Kotohira hot spring Onyado Shikisimakan

Natural hot spring Ryouun no Yu Onyado Nono Aasakusa

Consolidated Financial Results for FY3/20 Q1August 2019
Takumi Ueda
President

9616

FY3/20 Q1 Consolidated Financial Results

Executive Summary• Newly opened facilities in FY3/20 Q1 (April - June)
Dormitory business

13 facilities (1,451 rooms)

Dormy inn business

2 facilities (382 rooms)

Resort business

1 facility (86 rooms)• Robust growth both in revenue and profit in FY3/20 Q1 and reached the highest-ever profit
for the first quarter• Dormitory business : Occupancy rate at the beginning of FY3/20 was 98.7%, an increase of
1.0pp vs. PY• Revenue in 10-day Golden Week in 2019 grew by +27.5%* compared to the same period of
the previous year
• Excl. the impact of facilities that have been opened on and after April 1, 2018 to compare 2 periods of revenue on a common basis（Note） oku yen=100 MM yen

2

FY3/20 Q1 consolidated financial results(Unit: oku yen=100 MM yen)

FY3/19Q1 ActFY3/20Q1 Actvs. PY

Reveue

368.8

421.6

+52.8

+14.3%

Operating Profit

25.4

31.5

+6.0

+23.7%

Ordinary Profit

24.1

30.1

+5.9

+24.8%Net Profit

15.7

20.7

+5.0

+32.1%EPS(Yen)

40.3

53.2

+12.9

+32.1%

Depreciation Expense

10.9

12.2

+1.2

+11.2%Cash Flow*

26.7

33.0

+6.2

+23.5%* Net profit + Depreciation expense3

FY3/20 Q1 Revenue and Operating profit by business segment
124 130

Revenue

Hotel business total- FY3/19 Q1 177- FY3/20 Q1 198

123
107

(Unit: oku yen=100 MM yen)

69 75
FY3/19 Q1

35 39

34

FY3/20 Q1

31 34

16 17
Dormitory

Operating Profit

41

Dormy Inn

19.9 20.8

Resorts

Comprehensive Foods Service
Building
Business
Management
Business

Development
Business

OthersHotel business total- FY3/19 Q1 13.4
- FY3/20 Q1 16.8

19.0
15.2

+0.7 (incl. sales and lease back of real estate +0.3)

FY3/19 Q1
FY3/20 Q1

0.0 0.9
Dormitory

Dormy Inn

-1.8 -2.2
Resorts

1.2 1.9

0.0 0.5

0.0-0.6

Comprehensive Foods Service
Building
Business
Management
Business

Development
Business

Others4

Dormitory Business: FY3/20 Q1 Revenue and Operating profit(Unit: oku yen=100 MM yen)

Revenue

Operating Profit+0.9 oku yen/ +4.8％ vs. PY+5.6 oku yen/ +4.5％ vs. PY

-0.8

+1.0

+5.7

+1.0

-0.3

-0.8

-0.2

+0.9

130
124

124

FY3/19 Q1

FY3/19open

FY3/20open

Close

OthersFY3/20 Q1

19

19

FY3/19 Q1

FY3/19open

20

FY3/20open

Close

OthersFY3/20 Q1

5

Dormitory Business: Number of contracted rooms and occupancy rate at the beginning of FY (Historical data)
Number of contracted rooms at the beginning of FY – by category(Rooms)38,380(+1,285)

40,00030,000

4,372

4,586

4,810

8,050

8,682

9,387

5,097
10,068

5,293

5,531

11,312

12,085

13,266

20,52021,002

5,263

Domeal(+773)

20,00010,00040,089(+1,709)

Mainly coming from an increase incompanies to introduce a systemof dormitories for employees(+1,181)

Dormitories for
employees

21,292
20,20020,212

20,534

20,685

Dormitories forstudents(+290)(+482)
0
FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19Mainly driven by increase incontracted rooms for 4 year
university and college
students incl. foreign ones

FY3/20Occupancy rate at the beginning of FY
(%)

97.0

97.2

97.3

FY3/14

FY3/15

FY3/16

98.7

98.3

98.3

97.7

FY3/17

FY3/18

FY3/19FY3/206

Dormy Inn Business : FY3/20 Q1 Revenue and Operating profit(Unit: oku yen=100 MM yen)

Operating Profit

Revenue+3.8 oku yen/ +25.1％ vs. PY+15.8 oku yen/ +14.8％ vs. PY

+2.2

+0.0

-2.0

+10.9
+4.5

+2.0

+0.2

+2.9

-1.6

+0.3

-0.8

Marginal profit fromincrease in RevPAR+0.1
Decrease in foodstuffs

123
107

+1.0

107

exp.

