FY20/2 Full-Year Corporate Presentation
January11,
2019
April 16,
2020

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

www.ichigo.gr.jp/en

We would like to express our deepest condolences
to all those across the world affected by the Covid-19
coronavirus pandemic and our wishes for the earliest
possible recovery.

© Ichigo Inc. All rights reserved.

2

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

© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

Contents
FY20/2 Earnings‒ FY20/2 Summary‒ Operating Profit +6%, Recurring Profit +6%, EPS -46% (YOY)‒ Segment Earnings Details

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

Sustainable Growth as a Sustainable Infrastructure
Company‒ SRE: Selective on Acquisitions & Sales‒ AM: Growth Support for TSE REITs & YieldCo‒ CE: Scaling Rapidly (In-Development Plants +66%)‒ CE: New Plants Driving Growth‒ Launch of Ichigo J.League Shareholder Program‒ Share Buybacks‒ Progressive Dividend

Durable & Adaptive Growth Strategy‒ High-Integrity Balance Sheet‒ Cash Flow Maximization‒ Conservative Financing‒ Post-GFC Shift in Earnings Base & Financial Position© Ichigo Inc. All rights reserved.

FY21/2 Full-Year Forecast‒ FY21/2 Forecast‒ FY21/2 Forecast Stock & Flow Earnings‒ FY21/2 Forecast Segment Details

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

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

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

6

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

7

FY20/2 Summary
Durable Earnings Model
Robust Stock Earnings
Stock Earnings/Fixed Expenses
Depreciation

234%

1,632

2,507

SRE
583

Gross Profit
JPY 37.02B

18,485

Asset Management

Clean Energy

1,391

18,45013,451

FY19/2(Gross Profit: JPY M)

FY20/2

FY19/2

13,331

FY20/2

2,057

2,062

FY19/2

FY20/2

1,049

1,116

2,978

3,057

FY19/2

FY20/2

SRE: Strong Flow Earnings

FY20/2 Buyback & Dividend

Covid-19 Writedown– FY20/2 Asset Sales: JPY 60.6B

Share Buyback– Amount: JPY 3B– Shares purchased: 7,081,200(1.4% of shares outstanding)– Average share price: JPY 424

Systematic review of all assets’ current
market values– Wrote down assets impacted by current
business conditions, particularly hotels
and retail− Extraordinary Loss: JPY 8.1B
(Writedown of Real Estate for Sale:
7.5B)– Maintain balance sheet integrity &lower future balance sheet risk

– Gross Profit: JPY 17.16B (+14% YOY)
Gains on Sales: 2.8X Unrealized Gains– GPM: 28%

Progressive Dividend Policy− Maintain FY20/2 JPY 7 dividend
despite Covid-19 impact© Ichigo Inc. All rights reserved.

8

Operating Profit +6%, Recurring Profit +6%, EPS -46% (YOY)
Record-High Operating Profit and Recurring Profit
Extraordinary Loss on Covid-19 Writedown(JPY million)

FY19/2

FY20/2Full-Year
Forecast

YOY

Operating Profit

26,27927,721+5.5%

26,500Recurring Profit

23,076

24,395+5.7%

22,800Net Income

15,3738,201-46.7%

15,000

JPY 31.14

JPY 16.89-45.8%

JPY 30.39

Dividend

JPY 7

JPY 7

－

JPY 7

ROE

16.3%

8.2%

－

14.4%

DOE

3.7%

3.4%

－

－

EPS

© Ichigo Inc. All rights reserved.

9

Segment Earnings Details− Asset Management: Base AM Fees +0.2% YOY− Sustainable Real Estate: Rental Income -1% YOY
Gains on Sales +14% YOY− Clean Energy: Power Generation Revenue +3% YOY(JPY million)

Operating Profit
Segment

FY19/2

Asset Management (AM)2,195

FY20/2

2,526

Gross Profit
Full-Year
Forecast

YOY+15.1%

vs. Full-Year
Forecast

1,821

138.7%

Earnings Drivers(Parentheses show YOY change in
Gross Profit)

FY20/2

FY19/2

2,437

3,046

Sustainable Real Estate (SRE)

22,66923,971+5.7%

23,312102.8%

27,761

29,521

Clean Energy (CE)

1,364

1,272

-6.7%

1,367

93.1%

1,928

1,940

50

-49

–

–

–

–

–

26,27927,721+5.5%

26,500104.6%

32,12634,509Adjustment (including offsets ofcross-segment transactions)

Total© Ichigo Inc. All rights reserved.

