FY21/2 Q1 Corporate Presentation
January
2019
July 14,11,
2020

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

www.ichigo.gr.jp/en

We would like to express our deepest condolences
to all those across the world affected by the Covid-19
pandemic and to all those in Japan affected by the
recent heavy rainfalls, and our wishes for the earliest
possible recovery.

© 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
FY21/2 Q1 Earnings‒ FY21/2 Q1 Summary‒ Covid-19 Impacts‒ Covid-19 Countermeasures‒ Operating Profit -57%, Net Income -55%, EPS -54% (YOY)‒ Segment Earnings Details‒ FY21/2 Full-Year Forecast Upward Revision‒ Secure Dividend In Line with Progressive Dividend Policy

Powerful Value-Add Business Model Underpins Growth‒ Business Model (1) Stock + Flow Earnings‒ Business Model (2) Embedded Forward Earnings‒ Business Model (3) Value-Add Drives Durable Value Growth‒ Business Model (4) Robust Cash Generation‒ Strong Financial Base

Sustainable Growth as a Sustainable Infrastructure
Company‒ SRE: Selective on Acquisitions & Sales‒ AM: Growth Support for TSE REITs & YieldCo‒ CE: Scaling Rapidly (In-Development Plants +54%)‒ Ichigo J.League Shareholder Program© Ichigo Inc. All rights reserved.

Appendices
Ichigo’s Sustainability Commitment (ESG)‒ Ichigo Sustainability Policy‒ Ichigo ESG – Environmental‒ Ichigo ESG – Social‒ Ichigo ESG – Governance

Financial & Real Estate Data
Ichigo 2030: Ichigo as a Sustainable Infrastructure
Company‒ Go for Growth‒ Go Beyond Real Estate to Address Broad Needs‒ KPI Targets‒ Shareholder Return Policy

Ichigo 2030: New Initiatives‒ Top Partner of J.League, Japan’s Professional Soccer
League‒ Hotel Operator Market Entry: Hakata Hotels‒ Ichigo Animation: Anime + Real Estate Synergies‒ Real-World Augmented Reality (AR) Game TSUBASA+

6

FY21/2 Q1 Earnings© Ichigo Inc. All rights reserved.

7

FY21/2 Q1 Summary
Durable Earnings Model
Robust Stock Earnings
Stock Earnings/Fixed Expenses

207%(JPY million)

SRE

Cash
Earnings
JPY 6.29B

Asset Management

Clean Energy

316

4,750
4,041

3,386
2,511

Cash Earnings = Gross Profit + Fixed Asset Gainson Sales + Depreciation Expenses (Non-Cash)

FY20/2
Q1

FY21/2
Q1

FY20/2
Q1

FY21/2 Upward Revision

Ichigo Owners Growth

Revised Forecast– Robust Capabilities & Execution
amidst Covid-19– Operating Profit: JPY 7.4B – 12.9B– Recurring Profit: JPY 5.0B – 10.4B– Net Income: JPY 3.5B – 8.0B
Dividend Forecast: JPY 7 (in line with
Progressive Dividend Policy, unchanged
from FY20/2)© Ichigo Inc. All rights reserved.

FY21/2
Q1– Q1 Sales: JPY 16.64B(99% of Total)– Q1 Acquisitions: JPY 3.26B– Further FY20/1 Sales & Acquisitionsin Pipeline

541

441

FY20/2
Q1

FY21/2
Q1

822

1,089

FY20/2
Q1

FY21/2
Q1

Clean Energy Stability
+11%
+33%
86
MW
FY20/2
Q1

115
MW

FY21/2
Q1

128
MW

FY21/2
Forecast

8

Covid-19 Impacts− Decrease in Ichigo Hotel Performance-Based AM Fees – Minimal Impact on
Ichigo Office & Ichigo Green− Decrease in Hotel & Retail Rental Income – Minimal Impact on Other Asset Types− Sales & Acquisitions: Market Stress, but Residential Assets Continue to Be Active− Clean Energy Growth on Track – Unaffected by Economic Conditions
Covid-19 Impacts

Segment
Asset Management

Sustainable Real Estate

Clean Energy© Ichigo Inc. All rights reserved.

OfficeMinimal impact

Hotel

Decrease in performance-based AM fees due to decrease in hotel earnings (within forecast range)

Green

No impact. Stable power production agreements not sensitive to changes in economic conditions

RentalIncomeDecrease in rental income due to hotel and retail rental income (within forecast range)
Temporarily-closed hotels re-opening (started in June)

Tenants

Working to support tenants on an individualized basis

Asset
Sales

Residential asset sales on track
Some sales of other asset types in progress, but subject to market conditions

Asset
Acquisitions

Asset acquisitions, particularly residential, on track
More residential acquisitions in pipeline

Power
Generation
Revenue

No impact. Stable power production agreements not sensitive to changes in economic conditions

9

Covid-19 Countermeasures
Established Covid-19 Taskforce Comprised of 5 Teams – Led by CEO, COO, &Subsidiary CEOs
−
−
−
−
−

Infection Control & Response: Implement guidelines on information-sharing and disinfection
procedures when there is a suspected or confirmed case at Ichigo assets
Policy Research: Support tenants’ ability to access government Covid-19 subsidies
Tenant Relations: Discuss rent and subsidy options with tenants
Scenario Analysis: Gather and analyze cross-industry information on with/after Covid-19
scenarios
Finance: Manage cash flows at the asset level
Awareness and Prevention Promotion Poster

Implementing “With/After Covid-19” Improvements &Countermeasures at Ichigo Assets− Terraces and large
Hotel OneFive Terrace Fukuoka
doors/windows at hotels− Contactless sinks and bathrooms
in offices and hotels− Prevention of 3Cs (closed
spaces, crowded spaces, andclose contact) at retail assets© Ichigo Inc. All rights reserved.

10

Operating Profit -57%, Net Income -55%, EPS -54% (YOY)
Stock Earnings -15%, Flow Earnings -63% YOY on Covid-19(JPY million)

FY20/2
Q1

FY21/2
Q1

YOY

Revised Full-Year
Forecast

Operating Profit

8,537

3,650

-57.2%

7,400 –

12,900Recurring Profit

7,607

3,303

-56.6%

5,000 –

10,400Net Income

4,768

2,164

-54.6%

3,500 –

8,000

JPY 9.76

JPY 4.49-54.0%

JPY 7.26 –JPY 16.60

EPS© Ichigo Inc. All rights reserved.

11

Segment Earnings Details− Asset Management: Decrease in Hotel REIT Base AM Fees
− Sustainable Real Estate
Stock Earnings: Decrease in Hotel & Retail Rental Income
Flow Earnings: On Track – Last Year Heavily Weighted to Q1− Clean Energy: 7 New Plants Online since FY20/2 H1 – +33% MW YOY(JPY million)

Operating Profit
Segment

Asset Management (AM)

Sustainable Real Estate (SRE)

Clean Energy (CE)

Adjustment (including offsets ofcross-segment transactions)

Total© Ichigo Inc. All rights reserved.

FY20/2 Q1

519

FY21/2 Q1 Y

334

Gross Profit
Revised Full-Year
Forecast

YOY-35.7%

1,100

FY20/2 Q1

626

FY21/2 Q1

501

7,644

2,748

-64.0%

4,500 – 10,000

9,114

4,046

377

594

+57.4%

1,800

555

742

-5

-26

–

–

–

–

8,537

3,650

-57.2%

10,2955,289

7,400 – 12,900

Earnings Drivers(Parentheses show YOY change in
Gross Profit)
Base AM Fees 416 (-100)
Acquisition/Disposition Fees 22 (+4)
Ichigo Office Cash Flow Performance Fees 37 (-29)
Ichigo Green Operator Fees 12 (－)
Rental Income 1,853* (‐1,217)* Depreciation 658 (+342)
Gains on Sales 2,200 (-3,477)
Gains on Overseas Sales －(-373)

Power Generation Revenue 742* (+187)* Depreciation 347 (+79)

12FY21/2 Full-Year Forecast Upward Revision
Revised Up Bottom of Range: OP +19%, Net Income +75%
− Stock Earnings +JPY 550M (+4%)
Revised up rental income to reflect ongoing discussions with tenants & introduction of
government programs− Flow Earnings +JPY 690M (+22%)
Revised up sales to reflect strong Ichigo Owners activity− Revised down financing & other expenses to reflect current market conditions(JPY)

FY21/2
Revised Forecast

FY21/2Previous Forecast

Change(Bottom of Range)

FY20/2(Actual)Operating Profit

7.4B – 12.9B

6.2B – 12.9B+19.4%

27.7B

Recurring Profit

5.0B – 10.4B

3.4B – 10.4B+47.1%

24.3B

Net Income

3.5B – 8.0B

2.0B – 8.0B

+75.0%

8.2B

EPS

7.26 – 16.60

4.15 – 16.60+74.9%

16.89

7

TBD

–

7

3.5% – 7.7%

2.0% – 7.7%

–

8.2%

Dividend
ROE© Ichigo Inc. All rights reserved.

