet:
JPY 284.3B(Book Value JPY 232.2B + Unrealized Gains JPY 52B)
Debt
JPY
218B

Non-Recourse Loan-Related ICH Equity

JPY 21.3B

Operational Loan Investments
JPY 1.3B
Operational Securities Investments
JPY 3.8B

Corporate Loans

JPY 118.7B

Real Estate for Sale

JPY 115.7B

Real Estate for Sale

JPY 115.7B

Security Deposits Received
JPY 5.3B

Other JPY 8.1B

Fixed Assets

JPY 80.6B
Securities Investments
JPY 2.5B

Shareholder
EquityJPY 100B

Unrealized Gains
JPY 52B

Post-Tax Unrealized
Gains JPY 36.1B
Tax JPY 15.9B

Security Deposits Received
JPY 5.3B

Other JPY 8.1B

Mark-toMarket
Shareholder
Equity Ratio

36.8%

Other JPY 6.8B

Debt
JPY
132.1B

Fixed Assets

JPY 80.6B
Securities Investments
JPY 2.5B

Shareholder
EquityJPY 100B

Other JPY 6.8B

Unrealized Gains
JPY 52B

Net Risk-Based
Shareholder
Equity Ratio

47.9%

Post-Tax Unrealized
Gains JPY 36.1B
Tax JPY 15.9B

Note: Net Risk-Based Balance Sheet excludes client and non-recourse assets and liabilities and nets out Cash & Cash Equivalents.
© Ichigo Inc. All rights reserved.

36

Business Segments

Asset Management

Asset Management (AM) generates fee income via management of
Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282),
and real estate services related to real estate acquisition, operations,and disposition.

Sustainable
Real Estate

Sustainable Real Estate (SRE) preserves and improves real estate.
Ichigo receives rental income during the period in which it carries out
its value-add, along with earning gains on sale that reflect the realestate’s higher value after the value-add is complete.

Clean Energy

Clean Energy (CE) is utility-scale solar and wind power productionthat produces clean energy and brings productive use to idle land.

Note: The Sustainable Real Estate segment was formerly called Value-Add. In keeping with its recently announced Ichigo 2030 vision,
Ichigo is changing the segment name to Sustainable Real Estate from FY20/2 in order to put full focus on Ichigo’s commitment topreserving and improving real estate as a sustainable infrastructure company.
© Ichigo Inc. All rights reserved.

37

Consolidated Balance Sheet: Segment Breakdown(JPY million)
Cash andCash
Equivalents

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor SalePower
Plants for
Sale

–

–

–

–

–

Sustainable Real Estate

17,103

1,324

3,839

164,703

Clean Energy

2,401

–

–

Company-Wide Assets

19,206–

Total

38,711

1,324

Segment

Asset Management© Ichigo Inc. All rights reserved.

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
Assets

–

824

141

974

1,941

–

74,334

927

1,089

2,971

266,295––

24,540

215

–

1,187

28,344

–

–

–

66

137

1,327

902

21,6403,839

164,703–

98,941

2,104

2,559

6,035

318,220

Total Assets

38

Consolidated P&L: Segment Breakdown(JPY million)

Gross Profit
Segment

FY19/2 Q1

FY20/2 Q1Operating Profit
YOY Change

FY19/2 Q1

FY20/2 Q1YOY Change

FY20/2Full-Year
Forecast

548

626+14.2%

454

519+14.4%

1,821

Stock Earnings (Asset Management Fees)

504

546

+8.3%

–

–

–

–

Flow Earnings (Acquisition/Disposition Fees)

44

79+79.5%

–

–

–

–

6,336

9,114

+43.8%

5,105

7,644

+49.7%

23,312

Rental Income

2,925

3,070

+5.0%

–

–

–

–

Asset Sales

3,411

5,678

+66.5%

–

–

–

–

–

366

–

–

–

–

–

571

555

-2.8%

421

377

-10.3%

1,367

–

–

–

11

-5

–

–

7,454

10,295+38.1%

5,992

8,537

+42.5%

26,500Asset Management

Sustainable Real Estate

Other Flow Earnings
Clean Energy
Adjustment (including offsets of crosssegment transactions)
Total© Ichigo Inc. All rights reserved.

39

Asset Management AUM Detail

Ichigo Office(8975)

Ichigo Hotel(3463)

Ichigo Green(9282)
Private Equity
Real Estate Funds(excluding
consolidated funds)
Total(excluding
consolidated funds)

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2(12M)

FY19/2(12M)

FY20/2 Q1(3M)

JPY 123.8B

JPY 165.1B

JPY 194.5B

JPY 196.9B

JPY 203.0B

JPY 203.2B

JPY 759M

JPY 1,016M

JPY 1,291M

JPY 1,373M

JPY 1,426M

JPY 372M－–

JPY 20.4B

JPY 47.6B

JPY 50.9B

JPY 50.7B

JPY 52.9B

Base AM Fee Gross Profit (Actual) －–JPY 30M

JPY 287M

JPY 450M

JPY 547M

JPY 119M

AUM (Fiscal Year End)

－

–

–

JPY 10.0B

JPY 11.4B

JPY 11.4B

JPY 11.4B

Base AM Fee Gross Profit (Actual) －––JPY 11M

JPY 77M

JPY 85M

JPY 22M

AUM (Fiscal Year End)JPY 21.5B

JPY 15.4B

JPY 6.4B

JPY 12.3B

JPY 20.6B

JPY 20.6B

Base AM Fee Gross Profit (Actual)

JPY 114M

JPY 60M

JPY 27M

JPY 12M

JPY 41M

JPY 20M

JPY 145.3B

JPY 200.9B

JPY 258.6B

JPY 271.7B

JPY 285.8B

JPY 288.3B

JPY 872M

JPY 1,106M

JPY 1,617M

JPY 1,914M

JPY 2,100M

JPY 535M

AUM (Fiscal Year End)
Base AM Fee Gross Profit (Actual)
AUM (Fiscal Year End)AUM (Fiscal Year End)
Base AM Fee Gross Profit (Actual)

Ichigo Green Base AM Fee Gross Profit (Actual) includes operator fees.

© Ichigo Inc. All rights reserved.

40

Powerful Value-Add Business Model
Significant Synergies Between Ichigo’s Value-Add and Asset Management
Businesses
Value-Add Business Model
Green
Infrastructure

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office(8975)
Hotel

Ichigo Hotel(3463)© Ichigo Inc. All rights reserved.

