FY17/2 Q1 Corporate Presentation
April
23, 2016
2015
July 14,

Ichigo (2337)© 2016 Ichigo Inc. All rights reserved.

www.ichigo.gr.jp/english

© 2016 Ichigo Inc. All rights reserved.

© 2016 Ichigo Inc. All rights reserved.

Ichigo Preserves andImproves Real Estate© 2016 Ichigo Inc. All rights reserved.

FY17/2 Q1 Earnings‒ OP 2.1X, EPS 2.3X YOY‒ Earnings Growing Across All Segments‒ Robust Cash Flow and Cash-On-Hand‒ Strong Financial Position

Powerful Value-Add Business Model Underpins Growth‒ On-Going Ichigo Office REIT (8975) Growth‒ Ichigo Office REIT: 12 Consecutive Periods of Dividend Growth – No. 1 vs. All J-REITs‒ Value-Add Driving Earnings‒ Value-Add: Hotel Capex to Increase ADRs
‒ Value-Add: Hotel LED Lighting‒ Value-Add: Kumamoto Earthquake Damage Recovery‒ Infrastructure Fund Listing Progress‒ National Solar Power Plant Portfolio‒ CIAM Share Sale
Appendices: Financial & Real Estate Data
Power Up 2019 Mid-Term Business Plan

© 2016 Ichigo Inc. All rights reserved.

5

FY17/2 Q1 Earnings© 2016 Ichigo Inc. All rights reserved.

6

OP 2.1X, EPS 2.3X YOY‒ Revenue Growth 5.2X YOY on Asset Sales to Ichigo Office REIT
‒ Value-Add Segment Driving Earnings Growth(Million Yen)

FY16/2
Q1

FY17/2Q1

YOY

Full Year
Forecast

vs Full-Year
Forecast

Revenues

8,903

46,415+421.3%

125,600

37.0%

Gross Profit

3,627

6,612

+82.3%

23,867

27.7%

Operating Profit

2,492

5,412

+117.2%

18,50029.3%

Recurring Profit

2,233

4,806

+115.2%

16,40029.3%

Net Income

2,375

5,585

+135.1%

13,30042.0%

4.76 yen

11.13 yen+133.8%26.43 yen

42.1%

EPS

© 2016 Ichigo Inc. All rights reserved.

7

Earnings Growing Across All Segments‒ Value-Add OP 2.8X YOY‒ Value-Add Rental Income/Gain on Sale Split: 48%:52%(Million Yen)
Revenues
Segment

FY16/2 Q1

FY17/2 Q1Operating Profit
Full-Year
Forecast

YOY

vs Forecast

FY16/2 Q1

FY17/2 Q1Full-Year
Forecast

YOY

vs Forecast

Earnings Drivers(Gross Profit Basis, YOYchange in parentheses)

Asset Management

1,529

1,185

- 22.5%

5,079

23.3%

875

800

- 8.5%

2,386

33.5%

AM Fees: 343 (+131)
Acquisition/Disposition Fees: 87 (-203)
Performance Fees: 161 (+94)
Sponsor Credit Support Fee: 0 (-360)

Value-Add

6,988

44,667+539.2%

109,297

40.9%

1,572

4,404

+180.2%

13,53032.6%

Rental Income: 2,709 (+992)
Gain on Sale: 2,912 (+2,273)

379

556

+46.7%

11,152

5.0%

96

143

+49.3%

2,608

5.5% Solar Electricity Sales: 254(+88)

Other

6

5

- 16.7%

71

8.4%

-16

-14

―

-84

―

Total

8,903

46,415+421.3%

125,600

37.0%

2,527

5,334

+111.1%

18,440

28.9%

―

―

―

―

―

―

-34

77

―

59

―

―

8,903

46,415+421.3%

125,600

37.0%

2,492

5,412

+117.2%

18,50029.3%―

Clean Energy

Adjustment (including
offsets of cross-segment
transactions)Total© 2016 Ichigo Inc. All rights reserved.

8

Robust Cash Flow and Cash-On-Hand
FY17/2 Q1+JPY 14.9B
Cash Flow fromOperating Activities

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

Buy− Use cash
− Increase borrowings+JPY 37.6B
Acquisition of Value-Add Assets(Real Estate for Sale)-JPY 23.9B+JPY 4.8B
Cash Flow from
Investing Activities

Sale of CIAM Shares(Investment Securities)+JPY 6.0B

ValueAdd

Acquisition of Solar Power Plants(Fixed Assets)-JPY 1.0B
Cash Flow from
Financing Activities-JPY 11.6B

Sell− Receive cash
− Repay borrowings
Cash-on-Hand© 2016 Ichigo Inc. All rights reserved.

JPY 34.7B (+6.4B）
9

Strong Financial Position
Weighted Average Interest Rate

Weighted Average Interest Rate and Average Loan Period(Interest Rate)(Interest Rate)(Loan Period, Year)

Average Loan Period

3.0%

11 Year)(Loan Period,

2.5%

10.0 years
9.6 years

2.22% 2.56%

9.0 years

2.5%

9.0 years

8.7 years

9.0 years

1.96%2.22%

2.0%

8.0 years
1.96%
1.71%

2.0%

7

5.9 years

1.5%

4.7 years
5.9 years

1.5%

9

1.71%

6.0 years
1.37%
1.45%

1.41%

5

4.7 years
3.6 years

1.0%

1.0%

FY13/2FY12/2

FY14/2
FY13/2

Long/Short-Term
Loan Ratio
21% (JPY 1.5B)

14% (JPY 4.1B)

79%(JPY 5.5B)

86%(JPY 26.1B)

FY15/2
FY14/2

FY16/2
FY15/2

FY17/2
FY16/2Q1Q3

8% (JPY 4.9B)

10% (JPY 10.3B)

11% (JPY 11.6B)

92%(JPY 53.4B)

90%(JPY 94.4B)

89%(JPY 91.0B)

4.0
3 years

100%

Short-Term
Long-Term© 2016 Ichigo Inc. All rights reserved.

10Powerful Value-Add Business Model Underpins Growth© 2016 Ichigo Inc. All rights reserved.

11

On-Going Ichigo Office REIT (8975) GrowthCompleted Sale of 13 Mid-Size Office Assets (JPY 29.2B) to Ichigo Office
REIT, Driving Portfolio and Dividend Growth
Ichigo Office REIT Portfolio Growth
April 2016 Period

Asset Acquisitions

May 24, 2016
(After Asset Sales)

No. of Assets

73

13

86

+17.8%

Total Assets

JPY 162.7B

JPY 29.2B

JPY 191.9B+17.9%

2

2

2+19.3%

Leasable Area

Ichigo Motoazabu Building

217,381.68m

Ichigo Shibuya
East Building

41,954.01m

Ichigo Ningyocho
Building

259,335.69m

Ichigo Otsuka Building

Ichigo Nishi
Honmachi Building

ChangeIchigo Nishiki Building

Sale of 13 Assets
JPY29.2B

Gain on Sale
JPY 600M
Ichigo Nagoya Building

Ichigo Ikenohata
Building© 2016 Ichigo Inc. All rights reserved.

IchigoIkebukuro
East Building

IchigoMinami Morimachi
Building

Ichigo Hakata
Building

Ichigo Fushimi
Building

Nishiki First
Building

12

Ichigo Office REIT

12 Consecutive Periods of Dividend Growth – No. 1 vs. All J-REITs
Currently Forecasting 14 Consecutive Periods of Dividend Growth

1,890
yen

1,900
yen

(Forecast) (Forecast)

1,494
yen
1,219
yen

737
yen
(*)

April
2010

899
yen
(*)

October
2010

979
yen
(*)

April
2011

1,537
yen

1,541
yen

1,547
yen

October
2013

April
2014

October
2014

1,603
yen

1,706
yen

1,740
yen
(Actual)

1,387
yen

1,031
yen
(*)

October
2011

April
2012

October
2012

April
2013

April
2015

October April 2016
2015
(Actual)October
April
2016
2017
(Forecast) (Forecast)* Adjusted to reflect stock split on November 1, 2011
© 2016 Ichigo Inc. All rights reserved.