15

+1.1

15

19

Others+0.8

FY3/19 Existing* Existing* FY3/19 FY3/20 KOR Others FY3/20
Q1 facilities facilities open
open (Seoul)
Q1(GW(Excl.
period) GW
period)* At the end of March, 2018

Others FY3/20
FY3/19 Existing* Existing* FY3/19 FY3/20 KOR
open (Seoul)
Q1
Q1
facilities facilities open
(Excl.
(GW
GW
period)period)7

Dormy Inn Business: Occupancy rate and ADR
Occupancy rate and ADR data by month
FY3/19:OCC

FY3/19:ADR

FY3/20:OCC

FY3/20:ADR(Unit: thousand yen)
13.5

95.0%
91.6%

91.2%
90.3%

12.0

90.0%
*

10.5

85.0%

80.0%

9.0
Apr

May

Jun

Jul

Aug

Sep

OCC
Q1

Q2

Q3

Oct
Nov
Dec
ADR(thousand yen)

Full
year

Q4

Jan

Q1

Feb

Q2

Mar
Q3

Full
year

Q4

FY3/19 Act

89.1%

92.1%

92.7%

89.7%

90.9%

FY3/19 Act

10.9

11.7

11.0

10.3

11.0

FY3/20 Forecast

90.8%

93.4%

92.8%

89.8%

91.6%

FY3/20 Forecast

11.3

12.0

11.2

10.5

11.3

FY3/20 Act

91.0%

FY3/20 Act

11.3

vs. PY

+1.9ppvs. PY＋0.3

vs. Forecast＋0.0

vs. Forecast* OCC in Sep 2018 was significantly lower than the previous month due to natural disasters (Hokkaido earthquake and Typhoon No.21) which were occurred in Sep 2018
(Note) Above figures are excl. the impact of facilities that have been opened on and after April 1, 2018 to compare 2 periods of occupancy rate and ADR on a common basis

8

Dormy Inn Business: RevPAR
RevPAR data by month(Unit: thousand yen)

13.0
FY3/19:RevPAR

FY3/20:RevPAR

12.0
11.0

10.6

10.5
9.6

10.0

*

9.0
8.0
Apr

May

Jun

Jul

Q2

Q3

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Q2

Q3

Q4

RevPAR(thousand yen)
Q1

Q4

Q1

Full year

FY3/19 Act

9.7

FY3/20 Forecast

10.2

FY3/20 Act

10.3

FY3/20 Act

10.3

vs. PY＋0.5

vs. Forecast

＋0.1

10.8

10.2

9.3

10.0

11.2

10.4

Full year
9.4

10.3

* RevPAR in Sep 2018 was significantly lower than the previous month due to natural disasters (Hokkaido earthquake and Typhoon No.21) which were occurred in Sep 2018
(Note) Above figures are excl. the impact of facilities that have been opened on and after April 1, 2018 to compare 2 periods of RevPAR on a common basis

9

Dormy Inn Business: Inbound tourism (FY3/20 Q1 vs. PY)
Share by country in inboundtourism on a revenue basis

The number of
inbound hotel guests

South Korea

Hong Kong

FY3/20 Q1

8.4%
Taiwan410

510

thousand people

thousand people

Taiwan2.5%

4.9% FY3/19
15.3%
Q1 ActChina

Others in Asia

FY3/20Q1 Act

1.2%

10.0%

USA

Othersin AsiaUSA

FY3/19 Q1

China

South
Korea

37.4%

47.1%

10.7%

13.9%
20.8%

Hong Kong

27.9%

10

Dormy Inn Business: Third-party evaluation
Dormy Inn attained first place for the business hotel department at JCSI in FY3/20
Score of Customer Satisfaction in the Business Hotel Dept.
Ranking12
3
45