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
41

Value-Add Social SignificanceSustainable Real Estate Serving a Sustainable Society
End Demolish and Rebuild and Embrace Value-Add‒ Preserve and enhance high-function real estate‒ Lengthen useful life and improve quality of existing assets via Value-Add

Value-Add
DemolishandRebuild© Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

Preserve & Improve
・ Higher-Quality Tenant Services
・ Higher Functionality (Security, A/C)・ Upgrade Exteriors/Interior Spaces
・ Seismic Reinforcements

HighestEfficiency
LowestImpact42

Ichigo Value-Add Earnings Model Example
5.5% NOI Yield, JPY 2B Purchase, LTV 75%, 1.5% Interest Rate, JPY 50M
Capex, 15% Increase in NOI, 3-Year Value-Add Period
Value-Add Steps: Improved exterior, interior, & tenant services; seismic
strengthening; increased energy efficiency; new tenant leasing; etc.
NOI at Acquisition(JPY 110M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 87.5M NOI/yearNOI÷ Initial Investment ＝17.5% NOI return during investment period
.

Debt
Asset

JPY1.5B

JPY
2.0B

NOI after Value-Add(JPY 126.5M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 104M NOI/year
NOI ÷ Total Investment (JPY 500M + JPY 50M) ＝18.9% NOI return during
investment period.

EquityJPY 0.5B

Value-Add for Capital Gain
The 15% increase in NOI at an equivalent cap rate increases the exit price by
15%: JPY 2B * 115% = JPY 2.3B
JPY 2.3B – (JPY 2B + JPY 50M) = JPY 250M capital gain.

Value-Add (Capex JPY 50M )© Ichigo Inc. All rights reserved.

ResultJPY 550M investment generates JPY 512M over 3 years → 31.1% p.a.

43

Ichigo-Owned Real Estate Portfolio
By Location

By Asset TypeGround Lease
Other
1%
3%
Logistics 3%

Okinawa 1%
Hokkaido 2%
Sendai 3%

Office26%

Residence
16%
Hotel
22%

Retail21%

Hokkaido
4.3

Other
5%

Osaka 3%Mixed
8%(JPY billion)

Nagoya 1%

Tokyo
Metro* *
12%

Tokyo
57%

Tokyo
131.4

Fukuoka
16%

Sendai
5.9*Excludes Tokyo

By Asset Size

Okinawa
2.2
Osaka
7.0

>JPY 10B
12%<JPY 1B
20%

Fukuoka
36.4

Nagoya
1.2

Tokyo
Metro
(exTokyo)
27.3

Other
13.0

JPY 5B-10B
16%

JPY 1B-5B
52%

Total Ichigo-Owned Assets: JPY 228.7B
Including Ichigo-Managed AUM: JPY 517.1B* Acquisition price basis.
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 237.2B© Ichigo Inc. All rights reserved.

44

Sustainable Real Estate Asset Breakdown (1)174 Assets, JPY 229B, Forecast NOI JPY 14.3B (6.0% Book Value Yield)
No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/0647 years

JPY 73M

JPY 1,900M

–

–

2

RetailReal Estate for Sale

Minato-ku, Tokyo

JPY 2B-3B

2005/1050 years

JPY 144M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo≧JPY 3B

2006/0333 years

JPY 192M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/09

14 years

JPY 78M

JPY 1,157M

–

–

5

OfficeFixed Asset

Sendai≧JPY 3B

2006/10

11 years

JPY 317M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka≧JPY 3B

2006/12

10 years

JPY 414M

JPY 1,339M

–

–

10

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/0639 years

JPY 83M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/0638 years

JPY 126M

JPY 233M––

14

Ground Lease

Fixed Asset

Atsugi, Kanagawa

JPY 1B-2B

2011/06–

JPY 175M

JPY 147M––

15

Mixed (Office/Retail)Fixed Asset

Hiratsuka, Kanagawa<JPY 1B

2012/0223 years

JPY 85M

JPY 172M––

16

RetailReal Estate for Sale

Yokohama<JPY 1B

2012/10

5 years

JPY 30M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo≧JPY 3B

2013/038 years

JPY 235M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2013/05

32 years

JPY 47M

JPY 154M––

19

Mixed (Office/Retail)Fixed Asset

Chofu, Tokyo

JPY 1B-2B

2013/06

34 years

JPY 127M

JPY 310M––

21

Residence

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2013/06

3 years

JPY 47M

JPY 203M

–

–

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

45

Sustainable Real Estate Asset Breakdown (2)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

27

RetailFixed Asset

Tokorozawa, Saitama

JPY 1B-2B

2013/11

11 years

JPY 63M

JPY 92M––

29

Ground Lease

Fixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2014/03–

JPY 115M

JPY 273M––

30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2014/0335 years

JPY 44M

JPY 108M

6.95X

26.0%

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

13 years

JPY 60M

JPY 279M––

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

JPY 2B-3B

2014/05

10 years

JPY 168M

JPY 434M

3.08X

15.2%

37

RetailFixed Asset

Minato-ku, Tokyo<JPY 1B

2014/0746 years

JPY 43M

JPY 77M––

39

RetailFixed Asset

Fukuoka<JPY 1B

2014/0715 years

JPY 48M

JPY 213M––

40

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/09

34 years

JPY 51M

JPY 252M

1.88X

14.7%

41

Hotel

Real Estate for Sale

Utsunomiya, Tochigi

JPY 1B-2B

2014/0932 years

JPY 190M

JPY 400M

1.97X

28.3%

42

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/0918 years

JPY 53M

JPY 177M

5.54X

26.2%

43

RetailReal Estate for SaleOsaka

JPY 1B-2B

2014/0917 years

JPY 105M

JPY 301M

4.64X

24.3%

45

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2014/1116 years

JPY 74M

JPY 135M

10.70X

33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

JPY 2B-3B

2014/1216 years

JPY 117M

JPY 332M

2.18X

29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

JPY 1B-2B

2014/12

12 years

JPY 93M

JPY 270M

1.56X

14.6%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

JPY 1B-2B

2014/12

13 years

JPY 60M

JPY 163M

1.55X

15.2%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

46

Sustainable Real Estate Asset Breakdown (3)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

51

Residence

Real Estate for Sale

Ota-ku, Tokyo<JPY 1B

2014/1217 years

JPY 54M

JPY 150M

2.21X

35.7%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo<JPY 1B

2014/1216 years

JPY 38M

JPY 99M

2.96X

44.4%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo<JPY 1B

2014/12

14 years

JPY 26M

JPY 82M

2.05X

25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

JPY 1B-2B

2014/12

13 years

JPY 88M

JPY 270M

2.00X

23.2%

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

JPY 1B-2B

2014/1215 years

JPY 54M

JPY 186M

1.90X

21.0%

59

Residence

Real Estate for Sale

Setagaya-ku, Tokyo<JPY 1B

2014/12

14 years

JPY 40M

JPY 117M

2.11X

27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo<JPY 1B

2014/12

12 years

JPY 19M

JPY 55M

1.80X

21.1%

61

Mixed (Office/Retail)Operational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1256 years

