FY18/2 Corporate Presentation
January13,
2017
April 18,
2018

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

www.ichigo.gr.jp/en

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

© Ichigo Inc. All rights reserved.

Contents
FY18/2 Earnings‒ FY18/2 Summary‒ Operating Profit -4%, Net Income -6% (YOY)
ROE 16.5%‒ Segment Earnings Details‒ Two Share Buybacks (JPY 324, JPY 394)
‒ Dividend +20%, 6th Consecutive Year of
Dividend GrowthPowerful Value-Add Business Model
Underpins Growth‒ Capital-Efficient Asset Turnover‒ Business Model (1) Stock + Flow Earnings‒ Business Model (2) Embedded Forward
Earnings‒ Business Model (3) Value-Add Durable
Value Growth‒ Financing Details
FY19/2 Full-Year Forecast‒ FY19/2 Full-Year Forecast‒ FY19/2 Full-Year Forecast Details© Ichigo Inc. All rights reserved.

Building a Foundation for Sustainable
Growth‒ Power Up 2019 Key Initiatives‒ Core Business Growth Stock Earnings Growth Value-Add Supporting Best Asset Use
 Asset Management Growth Stable, Long-Term Clean Energy
Earnings‒ New Business Entry Real Estate Owner Services
 Self-Storage Hotel AI System Boutique Hotels

Appendices‒ Financial & Real Estate Data
‒ Power Up 2019 Mid-Term Business Plan

4

FY18/2 Earnings© Ichigo Inc. All rights reserved.

5

FY18/2 Summary
Robust Earnings Model

Core Business Growth

Stock Earnings/Fixed Expenses

Value-Add

Asset Management

Clean Energy

High Value-Add & GPM

Growth in Ongoing AM Fees

Launch of Tokyo Region’s
Largest Solar Power Plant

243%

Fixed
Expenses
JPY 5.31B(JPY million)(JPY billion)

+51%

+17%
35.7

23.6
Book Value

Flow
Earnings
JPY 12.97B

Stock
Earnings
JPY
12.96B

Sale Price

(MW)

+88%
101

1,606

1,871

54

Feb 2017

Feb 2018

Feb 2017

Feb 2018

New Business Entry
Real Estate Owner Services

Boutique Hotel

Ichigo Owners

THE KNOT YOKOHAMA

・Catering to needs ofclients seeking to invest
in real estate• Two Share Buybacks (JPY 1.5B x 2)
Avg. Share Price: JPY 324 & JPY 394(2018/4/17 Share Price: JPY 459)

term ownership with
Ichigo’s expertise・ Renovation of historical hotel
・ ADR target: +50%
・ A Japan first:
Guests can buy
furniture & items
featured in hotel

Self-Storage

IT x Real Estate (REtech)• Dividend +20%, 6th Consecutive Yearof Dividend Growth
FY19/2 Dividend Forecast +17%

・ Entering high-growthmarket with industry’s
leading security & air
conditioning systems

AI system development alliance with
Fujitsu Kyushu Systems
・Development and deployment of AI
system to increase guest satisfaction andearnings

Share Buybacks & Dividend© Ichigo Inc. All rights reserved.

・Quality assets for long-6

Operating Profit -4%, Net Income -6% (YOY), ROE 16.5%− Beat OP, RP, Net Income, EPS, & ROE forecasts− 44.8% GPM & 36.1% OPM Underscore Ongoing High Profitability(JPY million)

FY17/2

FY18/2Full-Year
Forecast

YOY

vs. Full-Year
Forecast

Revenue

109,253

57,846-47.1%

75,50076.6%

Gross Profit

26,80625,925-3.3%

25,994

99.7%

Operating Profit

21,781

20,858-4.2%

20,600101.3%

Recurring Profit

19,755

19,185-2.9%

18,300104.8%Net Income

14,89414,018-5.9%

13,500103.8%EPS

JPY 29.66

JPY 28.12-5.2%

JPY 26.98

104.2%

DPS

JPY 5

JPY 6

+20%

JPY 6

–

ROE

20.2%

16.5%

–

15.9%

–

© Ichigo Inc. All rights reserved.

7

Segment Earnings Details− Asset Management: Ongoing AM Fees +17% YOY− Value-Add: Rental Income +5%, Gains on Sales +14% YOY− Clean Energy: +21% vs. Forecast on Ichigo Showamura Plant Launch
Ahead of Schedule(JPY million)
Revenue
Segment

FY17/2

FY18/2YOY

Gross Profit
Full-Year
Forecast

vs. Full-Year
Forecast

FY17/2

FY18/2Full-Year
Forecast

YOY

vs. Full-Year
Forecast

Earnings Drivers(Parentheses show YOY change in
Gross Profit)

Asset Management

4,747

2,433

-48.7%

2,485

98%

2,910

2,427

-16.6%

2,457

AM Fees 1,913 (+307)
Acquisition/Disposition Fees 106 (-406)
Performance Fees 364 (+203)
98.8% PM/BM Fees 0 (-505)(Decrease in PM/BM Fees due to sale ofTakara Building Maintenance subsidiary)

Value-Add

92,13851,864-43.7%

69,71974.4%

20,22922,159+9.5%

22,336

99.2% Gains on Value-Add Sales 12,047 (+1,488)

Clean Energy

12,352

3,426-72.3%

3,216

106.5%

3,772

1,353

-64.1%

1,122

120.7% FIT Solar Power Sales 886 (-77)

Other

14

122

+721.1%78

156.4%

-105

-15

–

78

Total

109,253

57,846-47.1%

75,50076.6%

26,80625,925-3.3%

25,994© Ichigo Inc. All rights reserved.

Rental Income 10,111 (+441)

Gains on Sales of Power Plants 467 (-2,341)– Overseas Private Fund Disposition Expenses -15 (+90)

99.7%

8

Two Share Buybacks (JPY 324, JPY 394)
Purpose: Grow Value for Ichigo’s Shareholders
Share Type
Buyback Method

Common shares
In-market purchases via trust bank

April 2017 Share Buyback
Number of Shares
Average Share Price
Amount

4,627,400
JPY 324
JPY 1.5B

October 2017 Share Buyback
Number of Shares
3,809,100
Average Share Price
JPY 394
AmountJPY 1.5B
2018/4/17 Share Price: JPY 459© Ichigo Inc. All rights reserved.

9

Dividend +20%, 6th Consecutive Year of Dividend Growth
Ichigo Dividend Policy: Growth, Certainty, and Stability− DOE (Dividend on Equity) payout ratio of >3%
 Stable and growing dividend unaffected by short-term earnings volatility− Progressive Dividend Policy
 Previous year’s dividend is floor for the current year’s dividend. Dividend will be raised(or kept flat) but not cut, providing shareholders with downside dividend protection.
The policy underscores Ichigo’s commitment to driving continued earnings growth for
its shareholders(DPS)

6 Consecutive Years of Dividend Growth(7 Including FY19/2 Forecast)

JPY 5

JPY 6

JPY 7

JPY 3

FY12/2

JPY 1*

JPY 1.1

JPY 1.3

FY13/2

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2(Forecast)* Adjusted to reflect 200:1 stock split© Ichigo Inc. All rights reserved.

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

11

Capital-Efficient Asset Turnover− 93 New Acquisitions (Book Value 54.3B) via Innovating in Acquisition
Methods & Asset Types− Sold 18 Assets (Book Value JPY 23.6B), GPM 34%(JPY billion)

FY18/2 Acquisitions

Office
1.8

Self-Storage
2.1
Logistics
3.7

New Acquisition
Methods &Asset Types

M&A(Centro)5.6

Retail3.4

93 Assets
Total
AcquisitionPrice
JPY 54.3B

40%(JPY 21.7B)“Traditional”
Acquisitions

Hotel
16.3

For Ichigo Owners Clients
21.4(Residence 20.4)(Office 0.6)
(JPY 32.6B)(Retail 0.4)60%

© Ichigo Inc. All rights reserved.

