SAMTY Co., Ltd.
Financial Result
Explanatory Material
Third Quarter of Fiscal Year Ending November 30, 2020

S-RESIDENCE Esaka CRESCENT (Esaka-shi, Osaka)

TSE First Section 3244

At this time, we would like to extend our heartfelt sympathy
to all those affected by the novel coronavirus (COVID-19),
their families, and others persons concerned.
We would also like to show our respect for and express our
sincere gratitude to all those working hard to prevent the
spread of infections, including medical personnel and thehealth authorities.
All Executives and Employees of Samty, Co., Ltd.

Contents
1. Revised Business Summary and Business Forecast Infections in Samty Group
2. Dividend Policy/Shareholder Returns
3. Changes to Shareholder Special Benefits
4. Medium-Term Management Plan “Samty Toughening Plan”
5. Key Strategies Samty Group Business Model [Key Strategy 1] Investment Plan Progress Status [Key Strategy 2]

P.4
P.5
P.6
P.7
P.9

 [Real Estate Business] Purchase Status – Land for Projects [Key Strategy 2]
 [Real Estate Business] Sales Results– Development and Renovation Securitization/Investment Unit Sales in Lots [Real Estate Business] Residence Development Projects
 [Property Leasing Business] Acquisition Results [Key Strategy 2]
 [Real Estate Business] Development Plan for Hotels and Office Buildings [Key Strategy 3]

6. Third Quarter of Fiscal Year Ending November 30, 2020

P.17

Overview of Financial Results Third Quarter of Fiscal Year Ending November 30, 2020
Overview of Consolidated Financial Statements
 Third Quarter of Fiscal Year Ending November 30, 2020
Consolidated Balance Sheet Overview
 Financial Strategy
 Interest-bearing Debt/Net D/E Ratio
 Third Quarter of Fiscal Year Ending November 30, 2020
Overview of Consolidated Financial Statements by Segment
 Securing Ongoing Steady Profit
 [Real Estate Business] Overview of Consolidated Financial Statements [Property Leasing Business] Overview of Consolidated Financial Statements [Property Leasing Business] Asset Holdings by Region, Occupancy Rates
 [Other Business] Overview of Consolidated Financial Statements

3

Revised Business Summary and Business Forecast
for Fiscal Year Ending November 30, 2020
In light of the current external environment, the Company reviewed the establishment of a hotel REIT and the timing of
the sale of hotels from the next fiscal year onward. Changes were made to the properties to be sold, centering on rental
condominiums and office buildings that are less susceptible to economic trends or the impact of COVID-19 infections.
Based on the outlook for sales contracts for rental condominiums and office buildings for the fourth quarter consolidated
cumulative period, we announced a revision to the earnings forecast on September 30. Since it is still difficult toaccurately predict the impact of COVID-19, we continued to use the range format, assuming multiple scenarios, butraised the lower limits for net sales and income from the earnings forecast announced on July 15.

Net sales

（百万円）
(¥mn)

Operating income

(¥mn)
（百万円）

95,500~105,000

15,300~16,900

Total of
Property Sale
Contracts
andPurchases
Accepted

FY11/16

FY11/17

FY11/18

FY11/19

FY11/20(Forecast)

YoY-34.0％

YoY-54.6％

FY11/16

（百万円）
(¥mn)

FY11/16

Ordinary income

FY11/17

FY11/18

FY11/19

FY11/20(Forecast)

YoY-60.8％

FY11/18

FY11/19

Net income

（百万円）
(¥mn)

13,100~14,600

FY11/17

FY11/16

FY11/17

FY11/18＊Profit attributable to owners of parent

FY11/20(Forecast)

9,100~10,100

FY11/19

FY11/20(Forecast)

YoY-62.2％

4

Dividend Policy/Shareholder Returns
Changes in Dividends

Shareholder Returns

For the fiscal year ending November 30, 2020, we expect
an interim dividend of ¥38 yen, a year-end dividend of ¥44,
for an annual dividend of ¥82 (up ¥3 from the previousyear), and a payout ratio of between 33.0% and 39.2%.
Maintaining the dividend target of 30% or over.