JPY 128M

JPY 57M

15.26X

51.7%

62

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/1215 years

JPY 46M

JPY 212M

1.81X

14.4%

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/12

12 years

JPY 84M

JPY 129M––

64

RetailReal Estate for Sale

Shinagawa-ku, Tokyo<JPY 1B

2015/01

65 years

JPY 23M

–

–

–

66

RetailReal Estate for Sale

Sendai<JPY 1B

2015/0215 years

JPY 48M

JPY 8M

42.58X

198.9%

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

17 years

JPY 47M

JPY 79M

–

–

69

Hotel

Real Estate for SaleOsaka

JPY 2B-3B

2015/05

16 years

JPY 195M

JPY 633M

1.56X

58.3%

71

RetailReal Estate for Sale

Fujisawa, Kanagawa

JPY 1B-2B

2015/07

4 years

JPY 95M

JPY 126M

6.80X

37.3%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

47

Sustainable Real Estate Asset Breakdown (4)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

89

OfficeReal Estate for Sale

Musashino, Tokyo≧JPY 3B

2015/0730 years

JPY 147M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2015/07

11 years

JPY 100M

JPY 353M

1.82X

17.7%

110

Hotel

Real Estate for Sale

Fukuoka≧JPY 3B

2016/0333 years

JPY 288M

JPY 905M

2.05X

104.5%

111

Hotel

Fixed Asset

Yokohama

JPY 2B-3B

2016/0335 years

JPY 184M

JPY 228M

–

–

112

Hotel

Real Estate for Sale

Yokohama≧ JPY 3B

2016/0331 years

JPY 260M

JPY 354M

10.64X

36.2%

113

Hotel

Real Estate for Sale

Yokohama≧JPY 3B

2016/0331 years

JPY 213M

JPY 344M

5.84X

25.5%

114

Hotel

Real Estate for Sale

Fukuoka≧JPY 3B

2016/04

29 years

JPY 223M

JPY 550M

1.73X

72.6%

115

Hotel

Real Estate for SaleOsaka

JPY 2B-3B

2016/04

12 years

JPY 111M

JPY 274M

2.96X

30.7%

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

30 years

JPY 47M

JPY 86M––

118

RetailReal Estate for Sale

NagoyaJPY 1B-2B

2016/06

22 years

JPY 86M

JPY 102M

7.71X

32.6%

119

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2016/06

32 years

JPY 37M

JPY 136M

3.91X

17.4%

120

Hotel

Fixed Asset

Shinjuku-ku, Tokyo≧JPY 3B

2016/0939 years

JPY 845M

JPY 349M

–

–

121

OfficeReal Estate for Sale

Minato-ku, Tokyo≧JPY 3B

2016/1018 years

JPY 1,600M

JPY 3,450M

2.87X

43.5%

122

Hotel

Real Estate for Sale

Shima, Mie<JPY 1B

2017/01

21 years

JPY 54M

JPY 73M

5.49X

43.1%

123

Hotel

Real Estate for Sale

Shibuya-ku, Tokyo≧JPY 3B

2016/1224 years

JPY 202M

JPY 1,123M

1.25X

25.4%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

48

Sustainable Real Estate Asset Breakdown (5)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

124

Hotel

Real Estate for Sale

Asahikawa, Hokkaido<JPY 1B

2016/1229 years

JPY 78M

JPY 593M

1.48X

48.5%

126

Hotel

Real Estate for Sale

Fukuoka

JPY 1B-2B

2016/1228 years

JPY 91M

JPY 505M

1.25X

25.4%

127

Hotel

Real Estate for Sale

Ishigaki, Okinawa

JPY 2B-3B

2017/0216 years

JPY 168M

JPY 544M

1.80X

80.2%

128

Hotel

Real Estate for Sale

Mito, Ibaraki

JPY 1B-2B

2017/0226 years

JPY 150M

JPY 602M

1.47X

47.0%

130

RetailReal Estate for Sale

Taito-ku, Tokyo

JPY 1B-2B

2017/04

26 years

JPY 94M

JPY 297M

4.42X

21.1%

132

Residence

Real Estate for Sale

Minato-ku, Tokyo<JPY 1B

2017/04

15 years

JPY 51M

JPY 190M

2.66X

38.3%

133

Hotel

Real Estate for Sale

Minato-ku, Tokyo<JPY 1B

2017/04

17 years

JPY 32M

JPY 152M

3.85X

32.7%

134

Residence

Real Estate for Sale

Chuo-ku, Tokyo

JPY 1B-2B

2017/04

16 years

JPY 48M

JPY 197M

2.88X

26.2%

135

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

27 years

JPY 98M

JPY 188M

6.18X

25.8%

136

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

27 years

JPY 160M

JPY 203M

8.75X

32.8%

138

Hotel

Real Estate for Sale

Ogaki, Gifu

JPY 1B-2B

2017/05

29 years

JPY 84M

–

–

–

139

OfficeReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2017/05

2 years

JPY 28M

JPY 600M

1.15X

15.1%

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/09

34 years

JPY 97M

JPY 223M

3.78X

19.9%

144

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

JPY 1B-2B

2018/0231 years

JPY 97M

JPY 268M

8.00X

34.7%

145

Hotel

Real Estate for Sale

Fukuoka

JPY 2B-3B

2018/031 yearJPY 194M

JPY 301M

3.37X

102.4%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

49

Sustainable Real Estate Asset Breakdown (6)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

