FY24/2 Full-Year Corporate Presentation
January13,
2023
April 15,
2024

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

www.ichigo.gr.jp/en

We would like to express our deepest condolences
to all those impacted by the January 1, 2024
earthquake in Ishikawa Prefecture, and our wishes
for the earliest and fullest possible recovery for all.

© Ichigo Inc. All rights reserved.

2

Make The World
More Sustainable© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

Contents
FY24/2 Summary
FY24/2 Earnings‒ All-In Disclosure for Increased Earnings Transparency‒ All-In OP +25%, Cash EPS +19% (YOY)‒ Segment Earnings Details

Powerful Value-Add Business Model &Sustainability Focus‒ Stock + Flow Earnings‒ Durable Stock Earnings‒ Embedded Forward Earnings‒ Value-Add Drives Durable Value Growth‒ Robust Cash Generation‒ Strong Financial Base
‒ Significant Benefits from Sustainable/ESG Financing

Driving Sustainable Growth‒ SRE: Selective on Acquisitions & Sales‒ Hotels: Record Hotel Stock Earnings‒ Offices: Delivering Increased Tradepia Odaiba Occupancy‒ Ichigo Owners: Strong Growth via Meeting Clients’ Diverse
Needs‒ Ichigo Owners: Driving Diversified Growth via Sales
Channel Expansion‒ AM: Growth & ESG Support for Ichigo REITs & Ichigo
Green‒ CE: Second Largest Ichigo Plant Begins Operation –FIT JPY 40© Ichigo Inc. All rights reserved.

‒ CE: Environmental Contribution & Long-Term Growth‒ Shareholder Returns: Ongoing Share Buybacks & Treasury
Share Cancellation‒ Shareholder Returns: Share Buybacks – 7th ConsecutiveYear‒ Shareholder Returns: Raising Dividend – FY24/2 JPY 9,
FY25/2 JPY 10‒ Shareholder Returns: Ichigo J.League Shareholder
ProgramWorking to Protect Our Global Environment‒ Ichigo Climate Positive: CO2 Reduction vs. Emissions‒ RE100: Continued Renewable Energy Transition‒ 3rd Party Assessment: No. 1 in Nikkei GX500 Ranking‒ 3rd Party Assessment: CDP 2023 Leadership‒ ZEB (Net Zero Energy Building) Certification

FY25/2 Forecasts‒ FY25/2 Forecast: All-In OP +13%, Cash EPS +7% (YOY)‒ FY25/2 Forecast: Profit Growth Across All Segments‒ FY25/2 Forecast: Record Stock Earnings

Updated Ichigo 2030 KPIs
‒ KPI Update Summary‒ Updated KPIs

Appendices6

FY24/2 Summary
YOY Earnings Up Across-the-Board– All-In Operating Profit JPY 21.1B (+25%), Cash Net Income JPY 17.8B (+17%)– EPS JPY 26.89 (+32%), Cash EPS JPY 39.70 (+19%)– Record Stock Earnings on Hotel Business GrowthDriving Shareholder Value via Growth Investments & Share Buybacks– Asset Acquisitions: JPY 69.5B (+42% YOY)
– 2 Share Buybacks: Total JPY 6B (Ongoing, JPY 5.3B Completed)– Cancellation of 60 million shares (12% of Total Outstanding Shares)– 3 Consecutive Dividend Increases: Raised FY24/2 Dividend to JPY 9,
FY25/2 to JPY 10

Growing Value for Ichigo REITs as Sponsor– Delivering High-Quality Asset Pipeline: Sold 5 Hotels (JPY 15B), Including 2 Ichigo
THE KNOT Hotels, to Ichigo Hotel (3463)– Providing Financing: Participated in Ichigo Hotel Third-Party Share Issuance (JPY
1.5B) & Underwrote Bond to Finance Ichigo Office (8975) Value-Add Capex– Buying REIT Shares to Increase Sponsor & REIT Alignment: Ichigo Office (JPY 13B)
& Ichigo Hotel (JPY 2.5B)© Ichigo Inc. All rights reserved.

7

FY24/2 Summary
Robust Stock Earnings

Durable Earnings Model
Stock Earnings/Fixed Expenses■ FY23/2

214%■ FY24/2+24%(JPY million)

Fixed
Expenses
JPY 9.1B

Sustainable
Real Estate
(SRE)
+40%

Flow
Earnings
JPY 14.3B Cash Earnings

Asset
Management
(AM)

Clean
Energy(CE)19,417

JPY 33.7B

15,59812,566
8,989

Stock Earnings
JPY 19.4B

Stock Earnings Ratio

58%

+1%
+9%

4,542 4,590

2,066 2,260
% of
Total

58%

65%

13%

12%

29%

24%

Stock Earnings: Rental Income, Power Generation Revenues, Base AM Fees
Flow Earnings: Primarily Sustainable Real Estate Gains on Sales Fixed Expenses: Fixed SG&A + Interest Expenses
Cash Earnings: Gross Profit + SRE Extraordinary Gains on Sales + Depreciation© Ichigo Inc. All rights reserved.

8

FY24/2 Earnings© Ichigo Inc. All rights reserved.

9

All-In Disclosure for Increased Earnings Transparency– All-In disclosure allows for transparent tracking of full profitability
contribution of Sustainable Real Estate (SRE)– SRE is a core business, and Ichigo executes value-add on SRE assets
regardless of whether they are classified in accounting terms as Real
Estate for Sale (Current Assets) or Fixed Assets– Adding SRE’s Fixed Assets Gains on Sales (which are accounted for as
Extraordinary Gains in J-GAAP) to Operating Profit (OP) and Recurring
Profit (RP) to generate All-In OP & RP numbers thus provides
transparency on SRE’s actual core profit contribution© Ichigo Inc. All rights reserved.

10All-In OP +25%, Cash EPS +19% (YOY)– Cash Earnings Significantly Exceed Accounting Earnings Due to Ichigo’s
Focus on Maximizing Long-Term Cash Flows for Shareholders– Cash EPS = 1.5X EPS, Cash ROE 17.2%(JPY million)
FY23/2

FY24/2

FY24/2
Revised
Forecast

YOY

FY24/2
InitialForecast

Operating Profit

12,492

12,960+3.7%

12,9009,500

All-In Operating Profit

16,90821,194+25.4%

21,10018,000Recurring Profit

10,848

10,391-4.2%

10,3006,000

All-In Recurring Profit

15,264

18,626+22.0%

18,60014,500Net Income

9,409

12,108+28.7%

12,00010,000Cash Net Income

15,327

17,878+16.6%

17,80015,500EPS

JPY 20.45

JPY 26.89+31.5%

JPY 26.65

JPY 22.06

Cash EPS

JPY 33.30

JPY 39.70+19.2%–

JPY 34.19

Dividend

JPY 8

JPY 9

+12.5%

–

JPY 8

ROE

9.2%

11.7%

–

–

9.4%

Cash ROE

15.0%

17.2%

–

–

14.6%

Dividend on Equity (DOE)

3.6%

3.8%

–

–

–

All-In Operating Profit (All-In Recurring Profit) = Operating Profit (Recurring Profit) + SRE Extraordinary Gains on Sales
Cash Net Income = Net Income + Depreciation + Amortization +/- Valuation Losses (Gains)© Ichigo Inc. All rights reserved.

11

Segment Earnings Details– AM: Base AM Fees Increase on Back of Strong Hotel Demand– SRE Stock Earnings: Rental Growth Across All Asset Types– SRE Flow Earnings: Multi-Asset & Ichigo Owners Strong, Sold Non-Core
Self-Storage Business after Ichigo Value-Add– CE: Large Plant Online from Jan – Full-Year Earnings Contribution in FY25/2(JPY million)
All-In Operating Profit

Segment

FY23/2

FY24/2All-In Gross Profit
FY24/2
Forecast

YOY

FY23/2

FY24/2

Earnings(Parentheses show YOY change in
Gross Profit)

YOY

Base AM Fees 2,167 (+196)
Ichigo Office 1,423 (-93)
Ichigo Hotel 528 (+326)
Private Funds 177 (-34)
Ichigo Green Operator Fees 36 (-3)
Performance Fees 222 (-1,439)

Asset Management (AM)

3,026

1,496

-50.5%

1,000

3,753

2,482

-33.9%

Sustainable Real Estate (SRE)

11,893

17,742+49.2%

15,30017,28923,805+37.7% Rental Income (Net of Depreciation) 9,712 (+4,107)* Depreciation 2,854 (-530)+33.5% Gains on Sales 14,109 (+2,415)
Fixed Asset Gains on Sales 4,273 (-142)
Gains on Sale of Self-Storage 3,960 (+3,960)

Multi-Asset

8,376

12,249+46.2%

11,10012,77017,046

Ichigo Owners

3,516

5,492

+56.2%

4,200

4,519

6,759

Clean Energy (CE)

2,016

1,946

-3.5%

1,700

2,791

2,818

+1.0%

-27

9

－

－

－

－

－

16,90821,194+25.4%

18,00023,834

29,106+22.1%

Adjustments(Inter-Segment Transactions, etc.)
Total+49.6%

Power Generation Revenue (Net of Depreciation)
2,818 (+26)* Depreciation 1,772 (+21)

AM & CE All-In Operating Profit = Operating Profit; SRE All-In Operating Profit = Operating Profit + SRE Extraordinary Gains on Sales
AM & CE All-In Gross Profit = Gross Profit; SRE All-In Gross Profit = Gross Profit + SRE Extraordinary Gains on Sales© Ichigo Inc. All rights reserved.

12Powerful Value-Add Business Model & Sustainability Focus© Ichigo Inc. All rights reserved.

13

Stock + Flow Earnings
Cash Earnings■ Flow Earnings■ Stock Earnings

37,01633,733
28,97018,567

14,31524,705
13,371

20,9159,793
5,850

18,450FY20/2© Ichigo Inc. All rights reserved.

15,065

14,912

15,598

FY21/2

FY22/2

FY23/2

19,417
RecordHigh

FY24/214

Durable Stock Earnings
Record FY24/2 Stock Earnings: Strong Hotel Demand Driving Growth inRental Income, Operator Revenues, & AM Fees
Stock Earnings by Segment(JPY million)■ SRE (Primarily Rental Income) ■ Clean Energy ■ Asset Management Fees ■ Hotel Operator + PROPERA Revenues

19,41718,45015,065

14,912

15,598
11,782

13,196
9,773

3,057

3,830

2,062
134

1,832
-371

FY20/2© Ichigo Inc. All rights reserved.

FY21/2

9,343

9,147

4,343

4,542

2,091

2,066

-866

-158

FY22/2

FY23/2

4,590
2,260
784
FY24/215

Embedded Forward Earnings
Full Economic Earnings From Value-Add Exceed Accounting Earnings –Value-Add Thus Generates Significant Unrealized Gains That Are(JPY billion)
an Earnings Bank for Future Periods

63.9

65.2

67.8

72.5
RecordHigh

56.2

FY20/2© Ichigo Inc. All rights reserved.

FY21/2
FY22/2
FY23/2
Third-Party Appraisal Value-Based Unrealized Gains

FY24/216

Value-Add Drives Durable Value Growth
Third-Party Appraisal Value-Based Unrealized Gains
Actual Gains on Sales

2.8X

1.8X

2.1X

2.0X
JPY 17.1B

1.9X

JPY 11.6B

JPY
10.1B

JPY 9.4B
JPY 6.1B

JPY 5.7B

JPY 4.7B

JPY 6.3B

JPY 3.0B
FY20/2

FY21/2

FY22/2

FY23/2JPY
4.7B
FY24/2

Note: Self-storage assets sold in FY24/2 (36 assets, JPY3.9B gains on sales) accounted for as having no unrealized gains, as they were not the subject ofthird-party appraisals.
© Ichigo Inc. All rights reserved.

17

Robust Cash Generation
Economic Operating Cash Flow Exceeds Net Income
Net Income
Economic Operating Cash Flow

3.6X

(JPY billion)

2.1X

2.4X

1.5X

29.5
2.2X

25.3
15.6

11.1

8.2

FY20/2

9.4

6.5

5.0
FY21/214.4

FY22/2

FY23/212.1

FY24/2

Note: Economic Operating Cash Flow = Cash Flows from Operations, excluding net change in Real Estate and Power Plants for Sale, plus SRE
Extraordinary Gains on Sales© Ichigo Inc. All rights reserved.

18

Strong Financial Base
Weighted Average Loan Period
Weighted Average Remaining Loan Maturity
Weighted Average Interest Rate

Average Interest Rate & Loan Term
(Interest Rate)(Loan Term, Years)

12

2.5%

10.0 years

10.0 years

10.1 years

10.0 years
8.9 years

2.0%

7.6 years

7.2 years

6.5 years

9
6.5 years

6.1 years

1.5%

9.3 years6

5.2 years

0.91%

1.0%

0.92%

1.05%
0.89%

0.89%

0.89%

3

0

0.5%
FY20/2

FY21/2

FY22/2

FY23/2

FY24/2

FY25/2 Q1Forecast*

9% (JPY 15.6B)

8% (JPY 14.9B)

7% (JPY 12.5B)

6% (JPY 9.8B)

21% (40.7B)

13%

91%
(JPY 157.5B)

92%(JPY 162.7B)

93%(JPY 155.9B)

94%(JPY 157.8B)

79%(JPY 150.3B)

87%

FY20/2

FY21/2

FY22/2

FY23/2

FY24/2

Term Structure of Loans
Short-Term
Long-Term

FY25/2 Q1Forecast*

Note: FY25/2 Q1 forecast reflects already executed or highly-likely refinancings, and does not reflect any potential future acquisitions or sales© Ichigo Inc. All rights reserved.

