Onyado Nono Asakusa

Yukinohana Hot Spring

Overview of Consolidated Financial Results forthe fiscal year ended March 2020
May 27, 2020
President
Takumi Ueda

9616

Agenda01

Consolidated financial results for the
fiscal year ended March 2020

P. 2

02

Projected results for FY 3/21

P.18

03

Progress on the medium-term
management plan

P.20

1

Ogihama Hot Spring
Dormy Inn Kawasaki

Consolidated
financial results
for the fiscal year
ended March 2020

Hosei University Komagome
Dormitory

2

Executive Summary
Business results in the fiscal year ended March 2020 showed decreased
income due to the impact of the novel coronavirus
1➢ In the Dormitory Business segment, operating income increased by 2.7% despite the partial effectsof the novel coronavirus.
➢ The Hotel Business segment saw lower income due to decreased inbound tourism and restrained
business and leisure travel as results of the novel coronavirus.
➢ Impairment losses of ¥2,227 million were recorded, focused chiefly on assets such as those of the
Global Cabin (New-style compact hotel) business in the Hotel Business segment.

Opening of new facilities in FY 3/20 proceeded according to plan2

3

➢ Fifteen new dormitories (with 1,574 rooms), seven new Dormy inns (with 1,535 rooms),
and three new resorts (with 235 rooms)

Annual dividends per share were maintained at the same level as last year,
at 45 yen
➢ The payout ratio increased to 25.3% (vs. 18.3% in the same period last year)3Consolidated business results and main financial indicators in FY 3/20
(Unit: 100 million yen)

FY 3/19

FY 3/20

Results

Results

1,628.1

1,697.7

+69.5

+4.3%

Operating profit

145.6

112.0

-33.6

-23.1%

Ordinary profit

143.2

124.9

-18.2

-12.7%Net profit

95.6

69.2

-26.3

-27.6%EPS (JPY)

245.3

177.6

-67.7

-27.6%

Capital investment

174.8

226.3

+51.5

+29.5%

Depreciation

47.5

52.6

+5.0

+10.5%Cash flow*

143.2

121.8

-21.3

-14.9%

Dividends per share (yen)

45.0

45.0

-

-

Payout ratio

18.3%

25.3%

+7.0pp

-

ROE

12.6%

8.5%

-4.1pp

-

0.8x

0.9x

0.0x

-

Net sales

Net debt-to-equity (D/E) ratio

YoY change* Cash flow: Net profit + depreciation

4

FY 3/20 sales and operating profit broken down by segment
Net sales

489 503(Unit: 100 million yen)

Hotel total- FY 3/19 783- FY 3/20 789

455 460

327 329
158 167

155 166

FY 3/19

FY 3/20

69
Dormitory

Dormy Inn

Resorts

Operating profit

Comprehensive
Building
Management

Foods Service

Development

124 133

OthersHotel total- FY 3/19 82.1
- FY 3/20 48.5

78 80.2
66.5
52.6
FY 3/19-5.3 (includes -5.1 in the real-estate sale andleaseback business)

19.0

15.6

FY 3/20

Dormitory73

Dormy Inn

2.9 6.1-4.1

Resorts

13.7

0.9 1.1

0.3-1.2

Comprehensive
Building
Management

Foods Service

Development

Others5

Dormitory Business: FY 3/20 Net sales and operating profit(Unit: 100 million yen)

Net sales

Operating profit

Sales increased by 1.36 billion yen(2.8％) from the previous period

Profit increased by 210 million yen(2.7%) from the previous period

-2.8
-3.4
+18.6

+0.0
-1.8

+2.5

+1.4

+1.2

503
80
489

FY 3/1978

FY 3/19

FY 3/20

The impact of the

Facilities opened Facilities opened novel coronavirus

OthersFY 3/20

FY 3/19

FY 3/19

FY 3/20

The impact of the

Facilities opened

Facilities opened

novel coronavirus

OthersFY 3/20

6

Dormitory Business: Trends in initial number of leased units/occupancy rate
Trend in initial number of leased units (by category)This was due mainly todecreased demand for newemployee training as a resultof the novel coronavirus(Rooms)40,089(+1,709))40,00030,000