12

Business Model (1) Stock + Flow Earnings
Gross Profit
31.2

Stock Earnings (Primarily Rental Income, AM Fees, and FIT Solar Power Sales)
Flow Earnings (Primarily Profits on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expense)(JPY billion)

26.8

25.9
15.1

19.9

14.0

13.0

9.0

12.2
4.6
16.1

7.4
10.9

0.9
4.1

13.0

12.8

2.5

5.0

7.6
4.9

3.5

3.1

4.3

5.3

5.4

4.9

6.9

FY19/2(Forecast)
Note: From FY19/2, SPC-related non-recourse loan costs have been accounted for as Fixed Non-Operating Expenses, rather than COGS as previously.
The change increases each of FY19/2 Stock Earnings and FY19/2 Fixed Expenses by c. JPY 700 million.
FY13/2

FY14/2© Ichigo Inc. All rights reserved.

FY15/2

FY16/2

FY17/2

FY18/213

Business Model (2) Embedded Forward Earnings
Full Economic Earnings from Value-Add are Generally Not Recognized
during the Current Accounting Period – Value-Add Thus Generates
Significant Unrealized Gains that are an “Earnings Bank” for Future Periods(JPY billion)

36.8

45.4

28.1
19.6
12.3
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

Appraisal Value-Based Unrealized Gains© Ichigo Inc. All rights reserved.

14

Business Model (3) Value-Add Durable Value Growth
Gains on Sales Consistently Exceed Appraisal Value-Based Unrealized Gains− Ichigo Value-Add generates durable ongoing value− Ichigo also has ongoing rental income earnings stream during Value-Add− Post-Value-Add, run efficient sales processes to maximize gains on sales
GPM
34%
Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

GPM
14%

1.6X
GPM
23%

2.2X
Unrealized Gains(vs. Book Value)
12%

Unrealized Gains(vs. Book Value)
9%

JPY 10.5B
JPY 7.2B

JPY 6.4B

JPY 3.3B
FY16/2© Ichigo Inc. All rights reserved.

GPM
32%

4.4X

JPY 12.0B
Unrealized Gains(vs. Book Value)
14%

JPY 2.7B
FY17/2

FY18/215

Financing Details
Weighted Average Interest Rate
WeightedLoan
AverageLoan Term
Average
PeriodAverage Interest Rate and Loan Term

(Loan Term, Years)(Interest Rate)

12

2.5%
10.8 years
10.2 years
2.0%

1.96%

9 years9
8.7 years

1.71%

6

1.5%
5.9 years
1.41%
1.24%
1.04%

1.0%
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

3

Term Structure of Loans
14% (JPY 4.1B)

Short-Term
Long-Term

86%(JPY 26.1B)© Ichigo Inc. All rights reserved.

16

FY19/2 Full-Year Forecast© Ichigo Inc. All rights reserved.

17

FY19/2 Full-Year Forecast− OP +20%, RP +15%, Net Income & EPS +7% YOY− RP, Net Income, & EPS Forecast to Exceed MTP Targets− Dividend +17%, 7th Consecutive Dividend Increase(JPY million)

FY19/2(Forecast)

FY18/2(Actual)vs. FY18/2

Gross Profit

31,20025,925+20.3%

Operating Profit

25,00020,858+19.9%

Recurring Profit

22,00019,185+14.7%Net Income

15,00014,018+7%EPS

JPY 30.10

JPY 28.12

+7%

DPS

JPY 7

JPY 6

+16.7%

ROE

15.7%

16.5%

–

© Ichigo Inc. All rights reserved.

18

FY19/2 Full-Year Forecast Details(JPY million)

Segment Profit (Gross Profit)
FY19/2(Forecast)

FY18/2(Actual)Segment Profit (Operating Profit)vs. FY18/2

FY19/2(Forecast)

FY18/2(Actual)vs. FY18/2

Asset Management

2,216

2,427

-8.7%

1,752

2,043

-14.2%

Value-Add

26,92022,159+21.5%

21,71917,993+20.7%

Clean Energy

2,064

1,353

+52.5%

1,529

847+80.5%

Other

–

-15

–

–

-50

–

Total

31,20025,925+20.3%

25,00020,833

+20%

–

–

–

–

25

–

31,20025,925+20.3%

25,00020,858+19.9%

Adjustment (including offsets ofcross-segment transactions)
Total

Note: Forecast includes no Ichigo Office, Ichigo Hotel, or Ichigo Green public offerings© Ichigo Inc. All rights reserved.

19

Building a Foundation for Sustainable Growth© Ichigo Inc. All rights reserved.

20

Sustainability

Profitability

Power Up 2019 Key Initiatives

Core Business
Growth• List Ichigo’s solar assets on the TSE’s new
Infrastructure Market• Support the ongoing growth of Ichigo Office(8975) and Ichigo Hotel (3463)• Expand the architecture and structural
engineering team to deliver real estate that is
high-function, safe, secure, andenvironmentally friendly• Spin out a dedicated leasing team to drive
tenant acquisitions and rental income

New Business
Creation• Extend Ichigo’s REIT-focused asset
management business into the much larger
physical real estate market• Grow Ichigo’s hotel business synergisticallywith Ichigo Hotel REIT
• Launch one or more REtech businesses,
fusing Ichigo’s Real Estate and IT capabilities• Launched Ichigo Owners: JPY 21.4B acquisitions,
JPY 2.3B sales in first year
• Launched Ichigo’s first boutique hotel, THE KNOTYOKOHAMA, on Dec 1, 2017
• Allying with Fujitsu Kyushu Systems to develop AI hotelrevenue management system

Finance as aStrategic
Measure• Grow both financial stability and earnings• De-collateralize loans, lengthen loan
maturities, lower debt costs, get credit ratings,
and issue bonds to diversify funding profile• Average Loan Maturity: 10.2 years• Average Interest Rate: 1.04%• Long-Term Loan Ratio: 95%

High Capital
Efficiency andOrganic Growth• ROE >15%••

Best Place to
Work• Support employee health and wellness• Goal: Japan’s number one company inproviding opportunities for employees• 100% return rate for employees who take child leave• Annual stock option grants (fully expensed) to all employees
to align their interests with Ichigo shareholders

Global Best Practice Governance and Compliance© Ichigo Inc. All rights reserved.

•
•
•
•

Listing of Ichigo Green (9282) on Dec 1, 2016
Asset sales to Ichigo Office (8975) and Ichigo Hotel (3463)
Expanded the architecture and structural engineering teamSpun out a dedicated leasing team to drive tenantacquisitions and value-add

FY17/2 20.2%
FY18/2 16.5%• 6 of 9 Board Members are Independent Directors• 3 former CEOs of TSE 1st Section companies serve as
Independent Directors
21Core Business Growth

Stock Earnings Growth
Stock Earnings Growth via Value-Add NOI Growth & Launch of Tokyo
Region’s Largest Solar Power Plant
Tradepia Odaiba

Ichigo Showamura Ogose ECO Power Plant

Value-Add Driven NOI Growth(FY19/2 free rent incentives mean further
embedded NOI growth post-FY19/2)+JPY 391M
JPY
1,029M
FY18/2
Actual© Ichigo Inc. All rights reserved.

Ichigo Showamura NOI Growth on
Transition to Full-Year Operation+JPY 931M

JPY
1,420M
FY19/2
Forecast

JPY
574M
FY18/2
ActualJPY
1,505M

FY19/2
Forecast

22

Core Business Growth

Value-Add Supporting Best Asset Use− Supporting Ichigo Office Transition to Pure Office REIT
− Prime Location Serviced Apartment to Hotel Conversion (3-minute walkfrom JR Hamamatsucho Station)
 Ichigo’s second hotel brand: MusBee Termination of master lease & shift to Ichigo operation
 Advanced features such as smart locks, “at-home” comfort like staying with afriend, targeted at families and groups of guests of three or more

3 Offices

OfficeIchigo Office8975

ValueAdd

3 Serviced Apartments, 1 Retail Asset© Ichigo Inc. All rights reserved.

23

Core Business Growth

Asset Management Growth
OfficeIchigo Office(8975)
83 Assets, JPY 193.1B

Hotel

Ichigo Hotel(3463)
21 Hotels, JPY 50.9B

Green Infrastructure

Ichigo Green(9282)
15 Solar Plants, JPY 11.4B

FY18/2 Achievements

FY18/2 Achievements

FY18/2 Achievements

・Strategic portfolio restructuring:
Acquired 3 prime office assets & sold 4
less attractive assets
・Launched Ichigo Lounge, a shared-use
tenant space
・First bond issuance・Received highest GRESB Ranking
・15 consecutive periods of dividend
growth – No. 1 vs. All-J-REITs

・Acquired 2 assets with cash-on-handand loans・Acquired 2 solar power plants from
Ichigo with cash-on-hand and loans

・2nd J-REIT to execute share buyback
・Driving EPS growth via value-add
capex・Dividend exceeded forecast by 24.2%
・Two-for-one stock split to support
liquidity and expand investor base on
Jan 1, 2018. Post-split performance:+9.9% (Jan 31, 2018 share price)

Sponsor Support
・ Sold Ichigo Office 3 offices and bought 4
non-office assets© Ichigo Inc. All rights reserved.