Base AM Fees 2,018 (+6)
Acquisition/Disposition Fees 878 (+642)
Ichigo Office Cash Flow Performance Fees 106 (+48)
Ichigo Green Operator Fees 43 (-1)
Rental Income 11,940* (-927)* Depreciation 1,391 (+807)
Gains on Sales 17,158 (+2,153)
Gains on Overseas Sales 373 (+373)

Power Generation Revenue 1,940* (+11)* Depreciation 1,116 (+67)

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

11

Business Model (1) Stock + Flow Earnings
Robust Stock & Flow Earnings Growth

Gross Profit + Depreciation

37,016
Stock Earnings (Primarily Rental Income, Base AM Fees, and Power Generation Revenues)
33,759Stock Earnings (Depreciation)
Flow Earnings (Primarily Gains on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expenses)

28,641

27,953(JPY million)

18,567
15,273

21,563

14,13913,015

8,986

1,632

13,396
967

716

4,591

731

8,423

18,45014,93914,502

12,578248

5,847

18,485

503

2,576

2,507

8,805
4,239

5,069

5,846

FY14/2

FY15/2

FY16/2© Ichigo Inc. All rights reserved.

6,502

FY17/2

6,371

FY18/27,071

FY19/2

7,877

FY20/2
12

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

50.9
36.8

56.2

45.4

28.1

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2*

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

13

Business Model (3) Value-Add Drives Durable Value Growth
2.8X

Gains on Sales Consistently Exceed
Appraisal Value-Based Unrealized Gains

2.5X

Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

4.4X
1.6X

JPY 17.1B

2.2X

JPY 15.0B
JPY 12.0B
JPY 10.5B

JPY 7.2B

JPY 6.4B

JPY 3.3B

FY16/2© Ichigo Inc. All rights reserved.

JPY 5.9B

JPY 6.1B

JPY 2.7B

FY17/2

FY18/2

FY19/2

FY20/2
14

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

3.6X

Net Income
Economic Operating Cash Flow

1.7X
1.4X

1.3X

1.2X
29.5

25.5
21.5
17.1
12.9

14.9

14.0

16.7

15.4
8.2

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

FY20/215

Strong Financial Base
Average Interest Rate & Loan Term

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

(Interest Rate)(Loan Term, Years)12

2.5%
10.8 years

2.0%

1.96%

9.0 years

10.2 years

10.3 years

10.0 years

8.7 years

99.6 years
8.3 years
5.9 years

8.3 years

7.8 years

7.6 years

1.71%

7.6 years6

1.5%
5.5 years

1.41%
1.24%

1.04%

1.0%

0.97%

3
0.91%

0

0.5%
FY14/2

FY15/2

FY16/2

8% (JPY 4.9B)

10% (JPY 10.3B)

86%(JPY 26.1B)

92%(JPY 53.4B)

FY14/2

FY15/2

FY17/2

FY18/2

FY19/2

FY20/2

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

9% (JPY 15.6B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

91%(JPY 157.5B)

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

Term Structure of Loans
Short-Term

14% (JPY 4.1B)

Long-Term© Ichigo Inc. All rights reserved.

16

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

17

Sustainable Real Estate

Selective on Acquisitions and Sales− FY20/2 Continuing Sellers’ Market – FY20/2 GPM: 28%(FY19/2 GPM 26%)
− Ichigo Owners Continues High Level of Activity
Acquisitions: JPY 28.52B (45% of total); Sales: JPY 9.31B (15% of total)
FY20/2 Cumulative Net Acquisitions: JPY 2.4B

(JPY million)

Acquisitions
No. of Assets

Sales

Book Value (A)No. of Assets

Sale Price (B)Difference(A) - (B)

Office

3

6,134

5

7,211

-1,077Hotel

2

12,4468

18,010-5,564Retail

2

8,550

3

8,432

+118

Residential

37

31,33040

26,477+4,853

Logistics

1

2,374

－

－

+2,374Ground Lease

2

255

2

241

+14

Other

11

1,957

1

231

+1,726

Total

58

63,04859

60,601+2,447

Note: Book value of asset sales is JPY 42,771 million© Ichigo Inc. All rights reserved.