13

Secure Dividend In Line With Progressive Dividend Policy
Progressive Dividend Policy (Maintain or Raise)
Maintain JPY 7 Dividend despite Covid-19
9 Consecutive Years ofProgressive Dividend

JPY 7

JPY 7

JPY 7

FY19/2

FY20/2

FY21/2
Forecast

JPY 6
JPY 5
JPY 3
JPY 1*
FY13/2(InitiatedDividend)

JPY 1.1 JPY 1.3
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2* Adjusted to reflect 200:1 stock split© Ichigo Inc. All rights reserved.

14

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

15

Business Model (1) Stock + Flow Earnings
Stock Earnings (Primarily Rental Income, Power Generation Revenues, Depreciation (Non-Cash), and Base AM Fees)
Flow Earnings (Primarily Gains on Value-Add Real Estate Sales )37,016
Fixed Expenses (Fixed SG&A + Interest Expenses)

33,759Cash Earnings(JPY million)

28,641

27,953
18,567
15,27325,393
21,563

14,13913,015
10,77018,008

8,986

3,860

13,396
4,591
18,485
14,502

12,578

6,294

8,805
5,069

5,846

18,45014,939

6,502

6,371

7,071

7,877

14,62314,148

2,252
7,552

7,221

4,041 1,952
FY15/2

FY16/2© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2 Q1

FY21/2 Forecast FY21/2 Forecast
Bottom of Range Top of Range
16

Business Model (2) Embedded Forward Earnings
Full Economic Earnings from Value-Add Exceed Accounting Earnings
Value-Add Thus Generates Significant Unrealized Gains that are an“Earnings Bank” for Future Periods(JPY billion)

50.9
36.8

56.2

45.4

28.1

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2*

Appraisal Value-Based Unrealized Gains* FY20/2 Covid-19 writedown assets’ unrealized gains of JPY 3B treated as zero value.
© Ichigo Inc. All rights reserved.

17

Business Model (3) Value-Add Drives Durable Value Growth
Gains on Sales Consistently Exceed
Appraisal Value-Based Unrealized Gains
Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

2.8X
2.5X

4.4X
1.6X

JPY 17.1B
JPY 15.0B
JPY 12.0B
JPY 10.5B

JPY 6.4B

JPY 5.9B
JPY 2.7B

FY17/2© Ichigo Inc. All rights reserved.

FY18/2

2.2X

JPY 6.1B

JPY 1B
FY19/2

FY20/2

JPY 2.2B

FY21/2 Q1
18

Business Model (4) Robust Cash Generation
Economic Operating Cash Flow Exceeds Net Income(JPY billion)

3.6X

Net Income
Economic Operating Cash Flow

1.7X
1.4X

1.3X

1.2X
29.5

25.5
21.5
17.1
12.9

14.9

14.0

16.7

15.4
8.2

FY16/2
FY17/2
FY18/2
FY19/2
Note: Economic Operating Cash Flow = Cash Flows from Operations excluding net change in Real Estate and Power Plants for Sale
© Ichigo Inc. All rights reserved.

FY20/219

Strong Financial Base
Average Interest Rate & Loan Term

Weighted Average Loan Period
Weighted Average Remaining Loan Maturity
Weighted Average Interest Rate

(Interest Rate)(Loan Term, Years)

2.5%

12
10.8 years
9.0 years

10.2 years

10.3 years

10.0 years

9.9 years

8.7 years

2.0%

99.6 years
8.3 years

1.5%

1.71%

7.8 years

8.3 years

7.6 years

7.6 years

7.4 years

1.41%

6
1.24%
1.04%

0.97%

0.91%

0.90%

FY18/2

FY19/2

FY20/2

FY21/2 Q1

1.0%

0.5%

3

0
FY15/2

FY16/2

FY17/2

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

9% (JPY 15.6B)

10% (JPY 17.3B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

91%(JPY 157.5B)

90%(JPY 160.7B)

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2 Q1

Term Structure of Loans
Short-Term
Long-Term© Ichigo Inc. All rights reserved.

20

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

21

Sustainable Real Estate

Selective on Acquisitions and Sales
Q1 Net Sales of JPY 6.4B – Focus on Residential Assets− 13% GPM vs. 28% FY20/2 (full-year)

Ichigo Owners Robust Capabilities & Execution amidst Covid-19
−
−
−
−
−

Acquisitions: JPY 32.6B (31% of total vs. 43% last-year Q1)
Sales: JPY 16.6B (99% of total vs. 2% last-year Q1)
15% Margin (vs. acquisition cost) in Q1 vs. 10% target
High asset turnover: <1 year holding period
JPY 15B of Tokyo residential assets in acquisition pipeline(JPY million)

Acquisitions

Sales

No. ofBook Value (A)AssetsNo. ofAssetsSale Price (B)Difference(A) - (B)

Office

–

–

1

701

-701

Hotel

2

4,762

–

–

+4,762Retail

1

863

1

2,546

-1,683

Residential

7

4,351

13

13,478-9,127

Other

3

379

1

57

+322

Total

13

10,355

16

16,782-6,427

Note: Book value of asset sales is JPY 14,347 million© Ichigo Inc. All rights reserved.

22

Asset Management

Growth Support for TSE REITs & YieldCo
OfficeHotel

Ichigo Office(8975)

Green Infrastructure

Ichigo Hotel(3463)

Ichigo Green(9282)

IPO

IPO

IPO

October 12, 2005

November 30, 2015

December 1, 2016

Portfolio

Portfolio

Portfolio

85 Assets JPY 202.3B

23 Hotels JPY 51.9B

15 Plants JPY 11.4B

Dividend Yield (as of 2020/7/10)

Dividend Yield (as of 2020/7/10)

Dividend Yield (as of 2020/7/10)

6.0%

5.1%

6.8%

・ Entered FTSE Global REIT Index, a key
benchmark for global investors

・ Sold a hotel in Kyoto at 1.3x book value
and a hotel in Naha at 1.4x book value todiversify the portfolio and fund new growthacquisitions

・ Solar YieldCo focused on driving
shareholder value via income stability andearnings growth and contributing toJapan’s self-sufficiency in clean energy

・ Acquired Valie Hotel Hiroshima, a hotelwith value-add upside and potential for
future rebranding・ Portfolio of robust assets that havesuffered no injuries or damages fromnatural disasters

Ichigo Growth Support

Ichigo Growth Support

Ichigo Growth Support

Providing earthquake response support byincluding Ichigo Office assets in the
management system

Providing revenue management support by
deploying Ichigo-developed AI-based system

Operating all plants and providing ongoing
performance guarantee

・ Performance-based asset management
fee structure (effective upon shareholder
approval at the Shareholder Meeting)© Ichigo Inc. All rights reserved.

23

Clean Energy

Scaling Rapidly (In-Development Plants +54%)
3 New Plants (Total 8.1MW) Online in Q1
7 New Plants (Total 21.1MW) Forecast for FY21/2 (full-year)(Solar 13.7MW, Wind 7.4MW)

176.9MW(+29%)

Power Generation Growth
Operating

128.0MW(+20%)

In-Development
IchigoOperating Plants: 115.0MW
In-Development Plants: 61.9MW (+54%)
Total: 176.9MW
Ichigo Green (9282): 29.4MW

72.3MW(+155%)

83.6MW(+16%)

106.8 MW(+28%)

13.0(Wind 7.4)

137.3MW(+7%)

61.9(Wind 25.9)

22.3(Wind 7.4)

115.0
28.4MW

Avg FIT
Ichigo Investment

FY17/2
JPY 37.3
JPY 8.4B© Ichigo Inc. All rights reserved.