FY2019FY2018FY2017

Dormy Inn

Richmond Hotels

Richmond Hotels

81.7

81.8

81.2

Richmond Hotels

Dormy Inn

Super Hotels

81.0

80.0

80.7

Comfort Hotels

Comfort Hotels

Daiwa Roynet Hotels

79.1

79.0

79.4

Super Hotels

Super Hotels

Dormy Inn

78.5

78.3

79.2

Daiwa Roynet Hotels

Daiwa Roynet Hotels

Comfort Hotels

77.4

77.3

76.6

“JCSI(Japanese Customer Satisfaction Index)” is a survey of the customer satisfaction index in the service industries.
Japan Productivity Center is conducting a survey at six times per year, approximately 30 industries, about 400
companies are targeted.
11

Resort Business: FY3/20 Q1 Revenue and Operating profit(Unit: oku yen=100 MM yen)

Revenue

Operating Profit+5.8 oku yen/ +8.4％ vs. PY+1.0

Existing* Existing*facilities facilities(GW (Excl. GW FY3/19
FY3/19period) period) open
Q1

-2.8

+3.6

FY3/20open

OthersFY3/20
Q1

+1.0
+2.9
69

-1.2

75
+3.6

69

-2.7
FY3/19 Existing* Existing* FY3/19 FY3/20
Q1
facilities facilities open
open
(GW
(Excl.
period)GW
period)Others FY3/20
Q1

-1.8

Marginal profit from

+1.5

-1.6

increase in RevPAR

-2.2

+0.5
Decrease in personal,
foodstuffs andpromotional exp.

+2.1
Others+0.9* At the end of March, 201812

Resort Business: Occupancy rate and ADR
Occupancy rate and ADR data by month(Unit: thousand yen)

100.0%

FY3/19:OCC

FY3/19:ADR

FY3/20:OCC

FY3/20:ADR

55.0
50.0

90.0%
80.0%

*

79.1% 79.0% 77.9%

45.0
40.0

70.0%

35.0

60.0%
50.0%

30.0
Apr

May

Jun

Jul

Aug

Q4

Full
year

OCC

Sep

Oct

Nov

Dec

Jan

Feb

Mar

ADR(thousand yen)
Q1

Q2

Q3

Q1

Q2

Q3

Q4

Full
year

FY3/19

79.2%

87.6%

84.6%

83.0%

83.6%

FY3/19

40.0

44.4

42.0

41.0

41.9

FY3/20 Forecast

79.3%

88.9%

84.7%

83.1%

83.9%

FY3/20 Forecast

42.4

46.7

43.6

41.9

43.7

FY3/20 Act

78.7%

FY3/20 Act

42.7

vs. PY

-0.5ppvs. PY＋2.7

vs. Forecast＋0.3

vs. Forecast* OCC in Sep 2018 was significantly lower than the previous month due to natural disasters (Hokkaido earthquake and Typhoon No.21) which were occurred in Sep 2018
(Note) Above figures are excl. the impact of facilities that have been opened on and after April 1, 2018 to compare 2 periods of occupancy rate and ADR on a common basis

13

Resort Business: RevPAR
RevPAR data by month(Unit: thousand yen)

50.0
FY3/19:RevPAR
40.0

35.4

34.8

FY3/20:RevPAR

*

30.2
30.0

20.0
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

RevPAR(thousand yen)
Q1

Q2

Q3

Q4

Q1

Full year

FY3/1931.7

FY3/20 Forecast

33.6

FY3/20 Act

33.6

FY3/20 Act

33.6

vs. PY＋1.9

vs. Forecast

＋0.0

38.9

35.5

34.0

35.1

Q2
41.5

Q3
36.9

Q4
34.8

Full year
36.7* RevPAR in Sep 2018 was significantly lower than the previous month due to natural disasters (Hokkaido earthquake and Typhoon No.21) which were occurred in Sep 2018
(Note) Above figures are excl. the impact of facilities that have been opened on and after April 1, 2018 to compare 2 periods of RevPAR on a common basis

14

Other Business: FY3/20 Q1 Revenue and Operating profit(Unit: oku yen=100 MM yen)

Revenue: +13.7% vs. PY

Operating Profit : +413.8% vs. PY

15

FY3/20 Consolidated Financial Forecast

FY3/20 Consolidated Financial Forecast and KPIs
Key assumptions in FY3/20 Forecast(Unit: oku yen=100 MM yen)

ReveueFY3/19FY3/20Act

Forecast

1,628.1

1,830.0

Operating Profit

145.6

157.0

Ordinary Profit

143.2

Net Profit

Dormitory Businessvs. PY-

Occupancy rate at the beginning of FY3/20:
98.7%, +1.0pp vs. PY
Number of contracted rooms at the
beginning of FY3/20: 40,089, +4.5% vs. PY+201.8+12.4%