Expansion of Treasury Stock Acquisition Limitand Extension of Acquisition Period(¥)

Planning dividend increases
over eight consecutive periods

Total
dividend
¥79

90
80
70
60
50
40

Total
dividend¥33

Total
dividend
¥47

16.8%

5

Total
dividend¥68 (Note)
4

2
2
32.0%

33.0～
39.2％

75

6

82

36

2016
2016年

2017
2017年

Initial dividend
当初予想配当金
forecast

30.0%◆Total purchase price¥1.5 billion (upper limit)

25.0%◆Treasury share purchase period
From April 14, 2020, to November 30, 2020

20.0%

◆Status of purchase (as of September 30, 2020)
Total number of shares purchased 644,400 shares(1.6% of total number of shares issued, excluding treasury shares)

10.0%
5.0%

10
0

◆Total number of shares to be purchased

15.0%

52
33

35.0%

12

20.1% 24.0%

30
20Dividend forecast
¥82

2018
(Note)
2018年
Amountof
上方修正分
upward revision

2019
2019年

2020
(Forecast)
2020年予想

Additional amount
追加上方修正分

of upward revision◆Reasons for expanding treasury stock acquisition limit and extending
acquisition period
As a result of comprehensively taking into consideration the impact of
COVID-19 infections, recent trends in the stock market and theCompany’s stock price, a flexible capital policy in accordance with thebusiness environment, and the return of profits to shareholders, theCompany conducted the purchase of treasury shares.

0.0%

Payout
配当性向
ratio(Note) With regard to the 2018 dividend, on August 29, 2018, the dividend forecast was increasedby ¥44 from the ¥52 forecast to a ¥96 dividend forecast. The Company subsequently
issued a free allotment of stock acquisition rights based on the rights offering dated October
2018 and, by increasing the number of shares issued by 1.5 times, the dividend forecast
was ¥96 divided by 1.5, making ¥64. In addition, the Company increased the dividend by¥4 at the end of the fiscal year, for a total dividend of ¥68.

1,500,000 shares (upper limit)(3.71% of total number of shares issued, excluding treasury shares)

Total purchase price: ¥890,813,000

Expansion of Shareholders’ Coupons◆Content of shareholder benefits changed• Expanded available hotels from three hotels to 12 hotels (13 facilities)• Having abolished accommodation discount vouchers, changed to freeaccommodation vouchers common to 12 hotels• Changed the number of shareholder coupons according to the numberof shares held
→ We implemented the above changes for the purpose of improving
convenience for shareholders

Increasing Voting Rights◆To raise the voting right utilization rate, a QUO prepaid card is presented
as a reward to all shareholders who have exercised their voting rights
effectively.
Compared with the February 2019 Annual General Meeting of
Shareholders, the ratio of shareholders exercising their voting rights
increased by 33.5% (the ratio of the number of voting rights exercised
increased by 12.3%).

5

Changes to Shareholder Special Benefits
We will change the content of benefits of the shareholders listed on the shareholder registry as of November 30, 2020.
We offered discount coupons or free accommodation vouchers for three hotels—Center Hotel Tokyo, S-PERIA INN
Nihombashihakozaki, and S-PERIA INN Osaka Hommachi—but having given consideration to the status of shareholder
utilization, the accommodation discount vouchers will be abolished. For the purpose of improving convenience forshareholders and having them make use of hotels in which the Company is involved all over the country, as preferential
treatment we will change to free accommodation vouchers for 12 hotels (13 facilities).
Before Change

Eligible Hotels after Change(Note) The three hotels are Center Hotel Tokyo, S-PERIA INN
Nihombashihakozaki, and S-PERIA INN Osaka Hommachi.

After Change(Note) The free accommodation voucher is common
to all 12 hotels.