13

Value-Add Driving Earnings
In Addition to Rental Income from Value-Add Assets of JPY 2.7B,
Value-Add Asset Sales Generated Earnings of JPY 2.9B, of Which
Third-Party Sales Generated JPY 2.3B.
FY17/2 Q1 Value-Add Sales Breakdown

JPY 40.6B (18 Assets)

JPY 2.9B (18 Assets)

Third-Party

JPY 11.2B(5 Assets)
Third-Party

Gross Profit Margin

JPY 2.3B

20.7%(5 Assets)
REIT Bridge

JPY 29.4B(13 Assets)
REIT Bridge

JPY 0.6B(13 Assets)
Revenues© 2016 Ichigo Inc. All rights reserved.

Gross Profit Margin

2.0%

Gross Profit
14

Value-Add

Hotel Capex to Increase ADRs
Tokyo Hotel (Capex JPY 10M)
− Centrally located hotel close to tourist attractions, generating significant demand
from both business travelers and tourists− Converted 6 twin-bed rooms to triple-bed rooms (ADR +JPY 3.8M p.a.)− Renovated entrance floor and front desk area, and added a ramp to the stairsleading to the front entrance to ease guest access to the hotel
Twin-bed room

Triple-bed room

BeforeAfter

Osaka Hotel (Capex JPY 270M)− Well-located hotel ideal for both business travelers and tourists− Renovated common areas and all 300 guest rooms (forecast +9% ADR)
Before© 2016 Ichigo Inc. All rights reserved.

After

BeforeAfter

15

Value-Add

Hotel LED Lighting
Annual JPY 5.6M Savings on JPY 29.5M Capex (ROI 19%) via Lower
Energy Costs & Lighting Replacement Costs
Energy Consumption (KWh/year)
Facility

Energy Costs (thousand yen/year)

Location
Before LED

After LED

Difference

Before LED

After LED

Difference

Minimized
Replacement Cost
Cost
(thousand
Reduction
yen/year)Hotel A

Ehime

110,748

23,547- 87,201

1,550

330

- 1,220- 766- 85.8%

Hotel BOsaka

62,897

39,207- 23,690

943

588

- 355

- 257

- 51.8%

Hotel C

Okayama

63,47026,350- 37,120

889

369

- 520

- 259

- 67.9%Hotel D

Kumamoto

79,73325,502- 54,231

877

281

- 596

- 418

- 78.3%

Hotel ETokyo

15,555

6,135- 9,420

233

92

- 141

- 18

- 63.3%

Hotel FTokyo

10,357

3,384- 6,973

155

51

- 104

- 20

- 70.9%Hotel G

Okinawa

61,19324,118- 37,075

1,224

482

- 742

- 172

- 65.5%403,953

148,243- 255,710

5,871

2,193

- 3,678- 1,910- 71.8%

Total

Total JPY 5.6M p.a. savings© 2016 Ichigo Inc. All rights reserved.

16

Value-Add

Kumamoto Earthquake Damage Recovery
On-The-Ground Ichigo Relief and Recovery
 Ichigo Assets in Kumamoto: 1 Hotel and 1 Residence (Ichigo),
1 Office (Ichigo Office REIT) Ichigo management and technical support team on the ground in Kumamoto on
the first day after the initial April 14 quake, providing technical support forreconstruction and rebuilding to Ichigo tenants and Kumamoto community− Even larger earthquake on April 16, during which Ichigo continued relief and recovery
Technical Assistance for Reconstruction

Delivery of Essential Goods−

No injuries or major damage to property, but recorded JPY 242M extraordinary
loss for earthquake damages for repairs and tenant relief© 2016 Ichigo Inc. All rights reserved.

17

Infrastructure Fund Listing Progress
Establishment of Ichigo Green Infrastructure Investment Corporation (June 2016)
 Tax-advantaged solar ETF that will offer shareholders an opportunity to invest in the rapidly
expanding green infrastructure asset class Green, safe, and contributory to Japan’s energy self-sufficiency
 Ichigo Real Estate Investment Advisors, the asset manager of Ichigo Office REIT (8975) and
Ichigo Hotel REIT (3463), will be the asset manager
 Preparations are on track to list on the TSE’s new infrastructure fund market

First Secondary-Market Solar Power Plant Acquisition
 Acquired an operating solar power plant in May 2016, which
was renamed the Ichigo Kijo Takajo ECO Power Plant(FIT: 40 yen) Working on further secondary market acquisitions

Ichigo Kijo Takajo ECO Power Plant (0.90MW)

Have Begun Work on Wind Power Production
 Wind data surveys underway© 2016 Ichigo Inc. All rights reserved.

No.

Location

Expected Output

Wind Data Survey

1

Chiba

4.0MW

Completed2

Yamagata

7.5MW

In Preparation

3

Iwate

7.5MW

In Progress

4

Iwate

7.5MW

In Progress

5

Mie

7.5MW

In Preparation

18

National Solar Power Plant Portfolio (1)Serving Local Communities and the Environment
Total Operating and In-Development
Ichigo Solar Power Plants:

Ichigo Motomombetsu(1.40MW)36 Plants (113MW)

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

Ichigo Abira Toasa(1.17MW)

Currently Operating

Ichigo Nakashibetsu
Midorigaoka(1.93MW)

Ichigo Muroran Hatchodaira(1.24MW)

30 Plants (49MW)
Ichigo Yamaguchi Aionishi(1.24MW)

Ichigo Engaru Higashimachi(1.24MW)

Ichigo Hamanaka Bokujo Tsurunokotai(2.31MW)

Ichigo Higashi-Hiroshima
Saijocho Taguchi (2.73MW)

Ichigo Betsukai Kawakamicho(0.88MW)

Ichigo Hamanaka Bokujo Kajibayashi(2.31MW) Online in 2016/10

Ichigo Akkeshi Shirahama(0.81MW)

Ichigo Sera Tsukuchi(2.54MW) Online in 2017/1

Ichigo Yamaguchi Sayama(2.36MW )Ichigo Sera Aomizu(2.75MW) Online in 2017/2

Ichigo Toyokoro
Sasadamachi (0.61MW)

Ichigo Maebashi Naegashima(0.67MW)

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

Ichigo Fuchu Jogecho Yano
(0.99MW)

Ichigo Nago Futami(8.44MW)

Ichigo Toyokoro(1.03MW)

Ichigo Showamura Ogose(43.01MW) Online in 2018/1

Ichigo Yonago Izumi(2.61MW)

Ichigo Kiryu Okuzawa(1.33MW)

Ichigo Kasaoka Takumicho(1.12MW)

Ichigo Toride Shimotakai Kita
(1.03MW)

Ichigo Kijo Takajo(0.90MW)

Ichigo Toride Shimotakai Minami(0.54MW)

Ichigo Miyakonojo
Yasuhisacho (1.44MW)

Ichigo Toki Oroshicho(1.40MW)

Ichigo Tokushima
Higashi-Okinosu (2.52MW)
Ichigo Kure Yasuuracho Nakahata(2.65MW) Online in 2017/8© 2016 Ichigo Inc. All rights reserved.

Ichigo Takamatsu
Kokubunjicho Nii (2.43MW)

Ichigo Toyokawa Mitocho Sawakihama(1.80MW)

Ichigo Iyo Nakayamacho
Izubuchi (1.23MW)

As of July 14, 201619

National Solar Power Plant Portfolio (2)By Customer

By Feed-in-Tariff

By Operating Timeline

Chubu Kyushu
2%
Tohoku 3%
4%
32 yen9%

Shikoku
5%

40 yen31%

Okinawa
8%
TEPCO
50%

Hokkaido
11%>1 year inoperation
31%

To start
operation
within 1 - 2
years
49%

36 yen60%

To start
operation
within 0.5
years
7%

Chugoku17%

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

By Solar Intensity

By Output

B(In-Development)
4%C(In-Development)
5%
5%
A
16%

<2MW
23%
>10MW
(In-Development)
47%
2 - 10MW
21%

A(In-Development)
47%

B
27%

Rank
Solar Intensity
A
≧4.00
B
≧3.75, <4.00
C≧3.50, <3.75
D<3.50
Unit: (kWh/m2 per day)2 - 10MW(In-Development)
9%C
1%© 2016 Ichigo Inc. All rights reserved.

As of July 14, 201620

CIAM Share Sale
Sold All CITIC International Assets Management (CIAM ) Shares in Q1
 Proceeds of JPY 6.0B to be redeployed to fund further growth; Also recorded
extraordinary gain on sale of JPY 2.4B
 Divestment consistent with Ichigo’s strategy to focus on its core Japan homemarket With this sale, Ichigo has completed its legacy non-Japan asset sell-down andno longer owns any material non-Japan assets© 2016 Ichigo Inc. All rights reserved.