+11.3

+7.8%

154.0

+10.7

+7.5%

95.6

102.0

+6.3

+6.6%

EPS(Yen)

245.4

261.6

+16.1

+6.6%

Capital Investments

174.8

153.4

-21.4

-12.3%

Depreciation Expense

47.5

50.0

+2.4

+5.0%

Resort Business

Cash Flow*

143.2

152.0

+8.7

+6.1%

-

DPS (Yen)

45

47

+2.0

+4.4%

18.3%

18.0%

-0.4pp

-

DPR

*

-

Dormy Inn Business---

Number of hotels/rooms planned to open in
FY3/20:・8 hotels/ 1,842 rooms (+13.9%)
RevPAR (thousand yen): 10.3, +3.0% vs. PY

Number of hotels/rooms planned to open in
FY3/20:・3 hotels/ 241 rooms (+9.2%)
RevPAR (thousand yen): 36.7, +4.8% vs. PY* Incl. negative impact of 14.5 oku yen vs. PY – opening expense +4.5oku yen, huge renewal expense, etc. +8.0 oku yen and systemmodification fee +2.0 oku yen for customer satisfaction improvement
17Underlying growth of Revenue and Operating Profit (vs. PY)(Unit: oku yen=100 MM yen)

FY3/19 Act
Reported Revenue

vs.PY

FY3/20 Forecast

1,628.1

1,830.0+201.8-82.0-106.9-24.8

1,546.0

1,723.0+176.9+11.4%

Reported Operating Profit

145.6

157.0

+11.3

+7.8%

+) Opening expense

+18.6

+23.1

+4.5

+24.1%

+2.9

+10.9

+8.0

+274.1%

-

+2.0

+2.0

-

Total of above special factors

+21.6

+36.1

+14.5

+67.1%

Operating Profit excl. special factors

167.2

193.1

+25.8

+15.4%-) Real estate securitizations

-12.0

-13.0

-0.9

155.2

180.0

+24.8

-) Real estate securitizations
Underlying Revenue (excl. above item)+) Negative impact due to huge renewal+) System modification fee

For customer satisfaction
improvement

Underlying Operating Profit (excl. above items)+12.4%+16.0%
18

FY3/20 Dormitory Business: Revenue and Operating Profit(Unit: oku yen=100 MM yen)

Revenue

Operating Profit+19 oku yen/ +3.9％ vs. PY+3 oku yen/ +4.6％ vs. PY

-2.4
+2.9

+0.2

+0.4

+19.3

508

+2.1

81

78

489

FY3/19FY3/19open

FY3/20open

OthersFY3/20FY3/19FY3/19open

FY3/20open

OthersFY3/2019

FY3/20 Forecast - Dormy Inn Business: Revenue and Operating Profit(Unit: oku yen=100 MM yen)

Revenue

Operating Profit+57 oku yen/ +12.3％ vs. PY+1.1+7 oku yen/ +11.4％ vs. PY

+0.7

+25.2

+2.1
+5.6

-0.5

+1.3

-1.5

Marginal profit fromincrease in RevPAR

+20.7

+6.1
Recoverd from

525

+9.6

disasters

72

+2.0

65

Increase in hugerenewal exp.

- 3.5

467

Others+1.0

FY3/19 Existing* FY3/19 FY3/20 KOR Others FY3/20
facilities open
open (Seoul)

FY3/19 Existing* FY3/19 FY3/20
KOR
Others FY3/20
facilities open
open (Seoul)* At the end of March, 201820

FY3/20 Forecast - Dormy Inn Business: Occupancy rate, ADR and RevPAR(Unit: thousand yen)Occupancy rate and ADR estimate by quarter vs. PY
93.4%
91.0%
FY3/19:ADR(Act)

90.8%

10.9

ADR

11.3 11.3

OCC
91.6%

89.8%

89.1%

FY3/20:ADR(Forecast)
FY3/20:ADR(Act)

92.1%

92.8%
92.7%
90.9%

11.3

11.7 12.0

89.7%
11.0 11.2

11.0

10.3 10.5

FY3/19:OCC(Act)FY3/20:OCC(Forecast)
FY3/20:OCC(Act)