146

RetailFixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2018/08

28 years

JPY 31M

–

–

–

147

Hotel

Real Estate for Sale

Kyoto

≧JPY 3B

2018/08

1 yearJPY 328M

JPY 1,666M

1.59X

27.2%

148

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo<JPY 1B

2018/08

51 years

JPY 54M

JPY 166M

3.93X

104.4%

149

RetailFixed Asset

Chiyoda-ku, Tokyo≧JPY 3B

2018/0929 years

JPY 308M

JPY 2,269M

–

–

150

Mixed (Office/Retail)Real Estate for Sale

Chuo-ku, Tokyo≧JPY 3B

2018/1031 years

JPY 354M

JPY 1,161M

6.17X

24.7%

151

Mixed (Office/Retail)Real Estate for Sale

Fukuoka<JPY 1B

2018/1020 years

JPY 37M

JPY 38M

5.08X

43.1%

152

OfficeReal Estate for Sale

Fukuoka

JPY 2B-3B

2019/0231 years

JPY 174M

JPY 382M

5.07X

19.6%

153

Hotel

Real Estate for Sale

Fukuoka<JPY 1B

2019/0226 years

JPY 110M

–

–

–

154

Residence

Fixed Asset

Kita Kyushu, Fukuoka

JPY 1B-2B

2019/035 years

JPY 83M

JPY 181M

–

–

155

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

JPY 2B-3B

2019/0334 years

JPY 156M

JPY 616M

3.44X

14.8%

156

Logistics

Real Estate for Sale

Fukuoka

JPY 2B-3B

2019/0331 years

JPY 151M

JPY 651M

3.60X

30.0%

157

OfficeFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2019/04

36 years

JPY 52M

–

–

–

158

Other

Fixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2019/05–

JPY 12M

–

–

–

159

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo

JPY 2B-3B

2019/05

39 years

JPY 126M

JPY 210M

13.11X

44.3%

JPY 12,280M

JPY 36,707M

3.18X

37.6%

Sub-Total 89 Assets

1
2

JPY 194,646M
JPY 202,037M (Book Value)

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

50

Sustainable Real Estate Asset Breakdown (7)Acquisition
Price

Asset TypeNo.

vs. FY19/2 Q4

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple

Forecast
IRR

A

Ichigo Owners (Office & Residence)

41 Assets

JPY 25,033M+JPY 7,903M

JPY 1,221M

JPY 9,300M

–

–

B

Centro (Primarily Office & Residence)

19 Assets

JPY 6,998M-JPY 62M

JPY 479M

JPY 2,336M

–

–

C

Self-Storage

25 Assets

JPY 2,035M+JPY 40M

JPY 287M

JPY 500M––

JPY 14,267M

JPY 48,843M––

JPY 964M

JPY 5,715M––

Total 174 Assets

Assets acquired in FY20/2 Q1 (3M)

© Ichigo Inc. All rights reserved.

Total 22 Assets

JPY 228,711M
JPY 237,208M (Book Value)

JPY 20,000M

51

Ichigo Solar Power Plant Portfolio
Ichigo (In-Development)

Ichigo (Operating)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

JPY 40Aug 2013

Ichigo Takashima Kutsuki

Kansai

Panel
Output(MW)
3.74

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

JPY 40Mar 2014

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Jan 2020

Ichigo Yubetsu Barou

Hokkaido

0.80

JPY 40

Apr 2014

Ichigo Hitachi Omiya

Kanto

2.96

JPY 24

Feb 2020
Feb 2020

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 32

Nov 2019

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Toki Tsurusatocho Kakino Higashi

Chubu

1.68

JPY 21

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Kasaoka Osakaike

Chugoku2.39

JPY 21Mar 2020

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Minokamo Hachiyacho Kamihachiya

Chubu

1.30

JPY 18Mar 2020

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Hokota Aoyagi

Kanto

2.48

JPY 24

Apr 2020

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015

Ichigo Seto Jokojicho

Chubu

1.50

JPY 18Aug 2020

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Obu Yoshidamachi

Chubu

0.98

JPY 18

Sep 2020

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016(Wind) Ichigo Yonezawa Itaya

Tohoku7.39

JPY 22

Sep 2020

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Ichigo Kasaoka Idachiike

Chugoku

2.66

JPY 18

Oct 2020

Kanto

2.99

JPY 18Apr 2021

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Ichigo Toride Shimotakai Nishi

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Kobe Pompuike

Kansai

2.95

JPY 18Jul 2021

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Sera Shimotsuda

Chugoku

2.81

JPY 18Aug 2021

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Ueda Yoshidaike

Chubu

1.01

JPY 18

Oct 2021

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.96

JPY 32

Feb 2022

Ichigo Ebino Suenaga

Kyushu14.00

JPY 40Feb 2023

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Total (In-Development)

17 Plants 65.89MW

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Total (Operating & In-Development)

44 Plants 155.28MW

Ichigo Memuro Nishi-Shikari

Hokkaido

1.32

JPY 40Feb 2018

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.90

JPY 36

Mar 2018

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Mar 2018

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

JPY 24

Apr 2018

Ichigo Itoshima Iwara

Kyushu1.48

JPY 36

Jan 2019

Ichigo Sakahogi Fukagaya

Chubu

2.89

JPY 21

May 2019

Ichigo Sennan Kitsuneike

Kansai

2.86

JPY 21

Jul 2019

Total (Operating)Total
184.7MW© Ichigo Inc. All rights reserved.

27 Plants 89.38MW

Ichigo Green (9282)
Area(Number ofPower Plants)
Hokkaido (7)Kanto (1)Chubu (1)Panel
Output
(MW)
9.14
1.33
1.80

Chugoku (2)Shikoku (2)Kyushu (1)

3.60
3.67
1.44

Okinawa (1)
Total

FIT
(Pre-tax)
JPY 40JPY 40
JPY 32
JPY 36, JPY40
JPY 36, JPY40
JPY 36

8.44
JPY 4015 Plants 29.43MW

52

Ichigo Solar & Wind Power Plant Portfolio
Hokkaido

Serving Local Communities and the Environment
Total Operating and In-Development
Ichigo Power Plants