4,586

4,810

5,097

8,682

9,387

10,068

5,263
11,312

5,293
12,08538,898(-1,191)

5,531

5,673

13,266

12,405(-861)(+1,181)

DomealEmployee

20,00010,000***20,212

20,534

20,685

20,52021,002

21,292(+290)

20,820(-472)

FY 3/15FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20

FY 3/21

dormitory
Student dorm

0*International students included above

2,660(12.7%) 3,079(14.5%) 2,466(11.8%)

Trend in initial occupancy rate
(%)
97.2

97.3

98.3

98.3

97.7

98.7

As a result of the
impact of the novel
coronavirus,
international
students' arrivals inJapan have been
postponed, leading
to a decrease in theinitial number ofleased units

93.7

FY 3/15FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20

FY 3/217

Dormy Inn Business FY 3/20 Net sales and operating profit(Unit: 100 million yen)

Net sales

Operating Profit

Sales increased by 440 million yen(1.0%) from the previous period

Profit decreased by 1.38 billion yen(20.8%) from the previous period

+0.3
+19.9

+17.0

-5.9

+7.4

-28.0

-2.3

+2.0

-21.3

66
455

+5.7

66

460

453

52

FY 3/19

Existing*

FY 3/19

FY 3/20

The impact of the

facilities

Facilities opened

Facilities opened

novel coronavirus* Facilities opened as of March 31, 2018

OthersFY 3/20

FY 3/19

Existing*

FY 3/19

FY 3/20

The impact of the

facilities

Facilities opened

Facilities opened

novel coronavirus

OthersFY 3/208

Dormy Inn Business: Monthly trends in Occupancy Ratio and Average Daily Rate
FY 3/19:Average Daily Rate

FY 3/20:Average Daily Rate

FY 3/19:Occupancy Ratio

FY 3/20:Occupancy Ratio(Thousand yen)

96.2%

100.0%
91.2%

90.3%

91.6%

90.0%
88.2%

89.1%

90.1%

93.8%

92.8%

94.3%

21.0

94.7%

88.7%

91.5%

94.0%

94.0%
90.1%

91.8%

91.1%

90.6%

95.9%

19.0

86.6%

84.4%

86.5%

17.0

80.0%

15.0
70.0%
13.0
57.4%

60.0%

11.0
50.0%

9.0

40.0%

7.0

30.0%

5.0
Apr

May

Jun

Jul

Aug

Sep

Occupancy Ratio

Oct

Nov

Dec

Jan

Feb

Mar

Average Daily Rate
Annualcumulative
total

Q1

Q2

Q3

Q4

FY 3/19(actual results)

89.1%

92.1%

92.7%

89.7%

90.9%

FY 3/20(actual results)

91.0%

94.3%

93.2%

75.9%

YoY change＋1.9pp＋2.2pp＋0.5pp-13.8pp

Annualcumulative
total

Q1

Q2

Q3

Q4

FY 3/19(actual results)

10.9

11.7

11.0

10.3

11.0

88.6%

FY 3/20(actual results)

11.3

11.4

10.6

9.1

10.7

-2.3ppYoY change

+0.3

-0.3

-0.4

-1.2

-0.3

(Note) The table above shows figures not including hotels that opened in April 2018 or later (to enable comparison between the two periods under similar conditions)9Dormy Inn Business: Trends in inbound tourist demand
Overnight travel: Number of inboundaccommodations guests vs. PY

