FY17/2 Q3 (March-November 2016)
Corporate Presentation
January
2017
January 13, 2017

Ichigo (2337)© 2017 Ichigo Inc. All rights reserved.

http://en.ichigo.gr.jp/english

Ichigo Preserves andImproves Real Estate© 2017 Ichigo Inc. All rights reserved.

© 2017 Ichigo Inc. All rights reserved.

Contents
FY17/2 Q3 Earnings‒ OP 1.3X, Net Income 1.1X YOY‒ Earnings Growing Across All Segments‒ Robust Cash Flow and Cash-On-Hand‒ Strong Financial Position

Powerful Value-Add Business Model Underpins Growth‒ Ichigo Green (9282) IPO‒ Growing Asset Management Business‒ Accelerated Asset Turnover‒ Expanding Value-Add Business to Large-Size Office Buildings‒ New Business Launch: Client Real Estate Services‒ Clean Energy Business Growth
Appendices: Financial & Real Estate Data
Power Up 2019 Mid-Term Business Plan

© 2017 Ichigo Inc. All rights reserved.

4

FY17/2 Q3 Earnings© 2017 Ichigo Inc. All rights reserved.

5

OP 1.3X, Net Income 1.1X YOY‒ Gains on Sale of Solar Power Plants to Ichigo Green to be Recorded in Q4(Revenue JPY 10.3B, Net Income JPY 2.0B)‒ 96.5% Progress as of Q3 vs. Full-Year Net Income Forecast(Million Yen)
FY17/2 Q3Cumulative (9M)

Revenue

44,50093,835+110.9%125,600

74.7%

49,699Gross Profit

17,041

20,790+22.0%

23,86787.1%

19,863Operating Profit

13,602

17,042+25.3%

18,50092.1%

15,417

Recurring Profit

12,45015,375+23.5%

16,40093.8%

13,889Net Income

11,598

12,837+10.7%

13,30096.5%

12,92523.22 yen

25.57 yen

+10.1%

26.43 yen

96.7%

25.86 yen

EPS

© 2017 Ichigo Inc. All rights reserved.

YOY

Full-Year
Forecast% of FullYear
Forecast

FY16/2 Q3Cumulative (9M)

FY16/2 Actual

6

Earnings Growing Across All Segments‒ 108% Progress in Value-Add as of Q3 vs. Full-Year Forecast‒ Growth Across the Board in Ongoing Earnings(Million Yen)
Revenue
Segment

FY16/2 Q3Cumulative(9M)

FY17/2 3Q
Cumulative(9M)

Operating Profit
Full-Year
Forecast

YOY

vs. Forecast

FY16/2 Q3 FY17/2 3Q
Cumulative Cumulative
(9M)
(9M)

Full-Year
Forecast

YOY

vs. Forecast

Earnings Drivers(Parentheses show YOYchange in Gross Profit)

Asset Management

4,178

3,556

-14.9%

5,079

70.0%

2,527

1,859

-26.4%

2,386

・AM Fee: 1,157 (+375)
・Acquisition/Disposition Fees: 412(-123)
77.9%
・Performance Fees: 183 (-546)
・Sponsor Credit Support Fee: 38(-371)

Value-Add

38,95588,481 +127.1%

109,297

81.0%

11,011

14,637+32.9%

13,530108.2%

Clean Energy

1,315

1,783

+35.6%

11,152

16.0%

362

537

+48.3%

2,608

20.6%

Other

51

14

-72.2%

71

20.1%

-16

-142

–

-84

–

Total

44,50093,835 +110.9%

125,600

74.7%

13,884

16,892+21.7%

18,440

91.6%

–

–

–

-282

150

–

59

–

93,835 +110.9%

125,600

74.7%

13,602

17,042+25.3%

18,50092.1%

Adjustment (including
offsets of inter-segment
transactions)

Total

–
44,500© 2017 Ichigo Inc. All rights reserved.

–

・Rental Income: 7,239 (+1,347)
・Gains on Sale: 10,557 (+2,914)

・Solar Electricity Sales: 908 (+274)

・Up-Front Loan Fees & RelatedExpenses: 14 (-34)

7Robust Cash Flow and Cash-On-Hand
FY17/2 Q3 (9M)
JPY +19.3B
Cash Flow fromOperating Activities

Sale of Value-Add Assets(Real Estate for Sale)

JPY +66.4B

Buy− Deploy cash
− Increase borrowings

Acquisition of Value-Add Assets(Real Estate for Sale)

JPY -61.9B

JPY -6.2B
Cash Flow from
Investing Activities

Solar Power Plant Development(Fixed Assets)

ValueAdd

JPY -5.6B

Cash Flow from
Financing Activities

Cash-on-Hand

JPY -6.9B
JPY 32.4B (+4.0B)

Sell− Receive cash
− Repay borrowings* Parentheses show change vs. FY16/2© 2017 Ichigo Inc. All rights reserved.

8

Strong Financial Position
Weighted Average Interest Rate and Weighted Average Loan Term

Weighted Average Interest Rate
WeightedLoan
AverageLoan Term
Average
Period(Loan term, years)(Interest Rate)
2.5%

12
2.22%

10.7 years
1.96%

2.0%

9
9.0 years

8.7 years

1.71%
1.5%

6
4.7 years

1.41%

5.9 years

1.24%

1.0%

3
FY13/2

FY14/2

FY15/2

FY16/2

FY17/2 Q3

21% (JPY 1.5B)

14% (JPY 4.1B)

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 5.3B)

79%(JPY 5.5B)

86%(JPY 26.1B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 88.0B)

Term Structure of Loans
100%

Short-Term
Long-Term© 2017 Ichigo Inc. All rights reserved.

9

Powerful Value-Add Business Model Underpins Growth© 2017 Ichigo Inc. All rights reserved.

10

Ichigo Green (9282) IPO
Solar Power YieldCo Listed on TSE on December 1, 2016
 Offers investors an opportunity to invest in Japan’s rapidly expanding green
infrastructure asset class Ichigo’s third listed investment vehicle, in addition to Ichigo Office REIT
(8975) and Ichigo Hotel REIT (3463), offering institutional and individual
investors earnings stability and security, drawing upon Ichigo’s mission topreserve and improve real estate Not a development vehicle: all power plants in stable operation >1 year

Ichigo Takamatsu Kokubunjicho Nii ECOPower Plant (2.43MW)© 2017 Ichigo Inc. All rights reserved.

No. of Power Plants

13

Total Acquisition Price

JPY 10.02B

Total Panel Output

25.83 MW

Ichigo Kiryu Okuzawa ECO Power Plant(1.33MW)11

Growing Asset Management Business
2 Listed J-REITs, 1 Listed YieldCo Deploying Ichigo’s Value-Add Capabilities for REIT/YieldCo Shareholders
Name

Listing Date

Characteristics

Forecast Dividend Yield(Based on Share Price as of
Dec 30, 2016)

Portfolio
85 assets JPY 191.0B

Ichigo Office REIT
(8975)

・Specialized Office REIT focused on midsize offices with return stability and upside
potential
October 12, 2005

5.0%
・13 Consecutive periods of dividend
growth, No.1 among all J-REITs

19 hotels JPY 47.6B

Ichigo Hotel REIT
(3463)

・Specialized Hotel REIT focused on driving
shareholder value via income stability andearnings growth
November 30, 2015

4.5%
・Rapidly expanding portfolio via Ichigo'ssponsor support

・Offers investors an opportunity to invest inJapan's rapidly expanding green
infrastructure asset class
Ichigo Green(9282)

December 1, 2016

・Renewable energy YieldCo that maximizes
shareholder value via a portfoliothat offers both return stability and growthpotential

13 power plants JPY 10.0B(25.83MW)
6.0%

・The second YieldCo to be listed on
the TSE* Forecast dividend yield is based on the most recent dividend forecast. Ichigo Green includes dividend in excess of earnings.
© 2017 Ichigo Inc. All rights reserved.

