2020 Full-Year Results
From June 1, 2020 to May 31, 2021
ERI Holdings Co., Ltd.
July 13, 2021

ERI
Evaluation,Rating,Inspection

Holdings
1

Impact of coronavirus (COVID-19)
Market has trend around toward the post-pandemic
Year-on-year changes of the number of main services

Emergency
declaration

Copyright © 2019 ERI holdings. All rights reserved2SummaryWe revised up initial earnings/dividends forecasts in the4th quarter
◼

◼

◼

◼

◼
◼

COVID-19 pandemic has made housing/building market considerably
stagnant, however those impacts on our business have been going within ourassumption.
In the fourth quarter, we recovered a depressed performance, and the profits
exceeded our initial forecasts. Then we revised fiscal year end dividends
upward to ¥15 per share from ¥10.

Both new housing and non-housing starts were decreased, however themarket shows a sign of recovery.
Both Building Confirmation and Inspection and Housing Performance
Evaluation services revenue decreased largely due to sluggish housing sector.
Solution and Other services revenue also decreased.
Year on year sales decreased, however, continuous cost reduction efforts andacquisition of Sakoken Co., Ltd. result in almost the same net income of theprevious year.
Copyright © 2019 ERI holdings. All rights reserved3Consolidated financial results
Previousfiscal year

Reportingfiscal year

(Jun. 2019 –May 2020)(Jun. 2020–May 2021)

14,842

14,397

▲444

▲3.0%

Operating Profit

517402▲114▲22.2％

Operating Profit Ratio

3.5%

2.8%

▲0.7%

-

Ordinary Profit

598474▲123▲20.7％

Ordinary Profit Ratio

4.0%

3.3%

▲0.7-Profit Attributable toOwners of Parent25826462.5％

Profit per Share (Yen)33.69

33.95

0.26-(Millions of yen)

Net Sales

ChangeAmounts

Ratio

Copyright © 2019 ERI holdings. All rights reserved4Change in net sales and operating profit（Millions of Yen）

EnergyConservation
Services

Net Sales（Millions of Yen）

Operating Profit

Building
Confirmation
Housing
Performance
Evaluation

Breakdown ofthe changes in sales
described in the left
figure.

Solution
Services

Cost of sales
Labor cost -119
Outsourcing
expenses -113
etc.

SG&A expenses
Travel andtransportation
expenses -27
Repair expenses -20
etc.

Others-3.0%
FY 5/2020-22.2%
FY 5/2021

FY 5/2020

FY 5/2021
Copyright © 2019 ERI holdings. All rights reserved

5Consolidated financial results by segment
Previous
fiscal year

Reportingfiscal year

(Jun. 2019 –May 2020)(Jun. 2020–May 2021)

Amounts

Building Confirmation
and Inspection

7,946[53.5%]

7,849[54.5%]▲96

Housing Performance
Evaluation and its
related services

3,777[25.4%]

3,479[24.2%]

Solution Services

1,462[9.9%]

OthersNet Sales Total(Millions of yen)

ChangeSegment
ProfitChange▲1.2%

316▲75▲297▲7.9%

92▲1001,442[10.0%]▲19▲1.4%81▲601,657[11.2%]

1,626[11.3%]

▲30

▲1.9%

▲22123

14,842[100.0%]14,397[100.0%]

▲444

▲3.0%

402

▲114Ratio* From this fiscal year, segmentation is updated as follows.
“Building Confirmation and Inspection” was renamed “Building Confirmation and Inspection and its related services.” Segment of Structural Evaluations of High-rise Buildings and Approving of Compliance with
Building Type Standards was changed from “Others” to “Building Confirmation and Inspection and its related services.” Segment of Approving of Housing Type Performance, etc. was changed from “Others” to“Housing Performance Evaluation and its related services.”
Copyright © 2019 ERI holdings. All rights reserved

6Sales breakdown | Consolidated

Solution
services10％

FY 5/2020

FY 5/2021

Others11％

Others11％

Existingbuilding
9％
Newly built
Non-houses
29％

Housing
Performance
Evaluation andits related
services25％

Building
Confirmation
and Inspection
its related
services
54％
Newly built
houses62％

Solution
services
10％

Existingbuilding
9％

Newly built
Non-houses
29％
Housing
Performance
Evaluation andits related
services24％