19

Significant Benefits from Sustainable/ESG Financing
Ichigo’s Sustainability Execution Driving Attractive Financing Terms
Strengthening Financial Base via Diversified Borrowing
ESG Loans as % of Total Borrowings

ESG Loans■ ESG loans (including green bonds)■ Remaining ESG commitment line
■ Other corporate loans & bonds (excludes short-term loans)■ ESG loans (including green bonds)■ Remaining ESG commitment line
(as of FY24/2-end)(JPY billion)

ESG Loans

39.6
466

25%

(JPY billion)

Total ESG Loans(Cumulative)

6.4

JPY 84.7B

6.4
1,374
134.6

30.8

8.2

8.6

FY21/2

FY22/227.7

2.9
FY20/2© Ichigo Inc. All rights reserved.

FY23/2

FY24/220

Driving Sustainable Growth© Ichigo Inc. All rights reserved.

21

Sustainable Real Estate

Selective on Acquisitions & Sales (1)Acquisitions: JPY 69.5B (+37% YOY)
– Multi-Asset: JPY 26.2B – 2 Hotels (JPY 17.8B, Ichigo’s OneFive will be Operator)– Owners: JPY 43.2B – Sales Channel Expansion Increasing Competitive Advantage

Sales: JPY 69.6B (+26% YOY)
– Multi-Asset & Owners Both Active– Robust Global Demand for Japanese Real Estate(JPY million)

FY24/2 Net Acquisitions: JPY 12M

Multi-Asset

Ichigo Owners

Acquisitions
No. of Assets

Sales

Book Value (A)No. of Assets

Difference(A) – (B)Sale Price (B)Office

2

7,210

－

－

+7,210Hotel

217,8706

16,080+1,790Retail

1

63

2

2,226

-2,163

Residential

1

11

5

917

-906

Logistics

1

1,084

－

－

+1,084

Other

－

－

1

81

-80

Residential

33

43,27640

49,639-6,363Retail

－

－

1

750

-750

40

69,51455

69,693

-179

Total

Note: Book Value of Sales: JPY 60.5B (excludes self-storage assets: 36 assets, JPY 3.9B Gains on Sale)© Ichigo Inc. All rights reserved.

22

Sustainable Real Estate

Selective on Acquisitions & Sales (2)Sales & Acquisitions Exceeding Pre-Covid on Multi-Asset & Owners Growth– Acquisitions: Multi-Asset: Offices & Hotels Expanding REIT Pipeline
Owners: Sales Channel Expansion Supporting Residential Growth– Sales: Increase in Sales where Ichigo Has Ongoing AM Contracts – AUM Growth– Ichigo Hotel (3463) (5 Hotels, JPY 1.5B)– Ichigo Residence Tokens (11 Residential, JPY 15.8B)
SRE Sales & Acquisitions(JPY B)■ Multi-Asset■ Owners

Acquisitions(left) Sales(right)63.0

69.5 69.6

60.6
8.0

28.5

38.2

45.8

41.4
31.0

52.5

24.3

FY20/2

55.1
43.2
28.0

50.3

36.0

30.6
26.7

34.5
13.8

18.1

50.7

10.7

FY21/2

27.6

4.3
FY22/227.0
14.6

FY23/226.2

19.0

FY24/2

Notes: Ichigo Residence Tokens are security tokens, i.e., highly secure digital investment products with properties of traditional securities
that are managed on a blockchain. Sales & Acquisitions excludes Gains on Sale of self-storage business (JPY 3.9B)© Ichigo Inc. All rights reserved.

23

Sustainable Real Estate: Hotels

Record Hotel Stock Earnings
Value-Add Acquisitions, Ichigo Brand Hotels, & One Five Operator
Business Driving GrowthHotel Stock Earnings■ Ichigo Hotel Base AM Fees
■ Rental Income■ One Five Operator & PROPERA Revenues

JPY 11,718(JPY million)(1.4X Pre-Covid)

RevPAR JPY 8,565

JPY 7,256

5,524
528

3,994
381

JPY 3,807
JPY 2,531

2,688
201

4,194

1,101
95

3,478

134

FY20/2
Pre-Covid© Ichigo Inc. All rights reserved.

560
42
892
-371
FY21/2

2,638
1,872

784
-866

-158

FY22/2

FY23/2

FY24/2

Data for 14 hotels notincluding hotels soldwithin fiscal year
24

Sustainable Real Estate: Offices

Delivering Increased Tradepia Odaiba Occupancy (1)FY24/2 Occupancy Increased to 73% – FY25/2 Forecast: 85%– Addressing Tenant Demand for 50~100 tsubo Spaces (165~330 m2)

Tradepia Odaiba Occupancy
97%

85%
73%
54%

Addressing Tenant Needs
amidst Japanese Post-Covid
Office Recovery

50%

Covid-Linked Large Tenant
Departures & End of
Olympics-Related Demand

FY21/2© Ichigo Inc. All rights reserved.

FY22/2

FY23/2

FY24/2

FY25/225

Sustainable Real Estate: Offices

Delivering Increased Tradepia Odaiba Occupancy (2)Driving Tenant Satisfaction – New Tenant Café, Lounge, & Meeting Spaces– Multi-Purpose Spaces to Cater to Tenant Needs– Meet The Neighbors Community Building for Tenants & Local Businesses
Tenant Lounge: Bay Village Cafe

Meet The Neighbors
Tenant & Local Business Community Building

Live Classical Music & Games

New Multi-Purpose Tenant Café, Lounge, &Meeting Spaces© Ichigo Inc. All rights reserved.

AED & Emergency
Preparedness Training,
Tours of Onsite Emergency
Warehouse with 15,000
Tenant Meals
26

Sustainable Real Estate: Ichigo Owners

Strong Growth via Meeting Clients’ Diverse Needs
Accelerated Sales Channel Expansion via Ichigo Residence Tokens– Record Acquisitions & Sales– 2 Token Launches (JPY 15.8B) in FY24/2 – Total AUM JPY 20.9B(JPY B)

Ichigo Owners Acquisitions & Sales■ Acquisitions ■ Sales

5.4

3.8

3.5

50.3
Operating
Profit

2.1
1.3

30.6

28.5

0.9
5.4

0.1
2.6

FY18/2(Establishment)

11.7 13.7
FY19/2© Ichigo Inc. All rights reserved.

24.3

4.5

43.2

45.0

50.0

36.0
28.0

26.7
18.1

8.0
FY20/2

FY21/2

FY22/2

FY23/2

FY24/2

FY25/2
Forecast

27

Sustainable Real Estate: Ichigo Owners

Driving Diversified Growth via Sales Channel Expansion
Breaking New Ground in Japan’s Real Estate Security Token Market– Delivering Prime Real Estate Assets in Innovative Ways to New Customer
Segments
Ichigo Owners Clients by Category■ Individuals, Business Owners, & Businesses■ Ichigo Residence Tokens & Ichigo Co-Ownership Small Lot Sales■ Institutional Investors(JPY billion)

9.6

1.2
(4%)
5.9
(21%)

2.6

20.9
(75%)

28.0

(19%)

23.8
(47%)

50.3
16.8

FY18/2
Launch(34%)

FY23/2© Ichigo Inc. All rights reserved.

FY24/228

Asset Management

Growth & ESG Support for Ichigo REITs & Ichigo Green (1)Shareholder-Focused Asset Management& Sponsor Support

IchigoGrow REIT Shareholder Value
Increase NOI
Ichigo Office
Increase Dividend
Ichigo Hotel
Increase NAVREIT Growth & Ichigo AM Business Growth© Ichigo Inc. All rights reserved.

29

Asset Management

Growth & ESG Support for Ichigo REITs & Ichigo Green (2)Strengthening REIT Support as Sponsor & Driving AM Growth– Growth Support– Ichigo Hotel: Sold Ichigo Hotel 5 hotels, Including 2 THE KNOT hotels (JPY 15B)
Participated in Share Allotment to Finance Hotel Acquisitions (JPY 1.5B)– Ichigo Office: Underwrote Bond (JPY 350M) to Finance Ichigo Office Value-Add Capex– Strengthened Sponsor Commitment via REIT Share Acquisitions– Total JPY 15.5B: Ichigo Office JPY 13B, Ichigo Hotel JPY 2.5B

– ESG: Supported Ichigo Office & Ichigo Hotel transition to 100% renewable energy

THE KNOT Hotels Sold to Ichigo Hotel

THE KNOT SAPPORO© Ichigo Inc. All rights reserved.

THE KNOT YOKOHAMA
30

Clean Energy

Second Largest Ichigo Plant Began Operation – FIT JPY 40
Ichigo Ebino Suenaga Plant – Full-Year Earnings Contribution in FY25/2– Online from January 2024
– Total Capex JPY 4.0B – Panel Output 14MW
Ichigo Clean Energy■ Green Biomass (In-Pipeline/FIT JPY 40) ■ Non-FIT Solar Plants (In-Pipeline)■ Operating Plants (Solar/Wind FIT)
4.9

4.5

4.5

(Actual)(Actual)(Forecast)

55.9(207.4MW)

Ichigo Ebino Suenaga ECO Power Plant

6.0

Stock Earnings (JPY B)(5.2MW)

7.3(43.3MW)

38.8
38.5(144.8MW)

42.5(158.8MW)

42.5

42.5

FY24/2
JPY 31.6

FY25/2
JPY 31.6

FY26/2~

Total Capex(JPY B)Avg FIT

FY23/2
JPY 30.7© Ichigo Inc. All rights reserved.

31

Clean Energy

Environmental Contribution & Long-Term Growth
Ichigo Biomass Plant Development Approved by METI
– 1.1MW Plant in Tokushima Prefecture – FIT JPY 40, 20 Years (Capex JPY 1.2B)– Sustainable Infrastructure Contributing to:• Japanese forest conservation & revitalization using only domestic feedstocks• Emergency power supply to local communities to support resilience

Non-FIT Solar Power– Solar Power Generation to Meet Increasing Renewable Energy Demand– Will Also Contribute to Japan’s Energy Self-Sufficiency

Clean Energy Business Growth Drivers

Green Biomass

Non-FIT Solar PowerIn-Pipeline

In-Pipeline

5 Plants 5.2MW (JPY 6.0B)

10 Plants 43.3MW (JPY 7.3B)© Ichigo Inc. All rights reserved.

32

Shareholder Returns

Ongoing Share Buybacks & Treasury Share Cancellation
7th Consecutive Year of Share Buybacks– 2 Share Buybacks in FY24/2 – Total JPY 6B (JPY 5.3B Completed)– 1st Buyback: JPY 3B– 2nd Buyback (In Progress): JPY 3B Total, JPY 1.7B Completed

Treasury Share Cancellation – 12% of Total Shares Outstanding– Number of shares: 60M shares (12% of total outstanding shares)– Post-cancellation shares outstanding: 445.43 million shares (as of March 31, 2024)– Cancellation date: April 30, 2024

© Ichigo Inc. All rights reserved.

33

Shareholder Returns

Share Buybacks – 7th Consecutive Year

Share Buyback AmountJPY 6BJPY 0.7B
In Progress

2nd

JPY 2.3B(Completed)

JPY 4.5B
1st

JPY 3BJPY 3BJPY 3BJPY 3BJPY 3B(Completed)

JPY 1.5B
FY18/2

FY19/2© Ichigo Inc. All rights reserved.

FY20/2

FY21/2

FY22/2

FY23/2

FY24/234

Shareholder Returns

Raising Dividend – FY24/2 JPY 9, FY25/2 JPY 10
3 Years of Consecutive Dividend Increases– DOE (Dividend on Equity) 3.8%
– Total Payout Ratio (Dividends + Buybacks as a Percentage of Net Income) 72%– Dividend Approvals at Ichigo AGMs from FY24/2 to Increase Shareholder Input
on Important Corporate Decisions
Progressive
Dividend
PolicyDividend is maintained or raised every year,
underscoring Ichigo’s commitment to drive
earnings & dividend growth for shareholders

Dividend

JPY 5

JPY 6

JPY 7

JPY 7

JPY 7

JPY 7

FY19/2

FY20/2

FY21/2

FY22/2

JPY 8

JPY 9

JPY 10

JPY 3
JPY 1
FY13/2*

JPY 1.1 JPY 1.3
FY14/2

FY15/2* Adjusted to reflect 200:1 stock split© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/2

FY23/2

FY24/2

FY25/2
Forecast

35

Shareholder Returns

Ichigo J.League Shareholder Program
Represents Two Firsts for a Shareholder Program in Japan– First Japanese company to include not just its own shareholders, but also theshareholders of the REITs and listed solar power producer that it manages, in its
shareholder program (81,000 shareholders in total)– First company to offer shareholders free tickets to every J.League game at every
J.League club

Ichigo is deepening its partnership with the J.League and working tofurther Ichigo’s mission of promoting local community development.
Tickets to 2023 J.League Awards(December 5, 2023)

Invited shareholders to attend the2023 J.League Awards, whichcelebrates the achievements ofplayers, coaches, clubs, and referees
during the 2023 season

Ichigo J.League Shareholder Program Website Landing Page
© Ichigo Inc. All rights reserved.