FY18/2
JPY 36.4
JPY 21.1B

FY19/2
JPY 35.3
JPY 23.6B

FY20/2
JPY 34.3
JPY 30.0B

FY21/2
JPY 32.2
JPY 36.2B

FY22/2
JPY 31.5
JPY 37.8B

FY23/2 ~JPY 30.5
JPY 52.2B
24

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 YieldCo that it manages, in its shareholder program(55,000 shareholders 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 developments.
FY20/2 Shareholder Program- Free tickets for 85 games- c. 400 tickets*Program started mid-season

Ichigo Kids J.League Events- c. 350 participants
 Escort players onto field Join pre-match warm-up
 High-fives with players
 Carry club flag
 Unfurl center circle flag
Ichigo J.League Shareholder Program Website Landing Page
© Ichigo Inc. All rights reserved.

25

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

26

Ichigo Sustainability Policy
Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its business operations.

Energy Conservation, CO2 Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy
consumption, extending the useful life of assets, actively recycling, reducing waste
production and water consumption, and implementing green procurement measures.

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 applicablechanges in laws and regulations.

Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability
awareness among all Ichigo employees.

Sustainability Performance Communication and Disclosure
Ichigo communicates its Sustainability Policy and Ichigo’s sustainability initiatives to society atlarge. Ichigo also obtains certifications for its sustainability activities on an ongoing basis.

© Ichigo Inc. All rights reserved.

27

Ichigo ESG – Environmental
Sustainable Real Estate
Preserve & Enhance Existing Buildings
to End Wasteful Demolish & Rebuild

Solar and Wind Energy: Safe and Clean
Annual Power Generation
147,296,453 kWh

Annual CO2 Reduction
97,215,656 kg‒ Lengthen useful life of existing real estate‒ Shrink footprint by reducing demolition
waste and use of raw materials, energy,
and human effort for construction

DemolishLowestImpactHighestEfficiency

Equivalent to annual
CO2 emission of
42,300 cars

Equivalent to annual
energy consumption of
49,100 households
The Federation of Electric Power
Companies of Japan
Annual energy consumption per household
3,000kWh

Ministry of Environment
Annual CO2 emission per car c. 2,300kg(FY20/2 Actuals – Includes Ichigo Green)

Environmental Certifications

Environmental Certifications

No injuries or damages at any Ichigo asset or power
plant from recent natural disasters

Ichigo Office (8975)

Robust Assets- Real estate: continuous improvements to safety & functionality
via value-add capex- Power plants: site selection and construction based on
detailed specifications customized to local geography
Robust BCP & Realtime Response- Pre-typhoon preventative measures (water shielding,sandbags, etc.) & on-site checks- Overwhelming priority is safety of tenants: on-the-groundconfirmation & on-the-ground response- Ichigo engineering team immediate response: same day onsite safety and engineering inspections to prevent secondary
damage and losses© Ichigo Inc. All rights reserved.

Ichigo Kakyoin
Building

Ichigo Hakata Ichigo Hakata Meiji Green Star (Highest Ranking)Ekimae Square
Dori Building
3 years in a row

CASBEE
Rank

CASBEE
Rank

CASBEE
Rank

S

A

A

Other Certifications:
CASBEE, BELS, DBJ Green
Building Certification

28

Ichigo ESG – Social
SportsSupport National &World-Class Athletes‒ Weightlifting‒ Riflery‒ Track & Field

Weightlifting Athlete
Hiromi Miyake

Arts
Paralym Art Sponsor- Support artists withdisabilities“Hiromi Miyake”
by Kenji Ino“Re Born: Cheers to
Value-Add”
by SakuraChildren’s Cancer
Treatment
Support University of Miyazaki
Faculty of Medicine’s Programfor Children‒ Issued CSR bond & donated a
portion of underwriter commission
to the Cancer Program‒ Sponsor volunteer activities insupport of children with cancer

Local Communities
Promote Community Development via Sponsorship of
J.League (Only Top Partner with Real Estate Expertise)Strengthen Local Communities, Create Jobs,
and Boost Rural Economies via Smart Agriculture‒ Renovate and upgrade stadiums and help local governments
reduce steep operating and maintenance costs‒ Collaborate with local farmers to increase agricultural
output, improve quality, and raise rural incomes‒ Use real estate expertise to help build stronger and healthierlocal communities‒ Increase Japan’s food self-sufficiency©J.LEAGUE© Ichigo Inc. All rights reserved.

29

Ichigo ESG – Governance
Early Adopter of Independent Three Committee (Nominating,
Audit, & Compensation) Corporate Governance Structure
–
–





Adopted in 2006 to incorporate global best practice
Exceeded legal requirements by establishing Compliance 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)

Majority Independent Director Board
Underpins Strong Governance

Board of Directors Evaluation– Of 9 members of Ichigo’s Board of Directors, 5 are– Conducted since 2017
Independent Directors
 Board Composition– Includes former CEOs of TSE 1 Section companies Board Operation
Since FY20/2 (current) Board Effectiveness Masatoshi Matsuzaki (former CEO of Konica Minolta) Board Support Resources
 Nobuhide Nakaido (former CEO of SCSK) Engagement with Shareholders and Stakeholders
Stepped down after FY18/2– Third-party confirmation of the effectiveness of
Ichigo’s Board Evaluation by JMA Research Institute Takashi Kawamura (former CEO of Hitachi; stepped– Evaluation Results
down from Ichigo’s board in May 2017upon appointment as Chairman of TEPCO)“The Board confirmed that its deliberation and Kosuke Nishimoto (former CEO of Meitec; stepped
decision-making processes are effective, also
down from Ichigo’s board in May 2019
receiving third-party confirmation.”
upon appointment as EVP of Misumi Group)© Ichigo Inc. All rights reserved.

30

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

31

Significant Unrealized Gains on Balance Sheet
JPY 54.4B (Appraisal Value Basis), +2.6% vs. FY20/2-end
Real Estate Directly Held by Ichigo

Location(JPY million)

Book Value as of
May 31, 2020 (A)Appraisal NOI(B)

Appraisal Value(C)Cap Rate(B)/(A)

UnrealizedGains(C) - (A)Tokyo

95,904

5,457

5.7%

128,604+32,700

Outside Tokyo

104,402

6,953

6.7%

126,141+21,739

Total

200,306

12,4106.2%

254,745+54,439

Notes: Excludes Ichigo Owners, Centro, and self-storage assets (book value JPY 36.5B)
FY21/2 Q1 Unrealized Gains recorded as zero

© Ichigo Inc. All rights reserved.