21

Appendix: Financial & Real Estate Data

© 2016 Ichigo Inc. All rights reserved.

22

Powerful Value-Add Business Model
Significant Value-Add and Asset Management Business Synergies
Value-Add Business Model
Renewable Energy

Solar Plants
Buy
Ichigo GreenInfrastructure Fund

Sell
OfficeIchigo Office REIT
(8975)
Hotel

Ichigo Hotel REIT
(3463)© 2016 Ichigo Inc. All rights reserved.

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
23

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© 2016 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

HighestEfficiency
LowestImpact24

Value-Add Sample Earnings Model
5.5% NOI, JPY 2B purchase, LTV 75%, 1.5% interest rate, JPY 50M capex,
15% increase in NOI, 3-year value-add period
At Acquisition NOI(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 2B

After Value-Add NOI(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
Value-Add to increase NOI 15% at equivalent cap rate increases 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 )© 2016 Ichigo Inc. All rights reserved.

ResultJPY 550M investment generates JPY 512.5M over 3 years → 31.1% p.a.

25

Consolidated Risk-Based Balance Sheet
Consolidated Current Value Balance Sheet
Total: JPY 272.6B
Assets JPY 244.0B + Unrealized Gains JPY 28.5B

Non-Recourse LoanRelated Assets

As of May 31, 2016

Non-Recourse Loans &Related Liabilities

JPY 60.4B

Consolidated Risk-Based Balance Sheet
Assets JPY 183.5B

JPY 79.5B

Non-Recourse LoanRelated IGH Equity

JPY 19.0B
Cash & Cash Equivalents

Cash & Cash Equivalents

JPY 26.9B

Operational Investments in Loans
JPY 1.3B

Operational Investments in
Securities JPY 2.6B

Corporate Loans

JPY 102.6B

Debt
JPY
172.8B

Securities JPY 2.6B

JPY 31.2B
Investments in Securities
JPY 1.7B

Shareholder
EquityJPY 71.1B

Other JPY 10.0B

Unrealized Gains
JPY 28.5B

JPY 102.6B

JPY 90.5B

Security Deposits Received
JPY 3.9B

Security Deposits Received
JPY 3.9B

Other JPY 5.8B

Fixed Assets

Corporate Loans

Debt
JPY
112.4B

Real Estate For Sale

Real Estate For Sale

JPY 90.5B

JPY 26.9B

Operational Investments in Loans
JPY 1.3B
Operational Investments in

Unrealized Gains
JPY 28.5B

Other JPY 5.8B

Shareholder
Equity Ratio

36.6%

Fixed Assets

JPY 31.2B
Investments in Securities
JPY 1.7B

Shareholder
EquityJPY 71.1B

Other JPY 10.0B

Unrealized Gains
JPY 28.5B

Unrealized Gains
JPY 28.5B

Risk-Based
Shareholder
Equity Ratio
with
Unrealized Gains

47.0%

Note: Risk-based balance sheet includes unrealized gains/losses and excludes client and non-recourse assets and liabilities© 2016 Ichigo Inc. All rights reserved.

26

Significant Unrealized Gains on Balance Sheet
Total Unrealized Gains: JPY 28.5B (Appraisal Value Basis)
Real estate directly held by Ichigo(Million Yen)

LocationBook Value as of
May 31, 2016NOI

Cap Rate

Appraisal ValueNOI/Book Value after write-down

as of May 2016

Unrealized GainTokyo

70,365

4,156

5.9%

84,572+14,207

Outside Tokyo

97,481

6,431

6.7%

111,399+13,918

Total

167,846

10,587

6.4%

195,971+28,125

Note: Excludes development assets (c. JPY 371M) which are not currently generating NOI and
includes intangible fixed assets subject to appraisal (c. JPY 62M)

Real estate held by Ichigo within Ichigo-managed funds (SPCs) where there are other non-Ichigo equity holders(Million Yen)

Equity Investments(Non-consolidated)

Book Value as of
May 31, 2016

Appraisal Value asof May 31, 2016——

Unrealized Gains—

Equity Investments(Consolidated)

1,025

1,345

+319

Total

1,025

1,345

+319

© 2016 Ichigo Inc. All rights reserved.

27

Business Segments

Asset Management

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

Value-Add

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

Clean Energy

Other© 2016 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.

28

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

OutsideInvestors'
Interest

B/S

YOY

Market Value

Unrealized
Gain

Unrealized Gainon Listed
Securities 2

Cash and Cash Equivalents

28,77935,183

1,037+6,40435,183――Operating Loans Receivable (Value-Add)

1,324

1,324

―

―

1,324

―

―

Operational Investments in Securities

1,784

2,617

―

+833

2,617

―

+1

Value-Add

844

1,707

―

+863

1,707

―

―

Other

939

910

―

-29

910

―

+1

Real Estate for Sale (Value-Add)

172,833

159,384

3,009-13,449

186,952+26,789―

Fixed Assets

31,54633,020―+1,47434,818+1,798

―

39

37

―

-2

40

+3

―

Value-Add

15,897

15,845―-52

17,640+1,794―

Clean Energy

15,56017,094―+1,53417,094

―

―

48

42

―

-6

42

―

―

Intangible Assets

2,373

2,398

―

+25

2,398

―

―

Investments in Securities

5,486

1,734

―

-3,752

1,734

―

+704

Other

7,628

8,373

20

+745

8,373

―

―

251,757

244,037

4,067-7,720273,403+28,587+706

Asset Management

Other 1

Total Assets

1 Other refers to company assets that are not allocated to or cannot be allocated to above segments
2 Unrealized Gain on Listed Securities is recorded in Unrealized Gain on Operational Investment in Securities and in Intangible Assets© 2016 Ichigo Inc. All rights reserved.

29

Consolidated Balance Sheet: Segment Breakdown(Million Yen)

Cash andCash
Equivalents

Operating
Loans
Receivable

Operational
Investments
in Securities

Real Estatefor SaleFixed Assets

Intangible
AssetsInvestments
in Securities

Other Assets

393

―

―

―

37

1,606

―

1,065

3,103

Value-Add

12,864

1,324

1,707

159,384

15,845

170

―

3,249

194,547

Clean Energy

1,127

―

―

―
―

17,094

591

―

1,236

20,050

74

―

910
―

―

―

―

1,734

-442

2,276

Company-Wide Assets

20,722

―

―

―

42

29

―

3,264

24,059Total

35,183

1,324

2,617

159,384

33,020

2,398

1,734

8,373

244,037

Segment

Asset Management

Other© 2016 Ichigo Inc. All rights reserved.

Total Assets

30

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

Revenues

Gross Profit

Segment
FY16/2 Q1

FY17/2 Q1ChangeFY16/2 Q1

FY17/2 Q1ChangeYOY(Gross Profit)

1,529

1,185

-343

1,103

734

-368

- 33.4%

Asset Management Fees

509

438

-71

505

435

-70

- 13.8%PM/BM Fees

530

567

+37

113

122

+8

+7.6%

Other

489

179

-310

483

176

-306

- 63.4%

Value-Add

6,988

44,667+37,679

2,355

5,621

+3,265+138.6%

Rental Income

2,714

4,086

+1,371

1,716

2,709

+992

+57.8%

Asset Sales

4,273

40,581+36,307

639

2,912

+2,273+355.7%

Clean Energy

379

566

+177

165

254

+88

+53.1%

Other

6

5

-0

2

1

-0

- 15.1%

Total

8,903

46,415+37,511

3,627

6,612

+2,985+82.3%

Asset Management© 2016 Ichigo Inc. All rights reserved.