59 Plants (184MW)
Currently Operating

42 Plants (118MW)
Okinawa
Ichigo Nago Futami

8.44MW

KyushuIchigo Kijo Takajo

0.89MW

Chugoku
Ichigo Yonago Izumi

2.61MW

Ichigo Kasaoka Takumicho

1.11MW

Ichigo Fuchu Jogecho Yano

0.99MW

Ichigo Sera Tsukuchi

2.54MW

Ichigo Sera Aomizu

2.87MW

Ichigo Higashi-Hiroshima Saijocho
Taguchi

2.72MW

Ichigo Kasaoka Iwanoike

2.64MW

Ichigo Kure Yasuuracho Nakahata

2.90MW

Ichigo Yamaguchi Aionishi

1.24MW

Ichigo Yamaguchi Sayama

2.35MW

Ichigo Kasaoka Osakaike

2.39MW

Ichigo Yubetsu Barou

0.80MW

Ichigo Betsukai Kawakamicho

0.88MW

Ichigo Akkeshi Shirahama

0.80MW

Ichigo Toyokoro Sasadamachi

0.60MW

Ichigo Memuro Nishi-Shikari

1.32MW

Ichigo Motomombetsu

1.40MW

Ichigo Engaru Higashimachi

1.24MW

Ichigo Engaru Kiyokawa

1.12MW

Ichigo Abira Toasa

1.16MW

Ichigo Muroran Hatchodaira

1.24MW

Ichigo Toyokoro

1.02MW

Ichigo Nakashibetsu Midorigaoka

1.93MW

Total

13.57MW

TohokuIchigo Itoshima Iwara

1.48MW

Ichigo Kasaoka Idachiike

2.66MW

Ichigo Hamanaka Bokujo Tsurunokotai

Ichigo Miyakonojo Yasuhisacho

1.44MW

Ichigo Sera Shimotsuda

2.81MW

Ichigo Hamanaka Bokujo Kajibayashi

Ichigo Miyakonojo
Takazakicho Tsumagirishima

2.96MW

Total

29.89MW(Wind) Ichigo Yonezawa Itaya

7.39MW

Total

12.01MW

Ichigo Ebino Suenaga

14.00MW(Wind – Pipeline) Iwate1

7.50MW

Total

20.79MW(Wind – Pipeline) Fukushima2

7.00MW

Chubu

Kansai

IchigoIchigo Green (9282)
In-Development

1.39MW

Ichigo Tsu

2.94MW

Ichigo Sennan Kitsuneike

2.86MW

Ichigo Toki Tsurusatocho Kakino

1.31MW

Ichigo Takashima Kutsuki

3.74MW

Ichigo Sakahogi Fukagaya

2.89MW

Ichigo Kobe Pompuike

2.95MW

Total

9.56MW

Ichigo Toyokawa Mitocho Sawakihama 1.80MW

Ichigo Tokushima Higashi-Okinosu

2.52MW

Ichigo Toki Tsurusatocho
Kakino Higashi
Ichigo Minokamo Hachiyacho
Kamihachiya
Ichigo Seto Jokojicho

Ichigo Takamatsu Kokubunjicho Nii

2.43MW

Ichigo Obu Yoshidamachi

0.98MW

Ichigo Iyo Nakayamacho Izubuchi

1.23MW

Ichigo Ueda Yoshidaike

1.01MW

Total

6.19MW

Total

16.84MW

Shikoku© Ichigo Inc. All rights reserved.

Ichigo Toki Oroshicho

1.68MW
1.30MW
1.50MW

2.31MW
2.31MW

Kanto
Ichigo Maebashi Naegashima

0.67MW

Ichigo Showamura Ogose

43.34MW

Ichigo Toride Shimotakai Kita

1.03MW

Ichigo Toride Shimotakai Minami

0.54MW

Ichigo Kiryu Okuzawa

1.33MW

Ichigo Minakami Aramaki

12.02MW

Ichigo Hitachi Omiya

2.96MW

Ichigo Hokota Aoyagi

2.48MW

Ichigo Toride Shimotakai Nishi

2.99MW

Total

67.39MW(Wind – Pipeline) Chiba1

4.00MW

1 Wind survey completed 2 Wind survey in progress53

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 43 Plants (147.9MW)
By Feed-In Tariff

By Customer(Electric Power Utility Co)
Tohoku3%

Hokkaido
3%

By Operating Timeline

Shikoku2%

JPY 1811%
JPY 21
7%

Kyushu
13%
TEPCO
45%

Kansai6%

JPY 3644%

Chugoku18%<6 months inoperation
4%

By Solar Intensity

By Output<2MW(InDevelopment
4%

<2MW
9%

2-10MW(In-Development)
17%
>10MW
32%

© Ichigo Inc. All rights reserved.

2-10MW
21%

B(In-Development)
22%
A(In-Development)
13%
C
6%

Starting
operation within
6 months
14%>1 year inoperation
55%

0.5-1 year inoperation
1%

C(In-Development)
4%>10MW (InDevelopment)
17%

Starting
operation after+6 months
26%

JPY 24
8%
JPY 32
10%

Chubu
10%

JPY 40
20%

A
36%

Rank
A
B
C
D

Solar Intensity≧4.00≧3.75, <4.00≧3.50, <3.75<3.50

Unit: kWh/m² per day
B
19%

54

Reference: Japan’s Feed-In Tariff (FIT)
What is a FIT?
‒ A policy mechanism to encourage investment in renewable energies by
guaranteeing a fixed price for electricity over a 20-year contract period‒ The fixed price for new contracts is adjusted every year, but locked in for theduration of the contract period
Wind Power FIT

Solar Power FIT
Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2017 (4/1~9/30)

JPY 2220 years

FY2013

JPY 3620 years

FY2017 (10/1~3/31)

JPY 2120 years

FY2014

JPY 3220 years

FY2018JPY 2020 years

FY2015 (4/1~6/30)

JPY 2920 years

FY2019JPY 1920 years

FY2015 (7/1~3/31)

JPY 2720 years

FY2020

JPY 1820 years

FY2016

JPY 2420 years

FY2017

JPY 21 1

20 years

FY2018JPY 18 1

20 years

FY2019JPY 142

20 years

Source: METI, Agency for Natural Resources and Energy

1 FIT for >2MW non-residential solar power production determined via auction process
2 Forecast FIT >0.5MW non-residential solar power production to be determined via

auction process© Ichigo Inc. All rights reserved.

55

Consolidated Balance Sheet: Assets(JPY million)
FY16/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2 Q1

vs. FY19/2

28,779
691
1,324
1,784
172,833
1,766
3,966
-458
210,687

47,678
913
1,324
1,433
167,805
516
3,125
-453
222,344

45,510
1,097
1,324
2
180,789
342
2,643
-28
231,681

50,225
1,344
1,324
1,218
161,322–2,156-2
217,590

38,711
1,671
1,324
3,839
164,703–
2,131-3
212,378-11,514+327–+2,621+3,381–-25-1-5,212

3,830
12,256
12,192
3,264
31,546

7,375
7,246
18,627
12,40245,654

10,60019,773
26,993
1,190
58,55820,33819,05849,924
5,655
94,97622,051
19,19752,025
5,666
98,941+1,713+139+2,101+11+3,965