12

Accelerated Asset TurnoverHighly Competitive Acquisition Market, but Ichigo Value-Add Capabilities
an Acquisition Edge
Ongoing Sales to Ichigo REITs and YieldCo to Support Their Growth
FY17/2 Asset Acquisitions/Sales(as of December 31, 2016)

Acquired from Ichigo

IchigoIchigo Office (8975)

Acquisitions (Value-Add only)

13 Assets JPY 29.2B

17 Assets JPY 67.0B
Sales

50 Assets JPY 86.3B(Of which, sales to Ichigo REITs &YieldCo: 36 assets JPY 66.5B)

Accelerated
Asset
TurnoverIchigo Hotel (3463)

10 Assets JPY 27.2B
Ichigo Green (9282)

13 Assets JPY 10.0B© 2017 Ichigo Inc. All rights reserved.

13

Expanding Value-Add Business to Large-Size Office Buildings
Acquisition of Tradepia Odaiba on October 18, 2016 (JPY 30B)
̶̶

Landmark building visible from Tokyo’s Rainbow Bridge – will contribute tofurther build-out of Ichigo brand
Extensive Ichigo Value-Add opportunity

Started Value-Add Immediately upon Acquisition
̶̶̶

Ichigo team on-site from acquisition
Extensive tenant interviews – will carry out Capex matched to tenant needs
Cost efficiencies available to increase asset profitability

Name

Tradepia Odaiba

Location

2-Chome, Daiba, Minato-ku, Tokyo
3-minute walk from Tokyo Teleport Stationon the Tokyo Rinkai Line2
12,910.26m

AccessLand Area

Total Floor Area 76,580.43m
ZoningBuilder
Date Built

Commercial
Steel & Steel-Reinforced Concrete
23 Floors plus 2 Basement Floors
Joint Venture of Shimizu, Taisei, and Obayashi
February 2001

Date Acquired

October 18, 2016

Structure© 2017 Ichigo Inc. All rights reserved.

2

14

New Business Launch: Client Real Estate Services
New Opportunity for Ichigo to Serve Investor Needs̶̶

Extend Ichigo’s REIT-focused asset management business into Japan’s broader
real estate market, with Ichigo providing ongoing asset management services toclients
Large addressable market: Japan’s investable real estate market (JPY 208T)
15X larger than J-REIT market
Focus on Value-Add assets
Expand Ichigo client base̶̶

Aoyama Office Building Value-Add Example
̶
̶
̶

̶

Rectified building code violation vis-a-vis
site boundary
Fixed water leakage
Executed MOUs with city andsurrounding owners to establish
legal site boundaries that were missing
Replaced tenants, marked-to-market
rents, and implemented cost
efficiencies to increase NOI© 2017 Ichigo Inc. All rights reserved.

Five-story office building
with basement acquired in
March 2015
Conducted 1-year valueadd and completed sale toinvestor in October 201615

Clean Energy Business Growth
Ichigo Showamura Ogose ECO Power Plant (43.35MW) DevelopmentCompleted 165,000+ panel install
Completed high-voltage substation
75.2% complete as of Dec. 31, 2016
Power generation testing scheduled,expect operation-start next period

Wind Power Development
 All projects on track Growing project pipeline
No.

Location

1

Chiba

4.0MW

Completed2

Yamagata

7.5MW

In Progress

3

Iwate

7.5MW

In Progress

4

Iwate

7.5MW

In Progress

5

Mie

7.5MW

In Progress

Ichigo Showamura Ogose ECO Power Plant

Expected Output Wind Data Survey© 2017 Ichigo Inc. All rights reserved.

In detailed power
plant simulation anddesign phase16

Appendix: Financial & Real Estate Data

© 2017 Ichigo Inc. All rights reserved.

17

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

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office REIT
(8975)
Hotel

Ichigo Hotel REIT
(3463)© 2017 Ichigo Inc. All rights reserved.

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
18

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

Value‐Add
DemolishandRebuild© 2017 Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

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

HighestEfficiency
LowestImpact19

Value-Add Sample Earnings Model
5.5% NOI, JPY 2B purchase, LTV 75%, 1.5% interest rate on borrowings,
JPY 50M Capex, 15% increase in NOI, 3-year Value-Add period
NOI at Acquisition(JPY 110M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 87.5M NOI/yearNOI÷ Initial Investment ＝17.5% NOI return during investment period
.

Debt
Asset

JPY1.5B

JPY 2BNOI after Value-Add(JPY 126.5M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 104M NOI/year
NOI ÷ Total Investment (JPY 500M + JPY 50M) ＝18.9% NOI return during
investment period.

EquityJPY 0.5B

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

Value-Add (Capex JPY 50M )© 2017 Ichigo Inc. All rights reserved.

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

20

Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 288.4B(Book Value JPY 258.9B + Unrealized Gains JPY 29.5B)

Non-Recourse LoanRelated Assets

Non-Recourse Loans &Related Liabilities

JPY 75.2B

JPY 104.3B

As of November 30, 2016

Consolidated Risk-Based Balance Sheet: JPY 213.0B(Book Value JPY 183.5B + Unrealized Gains JPY 29.5B)
Non-Recourse Loan-Related
ICH Equity JPY 29.0B

Cash & Cash Equivalents

JPY 29.8B

Corporate Loans

JPY 93.3B

Debt
JPY
180.7B

Cash & Cash Equivalents

JPY 29.8B

JPY 93.3B

Operational Investments in Loans
JPY 1.3B

Operational Investments in Loans
JPY 1.3B

Operational Investments in
Securities JPY 0.9B

Operational Investments in
Securities JPY 0.9B

Security Deposits Received
JPY 3.9B

Real Estate For Sale

Power Plants for Sale
JPY 7.2B

Fixed Assets

JPY 31.3B
Investments in Securities
JPY 1.5B

Shareholder
EquityJPY 78.1B

Other JPY 7.2B

Unrealized Gains
JPY 29.5B

Security Deposits Received
JPY 3.9B

Real Estate For Sale

Other JPY 8.1B

JPY 75.3B

Unrealized Gains
JPY 29.5B

Corporate Loans

Debt
JPY
105.4BJPY 75.3B

Mark-toMarket
Shareholder
Equity Ratio

37.3%

Power Plants for Sale
JPY 7.2B

Fixed Assets

JPY 31.3B
Investments in Securities
JPY 1.5B

Other JPY 8.1B

Shareholder
EquityJPY 78.1B

Other JPY 7.2B

Unrealized Gains
JPY 29.5B

Risk-Based
Mark-toMarket
Shareholder
Equity Ratio

50.5%

Unrealized Gains
JPY 29.5B

Note: Risk-Based Balance Sheet excludes client and non-recourse assets and liabilities.
© 2017 Ichigo Inc. All rights reserved.

21

Significant Unrealized Gains on Balance Sheet
Total Unrealized Gains: JPY 29.4B (Appraisal Value Basis)
Real estate directly held by Ichigo(Million Yen)

LocationBook Value as of
Nov 30, 2016NOI

Cap Rate
NOI/Book Value after write-downAppraisal Valueas of Nov 30, 2016

Unrealized GainsTokyo

101,963

5,948

5.9%

119,644+17,681

Outside Tokyo

76,607

5,056

6.7%

88,046+11,439

Total

178,571

11,005

6.3%

207,690+29,119* Cap rate is the simple average of the cap rates for each asset. Excludes development assets (c. JPY 371 million)
which are not currently generating NOI and includes intangible fixed assets subject to appraisal (c. JPY 62 million).

Real estate held by Ichigo within Ichigo-managed funds (SPCs) where there are other non-Ichigo equity holders(Million Yen)
Book Value as of
Nov 30, 2016

Appraisal Value as of
Nov 30, 2016

Unrealized Gains

Equity Investments(Non-consolidated)

–

–

–

Equity Investments(Consolidated)

1,041

1,359

+317

Total

1,041

1,359

+317

© 2017 Ichigo Inc. All rights reserved.

22

Business Segments

Asset Management

Asset Management generates fee income via management of Ichigo
Office REIT (8975), Ichigo Hotel REIT (3463), and Ichigo Green(9282), and providing real estate services related to real estate
acquisition, operation (PM/BM), and disposition.