18

Asset Management

Growth Support for TSE REITs & YieldCo
OfficeHotel

Ichigo Office(8975)

Green Infrastructure

Ichigo Hotel(3463)

Ichigo Green(9282)

IPO

IPO

IPO

October 12, 2005

November 30, 2015

December 1, 2016

Portfolio

Portfolio

Portfolio

86 Assets JPY 204.7B

23 Hotels JPY 51.9B

15 Plants JPY 11.4B

Dividend Yield (as of 2020/4/14)

Dividend Yield (as of 2020/4/14)

Dividend Yield (as of 2020/4/14)

6.3%

7.8%

5.9%

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

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

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

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

Ichigo Growth Support

Ichigo Growth Support

Ichigo Growth Support

Provided a high-quality Hakata office asset

Provided a hotel in prime location to drive
NOI growth and diversify portfolio

Operating all plants and providing ongoing
performance guarantee

・Driving organic NOI growth via offering of
tailored services and office spaces,
drawing upon Ichigo’s value-add
capabilities
e.g., Ichigo Nogizaka Building: Forecast
ROI 26.5%© Ichigo Inc. All rights reserved.

19

Clean Energy

Scaling Rapidly (In-Development Plants +66%)
5 New Plants (Total 23.21MW) Began Operation in FY20/2– Kanto area (12.02 MW), Chubu area (4.57MW)– Kansai area (6.61MW)Power Generation Growth125.1MW(+17%)

Operating
In-Development
IchigoOperating Plants: 106.84MW
In-Development Plants: 70.05MW (+66%)
Total: 176.90MW
Ichigo Green (9282): 29.4MW

72.3MW(+155%)

83.6MW(+16%)

106.8 MW(+28%)

18.3

145.3MW(+16%)

38.5(Wind 14.4)

176.9MW(+22%)

70.1(Wind 25.9)(Wind 7.4)

106.8
28.4MW

Avg FIT
Ichigo Investment

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

FY18/2
JPY 36.4
JPY 21.1B

FY19/2
JPY 35.3
JPY 23.6B

FY20/2
JPY 34.3
JPY 30.0B

FY21/2
JPY 32.5
JPY 35.8B

FY22/2
JPY 30.9
JPY 41.5B

FY23/2 ~JPY 30.6
JPY 52.0B
20

Clean Energy

New Plants Driving Growth
Total 5 New Plants (23.21MW) Online in FY20/2 (1.3X MW Growth YOY,
83.6MW  106.8MW)
New FY20/2 Plants Will Drive FY21/2 Stock Earnings Growth
FIT
(JPY)

Panel
Output(MW)

Ichigo Sera Aomizu

32

2.87

Ichigo Showamura Ogose

36

43.34

Ichigo Memuro Nishi-Shikari

40

1.32

Feb 5, 2018

Ichigo Kure Yasuuracho Nakahata

36

2.90

Mar 2, 2018

Ichigo Tsu

24

2.94

Mar 6, 2018

Ichigo Kasaoka Iwanoike

24

2.64

Ichigo Toki Tsurusatocho Kakino

24

1.31

Apr 12, 2018

Ichigo Itoshima Iwara

36

1.48

Jan 7, 2019

Ichigo Sakahogi Fukagaya

21

2.89

May 17, 2019

Ichigo Sennan Kitsuneike

21

2.86

Jul 4, 2019

Ichigo Minakami Aramaki

36

12.02

Ichigo Takashima Kutsuki

32

3.74

Jan 2, 2020

Ichigo Toki Tsurusatocho Kakino Higashi

21

1.67

Feb 12, 2020

Solar Power Plant

FY18/2

FY19/2

FY20/2© Ichigo Inc. All rights reserved.

Total Panel
Output(MW)

Operation
Start Date

Aug 11, 2017
47.54

11.28

23.21

Sep 2, 2017

Mar 20, 2018

Jan 2, 202021

Launch of Ichigo J.League Shareholder Program
Represents Two Firsts for a Shareholder Program in Japan− Ichigo is the first Japanese company to include not just its own shareholders, butalso the shareholders of the REITs and YieldCo that it manages, in its
shareholder program− Ichigo is the first company to offer shareholders free tickets to every J.League
game at every J.League club (56 clubs in total)

Ichigo is deepening its partnership with the J.League and working tofurther Ichigo’s mission of promoting local community developments.

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

22

Share Buybacks
Purpose: Grow Value for Ichigo’s Shareholders
FY20/2
Number of Shares
Average Share Price
Amount7,081,200 (1.4% of shares outstanding)
JPY 424
JPY 3B

FY19/2
Number of Shares
Average Share Price
Amount

7,869,700 (1.6% of shares outstanding)
JPY 381
JPY 3B

FY18/2
Number of Shares
Average Share Price
Amount© Ichigo Inc. All rights reserved.