1,942
392
38
2,373

1,864
62
29
1,956

1,600
135
233
1,968

1,346
316
331
1,993

1,302
316
485
2,104

-44
–
+154
+111

5,486
12
39
1,736
-124
7,149
41,069251,757

1,426
10
339
1,820
-92
3,504
51,115
273,459

2,184
10
68
2,132
-91
4,303
64,831
296,512

2,455
10
177
2,231
-91
4,782
101,752
319,343

2,559
10
186
2,131
-91
4,795
105,842
318,220

+104
–
+9
-100
–
+13
+4,090-1,12356

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)
FY16/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders' Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders' Equity
Accumulated Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate hedges
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2 Q1

vs. FY19/2

80
2,188
79
–
8,161
2,975
631
53
13
3,979
18,161

110
805
611
112
5,209
6,825
1,655
62
36
4,119
19,548

–
1,042
–
112
4,449
3,921
1,609
494
34
4,652
16,316

–
3,275
–
112
7,881
1,666
3,760
–
31
5,178
21,905

–
6,467
–
112
8,660
1,666
1,326
–
281
4,065
22,579–+3,192––+779–-2,434–+250-1,113+674–
100
94,40956,193
1,543
8,707
475
161,430
179,591

632
100
91,60468,319
1,147
8,038
624
170,467
190,015520–
112,366
63,588
1,744
8,492
758
187,470
203,787

538–
131,569
51,068
2,164
8,292
946
194,579
216,484

538–
133,508
49,341
2,175
7,995
964
194,523
217,102––+1,939-1,727
+11
-297
+18
-56
+618

26,575
10,96829,454-41
66,956

26,65011,05642,840-15
80,532

26,723
11,11354,324-2,99589,16526,820
11,207
66,730-5,98898,76926,820
11,207
68,072-5,988100,111––+1,342–+1,342

761
-251
23
533
319
4,357
72,166
251,757

117
-365
55
-192
491
2,612
83,443
273,459

543
-372
–
171
666
2,722
92,725296,512

386
-408
–
-21
827
3,283
102,859
319,343

349
-420
–
-71
890
186
101,118
318,220

-37
-12
–
-50
+63
-3,097-1,741-1,12357

Consolidated P&L(JPY million)
FY16/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Negative goodwill amortization
Mark-to-market gain on long-term interest
rate hedges
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of securities investments
Gain on sale of shares in affiliates
Gain on sale of subsidiary shares
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on sale/disposal of fixed assets
Valuation loss on securities investments
Office move expenses
Impairment loss
Earthquake-related damages
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY17/2(12M)

FY18/2(12M)

FY19/2(12M)

FY 20/2 Q1(3M)

FY19/2 Q1(3M)

FY20/2Full-Year
Forecast

Change(YOY)

vs.
Forecast

49,69928,865
20,833
4,446
16,387109,253
81,32727,925
5,025
22,90057,84630,86026,986
5,067
21,91983,54051,41332,126
5,847
26,27926,29015,994
10,295
1,758
8,537

16,108
8,653
7,454
1,461
5,992

+10,182+7,341+2,841+297+2,545––––26,500

–
–
–
–
32.2%

2
79
90

–
85
–

3
57
–

3
68
–

1
35
–

–
21
–

1
+14
–

–
–
–

–
–
–

–

–

–

5

–

6

-6

–

–

-14
-4

–
–

–
–

43
215

32
118

100
161

70
147

15
53

29
57

2,234

2,278

2,249

2,328

558

569

-11

–

–

–

53

270

491

98

–

+98

–

–

98
380
2,713
13,889

714
217
3,263
19,755

207
168
2,895
19,185

327
203
3,350
23,076

236
89
982
7,607

226
37
833
5,217

+10
+52
+149
+2,390–––22,800

–
–
–
33.4%

223
–
－
–
－
–
223

2,466
–
–
－
–
2,466

–
1,221
–
－
41
1,263

2
–
–
–
2

11
–
169
35
215

2
–
–
–
2

+9
–
–
–
+213

–
–
–
–
–

–
–
–
–
–

–
49
9
–
–
31
89
14,022960
13,062
136
12,925

–
–
31
1,090
244
224
1,590
20,6305,436
15,194299
14,894

11
–
–
327
–
–
339
20,1095,923
14,185167
14,018

–
–
–
–
–
–
–
23,0797,333
15,746373
15,373

27
–
–
–
–
–
27
7,796
2,094
5,701
932
4,768

–
–
–
–
–
–
–
5,220
1,651
3,568
21
3,547

+27
–
–
–
–
–
+27
+2,576+443+2,133+911+1,221

–
–
–
–
–
–
–
–
–
–
–
15,000

–
–
–
–
–
–
–
–
–
–
–
31.8%

58

Consolidated Cash Flows from Operations(JPY million)
FY16/2 (12M)
Cash Flows from Operations
Pre-tax net income
Depreciation
Share-based compensation expenses
Goodwill amortization
Negative goodwill amortization
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Gain (loss) on sale of subsidiary shares
Loss (gain) on sale of shares in affiliates
Loss (gain) on sale of securities investments
Impairment loss
Valuation loss on securities investments
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational loans receivable
Decrease (increase) in operational securities
investments
Valuation loss on operational securities investments
Decrease (increase) in real estate for sale
Decrease (increase) in power plant for sale
Valuation loss on SPC capital contributions
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expense paid
Income taxes paid and refunded
Net Cash from (Used for) Operations© Ichigo Inc. All rights reserved.

FY17/2 (12M)

FY18/2 (12M)

FY19/2 (12M)

FY20/2 Q1 (3M)

14,022
792
174
139
-90
-3
3
-81
1,277
–
–
-223
–
49
-172
1,006

20,630
778
223
141
–
23
-3
-85
1,303
–
–
-2,466
1,090
–
-367
–

20,109
1,015
215
111
–
32
-355
-61
2,249
–
-1,221
–
327
–
-468
–

23,079
1,696
213
254
–
-3
-26
-71
2,328
–
–
-2
–
–
-247
–

7,796
610
62
43
–
250
–
-37
558
-169
–
-11
–
–
-326
–

1,239

2,727

1,663

3,509

611

19
-63,070–11-990-1,140
535
42
317
2,380
435
-43,324
81-1,226-186–-6,303
7,251
16
-190
-193
204
92
-49
-667
1,304
25,46085-1,146-2,852–-8,112
996
–
871
-10
573
-47
30
125
585
18,62861-2,231-5,854–-3,163
–
–
-333
-399
-332
25
269
-264
1,887
28,42071-2,118-4,610–-3,380
–
–
122
51
-824
104
–
-297
253
5,418
37
-463
-4,358-44,654

21,547

10,603

21,762632

59

Consolidated Cash Flows from Investments & Financing(JPY million)
FY16/2 (12M)
Cash Flows from Investments
Payments into time deposits
Redemptions of time deposits
Payments for securities investments
Proceeds from sale of securities investments
Proceeds from redemptions of securities investments
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisition of subsidiary shares resulting in change ofconsolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Other
Net Cash from (Used for ) Investments
Cash Flows from Financing
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
Redemption of non-recourse bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Share buyback
Proceeds from share issuance to non-controllingshareholders
Payments to non-controlling shareholders for redemptionof common shares
Sale of subsidiary shares resulting in no change ofconsolidation scope
Dividends paid to minority interests
Dividends paid
Net Cash from (Used for ) Financing© Ichigo Inc. All rights reserved.