Value-Add

Value-Add preserves and improves real estate. Ichigo receives rental
income during the period in which it is carrying out its value-add,
along with profits on sale that reflect the real estate’s higher value
after the value-add is complete.

Clean Energy

Other© 2017 Ichigo Inc. All rights reserved.

Clean Energy is utility-scale solar power production that produces
clean energy and brings productive use to idle land.

Other is primarily legacy securities investments that are not related tothe above three segments.

23

Consolidated Balance Sheet(Million Yen)FY 17/2 Q1
FY16/2

FY 17/2 Q3

FY 17/2 H1

B/S

B/S

B/S

OutsideInvestors'
Interest

QOQ

Market Value

Unrealized
Gains
on Listed
Securities²

Unrealized
Gains

Cash and Cash Equivalents

28,77935,183

46,47338,750558-7,72338,750––Operating Loans Receivable (Value-Add)

1,324

1,324

1,324

1,324

–

–

1,324

–

–

Operational Investments in Securities

1,784

2,617

880

982

–

+102

982

–

+1

Value-Add

844

1,707

134

204

–

+70

204

–

–

Other

939

910

746

777

–

+31

777

–

+1

172,833

159,384

135,193

168,869

3,014+33,676

197,279+27,636

–

–

–

7,251

7,259

–

+8

7,259

–

–

31,54633,02029,62431,937–+2,31333,893+1,955

–

39

37

29

28

–

-1

28

–

–

Value-Add

15,897

15,845

15,792

15,747–-45

17,703+1,955–

Clean Energy

15,56017,094

13,748

16,110–+2,362

16,110

–

–

48

42

54

51

–

-3

51

–

–

Intangible Assets

2,373

2,398

2,032

1,994

–

-38

1,994

–

–

Investments in Securities

5,486

1,734

1,583

1,565

–

-18

1,565

–

+235

Other

7,628

8,373

5,247

6,168

7

+921

6,168

–

–

251,757

244,037

229,612258,8533,580+29,241

289,218+29,592+237

Real Estate for Sale (Value-Add)
Power Plants for Sale (Clean Energy)
Fixed Assets
Asset Management

Other¹

Total Assets

1 Other refers to company assets that are not allocated to the three business segments
2 Unrealized Gains on Listed Securities is recorded in Unrealized Gains on Operational Investments in Securities and in Intangible Assets© 2017 Ichigo Inc. All rights reserved.

24

Consolidated Balance Sheet: Segment Breakdown(Million Yen)
Cash andCash
Equivalents

Operating
Loans
Receivable

455

–

–

–

–

Value-Add

14,244

1,324

204

168,869

Clean Energy

1,409

–

–

87

–

Company-Wide Assets

22,553

Total

38,750

Segment

Asset Management

Other© 2017 Ichigo Inc. All rights reserved.

Operational
Real Estate
Investments
for Salein Securities

Power
Plants for
Sale

Intangible
AssetsInvestmentsinSecurities

28

1,550

–

1,014

3,049

–

15,747

164

–

3,079

203,635–

7,259

16,110

254

–

1,351

26,386

777

–

–

–

–

1,565

-447

1,982

–

–

–

–

51

25

–

1,170

23,8001,324

982

168,869

7,259

31,937

1,994

1,565

6,168

258,853

Fixed
AssetsOther
AssetsTotal Assets

25Consolidated P&L: Gross Profit Segment Breakdown(Million Yen)

Revenue

Gross Profit

FY16/2Q3 Cumulative(9M)

FY17/2Q3 Cumulative
(9M)

4,178

3,556

Asset Management Fees

1,337

PM/BM Fees

YOY
(GrossProfit)FY16/2Q3 Cumulative(9M)

FY17/2Q3 Cumulative
(9M)

-621

2,834

2,178

-655

- 23.1%

1,596

+259

1,328

1,589

+260

+19.6%

1,645

1,721

+75

365

366

+1

+0.3%

Other

1,195

238

-956

1,139

222

-917

- 80.5%

Value-Add

38,95588,481+49,526

13,534

17,797+4,262+31.5%

Rental Income

9,160

10,990+1,830

5,891

7,239

+1,347+22.9%

Asset Sales

29,79577,491+47,696

7,643

10,557+2,914+38.1%

Clean Energy

1,315

1,783

+467

634

908

+274

+43.3%

Other

51

14

-37

38

-93

-132

–

Total

44,50093,835+49,335

17,041

20,790+3,748+22.0%

Segment

Asset Management© 2017 Ichigo Inc. All rights reserved.

ChangeChange26

Consolidated P&L: Results vs. Forecast(Million Yen)

FY17/2 Q3 (9M)
Segment% of Full-Year
Forecast

Revenue

Gross
ProfitFY17/2 Full-Year Forecast (12M)% of Full-Year
Forecast

Operating
Profit% of Full-Year
Forecast

Gross
ProfitRevenue

Operating
Profit

3,556

70.0%

2,178

72.6%

1,859

77.9%

5,079

2,999

2,386

Asset Management Fees

1,596

71.9%

1,589

71.9%

–

–

2,219

2,209

–

PM/BM Fees

1,721

66.5%

366

69.0%

–

–

2,588

531

–

238

88.0%

222

85.8%

–

–

271

259

–

88,481

81.0%

17,797

99.9%

14,637108.2%

109,297

17,82013,530Rental Income

10,990

82.3%

7,239

83.0%

–

–

13,346

8,727–

Asset Sales

77,491

80.8%

10,557116.1%––

95,950

9,093–

Clean Energy

1,783

16.0%

908

29.6%

537

20.6%

11,152

3,065

2,608

Other

14

20.1%

-93

–

-142

–

71

-18

-84

Total

93,835

74.7%

20,79087.1%

16,892

91.6%

125,600

23,86718,440

–

–

–

–

150

–

–

–

59

93,835

74.7%

20,79087.1%

17,042

92.1%

125,600

23,86718,500Asset Management

Other
Value-Add

Adjustm ent (including
offsets of inter-segm ent
transactions)Total© 2017 Ichigo Inc. All rights reserved.

27

Asset Management AUM Detail

Ichigo Office REIT
(8975)

FY12/2(12M)

FY13/2(12M)

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2Q3 (9M)JPY 106.1B

JPY 104.3B

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 194.5B

0.61%

0.63%

0.65%

0.65%

0.64%

0.68%*

JPY 719M

JPY 663M

JPY 733M

JPY 759M

JPY 1,016M

JPY 950M

AUM (Fiscal Year End)

–

–

–

–

JPY 20.4B

JPY 47.6B

AM Fee % (Average)

–

–

–

–

0.59%*

0.93%*AM Fee Gross Profit (Actual)

–

–

–

–

JPY 30M

JPY 185M

JPY 213.3B

JPY 169.7B

JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 6.4B

0.15%

0.15%

0.26%

0.37%

0.32%

0.27%*

JPY 284M

JPY 285M

JPY 257M

JPY 114M

JPY 60M

JPY 24M

JPY 319.3B

JPY 274.1B

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 248.6B

0.33%

0.33%

0.47%

0.59%

0.61%

0.69%*

JPY 1,004M

JPY 948M

JPY 989M

JPY 872M

JPY 1,106M

JPY 1,160M

AUM (Fiscal Year End)AM Fee % (Average)
AM Fee Gross Profit (Actual)

Ichigo Hotel REIT
(3463)

Private Equity Real
Estate Funds(excluding
consolidated funds)

AUM (Fiscal Year End)AM Fee % (Average)
AM Fee Gross Profit (Actual)

Total

AUM (Fiscal Year End)AM Fee % (Average)
AM Fee Gross Profit (Actual)* Annualized© 2017 Ichigo Inc. All rights reserved.