・ Strengthened hotel pipeline
・ Developing hotel AI system to increase
guest satisfaction and earnings

・ Sold 2 solar power plants
・ Optimized power plant operations
24

Core Business Growth

Stable, Long-Term Clean Energy Earnings‒ Solar: 35 Plants (101MW) in
operation‒ Wind: All wind power plants inpipeline (33MW) on track for launch 48 Plants (144MW) in operationand development, with additional
50MW in pipeline
Operating Solar Power Plants

(MW)

+42%
+88%

144.38101.7754.22(48 Plants)(35 Plants)(32 Plants)
FY17/2© Ichigo Inc. All rights reserved.

FY18/2

 First wind power plant start date:Dec 2019 (forecast)Wind Power Plants in Simulation & Design
Expected Wind Data
OutputSurveyFIT

Expected
Operation Start Date

No.

Location

1

Chiba

4.0MW

Completed JPY 22

November 2022

2

Yamagata

7.5MW

In Progress JPY 22

December 2019

3

Iwate

7.5MW

In Progress

4

Mie

7.5MW

In Progress JPY 22

5

Fukushima

7.0MW

In Progress

TBD

TBD

TBD
December 2020
TBD

FY19/2 onward(Forecast)25

New Business Entry: Real Estate Owner Services

Ichigo Owners Accelerating Asset Acquisitions for Clients
FY18/2 Acquisitions 2X Plan
FY18/2 acquisitions:45 Assets, JPY 21.4B
Asset sales to end-clients: 4 Assets, JPY 2.3B

FY19/2 Plan
− Both acquisitions and sales > JPY 20B− Provide high-quality assets appropriate for long-term ownership and AM services− Continue to build long-term, trusting relationships with Ichigo clients & business
partners such as tax accountants with their own clients© Ichigo Inc. All rights reserved.

26

New Business Entry: Self-Storage

Self-Storage Business Growth
Goal: Industry No.1, Backed by a Safe, Secure, & Clean
Brand− Dec 31, 2016: 14 facilities, c. 1,900 rooms →Feb 28, 2018: 27 facilities, c. 3,600 rooms (including indevelopment

Synergies with Ichigo Owners and Ichigo Land
− High levels of investor interest due to high earnings,
supported by IoT, unmanned operations, & earnings stability− Viable for use on existing assets held by clients

Storage Plus
Yokohama Kaminagaya(Opened Nov 30, 2017)

Synergies with Phil Company− Convened discussions on land and buildings after tie-up− First deal complete, leveraging Ichigo’s real estate expertise& Phil Company’s strength in planning & design− On-plan to open self-storage at Phil Park elevated buildings© Ichigo Inc. All rights reserved.

Phil Park Seijo Gakuenmae

27

New Business Entry: Hotel AI System

AI Alliance with Fujitsu Kyushu Systems
Develop Hotel AI System to Increase Guest Satisfaction & Earnings− Develop AI-based revenue management system using Ichigo’s know how− Conduct data analysis and optimize algorithms using Big Data gathered by
Ichigo’s revenue management system & Fujitsu Kyushu Systems’ and Ichigo’s
AI capabilities− Develop smart locks & automated check-in devices and deploy at Ichigo hotels

Leverage AI to Maximize Earnings of Ichigo-owned and Managed Hotels &Create a Non-Asset Earnings Stream

Big Data

IoT
Increase
Customer
Satisfaction

Data
Collection

Cloud
ServiceIoT© Ichigo Inc. All rights reserved.

AnalysisAI
Maximize
Hotel Earnings

AI(Artificial
Intelligence)

28

New Business Entry: Boutique Hotels

Second THE KNOT Hotel in Pipeline
Full Renovation via Ichigo Value-Add of the Historic Shinjuku New City
Hotel to Create THE KNOT TOKYO (provisional)− Designed for close integration with Shinjuku Central Park facing hotel− Features restaurant, bakery, lounges, conference rooms, along with Shinjuku
Central Park events, bike rentals, etc.

© Ichigo Inc. All rights reserved.

29

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

30

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

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office(8975)
Hotel

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

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
31

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

Value‐Add
DemolishandRebuild© 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
LowestImpact32

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

Debt
Asset

JPY1.5B

JPY
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.

33

Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 341.9B(Book Value JPY 296.5B + Unrealized Gains JPY 45.4B)

Non-Recourse LoanRelated Assets

Non-Recourse Loans &Related Liabilities

JPY 74.8B

JPY 100.0B

Cash & Cash Equivalents

JPY 35.7B
Operational Loan Investments
JPY 1.3B

Real Estate for Sale

JPY 103.1B

Corporate Loans

Consolidated Risk-Based Balance Sheet: JPY 267.0B(Book Value JPY 221.6B + Unrealized Gains JPY 45.4B)
Debt
JPY
207.1BJPY 118.4B

Non-Recourse LoanRelated ICH Equity

JPY 25.1B
Cash & Cash Equivalents

JPY 35.7B
Operational Loan Investments
JPY 1.3B

Real Estate for Sale

Security Deposits Received
JPY 5.2B

JPY 103.1B

Other JPY 8.5B

Fixed Assets

JPY 47.6B
Securities Investments
JPY 2.1B

Shareholder
EquityJPY 89.3B

Other JPY 6.4B

Unrealized Gains
JPY 45.4B

Unrealized Gains
JPY 45.4B

Corporate Loans

JPY 118.4B

Debt
JPY
132.2B

Security Deposits Received
JPY 5.2B

Other JPY 8.5B

Mark-toMarket
Shareholder
Equity Ratio

39.4%

Fixed Assets

JPY 47.6B
Securities Investments
JPY 2.1B

Shareholder
EquityJPY 89.3B

Risk-Based
Shareholder
Equity Ratio

50.5%

Other JPY 6.4B

Unrealized Gains
JPY 45.4B

Unrealized Gains
JPY 45.4B

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

34

Significant Unrealized Gains on Balance Sheet
Total Unrealized Gains: JPY 45.4B (Appraisal Value Basis), +24% YOYReal estate directly held by Ichigo(JPY million)
Unrealized
GainsBook Value as ofFeb 28, 2018

Expected NOI

Cap Rate
NOI/Book Value after Write-Down

Appraisal Value as ofFeb 28, 2018Tokyo

109,919

6,423

6.1%

134,453+24,534

Outside Tokyo

105,4277,130

7%126,026+20,599

Total

215,347

13,553

6.6%

260,479+45,132

Location* Cap rate is the simple average of the cap rates for each asset. Excludes development assets (c. JPY 244 million)
which are not currently generating NOI and includes intangible fixed assets subject to appraisal (c. JPY 135 million).

Real estate held by Ichigo within Ichigo-managed funds (SPCs) where there are other non-Ichigo equity holders(JPY million)
Book Value as ofFeb 28, 2018

Appraisal Value as ofFeb 28, 2018

Unrealized Gains

Equity Investments(Non-consolidated)–

Equity Investments(Consolidated)

1,116

1,423

+307

Total

1,116

1,423

+307

© Ichigo Inc. All rights reserved.

–－

–

35

Business Segments

Asset Management

Asset Management generates fee income via management of Ichigo
Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282), andproviding real estate services related to real estate acquisition,
operations, and disposition.

Value-Add

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

Clean Energy

Other© Ichigo Inc. All rights reserved.