32

Net Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 392B
(Book Value JPY 334.6B + Unrealized Gains JPY 57.4B)
Cash & Cash Equivalents

JPY 37.4B

Non-Recourse Loans &Related Liabilities

JPY 44.2B
Non-Recourse Loans &Related Assets

Net Consolidated Risk-Based Balance Sheet:
JPY 310.4B(Book Value JPY 253.0B + Unrealized Gains JPY 57.4B)

JPY 57.9B

Non-Recourse Loan-Related ICH Equity

Operational Loan Investments
JPY 1.3B

Operational Loan Investments
JPY 1.3B

JPY 13.7B

Operational Securities Investments
JPY 0.6B

Corporate Loans & Bonds

JPY 178.2B
Real Estate for Sale

JPY 58.2B

Debt
JPY
235.7B

Operational Securities Investments
JPY 0.6B

Corporate Loans & Bonds
Real Estate for Sale

JPY 58.2B

Security Deposits Received
JPY 5.4B

Other JPY 7.9B

Other JPY 7.9B
Fixed Assets

JPY 164.3B

JPY 164.3B

Securities Investments
JPY 4.5B

Unrealized Gains
JPY 57.4B

Mark-toMarket
Shareholder
Equity Ratio

35.4%

Other JPY 10.5B

Post-Tax Unrealized
Gains JPY 39.8B
Tax JPY 17.6B*

Debt
JPY
154.0B
Security Deposits Received
JPY 5.4B

Fixed Assets

Shareholder
EquityJPY 99B

JPY 140.7B*30.62% effective tax rate

Securities Investments
JPY 4.5B

Shareholder
EquityJPY 99B

Other JPY 10.5B

Unrealized Gains
JPY 57.4B

Net Risk-Based
Shareholder
Equity Ratio

44.7%

Post-Tax Unrealized
Gains JPY 39.8B
Tax JPY 17.6B*

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

33

Cash Flow Maximization
Reclassification of Sustainable Real Estate Assets to Fixed Assets
Real Estate for Sale & Fixed Assets

Fixed Asset Ratio
84.4%
30.1%

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

15.2%
7.2%

30.9

12.8%

140.2

169.4

164.9

162.3
167.2

(JPY billion)

Maximal use ofdepreciation allowances
lowers accounting EPS &ROE, but creates value by
being cash-generative tofund growth investments

60.4
13.1
FY 16/2

24.3

29.1

FY 17/2

FY 18/2

FY 19/2

FY 20/2

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

34

Robust Cash Flow Generation & Strong Earnings BaseKey Ichigo Strength: Robust Cash Generation to Fund Growth− Maximal Use of Non-Cash Depreciation Allowances− Majority of Cash Earnings are Stock Earnings− Stock Earnings/Fixed Expenses Ratio – Even amidst Covid-19 – isConsistently c. 200%
(JPY million)
FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2
FY21/2 Q1Forecast
Bottom of Range

FY21/2
Forecast
Top of Range

Stock Earnings (A)8,805

12,57814,502

14,93918,48518,4504,041

14,148

14,623(Depreciation)

503

731

716

967

1,632

2,507

1,005

4,308

4,363

Flow Earnings

4,591

8,986

14,13913,015

15,273

18,567

2,252

3,860

10,770Cash Earnings

13,396

21,56328,641

27,95333,75937,016

6,294

18,00825,393Fixed Expenses (B)

5,069

5,846

6,502

6,371

7,071

7,877

1,952

7,552

7,221

Stock Earnings/
Fixed Expenses (A/B)

174%

215%

223%

234%

261%

234%

207%

187%

203%

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

35

Post-GFC Shift in Earnings Base & Financial Position
Stock Earnings/
Fixed Expenses
Coverage Ratio

FY09/2GFC

FY14/2Start of Shift Up MTP

FY20/2

vs. GFC

75%

140%

234%

3.1X

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

3.7X

5.6 years
2.8 years

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

>3 years
7%28%<3 years
28%

14%<3 years
14%<3 years
93%>3 years72%>3 years
86%

2.22%

1.96%

0.91%

-79%

-59%

36

Business Segments

Asset Management

Asset Management (AM) generates fee income via management of
Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282),
and private 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.

Note: The Sustainable Real Estate segment was formerly called Value-Add. In keeping with its Ichigo 2030 vision, Ichigo is changing thesegment name to Sustainable Real Estate in 2019 in order to put full focus on Ichigo’s commitment to preserving and improving realestate as a sustainable infrastructure company.
© Ichigo Inc. All rights reserved.

37

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

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor SalePower Plants
for SaleFixed Assets

–

–

–

–

–

–

Sustainable Real Estate (SRE)

15,265

1,324

597

58,154–

Clean Energy (CE)

2,588

–

–

–

Company-Wide Assets

26,310

–

–

Total

44,164

1,324

597

Segment

Asset Management (AM)© Ichigo Inc. All rights reserved.

Intangible
AssetsSecurities
Investments

Other Assets

754

106

754

1,614

186,485

1,916

3,091

4,291

271,128–

27,622

199

–

1,901

32,311

–

–

60

158

1,321

1,754

29,604

58,154–

214,167

3,028

4,518

8,702

334,659

Total Assets

38

Consolidated P&L: Segment Breakdown(JPY million)

Gross Profit
Segment

YOY
ChangeFY21/2 Q1

FY20/2 Q1Operating Profit
YOY
ChangeFY21/2 Q1

FY20/2 Q1

FY21/2 Forecast

626

501

-20.0%

519

334-35.7%

1,100

Base AM Fees

541

441

-18.4%––––

Acquisition/Disposition Fees

85

60

-29.5%

–

–

–

–

9,114

4,046

-55.6%

7,644

2,748

-64.0%

4,500 – 10,000

Rental Income

3,070

1,853

-39.6%––––

Asset Sales

5,678

2,200

-61.2%

–

–

–

–

366

-7

–

–

–

–

–

555

742

+33.9%

377

594+57.4%

1,800

–

–

–

-5

-26

–

–

10,295

5,289-48.6%

8,537

3,650

-57.2%

7,400 – 12,900

Asset Management (AM)

Sustainable Real Estate (SRE)

Other Flow Earnings
Clean Energy (CE)
Adjustment (including offsets of crosssegment transactions)
Total© Ichigo Inc. All rights reserved.

39

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)

FY16/2(12M)

FY17/2(12M)

FY18/2(12M)

FY19/2(12M)

FY20/2(12M)

FY21/2 Q1(3M)

AUM (Fiscal Year End)JPY 165.1B

JPY 194.5B

JPY 196.9B

JPY 203.0B

JPY 203.2B

JPY 202.3B

Base AM Fee Gross Profit (Actual)

JPY 1,016M

JPY 1,291M

JPY 1,373M

JPY 1,426M

JPY 1,436M

JPY 362M

AUM (Fiscal Year End)JPY 20.4B

JPY 47.6B

JPY 50.9B

JPY 50.7B

JPY 50.8B

JPY 51.9B

JPY 30M

JPY 287M

JPY 450M

JPY461M

JPY 381M

JPY 11M

AUM (Fiscal Year End)–JPY 10.0B

JPY 11.4B

JPY 11.4B

JPY 11.4B

JPY 11.4B

Base AM Fee Gross Profit (Actual)–

JPY 11M

JPY 77M

JPY 85M

JPY 82M

JPY 22M

JPY 15.4B

JPY 6.4B

JPY 12.3B

JPY 20.6B

JPY 36.8B

JPY 36.8B

JPY 60M

JPY 27M

JPY 12M

JPY 41M

JPY 116M

JPY 33M

AUM (Fiscal Year End)JPY 200.9B

JPY 258.6B

JPY 271.7B

JPY 285.8B

JPY 302.4B

JPY 302.5B

Base AM Fee Gross Profit (Actual)

JPY 1,106M

JPY 1,617M

JPY 1,914M

JPY 2,014M

JPY 2,016M

JPY 429M

Base AM Fee Gross Profit (Actual)

AUM (Fiscal Year End)
Base AM Fee Gross Profit (Actual)

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

© Ichigo Inc. All rights reserved.

40

Powerful Sustainable Real Estate Business Model
Significant Synergies Between Ichigo’s Sustainable Real Estate and 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

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
41

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

Sustainable
Value-Add

DemolishandRebuild© Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

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

HighestEfficiency
LowestImpact42

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 Steps: 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

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

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

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

43

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

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2 Q1

GPM(vs. Revenue)

13.6%

33.7%

25.5%

28.3%

13.1%

GPM
(vs. Book Value)

15.8%

50.9%

34.3%

39.5%

15.1%

Revenue(JPY M)

77,50235,73358,69360,601

16,782Gross Profit(JPY M)

10,562

12,05014,986

17,1582,205© Ichigo Inc. All rights reserved.