©J.LEAGUE

36

Working to Protect Our Global Environment© Ichigo Inc. All rights reserved.

37

Ichigo Climate Positive: CO2 Reduction vs. Emissions (1)Ichigo CO2 Reduction = 5X CO2 Emissions

CO2 Reduction

101,217
tons

CO2 Reduction due to Ichigo & Ichigo Green Clean Energy
Power Plant Production© Ichigo Inc. All rights reserved.

CO2 Emissions

21,000tons

Scope 1+2 Emissions(Ichigo + Ichigo Office + Ichigo Hotel + Ichigo Green)

38

Ichigo Climate Positive: CO2 Reduction vs. Emissions (2)Ongoing Ichigo Clean Energy Production Growth (CO2 Reduction Increase) &Renewable Energy Transition & Carbon Offsets (CO2 Emissions Reduction)
CO2 Reduction/Reduction Impact/CO2 Emissions■ Total Ichigo Power Plant CO2 Reduction ■ Total Ichigo CO2 Emissions (Scope 1+2)
□ CO2 Reduction Due to Energy Efficiency, Transition to Renewable Energy, and Non-Fossil Fuel Certificate Tracking for Ichigo Power Plants(tons)-250-7,07075,42575,808-34,470

83,41259,445

101,217

98,647

95,47854,803
26,409FY20/2

FY21/2-40,000

FY22/2

FY23/221,000FY24/2(Estimated)

Notes: Reduction calculated using each EPCO’s adjusted CO2 emission factor disclosed by the Ministry of Environment as a constant for each period.
RE100 non-fossil fuel tracking certifies the environmental value of non-fossil electricity with tracking information on renewable energy power plants© Ichigo Inc. All rights reserved.

39

RE100: Continued Renewable Energy Transition
RE100 Progress: 90%, Exceeds FY24/2 Target
Targeting Full Group-Wide 100% Renewable Energy Transition in FY25/2– Ichigo Office & Ichigo Hotel Have Completed Transition to 100% Renewable Energy
RE100 Progress

RE100 Target: 2025
85%
FY24/2 Target

Non-Fossil Certificate
Tracking for
Ichigo Power Plants

37%

90%

53%

Renewable Energy Switch

Ichigo’s RE100 Target

100% Renewable Electricity Across its Operations by 2025
Including electricity used at Ichigo Office (8975), Ichigo Hotel (3463) assets© Ichigo Inc. All rights reserved.

40

3rd Party Assessment: No. 1 in Nikkei GX500 Ranking
2023 Nikkei GX (Green Transformation) 500 Ranking− Ichigo ranked No.1 in Emissions Management & Reduction and Information
Disclosure assessment categories out of 899 leading Japanese listed & non-listedcompanies

Ichigo Sakae Building

Ichigo Original 100% Green Energy Logo
posted at Ichigo RE100 buildings

Ichigo Toride Shimotakai Nishi ECO Power Plant

Non-Fossil Certificate Tracking-Adopted Plant© Ichigo Inc. All rights reserved.

41

3rd Party Assessment: CDP 2023 Leadership
Selected for the A List in the 2023 Climate Change Assessment– Selected as a company leading the way in environmental transparency andperformance on climate change

Selected as a Supplier Engagement Leader in the 2023 Supplier
Engagement Assessment– Recognized as the highest Supplier Engagement Leader for Ichigo’s supply
chain initiatives addressing climate change

CDP 2023 Climate Change Assessment
Participating companies: c. 23,000 companies worldwide (two-thirds of the world’s market
capitalization), 1,984 companies in Japan
No. of A List companies: 346 companies worldwide, 109 Japanese companies
No. of Supplier Engagement Leaders: 458 companies worldwide, 109 Japanese companies
About CDP: CDP is a global non-profit organization that represents more than 740 institutional investors and financial institutions worldwide andruns the world’s environmental disclosure system and assesses companies on their environmental transparency and actions. An assessment
questionnaire spanning various topics is used to score companies among eight levels: Leadership (A/A-), Management (B/B-), Awareness (C/C-),and Disclosure (D/D-).
© Ichigo Inc. All rights reserved.

42

ZEB (Net Zero Energy Building) Certification
Continuing Value-Add Activity to Increase Buildings’ Environmental
Performance & Reduce Environmental Impacts− Received ZEB Oriented Certification for Ichigo Kakyoin Building in Sendai
Ichigo Kakyoin Building (Sendai City, Miyagi)

Total Floor Area: 11,460m2 (Steel 14 Floors) Completion Date: March 2008
BELS: 5 Stars (Highest)
ZEB: ZEB Oriented

ZEB(Net Zero Energy Building)© Ichigo Inc. All rights reserved.

A ZEB-certified building aims to maintain a comfortable indoor environment while
reducing its annual primary energy consumption to zero via the use of insulation materials andenergy-efficient facilities as a part of transitioning to renewable energy. Based on the BELS system,
the ZEB certification ranks buildings (from highest to lowest) as ZEB, Nearly ZEB, ZEB Ready, and ZEB Oriented.
43

FY25/2 Forecasts© Ichigo Inc. All rights reserved.

44

FY25/2 Forecast: All-In OP +13%, Cash EPS +7% (YOY)
Stock Earnings Driving Growth(JPY million)

FY24/2

FY25/2
Forecast

YOY

Operating Profit

12,96016,000+23.5%

All-In Operating Profit

21,19424,000+13.2%

Recurring Profit

10,391

12,000+15.5%

All-In Operating Profit

18,62620,000+7.4%

Net Income

12,10814,000+15.6%Cash Net Income

17,87818,500+3.5%

EPS

JPY 26.89

JPY 32.10+19.4%Cash EPS

JPY 39.70

JPY 42.42+6.8%

Dividend

JPY 9

JPY 10+11.1%

ROE

11.7%

13.0%

–

Cash ROE

17.2%

17.2%

–

All-In Operating Profit (All-In Recurring Profit) = Operating Profit (Recurring Profit) + SRE Extraordinary Gains on Sales
Cash Net Income = Net Income + Depreciation + Amortization +/- Valuation Losses (Gains)
Cash EPS = Cash Net Income / Average Number of Shares Outstanding in the Fiscal Year© Ichigo Inc. All rights reserved.

45

FY25/2 Forecast: Earnings Growth Across All Segments––––

AM: Security Token & Hotel Growth
SRE Stock Earnings: Hotel Growth
SRE Flow Earnings: Sales Channel Expansion Supporting Growth
Clean Energy: Ichigo Ebino Plant Full-Year Earnings Contribution(JPY million)

All-In Operating Profit
Segment

FY24/2(Actual)FY25/2
Forecast

YOY

Asset Management (AM)

1,496

1,750

+16.9%

Sustainable Real Estate (SRE)

17,742

20,150+13.6%

Multi-Asset

12,24915,600+27.4%

Ichigo Owners

5,492

4,550

-17.2%

Clean Energy (CE)

1,946

2,100

+7.9%

9

－

－

21,19424,000+13.2%

Adjustments (Inter-Segment Transactions, etc.)

Total

SRE All-In Operating Profit = Operating Profit + SRE Extraordinary Gains on Sales; AM & CE All-In Operating Profit = Operating Profit© Ichigo Inc. All rights reserved.

46

FY25/2 Forecast: Record Stock Earnings– Hotel Value-Add Acquisitions, Ichigo Brand Hotels, & Operator Business to
Drive Further Growth– Ichigo Ebino Plant Full-Year Earnings Contribution
Cash Earnings■ Flow Earnings ■ Stock Earnings

37,01637,22233,733
28,97018,567

14,31524,705
13,371

20,9155,850

18,450FY20/2

9,793

19,417
15,065

14,912

15,598

FY21/2

FY22/2

FY23/2

Cash Earnings = Gross Profit + SRE Extraordinary Gains on Sales + Depreciation© Ichigo Inc. All rights reserved.

15,879FY24/2

21,343

FY25/2
Forecast
47

Updated Ichigo 2030 KPIs

© Ichigo Inc. All rights reserved.

48

KPI Update Summary
Strengthening Commitment to Ichigo 2030 Vision & Drive Sustainable
Growth in Shareholder Value

Grow Shareholder ValueHigh Capital Productivity
High Cash Flow Generation

New KPIs

High Earnings Stability

New KPIs

Shareholder Return Policy

Raise DOE from 3% to 4%

Work for a
Sustainable Planet

New KPIs© Ichigo Inc. All rights reserved.

49Updated KPIs (1)High Capital Efficiency & High Cash Flow Generation– Cash ROE >18% (New)– ROE >15%
– Economic Operating Cash Flow > Net Income

High Earnings Stability– FY30/2 Stock Earnings Ratio >60%
– Stock Earnings/Fixed Expenses Ratio >200% (New)© Ichigo Inc. All rights reserved.

50

Updated KPI Targets (2)Ichigo Shareholder Distribution Policy: Growth, Durability, & Certainty– Progressive Dividend Policy• Ichigo’s progressive dividend policy underscores our commitment todriving ongoing earnings and dividend growth for shareholders. Under
this policy, the dividend is maintained or raised every year (but not cut),providing shareholders with the security of a durable dividend.
– DOE (Dividend on Equity) Payout Ratio of >4% (Increased from 3%)•

Durable and growing dividend by short-term earnings volatility– Flexible Deployment of Share Buybacks•

Optimize capital structure & drive shareholder value

Dividend

JPY 5

JPY 6

JPY 7

JPY 7

JPY 7

JPY 7

FY19/2

FY20/2

FY21/2

FY22/2

JPY 8

JPY 9

JPY 10

JPY 3
JPY 1 JPY 1.1 JPY 1.3
FY13/2(Resumed
Dividend)

FY14/2

FY15/2© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/2

FY23/2

FY24/2

FY25/2(Forecast)51

Updated KPI Targets (3)Work for a Sustainable Planet (New)
Ichigo Climate Positive
Ichigo CO2 reduction via clean energy power production exceeds CO2
emissions
RE100
100% renewable electricity across all Ichigo operations by 2025
CDP Leadership
Climate Change: A
Water Security: A (Currently A-)© Ichigo Inc. All rights reserved.

52

Appendix: Ichigo’s Sustainability Commitment (ESG)© Ichigo Inc. All rights reserved.

53

Ichigo Sustainability Policy
Harmony With the Environment and Recycling
Ichigo actively monitors and minimizes the environmental impact of its business operations via extending the useful life of its
assets, reducing water and water consumption, and recycling.
Addressing Climate Change and Shift to Low-Carbon Society
Ichigo seeks to contribute to a low-carbon society and address climate change by lowering its energy consumption andgreenhouse gas emissions, using renewable energy, and improving the resilience of its assets.
Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independently-established environmental rules.
Ichigo also carefully monitors and complies with all applicable changes in laws and regulations.
Training, Awareness, and Cooperation With Stakeholders
Ichigo works to increase sustainability awareness via company training sessions, and promotes understanding of its
Sustainability Policy among all Ichigo employees and tenant employees working at its assets. Ichigo also works withstakeholders to promote understanding of its Sustainability Policy and implement sustainability initiatives.
Sustainability Performance Communication and Disclosure
Ichigo communicates this Sustainability Policy and Ichigo’s sustainability initiatives to society at large. Ichigo also obtains
certifications for its sustainability activities on an ongoing basis.
Sustainable Procurement
Ichigo implements sustainable procurement measures, including the use of environmentally-friendly construction methods
and materials, actively installing energy and resource efficient equipment, and the inclusion of sustainability initiatives as aselection criteria for business partners.
Building a Diverse, Inclusive Organization
Ichigo respects human rights and works to build a diverse organization where employees work with respect for each otherand realize their full potential regardless of race, beliefs, religion, skin color, nationality, age, gender, sexual orientation,
gender identity, disabilities, and social status. Ichigo also provides a healthy, comfortable work environment that focuses on
employee performance and well-being and drives organizational growth.
Biodiversity and Ecosystem Preservation
Ichigo contributes to the preservation of biodiversity and ecosystems via the addition of greenery to the interiors andexteriors of its assets, primarily using native plants.
© Ichigo Inc. All rights reserved.

54

ESG Initiatives: Environmental
Climate Positive & Sustainability-Driven
Preserve & Improve Real Estate
to End Wasteful Demolition

Community-Based, Productive Use of
Idle Land for Clean Energy

Pro-Active Environmental
Certifications

Ichigo's Sustainable Real Estate businesshas a proven track record of preserving andimproving existing real estate. Ichigo willbuild on this long-standing commitment tosustainability by developing newtechnologies to extend the lives of buildings
and other social infrastructure 100 years
and beyond.

Ichigo will not build power plants that require
the clearing of wooded land or the altering of
the landscape in a way that increases the riskof floods, landslides, or other water-related
disasters, or that face opposition from local
communities.

By obtaining certifications such as GRESB,CASBEE, BELS, and DBJ Green Building,
Ichigo is demonstrating our long-standing
commitment to sustainability via initiatives
that benefit investors, tenants, clients, andother stakeholders.