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

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

36

Consolidated Balance Sheet(JPY million)
FY18/2
FY17/2

OutsideInvestors'
Interest

B/S

YOY

Market Value

Unrealized Gains

Unrealized Gainson Listed
Securities 2

Cash and Cash Equivalents

47,67845,510843-2,16845,510––Operational Loan Investments (Value-Add)

1,324

1,324

–

–

1,890

+565

–

Operational Securities Investments

1,433

2

–

-1,431

2––

Value-Add

84

–

–

-84

–

–

–

Clean Energy

512

–

–

-512

–

–

–

Other

837

2

–

-835

2

–

–

167,805

180,789

2,532+12,984

214,769+33,231

–

–

–

–

–

–

–

–

45,65458,558–+12,904

70,111+11,552

–

30

–

–

-30

–

–

–

Value-Add

25,92037,047–+11,126

48,600+11,552–

Clean Energy

19,62021,440–+1,81921,440––

Other1

82

70

–

-12

70

–

–

Intangible Assets

1,956

1,968

–

+12

1,968

–

–

Securities Investments

1,426

2,184

–

+758

2,184

–

+782

Other

6,178

6,174

4

-4

6,174

–

–

273,459

296,5123,380+23,053

342,700+45,439+782

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

Total Assets

1 Other refers to company assets that are not allocated to the three business segments
2 Unrealized Gains on Listed Securities shows gains versus acquisition cost

© Ichigo Inc. All rights reserved.

37

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

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor Sale

–

–

–

–

–

Value-Add

17,695

1,324–

180,789

Clean Energy

2,296

–

–

1

–

Company-Wide Assets

25,516

Total

45,510

Segment

Asset Management

Other© Ichigo Inc. All rights reserved.

Power
Plantsfor Sale

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
Assets

–

912

–

752

1,664

–

37,047

595

–

2,482

239,935––

21,440

234

–

1,882

25,854

2

–

–

–

–

2,184

-75

2,112

–

–

–

–

70

226

–

1,131

26,945

1,324

2

180,789–

58,558

1,968

2,184

6,174

296,512

Total Assets

38

Consolidated P&L: Gross Profit Segment Breakdown(JPY million)

FY18/2 (12M)
Segment

vs. Full-Year
Forecast

Revenue

Gross
ProfitFY18/2 Full-Year Forecast (12M)

vs. Full-Year
Forecast

Operating
Profitvs. Full-Year
Forecast

Revenue

Gross Profit

Operating
Profit

2,433

97.9%

2,427

98.8%

2,043

123.4%

2,485

2,457

1,656

2,068

89.3%

2,062

89.9%

–

–

2,315

2,293

–

365

214.7%

365

222.6%

–

–

170

164

–

51,86474.4%

22,15999.2%

17,993

98.3%

69,71922,33618,304

Rental Income

16,134

98.5%

10,111

95.2%

–

–

16,37910,625–

Value-Add Asset Sales

35,73167%

12,047102.9%––

53,34011,711–

3,426

106.5%

1,353

120.6%

847

136.6%

3,216

1,122

620

Other

122

156.4%

-15

–

-50

–

78

78

-52

Total

57,84676.6%

25,925

99.7%

20,833101.5%

75,50025,994

20,529

–

–

–

–

25

–

–

–

70

57,84676.6%

25,925

99.7%

20,858101.3%

75,50025,99420,600Asset Management
Asset Management Fees
Other
Value-Add

Clean Energy

Adjustm ent (including
offsets of inter-segm ent
transactions)

Total© Ichigo Inc. All rights reserved.

39

Asset Management AUM Detail
Ichigo Office(8975)

FY13/2(12M)

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2(12M)

JPY 104.3B

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 194.5B

JPY 196.9B

0.63%

0.65%

0.65%

0.64%

0.69%

0.7%

JPY 663M

JPY 733M

JPY 759M

JPY 1,016M

JPY 1,291M

JPY 1,373M

AUM (Fiscal Year End)

–

–

–

JPY 20.4B

JPY 47.6B

JPY 50.9B

AM Fee % (Average)

–

–

–

0.59%

1

0.9%

0.9%

AM Fee Gross Profit (Actual)

–

–

–

JPY 30M

JPY 287M

JPY 450M

AUM (Fiscal Year End)

–

–

–

–

JPY 10.0B

JPY 11.4B

AM Fee % (Average)

–

–

–

–

0.21%

AM Fee Gross Profit (Actual)

–

–

–

–

JPY 5MJPY 34M

JPY 169.7B

JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 6.4B

JPY 12.3B

0.15%

0.26%

0.37%

0.32%

0.25%

0.19%

JPY 285M

JPY 257M

JPY 114M

JPY 60M

JPY 27M

JPY 12M

JPY 274.1B

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 258.6B

JPY 271.7B

0.33%

0.47%

0.59%

0.61%

0.68%

0.71%

JPY 948M

JPY 989M

JPY 872M

JPY 1,106M

JPY 1,611M

JPY 1,872M

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

Ichigo Hotel(3463)

Ichigo Green(9282)

Private Equity Real
Estate Funds(excluding
consolidated funds)

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

Total(excluding
consolidated funds)

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

1,2

0.32%

1 Annualized
2 In addition to the above AM fee, operator fees received from Ichigo Green (0.4% p.a. of AUM) are recorded separately in the Clean Energy segment.

© Ichigo Inc. All rights reserved.

40

Asset Management – Ichigo REITs and YieldCo

REIT/YieldCo

Ichigo Office(8975)

Ichigo Hotel(3463)

Listing Date

Characteristics

Forecast Dividend Yield(Based on Closing Share Price on
March 30, 2018)83 assets JPY 193.1B

・Specialized Office REIT focused on midsize offices with return stability and upside
potential

4.8%

October 12, 2005
・15 Consecutive periods of dividend
growth, No.1 among all J-REITs

21 hotels JPY 50.9B

・Specialized Hotel REIT focused on driving
shareholder value via income stability andearnings growth

5.1%

November 30, 2015
・Portfolio growth via Ichigo'ssponsor support

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

Portfolio

December 1, 2016

・Solar YieldCo focused on driving shareholder
value via income stability and earnings growth

15 power plants JPY 11.4B(29.43MW)

5.3%

・The second TSE-listed YieldCo* Forecast dividend yield is based on the most recent dividend forecast. Ichigo Green includes Dividend in Excess of Earnings (DEE) generated from operating cashflow.
© Ichigo Inc. All rights reserved.

41

Ichigo-Owned Real Estate Portfolio
By Location

By Asset Type
Logistics
2%

Ground
Lease
Other
1%
2%

(JPY billion)

Nagoya
2%

Mixed
5%

Other
11%

Sendai3%

Office28%

Residence
17%

Osaka
5%

Tokyo
51%

Kanto
13%

Retail
18%

Hotel
27%

Tokyo
108.2

Fukuoka
15%

Sendai
6.0

Kanto
26.9

By Asset Size
JPY 5B-10B
7%≧JPY 10B
13%

Osaka
9.6

Nagoya3.3

Fukuoka
31.1

Other
24.8

<JPY 1B21%

JPY 1B-5B
59%

Total Ichigo-Owned Assets: JPY 210.2B
Including Ichigo-Managed AUM: JPY 486.6B* Acquisition price basis.
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 214.0B© Ichigo Inc. All rights reserved.

42

Value-Add Asset Breakdown (1)165 Assets, JPY 210.2B, Forecast NOI JPY 13.3B (6.2% Yield)
No.

Asset TypeClassification

Location

Building
Age

AcquisitionPrice

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

45 years

JPY 2B-3B

2005/06

JPY 74M

JPY 1,900M

–

–

2

RetailReal Estate for Sale

Minato-ku, Tokyo

48 years

JPY 2B-3B

2005/10

JPY 148M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo

32 years≧JPY 3B

2006/03

JPY 192M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

13 years

JPY 1B-2B

2006/09

JPY 75M

JPY 1,157M

–

–

5

OfficeReal Estate for Sale

Sendai9 years≧JPY 3B

2006/10

JPY 287M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka

9 years≧JPY 3B

2006/12

JPY 406M

JPY 1,339M

–

–

9

Residence

Real Estate for Sale

Ota-ku, Tokyo

13 years<JPY 1B

2007/04

JPY 57M

JPY 403M––

10

RetailFixed Asset

Chiyoda-ku, Tokyo

38 years<JPY 1B

2007/06

JPY 84M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo

36 years<JPY 1B

2007/06

JPY 126M

JPY 233M––

14

Ground Lease

Real Estate for Sale

Atsugi, Kanagawa–

JPY 1B-2B

2011/06

JPY 175M

JPY 147M––

15

Mixed (Office/Retail)Fixed Asset

Hiratsuka, Kanagawa

22 years<JPY 1B

2012/02

JPY 84M

JPY 172M––

16

RetailReal Estate for Sale

Yokohama

4 years<JPY 1B

2012/10

JPY 33M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo

6 years≧JPY 3B

2013/03

JPY 236M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo

31 years<JPY 1B

2013/05

JPY 47M

JPY 154M––

19

Mixed (Office/Retail)Fixed Asset

Chofu, Tokyo

32 years

JPY 1B-2B

2013/06

JPY 125M

JPY 310M

–

–

1
2

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

© Ichigo Inc. All rights reserved.