Overnight travel: Number of inboundaccommodations guests by country

Source: Japan Tourism Agency
Unit: Thousand guests/night

othersFacilities with 10 or more employees

2,651

25,000

2,487

3,364

4,234

2,637

2,510

Down 37%
YoY

2,682

Canada10,811

America
2,135

22,021
10,00024,57321,011 21,932

21,285 21,943

22,260

6,019
7.3％

Germany

5,000

12,368
14.3％

Philippines
Indonesia

FY 3/19

FY 3/20

FY 3/19

1Q

FY 3/20

FY 3/192Q

FY 3/20

FY 3/193Q

FY 3/20
4Q

Dormy Inn: Number of inbound accommodations
guests vs. PY

Thailand

Down 36%
YoY
400

513

200

Europe/Americas 5.5%
7.5%

17.4%

497

440

316

1Q

FY 3 /1 9 FY 3/20
2Q

FY 3/19 FY 3 /2 0
3Q

FY 3/19 FY 3/20
4Q

Hong
Kong
6,007
7.3％

Korea
20.4%

3.1%

12.3%
14.9%

23.6%

China
16.2%

0
FY 3/19 FY 3/20

2.7%

489

499
410

Asia
othersTaiwan540

24,252
29.6％

Dormy Inn: Number of inboundaccommodations guests by country

Unit: Thousand guests/night

600

6,264
7.2％

11,272
13.7％

Singapore

China

23,594
27.3％

Taiwan

Malaysia0

FY 3/19
Results

FranceVietnam

FY 3/20
Results

12,142
14.0％

5,780
6.7％

England13,603

6,278
7.7％

11,33020,00015,000Korea

OthersAustralia

30,000Source：Japan Tourism Agency
Unit: Thousand guests / night

43.5%

FY 3/20
Actualresults

FY 3/19
Actualresults

Hong
Kong
33.0%

10

Resorts Business: FY 3/20 Net sales and operating profit(Unit: 100 million yen)

Net sales

Operating Profit

Sales increased by 190 million yen(0.6%) from the previous period+12.1

Profits decreased by 1.98 billion yen
from the previous year

-4.3
-15.8

-0.3

+14.8
-9.1

+4.3

+10.7

-10.6

354
327

-1.8
329

327

15

FY 3/19

Existing*
facilities

FY 3/19

FY 3/20

Facilities opened Facilities opened

NaturalThe impact of thedisasters

novel coronavirus

Others-11.4

FY 3/20－6.3

FY 3/19

Existing*
facilities* Facilities opened by the end of March, 2018

FY 3/19

FY 3/20

Facilities opened Facilities opened

NaturalThe impact of thedisasters

novel coronavirus

Others-4
FY 3/20

11

Resorts Business: Monthly trends in Occupancy Ratio and Average Daily Rate
FY 3/19:Average Daily Rate

FY 3/20:Average Daily Rate

FY 3/19:Occupancy Ratio

FY 3/20:Occupancy Ratio(Thousand yen)

100.0%

100.0%

60.0

95.6%

90.0%

84.1%
80.6%

80.0%
79.1%

79.6%
79.0%

77.9%

86.8%

85.6%
80.0%

80.7%

77.3%

88.8%

87.0%

81.9%

79.3%

83.3%

55.0

77.6%
50.0

79.3%

76.4%

70.0%

74.7%

76.8%

59.5%

45.0

60.0%
40.0
50.0%
35.0

40.0%

30.0%

30.0
Apr

May

Jun

Jul

Aug

Sep

Occupancy Ratio

Oct

Nov

Dec

Jan

Feb

Mar

Average Daily Rate
Annualcumulative
total

Q1

Q2

Q3

Q4

FY 3/19(actual results)

79.2%

87.6%

84.6%

83.0%

83.6%

FY 3/20(actual results)

78.7%

86.4%

79.7%

71.2%

YoY change-0.5pp-1.2pp-4.9pp-11.8pp

Annualcumulative
total

Q1

Q2

Q3

Q4

FY 3/19(actual results)

40.0

44.4

42.0

41.0

41.9

79.0%

FY 3/20(actual results)

42.7

45.0

40.9

39.6

42.2

-4.6ppYoY change

+2.7

+0.6

-1.1

-1.4

+0.3

(Note) The table above shows figures not including hotels that opened in April 2018 or later (to enable comparison between the two periods under similar conditions)12Other Businesses: FY 3/20 Net sales and operating profit(Unit: 100 million yen)

Net sales: YoY change +6.5%

総合事業
Comprehensive
Building
Management
Business
FY 3/19

155

事業
Food Service
Business

Development事業
Business

Operating profit: YoY change -2.1%

その他事業
Other
Businesses

FY 3/20

FY 3/19

166

158

69

+3.5

73

Food Service
事業
Business

Development事業
Business

Other
その他事業
Businesses

19.0

FY 3/20

167
13.7

124

+11.3

Comprehensive
総合事業
Building
Management
Business+8.5(includes +28.4
in the real-estatesale andleasebackbusiness)

133

+9.5
(includes PKP+7.4 andsenior + 0.4)