Q1

Q2

Q3

Q4

FY3/19FY3/20

RevPAR estimate by quarter vs. PY
11.2
10.3

FY3/19:RevP AR(Act)FY3/20:RevP AR(Forecast)

10.3
10.2

10.8

10.0

10.4

10.2

FY3/20:RevP AR(Act)

9.4

9.7

9.3
Q1

Q2

Q3

Q4

FY3/19FY3/2021

FY3/20 Forecast - Resort Business: Revenue and Operating Profit(Unit: oku yen=100 MM yen)

Revenue

Operating Profit+0.6 oku yen/ +4.1％ vs. PY+45 oku yen/ +14.5％ vs. PY

+1.5
+18.4

-7.0

+5.7
Marginal profit from

+0.8

increase in RevPAR

+6.0

+18.5

Recoverd fromdisasters

22 +2.3

361
+9.1

16

16

Decrease in fixed

cost & miscellaneous
exp.

16

16

17

FY3/20open

OthersFY3/20+2.5

Increase in huge

315

renewal exp.

-5.1

FY3/19

Existing*
facilities

FY3/19open

FY3/20
open

FY3/19FY3/20Existing*
facilities

FY3/19open* At the end of March, 201822

FY3/20 Forecast - Resort Business: Occupancy rate, ADR and RevPAR(Unit: thousand yen)Occupancy rate and ADR estimate by quarter vs. PY
ADR

88.9%
83.6%

87.6%
FY3/19:ADR(Act)FY3/20:ADR(Act)79.2%

FY3/19:OCC(Act)42.4 42.7
40.0

78.7%

83.9%
43.7

83.1%
41.9

84.6%

79.3%

FY3/20:ADR(Forecast)

84.7%

OCC

83.0%
46.7
44.4

43.6
42.0

41.041.9Q3

Q4

FY3/20:OCC(Forecast)
FY3/20:OCC(Act)Q1

Q2

FY3/19FY3/20

RevPAR estimate by quarter vs. PY
41.5

38.9

FY3/19:RevPAR(Act)

36.7

34.8

FY3/20:RevPAR(For ecast)
FY3/20:RevPAR(Act)

35.1

36.9

33.6
33.6

35.5
34.0

31.7
Q1

Q2

Q3

Q4

FY3/19FY3/2023

FY3/20 Forecast - Other Business: Revenue and Operating(Unit: oku yen=100 MM yen)

Revenue: +12.1% vs. PY

Operating Profit : +6.2% vs. PY

24

Progress in Mid-term Management Plan (FY3/18-FY3/22)

Key quantitative targets of mid-term management plan and progress report

Kyoritsu Jump Up Plan

Name of MMP
Outline

1. Customer satisfaction improvement- Produce products and services that lead to better customer satisfaction, raise customers’ assessment of the Company and get greater trust

2. Advanced development- Expand business bases and build a solid business foundation

Key Quantitative Targets / Development Plan
Key Quantitative Targets

Starting FY for Mid-term Management Plan

Final FY of Mid-term Management Plan

Progress at the end of FY3/17(FY3/17)(FY3/22)

Revenue

1,358 oku yen

1,628 oku yen(CAGR: +10%)

Operating Profit

118 oku yen

146 oku yen(CAGR: +11%)

Net D/E Ratio

0.9x

0.8x

DPR

16.8%

18.3% - projection

Advance gradually to more than 20%

ROE

11.7%

12.6%

More than 10%

Progress at the end of FY3/20 Q1

Final FY of Mid-term Management Plan

(FY3/18 - FY3/20 Q1 cummulative)(At the end of Mar, 2022)

Starting point for Mid-term Management Plan

Development Plan

(At the end of Mar, 2017)

2,200 oku yen(CAGR: +10%)
190 oku yen(CAGR: +10%)
Maintain lower than 1.0x
for securing financial health- Opened: 4,194 rooms
Dormitory

37,000 rooms- Already decided: Around 5,100 rooms

7,000 rooms(Progression rate: 73%)
- Opened: 3,483 rooms
Dormy Inn

9,800 rooms- Already decided: Around 9,000 rooms

9,000 rooms(Progression rate: 100%)- Opened: 510 rooms
Resort2,200 rooms- Already decided: Around 1,300 rooms

1,400 rooms(Progression rate: 93%)26

Note: oku yen=100 MM yen

Dormy Inn Business: RevPAR exceeding mid-term management plan across the board
RevPAR
113.0%

