February 2014 Q1 (March – May 2013)
CorporatepPresentation
July 18, 2013

Ichigog Groupp Holdings
g Co.,, Ltd. (2337)()© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

www.ichigo-holdings.co.jp/english

© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

Creating peace of mind through honest
and committed management.
management© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

Transformational Growth-Shift Up StrategyShift-Up
Operating Profit 2.3X, Net Profit 5.2X Year-on-YearSignificant Investment for Growth
Accelerating Asset Acquisitions
Profitable Asset Sales
Strengthened Lender Base
Improved Debt Terms
Successful Ichigo REIT (8975) Public Offeringg ECO Energy
gy Expansion
pIchigoAppendices: Financial & Real Estate Data
Stock Split to Promote Share Ownership & Liquidity© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

5

Transformational Growth© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

6

Shift-Up Strategy
Capitalizing on Changes in Market Environment to Radically Accelerate
GrowthAccellerated GrowthhStageeBuildding Strructural
ProfitabiilityPShift-Upp
Investing for Growth x Speedx Market Environment

100%Expense
CoverageRatio

Structural Profitability

Feb 2012

Feb 2013

Feb 2014© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

7

Operating Profit 2.3X, Net Profit 5.2X Year-on-Year
Achieved 45% of Full-Year Net Income Forecast in First Quarter(Million yen)Feb 13 Q1

Feb 14 Q1

YoY Change

FY 14
Full-Year
Forecast

Q1 vs.
Full-Year
Forecast

Feb 13 Actual

2,362

11,023467%

26,00042.4%

16,397

Operating Profit

335

767

229%

3 000
3,000

25 6%
25.6%1 844
1,844

Recurring Profit

307742242%

2,700,27.5%

1,734,Net Profit

264

1,360515%

3,000

45.3%

1,637

Revenues© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

8

Significant Investment for Growth
Acquiring High-Return Assets with Low-Cost Debt
Shareholder Equity Ratio

62.5%
Shareholder Equity Ratio

Liabilities
18.0

75%
Liabilities
9.7

Assets38.6(Billion yen)InterestB
Bearingi Debt
D bt

13.8
+6.9B in Q1

Assets
48.0
Net Assets
28.9

Febeb 2013
0 3

Net Assets
30.0

Mayay 2013
0 3

* Pro Forma (definition on p. 17)© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

9

Accelerating Asset Acquisitions
Acquired 9 Assets (JPY18B) in Q1
 Ichigo REIT Bridge Assets— Osaka office (JPY 11.9B)
9B)— Osaka retail (JPY 1.2B)

 Tokyo Minami Ikebukuro, Chofu, and Daikanyama Retail (Ichigo Estate) Tokyo Azabu Juban Development (Ichigo Estate) Other Retail (Yokohama) and Residential (Osaka)

Osaka Office (Ichigo REIT)© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

Osaka Retail (Ichigo REIT)

Minami Ikebukuro Retail10

Profitable Asset Sales
Q1 Asset Sales
 JPY 1.5B in profits from the sales of a central Tokyo office asset (Kyobashi)
and Ichigo REIT bridge assets to support Ichigo REIT’s
REIT s public offering

Osaka Redevelopment (Asset Sold in May 2014)
 Deploying Ichigo’s architectural, engineering, and leasing capabilities, weturned a single tenant movie theater into a multi-tenant entertainment complex
housing a music club, a pro-wrestling arena, and a traditional Japanesetheater© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

11

Strengthened Lender Base
Focusing on Key Megabank Relationships – Increased Megabanks from
25% to 45% of Total Borrowings
Megabank Loan Balance+4.9 billion yen

JPY 6.6B
JPY 1.7B

Feb 2013

July 2013* Pro Forma (definition on p. 17)© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

12

Improved Debt Terms
Two Large-Scale Refinancings Totaling JPY 3.9 Billion in Q1

Decreasedby 246bpt(Before Refinancing)

WeightedAverage
Interest Rate

(After Refinancing)

WeightedAverage
Intereste es Rateae© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

IGH annual profit
contribution of 89
million yen13Successful Ichigo REIT (8975) Public Offering• Backed REIT Growth via Provision of Bridge Assets (JPY8.6 B)• Public Offering Outcomes Improved portfolio quality
 Increased profitability
 Strengthened financial baseIchigo REIT Public Offering Acquisitions: Ichigo Akihabara North Building, Ichigo Sakaisuji Honmachi Building,
Konami Sports Club Izumi Fuchu© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