6.1
2.9
+3.1

+0.1

-5.3
(includes -5.1
in the realestate sale andleasebackbusiness)+1.5(includes
PKP-0.1 andsenior + 1.0)

0.9 1.1

0.3
-1.2
13

Balance sheet
End of March 2019

End of March 2020
Assets
217.0 billion yen(+14.5 billion yen)

Liabilities
133.1 billion yen(+10.1 billion yen)Interest-bearing
debt

AssetsLiabilities

Cash anddeposits

202.5 billion yen

122.9 billion yen

18.3 billion yen

93.0 billion yen

Cash anddeposits
16.6 billion yen

Interest-bearingdebt
82.9 billion yen(+1.6 billion yen)(+10.0 billion yen)
*Includes CB of
19.9 billion yen*Includes CB of
19.9 billion yen

Non-current
assets
165.9 billion yen

Non-current
assets160.7 billion yen(+5.1 billion yen)
Net assets
79.5 billion yen

Net assets
83.9 billion yen(+4.3 billion yen)

Treasury stock

Treasury stock-300 million yen-300 million yen

Interest-bearing liabilities = Short-term loans payable + Current portion of bonds + Bonds + Long-termloans payable + Convertible bonds (CB)

Figures in parentheses indicate changes
from the previous year

14

Interest-bearing debt and Net D/E ratio
Interest-bearing liabilities (net）(100 million yen)

Net debt-to-equity (D/E) ratio(Times)

800

1.6

600

1.2

0.9

0.9

0.8

0.7

400

561
200

0.9

407

611

663

0.9
747

410

0.8

0.4

0

0.0
FY 3/15FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20
15

Dividends/payout ratio(JPY)

Dividends

Payout ratio
30%

25.3%

50

40

30

16.5%

16.8%

40
26

18.3%

20%

45

20

10

17.7%

45
10%

31

0

0%
FY 3/16

FY 3/17

FY 3/18

FY 3/19

FY 3/20(Note) 1:2 stock split was conducted on April 1, 2017.

16

ESG initiatives• Enhancement of corporate governance➢ Appointment of outside Directors
Outside Director who is not a member of the audit and supervisory board (one Director): Newly appointed in June of last year A former
director of the Japan Tourism Agency, this outside Director is highly familiar with the fields of land, infrastructure, transport, and tourism
policies.
Outside Directors who are members of the audit and supervisory board (two Directors): Highly familiar with the fields of finance,accounting, business administration, and economics- Developing a structure for monitoring of Company management by independent Directors (recorded with the Tokyo Stock Exchange),
through the three outside Directors above. These independent Directors attend all meetings of the Board of Directors, where they offer
proactive and constructive opinions.
- Furthermore, plans call for increasing the number of independent outside Directors by three persons in the General Meeting of
Shareholders planned for June 2020. ＊The ratio of outside Directors is planning to be more than one-third.
➢ Shareholders will be provided with sufficient time for thorough consideration of the resolutions to be submitted to the General Meetingof Shareholders through means such as early notification, by electronic means, of convocation of the meeting.

• Realizing gender equality➢ In June 2019, the Company appointed its first female Director, and it plans to appoint a female outside Director among thoseplanned for appointment in June 2020 as well.
➢ The number of women hired as permanent, full-time employees is in an increasing trend (with the percentage as of the endof FY2019 having risen by 4.8 pp from the end of FY2015, to 47.4%).
➢ Both the percentage of managerial positions filled by women and the percentage of women permanent, full-time employees
in managerial positions show gently increasing trends.

• Clean, renewable energy for all➢ Renewable energy- Participating in the activities of the town of Nakanojo, Gunma Prefecture to promote community vitalization through local
production and local consumption of electricity➢ Environmental protection activities- Implementing WECO activities* for guests staying consecutive nights- Adoption of business cards made from limestone (LIMEX business cards)
A unique environmental protection initiative of the Company under which guests staying consecutive nights at Dormy Inn facilities can designate the extent to which they wish
to have their rooms cleaned