Building
Confirmation
and Inspection
its related
services
55％

Newly built
houses62％

Copyright © 2019 ERI holdings. All rights reserved

7Market trend
Changes in Housing/Non-housing starts (year-on-year rate)

Copyright © 2019 ERI holdings. All rights reserved

8Market trend
Changes in new housing starts by categories of housing(year-on-year rate)

Changesin the cumulative total(from June 2020 to May 2021)

New housing starts▲4.8%

Housings for
Owner-Occupation▲2.1%

Housings for rent

▲6.3%

Housings for sales(condo-miniums)▲3.2%

Housings for sales(single-detached)▲9.0%

Copyright © 2019 ERI holdings. All rights reserved

9Market trend
Changes in new orders of detached housesby Major house builders* New housing starts are on the basis of the number of houses , and the results of major house builders are on
the basis of amounts of money which was disclose on each company’s website.
Copyright © 2019 ERI holdings. All rights reserved

10Market trend
Stats of new construction starts in FY 5/2020（June 2020 ～ May 2021）
Housing sector
DetachedHouses

Terrace Houses

CollectiveHouses

Total

New Housing Starts

403,295

66,500353,661

823,456Year-on-Year▲4.5%▲18.5%

▲2.1%

▲4.8%

Proportion

49.0%

8.1%

42.9%

100.0%

Newly Built Floor Spaceof Construction Starts

45,6183,476

18,16867,262Year-on-Year▲4.8%▲19.4%

▲5.2%

▲5.8%

Proportion

67.8%

5.2%

27.0%

100.0%(Unit)(Thousand sqm)

Copyright © 2019 ERI holdings. All rights reserved

11Market trend
Stats of new construction starts in FY 5/2020（June 2020 ～ May 2021）
Non-housing sector
Offices

Stores

Factories

Warehouses

Medical andWelfare

Others(educational,lodging andetc.)

TotalNew HousingStarts

9,628

5,126

6,091

13,878

6,918

19,63861,279Year-on-Year▲10.9%▲11.9%▲14.1%

0.2%

▲3.4%

▲17.0%▲10.4%

Proportion

15.7%

8.4%

9.9%

22.6%

11.3%

32.0%

100.0%

Newly Built
Floor Space ofConstruction
Starts

5,330

4,238

5,891

11,748

4,385

8,750

40,341Year-on-Year

▲2.4%

10.5%

▲20.4%

12.0%▲12.9%▲17.3%▲5.8%

Proportion

13.2%

10.5%

14.6%

29.1%

10.9%

21.7%

100.0%(Unit)(Thousand sqm)

Copyright © 2019 ERI holdings. All rights reserved

12Main operating figures | ConsolidatedPrevious
fiscal year

(Jun. 2019 – May 2020)

Cases

Amounts(Millions of Yen)

Reportingfiscal year

Change(Jun. 2020 – May 2021)

Cases

Amounts(Millions of Yen)

Cases

Amounts(Millions of Yen)

Building Confirmations

75,183

3,241

69,408

3,178▲5,775▲63

Final Inspections

73,938

3,075

70,191

3,048▲3,747▲27

Detached
Houses36,464966

30,624952▲5,840▲14

Collective
Houses25,350259

23,742257▲1,608▲2

Detached
Houses32,752

1,828

29,181

1,576▲3,571▲252

Collective
Houses

19,531295

21,680319

2,14924

Housing DesignPerformance
Evaluations

Housing
Construction
Performance
Evaluations

Copyright © 2019 ERI holdings. All rights reserved

13Number of Building Confirmationand market share* Jyutaku Seinou Hyouka Center Co., Ltd. consolidated in Nov. 2017 is fully included from FY 3/2018 data.
* Sakoken Co., Ltd. Consolidated in Aug. 2020 is fully included from FY 3/2021 data.
* FY 3/2021 national data has not been published by MLIT yet and our share is unknown.
Copyright © 2019 ERI holdings. All rights reserved

14Number of Housing Design Performanceand market share* Jyutaku Seinou Hyouka Center Co., Ltd. consolidated in Nov. 2017 is fully included from FY 3/2018 data.
* Sakoken Co., Ltd. Consolidated in Sep. 2020 is fully included from FY 3/2020 data.