14

Ichigo ECO Energy Expansion• 17 Projects Underway (30.3MW Output) that Qualify for
20-year Fixed Feed-in Tariff of 42 yen/kWh Largest is Okinawa (8MW)(8MW), due to start construction in August 2013
■ Artist Rendering of finished Nago Futami Power Plant

Chubu
1 Project 2.5MW

Kanto
1 Project 12.0MW

Kansai1 Project 1.8MW
Chugoku
1 Project 1.3MW• New Project Pipeline 6 planned projects totaling 43.7MW
including several greater than 10MW

Shikoku
1 Project 9.7MW

Total
17 projects
30.3 MWKyushu1 Project 16.4MW© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

15

Appendix: Pro Forma Financial Data

© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

16

Pro Forma Disclosure to Improve Transparency•Under Japanese accounting rules, SPCs in which Ichigo Group Holdings(“IGH”) is a greater than 50% investor or SPCs for which IGH is the asset
manager and no single equity investor holds more than 50% of the total
investment must be consolidated onto IGH’s balance sheet.

•Our statutory consolidated and parent financial statements thus include clientrelated assets and liabilities and P&L which do not belong to IGH. In order tomore accurately reflect the true economic exposures borne by ourshareholders, we disclose Pro Forma financials which are intended to betterreflect IGH’s actual corporate financial position.

© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

17

Balance Sheet (Pro Forma)(Million yen)Feb 13

Total Assets

Feb 14 Q1

Change (QoQ)

38,56547,964

9,399

Cash and Cash Equivalents

5,744

5,892

148

Investment (Real Estate)

10 256
10,256

12 444
12,444

2 188
2,188

Investment (Domestic companies)

696

499

-197

Investment (Overseas companies)

4,815

4,662-153

Real Estate Held for Sale

1,499, 99

4,093,093

2,594,59

Fixed Assets10,047

14,296

4,249

Intangible Assets

2,223

2,714

491

Others

3,285

3,364

79

Liabilities

9,657

17,9768,319Interest-Bearing Debt

6,907

13,779

6,872

Others

2,750

4,197

1,447

Net Assets

28,90829,9871,079© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

18

P&L (Pro Forma)(Million yen)Feb 13

Feb 14 Q1

2,636

8 486
8,486

1 035
1,035

Gross Profit

4,855

1,601

SG&A

3,130

870

C t off Revenues
CostR(Million yen)Feb 14 Q1

13,341

Revenues

Breakdown

Revenues

2,636Real Estate Management Fees

714

Advisory Fees

10

Rental Income

444Real Estate Sales / Dividends

537

Securities Sales / Dividends

392
39

1,724

731

Building Maintenance Fees

528

-110-25

Others

11

1,614

706

Real Estate Management Fees

-41

667

674

Advisory Fees

10

1,573

1,373

Rental Income

263

Tax-51

14

Real Estate Sales / Dividends

537

Securities Sales / Dividends

6

Minority Interests-12-2

Building Maintenance Fees

124

1,637

1,360

Others-13

Operating Profit
Non-Operating Gain (Loss), net

Recurring Profit
Extraordinary Gain (Loss), net

Pre-tax Profit

Net Profit© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

Gross Profit

1,601

19Significant Unrealized Gains on Balance Sheet

Real Estate(Million yen)
Acquisition ValueBook Value(As of May 13)

Appraisal Value(As of Feb 13)

Unrealized Gain

Directly Owned on B/S

18 822
18,82215 072
15,07217 165
17,165+2 093+2,093

Investment in IGH Funds

17,757

11,313

16,936+5,622

Total

36,57926,386

34,101+7,715

Private Equity(Million yen)Book Value(As of May 13)

Market Value(As of Jun 13)

Unreali ed Gain
Unrealized

Domestic Securities

186416+230

Overseas Securities

240

462+102

Total

426878+332© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

20

Appendix： Consolidated Financial Data© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

21

Balance Sheet (Consolidated)(Million yen)Feb 13

Total Assets

Feb 14 Q1

QoQ change

80,42881,884

1,456

Cash and Cash Equivalents

9,713

9,391

-322

Operating Investments in Securities

4,271

5,476

1,205

Real Estate Held for Sale

46 176
46,17641 59841,598-4 578-4,578Fixed Assets

10,047

14,296

4,249

Intangible Assets

2,223

2,714

491

Investments in Securities

4,117

4,224

107

Others

3,881

4,185

304

Liabilities

49,36149,701

340

Interest-Bearing Debts (excl. Non-Recourse Loans)