31

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

セグメ ント内訳

FY17/2 Q1 (3M)
Segment

Revenues

vs Full-Year
Forecast

1,185

23.3%

734

24.5%

800

33.5%

5,079

2,999

2,386

Asset Management Fees

438

19.7%

435

19.7%

―

―

2,219

2,209

―

PM/BM Fees

567

21.9%

122

23.0%

―

―

2,588

531

―

Other

179

66.2%

176

68.2%

―

―

271

259

―

44,667

40.9%

5,621

31.5%

4,404

32.6%

109,297

17,82013,530Rental Income

4,086

30.6%

2,709

31.0%

―

―

13,347

8,727―

Asset Sales

40,581

42.3%

2,912

32.0%

―

―

95,950

9,093―

Clean Energy

556

5.0%

254

8.3%

143

5.5%

11,152

3,065

2,608

Other

5

8.4%

1

―

-14

―

71

-18

-84

Total

46,415

37.0%

6,612

27.7%

5,334

28.9%

125,600

23,86718,440

―

―

―

―

77

―

―

―

59

46,415

37.0%

6,612

27.7%

5,412

29.3%

125,600

23,86718,500Asset Management

Value-Add

Adjustm ent (including
offsets of cross-segm ent
transactions)Total© 2016 Ichigo Inc. All rights reserved.

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

vs Full-Year Operating vs Full-Year
Forecast
ProfitForecast

Revenues

Gross
ProfitOperating
Profit32

Asset Management AUM Detail

Ichigo Office REIT
(8975)

FY12/2(12M)

FY13/2(12M)

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 Q1(3M)

JPY 106.1B

JPY 104.3B

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 191.9B

0.61%

0.63%

0.65%

0.65%

0.64%

0.68%*

JPY 719M

JPY 663M

JPY 733M

JPY 759M

JPY 1,016M

JPY 293M

AUM (Fiscal Year End)

―

―

―

―

JPY 20.4B

JPY 20.4B

AM Fee % (Average)

―

―

―

―

0.59% *

0.78%*AM Fee Gross Profit (Actual)

―

―

―

―

JPY 30M

JPY 39M

JPY 213.3B

JPY 169.7B

JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 15.4B

0.15%

0.15%

0.26%

0.37%

0.32%

0.26%*

JPY 284M

JPY 285M

JPY 257M

JPY 114M

JPY 60M

JPY 10M

JPY 319.3B

JPY 274.1B

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 227.8B

0.33%

0.33%

0.47%

0.59%

0.61%

0.66%*

JPY 1,004M

JPY 948M

JPY 989M

JPY 872M

JPY 1,106M

JPY 344M

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

Ichigo Hotel REIT
(3463)

Private Equity Real
Estate Funds (excluding
consolidated)

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

Total

AM Fee % (Average)
AM Fee Gross Profit (Actual)* Annualized© 2016 Ichigo Inc. All rights reserved.

33

Ichigo-Owned Real Estate Portfolio
As of May 31, 2016
Assets by Location

Assets by TypeGround
Lease
3%

Other
1%

Nagoya2%

Sendai
4%

Mixed
6%

Hotel
30%

Residence

14%

Retail21%(Billion Yen)

Office
25%

Other
12%

Osaka
10%

Fukuoka
14%

Tokyo
43%

Kanto
15%

Sendai
6.4

Tokyo

72.8
Kanto
26.1

Assets by Size
JPY
JPY 55- JPY 0-1B
10B
10B JPY15%
0-1B
12%
12%
15%

JPY 1-5B
JPY 1-5B
73%
73%

Osaka
17.4
Fukuoka
24.7

Nagoya
3.3

Other
19.9

Total Assets: JPY 171.0B
Including Ichigo-Managed AUM: JPY 404.5B(Acquisition price basis)© 2016 Ichigo Inc. All rights reserved.

34

Value-Add Full Asset Breakdown (1)100 Assets, Book Value JPY 171.0B, Forecast NOI JPY 10.6B (6.2%)
No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

1

Other

Fixed Asset

Matsudo City, Chiba

44 years

JPY 2B-3B

2005/06

JPY 230M

JPY 1,900M

―

―

2

RetailReal Estate for Sale

Minato-ku, Tokyo

47 years

JPY 2B-3B

2005/10

JPY 131M

JPY 1,033M

―

―

3

RetailReal Estate for Sale

Minato-ku, Tokyo

30 years≧JPY 3B

2006/03

JPY 167M

JPY 1,356M

―

―

4

RetailReal Estate for Sale

Yokohama City, Kanagawa

11 years

JPY 1B-2B

2006/09

JPY 57M

JPY 1,157M

―

―

5

OfficeReal Estate for Sale

Sendai City, Miyagi

8 years≧JPY 3B

2006/10

JPY 265M

JPY 1,042M

―

―

6

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

7 years≧JPY 3B

2006/12JPY 389M

JPY 1,339M

―

―

7

Other

Fixed Asset

Isumi City, Chiba―

JPY 1B-2B

2007/02―

JPY 1,055M

―

―

9

Residence

Real Estate for Sale

Ota-ku, Tokyo

11 years<JPY 1B

2007/04

JPY 57M

JPY 403M――

10

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

36 years<JPY 1B

2007/06

JPY 85M

JPY 240M――

11

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

35 years<JPY 1B

2007/06

JPY 119M

JPY 233M――

12

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

52 years

JPY 2B-3B

2007/06

JPY 249M

JPY 554M――

13

OfficeReal Estate for Sale

Minato-ku, Tokyo

42 years≧JPY 3B

2007/11

JPY 314M

JPY 2,049M

―

―

14

Ground Lease

Real Estate for Sale

Atsugi City, Kanagawa―

JPY 1B-2B

2011/06

JPY 176M

JPY 147M――

15

Mixed (Office/Retail)Real Estate for Sale

Hiratsuka City, Kanagawa

20 years<JPY 1B

2012/02

JPY 83M

JPY 172M――

16

RetailReal Estate for Sale

Yokohama City, Kanagawa

2 years<JPY 1B

2012/10

JPY 32M

JPY 171M

―

―

1
2

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

© 2016 Ichigo Inc. All rights reserved.

35

Value-Add Full Asset Breakdown (2)*No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

17

RetailFixed AssetToshima-ku, Tokyo

5 years≧JPY 3B

2013/03

JPY 228M

JPY 340M――

18

RetailReal Estate for Sale

Shibuya-ku, Tokyo

29 years<JPY 1B

2013/05

JPY 45M

JPY 154M――

19

Mixed (Office/Retail)Real Estate for Sale

Chofu City, Tokyo

31 years

JPY 1B-2B

2013/06

JPY 112M

JPY 310M――

20

Residence

Real Estate for Sale

Kita-ku, Tokyo

27 years<JPY 1B

2013/06

JPY 2MJPY 31M――

21

Residence

Real Estate for Sale

Minato-ku, Tokyo

0 years<JPY 1B

2013/06

JPY 42M

JPY 203M――

22

Residence

Real Estate for Sale

Osaka City, Osaka

13 years<JPY 1B

2013/07

JPY 32M

JPY 81M――

23

Residence

Real Estate for Sale

Osaka City, Osaka

9 years<JPY 1B

2013/08

JPY 49M

JPY 81M――

24

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

25 years

JPY 1B-2B

2013/08

JPY 86M

JPY 520M――

25

Residence

Real Estate for Sale

Osaka City, Osaka

11 years<JPY 1B

2013/08

JPY 37M

JPY 90M――

26

RetailFixed Asset

Kobe City, Hyogo

15 years

JPY 1B-2B

2013/09

JPY 145M

JPY 616M――

27

RetailFixed Asset

Tokorozawa City, Saitama

8 years

JPY 1B-2B

2013/11

JPY 64M

JPY 92M――

28

Ground Lease

Real Estate for Sale

Chiba City, Chiba―

JPY 2B-3B

2014/02

JPY 128M

JPY 342M――

29

Ground Lease

Real Estate for Sale

Fujisawa City, Kanagawa―

JPY 1B-2B

2014/03

JPY 115M

JPY 273M

7.52 x44.5%30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo

32 years<JPY 1B

2014/03

JPY 39M

JPY 108M

6.95 x26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

5 years

JPY 1B-2B

2014/04

JPY 60M

JPY 1,090M

1.25 x12.0%

12Forecast Equity Multiple is based on the business plan of each asset and is the expected sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2016 Ichigo Inc. All rights reserved.