FY17/2 (12M)

FY18/2 (12M)

FY19/2 (12M)

FY20/2 Q1 (3M)

–
–
-671
296
3
-6,628
-21
-9
6
-37

-6,100
201
-300
6,136
–
-11,719
-1
-63
–
-5

-6
–
-140
–
–
-4,796
-83
-28
–
-36

-118
1,060
-539
32
–
-15,440
-425
-6
32
-16

-3
2,009
-93
111
–
-5,000
-70
-2
–
-20

–

-93

-2,619

–

–

–

–

2,096

–

–

9
-7,052

11-11,933-32-5,645-181-15,602-41-3,110

771
31
–
–
–
64,866-19,192
18,150-2,772153–-1,383
532
785
-56
–
55,674-61,22130,850-15,400
137
–

-306
-611
–
-112
-100
32,660-13,402
3,518-22,366
110-2,999

2,232
–
129
-112
–
43,062-20,352
3,500-18,473143-2,999

3,192
–
–
–
–
14,805-12,164–-1,727
–
–

2,000

–

–

90

–

–

-2,000

–

–

–

–

–

–

100

–

-43
-646
63,318-39-1,501
6,377–-2,513-6,124–-2,972
4,346-1,276-3,342-514

60

Top Partner of J.League, Japan’s Professional Soccer League
Partner with J.League to Promote Community Development, Revitalize Local
Economies, and Help People Enjoy Richer and Healthier Lives
J.League’s 100-Year Vision:
Promote Sports Development

Ichigo’s Mission:Serve Important Social Needs

J.League’s mission is to establish sports clubs rooted in local
communities, cooperating with local residents, businesses, andmunicipalities to promote community development

Ichigo believes that companies exist to serve society, andseeks to contribute to local communities as a sustainableinfrastructure company

Ichigo’s role as the only real estate company that is a J.League Top Partner:– Renovate and upgrade stadiums and help local governments find solutions for the rising costs ofoperating stadiums– Work to build stronger and healthier communities in cooperation with local residents, businesses, andmunicipalities© Ichigo Inc. All rights reserved.

61

Power Up 2019 Mid-Term Plan Achievement© Ichigo Inc. All rights reserved.

62

Power Up 2019 Achievement Details (1)Beat All KPI Targets
3-Year Growth: OP +60%, RP +66%, NI +19%** Ichigo’s effective tax rate normalized from FY16/2’s 6.9% to FY19/2’s 31.8%, so NI grew less than OP.
FY16/2 (Actual)(Shift Up 2016) (A)Operating Profit

16,387

Recurring Profit

Net Income

EPS

Dividend

FY19/2 (Actual)(Power Up 2019) (B)1(JPY million)

FY19/2 (Plan)(Power Up 2019)(B) - (A)vs. Plan

26,279+60.4%

25,000105.1%

13,88923,076+66.1%

21,400107.8%

12,925

15,373+18.9%

14,800103.9%

JPY 25.86

JPY 31.14+20.4%

JPY 29.00

107.4%

JPY 3

JPY 7

+133.3%JPY 7

100.0%

21.0%(Post-Tax)
15.3%

16.3%

–

15.6%

–

223.3%

239.6%–

191.4%–

2

ROE
Stock Earnings/
Fixed Expenses

1 From FY19/2, SPC-related non-recourse loan interest expenses are accounted as Fixed Non-Operating Expenses rather than COGS.

FY16/2 Operating Profit has been restated using this new accounting treatment to facilitate an accurate YOY comparison.

2 At Ichigo’s FY19/2’s normalized 31.8% tax rate, FY16/2 ROE would have been 15.3%.

© Ichigo Inc. All rights reserved.

63

Power Up 2019 Achievement Details (2)••Profitability

Core Business
Growth•••New Business
Creation••

Extend Ichigo’s REIT-focused asset
management business into the much larger
physical real estate market
Grow Ichigo’s hotel business synergisticallywith Ichigo Hotel
Launch one or more REtech businesses,
fusing Ichigo’s Real Estate and IT capabilities✓✓• Listing of Ichigo Green (9282) on Dec 1, 2016
• Asset sales to Ichigo Office (8975) and Ichigo Hotel(3463)• Created a long-term private fund (JPY 8.3B)• Expanded the engineering team• Spun out a dedicated leasing team and strengthened
marketing functions to drive asset acquisitions andvalue-add••••

Launched Ichigo Owners & Ichigo Land businesses
Launched 2 THE KNOT lifestyle hotels
Developed AI hotel revenue management system
Launched new real estate content businesses (storage,
laundry, & study spaces)• Entered business alliance with Phil Company• Established Sports & Entertainment group• Launched Community Lab and 100-Year Real Estate Lab••

Grow both financial stability and earnings
De-collateralize loans, lengthen loan
maturities, lower debt costs, get credit ratings,
and issue bonds to diversify funding profile✓• 24% of corporate loans are uncollateralized via
commitment lines and other credit lines (JPY 32.5B total)• Average Loan Period: 10.3 years, Average Interest Rate:
0.97%, Long-Term Loan Ratio: 92%

High Capital
Efficiency andOrganic Growth•

ROE >15%✓• Achieved ROE >15% for all 3 MTP years

Best Place to
Work

•
•

Support employee health and wellness
Goal: Japan’s number one company inproviding opportunities for employees✓• 100% return rate for employees who take child leave• Annual stock option grants (fully expensed) to all
employees to align their interests with Ichigo
shareholders• Launched Incubation Lab to support internal startups✓• 6 of 9 Board Members are Independent Directors• Former CEOs of TSE 1st Section companies serve as
Independent Directors

Finance as aStrategic
MeasureSustainability

List Ichigo’s solar assets on the TSE’s new
Infrastructure Market
Support the ongoing growth of Ichigo Office(8975) and Ichigo Hotel (3463)
Expand the architecture and structural
engineering team to deliver real estate that is
high-function, safe, secure, andenvironmentally friendly
Spin out a dedicated leasing team to drive
tenant acquisitions and rental income

Global Best Practice Governance and Compliance© Ichigo Inc. All rights reserved.