28

Ichigo-Owned Real Estate Portfolio
Other
3%

GroundLease
3%

Sendai
3%

Mixed
5%

Nagoya2%

Office36%

Retail
20%
Hotel
21%

(Billion Yen)

Other
5%

Osaka
5%

Residence
12%

As of November 30, 2016

Assets by Location

Assets by Class

Fukuoka
14%

Tokyo
57%

Kanto
14%

Tokyo
102.4

Kanto
25.1

Assets by Size
Osaka
8.7

>JPY
10B
16%

JPY 0-1B
12%

Sendai
5.8

Nagoya3.3

Fukuoka
24.7

Other
9.7

JPY 5-10B
13%
JPY 1-5B
59%

Total Ichigo-Owned Assets: JPY 179.7B
Including Ichigo-Managed AUM: JPY 434.0B(Acquisition price basis)© 2017 Ichigo Inc. All rights reserved.

29

Value-Add Asset Breakdown (1)85 Assets, Book Value JPY 179.7B, Forecast NOI JPY 11.0B (6.3% Yield)
No.

Asset ClassClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

1

Other

Fixed Asset

Matsudo City, Chiba

44 years

JPY 2B-3B

2005/06

JPY 230M

JPY 1,900M

–

–

2

RetailReal Estate for Sale

Minato-ku, Tokyo

47 years

JPY 2B-3B

2005/10

JPY 131M

JPY 1,033M

–

–

3

RetailReal Estate for Sale

Minato-ku, Tokyo

31 years≧JPY 3B

2006/03

JPY 167M

JPY 1,356M

–

–

4

RetailReal Estate for Sale

Yokohama City, Kanagawa

11 years

JPY 1B-2B

2006/09

JPY 57M

JPY 1,157M

–

–

5

OfficeReal Estate for Sale

Sendai City, Miyagi

8 years≧JPY 3B

2006/10

JPY 265M

JPY 1,042M

–

–

6

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

8 years≧JPY 3B

2006/12JPY 389M

JPY 1,339M

–

–

7

Other

Fixed Asset

Isumi City, Chiba–

JPY 1B-2B

2007/02–

JPY 1,055M

–

–

9

Residence

Real Estate for Sale

Ota-ku, Tokyo

11 years<JPY 1B

2007/04

JPY 57M

JPY 403M––

10

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

36 years<JPY 1B

2007/06

JPY 85M

JPY 240M––

11

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

35 years<JPY 1B

2007/06

JPY 119M

JPY 233M––

12

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

53 years

JPY 2B-3B

2007/06

JPY 249M

JPY 554M––

13

OfficeReal Estate for Sale

Minato-ku, Tokyo

43 years≧ JPY 3B

2007/11

JPY 314M

JPY 2,049M

–

–

14

Ground Lease

Real Estate for Sale

Atsugi City, Kanagawa–

JPY 1B-2B

2011/06

JPY 176M

JPY 147M––

15

Mixed (Office/Retail)Real Estate for Sale

Hiratsuka City, Kanagawa

21 years<JPY 1B

2012/02

JPY 83M

JPY 172M––

16

RetailReal Estate for Sale

Yokohama City, Kanagawa

3 years<JPY 1B

2012/10

JPY 32M

JPY 171M

–

–

1
2

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

© 2017 Ichigo Inc. All rights reserved.

30

Value-Add Asset Breakdown (2)No.

Asset ClassClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

17

RetailFixed AssetToshima-ku, Tokyo

5 years≧ JPY 3B

2013/03

JPY 228M

JPY 340M–

18

RetailReal Estate for Sale

Shibuya-ku, Tokyo

30 years<JPY 1B

2013/05

JPY 45M

JPY 154M

–

*–

19

Mixed (Office/Retail)Real Estate for Sale

Chofu City, Tokyo

31 years

JPY 1B-2B

2013/06

JPY 112M

JPY 310M––

21

Residence

Real Estate for Sale

Minato-ku, Tokyo

1 years<JPY 1B

2013/06

JPY 42M

JPY 203M––

23

Residence

Real Estate for Sale

Osaka City, Osaka

9 years<JPY 1B

2013/08

JPY 49M

JPY 81M––

24

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

25 years

JPY 1B-2B

2013/08

JPY 86M

JPY 520M––

26

RetailFixed Asset

Kobe City, Hyogo

16 years

JPY 1B-2B

2013/09

JPY 145M

JPY 616M––

27

RetailFixed Asset

Tokorozawa City, Saitama

9 years

JPY 1B-2B

2013/11

JPY 64M

JPY 92M––

28

Ground Lease

Real Estate for Sale

Chiba City, Chiba–

JPY 2B-3B

2014/02

JPY 128M

JPY 342M––

29

Ground Lease

Real Estate for Sale

Fujisawa City, Kanagawa–

JPY 1B-2B

2014/03

JPY 115M

JPY 273M

7.52 x44.5%30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo

32 years<JPY 1B

2014/03

JPY 39M

JPY 108M

6.95 x26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

6 years

JPY 1B-2B

2014/04

JPY 60M

JPY 1,090M

1.25 x12.0%

32

RetailFixed Asset

Fukuoka City, Fukuoka

10 years

JPY 1B-2B

2014/04

JPY 59M

JPY 279M––

33

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

27 years

JPY 2B-3B

2014/05

JPY 155M

JPY 530M

2.04 x20.0%

34

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

23 years

JPY 1B-2B

2014/05

JPY 131M

JPY 515M

2.27 x

23.4%

1
2

–

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

© 2017 Ichigo Inc. All rights reserved.

31

Value-Add Asset Breakdown (3)Acquisition
Date

Expected NOI/Year

Ichigo Investment

JPY 2B-3B

2014/05

JPY 155M

JPY 434M

3.08 x15.2%

9 years≧ JPY 3B

2014/06

JPY 213M

JPY 476M

3.52 x19.0%

Minato-ku, Tokyo

44 years<JPY 1B

2014/07

JPY 39M

JPY 77M

10.47 x23.9%

Real Estate for Sale

Shinjuku-ku, Tokyo

41 years≧ JPY 3B

2014/07

JPY 201M

JPY 645M

3.32 x21.1%

RetailFixed Asset

Fukuoka City, Fukuoka

12 years<JPY 1B

2014/07

JPY 47M

JPY 213M––

40

RetailFixed Asset

Fukuoka City, Fukuoka

31 years<JPY 1B

2014/09

JPY 55M

JPY 252M

–

–

41

Hotel

Real Estate for Sale

Utsunomiya City, Tochigi

29 years

JPY 1B-2B

2014/09

JPY 138M

JPY 400M

1.97 x28.3%

42RetailReal Estate for Sale

Fukuoka City, Fukuoka

16 years<JPY 1B

2014/09

JPY 54M

JPY 177M

5.54 x26.2%

43RetailReal Estate for Sale

Osaka City, Osaka

14 years

JPY 1B-2B

2014/09

JPY 90M

JPY 301M

4.64 x24.3%

44RetailReal Estate for Sale

Machida City, Tokyo

30 years<JPY 1B

2014/10

JPY 51M

JPY 82M

11.34 x43.9%

45RetailReal Estate for Sale

Fukuoka City, Fukuoka

13 years

JPY 1B-2B

2014/11

JPY 68M

JPY 135M

10.70 x33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

13 years

JPY 2B-3B

2014/12JPY 119M

JPY 332M

2.18 x29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 96M

JPY 270M

1.56 x14.6%

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 79M

JPY 238M

1.67 x16.6%

49

Residence

Real Estate for Sale

Minato-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 61M

JPY 185M

1.63 x15.7%

No.

Asset ClassClassification

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

7 years

36

Residence

Real Estate for Sale

Kumamoto City, Kumamoto

37

RetailReal Estate for Sale

38

Mixed (Office/Retail)

39

1
2

Location

Building Age

Acquisition Price

Forecast Equity
Multiple1

Forecast
IRR2

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

© 2017 Ichigo Inc. All rights reserved.

32

Value-Add Asset Breakdown (4)No.