6Medium-Term Management Plan
“Samty Toughening Plan”

7Medium-Term Management Plan “Samty Toughening Plan”
To succeed to and further strengthen “Challenge 40” key strategies and financial strategies.
Samty will maintain an equity ratio of 30%, and as a growth engine, expand development of hotels
and office buildings. In addition, we will achieve growth through expansion of our business area,and strengthening of non-asset businesses.
Key Strategies and Financial Strategies

Target KPI (Key Performance Indicators)

Expand the office building
development business[Key Strategy 2]
Strategic investment
in regional
metropolitan areas

Broaden thebusiness area

[Key Strategy 3]
Roll-out of hotel
development
business[Key Strategy 1]
Development ofbusiness model
centered on Samty
Residential
Investment
Corporation[Financial Strategy]
Maintain capitalefficiency
Establish financial baseStrengthen
financial base,centered onrent cash flow

Financial Strategy (Target indicators)
FY2021Equity ratio
At least 30％

FY2021ROE
15％ level

FY2021ROA
７％ levelEnhance fee-based
income businesses

8Key Strategies

9Samty Group Business Model[Key Strategy 1: REIT-Centered Business Model]
Income properties
Land for development

Samty Group
Property sales

Samty Groupmanaged REIT

Purchases
Domestic market

13.5%
investment
Property sales
Income properties
Properties for development

Subsidiary
Property management / works

Dividends
PM / Works

Sales of developed
properties

Condominium
sales companies

Investment
condominiums

Subsidiary

Asset management

Leasing of owned
properties

Tenants

Rental apartments
Office buildings,
hotels, etc.

Overseas
investment

Subsidiary

Hotel operations

PM fees
Works cost
ＡＭ
AM FeeAcquisition/
sales fees
Hotel
operations

Fees
Subsidiary

Overseas Development

Hotel REIT Being
Readied for Launch⇓

Targeting
Establishment from
Next Year Onward

Overseas market

10Investment Plan Progress Status[Key Strategy 2: Strategic investment in regional metropolitan areas]
Samty will invest a total of around ¥300 billion during the three-year period of the Samty Toughening Plan.
The current investment amount is ¥232.1 billion, and the progress rate is 77.3%.
Regarding the development of residences and the acquisition of profitable real estate that can secure stable income,progress is favorable at 124.9% and 74.9%, respectively.
With regard to the remaining ¥53.8 billion for hotel and office building development, we aim to achieve ¥300
billion by taking into account the current market conditions and transferring those funds to residential developments
and profitable real estate that are less susceptible to economic trends and the impact of COVID-19.

Three-Year (2019-2021) Total Investment Amount

Approx. ¥300 billion (¥232.1 billion(Note)Development ofresidential properties(S-RESIDENCE)(One-room apartments for investors)

Development of hotels
and office buildings/Rate of progress 77.3%)
Acquisition ofincome properties(fixed property)(inventory property)

¥80bn

￥85bn

Progress status(Note)

Progress status(Note)

Progress status(Note)

Rate of progress

Rate of progress

Rate of progress￥99.9bn
124.9％￥31.2bn
36.8％

Remaining ¥53.8 bn from plan

¥135bn￥101.0bn
74.9％Transfer to residential development,
profitable real estate(Note)The rate of progress of each of the abovementioned properties includes figures for contract completion and planned settlements.
For the progress status figures, the figures for the total cost of the project are stated.

11

[Real Estate Business] Purchase Status – Land for Projects[Key Strategy 2: Strategic investment in regional metropolitan areas]
Acquired 46 properties and ¥15.8 billion condominium development site by the third quarter of the
fiscal year ending November 30, 2020. Based on the acquisition amount, the budget progress rate
is 59.6%. Including planned settlement plans on 72 properties for ¥25.7 billion, budget progress
rate bullish at 97.0%.
Acquisition amount basis(Note) We list on acquisition amount of land base.