6,907

13,7796,872

Non Recourse Loans
Non-Recourse

35 03935,03928 58528,585-6,454
6 454

Others

7,415

7,337-78

Net Assets

31,06632,182

1,116

Shareholders Equity

28,457

29,676

1,219

Minority Interests and Other

2,609

2,506-103© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

22

Breakdown of Assets (Consolidated)(Million yen)Feb 13
AmountFeb 14 Q1

OutsideInvestors'
Interests

TheCompany's
Interests

--

9,391

AmountOutsideInvestors'
Interests

TheCompany's
Interests

QoQ Change
in theCom pany's
Interests---

Cash and Cash Equivalents

9,713

Operating Investments in Securities

4,271

0

4,271

5,476

0

5,476

1,205

2,474

0

2,474

4,106

0

4,106

1,632

Listed Domestic Companies

0000000

Unlisted Domestic Companies

34034

32032

-2

Listed Overseas Companies

9910991

514

0514

-477

Unlisted Overseas Companies

773

0773

8240824

51

Domestic Real Estate

Reference: Allow ance for Bad Debts forOperating Investments in Securities-328--328-358--358-30

Operating Investm ents in Securities
less Allow ance for Bad Debts forOperating Investm ents in Securities

3,944-

3,944

5,119-

5,119

1,175

Real Estate Held for Sale

46,17638,997

7,179

41,59831,758

9,839

2,660

Investments in Securities

4,117

0

4,117

4,224

0

4,224

107

Domestic Companies

662

0662

467

0467

-195

Overseas Companies

3,380

0

3,380

3,682

0

3,682

302

75

075

75

075

0Others
Reference: Allow ance for Bad Debts forInvestments in Securities-75--75-75

--75

0

Investm ents in Securities less
Allow ance for Bad Debts for
Investm ents in Securities

4,043

-

4,043

4,149

-

4,149

106

Fixed Assets

10,047--

14,296---

Intangible
gAssets

2,223--

2,714---

Other Assets

4,282-

-

4,617

-

--

Total Assets

80,428-15,16681,884-

19,107© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

3,941

23

P&L (Consolidated)
Breakdown
Feb 13

Feb 14 Q1Full Year
Full-Year
Forecast

vs.
Forecast

16,397

11,02326,00042.4%

11,422

9,385－－

Gross Profit

4,974

1,638－－SG&A

3,130870－

1,844767-110

Revenues
Cost of Revenues

Operatingpg Profit
Non-Operating Gain (Loss), net

Recurring Profit
Extraordinary Gain (Loss)(Loss), net

Pre-tax Profit
Tax
Minority Interests
Net Profit(Million yen)Feb 14 Q1

Revenues

11,023

Real Estate Management Fees

627

Advisory Fees

10

Rental Income

1,371

－

Real Estate Sales / Dividends

8,091

3,000

25.6%

Securities Sales / Dividends

392

Building Maintenance Fees

-25－－517

Others

15

1,734

742

2,700

27.5%

-4141668－－

1,693

1,410－

-51

14－

10834

1,637

1,360

© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

Gross Profit

1,638

Real Estate Management Fees

587

Advisory Fees

10－

Rental Income

635－

Real Estate Sales / Dividends

295

Securities Sales / Dividends

6113

－

－

Building Maintenance Fees

3,000

45.3%

Others-824

Appendix： Real Estate Data© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

25

Historical Assets Under Management (AUM)(As of May 2013)(Billion yen)
600
Development
500

Operating530 1530.1
62.0

496.0

REIT426.5400

330.6

385.3

379.6

113.8

106.1

335.9
257.0

335.0

104.3

123.4
312.1
263.2

66.4
151 2
151.2
100.0

Breakdown of Equity Investors

265.2
223.5

211.1

1000

278.6
104.3

320.7

166.4

Operating
63%

327.9

56.0

300

200

REIT
37%

174.3

161.0

Domestic Financial
Institution
3% Domestic

105.9
23.8

8.3

OperatingCompany
13%
Domestic Insurance
Company1%

8.3

IGH
39%

Overseas Fund12%

© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

OverseasPension Fund
20%
Overseas
Financial
Institution
12%

26

Real Estate Portfolio

AUM bby TypeT pe(As of May 2013)# of Properties byb TypeT pe
(Unit: # of buildings)(Unit: # of buildings)