44

Ichigo-Owned Real Estate Portfolio
By Location

By Asset Type(JPY billion)

Other 6%Ground Lease 1% Other 3%

Sendai 2%

Logistics
2%

Osaka 3%

Hokkaido
7.1

Hokkaido 3%

Residence
14%

Retail29%

Nagoya 3%
Tokyo
Metro*
11%

Hotel
25%

Tokyo
51%

Fukuoka
21%

Office26%

Sendai
5.9*Ex-Tokyo

By Asset Size
>JPY 10B
12%<JPY 1B21%

JPY 5B-10B
23%
JPY 1B-5B
44%

Tokyo
121.2

Nagoya7.3

Fukuoka
49.8

Osaka
7.0

Tokyo
Metro
(ExTokyo)
27.2

Other
12.8

Total Ichigo-Owned Assets: JPY 238.2B
Including Ichigo-Managed AUM: JPY 540.8B* Acquisition price basis
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 239.8B© Ichigo Inc. All rights reserved.

45

Sustainable Real Estate Asset Breakdown (1)175 Assets, JPY 238.2 B, Forecast NOI JPY 12.4B (6.2% Yield)
No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1
NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/0648 years–

JPY 1,900M

–

–

2

RetailFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2005/1051 years

JPY 136M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo>JPY 3B

2006/0334 years

JPY 165M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/0915 years

JPY 60M

JPY 1,157M

–

–

5

OfficeFixed Asset

Sendai>JPY 3B

2006/10

12 years

JPY 240M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka>JPY 3B

2006/12

11 years

JPY 350M

JPY 1,339M

–

–

10

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/06

40 years

JPY 85M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/0639 years

JPY 125M

JPY 233M––

14

Ground Lease

Fixed Asset

Atsugi, Kanagawa

JPY 1B-2B

2011/06–

JPY 172M

JPY 147M––

15

RetailFixed Asset

Hiratsuka, Kanagawa<JPY 1B

2012/0224 years

JPY 77M

JPY 172M––

16

RetailFixed Asset

Yokohama<JPY 1B

2012/10

6 years

JPY 34M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo>JPY 3B

2013/03

9 years

JPY 244M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2013/05

33 years

JPY 57M

JPY 154M––

19

RetailFixed Asset

Chofu, Tokyo

JPY 1B-2B

2013/06

35 years

JPY 135M

JPY 310M––

21

Residential

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2013/06

4 years

JPY 47M

JPY 203M––

Note: 6.2% yield excludes Ichigo Owners, Centro, and self-storage assets.
1

Expected NOI/ Year is based on the business plan of each asset and is the expected 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. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

46

Sustainable Real Estate Asset Breakdown (2)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

27

RetailFixed Asset

Tokorozawa, Saitama

JPY 1B-2B

2013/11

12 years

JPY 76M

JPY 92M––

29

Ground Lease

Fixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2014/03–

JPY 114M

JPY 273M––

30

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2014/0336 years

JPY 51M

JPY 108M––

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

14 years

JPY 58M

JPY 279M––

35

RetailFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2014/05

11 years

JPY 144M

JPY 434M––

37

RetailFixed Asset

Minato-ku, Tokyo<JPY 1B

2014/0747 years

JPY 47M

JPY 77M––

39

RetailFixed Asset

Fukuoka<JPY 1B

2014/0716 years

JPY 52M

JPY 213M––

40

RetailFixed Asset

Fukuoka<JPY 1B

2014/0935 years

JPY 49M

JPY 252M

–

–

41

Hotel

Fixed Asset

Utsunomiya, Tochigi

JPY 1B-2B

2014/09

33 years

JPY 143M

JPY 400M––

42

RetailFixed Asset

Fukuoka<JPY 1B

2014/09

19 years

JPY 60M

JPY 177M––

43

RetailFixed AssetOsaka

JPY 1B-2B

2014/0918 years

JPY 117M

JPY 301M––

45

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/1117 years

JPY 92M

JPY 135M––

57

Residential

Fixed Asset

Minato-ku, Tokyo

JPY 1B-2B

2014/1216 years

JPY 56M

JPY 186M––

62

RetailFixed Asset

Fukuoka<JPY 1B

2014/1216 years

JPY 41M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/12

13 years

JPY 85M

JPY 129M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected 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. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

47

Sustainable Real Estate Asset Breakdown (3)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

64

RetailFixed Asset

Shinagawa-ku, Tokyo<JPY 1B

2015/01–

JPY 26M

–

–

–

66

RetailFixed Asset

Sendai<JPY 1B

2015/0216 years

JPY 65M

JPY 8M––

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

18 years

JPY 46M

JPY 79M

–

–

69

Hotel

Fixed AssetOsaka

JPY 2B-3B

2015/05

17 years

JPY 170M

JPY 633M––

71

RetailFixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2015/07

5 years

JPY 99M

JPY 126M

–

–

110

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/0334 years

JPY 273M

JPY 905M

–

–

111

Hotel

Fixed Asset

Yokohama

JPY 2B-3B

2016/0336 years

JPY 207M

JPY 228M

–

–

112

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0332 years

JPY 239M

JPY 354M

–

–

113

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0332 years

JPY 288M

JPY 344M

–

–

114

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/04

30 years

JPY 183M

JPY 550M

–

–

115

Hotel

Fixed AssetOsaka

JPY 2B-3B

2016/04

13 years

JPY 130M

JPY 274M

–

–

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

31 years

JPY 63M

JPY 86M––

118

RetailFixed Asset

NagoyaJPY 1B-2B

2016/06

23 years

JPY 83M

JPY 102M

–

–

119

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2016/06

33 years

JPY 42M

JPY 136M

–

–

120

Hotel

Fixed Asset

Shinjuku-ku, Tokyo>JPY 3B

2016/0940 years

JPY 554M

JPY 349M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected 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. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

48

Sustainable Real Estate Asset Breakdown (4)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

121

OfficeFixed Asset

Minato-ku, Tokyo>JPY 3B

2016/1019 years

JPY 1,540M

JPY 3,450M

–

–

122

Hotel

Fixed Asset

Shima, Mie<JPY 1B

2017/01

22 years

JPY 78M

JPY 73M––

132

Residential

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2017/04

16 years

JPY 51M

JPY 190M

–

–

133

Hotel

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2017/04

18 years

JPY 46M

JPY 152M

–

–

134

Residential

Fixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2017/04

17 years

JPY 58M

JPY 197M

–

–

138

Hotel

Fixed Asset

Ogaki, Gifu

JPY 1B-2B

2017/05

30 years

JPY 116M

–

–

–

144

OfficeFixed Asset

Chiyoda-ku, Tokyo

JPY 1B-2B

2018/0232 years

JPY 129M

JPY 268M

–

–

145

Hotel

Fixed Asset

Fukuoka

JPY 2B-3B

2018/032 years

JPY 194M

JPY 301M

–

–

146

RetailFixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2018/08

29 years

JPY 32M

–

–

–

147

Hotel

Fixed Asset

Kyoto>JPY 3B

2018/08

1 yearJPY 327M

JPY 1,666M

–

–

148

Office (Land)

Fixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2018/08–

JPY 54M

JPY 166M

–

–

149

RetailFixed Asset

Chiyoda-ku, Tokyo>JPY 3B

2018/0930 years

JPY 308M

JPY 2,269M

–

–

151

OfficeFixed Asset

Fukuoka<JPY 1B

2018/1021 years

JPY 33M

JPY 38M––

152

OfficeFixed Asset

Fukuoka

JPY 2B-3B

2019/0232 years

JPY 174M

JPY 382M

–

–

154

Residential

Fixed Asset

Kita Kyushu, Fukuoka

JPY 1B-2B

2019/03

6 years

JPY 83M

JPY 181M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected 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. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

49

Sustainable Real Estate Asset Breakdown (5)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year 1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

155

OfficeFixed Asset

Shinagawa-ku, Tokyo

JPY 2B-3B

2019/0335 years

JPY 169M

JPY 616M

–

–

157

OfficeFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2019/04

37 years

JPY 52M

–

–

–

158

Other

Fixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2019/05–

JPY 12M

–

–

–

159

RetailFixed Asset

Shibuya-ku, Tokyo

JPY 2B-3B

2019/05

40 years

JPY 123M

JPY 210M

–

–

160

OfficeFixed Asset

Fukuoka

JPY 2B-3B

2019/06

22 years

JPY 129M

JPY 248M

–

–

161

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/07

25 years

JPY 368M

JPY 1,636M

–

–

162

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/07

21 years

JPY 353M

JPY 1,170M

–

–

164

Hotel

Fixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2020/03

11 years

JPY 57M

JPY 62M

–

–

165

Hotel

Fixed Asset

Sapporo>JPY 3B

2020/031 yearJPY 338M

JPY 3,900M––

JPY 10,400M

JPY 34,415M––

69 Fixed Assets

JPY 170,096M
JPY 171,510M (Book Value)

1

Expected NOI/ Year is based on the business plan of each asset and is the expected 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. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

50

Sustainable Real Estate Asset Breakdown (6)No.