Number of acquisitions by area

12

[Real Estate Business] Sales Results– Development and Renovation Securitization/Investment Unit Sales in Lots

Sold a total of 29 properties: S-RESIDENCE properties (three), hotels/office buildings (two), other (five), renovation
securitization (19)The number of sales expected from the third quarter onward is 26 properties, which is 94.8% of the lower limit of
the earnings forecast.
Budget and actual results（注）(Note 1) Including the sale of the Ibis Styles Nagoya site announced on February 20, 2020.
(Note 2) As announced on September 30, 2020, since sales are within range of the business forecast, the sales plan is also deemed in range.

13

[Real Estate Business] Residence Development Projects
The actual number of residence developments in 2019 was 17 buildings (1,200 units), and the number achieved up
to August 2020 was 18 buildings (1,072 units).
Planned for completion from the autumn of 2020 onward are 8 buildings (613 units), 2021 50 buildings (3,159
units), 2022 49 buildings (3,272 units), and 2023 14 buildings (1,216 units). A total of 121 buildings (approx.
8,200 units) are under development in cities throughout Japan, but primarily in Tokyo, Nagoya and Osaka.

50 buildings(3,159 units)

49 buildings(3,272 units)

18 buildings/8 buildings(1,072 units/613 units)
17 buildings(1,200 units)2019 Result

14 buildings(1,216 units)

2020 Result/Forecast

2021 Forecast

2022 Forecast

2023 Forecast

Note: With regard to S-RESIDENCE described on page 11, we have granted preferred negotiation rights to Samty Residential Investment Corporation, but
as of the end of May 2020 there had been no agreement to buy or sell made with Samty Residential Investment Corporation.

14

[Property Leasing Business] Acquisition Results[Key Strategy 2: Strategic investment in regional metropolitan areas]
Acquired 42 properties of profitable real estate in major cities nationwide for approx. ¥29.6 billion. Budget progress
rate is 61.7%. Including acquisition prospects, budget progress rate is 89.2%.
Acquisition amount basis

Number of acquisitions by area

15

[Real Estate Business] Development Plan for Hotels and Office Buildings[Key Strategy 3: Roll-out of Hotel Development Business]
Development Plan for Hotels and Office Buildings(Hotels) The sale of Mercure Kyoto Station (225 rooms) was completed on June 30, and the hotel opened on September 16.
The land transfer of the Ibis Styles Nagoya site has been completed. Scheduled to open on November 16.
The two Agora hotels, Fukuoka Hotel and Kyoto Oike Hotel are all expected to be sold to the hotel REIT.
Since these four hotels have long-term financing in place, it is possible to own them until the establishment of the hotel REIT.
(Office Buildings) S-BUILDING Shin-Osaka sale contract completed, planned for sale during the current term,
and negotiations for the sale of S-BUILDING Sapporo-Odori are under way.
Several parties are considering office building acquisitions. At present, there is no trend toward a rapid deterioration.

Note: The abovementioned development project figures are correct as of the date of this document but there remains the possibility that these will change.

16Third Quarter of Fiscal Year Ending November 30, 2020

Overview of Financial Results

17

Third Quarter of Fiscal Year Ending November 30, 2020
Overview of Consolidated Financial Statements
In the fiscal year ended November 30, 2019, many properties were sold in the first half, and profits were alsobiased towards the first half. As a result of sales being biased toward the fourth quarter, net sales are down 34.0%
and operating income is down 54.5% compared with the same period of the previous year, but for the full fiscal year
ending November 30, 2020, we are expecting the full-year results to end up in line with the earnings forecast.

（*）* Concerning recording of loss due to temporary close (¥101 million)
Due to the impact of COVID-19, fixed costs (personnel costs, land rents, depreciation expenses, etc.) of ¥101 million were incurred at hotels
and other facilities during the period of temporary closures.

18

Third Quarter of Fiscal Year Ending November 30, 2020
Consolidated Balance Sheet Overview
Making effective use of funds raised through property sales and borrowings, the Company actively acquires landfor development and profitable real estate.