8,436,500 (1.7% of shares outstanding)
JPY 355
JPY 3B23

Progressive Dividend
Progressive Dividend Policy (Maintain or Raise)
FY20/2 Dividend Maintained Despite Covid-19

Seven Consecutive Years of
Dividend Growth to FY20/2

JPY 7

JPY 7

FY19/2

FY20/2

JPY 6
JPY 5
JPY 3
JPY 1*

JPY 1.1

JPY 1.3

FY13/2(InitiatedDividend)

FY14/2

FY15/2

FY16/2

FY17/2

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

24

Durable & Adaptive Growth Strategy© Ichigo Inc. All rights reserved.

25

High-Integrity Balance Sheet
Systematic review of all assets’ current market values and writedown ofassets impacted by current market conditions, particularly hotels & retail
FY20/2 reclassification of Real Estate for Sale assets to Fixed Assets toincrease tax efficiency & cash generation via taking depreciation allowance
Real Estate for Sale Reclassification & Writedown
Writedown

JPY -7.5B

Book Value

JPY 179.4B

JPY 171.9B(-4%)

Pre-Writedown

Post-Writedown© Ichigo Inc. All rights reserved.

Maintain Balance Sheet
Integrity & Lower Future
Balance Sheet Risk

26

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

Fixed Asset Ratio
84.4%
30.1%

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

15.2%
7.2%

30.9

12.8%

140.2

169.4

164.9

162.3
167.2

(JPY billion)

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

60.4
13.1
FY 16/2

24.3

29.1

FY 17/2

FY 18/2

FY 19/2

FY 20/2

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

27

Conservative Financing
Prudent management to minimize risks
Actions

Outcomes

Lower Borrowing Costs

0.91% (weighted avg. interest rate)

Lengthen Loan maturities

10.0 years (weighted avg. loan maturity)

Increase Uncollateralized
Loans

25.6% (% of total loans uncollateralized)
JPY 20B (current 10-year & 11-year
uncollateralized commitment lines)

Diversify Loan Maturities

Loan Maturities as % of Total Loan Value- <1 year
9.0%- 1-2 years 3.3%
- 2-3 years 3.5%
- >3 years 84.2%© Ichigo Inc. All rights reserved.

28

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

FY09/2GFC

FY14/2Start of Shift Up MTP

FY20/2

vs. GFC

75%

140%

234%

3.1X

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

3.7X

5.6 years
2.8 years

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

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

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

2.22%

1.96%

0.91%

-79%

-59%

29

FY21/2 Full-Year Forecast© Ichigo Inc. All rights reserved.

30

FY21/2 Forecast
Given Covid-19 uncertainty, forecasting with a range, taking a conservative
view on the bottom of the range(JPY)

FY21/2(Forecast)

FY20/2(Actual)Operating Profit

6.2B – 12.9B

27.7B

Recurring Profit

3.4B – 10.4B

24.4B

Net Income

2.0B – 8.0B

8.2B

EPS

4.15 – 16.60

16.89

TBD

7

2.0% – 7.7%

8.2%

Dividend
ROE© Ichigo Inc. All rights reserved.

31

FY21/2 Forecast Stock + Flow Earnings
Gross Profit+
Depreciation

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

37,016Net Income

JPY 8B(JPY million)

18,567Net Income

JPY 2B

24,0939,470

Forecast as a range, withconservative stock earnings andgreater variance in flow earnings

16,793
2,507

3,170
4,363

4,363

18,45014,623

13,6237,877

FY20/2© Ichigo Inc. All rights reserved.

7,355

FY21/2(Bottom of Range)

7,221

FY21/2(Top of Range)
32

FY21/2 Forecast Segment Details− AM: Conservatively Forecast Stock & Flow AM Fees
− SRE: Gains on Sales range biggest swing factor− CE: Growth on plan, unaffected by Covid-19(JPY)

Operating Profit
FY21/2(Forecast)

Asset Management (AM)
Sustainable Real Estate (SRE)
Clean Energy (CE)Sum
Adjustment (including offsets ofcross-segment transactions)
Total

FY20/2(Actual)c. 1.1B

2.5B

3.3B – 10.0B

24.0B

c. 1.8B

1.3B

6.2B – 12.9B

27.7B

–

-49M

6.2B – 12.9B

27.7B

Note: Forecast assumes no Ichigo Office (8975), Ichigo Hotel (3463), or Ichigo Green (9282) public offerings.
© Ichigo Inc. All rights reserved.

33

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

34

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

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

Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independently
established environmental rules. Ichigo also carefully monitors and complies with all applicablechanges in laws and regulations.

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

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

© Ichigo Inc. All rights reserved.