17

Kotohira hot spring
Onyado Shikishimakan

Projected
results for
FY 3/21

Inazumi Hot Spring18

Projected consolidated results for FY 3/21
Impact of the novel coronavirus⇩⇩⇩
To be determined, due to uncertainty regarding future trends and the lack of grounds
for reliable estimates◼ Priority measures
I. Thorough cost cutting
Building a solid business structure through cost savings Companywide

II. Beginning aggressive efforts toward recovery in preparation for the release of the state of
emergency in stages◇ Assumptions
・ Thorough implementation of measures to prevent the spread of the coronavirus (e.g., in ways of serving*
meals and thoroughdisinfection and sterilization of guestrooms and common areas)・ A recovery in inbound tourism is expected to take one to one and one-half years or longer⇩⇩⇩
Offering and announcing new plans and services chiefly targeting domestic customers

III. Securing the planned funding necessary
The Company has secured the funding expected to be needed for the time being through agreementwith financial institutions on increased credit lines.

19

Kotohira hot spring
Onyado Shikishimakan

Progress on themedium-term
management plan

Okuhida Onsengo
Miyama Ouan
20

Main quantitative goals of the medium-term management plan
(March 2018 – March 2022) and state of progress on them
Name of this mediumterm management plan

Kyoritsu Jump Up Plan
1. Increasing customer satisfaction

Basic policies-

Creating products and services to lead to increased customer satisfaction, improving
customers’ evaluations of the Company, and further earning their trust.

2. Taking the initiative on development-

Growing our business facilities and building a rock-solid foundation

Main quantitative goals
Main quantitative goals

Results in FY 3/17, the starting pointof the medium-term management plan

Progress as of FY 3/20

Results in FY 3/22, the final fiscal year of themedium-term management plan

Net sales

135.8 billion yen

169.7 billion yen (CAGR: +6%)

220 billion yen (CAGR: +10%)

Operating profit

11.8 billion yen

11.2 billion yen(CAGR: ― )19 billion yen (CAGR: +10%)

Net D/E Ratio

0.9 times

0.9 times

No greater than 1.0,
the financial soundness target

Payout ratio

16.8%

25.3%

Gradually increasing, aiming for a targetof more than 20%

ROE

11.7%

8.5%

10% or more

Development plans

Results in FY 3/17, the starting point of themedium-term management plan

Progress as of FY 3/20
(FY 3/18 to FY 3/20)

End of FY 3/22, the final fiscal year of themedium-term management plan

Dormitory

37,000 rooms

Dormy Inn

10,200 rooms

Resorts

2,200 rooms- Development basis: 4,317 rooms- Projects on which the institutions already havemade decisions: Approximately 6,100 rooms(progress rate: 87%)
- Development basis: 4,636 rooms- Projects on which the institutions already havemade decisions: Approximately 9,000 rooms(progress rate: 100%)- Development basis: 659 rooms- Projects on which the institutions already havemade decisions: Approximately 1,500 rooms(progress rate: 107%)

7,000 rooms

9,000 rooms

1,400 rooms

21

Dormitory and hotel development plans to realize sustained growth
FY 3/18
Results

FY 3/19
Results

Dormitories, Domeal+10 facilities*

473 facilities

End of FY 3/17:

Number of facilities
in operation at endof yearNumber of
facilities inoperation at endof year

Leasing rate

88.5%

Leasing rate

463 facilities/37,000 rooms

Medium-term plan:
7,000 rooms

Projects on which theinstitutions already havemade decisions
Around 6,100 rooms
Progress rate
87%+963 rooms*+9 facilities

72 facilities

End of FY 3/17:
64 facilities/10,200 rooms

Leasing rate

98.8%

Medium-term plan:
9,000 rooms

Number of rooms
in operation at endof year

Progression rate100%

+1,571 rooms

11,811 rooms[L]PREMIUM Kanda,[L]Miyazaki,[L]global cabin Suidobashi,[L]Kofumarunouchi, [L]Izumo,[L]EXPRESS Sendai-Seaside,[L]Nono Nara, [L]Kochi,[L]Matsuyama

Resorts+4 facilities

29 facilities

End of FY3/17:

Number of facilities
in operation at endof year

24 facilities/2,200 rooms

Leasing rate

58.7%

Medium-term plan:
1,400 rooms

Number of rooms
in operation at endof year

Projects on which theinstitutions already havemade decisions
Around 1,500 rooms+253 rooms