43

Value-Add Asset Breakdown (2)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2 *

21

Residence

Fixed Asset

Minato-ku, Tokyo

2 years<JPY 1B

2013/06

JPY 49M

JPY 203M––

24

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

27 years

JPY 1B-2B

2013/08

JPY 89M

JPY 520M––

26

RetailReal Estate for Sale

Kobe

17 years

JPY 1B-2B

2013/09

JPY 149M

JPY 616M––

27

RetailFixed Asset

Tokorozawa, Saitama

10 years

JPY 1B-2B

2013/11

JPY 62M

JPY 92M––

29

Ground Lease

Real Estate for Sale

Fujisawa, Kanagawa–

JPY 1B-2B

2014/03

JPY 115M

JPY 273M

7.52X

44.5%

30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo

34 years<JPY 1B

2014/03

JPY 39M

JPY 108M

6.95X

26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

7 years

JPY 1B-2B

2014/04

JPY 60M

JPY 1,090M

1.25X

12.0%

32

RetailFixed Asset

Fukuoka

11 years

JPY 1B-2B

2014/04

JPY 60M

JPY 279M––

34

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

24 years

JPY 1B-2B

2014/05

JPY 137M

JPY 515M

2.27X

23.4%

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

9 years

JPY 2B-3B

2014/05

JPY 164M

JPY 434M

3.08X

15.2%

37

RetailReal Estate for Sale

Minato-ku, Tokyo46 years<JPY 1B

2014/07

JPY 41M

JPY 77M

10.47X

23.9%

38

Mixed (Office/Retail)Real Estate for Sale

Shinjuku-ku, Tokyo

42 years≧JPY 3B

2014/07

JPY 168M

JPY 645M

3.32X

21.1%

39

RetailFixed Asset

Fukuoka

13 years<JPY 1B

2014/07

JPY 48M

JPY 213M––

40

RetailReal Estate for Sale

Fukuoka

32 years<JPY 1B

2014/09

JPY 51M

JPY 252M

–

–

41

Hotel

Real Estate for Sale

Utsunomiya, Tochigi

30 years

JPY 1B-2B

2014/09

JPY 181M

JPY 400M

1.97X

28.3%

1
2

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

© Ichigo Inc. All rights reserved.

44

Value-Add Asset Breakdown (3)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple1

Forecast
IRR2

42

RetailReal Estate for Sale

Fukuoka

17 years<JPY 1B

2014/09

JPY 54M

JPY 177M

5.54X

26.2%

43

RetailReal Estate for SaleOsaka

15 years

JPY 1B-2B

2014/09

JPY 104M

JPY 301M

4.64X

24.3%

44

RetailReal Estate for Sale

Machida, Tokyo

31 years<JPY 1B

2014/10

JPY 55M

JPY 82M

11.34X

43.9%

45

RetailReal Estate for Sale

Fukuoka

15 years

JPY 1B-2B

2014/11

JPY 74M

JPY 135M

10.70X

33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

14 years

JPY 2B-3B

2014/12JPY 119M

JPY 332M

2.18X

29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 94M

JPY 270M

1.56X

14.6%

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

14 years

JPY 1B-2B

2014/12JPY 81M

JPY 238M

1.67X

16.6%

49

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years

JPY 1B-2B

2014/12JPY 64M

JPY 185M

1.63X

15.7%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 63M

JPY 163M

1.55X

15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo

16 years<JPY 1B

2014/12JPY 57M

JPY 150M

2.21X

35.7%

52

Residence

Real Estate for Sale

Osaka

10 years<JPY 1B

2014/12JPY 58M

JPY 148M

1.86X

24.8%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo

14 years<JPY 1B

2014/12

JPY 40M

JPY 99M

2.96X

44.4%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

13 years<JPY 1B

2014/12JPY 28M

JPY 82M

2.05X

25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 89M

JPY 270M

2.00X

23.2%

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

14 years

JPY 1B-2B

2014/12JPY 57M

JPY 186M

1.90X

21.0%

1
2

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

© Ichigo Inc. All rights reserved.

45

Value-Add Asset Breakdown (4)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

58

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

13 years<JPY 1B

2014/12

JPY 49M

JPY 157M

1.89X

21.5%

59

Residence

Real Estate for Sale

Setagaya-ku, Tokyo

13 years<JPY 1B

2014/12

JPY 42M

JPY 117M

2.11X

27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

11 years<JPY 1B

2014/12JPY 20M

JPY 55M

1.80X

21.1%

61

Mixed (Office/Retail)Operational Loan

Shinjuku-ku, Tokyo

54 years

JPY 1B-2B

2014/12JPY 118M

JPY 57M

15.26X

51.7%

62

RetailReal Estate for Sale

Fukuoka

14 years<JPY 1B

2014/12

JPY 43M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 84M

JPY 129M

3.98X

23.8%

64

RetailReal Estate for Sale

Shinagawa-ku, Tokyo

63 years<JPY 1B

2015/01

JPY 40M

–

–

–

66

RetailReal Estate for Sale

Sendai14 years<JPY 1B

2015/02

JPY 48M

JPY 8M

42.58X

198.9%

68

RetailFixed Asset

Shibuya-ku, Tokyo

16 years<JPY 1B

2015/04

JPY 47M

JPY 79M

5.65X

27.9%

69

Hotel

Real Estate for SaleOsaka

15 years

JPY 2B-3B

2015/05

JPY 194M

JPY 633M

1.56X

58.3%

70

Hotel

Real Estate for Sale

Aomori10 years<JPY 1B

2015/06

JPY 50M

JPY 113M

2.10X

20.2%

71

RetailReal Estate for Sale

Fujisawa, Kanagawa

2 years

JPY 1B-2B

2015/07

JPY 97M

JPY 126M

6.80X

37.3%

89

OfficeReal Estate for Sale

Musashino, Tokyo

29 years≧JPY 3B

2015/07

JPY 130M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

10 years

JPY 1B-2B

2015/07

JPY 92M

JPY 353M

1.82X

17.7%

93

OfficeReal Estate for Sale

Fukuoka

15 years

JPY 1B-2B

2015/07

JPY 91M

JPY 358M

1.92X

18.8%

1
2

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

© Ichigo Inc. All rights reserved.