35

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

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

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

DemolishLowestImpactHighestEfficiency

Equivalent to annual
CO2 emission of
42,300 cars

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

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

Environmental Certifications

Environmental Certifications

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

Ichigo Office (8975)

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

Ichigo Kakyoin
Building

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

CASBEE
Rank

CASBEE
Rank

CASBEE
Rank

S

A

A

Other Certifications:
CASBEE, BELS, DBJ Green
Building Certification

36

Ichigo ESG – Social
Sports & Arts
Support Outstanding,World-Class Athletes

Support University of Miyazaki Facultyof Medicine’s Program for Children
with Cancer‒ Weightlifting‒ Riflery‒ Track & Field

Paralym Art Sponsor‒ Support artists withdisabilities

Children’s Cancer Treatment

Weightlifting Athlete
Hiromi Miyake‒ Issued CSR bond & donated a portion ofunderwriter commission to the Cancer
Program‒ Sponsor volunteer activities in support ofchildren with cancer

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

37

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

Adopted in 2006 to incorporate global best practice
Exceeded legal requirements by establishing Compliance Committee
in addition to Nominating, Audit, and Compensation Committees
Nominating Committee: 5 members (3 Independent Directors)
Audit Committee: 3 members (All Independent Directors)
Compensation Committee: 5 members (3 Independent Directors)
Compliance Committee: 4 members (2 Independent Directors)

Majority Independent Director Board Underpins Strong Governance– Of 9 members of Ichigo’s Board of Directors, 5 are Independent Directors– Includes former CEOs of TSE First Section companies
Since FY20/2 (current) Masatoshi Matsuzaki (former CEO of Konica Minolta)
 Nobuhide Nakaido (former CEO of SCSK)Stepped down after FY18/2
 Takashi Kawamura (former CEO of Hitachi; stepped down from Ichigo’s board in May 2017upon appointment as Chairman of TEPCO) Kosuke Nishimoto (former CEO of Meitec; stepped down from Ichigo’s board in May 2019
upon appointment as EVP of Misumi Group)© Ichigo Inc. All rights reserved.

38

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

39

Significant Unrealized Gains on Balance Sheet
JPY 53B (Appraisal Value Basis), +6.8% vs. FY19/2-end
Real Estate Directly Held by Ichigo(JPY million)

LocationBook Value as ofAppraisal NOI
February 29, 2020 (A)(B)

Cap Rate(A)/(B)

Appraisal Value(C)

UnrealizedGains(C) - (A)Tokyo

94,372

5,374

5.7%

126,607+32,235

Outside Tokyo

100,758

6,723

6.7%

121,593+20,835

Total

195,130

12,0976.2%

248,200+53,070

Notes: Excludes Ichigo Owners, Centro, and self-storage assets (book value JPY 46.4B)
FY20/2 Unrealized Gains recorded as zero

© Ichigo Inc. All rights reserved.

40

Net Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 389.9B(Book Value JPY 333.7B + Unrealized Gains JPY 56.2B)
Cash & Cash Equivalents

JPY 34.8B

Non-Recourse Loans &Related Liabilities

JPY 44.2B
Non-Recourse Loans &Related Assets

Net Consolidated Risk-Based Balance Sheet:
JPY 310.9B(Book Value JPY 254.6B + Unrealized Gains JPY 56.2B)

JPY 57.3B

Non-Recourse Loan-Related ICH Equity

Operational Loan Investments
JPY 1.3B

Operational Loan Investments
JPY 1.3B

JPY 13.0B

Operational Securities Investments
JPY 0.9B

Corporate Loans & Bonds

JPY 173.2B
Real Estate for Sale

JPY 68.2B

Debt
JPY
233.2B

Operational Securities Investments
JPY 0.9B

Corporate Loans & Bonds
Real Estate for Sale

JPY 68.2B

Security Deposits Received
JPY 5.3B

Other JPY 10.4B

Other JPY 10.4B
Fixed Assets

JPY 156.1B

JPY 156.1B

Securities Investments
JPY 4.3B

Unrealized Gains
JPY 56.2B

Mark-toMarket
Shareholder
Equity Ratio

35.8%

Other JPY 10.6B

Post-Tax Unrealized
Gains JPY 39.0B
Tax JPY 17.2B*

Debt
JPY
154.2B
Security Deposits Received
JPY 5.3B

Fixed Assets

Shareholder
EquityJPY 100.4B

JPY 138.4B*30.62% effective tax rate

Securities Investments
JPY 4.3B

Shareholder
EquityJPY 100.4B

Other JPY 10.6B

Unrealized Gains
JPY 56.2B

Net Risk-Based
Shareholder
Equity Ratio

44.9%

Post-Tax Unrealized
Gains JPY 39.0B
Tax JPY 17.2B*

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

41

Business Segments

Asset Management

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

Sustainable
Real Estate

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

Clean Energy

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

Note: The Sustainable Real Estate segment was formerly called Value-Add. In keeping with its recently announced Ichigo 2030 vision,
Ichigo is changing the segment name to Sustainable Real Estate from FY20/2 in order to put full focus on Ichigo’s commitment topreserving and improving real estate as a sustainable infrastructure company.
© Ichigo Inc. All rights reserved.