2,478 rooms

Keiun (Izumo),
Tsukiyo no Usagi (Izumo),[L]Le Chien Kyu-Karuizawa,[L]Suiun (Gora)+9 facilities*

Number of
facilities inoperation at endof year+15 facilities*

485 facilities

Number of
facilities inoperation at endof year88.5%

Leasing rate

Number ofrooms in
38,166 rooms
39,450 rooms
operation at endof year[L]Waseda, [L]Hikifune,
Noda ANNEX,[L]Keiotsunashima,[L]Senjunakamachi,[L]Tsunashimaekimae, Higashiosaka, [L]Tsurugashima, Omoromachi,[L]Kaihinmakuhari,[L]Maihama, [L]Minamikoshigaya,[L]IrinakaⅡ, [L]Koroen ,and others. [L]Tokorozawa,[L]Hakataekiminami Ⅱ,[L]Kokuraekimae, and others.
Number of facilities
in operation at endof yearAround 9,000 rooms+1,780 rooms*

Number of rooms
in operation at endof yearDormy Inn

Projects on which theinstitutions already havemade decisions+14 facilities*

FY 3/20
Results+1,530 rooms*
80 facilities

Leasing rate
98.9%
Number ofrooms in
13,248 rooms
operation at endof year[L]Honhachinohe,[L]Osakatanimachi,[L]Korakuen, [L]Oita,[L]global cabin Hamamatsu,[L]global cabin
Yokohamachukagai,[L]Takamatsuchuokoenmae,[L]PREMIUM Namba ANNEX,[L]PREMIUM Osakakitahama

FY 3/21
Planned

+1,574 rooms*+15 facilities*+1,180 rooms*+8 facilities*+608 rooms*

494 facilities

Number of facilities
in operation at endof year

506 facilities

Number of facilities
in operation at endof year

512 facilities

Leasing rate

87.9%

Leasing rate

87.5%

41,620 rooms

Number of rooms
in operation at endof year41,987 rooms

87.6%

Number ofrooms in
40,633 rooms
operation at endof year[L] Sendai Higashiguchi V,[L] Motoyama, [L] Osaka Tenma,[L] Kagoshima, [L] Kobe,[L] Ichigaya, [L] Komagome,
Meiji University Global Village,[L] Setagaya Todoriki, and others+7 facilities

Number of
facilities inoperation at endof year

FY 3/22
PlannedNumber of rooms
in operation at
end of year

[L] Hokudai Avenue, [L] Nippori,[L] Sendai Tsutsujigaoka,[L] Nagakute, [L] Hamadayama,[L] Komazawa Koen,[L] Esaka Koen, [L] Azabu-Juban,[L] Hyakumanben Annex,[L] Yokohama-Nishi, and others[L] Sakado II, Niigata II,[L] Kyoto-Kuinabashi,[L] Iriya, [L] Hirao-Ekimae,[L] Kameari, and others+1,535 rooms+7 facilities+1,797 rooms+13 facilities+2,694 rooms

87 facilities

Number of facilities
in operation at endof year

94 facilities

Number of facilities
in operation at endof year107 facilities

99.1%

Leasing rate

99.3%

16,580 rooms

Number of rooms
in operation at endof year19,274 rooms

Leasing rate
Number ofrooms inoperation at endof year

99.0%

Leasing rate

14,783 rooms

Number of rooms
in operation at
end of year

+3 facilities+235 rooms+6 facilities+486 rooms+4 facilities+407 rooms

34 facilities

Number of facilities
in operation at endof year

40 facilities

Number of facilities
in operation at endof year

44 facilities

Leasing rate
60.2%
Leasing rate
61.6%
Number of
Number ofrooms inrooms in
2,649 rooms
2,884 rooms
operation at end
operation at endof yearof year[L]La Vista Kirishima (Kagoshima), [L]Echigoyuzawa (Niigata),