36

Value-Add Full Asset Breakdown (3)No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

32

RetailFixed Asset

Fukuoka City, Fukuoka

10 years

JPY 1B-2B

2014/04

JPY 59M

JPY 279M――

33

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

27 years

JPY 2B-3B

2014/05

JPY 155M

JPY 530M

2.04 x20.0%

34

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

23 years

JPY 1B-2B

2014/05

JPY 131M

JPY 515M

2.27 x23.4%

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

7 years

JPY 2B-3B

2014/05

JPY 155M

JPY 434M

3.08 x15.2%

36

Residence

Real Estate for Sale

Kumamoto City, Kumamoto

9 years≧JPY 3B

2014/06

JPY 213M

JPY 476M

3.52 x19.0%

37RetailReal Estate for Sale

Minato-ku, Tokyo

44 years<JPY 1B

2014/07

JPY 39M

JPY 77M

10.47 x23.9%

38

Mixed (Office/Retail)Real Estate for Sale

Shinjuku-ku, Tokyo

40 years≧JPY 3B

2014/07

JPY 201M

JPY 645M

3.32 x21.1%

39

RetailFixed Asset

Fukuoka City, Fukuoka

12 years<JPY 1B

2014/07

JPY 47M

JPY 213M

3.32 x―40

RetailFixed Asset

Fukuoka City, Fukuoka

31 years<JPY 1B

2014/09

JPY 55M

JPY 252M

―

―

41

Hotel

Real Estate for Sale

Utsunomiya City, Tochigi

29 years

JPY 1B-2B

2014/09

JPY 138M

JPY 400M

1.97 x28.3%

42RetailReal Estate for Sale

Fukuoka City, Fukuoka

15 years<JPY 1B

2014/09

JPY 54M

JPY 177M

5.54 x26.2%

43RetailReal Estate for Sale

Osaka City, Osaka

14 years

JPY 1B-2B

2014/09

JPY 90M

JPY 301M

4.64 x24.3%

44RetailReal Estate for Sale

Machida City, Tokyo

30 years<JPY 1B

2014/10

JPY 51M

JPY 82M

11.34 x43.9%

45RetailReal Estate for Sale

Fukuoka City, Fukuoka

13 years

JPY 1B-2B

2014/11

JPY 68M

JPY 135M

10.70 x33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

13 years

JPY 2B-3B

2014/12JPY 119M

JPY 332M

2.18 x29.2%

12

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

© 2016 Ichigo Inc. All rights reserved.

37

Value-Add Full Asset Breakdown (4)No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

9 years

JPY 1B-2B

2014/12JPY 96M

JPY 270M

1.56 x14.6%

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 79M

JPY 238M

1.67 x16.6%

49

Residence

Real Estate for Sale

Minato-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 61M

JPY 185M

1.63 x15.7%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 59M

JPY 163M

1.55 x15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo

14 years<JPY 1B

2014/12JPY 60M

JPY 150M

2.21 x35.7%

52

Residence

Real Estate for Sale

Osaka City, Osaka

8 years<JPY 1B

2014/12JPY 58M

JPY 148M

1.86 x24.8%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo

13 years<JPY 1B

2014/12JPY 38M

JPY 99M

2.96 x44.4%

54

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years<JPY 1B

2014/12JPY 38M

JPY 123M

1.97 x23.3%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

11 years<JPY 1B

2014/12JPY 29M

JPY 82M

2.05 x25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 87M

JPY 270M

2.00 x23.2%

57

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 57M

JPY 186M

1.90 x21.0%

58

Residence

Real Estate for Sale

Minato-ku, Tokyo

11 years<JPY 1B

2014/12

JPY 49M

JPY 157M

1.89 x21.5%

59

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

11 years<JPY 1B

2014/12JPY 39M

JPY 117M

2.11 x27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

9 years<JPY 1B

2014/12JPY 19M

JPY 55M

1.80 x21.1%

61

Mixed (Office/Retail)Operating Loan

Shinjuku-ku, Tokyo

53 years

JPY 1B-2B

2014/12JPY 103M

JPY 57M

15.26 x

51.7%

1
2

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

© 2016 Ichigo Inc. All rights reserved.

38

Value-Add Full Asset Breakdown (5)No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

62

RetailFixed Asset

Fukuoka City, Fukuoka

12 years<JPY 1B

2014/12

JPY 42M

JPY 212M――

63

RetailReal Estate for Sale

Meguro-ku, Tokyo

9 years

JPY 1B-2B

2014/12JPY 67M

JPY 129M

3.98 x23.8%

64RetailReal Estate for Sale

Shinagawa-ku, Tokyo

62 years<JPY 1B

2015/01

JPY 16M

JPY 0M――

65

OfficeReal Estate for Sale

Fujisawa City, Kanagawa

25 years

JPY 1B-2B

2015/01

JPY 69M

JPY 375M

1.41 x41.9%

66

RetailReal Estate for Sale

Miyagi City, Sendai

12 years<JPY 1B

2015/02

JPY 47M

JPY 8M

42.58 x198.9%

67

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

24 years

JPY 1B-2B

2015/03

JPY 59M

JPY 94M

6.39 x54.4%

68

RetailReal Estate for Sale

Shibuya-ku, Tokyo

14 years<JPY 1B

2015/04

JPY 42M

JPY 79M

5.65 x

27.9%

69

Hotel

Real Estate for Sale

Osaka City, Osaka

13 years

JPY 2B-3B

2015/05

JPY 178M

JPY 633M

1.56 x

58.3%

70

Hotel

Real Estate for Sale

Aomori City, Aomori

8 years<JPY 1B

2015/06

JPY 45M

JPY 113M

2.10 x20.2%

71RetailReal Estate for Sale

Fujisawa City, Kanagawa

1 years

JPY 1B-2B

2015/07

JPY 99M

JPY 126M

6.80 x37.3%

85

OfficeReal Estate for Sale

Bunkyo-ku, Tokyo

24 years

JPY 2B-3B

2015/07

JPY 114M

JPY 428M

1.34 x16.8%

88

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

28 years

JPY 1B-2B

2015/07

JPY 96M

JPY 355M

1.32 x15.8%

89

OfficeReal Estate for Sale

Musashino City, Tokyo

27 years≧JPY 3B

2015/07

JPY 127M

JPY 670M

1.72 x13.3%

90OfficeReal Estate for Sale

Osaka City, Osaka

22 years

JPY 1B-2B

2015/07

JPY 76M

JPY 248M

1.29 x

15.6%

91

OfficeReal Estate for Sale

Osaka City, Osaka

18 years

JPY 1B-2B

2015/07

JPY 94M

JPY 330M

1.14 x16.1%

12

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

© 2016 Ichigo Inc. All rights reserved.

39

Value-Add Full Asset Breakdown (6)No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

92

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

8 years

JPY 1B-2B

2015/07

JPY 87M

JPY 353M

1.82 x17.7%

93

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

13 years

JPY 1B-2B

2015/07

JPY 87M

JPY 358M

1.92 x18.8%

95

OfficeReal Estate for Sale

Nagoya City, Nagoya

24 years

JPY 1B-2B

2015/07

JPY 59M

JPY 240M

1.17 x

19.4%

96

Hotel

Real Estate for Sale

Sapporo City, Hokkaido

23 years<JPY 1B

2015/08

JPY 26M

JPY 2M

5.52 x291.5%

97

Hotel

Real Estate for Sale

Chuo-ku, Tokyo

1 years

JPY 1B-2B

2015/09

JPY 70M

JPY 240M

1.49 x

48.7%

98

Hotel

Real Estate for Sale

Naha City, Okinawa

27 years

JPY 2B-3B

2015/11

JPY 166M

JPY 640M

1.91 x

25.9%

99

Hotel

Real Estate for Sale

Suginami-ku, Tokyo

23 years

JPY 2B-3B

2015/12JPY 182M

JPY 764M

1.74 x

74.4%

100

Hotel

Real Estate for Sale

Taito-ku, Tokyo

23 years

JPY 1B-2B

2015/12JPY 85M

JPY 387M

1.71 x

70.6%

101

Hotel

Real Estate for Sale

OkayamaCity, Okayama

32 years<JPY 1B

2015/12JPY 81M

JPY 321M

1.58 x

57.9%

102

Hotel

Real Estate for Sale

Matsuyama City, Ehime

27 years

JPY 1B-2B

2015/12JPY 114M

JPY 412M

1.69 x

68.5%

103

Hotel

Real Estate for Sale

Naha City, Okinawa

41 years

JPY 2B-3B

2015/12JPY 192M

JPY 596M

2.04 x104.3%

104

Hotel

Real Estate for Sale

Osaka City, Osaka

31 years≧JPY 3B

2015/12JPY 341M

JPY 1,437M

1.76 x

76.0%

105

Hotel

Real Estate for Sale

Kumamoto City, Kumamoto

31 years

JPY 1B-2B

2015/12JPY 117M

JPY 453M

1.61 x

61.2%

106

Hotel

Real Estate for Sale

Tokoname City, Aichi

11 years≧JPY 3B

2016/02

JPY 274M

JPY 1,228M

1.46 x

46.4%

107

Hotel

Real Estate for Sale

Kushiro City, Hokkaido

6 years<JPY 1B

2016/02

JPY 26M

JPY 107M

1.59 x59.4%

12Forecast Equity Multiple is based on the business plan of each asset and is the expected sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2016 Ichigo Inc. All rights reserved.