19

Financial Strategy
In addition to self-financing, we utilize borrowing to actively acquire profitable real estate.
Due to a temporary increase in assets brought about by the acquisition of treasury shares andthe postponed establishment of the hotel REIT, the capital ratio as of the end of the third
quarter was 27.5%. The policy is to maintain this at 30% at the end of the fiscal year.
Equity ratio(%)

Equity capital(¥mn)

ＲＯＥ・ＲＯＡ
18.0%

Equity ratio
At least 30％

17.1%

16.9%
15.3%

16.0%

15.8%
14.7%

14.0%

ROE
15％ level

12.0%
10.0%

ROA
7％ level

8.0%
6.0%

8.5%

6.5%

8.1%

6.6%

5.4%

4.0%
2.0%
0.0%
FY11/16

FY11/17

FY11/18

FY11/19

FY11/20 3Q

FY11/15
FY11/16
FY11/17
FY11/18
FY11/192015/11期
2016/11期
2017/11期
2018/11期
2019/11期

ROE

ROA*ROA=Operating income/total assets (beginning andending balance average)

20

Interest-bearing Debt/Net D/E Ratio
Long-term debt increased due to active acquisition of profitable real estate. Net D/E ratio was 2.11 times.
Average long-term borrowing period is 14.7 years, average borrowing interest rate is 1.14% (averageborrowing period for profitable real estate 19.5 years, average borrowing interest rate 1.11%)
Interest-bearing Debt/Net D/E Ratio(¥mn)(Times)（注2）

FY11/16

FY11/17

FY11/18

FY11/19

FY11/20 3Q(Note 1) Net Debt Equity Ratio= (Interest-bearing debt - Cash and deposits) ÷ Shareholders’ equity(Note 2) Net D/E ratio temporarily declined due to rights offering in fiscal year ended November 30, 201821

Third Quarter of Fiscal Year Ending November 30, 2020
Overview of Consolidated Financial Statements by Segment
Real EstateBusiness

Net sales and operating loss were -38.0% and -54.5%, respectively, compared with thesame period of the previous fiscal year. This year, sales were biased toward the fourth
quarter, and at the present time the properties that have been contracted or purchased isapproximately ¥36.3 billion.
In the Property Leasing business, the occupancy rates of real estate under ownership

Property Leasing remains high. Due to the aggressive acquisition of profitable real estate, net sales
increased 23.0% compared with the 3Q of FY2019/11. Operating increased by 47.1%
Business

Net sales

YoY¥39,589mn-38.0％¥6,098mn+23.0％¥1,929mn-39.9％

compared with the 3Q of FY2019/11.

Other Business

Due to the impact of COVID-19, hotel operating conditions fell sharply, and both net sales
and operating income fell compared with the same period of the previous fiscal year.
Following the launch of the Go To Travel Campaign, hotel operations are currently on arecovery trend.

22Securing Ongoing Steady Profit(Factors Contributing to Differences with Same Period in Previous Fiscal Year)●Increase in rent income due to increase in number of properties (+¥866 million)●Although AM compensation and property management increased (+¥139 million) during the period due to the
expansion of the investment corporation, hotel income decreased (–¥1,235 million) due to the impact of COVID-19,
resulting in a decrease compared with the same period of the previous year.
●Brokerage, AM fees (acquisition), decrease in construction works (–¥371 million)

Compared with Same Period ofPrevious Fiscal YearNet sales (¥mn)

Fiscal Year-end Comparison
Net sales (¥mn)

2019 3Q

Total
9,590

2018
Total
11,1382019
Total
12,997

2020
Forecast
Total
12,4652020 3Q

Decrease in
hotel
revenue

Total
8,974

Decrease in
brokerage,
AM fees(acquisitions)

Increase in
rent
income2019 3Q

2020 3Q

AM fees (during period), hotel income, property management
AM fees (acquisition fees), brokerage, works fees
Dividends, rental income

2018

2019

2020 (Forecast)

AM fees (during period), hotel income, property management
AM fees (acquisition fees), brokerage, works fees
Dividends, rental income23[Real Estate Business] Overview of Consolidated Financial Statements
Segment Sales and Operating Profit Ratio

Net Sales by Asset Category
Investment Condominium
Sales (to investors)
3,150

Asset management

Sales
(¥mn)