42

Consolidated Balance Sheet: Segment Breakdown(JPY million)
Segment

Cash andCash
Equivalents

Operational Operational
Loan
Securities
Investments Investments

Real Estatefor SalePower
Plants for
Sale

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
AssetsTotal Assets

–

–

–

–

–

–

771

147

1,600

2,519

Sustainable Real Estate (SRE)

15,404

1,324

902

68,290–178,672

1,397

2,652

4,810

273,455

Clean Energy (CE)

2,633

–

–

–

–

27,462

203

–

1,327

31,627Company-Wide Assets

23,029

–

–

–

–

63

110

1,521

1,398

26,124

Total

41,067

1,324

902

68,290–206,198

2,482

4,321

9,137

333,726

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

43

Consolidated P&L: Segment Breakdown(JPY million)

Gross Profit
Segment

YOY
ChangeFY20/2

FY19/2

Operating Profit
YOY
ChangeFY20/2

FY19/2

FY20/2
Forecast

2,437

3,046

+25.0%

2,195

2,526

+15.1%

1,821

2,057

2,062

+0.2%

–

–

–

–

379

984

+159.6%

–

–

–

–

27,761

29,521+6.3%

22,66923,971+5.7%

23,312

Rental Income

12,867

11,940

-7.2%

–

–

–

–

Asset Sales

15,005

17,158+14.3%

–

–

–

–

- 112

423

–

–

–

–

–

1,928

1,940

+0.6%

1,364

1,272

-6.7%

1,367

–

–

–

50

-49

–

–

32,12634,509+7.4%

26,27927,721+5.5%

26,500Asset Management (AM)Base AM Fees
Acquisition/Disposition Fees
Sustainable Real Estate (SRE)

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

44

Asset Management AUM Detail

Ichigo Office(8975)

Ichigo Hotel(3463)

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

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2(12M)

FY19/2(12M)

FY20/2(12M)

JPY 123.8B

JPY 165.1B

JPY 194.5B

JPY 196.9B

JPY 203.0B

JPY 203.2B

JPY 759M

JPY 1,016M

JPY 1,291M

JPY 1,373M

JPY 1,426M

JPY 1,436M

AUM (Fiscal Year End)–JPY 20.4B

JPY 47.6B

JPY 50.9B

JPY 50.7B

JPY 50.8B

Base AM Fee Gross Profit (Actual)–

JPY 30M

JPY 287M

JPY 450M

JPY461M

JPY 381M

AUM (Fiscal Year End)––JPY 10.0B

JPY 11.4B

JPY 11.4B

JPY 11.4B

Base AM Fee Gross Profit (Actual)––

JPY 11M

JPY 77M

JPY 85M

JPY 82M

AUM (Fiscal Year End)JPY 21.5B

JPY 15.4B

JPY 6.4B

JPY 12.3B

JPY 20.6B

JPY 36.8B

Base AM Fee Gross Profit (Actual)

JPY 114M

JPY 60M

JPY 27M

JPY 12M

JPY 41M

JPY 116M

JPY 145.3B

JPY 200.9B

JPY 258.6B

JPY 271.7B

JPY 285.8B

JPY 302.4B

JPY 872M

JPY 1,106M

JPY 1,617M

JPY 1,914M

JPY 2,014M

JPY 2,016M

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

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

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

© Ichigo Inc. All rights reserved.

45

Powerful Sustainable Real Estate Business Model
Significant Synergies Between Ichigo’s Sustainable Real Estate and AssetManagement Businesses
Sustainable Real Estate Business Model
Green
Infrastructure

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office(8975)
Hotel

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

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
46

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

Sustainable
Value-Add

DemolishandRebuild© Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

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

HighestEfficiency
LowestImpact47

Ichigo Sustainable Real Estate Earnings Model Example
5.5% NOI Yield, JPY 2B Purchase, LTV 75%, 1.5% Interest Rate, JPY 50M
Capex, 15% Increase in NOI, 3-Year Value-Add Period
Value-Add Steps: Improved exterior, interior, & tenant services; seismic
strengthening; increased energy efficiency; new tenant leasing; etc.
NOI at Acquisition(JPY 110M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 87.5M NOI/yearNOI÷ Initial Investment ＝17.5% NOI return during investment period
.