46

Value-Add Asset Breakdown (5)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

98

Hotel

Real Estate for SaleNaha, Okinawa

29 years

JPY 2B-3B

2015/11

JPY 223M

JPY 640M

1.91X

25.9%

105

Hotel

Real Estate for Sale

Kumamoto

33 years

JPY 1B-2B

2015/12JPY 154M

JPY 453M

1.61X

61.2%

109

Hotel

Real Estate for Sale

Nagoya9 years

JPY 2B-3B

2016/03

JPY 141M

JPY 525M

1.84X

37.7%

110

Hotel

Real Estate for Sale

Fukuoka

32 years≧JPY 3B

2016/03

JPY 288M

JPY 905M

2.05X

104.5%

111

Hotel

Real Estate for Sale

Yokohama

34 years

JPY 2B-3B

2016/03

JPY 166M

JPY 228M

5.32X

23.3%

112

Hotel

Real Estate for Sale

Yokohama

30 years≧JPY 3B

2016/03

JPY 261M

JPY 354M

10.64X

36.2%

113

Hotel

Real Estate for Sale

Yokohama

30 years≧JPY 3B

2016/03

JPY 231M

JPY 344M

5.84X

25.5%

114

Hotel

Real Estate for Sale

Fukuoka

28 years≧JPY 3B

2016/04

JPY 210M

JPY 550M

1.73X

72.6%

115

Hotel

Real Estate for Sale

Osaka

10 years

JPY 2B-3B

2016/04

JPY 117M

JPY 274M

2.96X

30.7%

116

RetailFixed Asset

Sendai29 years<JPY 1B

2016/04

JPY 47M

JPY 86M

7.50X

28.4%

118

RetailReal Estate for Sale

Nagoya20 years

JPY 1B-2B

2016/06

JPY 87M

JPY 102M

7.71X

32.6%

119

RetailReal Estate for Sale

Shibuya-ku, Tokyo

30 years<JPY 1B

2016/06

JPY 33M

JPY 136M

3.91X

17.4%

120

Hotel

Real Estate for Sale

Shinjuku-ku, Tokyo

38 years≧JPY 3B

2016/09

JPY 548M

JPY 349M

2.70X

39.9%

121

OfficeReal Estate for Sale

Minato-ku, Tokyo

17 years≧JPY 3B

2016/10

JPY 1,526M

JPY 3,450M

2.87X

43.5%

122

Hotel

Real Estate for Sale

Shima, Mie

20 years<JPY 1B

2017/01

JPY 48M

JPY 73M

5.49X

43.1%

1
2

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

© Ichigo Inc. All rights reserved.

47

Value-Add Asset Breakdown (6)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

123

Hotel

Real Estate for Sale

Shibuya-ku, Tokyo

23 years≧JPY 3B

2016/12JPY 170M

JPY 1,123M

1.25X

25.4%

124

Hotel

Real Estate for Sale

Asahikawa, Hokkaido

28 years<JPY 1B

2016/12JPY 73M

JPY 593M

1.48X

48.5%

125

Hotel

Real Estate for Sale

Kurashiki, Okayama

24 years

JPY 1B-2B

2016/12JPY 117M

JPY 484M

1.53X

53.0%

126

Hotel

Real Estate for Sale

Fukuoka

27 years

JPY 1B-2B

2016/12JPY 71M

JPY 505M

1.25X

25.4%

127

Hotel

Real Estate for Sale

Ishigaki, Okinawa

15 years

JPY 2B-3B

2017/02

JPY 173M

JPY 544M

1.80X

80.2%

128

Hotel

Real Estate for Sale

Mito, Ibaraki

24 years

JPY 1B-2B

2017/02

JPY 103M

JPY 602M

1.47X

47.0%

1
2

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

© Ichigo Inc. All rights reserved.

48

Value-Add Asset Breakdown (7)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

24 years

JPY 1B-2B

2017/04

JPY 99M

JPY 297M

4.42X

21.1%

1 yearJPY 1B-2B

2017/04

JPY 101M

JPY 236M

2.07X

49.9%

Forecast Equity
Multiple 1

Forecast
IRR2

130

RetailReal Estate for Sale

Taito-ku, Tokyo

131

Hotel

Real Estate for Sale

Fukuoka132

Residence

Real Estate for Sale

Minato-ku, Tokyo

14 years<JPY 1B

2017/04

JPY 51M

JPY 190M

2.66X

38.3%

133

Hotel

Real Estate for Sale

Minato-ku, Tokyo

15 years<JPY 1B

2017/04

JPY 46M

JPY 152M

3.85X

32.7%

134

Residence

Real Estate for Sale

Chuo-ku, Tokyo

15 years

JPY 1B-2B

2017/04

JPY 58M

JPY 197M

2.88X

26.2%

135

Logistics

Real Estate for Sale

Narashino, Chiba

26 years

JPY 1B-2B

2017/04

JPY 114M

JPY 188M

6.18X

25.8%

136

Logistics

Real Estate for Sale

Narashino, Chiba

26 years

JPY 1B-2B

2017/04

JPY 153M

JPY 203M

8.75X

32.8%

138

Hotel

Real Estate for Sale

Ogaki, Gifu

28 years

JPY 1B-2B

2017/05

JPY 137M

–

–

–

139

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

1 year<JPY 1B

2017/05

JPY 28M

JPY 600M

1.15X

15.1%

140

Hotel

Real Estate for Sale

Minato-ku, Tokyo

New≧JPY 3B

2017/06

JPY 228M

JPY 597M

2.27X

54.7%

141

Hotel

Real Estate for SaleOsaka

1 yearJPY 1B-2B

2017/11

JPY 83M

JPY 334M

1.27X

27.4%

142

Hotel

Real Estate for Sale

Kanazawa

New

JPY 1B-2B

2017/11

JPY 117M

JPY 372M

2.12X

54.2%

143

RetailReal Estate for Sale

Fukuoka

33 years

JPY 1B-2B

2017/09

JPY 105M

JPY 223M

3.78X

19.9%

144

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

29 years

JPY 1B-2B

2018/02

JPY 129M

JPY 268M

8.00X

34.7%

Sub-Total

96 Assets

JPY 11,855M

JPY 37,777M

2.82X

35.2%

JPY 188,209M
JPY 191,393M (Book Value)* Assets acquired in the current FY18/2 period12Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

49

Value-Add Asset Breakdown (8)Asset TypeNo.

No. ofAssetsAcquisitionPrice

Acquisition
Date

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

A

Ichigo Owners (Office & Residence)

36 Assets

JPY 15,250M

FY18/2

JPY 902M

–

–

–

B

Centro (Primarily Office & Residence)

11 Assets

JPY 4,942M

FY18/2

JPY 378M

–

–

–

C

Self-Storage

23 Assets

JPY 1,876M

FY18/2

JPY 227M–––

JPY 13,364M

JPY 37,777M

2.82X

35.2%

Total

165 Assets

JPY 210,279M
JPY 214,016M (Book Value)

Assets acquired in FY18/2 Q1 (3M)

Total 11 Assets

JPY 12,392M

JPY 833M

JPY 3,126M

2.65X

26.9%

Assets acquired in FY18/2 Q2 (3M)

Total 38 Assets

JPY 12,159M

JPY 836M

JPY 597M

2.27X

54.7%

Assets acquired in FY18/2 Q3 (3M)

Total 35 Assets

JPY 18,065M

JPY 1,109M

JPY 929M

2.21X

33.9%

Assets acquired in FY18/2 Q4 (3M)

Total 8 Assets

JPY 4,852M

JPY 173M

JPY 863M

8.00X

34.7%

Assets acquired in FY18/2 (12M)

Total 92 Assets

JPY 47,470M

JPY 2,953M

JPY 5,516M

2.81X

30.7%

Assets acquired and sold in FY18/2

Total 8 Assets

JPY 3,228M

JPY 199M

JPY 658M

1.13X

13.5%

* Assets acquired in the current FY18/2 period1Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.
3 Includes 2 Ichigo Owners Assets, 2 Centro Assets (Forecast Equity Multiple and Forecast IRR are actuals)
2© Ichigo Inc. All rights reserved.

50

Reference: Japan’s Feed-in-Tariff (FIT)
What is a FIT?
‒ A policy mechanism designed to accelerate the deployment of renewableenergy such as solar and wind, guaranteeing a long-term sale price forelectricity (in Japan, 20 years) at a fixed price.
‒ Japan’s FIT is updated every year.
Solar Power FIT

Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2015 (7/1～3/31)

JPY 2720 years

FY2013

JPY 3620 years

FY2016

JPY 2420 years

FY2014

JPY 3220 years

FY2017

JPY 21*20 years

FY2015 (4/1～6/30)

JPY 2920 years

Pre-consumption tax FIT for power plants with output of >10kW
Source: METI, Agency for Natural Resources and Energy© Ichigo Inc. All rights reserved.