40

Value-Add Full Asset Breakdown (7)No.

Asset Class

Asset Type

Location

Building Age

Acquisition Price

Acquired
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

108

Hotel

Real Estate for Sale

Suzuka City, Mie

8 years<JPY 1B

2016/02

JPY 25M

JPY 95M

1.60 x

59.7%

109

Hotel

Real Estate for Sale

Nagoya City, Aichi

7 years

JPY 2B-3B

2016/03

JPY 130M

JPY 525M

1.84 x

37.7%

110

Hotel

Real Estate for Sale

Fukuoka City, Fukuoka

30 years≧JPY 3B

2016/03

JPY 274M

JPY 905M

2.05 x104.5%

111

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

32 years

JPY 2B-3B

2016/03

JPY 207M

JPY 228M

5.32 x

23.3%

112

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

28 years≧JPY 3B

2016/03

JPY 319M

JPY 354M

10.64 x

36.2%

113

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

28 years≧JPY 3B

2016/03

JPY 260M

JPY 344M

5.84 x

25.5%

114

Hotel

Real Estate for Sale

Fukuoka City, Fukuoka

26 years≧JPY 3B

2016/04

JPY 175M

JPY 550M

1.73 x

72.6%

115

Hotel

Real Estate for Sale

Osaka City, Osaka

9 years

JPY 2B-3B

2016/04

JPY 130M

JPY 274M

2.96 x30.7%

116

RetailReal Estate for Sale

Sendai City, Miyagi

27 years<JPY 1B

2016/04

JPY 70M

JPY 86M

7.50 x28.4%

117

RetailReal Estate for Sale

Sendai City, Miyagi

24 years<JPY 1B

2016/04

JPY 38M

JPY 126M

1.63 x

62.6%

Total

1
2

100 Assets

JPY 171,044M

JPY 10,690M

JPY 39,153M

2.51 x41.7%

Assets acquired in FY17/2 Q1 Total 9 Assets

JPY 23,485M

JPY 1,603M

JPY 3,392M

3.66 x46.8%

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

© 2016 Ichigo Inc. All rights reserved.

41

Reference: Japanese Feed-in-Tariff (FIT)
What is a FIT?
‒‒

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

Tariff per
1kWh*Guarantee
PeriodContract Date

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

40 yen20 years

FY2015 (4/1-6/30)

29 yen20 years

FY2013 (4/1-3/31)

36 yen20 years

FY2015 (7/1-3/31)

27 yen20 years

FY2014 (4/1-3/31)

32 yen20 years

FY2016 (4/1-3/31)

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

Current Regulatory Framework and Ichigo Plant Status‒‒‒

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

© 2016 Ichigo Inc. All rights reserved.

42

Clean Energy Earnings
Revenue Growth Via New Plants Coming Online
OP +49.3% YOY (FY16/2 Q1 OP = JPY 143M vs. FY15/2 Q1 JPY 96M)
(Million Yen)
FY16/2(12M)

Revenues

FY17/2 Q1(3M)

FY17/2 Full-Year
Forecast (12M)

vs Full-Year
Forecast

1,628

556

11,152

5.0%

Cost of Goods Sold

945

302

8,087

3.7%

Gross Profit

683

254

3,065

8.3%

SG&A

358

110

456

24.2%

(including offsets of crosssegment transactions)

―

―

―

―

Operating Profit

323

143

2,608

5.5%

Adjustments

Solar Power Plant
Schedule

24 Plants Online
41.97MW

27 Plants Online
46.35MW33 Plants Online
52.92MW (Forecast)

36 Plants Online
112.84MW (Plan)(Forecast)

Total operating and in-development: 36 plants, 112.84MW© 2016 Ichigo Inc. All rights reserved.

43

Individual Solar Power Plant P&L Breakdown (1)Total 20-Year Forecast IRR for All Plants: 38.5% p.a.
No.

Solar Power Plant

Area

Panel
Output(MW)

Fixed
Tariff(Pre-tax,
yen)

Operation
Start Date

Expected
NOI/Year

Depreciation

Forecast Equity
Multiple (If heldfor 20 years) 1

IchigoInvestment

Forecast
IRR2

1

Ichigo Tokushima Higashi Okinosu ECO Power Plant

Shikoku

2.52

40

Aug-13

JPY 84M

JPY 36M

JPY 129M

7.46 x26.2%

2

Ichigo Kiryu Okuzawa ECO Power Plant

Kanto

1.33

40

Sep-13

JPY 42M

JPY 20M

JPY 94M

4.77 x17.6%

3

Ichigo Motomombetsu ECO Power Plant

Hokkaido

1.40

40

Feb-14

JPY 44M

JPY 21M

JPY 134M

3.84 x15.2%

4

Ichigo Fuchu Jogecho Yano ECO Power Plant

Chugoku

0.99

40

Mar-14

JPY 28M

JPY 15M

JPY 102M

3.09 x12.4%

5

Ichigo Muroran Hatchodaira ECO Power Plant

Hokkaido

1.24

40Mar-14

JPY 41M

JPY 20M

JPY 138M

3.29 x12.3%

6

Ichigo Engaru Kiyokawa ECO Power Plant

Hokkaido

1.12

40Mar-14

JPY 35M

JPY 16M

JPY 93M

4.17 x16.5%

7

Ichigo Yubetsu Barou ECO Power Plant

Hokkaido

0.80

40

Apr-14

JPY 23M

JPY 13M

JPY 31M

5.30 x15.0%

8

Ichigo Iyo Nakayamacho Izubuchi ECO Power Plant

Shikoku

1.23

40

Apr-14

JPY 43M

JPY 19M

JPY 73M

6.58 x25.3%

9Ichigo Maebashi Naegashima ECO Power Plant

Kanto

0.67

40

Apr-14

JPY 25M

JPY 9MJPY 40M

8.57 x34.3%

10

Ichigo Betsukai Kawakamicho ECO Power Plant

Hokkaido

0.8840

Oct-14

JPY 29M

JPY 14M

JPY 42M

6.31 x23.0%

11

Ichigo Toyokoro Sasadamachi ECO Power Plant

Hokkaido

0.61

40

Oct-14

JPY 23M

JPY 10M

JPY 31M

7.27 x27.4%

12

Ichigo Nakashibetsu Midorigaoka ECO Power Plant

Hokkaido

1.93

40

Nov-14

JPY 64M

JPY 29M

JPY 175M

4.09 x15.3%

13

Ichigo Abira Toasa ECO Power Plant

Hokkaido

1.1740

Dec-14

JPY 39M

JPY 19M

JPY 36M

10.12 x35.2%

14Ichigo Toyokoro ECO Power Plant

Hokkaido

1.03

40

Dec-14

JPY 41M

JPY 16M

JPY 65M

7.59 x33.0%

15

Ichigo Higashi Hiroshima Saijocho Taguchi ECO Power Plant

Chugoku

2.73

40

Jan-15

JPY 97M

JPY 41M

JPY 241M

5.15 x20.3%

16

Ichigo Nago Futami ECO Power Plant

Okinawa

8.44

40

Feb-15

JPY 308M

JPY 132M

JPY 1,189M

3.48 x12.0%

17

Ichigo Engaru Higashimachi ECO Power Plant

Hokkaido

1.24

40

Feb-15

JPY 40M

JPY 19M

JPY 32M

10.90 x37.5%

18

Ichigo Akkeshi Shirahama ECO Power Plant

Hokkaido

0.81

40Mar-15

JPY 23M

JPY 13M

JPY 43M

4.21 x14.6%

19

Ichigo Takamatsu Kokubunjicho Nii ECO Power Plant

Shikoku

2.43

36

Jun-15

JPY 85M

JPY 32M

JPY 59M

16.72 x37.9%

20

Ichigo Miyakonojo Yasuhisacho ECO Power Plant

Kyushu1.44

36

Jul-15

JPY 46M

JPY 20M

3

3

N/A3

N/A

N/A

1 Forecast Equity Multiple is based on the P50* business plan of each plant and is the forecast 20-year NOI divided by Ichigo Investment.
2 Forecast IRR is the internal rate of return based on each plant’s P50 forecast cash flow.
3 The consumption tax rebate that Ichigo receives as the operator of these renewable power plants is greater than Ichigo’s equity investment.