110.4%（Estimation）

111.0%
109.0%

Operating profit + 7 oku yen vs.
mid-term management plan in
FY3/22, if RevPAR in FY3/22 (thelast year of mid-term managementplan) is 110.4%

107.2%

107.0%

105.1%

105.0%
103.0%
101.0%

100.0%

Results

Mid-term Management Plan

99.0%
97.0%
FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22Visitors arrivals

FY17/324MM people

FY18/3+4.9MM（+19.9％）29MM people

FY19/3+1.8MM（+6.2％）

31MM people27

Development plan of dormitories and hotels leading to sustainable growth
Development
Plan

FY3/18

FY3/19FY3/20FY3/21Results

Results

Plan

Plan

FY3/22
Plan

Dormitory+10 facilities*+963 rooms*+15 facilities*+1,852 rooms*+14 facilities*+1,506 rooms*+6 facilities*+474 rooms*+4 facilities+401 rooms

FY3/17 :Available facilities

473 facilities

Available facilities

485 facilities

Available facilities

494 facilities

Available facilities

498 facilities

Available facilities

502 facilities

463 facilities/37,000 rooms

Lease ratio

88.5%

Lease ratio

88.5%

Lease ratio

87.4%

Lease ratio

87.5%

Lease ratio

87.4%

Available rooms

38,166 rooms

Available rooms

39,450 rooms

Available rooms

40,666 rooms

Available rooms

41,042 rooms

Available rooms

41,443 rooms

MTMP**7,000 rooms Noda ANNEX,[L]Senjunakamachi,→Already decided
Around 5,100 rooms

Progression rate73%

[L]Tsunashimaekimae,
Higashiosaka, [L]Maihama,[L]Minamikoshigaya,[L]IrinakaⅡ, [L]Koroen etc.

Dormy Inn
FY3/17 :64 facilities/10,200 rooms

Progression rate100%

24 facilities/2,200 rooms[L]Kaihinmakuhari, [L]Tokorozawa,[L]Ichigaya, Meidai global village,[L]Hakataekiminami Ⅱ,[L]Komagome,[L]Kokuraekimae etc.

[L]Setagayatodoroki etc.

[L]Kyoto Kuinabashi,[L]Nippori, [L]Sendaihigashiguchi, [L]Hiraoekimae[L]Nagoyanisshin,[L]Hamadayama+9 facilities*+1,530 rooms*+8 facilities+1,842 rooms+11 facilities+2,437 rooms+8 facilities+1,647 rooms

Available facilities

80 facilities

Available facilities

88 facilities

Available facilities

99 facilities

Available facilities

107 facilities

Lease ratio

98.8%

Lease ratio

98.9%

Lease ratio

99.1%

Lease ratio

99.2%

Lease ratio

99.3%

Available rooms

11,811 rooms

Available rooms

13,248 rooms

Available rooms

15,090 rooms

Available rooms

17,527 rooms

Available rooms

19,174 rooms[L]Honhachinohe, [L]Osakatanimachi,[L]Korakuen, [L]Oita,[L]GLOBAL CABIN Suidobashi,[L]Kofumarunouchi, [L]Izumo,[L]EXPRESS Sendai-Seaside,[L]GLOBAL CABIN Hamamatsu,[L]GLOBAL CABIN Yokohamachukagai,[L]Takamatsuchuokoenmae,[L]Maebashi, [L]Fukui,[L]Nono Kyotoshichijo, [L]Kobe,[L]PREMIUM Ginza,[L]Morioka, [L]Nono Asakusa,[L]Ikebukuro, [L]Nagasakiekimae,[L]Kawasaki, [L]Furano,[L]Toyohashi,[L]Mito, [L]Nono Kanazawa[L]Gotenba, [L]Nono Matsue,[L]PREMIUM Osakakitahama[L]Nono Sendai,[L]Tokyo bay(Toyosu),[L]Hiroshima ANNEX,[L]Nono Asakusabettei,[L]PREMIUM Namba ANNEX,[L]Nono Matsumoto,[L]Yokohama, [L]Fukuyama[L]Nono Yodoyabashi,[L]Okayama, [L]Nono Kumamoto[L]Enoshima+4 facilities+253 rooms+2 facilities+171 rooms+3 facilities+241 rooms+6 facilities+486 rooms+3 facilities+197 rooms