Asset ClassClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 59M

JPY 163M

1.55 x15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo

14 years<JPY 1B

2014/12JPY 60M

JPY 150M

2.21 x35.7%

52

Residence

Real Estate for Sale

Osaka City, Osaka

8 years<JPY 1B

2014/12JPY 58M

JPY 148M

1.86 x24.8%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo

13 years<JPY 1B

2014/12JPY 38M

JPY 99M

2.96 x44.4%

54

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years<JPY 1B

2014/12JPY 38M

JPY 123M

1.97 x23.3%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

11 years<JPY 1B

2014/12JPY 29M

JPY 82M

2.05 x25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 87M

JPY 270M

2.00 x23.2%

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 57M

JPY 186M

1.90 x21.0%

58

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

11 years<JPY 1B

2014/12

JPY 49M

JPY 157M

1.89 x21.5%

59

Residence

Real Estate for Sale

Setagaya-ku, Tokyo

11 years<JPY 1B

2014/12JPY 39M

JPY 117M

2.11 x27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

10 years<JPY 1B

2014/12JPY 19M

JPY 55M

1.80 x21.1%

61

Mixed (Office/Retail)Operating Loan

Shinjuku-ku, Tokyo

53 years

JPY 1B-2B

2014/12JPY 103M

JPY 57M

15.26 x51.7%

62RetailFixed Asset

Fukuoka City, Fukuoka

12 years<JPY 1B

2014/12

JPY 42M

JPY 212M––

63

RetailReal Estate for Sale

Meguro-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 67M

JPY 129M

3.98 x23.8%

64RetailReal Estate for Sale

Shinagawa-ku, Tokyo

62 years<JPY 1B

2015/01

JPY 16M

JPY 0M––

1
2

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

© 2017 Ichigo Inc. All rights reserved.

33

Value-Add Asset Breakdown (5)No.

Asset ClassClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

66

RetailReal Estate for Sale

Sendai City, Miyagi

12 years<JPY 1B

2015/02

JPY 47M

JPY 8M

42.58 x198.9%

68

RetailReal Estate for Sale

Shibuya-ku, Tokyo

15 years<JPY 1B

2015/04

JPY 42M

JPY 79M

5.65 x

27.9%

69

Hotel

Real Estate for Sale

Osaka City, Osaka

14 years

JPY 2B-3B

2015/05

JPY 178M

JPY 633M

1.56 x

58.3%

70

Hotel

Real Estate for Sale

Aomori City, Aomori

9 years<JPY 1B

2015/06

JPY 45M

JPY 113M

2.10 x20.2%

71RetailReal Estate for Sale

Fujisawa City, Kanagawa

1 years

JPY 1B-2B

2015/07

JPY 99M

JPY 126M

6.80 x37.3%

85

OfficeReal Estate for Sale

Bunkyo-ku, Tokyo

24 years

JPY 2B-3B

2015/07

JPY 114M

JPY 428M

1.34 x16.8%

88

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

28 years

JPY 1B-2B

2015/07

JPY 96M

JPY 355M

1.32 x15.8%

89

OfficeReal Estate for Sale

Musashino City, Tokyo

27 years≧ JPY 3B

2015/07

JPY 127M

JPY 670M

1.72 x13.3%

92

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

9 years

JPY 1B-2B

2015/07

JPY 87M

JPY 353M

1.82 x17.7%

93

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

14 years

JPY 1B-2B

2015/07

JPY 87M

JPY 358M

1.92 x

18.8%

96

Hotel

Real Estate for Sale

Sapporo City, Hokkaido

23 years<JPY 1B

2015/08

JPY 26M

JPY 2M

5.52 x291.5%

98

Hotel

Real Estate for Sale

Naha City, Okinawa

28 years

JPY 2B-3B

2015/11

JPY 166M

JPY 640M

1.91 x

25.9%

105

Hotel

Real Estate for Sale

Kumamoto City, Kumamoto

32 years

JPY 1B-2B

2015/12JPY 117M

JPY 453M

1.61 x61.2%

12

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

© 2017 Ichigo Inc. All rights reserved.

34

Value-Add Asset Breakdown (6)No.

Asset ClassClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
2

IRR

109

Hotel

Real Estate for Sale

Nagoya City, Aichi

8 years

JPY 2B-3B

2016/03

JPY 130M

JPY 525M

1.84 x

37.7%

110

Hotel

Real Estate for Sale

Fukuoka City, Fukuoka

31 years≧JPY 3B

2016/03

JPY 274M

JPY 905M

2.05 x104.5%

111

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

32 years

JPY 2B-3B

2016/03

JPY 207M

JPY 228M

5.32 x

23.3%

112

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

29 years≧JPY 3B

2016/03

JPY 319M

JPY 354M

10.64 x

36.2%

113

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

29 years≧JPY 3B

2016/03

JPY 260M

JPY 344M

5.84 x

25.5%

114

Hotel

Real Estate for Sale

Fukuoka City, Fukuoka

26 years≧JPY 3B

2016/04

JPY 175M

JPY 550M

1.73 x

72.6%

115

Hotel

Real Estate for Sale

Osaka City, Osaka

9 years

JPY 2B-3B

2016/04

JPY 130M

JPY 274M

2.96 x30.7%

116

RetailReal Estate for Sale

Sendai City, Miyagi

27 years<JPY 1B

2016/04

JPY 70M

JPY 86M

7.50 x28.4%

118

RetailReal Estate for Sale

Nagoya City, Aichi

19 years

JPY 1B-2B

2016/06

JPY 83M

JPY 102M

7.71 x32.6%

119RetailReal Estate for Sale

Shibuya-ku, Tokyo

29 years<JPY 1B

2016/06

JPY 42M

JPY 136M

3.91 x

17.4%

120

Hotel

Real Estate for Sale

Shinjuku-ku, Tokyo

37 years≧JPY 3B

2016/09

JPY 554M

JPY 349M

2.70 x39.9%

121

OfficeReal Estate for Sale

Minato-ku, Tokyo

15 years≧JPY 3B

2016/10

JPY 1,489M

JPY 3,450M

2.87 x

43.5%

Total

85 Assets

JPY 179,771M

JPY 11,004M

JPY 35,989M

2.92 x37.4%

Assets acquired in FY17/2 Q1 Total 9 Assets

JPY 23,485M

JPY 1,603M

JPY 3,392M

3.66 x85.8%

Assets acquired in FY17/2 Q2 Total 2 Assets

JPY 2,100M

JPY 125M

JPY 238M

5.54 x25.0%

Assets acquired in FY17/2 Q3 Total 2 Assets

JPY 35,100M

JPY 2,043M

JPY 3,799M

2.86 x41.7%

Assets acquired in FY17/2 Cumulative Q3 (9M) Total 13 Assets

JPY 60,685M

JPY 3,773M

JPY 7,429M

3.31 x69.7%

Note: Assets acquired and sold in FY17/2 Total 1 Asset

JPY 670M

JPY 38M

JPY 126M

1.57 x413.7%* Assets acquired in the current FY17/2 period12Forecast Equity Multiple is based on the business plan of each asset and is the expected sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2017 Ichigo Inc. All rights reserved.

35

Reference: Japan’s Feed-in-Tariff (FIT)
What is a FIT?
‒‒

A policy mechanism designed to accelerate the deployment of renewable energy such as solar andwind, guaranteeing a long-term sale price for electricity (in Japan, 20 years) at a fixed price.
Japan’s FIT is updated every year.
Contract Date

Tariff per
1kWh*Guarantee
PeriodContract Date

Tariff per
1kWh*Guarantee
PeriodFY2012 (4/1-3/31)

40 yen20 years

FY2015 (4/1-6/30)

29 yen20 years

FY2013 (4/1-3/31)

36 yen20 years

FY2015 (7/1-3/31)

27 yen20 years

FY2014 (4/1-3/31)

32 yen20 years

FY2016 (4/1-3/31)

24 yen20 years*Pre-consumption tax FIT for power plants with output of >10kW
Source: METI, Agency for Natural Resources and Energy

Current Regulatory Framework and Ichigo Plant Status‒‒‒

Utilities are allowed to suspend renewable energy supply, without compensation, if supply exceeds
demand. The maximum suspension duration is either 30 days per year or 360 hours per year.
Although utilities are not allowed to suspend acceptance of applications (based on the “Act on Special
Measures concerning the Procurement of Renewable Electric Energy by Operators of Electric Utilities”),
approval for grid connection is pending for many solar power suppliers.
In certain cases, utilities that are potentially subject to renewable energy production in excess of theirgrid capacity are allowed to suspend renewable energy supply from new suppliers without limit andwithout compensation. None of Ichigo’s power plants are subject to these suspensions.