Therefore, Ichigo Investment is negative and Forecast Equity Multiple and Forecast IRR are not meaningful.
* P50 is a third-party, 50% probability mean annual production forecast that serves as the base forecast for each solar power plant’s operating plan.
© 2016 Ichigo Inc. All rights reserved.

44

Individual Solar Power Plant P&L Breakdown (2)No.

Solar Power Plant

Area

Panel
Output(MW)

Fixed
Tariff(Pre-tax,
yen)

Operation
Start Date

Expected
NOI/Year

Depreciation

Forecast Equity
Multiple (If heldfor 20 years) 1

IchigoInvestment

Forecast
IRR2

21

Ichigo Toyokawa Mitocho Sawakihama ECO Power Plant

Chubu

1.80

32

Sep-15

JPY 41M

JPY 22M

JPY 10M

32.63 x97.1%

22

Ichigo Yamaguchi Aionishi ECO Power Plant

Chugoku

1.24

40

Dec-15

JPY 42M

JPY 19M

JPY 13M

29.44 x87.0%

23

Ichigo Hamanaka Bokujo Tsurunokotai ECO Power Plant

Tohoku2.31

36

Dec-15

JPY 74M

JPY 31M

JPY 22M

30.84 x

92.6%

3

N/A

3

N/A3

24

Ichigo Yonago Izumi ECO Power Plant

Chugoku

2.61

40

Jan-16

JPY 89M

JPY 34M

N/A

25

Ichigo Kasaoka Takumicho ECO Power Plant

Chugoku

1.12

32

Mar-16

JPY 26M

JPY 14M

JPY 10M

20.48 x59.6%

26

Ichigo Yamaguchi Sayama ECO Power Plant

Chugoku

2.36

36

Apr-16

JPY 74M

JPY 33M

JPY 19M

36.82 x127.7%

27

Ichigo Kijo Takajo ECO Power Plant

Kyushu0.90

40

May-16 4

JPY 35M

JPY 18M

JPY 141M

3.01 x18.2%

28

Ichigo Toki Oroshicho ECO Power Plant

Chubu

1.40

36

Jun-16

JPY 41M

JPY 20M

JPY 9M

38.04 x96.1%

29

Ichigo Toride Shimotakai Kita ECO Power Plant

Kanto

1.03

32

Jul-16

JPY 25M

JPY 13M

JPY 8M

26.18 x67.7%

30

Ichigo Toride Shimotakai Minami ECO Power Plant

Kanto

0.54

32

Jul-16

JPY 12M

JPY 6MJPY 3M

32.29 x75.3%

31

Ichigo Hamanaka Bokujo Kajibayashi ECO Power Plant

Tohoku2.31

36

Oct-16

JPY 74M

JPY 33M

JPY 45M

15.13 x35.3%

32

Ichigo Sera Tsukuchi ECO Power Plant

Chugoku

2.54

32

Jan-17

JPY 68M

JPY 30M

JPY 50M

6.93 x22.2%

33

Ichigo Sera Aomizu ECO Power Plant

Chugoku

2.75

32

Feb-17

JPY 74M

JPY 33M

JPY 54M

6.92 x21.7%

34

Ichigo Kure Yasuuracho Nakahata ECO Power Plant

Chugoku

2.65

36

Aug-17

JPY 70M

JPY 35M

JPY 88M

7.43 x19.8%

35

Ichigo Showamura Ogose ECO Power Plant

Kanto

43.01

36

Jan-18JPY 1,359M

JPY 606M

JPY 482M

29.07 x43.1%

36

Ichigo Minakami Aramaki ECO Power Plant

Kanto

10.26

36

Jul-18

Total 112.84MW

JPY 347M

JPY 176M

JPY 329M

9.40 x14.9%

JPY 3,611M

JPY 1,637M

JPY 4,030M

13.16 x

38.5%

1 Forecast Equity Multiple is based on the P50* business plan of each plant and is the forecast 20-year NOI divided by Ichigo Investment.
2 Forecast IRR is the internal rate of return based on each plant’s P50 forecast cash flow.
3 The consumption tax rebate that Ichigo receives as the operator of these renewable power plants is greater than Ichigo’s equity investment.

Therefore, Ichigo Investment is negative and Forecast Equity Multiple and Forecast IRR are not meaningful.
4 Ichigo’s acquisition date. The plant began operation in April 2014.

* P50 is a third-party, 50% probability mean annual production forecast that serves as the base forecast for each solar power plant’s operating plan.
© 2016 Ichigo Inc. All rights reserved.

45

Consolidated Balance Sheet: Assets(Million Yen)
FY13/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational investments in loans
Operational investments in securities
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful
accounts
Total
Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Equipment (net)Land
Buildings under construction
Other (net)
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Investments in securities
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful
accounts
Total
Investments and Other
Assets
Total
Fixed Assets
Total Assets© 2016 Ichigo Inc. All rights reserved.

FY14/2

FY15/2

FY16/2

FY17/2 Q1(This quarter)vs FY16/2(Increase/Decrease)

9,713
548
3,636
4,271
46,176369
2,042-3,177
63,581

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

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

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

35,183
1,494
1,324
2,617
159,384
1,173
4,669
-447
205,401+6,404
+803
— －
+833
-13,449
-593
+703
+11
-5,286

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

3,830
12,267
12,192
3,255
31,546

3,773
13,09912,192
3,953
33,020

-57
+832
— －
+698
+1,474

2,203
—
20
2,223

2,221
392
71
2,686

2,082
392
27
2,502

1,942
392
38
2,373

1,969
392
35
2,398

+27
— －
-3
+25

4,117
13
0
545
-101
4,575
16,84680,428

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

1,734
10
33
1,532
-93
3,217
38,635244,037-3,752
-2
-6
-204
+31
-3,932-2,434-7,72046

Consolidated Balance Sheet: Liabilities & Net Assets(Million Yen)
FY13/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term borrowings
Short-term non-recourse loans
Long-term borrowings (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
Non-recourse bonds
Long-term borrowings
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 hedges
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Non-controlling Interests
Total Net Assets
Total Liabilities and Net Assets© 2016 Ichigo Inc. All rights reserved.

FY14/2

FY15/2

FY16/2

FY17/2 Q1(This quarter)vs FY16/2(Increase/Decrease)

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

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

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

80
2,188
79
8,161
2,975
631
53
13
3,979
18,16181
1,425
79
10,171
931
250
75
155
3,906
17,077+1-763－ －+2,010-2,044
-381
+22
+142
-73
-1,084－－
5,456
32,776
277
3,230
270
46
42,05649,361－
26,12624,178
1,213
4,770
180
44
56,51364,102100
53,40943,004
1,402
6,391
90
96
104,494
114,367100
94,40956,193
1,543
8,707
－
475
161,430
179,591100
91,011
52,447
1,590
6,965
－
742
152,857
169,934－ －-3,398-3,746+47-1,742－ －+267-8,573-9,657

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

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

26,58910,98333,534-39
71,068+14+15+4,080+2+4,112

160
－
－
16
177
143
2,466
31,06680,428

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

503
-440
20
83
365
2,586
74,103244,037

-258
-189
-3
-450
+46
-1,771+1,937-7,72047

Consolidated P&L(Million Yen)
FY13/2(12M)
Revenues
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Profit
Interest income
Dividend income
Amortization of negative goodwill
Other
Total Non-Operating Profit
Non-Operating Expenses
Interest expense
Debt financing-related fees, etc.
Stock Issuance Cost
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gain
Gain on sales of investment securities
Total Extraordinary Gain
Receipt of share trading proceeds
Other
Total Extraordinary Gain
Extraordinary Loss
Loss on sales and retirement of fixed assets
Valuation loss on investments in securities
Office move expenses
Impairment Loss
Earthquake damages
Other
Total Extraordinary Loss
Pre-Tax Net Income
Income Taxes – Current
Income Taxes – Deferred
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© 2016 Ichigo Inc. All rights reserved.