Debt
Asset

JPY1.5B

JPY
2.0B

NOI after Value-Add(JPY 126.5M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 104M NOI/year
NOI ÷ Total Investment (JPY 500M + JPY 50M) ＝18.9% NOI return during
investment period.

EquityJPY 0.5B

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

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

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

48

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

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

GPM(vs. Revenue)

23.0%

13.6%

33.7%

25.5%

28.3%

GPM
(Vs. Book value)

29.9%

15.8%

50.9%

34.3%

39.5%

Revenue(JPY M)

31,67477,50235,73358,69360,601Gross Profit(JPY M)

7,283

10,562

12,05014,986

17,158© Ichigo Inc. All rights reserved.

49

Ichigo-Owned Real Estate Portfolio
By Location

By Asset TypeGround Lease
1%

Other 3%

Hokkaido 1%
Sendai 2%

Logistics
2%

Osaka 3%

Hotel
23%

Retail29%

Office26%

Hokkaido
3.4

Other
5%

Nagoya 3%

Residence
16%(JPY billion)

Tokyo
Metro*
11%

Tokyo
54%
Tokyo
129.7

Fukuoka
21%

Sendai
5.9*Ex-Tokyo

By Asset Size

Nagoya
7.3
Osaka
7.0

>JPY 10B
12%<JPY 1B
20%

Fukuoka
49.8

Tokyo
Metro
(exTokyo)
26.5

Other
12.8

JPY 5B-10B
22%
JPY 1B-5B
46%

Total Ichigo-Owned Assets: JPY 242.3B
Including Ichigo-Managed AUM: JPY 544.7B* Acquisition price basis
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 244.4B© Ichigo Inc. All rights reserved.

50

Sustainable Real Estate Asset Breakdown (1)177 Assets, JPY 242B, Forecast NOI JPY 12B (6.2% Yield)
No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected

Ichigo Equity
Investment

1

NOI/Year

Forecast
EquityMultiple2

Forecast
IRR

3

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/0647 years–

JPY 1,900M

–

–

2

RetailFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2005/1050 years

JPY 136M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo>JPY 3B

2006/0334 years

JPY 165M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/0915 years

JPY 60M

JPY 1,157M

–

–

5

OfficeFixed Asset

Sendai>JPY 3B

2006/10

11 years

JPY 240M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka>JPY 3B

2006/12

11 years

JPY 350M

JPY 1,339M

–

–

10

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/06

40 years

JPY 85M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/0638 years

JPY 125M

JPY 233M––

14

Ground Lease

Fixed Asset

Atsugi, Kanagawa

JPY 1B-2B

2011/06–

JPY 172M

JPY 147M––

15

RetailFixed Asset

Hiratsuka, Kanagawa<JPY 1B

2012/0224 years

JPY 77M

JPY 172M––

16

RetailFixed Asset

Yokohama<JPY 1B

2012/10

6 years

JPY 34M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo>JPY 3B

2013/03

9 years

JPY 244M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2013/05

33 years

JPY 57M

JPY 154M––

19

RetailFixed Asset

Chofu, Tokyo

JPY 1B-2B

2013/06

34 years

JPY 135M

JPY 310M––

21

Residential

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2013/06

4 years

JPY 47M

JPY 203M––

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

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

51

Sustainable Real Estate Asset Breakdown (2)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1

NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

27

RetailFixed Asset

Tokorozawa, Saitama

JPY 1B-2B

2013/11

12 years

JPY 76M

JPY 92M––

29

Ground Lease

Fixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2014/03–

JPY 114M

JPY 273M––

30

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2014/0336 years

JPY 51M

JPY 108M––

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

13 years

JPY 58M

JPY 279M––

35

RetailFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2014/05

11 years

JPY 144M

JPY 434M––

37

RetailFixed Asset

Minato-ku, Tokyo<JPY 1B

2014/0747 years

JPY 47M

JPY 77M––

39

RetailFixed Asset

Fukuoka<JPY 1B

2014/0715 years

JPY 52M

JPY 213M––

40

RetailFixed Asset

Fukuoka<JPY 1B

2014/09

34 years

JPY 49M

JPY 252M

–

–

41

Hotel

Fixed Asset

Utsunomiya, Tochigi

JPY 1B-2B

2014/0932 years

JPY 143M

JPY 400M––

42

RetailFixed Asset

Fukuoka<JPY 1B

2014/09

19 years

JPY 60M

JPY 177M––

43

RetailFixed AssetOsaka

JPY 1B-2B

2014/0917 years

JPY 117M

JPY 301M––

45

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/1117 years

JPY 92M

JPY 135M––

57

Residential

Fixed Asset

Minato-ku, Tokyo

JPY 1B-2B

2014/1216 years

JPY 56M

JPY 186M––

62

RetailFixed Asset

Fukuoka<JPY 1B

2014/1216 years

JPY 41M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/12

13 years

JPY 85M

JPY 129M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

52

Sustainable Real Estate Asset Breakdown (3)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1
NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