OP Ratio

1,060

Full-year forecast(Upper limit)

Forecast (Upper limit)
Forecast (Lower limit)
Sales

Actual + contract,
total received attime of acceptanceSegment profit
75,946(Lower limit)
Contract completed,purchase acceptedand completed

Segment OP ratio

FY2020 (3Q)
Net sales
39,583 (Millions of yen)
Renovation
securitization
15,760

Segment profit(Upper limit)

Development
securitization

Full-year forecast(Lower limit)

19,6292020年11月期第3Q
売上高39,583百万円

Unit: Millions of yen

Note: Segment sales figures for FY2020 are after intersegment eliminations,while total sales amount figure is prior to intersegment eliminations.

2017

2018

2019

2020 3Q

2020 (Forecast)24

[Property Leasing Business] Overview of Consolidated Financial Statements
Segment Sales and Operating Profit Ratio

Net Sales by Asset Category
Sales
(¥mn)

Forecast

OP Ratio

Sales
Segment OP ratio

Commercial
facilities
1,540

Full-year
forecast
8,200

FY2020 (3Q)
Net sales
6,076 (Millions of yen)
Office buildings
770

Residence
3,817

Unit: Millions of yen

Note: Segment sales figures for FY2020 are after intersegment eliminations,while total sales amount figure is prior to intersegment eliminations.

2017

2018

2019

2020 3Q

2020 (Forecast)25

[Property Leasing Business] Asset Holdings by Region, Occupancy Rates◆Diversified asset holdings centered on ordinance-designated cities and regional hub cities.
‣ Competition for property transactions limited‣ Relatively high profitability compared with Tokyo metropolitan area
◆Not susceptible to the impact of COVID-19 infections, the residence occupancy rate remains high at 94.7%.
◆Strengthen leasing for busy fall season.

Asset Holdings by Region

Occupancy Rate of Residences

Hokkaido
16%

Kansai
26%

Chubu
22%
Kyushu30%
Chugoku
6%(Note 1) As of end of fiscal year ending August 31, 2020
(Note 2) Profitable real estate held by Samty on non-consolidated basis(fixed assets + real estate for sale)(Note 3) Excluding development properties, such as S-RESIDENCE(Note 4) Average occupancy rate at end of each quarter(*) Total floor area basis (weighted average):
Total leased area of each property / Total leasable area

FY11/18

FY11/19

FY11/20(Note) With the exception of special properties, calculated on the basis that,for example, the buildings were acquired new and that a certain periodof time has not passed since the acquisition.

26

[Other Business] Overview of Consolidated Financial Statements
Net Sales by Asset Category

Segment Sales and Operating Profit Ratio
Forecast
Sales
Segment OP ratio

Investment
dividend, etc.
Construction,
condominium
management, etc.

155

583

Rental income,such as fromvacation rentals
160

FY2020 (3Q)
Net sales
1,734 (Millions of yen)

通期計画
2,800

Room income
886

Unit: Millions of yen
2017

2018

2019

2020 3Q

2020 (Forecast)

Note: Segment sales figures for FY2020 are after intersegment eliminations,while total sales amount figure is prior to intersegment eliminations.

27

お問い合わせ先This document includes forecasts of future business performance and statements concerning development
plans, numerical targets, etc.
These statements are based on the information available at the time of preparation and certain subjective
assumptions we have made that depend on uncertain factors. As such, they are subject to underlying risks
and uncertainties.
There is no guarantee that these statements will match future events.
Actual results could differ from the projections made within this document due to changes in economic
conditions, market trends, the business environment and other factors.
Moreover, while utmost care has been taken in the preparation of this document, we cannot guarantee thenovelty, validity, usefulness, suitability for a specific purpose, function or safety of every item within.
Thank you for your understanding.
This document is not intended as a solicitation for investment.
Any investment decision is to be made at your own discretion.

<Inquiries>
Investor Relations Office✉ samty-pr@samty.co.jp

お問い合わせ先