© 2017 Ichigo Inc. All rights reserved.

36

Clean Energy Earnings
Revenue Growth via New Plants Coming Online
OP +48% YOY (JPY 537M in FY17/2 Q3 vs. JPY 362M in FY16/2 Q3)
FY16/2(12M)

Revenue

FY17/2 Q1(3M)

FY17/2 H1(6M)

FY17/2 Q3(9M)

FY17/2 Full-Year
Forecast (12M)% of Full-Year
Forecast

JPY 1,628M

JPY 556M

JPY 1,214M

JPY 1,783M

JPY 11,152M

16.0%

Cost of Goods Sold

JPY 945M

JPY 302M

JPY 629M

JPY 874M

JPY 8,087M

10.8%

Gross Profit

JPY 683M

JPY 254M

JPY 584M

JPY 908M

JPY 3,065M

29.6%

SG&A

JPY 358M

JPY 110M

JPY 233M

JPY 371M

JPY 456M

81.3%

–

–

–

–

–

–

JPY 323M

JPY 143M

JPY 351M

JPY 537M

JPY 2,608M

20.6%

24 Plants Online
41.97MW

27 Plants
46.35MW

Adjustments(including offsets of intersegment transactions)Operating Profit

IchigoSolar Power Plant
Schedule

30 Plants
49.32MW

31 Plants
51.61MW

19 Plants
28.37MW (Forecast)

Ichigo Green(9282)

13 Plants
25.83MW (Forecast)

24 Plants (Forecast)
90.12MW

Total operating and in-development: 37 plants, 115.95MW© 2017 Ichigo Inc. All rights reserved.

37

National Solar Power Plant Portfolio (1)IchigoIchigo Green (9282)
Area

Panel
Output(MW)

Fixed
Tariff(Pre-tax)

Operation
Start Date

Ichigo Tokushima Higashi Okinosu

Shikoku

2.52

40 yenAug 2013

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

40 yenMar 2014

Ichigo Yubetsu Barou

Solar Power Plant

Hokkaido

0.80

40 yenApr 2014

Ichigo Maebashi Naegashima

Kanto

0.67

40 yenApr 2014

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

40 yenOct 2014

Ichigo Toyokoro Sasadamachi

Hokkaido

0.61

40 yenOct 2014

Ichigo Higashi Hiroshima Saijocho Taguchi

Chugoku

2.73

40 yenJan 2015

Ichigo Akkeshi Shirahama

Hokkaido

0.81

40 yenMar 2015

Ichigo Yamaguchi Aionishi

Chugoku

1.24

40 yenDec 2015

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

36 yenDec 2015

Ichigo Yonago Izumi

Chugoku

2.61

40 yenJan 2016

Ichigo Kasaoka Takumicho

Chugoku

1.12

32 yenMar 2016

Ichigo Yamaguchi Sayama

Chugoku

2.36

36 yenApr 2016

Ichigo Kijo Takajo

Kyushu0.90

40 yenMay 2016

Ichigo Toki Oroshicho

Chubu

1.40

36 yenJun 2016

Ichigo Toride Shimotakai Kita

Kanto

1.03

32 yenJul 2016

Ichigo Toride Shimotakai Minami

Kanto

0.54

32 yenJul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

36 yenOct 2016

Ichigo Sera Tsukuchi

Chugoku

2.54

32 yenFeb 2017

Ichigo Sera Aomizu

Chugoku

2.87

32 yenMar 2017

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.65

36 yenAug 2017
Jan 2018

Ichigo Showamura Ogose

Kanto

43.35

36 yenIchigo Minakami Aramaki

Kanto

10.26

36 yenJul 2018

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.65

32 yenNov 2021

Total© 2017 Ichigo Inc. All rights reserved.

90.12MW

Area

Panel
Output(MW)

Fixed
Tariff(Pre-tax)

Operation
Start Date

Ichigo Kiryu Okuzawa
Ichigo Motomombetsu

Kanto
Hokkaido

1.33
1.40

40 yen40 yenSep 2013
Feb 2014

Ichigo Muroran Hatchodaira
Ichigo Engaru Kiyokawa

Hokkaido
Hokkaido

1.24
1.12

40 yen40 yenMar 2014
Mar 2014

Ichigo Iyo Nakayamacho Izubuchi
Ichigo Nakashibetsu Midorigaoka

Shikoku
Hokkaido

1.23
1.93

40 yen40 yenApr 2014
Nov 2014

Ichigo Abira Toasa
Ichigo Toyokoro
Ichigo Nago Futami

Hokkaido
Hokkaido
Okinawa

1.17
1.03
8.44

40 yen40 yen40 yenDec 2014
Dec 2014
Feb 2015

Ichigo Engaru Higashimachi
Ichigo Takamatsu Kokubunjicho Nii

Hokkaido
Shikoku

1.24
2.43

40 yen36 yenFeb 2015
Jun 2015

Ichigo Miyakonojo Yasuhisacho
Ichigo Toyokawa Mitocho Sawakihama

Kyushu
Chubu

1.44
1.80

36 yen32 yenJul 2015
Sep 2015

Solar Power Plant

Total

25.83MW

Total Solar Plant Output
115.95MW

38

National Solar Power Plant Portfolio (2)As of December 1, 2016

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

Ichigo Motomombetsu(1.40MW)

37 Plants (116MW)

Ichigo Engaru Kiyokawa(1.12MW)
Ichigo Yubetsu Barou(0.80MW)

Ichigo Abira Toasa(1.16MW)

Currently Operating

Ichigo Nakashibetsu
Midorigaoka(1.93MW)

Ichigo Muroran Hatchodaira(1.24MW)

31 Plants (52MW)
Ichigo Yamaguchi Aionishi(1.24MW)

Ichigo Engaru Higashimachi(1.24MW)

Ichigo Hamanaka Bokujo Tsurunokotai(2.31MW)

Ichigo Higashi-Hiroshima
Saijocho Taguchi (2.73MW)

Ichigo Betsukai Kawakamicho(0.88MW)

Ichigo Hamanaka Bokujo Kajibayashi(2.31MW)

Ichigo Akkeshi Shirahama(0.81MW)

Ichigo Sera Tsukuchi(2.54MW) Online in 2017/2

Ichigo Yamaguchi Sayama(2.36MW )Ichigo Sera Aomizu(2.87MW) Online in 2017/3

Ichigo Toyokoro
Sasadamachi (0.61MW)

Ichigo Maebashi Naegashima(0.67MW)

Ichigo Minakami Aramaki(10.26MW) Online in 2018/7

Ichigo Fuchu Jogecho Yano
(0.99MW)

Ichigo Nago Futami(8.44MW)

Ichigo Toyokoro(1.02MW)

Ichigo Showamura Ogose(43.35MW) Online in 2018/1

Ichigo Yonago Izumi(2.61MW)

Ichigo Kiryu Okuzawa(1.33MW)

Ichigo Kasaoka Takumicho(1.12MW)

Ichigo Toride Shimotakai Kita
(1.03MW)

Ichigo Kijo Takajo(0.90MW)

Ichigo Toride Shimotakai Minami(0.54MW)
Ichigo Toki Oroshicho(1.40MW)

Ichigo Miyakonojo Takazakicho
Tsumagirishima (2.65MW)
Online in 2021/11
Ichigo Miyakonojo
Yasuhisacho (1.44MW)

Ichigo Tokushima
Higashi-Okinosu (2.52MW)
Ichigo Kure Yasuuracho Nakahata(2.65MW) Online in 2017/8© 2017 Ichigo Inc. All rights reserved.