Annual Power Production

228,739,150 kWh
Ichigo’s Sustainable Real Estate
Preserve & Create Value
Sustainable
Real Estate

Increase
Quality ofTenantServices+

Renovate &RepairIncrease= Tenant
Satisfaction

Improve aesthetics and comfort
Seismic reinforcements
Regulatory compliance
Increase energy efficiency© Ichigo Inc. All rights reserved.

Equivalent to annual energy
consumption of 52,900 households
Annual Energy Consumption(Japan Average) 4,322kWh/household(Ministry of Environment document)

Annual CO2 Reduction

101,217,992 tons
Equivalent to annual CO2 emissionof 44,000 cars
Gasoline Passenger Cars 2,300kg/car
per year(Ministry of Environment document)*Ichigo, Ichigo Green FY24/2 Actuals

Ichigo Group-Wide
Ichigo & Ichigo Office (8975)
Total 16 Assets
Ichigo Office (8975)
4 Stars / Green Star
Ichigo Hotel (3463)
2 Stars / Green Star
BELS
7 Assets
DBJ Green Building 2 Assets
Tokyo Low-Carbon
Small and Medium-Sized
Model Building
9 Assets
55

ESG Initiatives: Social
Contributing to Society
Contributing to Regional Revitalization

Ichigo University

Sports Initiatives

Ichigo works to revitalize local communities
and promote regional economic
development. Ichigo’s model of preserving
and improving existing real estate creates
jobs and supports businesses, and ourrenewable energy power plants also
support their host communities by providing
new and sustainable sources of income.

Ichigo established Ichigo University in May
2013 to support employees’ continuing
education and personal growth.

As a top partner of the J.League
professional soccer league, we support theleague’s mission to promote community
development. Ichigo supports outstanding
athletes in weightlifting, rifle shooting, trackand field, and tennis.

Ichigo University courses are taught byemployees and external professionals whoare specialists in their fields and have deep
experience.
Average Annual Number of Courses: 30

Miyako City

Ichigo University Classes

Retail Asset / Miyazaki
www.miyakocity.com

Chisato Kiyoyama(Track and Field)
Hiromi Miyake(Weightlifting)

THE KNOT TOKYO
Shinjuku
Hotel / Tokyo
https://hotel-theknot.jp/tokyoshinjuku/en

OnlineIn-Person

Certified as a Sports Yell
Company & Tokyo Metropolitan
Government Sports
Promotion Company for 7th year in a row
Ichigo Sports Site (Japanese only)
www.ichigo.gr.jp/ichigosports© Ichigo Inc. All rights reserved.

56

ESG Initiatives: Governance
Global Best Practice Governance
Early Adopter of Global Best PracticeCorporate Governance Structure

Majority Independent Director Board
Underpins Strong Governance

All Directors on Ichigo’s Board of Directors
are aware of their fiduciary responsibility
towards shareholders and work
collaboratively and appropriately with otherstakeholders to ensure sustained value
creation for shareholders.

Of 9 members of Ichigo’s Board of
Directors, majority are Independent
Directors, including former CEOs of TSE
Prime (formerly 1st Section)

Major Initiatives
Adopted Independent Director-led, committee
based governance system in 2006
̶

Exceeded legal requirements by establishingCompliance Committee in addition to
Nominating, Audit, and Compensation
Committees

̶

̶

̶

̶

̶

Nominating Committee: 5 members(3 Independent Directors)
Audit Committee: 3 members(All Independent Directors)
Compensation Committee: 5 members(3 Independent Directors)
Compliance Committee: 4 members(2 Independent Directors)© Ichigo Inc. All rights reserved.

FY18/2 to present
Nobuhide Nakaido (former CEO of SCSK)
FY17/2 to May 2023
Masatoshi Matsuzaki (former CEO of Konica
Minolta)
FY16/2 to May 2019
Kosuke Nishimoto (former CEO of Meitec;
stepped down from Ichigo’s board upon
appointment as EVP of Misumi Group)

Annual Board of Directors
Evaluation
Board evaluations are conducted by having
each Director assess the Board along thecriteria shown below, with aggregate survey
results collectively reviewed by the Board.
(1) Board Composition(2) Board Operation(3) Board Effectiveness(4) Board Support Resources(5) Engagement with Shareholders andStakeholders(6) Board Operation Under Covid(7) SDGs and Sustainability Initiatives

FY16/2 to FY17/2
Takashi Kawamura (former CEO of Hitachi;
stepped down from Ichigo’s board upon
appointment as Chairman of TEPCO)

57

Sustainability Initiatives
Joining Third-Party Initiatives to Accelerate Ichigo’s Sustainability Activities

UN Global Compact
UN Global Compact is a global sustainability initiative that calls for companies and organizations to take leadership and take actions as members ofsociety to implement universal sustainability principles. Companies and organizations that sign the UN Global Compact are required to achieve theTen Principles regarding human rights, labor, environment, and anti-corruption based on CEO commitments.

TCFD (Task Force on Climate-related Financial Disclosures)
TCFD was established by the Financial Stability Board (“FSB”) in December 2015, at the request of the G20, to develop a framework on climaterelated financial risk disclosures and how the financial sector can address climate change. TCFD recommends that companies disclose theirclimate-related risks and opportunities.

CDP
CDP is a global initiative led by a non-profit organization representing over 500 global investors that runs the global disclosure system for investors,
companies, cities, states, and regions to manage their environmental impacts. Assessment is based on governance, risk management, businessstrategy, targets and performance, etc., and companies are scored from A to D-.
Ichigo’s scores for 2022: A- (Climate Change Assessment), A- (Water Security Assessment)

RE100
RE100 is a global initiative bringing together the world’s most influential businesses committed to 100% renewable power. The RE100’s mission isto accelerate change towards a net zero carbon society.
Ichigo’s RE100 Target: 100% renewable electricity across its operations, including Ichigo Office (8975) and Ichigo Hotel (3463), by 2025

Fun to ShareFun to Share is the Ministry of Environment’s campaign to promote the achievement of a low-carbon society by sharing the most up-to-date
information openly and broadly.
© Ichigo Inc. All rights reserved.

58

Rich ESG Content
ICHIGO Sustainable City

Ichigo Sustainability Report

Introducing Ichigo’s Vision for Society’s Future

Promoting Awareness of Ichigo’s Sustainability
Initiatives via Ichigo Sustainability Report

Sustainable InfrastructureSportsSenior Management Message

Sustainable Business Management

CultureSmart Agriculture

Sustainability Policy

ESG Initiatives

Regional Development

ESG/SDGs

Third-Party Assessments

ESG Data

Ichigo Brand Site: ICHIGO Sustainable City

Ichigo Sustainability Reportwww.ichigo.gr.jp/company/brand (Japanese only)

www.ichigo.gr.jp/pdf/esg/Ichigo_Sustainability_Report_ENG.pdf© Ichigo Inc. All rights reserved.

59

Appendix: Financial & Operational Data

© Ichigo Inc. All rights reserved.

60

Business Segments

Asset Management

Asset Management (AM) generates fee income via management of
Ichigo Office (8975), Ichigo Hotel (3463), Ichigo Green (9282), andprivate real estate funds.

Sustainable
Real Estate

Sustainable Real Estate (SRE) preserves and improves real estate.
Ichigo receives rental income during the period in which it carries out
its value-add, along with earning gains on sales that reflect the realestate’s higher value after the value-add is complete.

Clean Energy

Clean Energy (CE) is utility-scale solar and wind power productionthat produces clean energy and brings productive use to idle land.

© Ichigo Inc. All rights reserved.

61

Significant Unrealized Gains on Balance Sheet
Real Estate Directly Held by Ichigo

LocationBook Value as ofFebruary 29, 2024
(A)

(JPY million)

Appraisal NOI(B)

Cap Rate(B)/(A)

Appraisal Value(C)

Unrealized Gains(C) – (A)Tokyo

88,228

5,307

6.0%

126,264+38,036

OutsideTokyo

108,855

6,874

6.3%

139,348+30,493

Total

197,083

12,181

6.2%

265,612+68,529

Note: Excludes Ichigo Owners and Centro assets (book value JPY 60.3B)© Ichigo Inc. All rights reserved.

62

Risk-Based Balance Sheet

Mark-to-Market Consolidated Balance Sheet: JPY 439.5B(Book Value JPY 367.0B + Unrealized Gains JPY 72.5B)
Cash & Cash Equivalents

JPY 39.7B

Non-Recourse Loans &Related Liabilities

JPY 44.7B

Non-Recourse Loans& Related Assets
JPY 63.6B

Non-Recourse Loans &Related Assets JPY 18.8B

Corporate Loans
Real Estatefor Sale
JPY 103.7B

Fixed Assets
JPY 130.1B(including Bonds
JPY 7.4B)

JPY 191.1B

Debt
JPY 262.3B

Other JPY 26.5B

Shareholder
EquityJPY 104.6B

Other JPY 29.7B
Unrealized Gains
72.5

Risk-Based Consolidated Balance Sheet: JPY 355.0B(Book Value JPY 282.5B + Unrealized Gains JPY 72.5B)

Post-Tax
Unrealized Gains
JPY 50.3B
Tax JPY 22.1B

Real Estatefor Sale
JPY 103.7B

Fixed Assets
JPY 130.1B
Mark-toMarket
Shareholder
Equity Ratio

35.3%

Corporate Loans(including Bonds
JPY 7.4B)

JPY 151.3B

Other JPY 26.5B

Shareholder
EquityJPY 104.6B

Other JPY 29.7B

Unrealized Gains
JPY 72.5B

Debt
JPY 177.8B

Post-Tax
Unrealized Gains
JPY 50.3B
Tax JPY 22.1B

Risk-Based
Shareholder
Equity Ratio

43.6%

Note: Risk-Based Balance Sheet excludes client and non-recourse assets & liabilities and nets out Cash & Cash Equivalents.
© Ichigo Inc. All rights reserved.

63

Cash Flow Maximization
Maximal Use of Depreciation Allowances to Increase Cash Flow
Real Estate for Sale & Fixed Assets
Fixed Assets (SRE)
Real Estate for Sale (SRE)

15.2%

30.1%

84.4%
30.9

84.4%

84.7%

84.3%

72.4%

29.5

29.7

56.3

162.3
173.3

162.8

159.3

FY22/2

FY23/2

148.0

60.4
29.1
FY18/2

FY19/2

FY20/2(JPY billion)

32.0

140.2

167.2

Fixed Asset Ratio

FY21/2

Reclassification of
Sustainable Real
Estate Assets to Fixed
Assets in FY20/2
Maximal use ofdepreciation
allowances lowers
stated accounting
earnings, but createsvalue by being cashgenerative to fundgrowth investments

FY24/2

Note: Excludes Ichigo Owners, Centro, and self-storage assets© Ichigo Inc. All rights reserved.

64

Robust Cash Flow Generation & Strong Earnings BaseKey Ichigo Strength: Robust Cash Generation to Fund Growth– Maximal use of depreciation allowances to lower accounting earnings &increase cash flow
– Majority of cash earnings are Stock Earnings– Maintained high Stock Earnings/Fixed Expenses Ratio even amidst Covid(JPY million)

FY18/2

Stock Earnings (A)FY19/2

FY20/2

FY21/2

FY22/2

FY23/2

FY24/2

FY24/2
Forecast

14,93918,48518,45015,065

14,912

15,59819,417

16,985

Depreciation

967

1,632

2,507

4,603

5,278

5,135

4,626

4,769

Flow Earnings

13,015

15,273

18,567

5,850

9,793

13,371

14,315

13,482

Cash Earnings

27,95333,75937,016

20,91524,70528,97033,73330,467

Fixed Expenses (B)

6,371

7,071

7,877

7,723

7,819

8,087

9,060

9,020

Stock Earnings/
Fixed Expenses (A/B)

234%

261%

234%

195%

191%

193%

214%

188%

Note: Cash Earnings = Gross Profit + Fixed Asset Gains on Sales + Depreciation Expenses© Ichigo Inc. All rights reserved.

65

Post-GFC Shift in Earnings Base & Financial Position

Stock Earnings/
Fixed Expenses
Coverage Ratio

FY09/2GFC

FY14/2Start of Shift Up MTP

FY24/2

vs. GFC

75%

140%

214%

2.9X

8.9 years
Loan Maturity(Weighted avg.,
corporate + non-recourse loans)

5.6 years
2.8 years

93%% of <3 Year Loans(corporate + non-recourse loans)Interest Rate
(Weighted avg., corporate loans)© Ichigo Inc. All rights reserved.

>3 years
7%

2.8 years

28%<3 years
28%<3 years
93%>3 years
72%

2.22%

1.96%

5.6 years

3.2X

2.8 years

46%
-47pt

<3
years
>3 years46%
54%

To be improved via
loan repayments & refinancing

0.89%-1.33 pt66

Consolidated Balance Sheet: Segment Breakdown(JPY million)
Cashand Cash
Equivalents

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor Sale

Asset Management (AM)

–

–

–

–

Sustainable Real Estate(SRE)

14,071

1,324

14

Clean Energy (CE)

3,537

–

Company-Wide Assets

29,309Total

46,917

Segment© Ichigo Inc. All rights reserved.