Asset TypeClassification

Location

Expected

AcquisitionPrice

Acquisition
Date

Building
Age

NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

61

RetailOperational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1257 years

JPY 120M

JPY 57M

15.26X

51.7%

89

OfficeReal Estate for Sale

Musashino, Tokyo>JPY 3B

2015/07

31 years

JPY 131M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2015/07

12 years

JPY 85M

JPY 353M

1.82X

17.7%

130

RetailReal Estate for Sale

Taito-ku, Tokyo

JPY 1B-2B

2017/04

27 years

JPY 100M

JPY 297M

4.42X

21.1%

135

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

28 years

JPY 114M

JPY 188M

6.18X

25.8%

136

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

28 years

JPY 152M

JPY 203M

8.75X

32.8%

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/0935 years

JPY 106M

JPY 223M

3.78X

19.9%

150

RetailReal Estate for Sale

Chuo-ku, Tokyo>JPY 3B

2018/1032 years

JPY 359M

JPY 1,161M

6.17X

24.7%

153

Hotel

Real Estate for Sale

Fukuoka<JPY 1B

2019/0227 years

JPY 110M

–

–

–

156

Logistics

Real Estate for Sale

Fukuoka

JPY 2B-3B

2019/0332 years

JPY 150M

JPY 651M

3.60X

30.0%

163

RetailReal Estate for Sale

Nagoya>JPY 3B

2019/08

22 years

JPY 479M

JPY 1,146M

3.47X

17.0%

166

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2020/03

14 years

JPY 39M

JPY 863M

3.23X

13.5%

JPY 1,944M

JPY 5,811M

4.29X

25.4%

JPY 12,345M JPY 40,227M––

12 Real Estate for Sale

Subtotal 81 Assets

JPY 31,665M
JPY 31,779M (Book Value)
JPY 201,762M
JPY 203,290M (Book Value)

1

Expected NOI/ Year is based on the business plan of each asset and is the expected 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. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

51

Sustainable Real Estate Asset Breakdown (7)Acquisition
Price

Asset TypeNo.

vs. FY20/2 Q4

Expected
1
NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple

Forecast
IRR

A

Ichigo Owners (Office & Residential)

41 Assets

JPY 26,022M-JPY 10,612M

JPY 1,325M

JPY 8,240M

–

–

B

Centro (Primarily Office & Residential)

22 Assets

JPY 7,917M+JPY 1,089M

JPY 588M

JPY 1,982M

–

–

C

Self-Storage

31 Assets

JPY 2,564M+JPY 208M

JPY 307M

JPY 820M––

JPY 14,567M

JPY 51,270M––

JPY 662M

JPY 4,825M––

Total 175 Assets
Assets acquired in FY21/2 Q1 (3M)

1

Total 13 Assets

JPY 238,266M
JPY 239,802M (Book Value)
JPY 9,693M

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

© Ichigo Inc. All rights reserved.

52

Ichigo Solar Power Plant Portfolio, Total 187.8MW
Ichigo (In-Development)

Ichigo (Operating)Solar Power Plant
Ichigo Tokushima Higashi-Okinosu
Ichigo Fuchu Jogecho Yano
Ichigo Yubetsu Barou
Ichigo Maebashi Naegashima

Area
Shikoku
Chugoku
Hokkaido
Kanto

Panel
Output
(MW)
2.52
0.99
0.80
0.67

FIT
(Pre-tax)

Operation
Start Date

Solar Power Plant

Area

JPY 40Aug 2013

Ichigo Minokamo Hachiyacho Kamihachiya

Chubu

Panel
Output(MW)
1.29

Mar 2014

Ichigo Seto Jokojicho

Chubu

1.45

Apr 2014(Wind) Ichigo Yonezawa Itaya

TohokuApr 2014

Ichigo Toride Shimotakai Nishi
Ichigo Sera Shimotsuda

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

Operation
Start Date

JPY 18Aug 2020

JPY 18Aug 2020

7.39

JPY 22

Dec 2020

Kanto

2.85

JPY 18

Jan 2021

Chugoku

2.94

JPY 18Aug 2021

Ichigo Obu Yoshidamachi

Chubu

0.98

JPY 18

Jan 2022

Ichigo Kobe Pompuike

Kansai

2.45

JPY 18

Jan 2022

Ichigo Miyakonojo Takazakicho Tsumagirishima Kyushu

2.96

JPY 32

Feb 2022
Mar 2022

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Higashi-Hiroshima Saijocho Taguchi Chugoku

2.72

JPY 40Jan 2015

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Total (In-Development)

16 Plants 43.40MW

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Total (Operating & In-Development)

49 Plants 158.39MW

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Ichigo Memuro Nishi-Shikari

Hokkaido

1.32

JPY 40Feb 2018

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.90

JPY 36

Mar 2018

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Mar 2018

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

JPY 24

Apr 2018

Ichigo Itoshima Iwara

Kyushu1.48

JPY 36

Jan 2019

Ichigo Sakahogi Fukagaya

Chubu

2.89

JPY 21

May 2019

Ichigo Sennan Kitsuneike

Kansai

2.86

JPY 21

Jul 2019

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Jan 2020

Ichigo Takashima Kutsuki

Kansai

3.74

JPY 32

Jan 2020

Ichigo Toki Tsurusatocho Kakino Higashi

Chubu

1.67

JPY 21

Feb 2020

Ichigo Hitachiomiya

Kanto

2.99

JPY 24

Mar 2020

Ichigo Hokota Aoyagi

Kanto

2.48

JPY 24

Apr 2020

Ichigo Kasaoka Osakaike
Total (Operating)

Chugoku
2.66
JPY 2133 Plants 114.99MW

Apr 2020© Ichigo Inc. All rights reserved.

Ichigo Kasaoka Idachiike

Chugoku

2.67

JPY 18

Ichigo Ueda Yoshidaike

Chubu

1.01

JPY 18

Oct 2022

Ichigo Komagane Akaho Minami

Chubu

0.74

JPY 14

Jan 2023

Ichigo Komagane Akaho Kita

Chubu

0.39

JPY 14

Jan 2023

Ichigo Chiba Wakaba-ku Omiyacho Nishi

Kanto

0.74

JPY 14

Jan 2023

Ichigo Chiba Wakaba-ku Omiyacho Higashi

Kanto

0.74

JPY 14

Jan 2023

Ichigo Tatsunomachi Sawasoko

Chubu

0.74

JPY 14

Jan 2023

Ichigo Ebino Suenaga

Kyushu13.99

JPY 40Jan 2024* Excludes additional wind power plants under development (18.5MW)

Ichigo Green (9282)
Total 15 Plants 29.4MW

Ichigo (by Area)
Total 49 Plants 158.4MW
Area

Panel Output(MW)
OperatingHokkaido
Tohoku
Kanto
Chubu
Kansai
Chugoku
Shikoku
Kyushu
Total

4.43
4.62
63.10
10.23
6.61
21.07
2.52
2.38
114.99FIT (Pre-tax)(JPY)

InInOperating
Development
Development

–
7.39
4.34
6.64
2.45
5.6
–
16.95
43.40

40
36
24 – 40
21 – 36
21, 3221 – 4040
36, 40–22
14, 1814, 1818
18–
32, 40Area

Panel
Output(MW)

FIT(Pre-tax)(JPY)

Hokkaido
Kanto
Chubu
Chugoku
Shikoku
KyushuOkinawa
Total

9.14
1.33
1.80
3.60
3.67
1.44
8.44
29.43

40
40
32
36, 4036, 4036
4053

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 48 Plants (151.0MW)
By Customer(Electric Power Utility Co)
Hokkaido
3%
Tohoku3%

By Feed-In Tariff

By Years in Operation
JPY 142%

Shikoku1%

JPY 1810%
JPY 21
7%

Kyushu13%
Kansai
6%

TEPCO
45%

JPY 4019%

JPY 24
8.2%
JPY 32
10%

Chubu
11%

By Solar Intensity>10MW(In-Development)
9%2-10MW(In-Development)
9%

<2MW
10%

<2MW
(In-Development)
5.4%

2-10MW
29%
>10MW
37%

© Ichigo Inc. All rights reserved.