Leasing rate

60.4%

Leasing rate

68.9%

Number of rooms
in operation at
end of year

3,370 rooms

Number of rooms
in operation at endof year

3,777 rooms+2 facilities

Number of
facilities inoperation at endof year+171 rooms
31 facilities[L]Shirakawago (Gifu)[L]Maebashi, [L]Fukui,[L]Morioka, [L]Nono Asakusa,[L]Kawasaki, [L]Furano,[L]MitoNumber of
facilities inoperation at endof year[L]Kotohira (Kagawa),
Inazumi (Akita)[L] Nono Kyoto-Shichijo,[L] Kobe, [L] PREMIUM Ginza,[L] Ikebukuro,[L] Nagasaki-Ekimae,[L] Toyohashi,[L] Nono Kanazawa[L] La Vista Kusatsu (Gunma),[L] Nasu-Shiohara Rengetsu (Tochigi),[L] Wakura Hot Spring (Ishikawa),
Kikuya Bettei Suigetsu (Shizuoka),
and others[L] Gotemba, [L] Nono Matsumoto,[L] Nono Sendai, [L] Fukuyama[L] Tokyo Bay (Toyosu),[L] Hiroshima ANNEX,[L] Aomori, [L] NonoYodoyabashi,[L] Okayama, [L] Nono Matsue,[L] Nono Kumamoto,[L] Yokohama,[L] Nono Asakusa Bettei,[L] Kawazu Hot Spring (Shizuoka),[L] Kyoto Umekoji,[L] La Vista Hakodate Bay ANNEX,[L] Jozankei

Progression rate
107%
Companywide leasing rate

89.4%

89.7%

89.2%

89.4%

89.9%

* Indicates numbers of increases in facilities and rooms from development projects (does not indicate numbers of increases from the end of the previous year for facilities and rooms in operation at the end of the year)
Note: Red text indicates development projects for which rates of inbound tourism are higher than the Company average; “L” indicates a leased facility; underlines indicate real-estate sale and leaseback projects including future plans

22Progress on real-estate sale and leaseback
Development
profit(projected)

Effects of equalization of profit
through securing development profit

The final increase greatly
exceeds the initial five-year planof 30 billion yen

3.2 billion yen

Expansion of investment andcapital policy choices throughincreases in funds

1 billion yen(Initial planned figure)30 billion yen
Development
profitability
3%

Approximately
Sumitomo Mitsui Finance30 billion yen
and Leasing 14 properties,
implemented
65 billion yen
as of end of Development profitability: 5%
FY3/20
CAP 4.5 to 5.5%

【Medium-term plan】

Planned amount of
real-estate sale andleasebackGenerating profits through further
enhancement of the business foundation

Development
investment

Financing

8 otherproperties
35 billion

140 billion yen↑↑

Cash flow from operating
activities/external fund-raising

Real-estate sale andleaseback

110 billion yen

30 billion yen

Additional development investment

Funds of 20-30 billion yen generated
through real-estate sale and leaseback(higher than initially planned)

23

Securing stable staffing and human resources

New-graduate
hires

April 2019

April 2020

April 2021

296 persons (actual)

285 persons (actual)180-260 persons (planned)

Management track: 31
persons
Hotel: 260 persons
Senior: 5 persons

Management track: 21
persons
Hotel 256 persons
Senior: 8 persons

Management track: 15 persons
Hotel: 155-235 persons
Senior: 10 persons

International students included
above: 62 persons(Vietnam, China, South Korea, etc.)

HiringroutesUtilizing strong ties with schools, built up through the Dormitory
Business, we have prospective employees introduced byschools.

Proactively hiring outstanding human resources,
with no restrictions on numbers of foreign
nationals hired
Graduates of schools using our dormitory
services account for 49.1% of new-graduate
hires (140 persons).

Dormy Inn

Foreignlanguagecapable staff
Cleaning andlinen staff

➢
➢
➢
➢

Developing a structure under which hotels can call an internal call center to communicate with guests in theirown languages
Staff who can speak foreign languages (English, Chinese, and Korean) are assigned at all times to the front
desks in the greater Tokyo and Osaka areas, where percentages of guests from overseas are especially high.
Utilizing our brand's hiring advantages, at present we have 18 buildings to operate directly for cleaning and linen
services through a structure that enables direct hiring and training regardless of nationality. Other facilities
employ structures including use of multiple vendors at each facility.
We are making progress on simplification of cleaning operations without loss of quality, through businessreforms.