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
Assets

Total
Assets

–

498

109

908

1,516

103,721

154,223

1,817

1,124

5,133

281,430––

30,473

150

–

2,006

36,168

–

–

–

535

32

15,851

2,170

47,8991,324

14103,721

185,232

2,498

17,086

10,219367,01567

Consolidated P&L: Segment Breakdown(JPY million)

All-In Gross Profit
Segment

FY23/2All-In Operating Profit
YOY

FY24/2

FY23/2

FY24/2
Forecast

YOY

FY24/2

Asset Management (AM)

3,753

2,482

-33.9%

3,026

1,496

-50.5%

1,000

Base AM Fees

2,066

2,260

+9.4%

－

－

－

－

Acquisition/Disposition
Fees

1,687

222

-86.8%－－－－

Sustainable Real Estate(SRE)

17,28923,805+37.7%

11,893

17,742+49.2%

15,300Rental Income

5,605

9,712

+73.3%

3,664

7,089

+93.5%－

Asset Sales

11,694

14,109+20.7%

8,229

10,652+29.4%－

Other Flow Earnings

-9

-15

－

－

－

－

－

Clean Energy (CE)

2,791

2,818

+1.0%

2,016

1,946

-3.5%

1,700

－

－

－

-27

9

－

－

23,834

29,106+22.1%

16,90821,194+25.4%

18,000Adjustment (including
offsets of crosssegment transactions)
Total

AM & CE All-In Gross Profit = Gross Profit; SRE All-In Gross Profit = Gross Profit + SRE Fixed Asset Gains on Sales
AM & CE All-In Operating Profit = Operating Profit; SRE All-In Operating Profit = Operating Profit + SRE Fixed Asset Gains on Sales© Ichigo Inc. All rights reserved.

68Appendix: Sustainable Real Estate Details© Ichigo Inc. All rights reserved.

69

Sustainable Real Estate Social SignificanceSustainable Infrastructure for a Sustainable Society
End Wasteful Demolishment and Embrace Sustainable Real Estate– Improve quality of assets via Sustainable Value-Add– Preserve and improve highly functional real estate to contribute to environmental
conservation and sustainability– Lengthening buildings’ useful lives beyond 100 years© Ichigo Inc. All rights reserved.

70

Powerful Sustainable Real Estate (SRE) Business Model
Significant Synergies Between Ichigo’s Sustainable Real Estate & AssetManagement Businesses
Sustainable Real Estate Business Model
Green
Infrastructure

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office(8975)
Hotel

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

Sell

Real
不動産
EstateSustainable
Value-Add
Preserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
71

Ichigo Sustainable Real Estate Earnings Model Example
5.5% NOI Yield, JPY 2B Purchase, LTV 75%, 1.5% Interest Rate, JPY 50M
Capex, 15% Increase in NOI, 3-Year Value-Add Period
Value-Add Measures: Improved exterior, interior, & tenant services; seismic
strengthening; increased energy efficiency; new tenant leasing; etc.
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
2.0B

NOI 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

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 )© Ichigo Inc. All rights reserved.

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

72

Sustainable Real Estate

Value-Add Robust to Changes in Market Environment

NormalMarketBuy

MarketDownturn

Build strong tenant relationship
Improve assets
Improve soft services

NOI
+25%

Sustainable Real Estate
Value-Add (avg. 2-5 years)

Complete
Value-Add

Acquisition Criteria
Acquire assets with earnings upside
driven by Ichigo value-add(NOI +20～30%)

Multi-Asset

Ichigo Owners

GPM
32%

GPM
11%

Avg. Hold:
3.2 Years

Avg. Hold:
0.8 Years

Sell (orContinued Hold)

Earnings Structure/ Financial Base
Stock Earnings/Fixed Expenses c. 180%
Rental Income During Holding Period
Average Loan Period c. 10 years

Value-Add
Minimizes Downside Risk

Sell Asset at Optimal Timing

Note: NOI = FY18~FY20 Actual Office, Retail, Hotel NOI at acquisition vs. NOI at saleMulti-Asset GPM = FY18~FY20 Actual Office, Retail, Hotel (weighted average)
Ichigo Owners GPM = FY18~FY21 Actual Residential (weighted average)© Ichigo Inc. All rights reserved.

73

Sustainable Real Estate: Ichigo Owners

Ichigo Owners Deep Value-Add
Advantaged Ichigo Capabilities & Cost Competitiveness Build upon Ichigo’s
Strong PASEO Residential Brand & Deep Developer Support & Synergies– Development, Marketing, & Branding Tailored to Diverse Buyer and Tenant Needs– Eliminate Development Risk & Cut Costs via Outsourcing Construction to ThirdParty Developers– Construction Quality Control by Ichigo Engineering Organization
Third-Party Developers(Construction)

ProvideKnow-How

PASEO Series
165 Buildings (4,463 Rooms)
Quality Control
by Ichigo Engineering

PASEO Series
GRAN PASEO
GRAN PASEO
Shibakoen Nakameguro East/West

Marketing &Branding

Acquisitions
Ichigo-Tailored Specs

Investment Products Sales/Management
Diverse Channels

Collect Tenant Needs
c. 2,000 units p.a.
Collect Buyer Needs
115 assets over 7 years.
© Ichigo Inc. All rights reserved.

74

Sustainable Real Estate: Gross Profit Margin (GPM)
Ichigo Sustainable Value-Add Supports Ongoing High GPM
FY20/2

FY21/2

FY22/2

FY23/2

FY24/2

GPM(vs. Revenue)

28.3%

13.9%

20.6%

21.1%

14.6%

GPM
(vs. Book Value)

39.5%

16.2%

26.2%

27.1%

16.8%

Revenue(JPY M)

60,601

41,43045,83055,166

69,693Gross Profit(JPY M)

17,158

5,762

9,421

11,648

10,155

Includes Fixed Asset Gains on Sales© Ichigo Inc. All rights reserved.

75

Ichigo-Owned Real Estate Portfolio
Actively Acquiring Mid-Size Assets with Value-Add Potential, Including Retail
Assets Near Stations, Offices, Retail, & Hotels in Tokyo & Major Cities
Total Ichigo-Owned Assets: JPY 256.5B(Including Ichigo-Managed AUM: JPY 599.9B)

Logistics
1%* Acquisition price basis (Total Ichigo-Owned Assets Book Value: JPY 255.4B)* Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets

By Location

Ground Lease
1%
Other
1%

By Asset Type

Residential
19%(JPY billion)

128.3
(50%)

Retail22%

Office
31%

Hotel
25%

By Asset Size
>JPY 10B
11%<JPY 1B
18%

46.9
(18%)
24.1
(9%)

Tokyo

Fukuoka

20.1(8%)

Tokyo Osaka
Metro(Ex-Tokyo)© Ichigo Inc. All rights reserved.

7.8
(3%)

9.9
(4%)

Nagoya Hokkaido Sendai

Other

9.9
(4%)

9.3
(4%)

JPY 5B-10B
19%
JPY 1B-5B
52%

76

Sustainable Real Estate Asset Breakdown (1)132 Assets, JPY 255.4B, Annual NOI JPY 12.1B (6.2% Yield)
No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Forecast
NOI/Year

Ichigo Equity
Investment

1

Forecast Equity
Multiple

Forecast

2

3

IRR

1

RetailFixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/06

51 years–

JPY 1,900M

–

–

2

RetailFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2005/1054 years

JPY 136M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo>JPY 3B

2006/0338 years

JPY 165M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/09

19 years

JPY 60M

JPY 1,157M

–

–

5

OfficeFixed Asset

Sendai>JPY 3B

2006/1015 years

JPY 240M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka>JPY 3B

2006/1215 years

JPY 350M

JPY 1,339M

–

–

10

RetailFixed Asset

Chiyoda-ku, Tokyo

JPY 1B-2B

2007/0644 years

JPY 85M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo

JPY 1B-2B

2007/0642 years

JPY 125M

JPY 233M––

14

Ground Lease

Fixed Asset

Atsugi, Kanagawa

JPY 2B-3B

2011/06–

JPY 172M

JPY 147M––

15

RetailFixed Asset

Hiratsuka, Kanagawa<JPY 1B

2012/0228 years

JPY 75M

JPY 172M––

16

RetailFixed Asset

Yokohama<JPY 1B

2012/10

10 years

JPY 34M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo>JPY 3B

2013/03

12 years

JPY 243M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2013/05

37 years

JPY 57M

JPY 154M––

19

RetailFixed Asset

Chofu, Tokyo

JPY 1B-2B

2013/0638 years

JPY 136M

JPY 310M––

27

RetailFixed Asset

Tokorozawa, Saitama

JPY 1B-2B

2013/1116 years

JPY 74M

JPY 92M––

Note: Annual NOI & Yield excludes Ichigo Owners and Centro assets.
1

Forecast NOI/ Year is based on the business plan of each asset and is the forecast NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow.
2© Ichigo Inc. All rights reserved.

77

Sustainable Real Estate Asset Breakdown (2)Forecast Equity
2
Multiple

Ichigo Equity
Investment

Forecast
3
IRR

AcquisitionPrice

Acquisition
Date

Fixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2014/03–

JPY 113M

JPY 273M––

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2014/0340 years

JPY 51M

JPY 108M––

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

17 years

JPY 58M

JPY 279M––

35

OfficeFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2014/05

15 years

JPY 144M

JPY 434M––

37

RetailFixed Asset

Minato-ku, Tokyo<JPY 1B

2014/0751 years

JPY 47M

JPY 77M––

39

RetailFixed Asset

Fukuoka<JPY 1B

2014/0719 years

JPY 50M

JPY 213M––

40

RetailFixed Asset

Fukuoka<JPY 1B

2014/0938 years

JPY 49M

JPY 252M

–

–

41

Hotel

Fixed Asset

Utsunomiya, Tochigi

JPY 1B-2B

2014/09

36 years

JPY 143M

JPY 400M––

42

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/09

23 years

JPY 59M

JPY 177M––

43

RetailFixed AssetOsaka

JPY 1B-2B

2014/09

21 years

JPY 114M

JPY 301M––

57

Residential

Fixed Asset

Minato-ku, Tokyo

JPY 1B-2B

2014/1220 years–

JPY 186M––

62

RetailFixed Asset

Fukuoka<JPY 1B

2014/1220 years

JPY 41M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/1217 years

JPY 85M

JPY 129M––

64

RetailFixed Asset

Shinagawa-ku, Tokyo<JPY 1B

2015/01–

JPY 26M

–

–

–

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

22 years

JPY 48M

JPY 79M––

Asset Type29

Ground Lease

30

Classification

Building
Age

Forecast
1
NOI/Year

LocationNo.

1

Forecast NOI/ Year is based on the business plan of each asset and is the Forecast NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow.
2© Ichigo Inc. All rights reserved.

78

Sustainable Real Estate Asset Breakdown (3)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Forecast
NOI/Year1

Forecast Equity

Ichigo Equity
Investment

Multiple

Forecast

2

IRR3

110

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/0338 years

JPY 273M

JPY 905M

–

–

112

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0336 years

JPY 319M

JPY 354M

–

–

114

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/04

34 years

JPY 182M

JPY 550M

–

–

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

35 years

JPY 63M

JPY 86M––

118

RetailFixed Asset

NagoyaJPY 1B-2B

2016/06

26 years

JPY 83M

JPY 102M

–

–

119

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2016/06

36 years

JPY 42M

JPY 136M

–

–

120

Hotel

Fixed Asset

Shinjuku-ku, Tokyo>JPY 3B

2016/0944 years

JPY 554M

JPY 349M

–

–

121

OfficeFixed Asset

Minato-ku, Tokyo>JPY 3B

2016/1023 years

JPY 1,540M

JPY 3,450M

–

–

145

Hotel

Fixed Asset

Fukuoka>JPY 3B

2018/03

6 years

JPY 194M

JPY 301M

–

–

147

Hotel

Fixed Asset

Kyoto>JPY 3B

2018/08

5 years

JPY 327M

JPY 1,666M

–

–

149

RetailFixed Asset

Chiyoda-ku, Tokyo>JPY 3B

2018/09

33 years

JPY 308M

JPY 2,269M

–

–

151

OfficeFixed Asset

Fukuoka<JPY 1B

2018/1025 years

JPY 36M

JPY 38M––

155

OfficeFixed Asset

Shinagawa-ku, Tokyo

JPY 2B-3B

2019/0338 years

JPY 169M

JPY 616M

–

–

157

OfficeFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2019/04

40 years

JPY 52M

–

–

–

159

RetailFixed Asset

Shibuya-ku, Tokyo

JPY 2B-3B

2019/05

44 years

JPY 123M

JPY 210M––

1

Forecast NOI/ Year is based on the business plan of each asset and is the forecast NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow.
2© Ichigo Inc. All rights reserved.