Ichigo Iyo Nakayamacho
Izubuchi (1.23MW)

Ichigo Takamatsu
Kokubunjicho Nii (2.43MW)

Ichigo Toyokawa Mitocho Sawakihama(1.80MW)

IchigoIchigo Green (9282)
39

Ichigo-Owned Solar Power Plant Details
As of December 1, 2016

 By Feed-In-Tariff By Customer(Electric Power Utility Co)
Chubu
2%

Shikoku
3%

Kyushu 4%

Tohoku5%

Hokkaido
3%

Chugoku21%

 By Operating Timeline

32 yen
12%

TEPCO
62%

>1 year inoperation
19%

40 yen16%

Starting operation
within 1-2 years
62％

36 yen72%

0.5-1 year inoperation
7%<0.5 year inoperation
6%

Starting operation
within 0.5 years
6% By Output

 By Solar Intensity
B (In-Development)
6%

A
7%

<2MW
12%

>10MW
(In-Development)
60%

B
20%

2-10MW
19%

2-10MW(In-Development)
9％© 2017 Ichigo Inc. All rights reserved.

C (In-Development)
3%

A(In-Development)
60%

C
4%

Rank
A
B
C
D

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

Unit: kWh/m² per day

40Consolidated Balance Sheet: Assets(Million Yen)
FY13/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational investments in loans
Operational investments in securities
Real estate for sale
Power plants for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and Structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Investments in securities
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© 2017 Ichigo Inc. All rights reserved.

－

FY14/2

FY15/2

FY16/2

FY17/2 H1

FY17/2 Q3Change
(QOQ)

9,713
548
3,636
4,271
46,176–－369
2,042-3,177
63,581

24,991
451
1,100
3,583
54,084
–
576
1,384
-410
85,761

19,383
519
2,330
1,965
109,769
–
1,200
2,657
-484
137,342

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

46,473
1,021
1,324
880
135,193
7,251
407
2,954
-414
195,093

38,750
1,382
1,324
982
168,869
7,259
435
2,866
-447
221,424-7,723+361–+102+33,676
+8
+28
-88
-33
+26,331

2,863
21
7,082
80
10,0474,901
2,044
12,433
1,922
21,3004,021
9,168
12,142989
26,321

3,830
12,267
12,192
3,255
31,5463,734
6,850
12,1096,929
29,624

3,687
6,771
12,1109,368
31,937-47-79+1+2,439+2,313

2,203
–
20
2,223

2,221
392
71
2,686

2,082
392
27
2,502

1,942
392
38
2,373

1,935
62
33
2,032

1,900
62
32
1,994

-35
–
-1
-38

4,117
13
–
545

4,278
13
222
780

5,266
12
2
1,392

5,486
12
39
1,736

1,583
10
40
1,322

1,565
10
39
1,974

-18
–
-1
+652

-101

-97

-95

-124

-92

-92

–

4,575
16,84680,428

5,196
29,183
114,944

6,578
35,402
172,744

7,149
41,069251,757

2,862
34,519229,6123,496
37,429258,853+634+2,910+29,24141

Consolidated Balance Sheet: Liabilities & Net Assets(Million Yen)
FY13/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Negative goodwill
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© 2017 Ichigo Inc. All rights reserved.

FY14/2

FY15/2

FY16/2

FY17/2 Q2

FY17/2 Q3Change
(QOQ)

64
484
–
–
966
2,263
65
15
25
3,419
7,304

132
950
–
–
3,123
428
96
24
14
2,817
7,588

124
1,416
48
–
3,488
786
284
30
16
3,677
9,872

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

72
1,410
79
112
5,066
902
747
48
123
5,350
13,912

111
600
611
112
4,645
1,370
727
54
247
5,534
14,014

+39
-810
+532
–
-421
+468
-20
+6
+124
+184
+102

–
–
5,456
32,776
277
3,230
270
46
42,05649,361––
26,12624,178
1,213
4,770
180
44
56,51364,102–100
53,40943,004
1,402
6,391
90
96
104,494
114,367–100
94,40956,193
1,543
8,707
–
475
161,430
179,591

688
100
78,69947,621
1,398
6,239
–
881
135,627
149,539

688
100
87,33765,365
1,408
7,979
–
788
163,668
177,682––+8,638+17,744+10+1,740–-93+28,041+28,143

18,113
2,429
7,923
-187
28,27926,443
10,808
10,891-92
48,05026,49910,873
17,201-78
54,496

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

26,594
10,98839,885-39
77,42926,625
11,03040,786- 17
78,425

+31
+42
+901
+22
+996

160

400

1,208

761

178

175

-3

–

–

-36

-251

-534

- 471

+63

16
177
143
2,466
31,06680,428

9
409
121
2,261
50,842
114,944

6
1,177
198
2,505
58,377
172,744

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

6
-349
419
2,573
80,072
229,612

-2
- 299
449
2,594
81,170258,853

-8
+50
+30
+21
+1,098+29,24142

Consolidated P&L(Million Yen)
FY13/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Amortization of negative goodwill
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Stock issuance cost
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sales of fixed assets
Gain on sales of investment securities
Receipt of share trading proceeds
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on sales and retirement of fixed assets
Valuation loss on investments in securities
Office move expenses
Impairment loss
Earthquake-related damages
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes – Current
Income Taxes – Deferred
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© 2017 Ichigo Inc. All rights reserved.

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2Q3 Cumulative(9M)

FY16/2Q3 Cumulative(9M)

Change(YOY)

FY17/2Full-Year
Forecast

vs.
Forecast

16,397
11,422
4,974
3,130
1,844

35,101
27,666
7,435
3,522
3,912

42,70530,53912,166
3,977
8,189

49,69929,835
19,863
4,446
15,417

93,83573,045
20,7903,748
17,04244,50027,45817,041
3,439
13,602+49,335+45,587+3,749+309+3,440125,600–
23,867–18,500

74.7%
–
87.1%
–
92.1%

3
24
90
36
155

4
112
90
31
238

5
78
90
39
213

2
79
90
43
215

－
80
－
35
115

1
74
67
34
177

-1
+6
- 67
+1
- 62

–
–
–
–
–

–
–
–
–
–

238
–
26
265
1,734

370
89
93
553
3,597

943
–
202
1,146
7,255

1,277
–
465
1,743
13,889

1,034
－
747
1,782
15,375

950
–
378
1,329
12,450

+84
–
+369
+453
+2,925––––
16,400

–
–
–
–
93.8%

9
72
–
–
83

7
204
434
33
680

–
–
–
57
57

–
223
–
–
223

－
2,427
－
－
2,427

–
223
–
–
223

–
+2,204––+2,204

–
–
–
–
–

–
–
–
–
–

1
62
19
33
–
8
124
1,693
54
-106
-51
1,745
108
1,637

1
–
21
307
–
13
344
3,933
43
-616
-573
4,506
-19
4,526

–
–
1
–
–
91
93
7,220
564
-220
343
6,876
115
6,761

–
49
9
–
–
31
89
14,022
1,330
-369
960
13,062
136
12,925

－
－
－
－
269
–
269
17,533
3,147
1,250
4,398
13,135297
12,837

–
–
9
–
–
–
9
12,664
1,185
-223
962
11,702
104
11,598

–
–
-9
–
+269
–
+260
+4,869+1,962+1,473+3,436+1,433+193+1,239

–
–
–
–
–
–
–
–
–
–
–
–
–
13,300

–
–
–
–
–
–
–
–
–
–
–
–
–
96.5%

43

Consolidated Cash Flows from Operating Activities(Million Yen)
FY13/2 (12M)
Cash Flows from Operating Activities:
Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in other allowancesInterest and dividend income
Interest expense
Loss (gain) on sales of investment securities
Loss (gain) on sales/retirement of fixed assets
Impairment loss
Valuation loss on investment securities
Decrease (increase) in trading notes and receivables
Decrease (increase) in operating loan receivables
Decrease (increase) in operational investments in securities
Valuation loss on operational investments in securities
Decrease (increase) in real estate for sale
Valuation loss on real estate for sale
Valuation loss on investments in capital
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expenses paid
Income taxes paid and refunded
Net Cash from (Used for) Operating Activities© 2017 Ichigo Inc. All rights reserved.