Available facilities

29 facilities

Available facilities

31 facilities

Available facilities

34 facilities

Available facilities

40 facilities

Available facilities

43 facilities

Lease ratio

58.7%

Lease ratio

60.2%

Lease ratio

61.7%

Lease ratio

60.4%

Lease ratio

67.1%

Available rooms

2,478 rooms

Available rooms

2,649 rooms

Available rooms

2,890 rooms

Available rooms

3,376 rooms

Available rooms

3,573 rooms

MTMP**1,400 rooms Keiun (Izumo),

Tsukiyo no Usagi (Izumo),→Already decided[L]Le Chien Kyu-Karuizawa,

Around 1,300 rooms[L]Suiun (Gora)

Progression rate[L]Osakatenmangu, [L]Kagoshima,[L]SakadoⅡ, NiigataⅡ,[L]Sapporoekihigashi,

72 facilities[L]Matsuyama

FY3/17 :[L]Tsurugashima, Omoromachi,[L]Sapporokita,+1,571 rooms[L]Nono Nara, [L]Kochi,

Resorts[L]Motoyama, [L]Kobe,+9 facilities[L]Miyazaki,
Around 9,000 rooms[L]Sendaihigashiguchi Ⅴ,[L]Keiotsunashima,

Available facilities

MTMP**９,000 rooms [L]PREMIUM Kanda,→Already decided[L]Waseda, [L]Hikifune,[L]La Vista Kirishima (Kagoshima),[L]Echigoyuzawa (Niigata),[L]La Vista Kusatsu (Gunma),[L]Shirakawago (Gifu)[L]Kotohira (Kagawa),[L]Nasushiobara Rengetsu(Tochigi),[L]Ninnaji (Kyoto),[L]Wakuraonsen (Ishikawa),[L]La Vista Hakodate bay ANNEX

Inazumi (Akita)[L]Kawadsu Onsen (Shidsuoka),

Kikuyabettei Suigetsu (Shizuoka)
etc.

93%
Lease ratio（Total）

89.4%

89.7%

89.1%

89.3%

89.8%

* The number of increase in development facilities/rooms (not available facilities/rooms at the end of FY) ** Mid-term Management Plan
(Note) Red-highlighted parts mean the development facility with higher inbound ratio than our average. Underlined parts mean the developing facilities for sales and lease back of realestate not only complied with but also planned. ［L］parts mean the facilities for lease.

28

Act and Estimation of Sales and Lease Back of Real Estate
Development
profit(estimated)

The effect of profit leveling by
development profit

The amount of sales and lease back of realestate which has already decided
significantly exceeds ¥30 bn of the
expectation in mid-term management plan

¥3.2 bn

Expanding how to use the funds
by increasing resources¥1.0 bn(Initial plan)¥30 bnDevelopment
margin 3%

Sumitomo Mitsui
Finance and leasing
14 properties ¥65 bn
Development margin 5%
CAP 4.5～5.5%

The amount of sales
and lease back ofreal estate(estimated)

Others8 properties¥35 bnNumber of

Revenue

Profitproperties（bn yen）（bn yen）

FY3/18 Act

1

1.59

FY3/19 Act

3

8.20

0.28
1.20

FY3/20 Plan

4

10.69

1.30

Estimation on and after FY3/21

12

31.14

2.74

(Note) Development margin above shown is initially anticipated base.
This margin may be fluctuate greatly depending on each contract timing and property.

29

Stable hiring of personnel

Hiring of new
graduates

April 2019

April 2020

April 2021

296(Act)

300(Plan)

300～320(Plan)

Comprehensive work: 31
Hotel: 260
Senior Life Business: 5Comprehensive work: 22
Hotel: 270
Senior Life Business: 8Comprehensive work: 20
Hotel: 290
Senior Life Business: 10

Incl. foreign students: 57(Nepal, Vietnam, China, Republic of Korea)

No restriction in the number of foreigners hired
Hiring talented foreigners actively

Hiring route
We can get universities and colleges to introduce
many graduates to us with good relationship that wehave been building through our dormitory businesswith them

Breakdown of new employees
in April 2019

Others50.3%(149 people)

49.7%(147 people)

From universities andcolleges that used
our dormitories

30

Awareness of our company■ Distributed corporate TV commercials to live broadcasting of the Hakone Ekiden and Izumo Ekiden– undoubtedly one of the well-known Ekiden races held in Japan■ Distributed corporate radio commercials to TBS radio through the program we sponsored■ Distributed TV commercials of Kyoritsu Resort “La Vista”
in Hokkaido and Kyushu areas■ Broadcasting the PR video of Kyoritsu Resort■ Acting as an official sponsor of the Japan Women’s Football League in 2019,
We have signed an official sponsorship agreement withthe“Nadeshiko League”, where strong and healthy womenshine brightly.
We will eagerly support popularization activities meant
to convey dreams of achievement and feelings ofinspiration from the hard-playing athletes inthe“Nadeshiko League”to as many people as possible.