A(In-Development)
4.2%<1 year17%

JPY 3644%

Chugoku
18%

By Output>5 years
6%
3-5 years
10%
In Development24%

1-3 years
43%

C(In-Development)
2%

B(In-Development)
18%
A
45%

C
8%

Rank
A
B
C
D

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

Unit: kWh/m² per day
B
23%

54

Reference: Japan’s Feed-In Tariff (FIT)
What is a FIT?
‒ A policy mechanism to encourage investment in renewable energies by
guaranteeing a fixed price for electricity over a 20-year contract period‒ The fixed price for new contracts is adjusted every year, but locked in forthe duration of the contract period
Wind Power FIT

Solar Power FIT
Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2017 (4/1~9/30)

JPY 2220 years

FY2013

JPY 3620 years

FY2017 (10/1~3/31)

JPY 2120 years

FY2014

JPY 3220 years

FY2018JPY 2020 years

FY2015 (4/1~6/30)

JPY 2920 years

FY2019JPY 1920 years

FY2015 (7/1~3/31)

JPY 2720 years

FY2020

JPY 1820 years

FY2016

JPY 2420 years

FY2017

JPY 21 1

20 years

FY2018JPY 18 1

20 years

FY2019JPY 14 2

20 years

FY2020

JPY 13 3
JPY 12 4

20 years

1 FIT for >2MW non-residential solar power production determined via auction process
2 FIT for >0.5MW non-residential solar power production determined via auction process
3 FIT for 0.01 to 0.05MW non-residential solar power production

FIT for >0.5MW non-residential solar power production determined via auction process
4 FIT for 0.05 to 0.25MW non-residential solar power production

Source: METI, Agency for Natural Resources and Energy© Ichigo Inc. All rights reserved.

FIT for >0.5MW non-residential solar power production determined via auction process55

Consolidated Balance Sheet: Assets(JPY million)

FY17/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
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.

FY18/2

FY19/2

FY20/2

FY21/2 Q1

vs. FY20/2

47,678
913
1,324
1,433
167,805
516
3,125
-453
222,344

45,510
1,097
1,324
2
180,789
342
2,643
-28
231,681

50,225
1,344
1,324
1,218
161,322–2,156-2
217,590

41,067
2,308
1,324
902
68,290–3,721-6
117,608

44,164
1,686
1,324
597
58,154–4,324-7110,244+3,097-622–-305-10,136–+603-1-7,364

7,375
7,246
18,627
12,40245,654

10,60019,773
26,993
1,190
58,55820,33819,05849,924
5,655
94,97655,05023,425
122,114
5,607
206,198

58,13524,415
124,773
6,843
214,167+3,085+990+2,659+1,236+7,969

1,864
62
29
1,956

1,600
135
233
1,968

1,346
316
331
1,993

1,090
687
705
2,482

1,062
1,132
834
3,028

-28
+445
+129
+546

1,426
10
339
1,820
-92
3,504
51,115
273,459

2,184
10
68
2,132
-91
4,303
64,831
296,512

2,455
10
177
2,231
-91
4,782
101,752
319,343

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

4,518
10
580
2,200
-91
7,217
224,414334,659

+197
-500
+12
+72
–
-219
+8,296+933

56

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

FY17/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
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
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© Ichigo Inc. All rights reserved.

FY18/2

FY19/2

FY20/2

FY21/2 Q1

vs. FY20/2

110
805
611
112
5,209
6,825
1,655
62
36
4,119
19,548

–
1,042
–
112
4,449
3,921
1,609
494
34
4,652
16,316

–
3,275
–
112
7,881
1,666
3,760
–
31
5,178
21,905

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

–
4,366
–
274
12,734
1,178
1,057
–
205
3,987
23,804–+1,280––+457–-1,359–+172-1,026
-476

632
100
91,60468,319
1,147
8,038
624
170,467
190,015520–
112,366
63,588
1,744
8,492
758
187,470
203,787

538–
131,569
51,068
2,164
8,292
946
194,579
216,484

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

6,111–
154,683
39,043
1,892
8,049
896
210,677
234,481+29–+3,200
-113
+2
-69
-211
+2,839+2,362

26,65011,05642,840-15
80,532

26,723
11,11354,324-2,99589,16526,820
11,207
66,730-5,98898,76926,885
11,272
71,505-8,988100,674

26,886
11,27270,297-8,98899,468+1–-1,208–-1,206

117
-365
55
-192
491
2,612
83,443
273,459

543
-372
–
171
666
2,722
92,725296,512

386
-408
–
-21
827
3,283
102,859
319,343

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

-64
-406
–
-470
996
183
100,177
334,659

-222
-9
–
-231
+8
-1
-1,430+933

57

Consolidated P&L(JPY million)
FY17/2(12M)
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
rate hedges
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expenses
Mark-to-market losses on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
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
Office move expenses
Impairment loss
Earthquake-related damages
Covid-19 writedown of real estate for sale
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY18/2(12M)

FY19/2(12M)

FY20/2(12M)

FY21/2 Q1(3M)

FY20/2 Q1(3M)

Change(YOY)

FY21/2Full-Year
Forecast(Revised)

vs.
Forecast

109,253
81,32727,925
5,025
22,90057,84630,86026,986
5,067
21,91983,54051,41332,126
5,847
26,27987,36052,851
34,5096,787
27,721

22,73017,440
5,289
1,638
3,650

26,29015,994
10,295
1,758
8,537-3,560+1,446-5,006-120-4,887––––7,400 – 12,900––––
28.3% – 49.3%

–
85

3
57

3
68

8
78

3
54

1
35

+2
+19

–
–

–
–

–

–

5

–

239

–

+239

–

–

32
118

100
161

70
147

62
150

16
314

15
53

+1
+261

–
–

–
–

2,278

2,249

2,328

2,293

573

558

+15

–

–

53

270

491

336

10

98

-88

–

–

714
217
3,263
19,755

207
168
2,895
19,185

327
203
3,350
23,076

538
307
3,476
24,395

7
69
660
3,303

236
89
982
7,607

-229
-20
-322
-4,304–––5,000 – 10,400–––
31.8% – 66.1%

2,466
–
–
–
2,466

–
1,221
–
41
1,263

2
–
–
–
2

11
–
169
35
215

–
–
–
–
–

11
–
169
35
215

-11
–
-169
-35
-215

–
–
–
–
–

–
–
–
–
–

–
–
31
1,090
244
–
224
1,590
20,6305,436
15,194299
14,894

11
–
–
327
–
–
–
339
20,1095,923
14,185167
14,018

–
–
–
–
–
–
–
–
23,0797,333
15,746373
15,373

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

–
114
–
–
–
–
–
115
3,188
1,023
2,165
1
2,164

27
–
–
–
–
–
–
27
7,796
2,094
5,701
932
4,768

-27
+114
–
–
–
–
–
+88
-4,608-1,071-3,536-931-2,604

–
–
–
–
–
–
–
–
–
–
–
–
3,500 – 8,000

–
–
–
–
–
–
–
–
–
–
–
–
27.1% – 61.8%

58Consolidated Cash Flows from Operations(JPY million)
FY17/2 (12M)
Cash Flows from Operations
Pre-tax net 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 sales of subsidiary shares
Losses (gains) on sales of shares in affiliates
Losses (gains) on sales of securities investments
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-19 writedown of real estate for sale
Decrease (increase) in power plant 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.