FY14/2 (12M)

FY15/2 (12M)

FY17/2Q3 Cumulative (9M)

FY16/2 (12M)

1,693
230
49
114
-90
3

3,933
304
69
139
-90
-11

7,220
565
112
139
-90
1

14,022
792
174
139
-90
-3

17,533
615
167
106
–
234

195

33

65

3

–

-11
-28
238
-72
-8
33
62
515
-1,100
723
63
2,556
119
1
–
-380
-39
519
11
-253
-239
4,908
28
-220
-106

-116
370
-204
-6
307
–
97
218
1,635
114
-6,729
–
12
–
-255
-139
137
38
1,230
522
1,611
116
-378
-94

–
-83
943
–
–
–
–
-68
-1,2301,110–-42,991–
91–-1,079
388
16
211
1,391
-407
-33,693
83
-843
161

–
-81
1,277
-223
–
–
49
-172
1,006
1,239
19
-63,070–11-990-1,140
535
42
317
2,380
435
-43,324
81-1,226
-186

–
- 80
1,034
- 2,427
–
–
–
- 691
–
2,616
–
3,956
–
–
- 190
- 217
- 638
40
–
- 726
-1,426
19,906
80
-909
313

4,609

1,254

-34,292-44,654

19,39044

Consolidated Cash Flows from Investing & Financing Activities(Million Yen)
FY13/2 (12M)
Cash Flows from Investing Activities:
Payments into time deposits
Redemption of time deposits
Acquisition of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Acquisition of property and equipment
Proceeds from sale of property and equipment
Acquisition of intangible assets
Payments for investments
Proceeds from redemption of investments
Payments of security deposits
Acquisitions of subsidiaries resulting in the change ofconsolidation scope
Payments for acquisitions of newly consolidated subsidiaries
Other
Net Cash from (Used for) Investing Activities
Cash Flows from Financing Activities:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Issuance of bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from issuance of common shares
Proceeds from employee exercise of stock options
Payments received from minority interests
Payments to minority interests
Dividends paid
Dividends paid to minority interests
Net Cash from (Used for) Financing Activities© 2017 Ichigo Inc. All rights reserved.

FY14/2 (12M)

FY15/2 (12M)

FY17/2Q3 Cumulative (9M)

FY16/2 (12M)

–
151
-15
76
30
-124
17
–
-4
–
–

–
–
–
282
2
-7,150
72
-389
-5
7
-5

-325
325
-210
–
–
-10,769
–
-23
-10
–
-127

–
–
-671
296
3
-6,628
–
-21
-9
6
-37

- 6,100
201
- 300
6,021
–
- 5,604
–
-1
- 401
–
-5

-218

-1,389

–

–

- 93

–
60
-27

–
-35
-8,610-1,3494-12,485–
9-7,052–18- 6,263

314
–
–
5,440
-8,19912,346-13,885
–
48
20
-19
–
–
-3,935465––
26,777-5,388
5,675-19,030
16,387
242
–
–
-445
–
24,682466
48–
47,203-19,557
19,900-5,958
–
99
–
–
-543
–
41,658771
31–64,866-19,192
18,150-2,772
–
153
2,000
–
-646
-43
63,318- 1,588532
785
49,177- 59,556
22,350- 15,232–99–- 2,000- 1,500- 39- 6,972

45

Appendix: Power Up 2019 Mid-Term Business Plan

© 2017 Ichigo Inc. All rights reserved.

46

Power Up 2019 Key Goals & KPIs
Key Goals
1. Drive Further Sustainable Growth in Ichigo’s Core Businesses
2. Develop New Ichigo Businesses
3. Deepen Ichigo’s Core Capabilities and Corporate Strength
Power Up 2019 KPIs (Key Performance Indicators)(Million Yen)

FY16/2 (Actual)

FY17/2 (Forecast)

Operating Profit

15,41718,50025,000+62.2%

Recurring Profit

13,88916,40021,400+54.1%

6.9%

27.8%

30.0%

－

12,925

13,30014,800+14.5%

EPS

25.86 yen

26.43 yen

29.00 yen

+12.1%

DPS

3.00 yen

5.00 yen

7.00 yen+133.0%

ROE

21.0%

18.1%

15.6%

Tax Rate
Net Income

CapitalEfficiency© 2017 Ichigo Inc. All rights reserved.

ROE > 15%

Dividend

FY19/2 (Plan)

vs FY16/2－

DOE > 3%47

Target: Top 200 Ranking within the JPX-Nikkei 400
Ichigo targeting ranking within the Index’s top 200 companies
by August 2019 (the final year of Power Up 2019)
Note: While the JPX-Nikkei Index 400 does not provide an official ranking of its 400 constituents, it can becalculated based upon the JPY-Nikkei 400’s publically-available quantitative ranking formula, whichrank orders the top 1,000 companies from the joint set of the 1,200 highest market capitalizationand 1,200 highest value-traded Japanese companies by:(a) 3-year average ROE (40% weighting)(b) 3-year cumulative operating profit (40% weighting)(c) Market capitalization (20% weighting)© 2017 Ichigo Inc. All rights reserved.

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Power Up 2019 Key Initiatives
Profitability• List Ichigo’s solar assets on the TSE’s new
Infrastructure Market• Support the ongoing growth of Ichigo Office
REIT (8975) and Ichigo Hotel REIT (3463)(1) Core Business
Growth• Expand the architecture and structural
engineering team to deliver real estate that is
high-function, safe, secure, andenvironmentally friendly• Spin out a dedicated leasing team to drive
tenant acquisition and rental income• Extend Ichigo’s REIT-focused asset
management business into the much larger
physical real estate market(2) New Business
Creation

Sustainability• Grow both financial stability and earnings(3) Finance as aStrategic Measure(4) High Capital
Efficiency andOrganic Growth(5) Best Place toWork• De-collateralize loans, lengthen loan
maturities, lower debt costs, get credit
ratings, and issue bonds to diversify funding
profile• ROE >15%

• Support employee health and wellness• Goal: Japan’s number one company inproviding opportunities for employees• Grow Ichigo’s hotel business synergisticallywith Ichigo Hotel REIT
• Launch one or more REtech businesses,
fusing Ichigo’s Real Estate and IT
capabilities© 2017 Ichigo Inc. All rights reserved.

(6) Global Best Practice Governance and Compliance49Adoption of Progressive Dividend & DOE Policy
 Progressive Dividend: The previous year’s dividend is the floor for the current
year’s dividend. Dividend will be raised (or kept flat) but not cut, providing
shareholders with downside dividend protection
 Newly set a minimum DOE (dividend on equity) payout ratio of >3 %‒ Dividend payout ratio policy: Dividends based on annual earnings
 More Volatile‒ DOE policy: Dividends based on shareholder equity
 More Stable The combination of a Progressive Dividend and DOE policy will significantly
increase the stability, certainty, and visibility of Ichigo’s dividend to the benefitof Ichigo’s shareholders
 Adoption of this policy also underscores Ichigo’s commitment to driving
continued organic earnings growth and dividend growth for its shareholders© 2017 Ichigo Inc. All rights reserved.

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These materials were prepared to explain the Company’s businesses and are not for the purpose ofsoliciting investment in marketable securities issued by the Company. The Company does notguarantee the accuracy of the figures, information, estimates or other statements included herein, andaccepts no responsibility for damages or losses arising through the use of the figures, information,
estimates or other statements contained herein.
These materials are based upon information available as of the publication date, and may containforward-looking statements pertaining to the Company’s expectations, targets, plans and strategies.
Such forward-looking statements are not facts, but are the result of management’s judgment based on
information currently available. Actual operating results or developments concerning the Company
may differ substantially from those indicated by forward-looking statements. The information enclosed
is subject to revision without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English
translation, the Japanese version shall prevail.
Contact:
Ichigo (TSE1 2337)
Investor Relations

Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.
© 2017 Ichigo Inc. All rights reserved.

TEL: +81-3-3502-4818 FAX:+81-3-3502-4801
E-mail： ir@ichigo.gr.jp
http://en.ichigo.gr.jp/english

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