■ Enhancement of IR activities - participating in various IR events- IR activities for domestic investors: Some briefing sessions for individual and institutional investors, participating in IR fairs
and one-on-one meeting with investors, etc.
- IR activities for overseas investors: IR Road Show, participating in some IR conferences - 5 times in FY3/19
31

Further improvement in customer satisfaction■ Setting up and enhancement of comprehensive customer network-

Utilization of comprehensive customer database that leads to very kind hospitality
Customer data makes it possible to provide each customer with higher-quality service
Use historical information on usage by customer as an effective way of marketing and take thorough countermeasures to secure
customer information-

Designing a membership program so that customers can use our company over an extended period of time
Make most valued customers understand our business and service better/ Grant some privileges/services to them-Starting point program so that our customers can enjoy the benefits by using of our site to reserve our hotels.
The number of members of our site at the end of FY6/19 was 700 thousand people, increasing +29.2%
compared to the end of FY3/18.
Arranged a tie-up with “d point” program produced by NTT DOCOMO – very easy to earn and use “points”※ Made “earning” and “using” d point service available in “November 2018” and “April 2019”, respectively■ Developed the application of “Domico” for residents of our dormitories- Gradually expanded this operation from FY3/20-

Made it possible to apply for and cancel the board service at our dormitories on the day with simple
method “by mobile phone”-

In addition, made it possible to file the notification of sleepover with dormitory “by mobile phone”
32

Important Notice
For the purposes of this notice, “presentation” means this document, any oral presentation, any question and answer session and any written or oral material discussed or
distributed by Kyoritsu Maintenance Co., Ltd. (“Kyoritsu”) during the presentation. This presentation (including any oral briefing and any question-and-answer in connection
with it) is not intended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for,exchange, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction. No shares or other securities are being offered to the publicby means of this presentation.
The companies in which Kyoritsu directly and indirectly owns investments are separate entities. In this presentation, “Kyoritsu” is sometimes used for convenience wherereferences are made to Kyoritsu and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who workfor them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

Forward-Looking Statements
This presentation and any materials distributed in connection with this presentation may contain forward-looking statements, beliefs or opinions regarding Kyoritsu’s futurebusiness, future position and results of operations, including estimates, forecasts, targets and plans for Kyoritsu. Without limitation, forward looking statements often include
the words such as “targets”, “plans”, “believes”, “hopes”, “continues”, “expects”, “aims”, “intends”, “will”, “may”, “should”, “would”, “could” “anticipates”, “estimates”,“projects” or words or terms of similar substance or the negative thereof. Any forward-looking statements in this document are based on the current assumptions and beliefsof Kyoritsu in light of the information currently available to it. Such forward-looking statements do not represent any guarantee by Kyoritsu or its management of future
performance and involve known and unknown risks, uncertainties and other factors, including but not limited to: the economic circumstances surrounding Kyoritsu’s business,
including general economic conditions in Japan and worldwide; competitive pressures and developments; applicable laws and regulations; decisions of regulatory authorities
and the timing thereof; natural disasters, any of which may cause Kyoritsu’s actual results, performance or financial position to be materially different from any future results,
performance, achievements or financial position expressed or implied by such forward-looking statements. Neither Kyoritsu nor its management gives any assurances that the
expectations expressed in these forward-looking statements will turn out to be correct, and actual results or performance could materially differ from expectations. Persons
receiving this presentation should not place undue reliance on forward looking statements. Kyoritsu undertakes no obligation to update any of the forward-looking statements
contained in this presentation or any other forward-looking statements it may make. Past performance is not an indicator of future results and the results of Kyoritsu in thispresentation may not be indicative of, and are not an estimate, forecast or projection of Kyoritsu’s future results.

33

Further accelerating priority measures of FY3/18-FY3/22 Mid-term Management
Plan and delivering stellar results

Thank you!

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