79

Sustainable Real Estate Asset Breakdown (4)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Forecast

Ichigo Equity
Investment

NOI/Year1

Forecast Equity

Forecast

Multiple2

IRR3

161

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/0729 years

JPY 354M

JPY 1,636M

–

–

162

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/07

25 years

JPY 353M

JPY 1,170M

–

–

167

Hotel

Fixed Asset

Hiroshima>JPY 3B

2020/08

3 years

JPY 306M

–

–

–

171

OfficeFixed Asset

Taito-ku, Tokyo<JPY 1B

2022/0244 years

JPY 71M

JPY 38M––

172

OfficeFixed Asset

Sapporo, Hokaido>JPY 3B

2022/04–

JPY 624M

JPY 3,349M

–

–

175

OfficeFixed Asset

Utsunomiya, Tochigi

JPY 2B-3B

2022/09

16 years

JPY 203M

JPY 217M

–

–

177

RetailFixed Asset

Matsudo, Chiba

JPY 1B-2B

2023/01

18 years

JPY 69M

JPY 1,189M

–

–

182

RetailFixed Asset

Nanto, Toyoma

JPY 1B-2B

2024/02

1 year–JPY 63M––

JPY 9,226M

JPY 31,499M––

53 Fixed Assets

JPY 150,858M
JPY 147,996M (Book Value)

1

Forecast NOI/ Year is based on the business plan of each asset and is the forecast NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow.
2© Ichigo Inc. All rights reserved.

80

Sustainable Real Estate Asset Breakdown (5)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Forecast
1

NOI/Year

Forecast Equity

Ichigo Equity
Investment

Multiple2

Forecast
3

IRR

61

RetailOperational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1260 years

JPY 120M

JPY 57M

15.26X

51.7%

89

OfficeReal Estate for Sale

Musashino, Tokyo>JPY 3B

2015/0735 years

JPY 134M

JPY 670M

1.72X

13.3%

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/0939 years

JPY 105M

JPY 223M

3.78X

19.9%

153

Hotel

Real Estate for Sale

Fukuoka<JPY 1B

2019/0230 years

JPY 110M

–

5.00X

20.3%

156

Logistics

Real Estate for Sale

Fukuoka

JPY 2B-3B

2019/0336 years

JPY 150M

JPY 651M

3.60X

30.0%

163

RetailReal Estate for Sale

Nagoya>JPY 3B

2019/08

26 years

JPY 481M

JPY 1,146M

3.47X

17.0%

166

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2020/0318 years

JPY 39M

JPY 83M

3.23X

13.5%

168

OfficeReal Estate for Sale

Koto-ku, Tokyo

JPY 1B-2B

2020/1133 years

JPY 105M

–

3.17X

53.6%

169

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2021/1038 years

JPY 54M

JPY 109M

2.70X

170.5%

170

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2021/1115 years

JPY 64M

JPY 270M

1.68X

23.9%

173

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

JPY 1B-2B

2022/05

16 years

JPY 74M

JPY 121M

5.02X

74.2%

174

OfficeReal Estate for Sale

Meguro-ku, Tokyo

JPY 2B-3B

2022/08

34 years

JPY 106M

JPY 344M

3.25X

41.2%

176

OfficeReal Estate for Sale

Fukuoka<JPY 1B

2022/09

19 years

JPY 41M

JPY 65M

3.85X

36.7%

178

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2022/12

14 years

JPY 35M

JPY 28M

7.96X

44.6%

179

OfficeReal Estate for Sale

Minato-ku, Tokyo

JPY 1B-2B

2023/0232 years

JPY 59M

JPY 170M

2.38X

33.6%

180

OfficeReal Estate for Sale

Funabashi, Chiba

JPY 2B-3B

2023/04

32 years

JPY 178M

JPY 203M

7.05X

27.3%

1

Forecast NOI/ Year is based on the business plan of each asset and is the forecast NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow.
2© Ichigo Inc. All rights reserved.

81

Sustainable Real Estate Asset Breakdown (6)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Forecast
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple2

Forecast
IRR3

181

Logistics

Real Estate for Sale

Sanbu-gun, Chiba

JPY 1B-2B

2023/11

1 year

JPY 55M

JPY 1,084M

–

–

183

OfficeReal Estate for Sale

Sapporo, Hokaido

JPY 1B-2B

2023/1235 years

JPY 209M

JPY 696M

–

–

184

Hotel

Real Estate for Sale

Sendai, Miyagi

JPY 1B-2B

2023/12

13 years

JPY 165M

JPY 20M

4.51X

88.7%

185

Hotel

Real Estate for SaleOsaka

JPY 1B-2B

2024/0227 years

JPY 958M

JPY 2,062M

2.11X

28.7%

JPY 3,243M

JPY 61,347M

2.73X

39.5%

JPY 12,469M

JPY 92,847M––

Forecast

Ichigo Equity
Investment

20 Real Estate For Sale

Subtotal 73 Assets

No.

JPY 54,269M
JPY 56,346M (Book Value)
JPY 205,127M
JPY 204,343M (Book Value)

Acquisition
Price

Asset Typevs. FY23/2 Q4

NOI/Year1

Forecast Equity
Multiple

Forecast
IRR

A

Ichigo Owners (Residential)

37 Assets

JPY 44,346M-JPY 1,469M

JPY 1,725M

JPY 9,206M

–

–

B

Ichigo Owners (Other)

2 Assets

JPY 999M-JPY 2,111M

JPY 96M

JPY 999M––

C

Centro (Primarily Office & Residential)

20 Assets

JPY 6,102M-JPY 445M

JPY 434M

JPY 1,630M––

JPY 14,725M

JPY 104,684M––

JPY 2,906M

JPY 10,525M––

Total 132 Assets
Assets acquired in FY24/2 (12M)1

Total 40 Assets

JPY 256,576M
JPY 255,435M (Book Value)
JPY 60,894M

Forecast NOI/ Year is based on the business plan of each asset and is the forecast NOI after value-add is completed.

© Ichigo Inc. All rights reserved.

82

Appendix: Asset Management Details© Ichigo Inc. All rights reserved.

83

Asset Management

Ichigo REITs & Ichigo Green
Ichigo Office 8975

Ichigo Hotel 3463

Ichigo Green 9282

Portfolio

JPY 212.4B (88 Assets)

JPY 69.8B (30 Hotels)

JPY 11.4B (15 Solar Plants)

Dividend Yield

5.0%

4.9%

5.3%

・ Entered FTSE Global REIT
Index, a key benchmark for
global investors
・ Ichigo Office & Ichigo Hotel only
J-REITs with a no fixed fee,
performance fee-only fee
structure
・100% renewable energy for all
assets with full Ichigo ownership(83 assets, excludes partiallyowned and co-owned assets)

・ Geographically diversified
portfolio focused on lodgingfocused hotels
・ Ichigo Office & Ichigo Hotel only
J-REITs to implement no fixedfee, performance fee-only
structure・ Driving earnings & value growth
via value-add, strategicacquisitions & sales
・ 100% renewable energy

・ Solar power producers focusedon driving shareholder value via
income stability and earnings
growth and contributing toJapan’s self-sufficiency in clean
energy・ Portfolio of robust assets thathave suffered no injuries ordamages from natural disasters(as of April 11, 2024)

Overview*as of Dec 25, 2023

© Ichigo Inc. All rights reserved.

84

Asset Management

Growth & ESG Support for Ichigo REITs & Ichigo Green

Ichigo Office(8975)・ Strengthening growth commitment via Ichigo Office share purchase (JPY 13B)
・ Created bridge fund (Ichigo Office acquired 2 assets of 4 assets in bridge fund)Ichigo Hotel(3463)・ Strengthening growth commitment via Ichigo Hotel share purchase (JPY 2.5B)
・ Sold 5 hotel assets including Ichigo brand THE KNOT(JPY 15B) & supported third-party share allotment (JPY 1.5B)
・ Reduced Ichigo Hotel operator risk via bringing in OneFive Hotels (6 Hotels, 734 rooms)

Ichigo Green(9282)

・ Ichigo ECO Energy operating all 15 power plants
・ Ichigo earnings support via minimum daylight hour guarantee

ESG Support

・ Supporting Ichigo Office & Ichigo Hotel RE100 achievement
・ Assessing asset risks using value-add know-how and supporting group-wide ESG initiatives
・ Strengthening ESG initiatives via third-party assessments
・ Group-wide real-time reporting system for natural disaster response© Ichigo Inc. All rights reserved.

85

Asset Management AUM Detail

Ichigo Office(8975)

Ichigo Hotel(3463)

Ichigo Green(9282)
Private Equity
Real Estate Funds(excluding
consolidated funds)
Total(excluding
consolidated funds)

FY19/2(12M)

FY20/2(12M)

FY21/2(12M)

FY22/2(12M)

FY23/2(12M)）

FY24/2(12M)

AUM (Fiscal Year End)JPY 203.0B

JPY 203.2B

JPY 206.1B

JPY 205.4B

JPY 212.1B

JPY 212.1B

Base AM Fee Gross Profit(Actual)JPY 1,426M

JPY 1,436M

JPY 1,524M

JPY 1,725M

JPY 1,517M

JPY 1,423M

AUM (Fiscal Year End)JPY 50.7B

JPY 50.8B

JPY 51.9B

JPY 51.9B

JPY 54.7B

JPY 69.8B

Base AM Fee Gross Profit(Actual)JPY 461M

JPY 381M

JPY 42M

JPY 95M

JPY 201M

JPY 528M

AUM (Fiscal Year End)JPY 11.4B

JPY 11.4B

JPY 11.4B

JPY 11.4B

JPY 11.4B

JPY 11.4B

Base AM Fee Gross Profit(Actual)

JPY 85M

JPY 82M

JPY 79M

JPY 77M

JPY 78M

JPY 73M

AUM (Fiscal Year End)JPY 20.6B

JPY 36.8B

JPY 36.8B

JPY 49.3B

JPY 42.3B

JPY 49.8B

Base AM Fee Gross Profit(Actual)JPY 41M

JPY 116M

JPY 137M

JPY 144M

JPY 212M

JPY 177M

AUM (Fiscal Year End)JPY 285.8B

JPY 302.4B

JPY 306.4B

JPY 318.2B

JPY 320.7B

JPY 343.3B

Base AM Fee Gross Profit(Actual)JPY 2,014M

JPY 2,016M

JPY 1,782M

JPY 2,042M

JPY 2,010M

JPY 2,203M

Ichigo Green Base AM Fee Gross Profit (Actual) includes operator fees.

© Ichigo Inc. All rights reserved.

86Appendix: Clean Energy Details© Ichigo Inc. All rights reserved.

87

Ichigo Solar Power Plant Portfolio
Total Operating and In-Pipeline Ichigo-Owned Solar Power Plants: 48 Plants (151.4MW)
By Customer (Electric Power Utility Co)

By Feed-In Tariff

Hokkaido 3% Shikoku 2%
Tohoku3%
Kansai6%

Kyushu
13%
TEPCO
45%
Chubu
11%
Chugoku
18%

By Years in Operation

JPY 142%

JPY 24
7%
JPY 272%

JPY 1811%
JPY 21
7%

JPY 3210%>5 years
55%

3-5 years
24%

JPY 3643%

Panel Output and FIT by Customer

By Solar Intensity

By Output<1 year9%
1-3 years
11%

JPY 4019%

Operating

TEPCO

Panel
Output
(MW)
67.4

FIT
(Pre-Tax)
(JPY)
14-40

Panel
Output(MW)－

FIT(Pre-Tax)(JPY)－

Chugoku

26.6

18-40

－

－

Kyushu

19.3

32-40

－

－

Chubu

16.9

14-36

－

－

Kansai

9.3

18-32

－

－

Tohoku

4.6

36

－

－

Hokkaido

4.4

40

－

－

Shikoku

2.5

40

－

－

Total

151.4

－

－

－

Area

C
10%

<2MW
16%
>10MW
46%
2-10MW
38%

B
40%

A
50%

Solar Intensity Rank A: ≥4.00
Unit: kWh/m2 per day© Ichigo Inc. All rights reserved.

In-Pipeline

B: ≥3.75, <4.00

C: ≥3.50, <3.75

D: <3.588Ichigo Solar Power Plant Portfolio
Operating
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

Solar Power Plant
Ichigo Tokushima Higashi-Okinosu
Ichigo Fuchu Jogecho Yano
Ichigo Yubetsu Barou
Ichigo Maebashi Naegashima
Ichigo Kijo Takajo
Ichigo Betsukai Kawakamicho
Ichigo Toyokoro Sasadamachi
Ichigo Higashi-Hiroshima Saijocho Taguchi
Ichigo Akkeshi Shirahama
Ichigo Hamanaka Bokujo Tsurunokotai
Ichigo Yonago Izumi
Ichigo Kasaoka Takumicho
Ichigo Toki Oroshicho
Ichigo Toride Shimotakai Kita
Ichigo Toride Shimotakai Minami
Ichigo Hamanaka Bokujo Kajibayashi
Ichigo Sera Tsukuchi
Ichigo Sera Aomizu
Ichigo Showamura Ogose
Ichigo Memuro Nishi-Shikari
Ichigo Kure Yasuuracho Nakahata
Ichigo Tsu
Ichigo Kasaoka Iwanoike
Ichigo Toki Tsurusatocho Kakino
Ichigo Itoshima Iwara
Ichigo Sakahogi Fukagaya
Ichigo Sennan Kitsuneike
Ichigo Minakami Aramaki
Ichigo Takashima Kutsuki
Ichigo Toki Tsurusatocho Kakino Higashi© Ichigo Inc. All rights reserved.