Copyright © 2019 ERI holdings. All rights reserved

15

Key service figures | Consolidated
Previous
fiscal year

(Jun. 2019 – May 2020)

Cases

Amounts(Millions of Yen)

Reportingfiscal year

Change(Jun. 2020 – May 2021)

Cases

Amounts(Millions of Yen)

Cases

Amounts(Millions of Yen)

Building Confirmations formedium to large sizebuildings (over 500 sqm)

5,000

1,471

4,908

1,480▲929

Technical Assessments forLong-life Quality Housings

27,727381

24,227344▲3,500▲37

Inspections for Housing
Defect Liability Insurance

38,722362

38,033340▲689▲22Evaluation for Compliancewith Energy Consumption
Performance of Buildings(incl. 300-2,000 sqm)

1,650(-)

269(-)

1,712(81)266(7)

62▲3Nonhousings

173

35213

47

40

12Housings

5,613

105

6,794

125

1,181

20BELSCertifications* “Building Confirmations for medium to large size buildings (over 500 sqm)” includes the numbers of plan change.
* “Technical Assessments for Long-life Quality Housings” represents the numbers and amounts of conformance certificate, which includes the numbers and amounts of extension and renovation. The numbers ofplan change is included.
* Counting rules of “Inspections for Housing Defect Liability Insurance” is as follows. 1) Including Defect Insurance but excluding inspection for insurance firm and Housing Performance Certification, 2) Including
insurance brokerage, and 3) Including the data of all housing defect liability insurance companies.
* “Evaluation for Compliance with Energy Consumption Performance of Buildings” includes the numbers of plan change from this time.

Copyright © 2019 ERI holdings. All rights reserved

16Forecasts for FY 5/2022
V-shaped recovery expected◼

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◼

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Our clients’ business operation, especially in a severely depressed housing sector, havebeen resuming evidently. We assume COVID-19 vaccination will progress and no severemarket depression will arise in this fiscal year.

We plan a V-shaped recovery mainly boosted up by a growth of energy saving related
services by a tightening of the regulation which became effective on April 1, 2021.
This forecasts don’t include new M&As, however, we will energetically seek M&A
opportunity that will benefit ERI group business.

In accordance with these expected recovery, we raised an annual dividend forecast to¥30 from ¥15 of the last fiscal year.

Copyright © 2019 ERI holdings. All rights reserved

17Forecasts for FY 5/2022
ChangeFY 5/2021

FY 5/2022(Jun. 2020 –May 2021)(Jun. 2021 –May 2022)

14,397

15,232834

5.8%

Operating Profit

402

789

386

95.9%

Operating Profit Ratio

2.8%

5.2%

--Ordinary Profit

474

825

351

74.1%

Ordinary Profit Ratio

3.3%5.4%--

Profit Attributable toOwners of Parent

264

492

227

85.9%

Profit per Share (Yen)

33.95

62.84

28.89

-(Millions of yen)

Net SalesAmounts

Ratio

Copyright © 2019 ERI holdings. All rights reserved

18Topics
ICT promotion in Building Confirmation operation
COVID-19 epidemic induced both teleworking and e-filing Building Confirmation.

BIM began to spread in the industry and Building Confirmation by BIM is growing.

Service differentiation strategy by a proactive DXCases

Results and forecasts of Building
Confirmation by BIM in ERI Group

Copyright © 2019 ERI holdings. All rights reserved

19Topics
From April 1, 2021, an enhancement of Mandatory Energy
Saving Standards started
Minimum bldg. volume of the mandatory requirement is expanded from 2,000 sqm to 300 sqm

Revised requirements （Apr. 2021～）
Non-housing
Large scale
floor area
≥ 2,000 sqm

Medium scale

floor area
300 sqm – 2,000 sqm

Small scale
Floor area
< 300 sqm

Mandatory compliance【prerequisite for Building
Confirmation】

Housing

Filing required

Mandatory compliance【prerequisite for Building
Confirmation】

Explain required

Expected volume ofmarket expansion
14,000 bldgs. per year
＊3,246 bldgs.

14,144 bldgs.