64

Power Up 2019 Achievement Details (3) JPX-Nikkei 400 Index– Selected for inclusion in the JPX-Nikkei 400 three years in a row(2016, 2017, 2018)– Targeting Ranking within the Index’s Top 200 Companies in August 2019

Ranking Calculation:
While the JPX-Nikkei 400 does not provide an official ranking of its 400 constituents, it
can be calculated based upon the JPX-Nikkei 400’s publically-available quantitative
ranking formula, which rank orders the top 1,000 companies from the joint set of the
1,200 highest market capitalization and 1,200 highest value-traded Japanese companiesby:(a) 3-year average ROE (40% weighting)(b) 3-year cumulative operating profit (40% weighting)(c) Market capitalization (20% weighting)Total Score = 0.4×(a) + 0.4×(b) + 0.2×(c)© Ichigo Inc. All rights reserved.

65

Ichigo 2030: Ichigo as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

66

Go for Growth
Grow & Expand Ichigo’s Core Businesses into New Areas, Creating New
Earnings Streams and Increasing Both Earnings and Earnings Stability
Sustainability

Infrastructure

Sustainability is integral to the health anddevelopment of people, society, and the environment.

Ichigo has a direct and critically important role inpreserving and improving the social infrastructure that
supports the quality of people’s lives.

Ichigo’s current core business of preserving andimproving real estate is a highly sustainable businessmodel that combines high efficiency with low
environmental impact.
Under Ichigo 2030, Ichigo will continue its longstanding commitment to sustainability whiledeveloping new technologies to extend the lives ofkey social infrastructure beyond 100 years.

By expanding its current real estate and clean energy
businesses into other infrastructure areas, Ichigo will
integrate the “hard” physical elements and “soft”
service elements of infrastructure to serve broadclient needs.
Critical to success will be unifying Ichigo’s Value-Add
and IT capabilities. Ichigo will work to deliver first-inclass and best-in-class solutions to drive significant
value for clients and society across a diverse set of
infrastructure environments. Being one of many is notenough. Ichigo needs to lead.

Ichigo as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

67

Go Beyond Real Estate to Address Broad Needs

AssetsResidence
Office

Needs

Live
Work

Nursing Care

Responding
to Diverse
Needs

Child Care

Education

Senior Business

Tourism

RetailBuy, Dine

Medical Care
Agriculture

Hotel

Stay, Travel

Solar Power
Plant

Power Lives &Businesses

StadiumEntertainment,
Recreation, & Health© Ichigo Inc. All rights reserved.

Entertainment
Public WorksSportsCultureOther
Energy68

KPI Targets
1. High Capital Efficiency− FY20/2~FY30/2 Average ROE >15%
 Increase long-term ROE by driving higher capital efficiency and earnings stability
 Via high ROE, grow long-term EPS as a key driver of shareholder value− FY20/2~FY30/2 Continuous JPX-Nikkei 400 Index Inclusion Target 11 consecutive years of inclusion

2. High Cash Flow Generation− FY20/2~FY30/2 Continuous Economic Operating Cash Flow > Net Income
 Ichigo’s robust cash flows fund both growth investments and shareholder returns
 Target 11 consecutive years of EOCF > NI

3. High Earnings Stability− FY30/2 Stock Earnings Ratio >60%
 Raise Stock Earnings ratio from FY19/2’s 53%
 Concurrently, increase and diversify Flow Earnings, which are currently centered on
Value-Add Gains on Sales

Note: Economic Operating Cash Flow = Cash Flows from Operations excluding net investment in Real Estate and Power Plants for Sale
© Ichigo Inc. All rights reserved.

69

Shareholder Return Policy
Ichigo Dividend Policy: Growth, Certainty, and Stability− Progressive Dividend Policy
 Ichigo’s progressive dividend policy underscores our commitment todriving continued organic earnings and dividend growth forshareholders. Under this policy, the previous year’s dividend becomesthe floor for the current year’s dividend. The dividend will be raised (orkept flat) but not cut, providing shareholders downside protection.
− DOE (Dividend on Equity) Payout Ratio of >3%
 Stable and growing dividend unaffected by short-term earnings volatility− Flexible Deployment of Share Buybacks (New)Dividend growth via
DOE > 3% Policy

 Conduct share buybacks to optimize capital
structure and drive shareholder value

7 Consecutive Years of
Dividend Growth
JPY 5

JPY 6

JPY 7

JPY 7

FY19/2

FY20/2(Forecast)

JPY 3
JPY 1*
FY12/2

JPY 1.1 JPY 1.3

FY13/2
FY14/2
FY15/2* Adjusted to reflect 200:1 stock split© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/270

FY20/2 Initiatives
Deepen Capabilities in Sustainable Real Estate− Expand into new asset types (e.g., dormitories, sports facilities)− Seek to be “Best Partner” to tenants via continually improving tenant services andsolutions− Strengthen group operating structure to deliver best-in-class outcomes
Accelerate Creation of New Businesses− Further develop Ichigo Sustainable Lab− Develop first-in-class and best-in-class Ichigo apps and other software solutions toaddress client needs and launch new businesses
Pro-Actively Deploy IT to Drive Higher Productivity− Build integrated asset database− Deploy BPA solutions− Streamline tasks and increase asset managementbusiness productivity© Ichigo Inc. All rights reserved.

71

MEMO

© Ichigo Inc. All rights reserved.

72

MEMO

© Ichigo Inc. All rights reserved.

73

MEMO

© Ichigo Inc. All rights reserved.

74

These materials were prepared to explain Ichigo’s businesses and are not for the purpose of soliciting investment inmarketable securities issued by Ichigo. Ichigo does not guarantee the accuracy of the figures, information, estimates, orother statements included herein, and accepts no responsibility for damages or losses arising through the use of the
figures, information, estimates, or other statements contained herein.
These materials are based upon information available as of the publication date, and may contain forward-looking
statements pertaining to Ichigo’s expectations, targets, plans, and strategies. Such forward-looking statements are notfacts, but are the result of management’s judgment based on information currently available. Actual operating results ordevelopments concerning Ichigo may differ substantially from those indicated by forward-looking statements. The
information enclosed is subject to revision without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation,
the Japanese version shall prevail.

Make The World
More Sustainable

Contact:
Ichigo (TSE First Section 2337)
Investor Relations
TEL: +81-3-3502-4818
E-mail： ir@ichigo.gr.jp
www.ichigo.gr.jp/en
Ichigo is Japan’s first zero-carbon listed real estate company.
We are taking responsibility for our environmental footprint byoffsetting our carbon emissions and investing in low-carbon
technologies such as solar energy.

© Ichigo Inc. All rights reserved.

75