24

Measures to increase corporate name recognition■ Corporate TV commercials aired during broadcasts ofthe Hakone Ekiden relay marathon■ Sponsoring original programming on TV Asahi and TBS Radio■ Sponsoring the programs "Sukkiri" on the Nippon Television Networkand "Nonstop" on Fuji TV (February-March)■ Broadcasting nine live 60-second commercials on TBS Radio (publicity)■ 2019 official sponsor of the Japan Women's Football League
The Company concluded an official sponsorship agreement with theNadeshiko League, where strong, healthy women athletes shine.
The Company will continue to support activities to promote the Nadeshiko
League to convey its players' dreams and feelings to as many fans as
possible.

■ Participation in various IR events etc.
-

IR for domestic individual investors: Holding briefings for individual and institutional investors,
participation in IR fairs, holding meetings with investors, etc.

-

IR for overseas institutional investors: Participation in international IR road shows andconferences (three events/year in FY 3/20)
25

Measures to increase customer satisfaction■ Building and enhancing our comprehensive customer network-

Utilizing customer data to deliver optimal hospitality to customers
Designing a membership program to help customers to better understand the Company and use
it loyally
We have begun planning a loyalty points program to enable customers to enjoy the benefits ofuse of our own reservation channels
Number of registered members of the hotel reservation site: 550,000 at end of March 2018 →
830,000 at end of March 2020 (+50.9%)■ Development of “Domico” an app exclusively foruse by dormitory residents (to be introduced
nationwide in 2020)-

Users can view photos of menu items and request meals easily
Provides notice of dormitory events, inspections, etc.
Enables communication with the dormitory manager and dorm
mothers and other tasks
26

Important notes

As used in these Notes, "presentation" refers to this Document explained or distributed by Kyoritsu Maintenance Co., Ltd. ("Kyoritsu" hereinafter), as well as oralpresentations, questions and answers, and information provided in writing or orally. This presentation (including related oral explanations and questions andanswers) does not constitute, state, or form, under any legal jurisdiction, a part of any proposal, guidance, or solicitation to purchase, acquire, apply for,exchange, trade, or otherwise dispose of any securities, or solicitation of any vote or approval.
Companies invested in by Kyoritsu, whether directly or indirectly, are separate companies. The term "Kyoritsu" may be used in this presentation for convenience'sake to refer to Kyoritsu and its subsidiaries in general. Similarly, the term "the Company" (including "we," "us," and "our") may be used to refer to thesubsidiaries in general or to persons working for them. These terms also may be used in cases in which it would not be useful to specify a specific company.

Forward-looking statements
This presentation and materials distributed in connection with this presentation include forward-looking statements, ideas, or views regarding the Company's
future businesses and future positions and results, including Kyoritsu estimates, projections, goals, and plans. While forward-looking statements often include
terms such as “targets,” “plans,” “believes,” “hopes,” “continues,” “expects,” “aims,” “intends,” “will,” “may,” “should,” “would,” “could,” “anticipates,” “estimates,”“projects,” or similar terms, or negative expressions thereof, that is not necessarily always the case. The forward-looking statements in this document are basedon current assumptions and ideas in light of the information currently available to the Company. Forward-looking statements are not guarantees by the Company
or its executives of future business results, and they involve risks, both known and unknown, uncertainties, and other factors. Risks and uncertainties include,
but are not limited to, the economic conditions of the Company’s businesses, including general economic conditions in Japan and around the world, as well as
the appearance or development of competing products, decisions by regulators and the timing thereof, and natural disasters. As a result of such factors, theCompany’s actual business performance, results, and financial details may differ substantially from the future business performance, results, and financial
details described, whether explicitly or implicitly, in forward-looking statements. The Company and its executives make no guarantee of any kind regarding theultimate accuracy of projections indicated in forward-looking statements, and actual business performance or results may differ substantially. Recipients of thispresentation should not depend excessively on forward-looking statements. Kyoritsu is under no obligation to update the forward-looking statements containedin this presentation or presented by the Company through other means. Past performance is no indicator of future results, and Kyoritsu’s business results as
contained in this presentation are neither indicators, forecasts, projections, nor estimates of its future business results.

27

The Company will strive to improve business results further throughadvancing the priority measures identified in the medium-term
management plan (March 2018-March 2022) at an accelerating pace.

Thank you!

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