* FIT for >2MW non-residential solar power production determined via auction process51

Solar Power Plant Portfolio
Ichigo (In-Development)

Ichigo (Operating)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

Ichigo Yubetsu Barou

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 40Aug 2013

Ichigo Itoshima Ihara

KyushuPanel
Output(MW)
1.48

JPY 40Mar 2014

Ichigo Sennan Kitsuneike

Kansai

2.86

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 36

Jul 2018

JPY 21Mar 2019

Hokkaido

0.8

JPY 40

Apr 2014

Ichigo Sakahogi Fukagaya

Chubu

2.9

JPY 21

May 2019

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Toki Tsurusatocho Kakino Higashi

Chubu

1.77

JPY 21

Jul 2019

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Oct 2019

Ichigo Toyokoro Sasadamachi

Hokkaido

0.6

JPY 40

Oct 2014

Ichigo Hitachi Omiya

Kanto

2.96

JPY 24

Nov 2019

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Takashima Kutsuki

Kansai

3.75

JPY 32

Nov 2019

Ichigo Akkeshi Shirahama

Hokkaido

0.8

JPY 40Mar 2015

Ichigo Kasaoka Osakaike

Chugoku2.39

JPY 21

Dec 2019

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.64

JPY 32

Nov 2021

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Total (In-Development)

9 Plants 32.8MW

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Total (Operating & In-Development)

33 Plants 114.94MW

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 Green (9282)

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Kiryu Okuzawa

Kanto

Panel
Output(MW)
1.33

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Ichigo Motomombetsu

Hokkaido

1.4

JPY 40Feb 2014

Ichigo Memuro Nishishikari

Hokkaido

1.32

JPY 40Feb 2018

Ichigo Muroran Hatchodaira

Hokkaido

1.24

JPY 40Mar 2014

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.9

JPY 36

Mar 2018

Ichigo Engaru Kiyokawa

Hokkaido

1.12

JPY 40Mar 2014

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Iyo Nakayamacho Izubuchi

Shikoku

1.23

JPY 40

Apr 2014

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Mar 2018

Ichigo Nakashibetsu Midorigaoka

Hokkaido

1.93

JPY 40

Nov 2014

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

JPY 24

Apr 2018

Ichigo Abira Toasa

Hokkaido

1.16

JPY 40Dec 2014

Ichigo Toyokoro

Hokkaido

1.02

JPY 40Dec 2014

Total (Operating)Total
144.38MW© Ichigo Inc. All rights reserved.

24 Plants 82.14MW

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 40

Sep 2013

Ichigo Nago Futami

Okinawa

8.44

JPY 40Feb 2015

Ichigo Engaru Higashimachi

Hokkaido

1.24

JPY 40Feb 2015

Ichigo Takamatsu Kokubunjicho Nii

Shikoku

2.43

JPY 36

Jun 2015

Ichigo Miyakonojo Yasuhisacho

Kyushu1.44

JPY 36

Jul 2015

Ichigo Toyokawa Mitocho Sawakihama

Chubu

1.8

JPY 32

Sep 2015

Ichigo Yamaguchi Aionishi

Chugoku

1.24

JPY 40Dec 2015

Ichigo Yamaguchi Sayama

Chugoku

2.35

JPY 36

Apr 2016

Total

15 Plants 29.43MW

52

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

48 Plants (144MW)
Currently Operating

39 Plants (112MW)
Okinawa
Ichigo Nago Futami

8.44MW

KyushuIchigo Kijo Takajo

0.89MW

Ichigo Miyakonojo Yasuhisacho
Ichigo Itoshima Ihara
Ichigo Miyakonojo Takazakicho
Tsumagirishima
Total

1.44MW
1.48MW
2.64MW

Hokkaido

Chugoku
Ichigo Yonago Izumi
Ichigo Kasaoka Takumicho
Ichigo Fuchu Jogecho Yano
Ichigo Sera Tsukuchi

2.61MW
1.11MW
0.99MW
2.54MW

Ichigo Sera Aomizu
Ichigo Higashi-Hiroshima Saijocho
Taguchi
Ichigo Kasaoka Iwanoike
Ichigo Kure Yasuuracho Nakahata
Ichigo Yamaguchi Aionishi
Ichigo Yamaguchi Sayama

2.87MW

2.64MW
2.9MW
1.24MW
2.35MW

Ichigo Kasaoka Osakaike
Total

2.39MW
24.41MW2.72MW

0.8MW
0.88MW
0.8MW
0.6MW
1.32MW
1.4MW
1.24MW
1.12MW
1.16MW
1.24MW

Ichigo Toyokoro
Ichigo Nakashibetsu Midorigaoka

1.02MW
1.93MW

Total

13.57MWKansai
Ichigo Sennan Kitsuneike
Ichigo Takashima Kutsuki

2.86MW
3.75MW

Total

6.61MW

TohokuIchigo Hamanaka Bokujo Tsurunokotai 2.31MW
Ichigo Hamanaka Bokujo Kajibayashi 2.31MW

6.47MW

IchigoIchigo Toki Oroshicho
Ichigo Tsu

Ichigo Green (9282)
In Development
Shikoku
Ichigo Tokushima Higashi-Okinosu

2.52MW

Ichigo Takamatsu Kokubunjicho Nii
Ichigo Iyo Nakayamacho Izubuchi

2.43MW
1.23MW

Total

6.19MW

Total

4.62MW(Wind) Yamagata

7.5MW(Wind) Iwate

7.5MW(Wind) Fukushima

7MW

Kanto

Chubu

© Ichigo Inc. All rights reserved.

Ichigo Yubetsu Barou
Ichigo Betsukai Kawakamicho
Ichigo Akkeshi Shirahama
Ichigo Toyokoro Sasadamachi
Ichigo Memuro Nishishikari
Ichigo Motomombetsu
Ichigo Engaru Higashimachi
Ichigo Engaru Kiyokawa
Ichigo Abira Toasa
Ichigo Muroran Hatchodaira

1.39MW
2.94MW

Ichigo Toki Tsurusatocho Kakino
1.31MW
Ichigo Toyokawa Mitocho Sawakihama 1.8MW
Ichigo Sakahogi Fukagaya
2.9MW
Ichigo Toki Tsurusatocho
1.77MW
Kakino Higashi
Total
12.13MW(Wind) Mie
7.5MW

Ichigo Maebashi Naegashima

0.67MW

Ichigo Showamura Ogose

43.34MW

Ichigo Toride Shimotakai Kita

1.03MW

Ichigo Toride Shimotakai Minami

0.54MW

Ichigo Kiryu Okuzawa

1.33MW

Ichigo Minakami Aramaki

12.02MW

Ichigo Hitachi Omiya

2.96MW

Total

61.92MW(Wind) Chiba

4MW

53

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 29 Plants (104.75MW) By Customer(Electric Power Utility Co)
Hokkaido
4%

Tohoku4%

 By Feed-In-Tariff

Shikoku
2%

Kyushu4%
Kansai6%

JPY 21
JPY 40
9%
13%
JPY 24
9%

Chubu
9%

TEPCO
53%

<10MW
(In-Development)
11%

<2MW
10%

2-10MW(In-Development)
15%

>10MW
38%

© Ichigo Inc. All rights reserved.

2-10MW23%<6 months inoperation
10%

JPY 3657%

 By Solar Intensity

 By Output>1 yearStarting
operation after in operation
22%+6 months
27%

JPY 32
12%

Chugoku18%<2MW(In-Development)3%

 By Operating Timeline

B(In-Development)
9%0.5-1 yearin operation
40%

C(In-Development)
5%

A(In-Development)
15%
C 6%

B
21%

A
44%

Rank
A
B
C
D

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

Unit: kWh/m² per day

54

Consolidated Balance Sheet: Assets(JPY million)
FY14/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Power plants for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
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.

FY15/2

FY16/2

FY17/2

FY18/2

vs. FY17/2

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

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

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

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
231,681-2,168+184–-1,431+12,984
–
-174
-482
+425
+9,3374,901
2,044
12,433
1,922
21,3004,021
9,168
12,142989
26,321

3,830
12,256
12,192
3,264
31,546

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

10,60019,773
26,993
1,190
58,558+3,225+12,527+8,366-11,212+12,904

2,221
392
71
2,686

2,082
392
27
2,502

1,942
392
38
2,373

1,864
62
29
1,956

1,600
135
233
1,968

-264
+73
+204
+12

4,278
13
222
780
-97
5,196
29,183
114,944

5,266
12
2
1,392
-95
6,578
35,402
172,744

5,486
12
39
1,736
-124
7,149
41,069251,757

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

+758
–
-271
+312
+1
+799
+13,716+23,05355

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)
FY14/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Negative goodwill
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate hedges
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.