Explain required* source: Number of bldgs. is FY 3/2018
data from MLIT 2021 publication
Copyright © 2019 ERI holdings. All rights reserved20

Topics
Next, mandatory energy saving standards will cover allbuildings including housings“ (Draft) Procedure for energy saving housings/buildings towards a decarbonized society”
by the joint conference of MLIT, METI and MOE with experts and officials, June 2021
New requirements （under consideration）
Non-housing
Large scale
floor area≥ 2,000 sqm

Medium scale

floor area
300 sqm – 2,000 sqm

Housing

Expected volume of filing
required bldgs.
493,000 bldgs. per year＊

Mandatory compliance【from 2019】

Mandatory compliance【from 2021】

Toward amandatorycompliance【details are underconsideration】

Small scale
Floor area
< 300 sqm

* source: Number of bldgs. is FY 3/2018
data from MLIT 2021 publication
Copyright © 2019 ERI holdings. All rights reserved21

Topics
BELS is growing by fat budgets under ZEH promotion policy
Policy goal：average energy performance of new housings will achieve ZEH by 2030.
MLIT, METI and MoE have collaboratively set up subsidy programs for ZEH promotion.

MLIT

More-advanced carbon saving housing(Life cycle carbon minus housing)
Included in FY2022 budget 7.49 billion yen

ZEH promotion

METIMoE
MLIT

Further promotion desired ZEH(Next generation ZEH, high-rise condominium)
Included in FY2022 budget 8.39 billion yen

Continuously promotion desired ZEH and ZEH+
(detached house, condominium)
Included in FY2022 budget 11 billion yen
Included in FY2021 budget 4.5 billion yen

Unified application
procedure by BELS
Unified informationdeliveryMedium and small homebuilders’ ZEH(Support for poor experience builders)
Included in FY2022 budget 14 billion yen
Included in FY2021 budget 1 billion yen

Source : publication by MLIT, METI and MoE FY2021 subsidy program

Copyright © 2019 ERI holdings. All rights reserved

22Topics
ZEB/ZEH growth will spurs BELS needs
We are improving our nationwide business operation to take the opportunity ofenergy saving related services growth.

Non-housebuildings
ZEB penetration,
Buildings 0.3％

ZEH penetration,
Condos 1.9％

Housings

Mandatory complianceeffective from April 2017

ZEH penetration,
Custom houses 20.3％

ZEH market
potential ofHousings 92.2％

ZEB market
potential ofBldgs. 99.7％
875,616 units
52,953 bldgs.

Mandatory complianceeffective from April 2021

Source: Number of bldgs. is FY 3/2019
data from MLIT 2021 publication

For mandatory compliance ofsmall buildings and housings,scheduling and other retail areunder discussion.

ZEH penetration,
Dwelling for sale 1.3％

Copyright © 2019 ERI holdings. All rights reserved23

Consolidated financial statements | Assets
Previousfiscal year

(Millions of yen)Reportingfiscal year

Change(Jun. 2019 – May 2020) (Jun. 2020 – May 2021)

Total assets

6,762

6,477

▲285

Total current assets

4,2894,261▲282,7252,650▲74

Accounts receivable – trade

786902116

Work in process

439

420

▲19

Total non-current assets

2,473

2,216

▲256

Property, plant andequipment

570531▲39

Total intangible assets

859755▲103

Goodwill

496432▲641,043929▲114

Cash and deposits

Total investments and otherassets

Copyright © 2019 ERI holdings. All rights reserved24Consolidated financial statements | Liabilities(Millions of yen)Previous
fiscal year

Reportingfiscal year

Change(Jun. 2019 – May 2020) (Jun. 2020 – May 2021)

4,015

3,453

▲562

2,524

2,361

▲163

Accrued expenses

646784138

Advances received

869769▲100

Total non-current liabilities

1,491

1,092

▲399

2,746

3,024

277

2,706

2,989

282

1,783

1,954

170

6,762

6,477

▲285

Total liabilities
Total current liabilities

Total net assets
Total shareholders’ equity
Retained earnings

Total liabilities and net assets

Copyright © 2019 ERI holdings. All rights reserved25Changes of quarterly results | Consolidated

Copyright © 2019 ERI holdings. All rights reserved

26

Contact
ERI Holdings Co., Ltd.

Investor Relations and Public Relations Group
E－Mail ｜ info@h-eri.co.jp
https://www.h-eri.co.jp/
This release contains forward-looking statements
about ERI Holdings Co., Ltd.’s future plans,
strategies, beliefs and performance that are nothistorical facts. Such statements are based on thecompany’s assumptions and risks, uncertainties andassumptions that, without limitation, relate toeconomic conditions. Accordingly, ERI Holdings Co.,
Ltd. wishes to caution readers that actual results
may differ materially from those projected in thisrelease and ERI Holdings Co., Ltd. bear no
responsibility for any negative impact caused by theuse of this release.

Copyright © 2019 ERI holdings. All rights reserved27