Area
Shikoku
Chugoku
Hokkaido
Kanto
KyushuHokkaido
Hokkaido
Chugoku
Hokkaido
TohokuChugoku
Chugoku
Chubu
Kanto
Kanto
TohokuChugoku
Chugoku
Kanto
Hokkaido
Chugoku
Chubu
Chugoku
Chubu
KyushuChubu
Kansai
Kanto
Kansai
Chubu

Panel Output
(MW)
2.52
0.99
0.80
0.67
0.89
0.88
0.60
2.72
0.80
2.31
2.61
1.11
1.39
1.03
0.54
2.31
2.54
2.87
43.34
1.32
2.90
2.94
2.64
1.31
1.48
2.89
2.86
12.02
3.74
1.67

FIT
(Pre-tax)
JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40
JPY 36
JPY 40
JPY 32
JPY 36
JPY 32
JPY 32
JPY 36
JPY 32
JPY 32
JPY 36
JPY 40
JPY 36
JPY 24
JPY 24
JPY 24
JPY 36
JPY 21
JPY 21JPY 36
JPY 32
JPY 21

Operation
Start Date
2013/08
2014/03
2014/04
2014/04
2014/04
2014/10
2014/10
2015/01
2015/03
2015/122016/01
2016/03
2016/06
2016/07
2016/07
2016/102017/022017/082017/092018/022018/032018/032018/032018/04
2019/01
2019/05
2019/07
2020/01
2020/01
2020/0289

Ichigo Solar Power Plant Portfolio
OperatingNo.

Solar Power Plant

31

Ichigo Hitachiomiya
Ichigo Hokota Aoyagi
Ichigo Kasaoka Osakaike
Ichigo Minokamo Hachiyacho Kamihachiya
Ichigo Seto Jokojicho
Ichigo Toride Shimotakai Nishi
Ichigo Chiba Wakaba-ku Omiyacho Higashi
Ichigo Kasaoka Idachiike
Ichigo Komagane Akaho Minami
Ichigo Komagane Akaho Kita
Ichigo Chiba Wakaba-ku Omiyacho Nishi
Ichigo Tatsunomachi Sawasoko
Ichigo Miyakonojo Takazakicho Tsumagirishima
Ichigo Kobe Pompuike
Ichigo Obu Yoshidamachi
Ichigo Sera Shimozuta
Ichigo Ueda Yoshidaike
Ichigo Ebino Suenaga
Total (Operating)

32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48

© Ichigo Inc. All rights reserved.

Area
Kanto
Kanto
Chugoku
Chubu
Chubu
Kanto
Kanto
Chugoku
Chubu
Chubu
Kanto
Chubu
KyushuKansai
Chubu
Chugoku
Chubu
Kyushu48 Plants

Panel Output
(MW)
2.99
2.48
2.66
1.29
1.45
2.84
0.74
2.66
0.74
0.39
0.74
0.74
2.96
2.73
1.00
2.93
1.16
13.99
151.4MW

FIT(Pre-tax)
JPY 24
JPY 27
JPY 21
JPY 18JPY 18JPY 18JPY 14
JPY 18JPY 14
JPY 14
JPY 14
JPY 14
JPY 32
JPY 18JPY 18JPY 18JPY 18
JPY 40Operation
Start Date
2020/032020/04
2020/04
2020/09
2020/102021/01
2021/092021/102021/112021/112021/112021/122021/122022/01
2022/032022/032022/112024/0190

Ichigo Wind Power Plant Portfolio
OperatingNo.
1Wind Power Plant
Ichigo Yonezawa Itaya
Total (Operating)

Area

Panel Output
(MW)

FIT
(Pre-tax)

Operation
Start Date

Tohoku7.39

JPY 222021/03

1 Plant

7.3MW

Ichigo Solar & Wind Power Plant (Operating/In-Pipeline) Total: 49 Plants 158.8MW
Reference: Japan’s Feed-In Tariff (FIT)• A policy mechanism to encourage investment in renewable energies by guaranteeing a fixed purchase price for electricity over a 20-year
contract period• The fixed price for new contracts is adjusted every year, but locked in for the duration of the contract period
Power Source[Contract Period]

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

Determined via Determined via Determined via Determined via Determined via
Determined via auction process
auction process auction process auction process auction process auction process(>2,000kW)(>500kW)(>250kW)(>250kW)(>250kW)(>250kW)

Solar Power(>10kW)[20 years]

Wind Power(>20kW)[20 years]

Biomass(Domestic Feedstocks)[20 years]

JPY 40

JPY 36

JPY 32

JPY 29JPY 27

JPY 24

JPY 21(10kW2,000kW)

JPY 18(10kW2,000kW)

JPY 14(10kW500kW)

JPY 12(50kW250kW)

JPY 11(50kW250kW)

JPY 10(50kW250kW)

JPY 9.5(50kW250kW)

JPY 13(10kW50kW)

JPY 12(10kW50kW)

JPY 11(10kW50kW)

JPY 10(10kW50kW)

JPY 21
JPY 22

JPY 32© Ichigo Inc. All rights reserved.

JPY 22

JPY 22

JPY 22

JPY 22*JPY 22 until
Sept 30, 2017

JPY 20

JPY 19JPY 18JPY 17

JPY 16

JPY 15

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 40(<2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 32(>2,000kW)

JPY 3291

Ichigo Green (9282) Solar Plant Portfolio
Operating
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Solar Power Plant
Ichigo Kiryu Okuzawa
Ichigo Motomombetsu
Ichigo Muroran Hatchodaira
Ichigo Engaru Kiyokawa
Ichigo Iyo Nakayamacho Izubuchi
Ichigo Nakashibetsu Midorigaoka
Ichigo Abira Toasa
Ichigo Toyokoro
Ichigo Nago Futami
Ichigo Engaru Higashimachi
Ichigo Takamatsu Kokubunjicho Nii
Ichigo Miyakonojo Yasuhisacho
Ichigo Toyokawa Mitocho Sawakihama
Ichigo Yamaguchi Aionishi
Ichigo Yamaguchi Sayama
Total (Operating)

Area
Kanto
Hokkaido
Hokkaido
Hokkaido
Shikoku
Hokkaido
Hokkaido
Hokkaido
Okinawa
Hokkaido
Shikoku
Kyushu
Chubu
Chugoku
Chugoku
15 Plants

Panel Output
(MW)
1.33
1.40
1.24
1.12
1.23
1.93
1.16
1.02
8.44
1.24
2.43
1.44
1.80
1.24
2.35

FIT
(Pre-tax)
JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40JPY 40
JPY 36
JPY 36
JPY 32
JPY 40
JPY 36

Operation
Start Date
2013/09
2014/02
2014/03
2014/03
2014/04
2014/11
2014/12
2014/122015/02
2015/02
2015/06
2015/07
2015/09
2015/122016/04

29.4MW

Ichigo & Ichigo Green Power Plant (Operating/In-Pipeline) Total: 188.2MW
Solar Power Plants: 151.4MW
Wind Power Plants: 7.3MW
Ichigo Green Plants: 29.4MW© Ichigo Inc. All rights reserved.

92

Green Biomass Entry
Fully Local Green Biomass as Ichigo’s 3rd Renewable Energy Business– 5 Plants In Development (5.2MW, JPY 6.0B in Total Business Expenses)– Diversify & stabilize power production– Procure biomass feedstock via Ichigo’s relationships with local government
Weather
Characteristics
Impacts
Solar Power・ Lots of potential plant site candidates, able to make effective use ofidle land

YesWind Power・ Night time power production capability

Yes・ 24-hour power generation capacity regardless of weather conditions
・ Able to control power generation
・ Requires stable supply of biomass energy sources

No

Biomass

Maintain & Conserve Forests– Support biodiversity & contribute to fight against climate change
Purposeful Use of Japan’s Abundant Forest Resources– Japan’s forest ratio is 67% (3rd highest amongst OECD countries), 8th largest
cultivated forest area in the world– Productive use of unused domestic wood materials as biomass energy source© Ichigo Inc. All rights reserved.

93

Appendix: Financial Statements© Ichigo Inc. All rights reserved.

94

Consolidated Balance Sheet: Assets(JPY million)

FY20/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivables
Operational loan investments
Operational securities investments
Real estate for sale
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar and wind power plants (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© Ichigo Inc. All rights reserved.

FY21/2

FY22/2

FY23/2

FY24/2

vs. FY23/2

41,067
2,308
1,324
902
68,2903,721-6
117,608

50,832
1,382
1,324
590
64,1092,698-167
120,771

46,458
1,819
1,324
2,547
68,666
2,613-633
122,798

40,536
3,866
1,324
47
79,151
3,197-66
128,057

46,917
2,448
1,324
14
103,7213,720-401
157,746+6,381-1,418－-33+24,570+523-335+29,689

55,05023,425
122,114
5,607
206,198

60,67324,191
122,592
6,935
214,392

56,20827,953116,079
3,796
204,038

54,03926,862
114,4313,990
199,323

45,56829,234105,368
5,060
185,232-8,471+2,372-9,063+1,070-14,091

1,090
687
705
2,482

968
1,272
1,797
4,038

1,580
1,365
605
3,551

717
1,397
283
2,398

989
1,332
176
2,498

+272
-65
-107
+100

4,321
510
568
2,128
-91
7,436
216,118
333,726

5,147
10
605
2,202
-91
7,874
226,305
347,076

3,463
270
883
3,013
-131
7,498
215,089
337,887

4,455
240
341
3,937
-133
8,840
210,562
338,619

17,086
838
682
3,766
-835
21,537
209,269
367,015+12,631
+598
+341
-171
-702
+12,697-1,293+28,39695

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)

FY20/2
Liabilities
Current Liabilities
Short-term 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
Accrued bonuses
Other
Total Current Liabilities
Long-Term Liabilities
Bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
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 gains (losses) on other securities
Deferred gains (losses) on long-term interest rate hedges
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© Ichigo Inc. All rights reserved.

FY21/2

FY22/2

FY23/2

FY24/2

vs. FY23/2

3,086
274
12,277
1,178
2,416
33
5,013
24,280

4,879
274
9,751
1,358
573
9
5,527
22,374

2,382
274
9,888
1,375
1,888
39
5,012
20,861

962
364
8,539
4,218
949
112
4,053
19,20016,726
3,162
20,878
6,413
4,039
136
4,805
56,162+15,764+2,798+12,339+2,195+3,090+24+752+36,962

6,082
151,483
39,156
1,890
8,118
1,107
207,838
232,119

5,878
156,890
40,974
1,868
7,795
1,039
214,446
236,820

5,603
150,389
39,489
1,795
6,749
805
204,833
225,695

5,239
152,624
38,012
1,589
7,163
396
205,026
224,226

4,306
146,043
35,265
1,323
7,229
404
194,572
250,734-933-6,581-2,747-266+66+8-10,454+26,508

26,885
11,272
71,505-8,988100,674

26,888
11,27573,160-11,988
99,33526,888
11,26876,310-13,423
101,043

26,888
11,26682,438-17,914102,678

26,892
10,31390,967-22,446
105,727+4-953+8,529-4,532+3,049

158
-397
-239
988
184
101,607
333,726

90
-375
-285
1,007
10,197110,255
347,076

25
-254
-228
961
10,415
112,191
337,887

296
51
347
814
10,552
114,393338,619-1,14344-1,099879
10,772
116,281
367,015-1,439-7-1,446+65+220+1,888+28,39696

Consolidated P&L(JPY million)
FY20/2
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Mark-to-market gains on long-term interest
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Mark-to-market losses on long-term interest
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gains on sale of fixed assets
Gains on sales of securities investments
Gains on sales of shares in affiliates
Gains on sales of subsidiary shares
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on disposal of fixed assets
Valuation losses on securities investments
Impairment loss
Covid writedown of real estate for sale
Other
Total Extraordinary Losses
Pre-Tax Income
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY21/2

FY22/2

FY23/2

FY24/2

Change(YOY)

FY24/2Full-Year
Forecast

vs.
Forecast

87,36052,851
34,5096,787
27,721

61,36845,776
15,591
5,923
9,668

56,93440,757
16,177
6,159
10,01868,093
48,674
19,4186,926
12,49282,74761,87520,872
7,911
12,960+14,654+13,201+1,454
+985
+468

－
－
－
－
9,500

－
－
－
－
136.4%

8
78
－－
62
150

17
78
243
78
417

29
30
98
202
361

46
38
790
103
979

36
361
109
218
725

-10
+323
-681
+115
-254

－
－
－
－
－

－
－
－
－
－

2,293
336
538
307
3,476
24,395

2,338
29
279
258
2,906
7,179

2,341
53
157
355
2,908
7,471

2,165
－
171
285
2,622
10,848

2,349
330
262
351
3,294
10,391

+184
+330
+91
+66
+672
-457

－
－
－
－
－
6,000

－
－
－
－
－
173.2%

－
11
－
169
35
215

720
－
－
－
－
720

3,248
15
－
－
120
3,383

4,416
－
－
－
205
4,621

4,376
89
3,960
－
551
8,978

-40
+89
+3,960－+346+4,357

－
－
－
－
－

－
－
－
－
－

27
229
319
7,487
－
8,065
16,545
7,406
9,139
938
8,201

－
114
27
－
146
288
7,610
2,564
5,046
18
5,027

5
43
716
－
493
1,259
9,595
2,901
6,694
220
6,473

23
261
803
－
146
1,235
14,234
4,578
9,656
246
9,409

147
－
－
－
1,259
1,406
17,962
5,626
12,335
227
12,108

+124
-261
-803
－
+1,113+171+3,728+1,048+2,679-19+2,699

－
－
－
－
－
－
－
－
－
－
－
10,000

－
－
－
－
－
－
－
－
－
－
－
121.1%

97

Consolidated Cash Flows: Operations(JPY million)

FY20/2
Cash Flows from Operations
Pre-tax income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Losses (gains) on sale of subsidiary shares
Losses (gains) on sale of shares in affiliates
Losses (gains) on sale of securities investments
Losses (gains) on disposal of fixed assets
Losses (gains) on sale of fixed assets
Impairment loss
Valuation losses on securities investments
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational securities investments
Decrease (increase) in real estate for sale
Covid writedown of real estate for sale
Valuation losses on SPC capital contributions
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) Operations© Ichigo Inc. All rights reserved.