AUM by Location

Land with
Ground Lease
2%
Other3%Other
9Residential
21%

Office52%

Land with
Ground Lease
55

Mixed
9%

Residential
44

RetailRt il
13%

Sendai

Office
64

Kanto
7%

Other 2%%
6%

Fukuoka
7%

Retail18

Mixed
9Nagoya7%

Tokyo63%

Tokyo

Osaka
10%

87
Sendai 2

AUM by Size

# of Properties by Size

Kanto

(Unit: # of buildings)

14Landwith
GroundLeases&Others

Osaka

5~10 bn yen
100~1 bn yen
12%15Nagoya
Fukuoka

5~10510 bnb yen
26%

91～5 bn yen
85755
Others100～1 bn yen
104

1~5 bn yen
62%© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

27

Real Estate Cap Rates•••

Conservative assessment of cap rates vis-à-vis market cap rates
Continually mark assets to market
Unrealized gains in both client and IGH assets(As of May 2013)

Real Estate Investments held by Ichigo Funds (SPCs)(Million yen)Book ValueNOI(current)

Cap rate (at Acquisition)
NOI / Acquisition Value

Cap Rate (current)Appraisal Valueas of February 2013

Location

Acquisition ValueTokyo

93,92985,746

4,953

5.9%

6.8%

89,281+3,535

Outside Tokyo

68,92359,604

4,141

6.0%

7.0%

62,107+2,503Total

162 852
162,852

145 350
145,350

9 094
9,094

6 0%
6.0%

6 9%
6.9%

151 388
151,388+6 038+6,038(af ter write-down)

NOI / Book Value af ter write-down

Unrealized Gain

Real Estate Investments directly held by IGH(Million yen)Book ValueNOI(current)

Cap rate (at Acquisition)
NOI / Acquisition Value

Cap Rate (current)Appraisal Valueas of February 2013

Location

Acquisition Value

Tokyo

7,546

6,665

441

5.6%

6.3%

7,432+767

O id TOutsideTokyok8 667
8,667

7 402
7,402

683

7 8%
7.8%

9 1%
9.1%

8 723
8,723

+1,321
1 321

Total

16,21314,067

1,123

6.9%

8.0%

16,155+2,088(af ter write-down)

NOI / Book Value af ter write-down

Unrealized Gain

*Excludes two development assets (c. JPY 1,005M) which are not currently generating NOI© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

28Stock Split to Promote Share Ownership & Liquidity
Ichigo will conduct a stock split to increase liquidity and promote shareownership by reducing the minimum trading amount.
••••

1 share will become 200 shares
Minimum Trading Lot: 100 shares
Effective Date: September 1, 2013
Total shares will rise from 2,750,000 to 550,000,000

Before Split

After Split

100 shares
1 share200 shares
100 shares

Minimum
Minimm trading lot
halved29© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

These materials were prepared to explain the Company’s businesses and are not for the purpose ofsoliciting investment in marketable securities issued by the Company. The Company does notguarantee the accuracygy of the figures,g, information,, estimates or other statements included herein,, andaccepts no responsibility for damages or losses arising through the use of the figures, information,
estimates or other statements contained herein.
These materials are based uponp information available as of the ppublication date,, and may
y contain
forward-looking statements pertaining to the Company’s expectations, targets, plans and strategies.
Such forward-looking statements are not facts, but are the result of management’s judgment based on
information currently available. Actual operating results or developments concerning the Companymayy differ substantiallyy from those indicated byy forward-looking
g statements. The information enclosed
is also subject to revision without prior notice.

Contact:
Ichigo Group Holdings Co., Ltd.
Investor Relations

Ichigog Groupp Holdings
g is Japan’sp
first zero-carbon listed real estate company.
p yWe are taking responsibility for the carbon emissions we create, such as via thispresentation material, by taking measures to create offsets to our carbon
emissions and working with organizations to invest in low-carbon technologies.
© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.

TEL: +81-3-3502-4818 FAX:+81-3-3502-4801
E-mail： IR@ichigo-holdings.co.jp
www.ichigo-holdings.co.jp/english

30