FY15/2

FY16/2

FY17/2

FY18/2

vs. FY17/2

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

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

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

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

-110
+237
-611
–
-760
-2,904
-46
+432
-2
+533
-3,232––
26,12624,178
1,213
4,770
180
44
56,51364,102–100
53,40943,004
1,402
6,391
90
96
104,494
114,367–100
94,40956,193
1,543
8,707
–
475
161,430
179,591

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
203,787-112-100+20,762-4,731
+597
+454
–
+134
+17,003+13,772

26,443
10,808
10,891-92
48,05026,49910,873
17,201-78
54,496

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

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

26,723
11,11354,324-2,99589,165+73+57+11,484-2,980+8,633

400
–
9
409
121
2,261
50,842
114,944

1,208
-36
6
1,177
198
2,505
58,377
172,744

761
-251
23
533
319
4,357
72,166
251,757

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

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

+426
-7
-55
+363
+175
+110
+9,282+23,05356

Consolidated P&L(JPY million)
FY14/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Negative goodwill amortization
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Stock issuance cost
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of fixed assets
Gain on sale of securities investments
Gain on sale of shares in affiliates
Receipt of share trading proceeds
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on sale/disposal of fixed assets
Valuation loss on securities investments
Office move expenses
Impairment loss
Earthquake-related damages
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.

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2(12M)

Change(YOY)

FY18/2
Forecast

vs.
Forecast

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

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

49,69929,835
19,863
4,446
15,417109,253
82,44626,806
5,025
21,781

57,84631,92025,925
5,067
20,858-51,407-50,526
-881
+42
-923

75,500–25,994–20,600

76.6%
–
99.7%
–
101.3%

4
112
90
31
238

5
78
90
39
213

2
79
90
43
215

–
85
–
32
118

3
57
–
100
161

+3
-28
–
-32
+43

–
–
–
–
–

–
–
–
–
–

370
89

943
–

1,277
–

1,303
–

1,266
–

-37
–

–
–

–
–

–

–

–

38

244

+206

–

–

–
93
553
3,597

–
202
1,146
7,255

86
379
1,743
13,889

585
216
2,144
19,755

159
165
1,835
19,185

-426
-51
-309
-570

–
–
–
18,300–––104.8%

7
204
–
434
33
680

–
–
–
–
57
57

–
223
–
–
–
223

–
2,466
–
–
–
2,466

–
–
1,221
–
41
1,263

–
-2,466+1,221–+41-1,203

–
–
–
–
–
–

–
–
–
–
–
–

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

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

–
49
9
–
–
31
89
14,022960
13,062
136
12,925

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

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

+11
–
-31
-763
-244
-224
-1,251-521+487-1,009
-132
-876

–
–
–
–
–
–
–
–
–
–
–
13,500

–
–
–
–
–
–
–
–
–
–
–
103.8%

57

Consolidated Cash Flow from Operations(JPY million)
FY14/2 (12M)

FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 (12M)

Cash Flow from Operations
Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Loss (gain) on sale of shares in affiliates
Loss (gain) on sale of securities investments
Loss (gain) on sale/disposal of fixed assets
Impairment loss
Valuation loss on securities investments
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational loans receivable
Decrease (increase) in operational securities investments
Valuation loss on operational securities investments
Decrease (increase) in real estate for sale
Decrease (increase) in solar power plants for sale
Valuation loss 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 expense paid
Income taxes paid and refunded

3,933
304
69
139
-90
-11
33
-116
370
–
-204
-6
307
–
97
218
1,635
114
-6,729
–
12
–
-255
-139
137
38
1,230
522
1,611
116
-378
-94

7,220
565
112
139
-90
1
65
-83
943
–
–
–
–
–
-68
-1,2301,110–-42,991–
91–-1,079
388
16
211
1,391
-407
-33,693
83
-843
161

14,022
792
174
139
-90
-3
3
-81
1,277
–
-223
–
–
49
-172
1,006
1,239
19
-63,070–11-990-1,140
535
42
317
2,380
435
-43,324
81-1,226-186

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

20,109
1,015
215
111
–
32
-355
-61
1,266
-1,221
–
–
327
–
-468
–
1,663
–
-8,112
996
–
871
-10
573
-285
30
125
709
17,532
61-1,135-5,854

Net Cash from (Used for) Operations

1,254-34,292-44,654

21,547

10,603© Ichigo Inc. All rights reserved.

58

Consolidated Cash Flow from Investments & Financing(JPY million)
FY14/2 (12M)
Cash Flow from Investments
Payments into time deposits
Redemptions of time deposits
Acquisition of securities investments
Proceeds from sale of securities investments
Proceeds from redemptions of investments
Acquisition of property, plant, and equipment
Proceeds from sale of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisition of subsidiary shares resulting in change ofconsolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Payments for acquisitions of newly consolidated subsidiaries
Other
Net Cash from (Used for) Investments
Cash Flow 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
Repayment of maturing non-recourse 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 issuance of common shares
Proceeds from employee exercise of stock options
Payments received from minority interests
Payments to minority interests
Share buyback
Dividends paid
Dividends paid to minority interests
Net Cash from (Used for) Financing© Ichigo Inc. All rights reserved.

FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 (12M)

–
–
–
282
2
-7,150
72
-389
-5
7
-5

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

–
–
-671
296
3
-6,628
–
-21
-9
6
-37

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

-6
–
-140
–
–
-4,796
–
-83
-28
–
-36

-1,389––-93-2,619

–

–

–

–

2,096

–
-35
-8,610-1,3494-12,485–
9-7,052–
11-11,933–-32-5,645465–––－
26,777-5,388
5,675-19,030
16,387
242
–
–
–
-445
–
24,682

466
48
–
–
－
47,203-19,557
19,900-5,958
–
99
–
–
–
-543
–
41,658

771
31
–
–
－
64,866-19,192
18,150-2,772
–
153
2,000
–
–
-646
-43
63,318-1,383
532
785
-56
－
55,674-61,22130,850-15,400–
137–-2,000–-1,501
-39
6,377

-306
-611
–
-112
-100
32,660-13,402
3,518-22,366–
110––-2,999-2,513–-6,12459

Appendix: Power Up 2019 Mid-Term Business Plan

© Ichigo Inc. All rights reserved.

60

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

FY16/2 (Actual)

FY17/2 (Actual)

FY18/2 (Actual)

Operating Profit

15,417

21,781

20,85825,00025,000+62.2%

Recurring Profit

13,88919,755

19,185

21,40022,000+58.4%

6.9%

26.4%

30%

30%

30%

–

12,925

14,89414,01814,80015,000+16.1%EPS

JPY 25.86

JPY 29.66

JPY 28.12

JPY 29JPY 30.10+16.4%

DPS

JPY 3

JPY 5

JPY 6

JPY 7

JPY 7

133%

ROE

21%

20.2%

16.5%

15.6%

15.7%

–

Tax Rate
Net Income© Ichigo Inc. All rights reserved.

FY19/2 (Plan)

FY19/2 (Forecast)vs. FY16/2

61

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

62

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

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

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

(6) Global Best Practice Governance and Compliance63Adoption of Progressive Dividend & DOE Policy
 Progressive Dividend: The previous year’s dividend is the floor for the current
year’s dividend. Dividend will be raised (or kept flat) but not cut, providing
shareholders with downside dividend protection
 Newly set a minimum DOE (dividend on equity) payout ratio of >3 %‒ Dividend payout ratio policy: Dividends based on annual earnings
 More Volatile‒ DOE policy: Dividends based on shareholder equity
 More Stable The combination of a Progressive Dividend and DOE policy will significantly
increase the stability, certainty, and visibility of Ichigo’s dividend to the benefitof Ichigo’s shareholders
 Adoption of this policy also underscores Ichigo’s commitment to driving
continued organic earnings growth and dividend growth for its shareholders© Ichigo Inc. All rights reserved.

64

MEMO

© Ichigo Inc. All rights reserved.

65

MEMO

© Ichigo Inc. All rights reserved.

66

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.

Contact:
Ichigo (TSE First 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 our carbon emissions
and investing in low-carbon technologies such as solar energy.

© Ichigo Inc. All rights reserved.

67