16,545
2,630
194
174
2
4
-86
2,293
-169
－
-11
－
－
319
229
-903
11,682-17,447
7,487
－
16
29
201
-36
-285
-169
600
23,30486-2,068-9,43011,892

FY21/2
7,610
4,797
21
121
-24
161
-96
2,338
－
－
－
－
-720
27
114
925
343
5,342
－
4
61
16
-437
94
-57
-323
1,550
21,87096-2,119-4,384
15,463

FY22/2
9,595
5,644
73
149
29
505
-60
2,341
－
－
-15
5
-3,248
716
43
-437
1,279
-3,873
－
2
-60
-74
-113
25
795
-1,045-877
11,40360-2,174-1,3507,939

FY23/2
14,234
5,339
－
177
73
134
-85
2,165
－
－
－
23
-4,416803
261-2,096
3,178-10,114
－
3
-6
-62
462
-38
-908
413
-1,8597,682
85-2,051-5,462254

FY24/2
17,962
4,859
－
97
31
1,036
-397
2,349
－
-3,960-89
45-4,273
2
－
1,469
1,229
-25,238
－
1
-615
-21
395
168
40
193
945
-3,769397-2,161-3,043-8,57798

Consolidated Cash Flows: Investments & Financing(JPY million)

FY20/2
Cash Flows from Investments
Payments into time deposits
Proceeds from withdrawal from time deposits
Payments for securities investments
Proceeds from sale of securities investments
Acquisitions of property, plant, and equipment
Proceeds from property, plant, and equipment
Acquisitions of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Proceeds from sale of subsidiary shares resulting inchange of consolidation scope
Acquisitions of consolidated subsidiary
Other
Net Cash from (Used for) Investments
Cash Flow from Financing
Net increase (decrease) in short-term loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
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 employee exercise of stock options
Share Buyback
Proceeds from minority interests
Payments to minority interests
Dividends paid to minority interests
Dividends paid
Net Cash from (Used for) Investments© Ichigo Inc. All rights reserved.

FY21/2

FY22/2

FY23/2

FY24/2-113
5,033-2,361
111-11,244
－
-562
-2
－
-34
－

-7
－
-547
10
-16,447
2,850-1,468
-3
15
－
－

-7
30
-606
569
-5,79812,757
-195
-4
－
-16
－

-2
23
-968
－
-10,516
14,065
-24
-6
97
－
－

-701
－
-16,567
133-8,203
18,384
-114
－
8
-127
3,356

-187
-902
-10,263－-30-15,630

－
-223
6,502

－
-33
2,635

－
1,306
-2,524

426
5,828
-193
49,957-26,475
5,300-17,701
95-2,999－-1,276-8-3,416
9,537

1,793
70
-274
51,877-48,996
3,300-1,301
4-2,99910,000－-5-3,298
10,167-2,497－-274
26,552-32,940－-1,467－-1,499－－-2-3,230-15,360-1,419－-274
41,834-40,385
3,000-1,633－-4,499－－-6-3,197-6,582

15,7642,221-364
64,043-54,996
4,600-5,152
7-4,771－－-6-3,553
17,791

99

Ichigo 2030: Ichigo as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

100

Go for Growth
Grow & Expand Ichigo’s Core Businesses into New Areas, Creating New
Earnings Streams and Increasing Both Earnings and Earnings Stability
Sustainability

Infrastructure

Sustainability is integral to the health anddevelopment of people, society, and the environment.

Ichigo has a direct and critically important role inpreserving and improving the social infrastructure that
supports the quality of people’s lives.

Ichigo’s current core business of preserving andimproving real estate is a highly sustainable businessmodel that combines high efficiency with low
environmental impact.
Under Ichigo 2030, Ichigo will continue its longstanding commitment to sustainability whiledeveloping new technologies to extend the lives ofkey social infrastructure beyond 100 years.

By expanding its current real estate and clean energy
businesses into other infrastructure areas, Ichigo will
integrate the “hard” physical elements and “soft”
service elements of infrastructure to serve broadclient needs.
Critical to success will be unifying Ichigo’s
Sustainable Value-Add and IT capabilities. Ichigo will
work to deliver first-in-class and best-in-classsolutions to drive significant value for clients andsociety across a diverse set of infrastructures. Being
one of many is not enough. Ichigo needs to lead.

Ichigo as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

101

Addressing Diverse Needs of Individuals & Communities© Ichigo Inc. All rights reserved.

102

Ichigo 2030: New Initiatives© Ichigo Inc. All rights reserved.

103

Real Estate x Sports

Top Partner of J.League, Japan’s Professional Soccer League
Partner with J.League to Promote Community Development, Revitalize Local
Economies, & Help People Enjoy Fuller and Healthier Lives
J.League’s 100-Year Vision:
Promote Sports Development

Ichigo’s Mission:Serve Important Social Needs

J.League’s mission is to establish sports clubs rooted in local
communities, cooperating with local residents, businesses, andmunicipalities to promote community development

Ichigo believes that companies exist to serve society, andseeks to contribute to local communities as a sustainableinfrastructure company

Ichigo’s role as the only real estate company that is a J.League Top Partner:– Renovate and upgrade stadiums and help local governments find solutions for the rising costs ofoperating stadiums– Work to build stronger and healthier communities in cooperation with local residents, businesses, andmunicipalities© Ichigo Inc. All rights reserved.

104

Real Estate x Sports

J.League Tegevajaro Miyazaki Acquisition
Working to Support Local Communities Across the Board– Acquired ownership of J.League Tegevajaro Miyazaki soccer club
– Establishing community-based program to promote youth soccer development– Building strong prefecture-wide support network with local government & companies– Fostering community & business ties and working to improve club management– Leveraging Ichigo’s sustainable real estate know-how to manage stadium &facilities

Tegevajaro Miyazaki
Websitewww.tegevajaro.com(Japanese only)© Ichigo Inc. All rights reserved.

105

Real Estate x IT x Tourism

PROPERA: Ichigo's AI Hotel Revenue Management System– Maximizes Hotel Revenues & Increases Labor Productivity– Solves Issues Faced by Hotels and Supports Competitiveness– Developed PROPERA-Lite* Tailored to Hotels’ Needs* Provides limited information on pricing levels

Number of Lodging Facilities
in Japan

50,000

Number of Hotel Booking
System Users

Revenue Managers- Determine prices based on guest room
reservations and market research- Reflect prices in hotel booking
system

20,000Issues Faced by Lodging Facilities
Managing Check-in/Check-out and Revenue-

Managing Multiple Reservation Sites

Lack of revenue managers
Dependent on managers’ know-how
Differences in skill levels
Labor-intensive

Hotel
Booking System

Core Hotel System

From People to AI
Reservation
Information

Optimal Pricing
Information onreservations andsales conditions

Actual Sales Information

PROPERABusiness Alliance withTEMAIRAZU used by hotel
reservation sites such as
Booking.com

Lead time between installing algorithm leveraging Ichigo know-how
and system implementation is shortest in the industry© Ichigo Inc. All rights reserved.

106Real Estate x IT x Tourism

PROPERA: Market Size & Customer Acquisition Target
Customer Acquisition Target: 2,000 Hotels
c. 50,000

No. Of Japanese Hotels

c. 33,000

No. Of Japanese Hotels With
Online Booking Systems

c. 20,000

No. Of Japanese Hotels
Deploying Site Controllers

2,000
Hotels

FY26/2
TargetSite controller: A channel management system that integrates & coordinates information
across multiple online distribution channels© Ichigo Inc. All rights reserved.

107

Real Estate x IT x Tourism

PROPERA: Accelerating External Sales
Two Key Initiatives to Increase Market Share
1. Drive Customer Growth via
PROPERA Lite
PROPERA Lite・ Price trend visualization only・ Pricing requires manual intervention
・ Usage fee: JPY 26K monthly per hotel

2. Tightly Integrate With Site Controllers
PROPERA Site Controller Integration
Will Give Access to c. 18,000 Hotels(90% of all Japanese hotels
with site controllers)

Increase Share to 2,000 Hotels by FY26/2
Drive Earnings via Shift From PROPERA Lite to PROPERAPROPERA・ Fully Automated Revenue Optimization
・ Usage Fee: 1% of Revenue(monthly per hotel)**Standard Plan
© Ichigo Inc. All rights reserved.

PROPERA Sample Earnings Model
Hotel with RevPAR JPY 6,000 and 100 rooms
Annual Ichigo Earnings: c. JPY 2M
108

PROPERA: Ichigo's AI Hotel Revenue Management System
Launch ofThird-Party
Sales

Increase Market Share

Drive Non-Asset Stock
Earnings

Earnings Upside From Participation in
Hotel Earnings GrowthLong-Term Earnings Growth

PROPERA Business Market Turnaround・ Strong domestic & inbound hotel demand recovery
・ Focus on operating cost reductions
・ Optimizing operations impacted by staff shortage
Start promotions targeting
hotels with PMS that havecompleted integrating systems

311
Launch ofThird-Party
Sales

49
Hotels

210
127

155

HotelsHotels

FY22/2

FY23/2

FY21/2

Hotels
FY24/2(Initial Target
500 Hotels)

Hotels2,000
Hotels(10% Market
Share*)
FY26/2
Target* Of JapaneseHotels
Deploying Site
Controllers

Sample Earnings Model
Usage Fee: 1% of Revenue

As of April 15, 2024

Hotel with RevPAR JPY 6,000& 100 Rooms

Annual Ichigo Earnings:
JPY 2M

1 PMS: In-house hotel system that manages check-in/check-out & revenue 2 20,000 Japanese Hotels Deploying Site Controllers© Ichigo Inc. All rights reserved.

109

Real Estate x Tourism

OneFive Hotels: Hotel Operations
Non-Asset Business Growth Driver– Operations and Master Leases of Third-Party Hotels– Growth Exceeding Pre-Covid Levels Without Dedicated Sales andMarketing Teams– Driving Earnings and Cost Reductions via PROPERA deployment at
hotels (generating 10 to 40% revenue increases p.a.)Operating 16 hotels (2,225 rooms)
in major cities
As of April 15, 2024

HOTEL IL PALAZZO
Tourism

The OneFive Villa Fukuoka© Ichigo Inc. All rights reserved.

The OneFive Terrace Fukuoka
110Real Estate x Entertainment x Culture x Tourism

Ichigo Animation: Anime + Real Estate Synergies
Released the Complete Series of New Anime VLADLOVE Written & Directedby Mamoru Oshii, with Co-Director Junji Nishimura– Established Ichigo Animation in April 2019
– Introducing tenant collaboration initiatives that go beyond typical owner/tenant,hands-off leasing relationships– Collaborating across multiple industries to drive new synergies with Ichigo’s existing
businesses

New Earnings via Anime Content Streaming & Sales of DVDs, CDs, & Goods
Promote Ichigo’s AKIBA CULTURES ZONE (ACZ) as Global Anime Landmark– Increase ACZ’s value by integrating anime content & events(anime, dance, music, entertainment, retail, tourism, etc.)

Entertainment– Anime-related events & sales of goods at ACZ will drive
both customer traffic & higher earnings
Tourism×©2020 Mamoru Oshii/Ichigo Animation© Ichigo Inc. All rights reserved.

CultureAKIBA CULTURES ZONE
111

These materials were prepared to explain Ichigo’s businesses and are not for the purpose of soliciting investment inmarketable securities issued by Ichigo. Ichigo does not guarantee the accuracy of the figures, information, estimates, orother statements included herein, and accepts 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 contain forward-looking
statements pertaining to Ichigo’s expectations, targets, plans, and strategies. Such forward-looking statements are notfacts, but are the result of management’s judgment based on information currently available. Actual operating results ordevelopments concerning Ichigo 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.

Make The World
More Sustainable

Contact:
Ichigo (TSE Prime 2337)
Investor Relations
TEL: +81-3-4485-5221
E-mail: ir@ichigo.gr.jp
www.ichigo.gr.jp/en
Ichigo is Japan’s first zero-carbon listed real estate company.
We are taking responsibility for our environmental footprint by offsetting ourcarbon emissions and investing in low-carbon technologies such as solar energy.

© Ichigo Inc. All rights reserved.

112