20,630
778
223
141
23
-3
-85
1,303
–
–
-2,466
1,090
–
-367
2,727
-6,303
–
7,251
16
-190
-193
204
92
-49
-667
1,304
25,46085-1,146-2,852
21,547

FY18/2 (12M)
20,109
1,015
215
111
32
-355
-61
2,249
–
-1,221
–
327
–
-468
1,663
-8,112
–
996
–
871
-10
573
-47
30
125
585
18,62861-2,231-5,854
10,603

FY19/2 (12M)
23,079
1,696
213
254
-3
-26
-71
2,328
–
–
-2
–
–
-247
3,509
-3,163
–
–
–
-333
-399
-332
25
269
-264
1,887
28,42071-2,118-4,61021,762

FY20/2 (12M)
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 Q1 (3M)
3,188
1,046
8
27
172
–
-58
573
–
–
–
–
114
622
305
10,114
–
–
3
291
-20
-1,079
97
–
-67
-631
14,71058-494-2,155
12,11859

Consolidated Cash Flows from Investments & Financing(JPY million)
FY17/2 (12M)
Cash Flows from Investments
Payments into time deposits
Proceeds from withdrawal from time deposits
Payments for securities investments
Proceeds from sales of securities investments
Proceeds from redemptions of securities investments
Acquisitions of property, plant, and equipment
Acquisitions of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisitions of subsidiary shares resulting in change ofconsolidation scope
Sales of subsidiary shares resulting in change ofconsolidation scope
Acquisitions of consolidated subsidiary
Other
Net Cash from (Used for ) Investments
Cash Flows from Financing
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
Redemption of non-recourse bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Share buyback
Proceeds from minority interests
Payments to minority interests
Sales of subsidiary shares resulting in no change ofconsolidation scope
Dividends paid to minority interests
Dividends paid
Net Cash from (Used for ) Financing© Ichigo Inc. All rights reserved.

FY18/2 (12M)

FY19/2 (12M)

FY20/2 (12M)

FY21/2 Q1 (3M)

-6,100
201
-300
6,136
–
-11,719
-1
-63
–
-5

-6
–
-140
–
–
-4,796
-83
-28
–
-36

-118
1,060
-539
32
–
-15,440
-425
-6
32
-16

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

-2
–
-46
–
–
-9,612
-611
-3
15
–

-93

-2,619

–

–

–

–

2,096

–

–

–

–
11
-11,933–-32-5,645–-181-15,602-187-902-10,263–-379-10,640-1,383
532
785
-56
–
55,674-61,22130,850-15,400
137––-2,000

-306
-611
–
-112
-100
32,660-13,402
3,518-22,366
110-2,999
–
–

2,232
–
129
-112
–
43,062-20,352
3,500-18,473143-2,999
90
–

426
–
5,828
-193
–
49,957-26,475
5,300-17,701
95-2,999–-1,276

1,280
–
70
-40
–
13,515-9,858
–
-112
1
–
–
–

–

–

100

–

–

-39
-1,501
6,377–-2,513-6,124–-2,9724,346-8-3,4169,537-1-3,235
1,617

60

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

61

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 Value-Add
and IT capabilities. Ichigo will work to deliver first-inclass and best-in-class solutions to drive significant
value for clients and society 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.

62

Go Beyond Real Estate to Address Broad Needs

AssetsResidential
Office

Needs

Live
Work

Nursing Care

Responding
to Diverse
Needs

Child Care

Education

Senior Business

Tourism

RetailBuy, Dine

Medical Care
Agriculture

Hotel

Stay, Travel

Solar Power
Plant

Power Lives &Businesses

StadiumEntertainment,
Recreation, & Health© Ichigo Inc. All rights reserved.

Entertainment
Public WorksSportsCultureOther
Energy63

KPI Targets
1. High Capital Efficiency− FY20/2~FY30/2 Average ROE >15%
 Increase long-term ROE by driving higher capital efficiency and earnings stability
 Via high ROE, grow long-term EPS as a key driver of shareholder value− FY20/2~FY30/2 Continuous JPX-Nikkei 400 Index Inclusion Target 11 consecutive years of inclusion

2. High Cash Flow Generation− FY20/2~FY30/2 Continuous Economic Operating Cash Flow > Net Income
 Ichigo’s robust cash flows fund both growth investments and shareholder returns
 Target 11 consecutive years of EOCF > NI

3. High Earnings Stability− FY30/2 Stock Earnings Ratio >60%
 Raise Stock Earnings ratio from FY19/2’s 53%
 Concurrently, increase and diversify Flow Earnings, which are currently centered on
Value-Add Gains on Sales

Note: Economic Operating Cash Flow = Cash Flows from Operations excluding net investment in Real Estate and Power Plants for Sale
© Ichigo Inc. All rights reserved.

64

Shareholder Return Policy
Ichigo Dividend Policy: Growth, Certainty, and Stability− Progressive Dividend Policy
 Ichigo’s progressive dividend policy underscores our commitment todriving continued organic earnings and dividend growth forshareholders. Under this policy, the dividend is maintained or raised
every year (but not cut), providing shareholders with the security of adurable dividend.
− DOE (Dividend on Equity) Payout Ratio of >3%
 Stable and growing dividend unaffected by short-term earnings volatility− Flexible Deployment of Share Buybacks (New)Dividend growth via
DOE > 3% Policy

 Conduct share buybacks to optimize capital
structure and drive shareholder value

9 Consecutive Years of
Dividend Growth
JPY 5

JPY 6

JPY 7

JPY 7

JPY 7

FY19/2

FY20/2

FY21/2(Forecast)

JPY 3
JPY 1*

JPY 1.1 JPY 1.3

FY13/2
FY14/2
FY15/2* Adjusted to reflect 200:1 stock split© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/265

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

66

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, and 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.

67

Real Estate x Tourism

Hotel Operator: Hakata Hotels
Hotel Operator in Kyushu/Yamaguchi Region
Seeing Inbound Tourism Growth– Started operations at 3 hotels on June 1, 2019
and will expand to 11 hotels in Sep 13, 2020

Deploying Propera, Ichigo’s AI-based Hotel
Revenue Management System– Increasing employee productivity via IT
systems to automate administrative tasks so
employees can focus on hospitality & service– Sales of Propera to non-Ichigo hotel operators
expected to drive Ichigo non-asset revenue
streamIchigo’s Hotel Il Palazzo in Fukuoka was the first building outside theU.S. to win an American Institute of Architects Honor Award in 1991

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

The Hakata Hotels logo features hakata-ori woven silk textiles that are a local Fukuoka
craft, including the koukou shima weaving pattern in which a thick vertical line issurrounded by thin vertical lines. The thin lines represent children, and the thick lines
parents, expressing the sense of care shown within families. The multiple colors reflect
Ichigo’s values of respect for diversity. The values represented in the logo are also
resonant with Ichigo’s philosophy of Ichigo Ichie, literally meaning “One lifetime, one
encounter.”© Ichigo Inc. All rights reserved.

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsCultureEnergyOther

68

Real Estate x Entertainment x Culture X Tourism

Ichigo Animation: Anime + Real Estate Synergies
Production of New Anime Series VLADLOVE Written & Directed by 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, and 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.)
 Anime-related events and sales of goods at ACZ will drive
both customer traffic & higher earnings

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment×

CultureAKIBA CULTURES ZONE
© Ichigo Inc. All rights reserved.

Public WorksSportsEnergyOther

69

Real Estate x Entertainment x Sports x Tourism

Real-World Augmented Reality (AR) Game TSUBASA+
Investing in TSUBASA+, an AR Game that Uses Smartphone GPS
Japanese soccer manga, Captain Tsubasa ×avatars of world-classsoccer players

Game Features

Integrates real-world stadiums around the world
Users can play on-line with professional soccer players
Scheduled for global release in fall 2020, starting in Japan andEuropeSales royalties

Business
Opportunity

Build virtual stadiums at Ichigo assets to drive customer traffic &activity

Development by MIRAIRE Inc.

Increase value of Ichigo assets, collaborate with hotels and retailers,promote community development, & support sports

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsDevelopment by MIRAIRE Inc.
© Ichigo Inc. All rights reserved.

CultureEnergyOther

70

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 First Section 2337)
Investor Relations
TEL: +81-3-3502-4818
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.

71