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 Q1(3M)

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

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

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

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

46,41539,803
6,612
1,200
5,412

3
24
90
36
155

4
112
90
31
238

5
78
90
39
213

2
99
90
43
215

-13,449
-593
—
5
-57

238
—
0
26
265
1,734

370
—
89
93
553
3,597

943
—
—
202
1,146
7,255

1,277
—
—
465
1,743
13,889

381
202
—
30
614
-3

9
72
－
0
83

7
204
434
33
680

—
—
—
57
57

—
223
—
—
223

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

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

0
—
1
—
—
91
93
7,220
564
-220
343
6,876
115
6,761

—
49
9
－
－
31
89
14,022
1,330
-369
960
13,062
136
12,925—-3,752
-6
-204
2,427
-3,932-2,434
—
—
—
242
—
242
-7,720
548
555
1,103
5,886
301
5,585

FY16/2 Q1
(3M)
8,903
5,276
3,627

FY17/2Full-Year
Forecast

Change(YoY)

vsForecast+37,512+34,527+2,985+66+2,920125,600－
23,867－18,500

37.0%
－
27.7%
－
29.3%

22
13
41

—
-1
-22
-8
-33

—
—
—
—
—

—
—
—
—
—

+116
+195
—
+3
+314
+2,573

—

—

7
—
27
300
2,233

—
—
—
16,400

—
—
—
0.0%

—
223
—
—
223

—
+2,204——+2,204

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—
—
—
2,456
179
-124
55
2,401
25
2,375

—
—
—
—
+242
－
+242
+4,534+369+679+1,048+3,485+276+3,210

—
—
—
—
—
—
—
—
—
—
—
—
—
13,300

—
—
—
—
—
—
—
—
—
—
—
—
—
42.0%

48

Consolidated Cash Flows from Operating Activities(Million Yen)
FY13/2(12M)
Cash Flows From Operating Activities
Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in other allowancesInterest and dividend income
Interest expense
Loss (gain) on sales of investment securities
Loss (gain) on sales/retirement of fixed assets
Impairment Loss
Valuation loss on investment securities
Decrease (increase) in trading notes and receivables
Decrease (increase) in operating loans receivable
Decrease (increase) in operational investments
Decrease (increase) in operational investment
Decrease (increase) in real estate for sale
Valuation loss in real estate for sale
Valuation loss on investments in capital
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net Cash from (Used for) Operating Activities© 2016 Ichigo Inc. All rights reserved.

－

FY14/2
(12M)
1,693
230
49
114
-90
3
195
-11
-28
238
-72
-8
33
62
515
-1,100
723
63
2,556
119
1
— －
-380
-39
519
11
-253
-239
4,908
28
-220
-106
4,609

FY15/2
(12M)
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
1,254

FY16/2
(12M)
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
161-34,292

FY17/2 Q1(3M)
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
81-1,226-186-44,654

6,990
224
56
35
—
142
-6
—
-3
381
-2,427
—
—
—
-802
—
814
—
13,451
—
—
10
-393
-872
44
—
-1,740-40
15,8653-327-547
14,99449

Consolidated Cash Flows from Investing & Financing Activities(Million Yen)
FY13/2(12M)
Cash Flows from Investing Activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Acquisition of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Acquisition of property and equipment
Proceeds from sale of property and equipment
Acquisition of intangible assets
Payments for investments
Proceeds from redemption of investments
Proceeds from redemption of investments
Proceeds from acquisitions of subsidiaries resulting in the change of consolidation scope
Payments for acquisitions of newly consolidated subsidiaries Payments for acquisitions of
Other
Net Cash from (Used for) Investing Activities
Cash Flows from Financing Activities:
Increase (decrease) in short-term bank loans, net
Increase (decrease) in short-term non-recourse loans, net
Proceeds from long-term bank loans
Repayment of long-term bank loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from issuance of common shares
Proceeds from exercise of stock options
Cash dividends paid
Share issuance to non-controlling interests
Proceeds from minority interests
Cash dividends paid to minority interests
Net Cash from (Used for) Financing Activities© 2016 Ichigo Inc. All rights reserved.

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 Q1
(3M)

-0
151
-15
76
30
-124
17
-0
-4
0
—
-218
—
60
-27

-0
—
—
282
2
-7,150
72
-389
-5
7
-5
-1,389—-35-8,610

-325
325
-210
—
0
-10,769
－
-23
-10
0
-127
—
-1,3494-12,485

-0
—
-671
296
3
-6,628
—
-21
-9
6
-37
—
—
9
-7,052

-0
—
—
6,021
—
-1,045
—
—
-2
—
—
-89
—
-0
4,884

314
—
5,440
-8,19912,346-13,885
—
48
—
20
-19
-0
-3,935465—
26,777-5,388
5,675-19,030
16,387
242
-445
—
—
—
24,682466
48
47,203-19,557
19,900-5,958
—
99
-543
—
—
—
41,658771
3164,866-19,192
18,150-2,772
—
153
-646
2,000
—
-43
63,318-763—
25,870-27,504
4,350-10,140—
22-1,425—-2,000-39-11,63050

Appendix: Power Up 2019 Mid-Term Business Plan

© 2016 Ichigo Inc. All rights reserved.

51

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

Power Up 2019 KPIs (Key Performance Indicators)(Million Yen)

FY16/2 (Actual)

FY17/2 (Forecast)

Operating Profit

15,41718,50025,000+62.2%

Recurring Profit

13,88916,40021,400+54.1%

6.9%

27.8%

30.0%

－

12,925

13,30014,800+14.5%

EPS

25.86 yen

26.43 yen

29.00 yen

+12.1%

DPS

3.00 yen

5.00 yen

7.00 yen+133.0%

ROE

21.0%

18.1%

15.6%

Tax Rate
Net Income

CapitalEfficiency© 2016 Ichigo Inc. All rights reserved.

ROE>15%

Shareholder
ReturnFY19/2 (Plan)

vs FY16/2－

DOE>3%
52

Power Up 2019 JPX-Nikkei 400 Top 200 Ranking
Additional Target: JPX-Nikkei 400 Top 200 Ranking by August 2019
 Anticipate entering JPX-Nikkei 400 this August By August 2019, the final year of Power Up 2019, Ichigo will seek to rank
within the JPX-Nikkei 400’s top 200 companies

Note: While the JPX-Nikkei 400 does not provide an official ranking of its 400 constituents, the ranking
can be objectively calculated based upon the JPY-Nikkei 400’s publically-available quantitative
ranking formula, which rank orders the joint set of the 1,200 highest market capitalization and 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)© 2016 Ichigo Inc. All rights reserved.

53

Power Up 2019 Key Initiatives
Profitability• List Ichigo’s solar assets on the TSE’s new
Infrastructure Fund Market• Support the on-going 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 Weapon(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© 2016 Ichigo Inc. All rights reserved.

(6) Global Best Practice Governance and Compliance54Adoption of Progressive Dividend Policy
 Progressive Dividend: 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 setting 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 Combination of progressive dividend and DOE-based payout policy will
significantly increase the security, certainty, and visibility of the dividend to thebenefit of Ichigo’s shareholders
 Also underscores Ichigo’s commitment to driving continued organic earningsand dividend growth for its shareholders© 2016 Ichigo Inc. All rights reserved.

55

Notice: Corporate Name Change on September 1, 2016
To further focus on its core identity and unify its Japanese and English
corporate names, Ichigo is simplifying its Japanese corporate name to
Ichigo Inc. as of September 1, 2016.
The change in the asset management subsidiary name is to reflect thelisting of the Green Infrastructure Fund.
 New Japanese Company Name
- Ichigo Inc. from Ichigo Group Holdings(No change to the English corporate name, which is already Ichigo Inc.)
 New Asset Management Subsidiary Name
- Ichigo Investment Advisors Co., Ltd from Ichigo Real Estate
Investment Advisors Co., Ltd.

© 2016 Ichigo Inc. All rights reserved.

56

MEMO

© 2016 Ichigo Inc. All rights reserved.

57

MEMO

© 2016 Ichigo Inc. All rights reserved.

58

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

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

© 2016 Ichigo Inc. All rights reserved.

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

59