64

RetailFixed Asset

Shinagawa-ku, Tokyo<JPY 1B

2015/01–

JPY 26M

–

–

–

66

RetailFixed Asset

Sendai<JPY 1B

2015/0216 years

JPY 65M

JPY 8M––

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

18 years

JPY 46M

JPY 79M

–

–

69

Hotel

Fixed AssetOsaka

JPY 2B-3B

2015/05

17 years

JPY 170M

JPY 633M––

71

RetailFixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2015/07

4 years

JPY 99M

JPY 126M

–

–

110

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/0334 years

JPY 273M

JPY 905M

–

–

111

Hotel

Fixed Asset

Yokohama

JPY 2B-3B

2016/0336 years

JPY 207M

JPY 228M

–

–

112

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0332 years

JPY 239M

JPY 354M

–

–

113

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0332 years

JPY 288M

JPY 344M

–

–

114

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/04

30 years

JPY 183M

JPY 550M

–

–

115

Hotel

Fixed AssetOsaka

JPY 2B-3B

2016/04

12 years

JPY 130M

JPY 274M

–

–

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

31 years

JPY 63M

JPY 86M––

118

RetailFixed Asset

NagoyaJPY 1B-2B

2016/06

22 years

JPY 83M

JPY 102M

–

–

119

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2016/06

32 years

JPY 42M

JPY 136M

–

–

120

Hotel

Fixed Asset

Shinjuku-ku, Tokyo>JPY 3B

2016/0940 years

JPY 554M

JPY 349M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

53

Sustainable Real Estate Asset Breakdown (4)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1
NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

121

OfficeFixed Asset

Minato-ku, Tokyo>JPY 3B

2016/1019 years

JPY 1,540M

JPY 3,450M

–

–

122

Hotel

Fixed Asset

Shima, Mie<JPY 1B

2017/01

22 years

JPY 78M

JPY 73M––

132

Residential

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2017/04

16 years

JPY 51M

JPY 190M

–

–

133

Hotel

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2017/04

17 years

JPY 46M

JPY 152M

–

–

134

Residential

Fixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2017/04

17 years

JPY 58M

JPY 197M

–

–

138

Hotel

Fixed Asset

Ogaki, Gifu

JPY 1B-2B

2017/05

30 years

JPY 116M

–

–

–

144

OfficeFixed Asset

Chiyoda-ku, Tokyo

JPY 1B-2B

2018/0231 years

JPY 129M

JPY 268M

–

–

145

Hotel

Fixed Asset

Fukuoka

JPY 2B-3B

2018/032 years

JPY 194M

JPY 301M

–

–

146

RetailFixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2018/08

29 years

JPY 32M

–

–

–

147

Hotel

Fixed Asset

Kyoto>JPY 3B

2018/08

1 yearJPY 327M

JPY 1,666M

–

–

148

Office (Land)

Fixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2018/08–

JPY 54M

JPY 166M

–

–

149

RetailFixed Asset

Chiyoda-ku, Tokyo>JPY 3B

2018/0929 years

JPY 308M

JPY 2,269M

–

–

151

OfficeFixed Asset

Fukuoka<JPY 1B

2018/1021 years

JPY 33M

JPY 38M––

152

OfficeFixed Asset

Fukuoka

JPY 2B-3B

2019/0232 years

JPY 174M

JPY 382M

–

–

154

Residential

Fixed Asset

Kita Kyushu, Fukuoka

JPY 1B-2B

2019/03

6 years

JPY 83M

JPY 181M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

54

Sustainable Real Estate Asset Breakdown (5)No.

Asset TypeClassification

Location

Expected

AcquisitionPrice

Acquisition
Date

Building
Age

NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

155

OfficeFixed Asset

Shinagawa-ku, Tokyo

JPY 2B-3B

2019/0334 years

JPY 169M

JPY 616M

–

–

157

OfficeFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2019/04

36 years

JPY 52M

–

–

–

158

Other

Fixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2019/05–

JPY 12M

–

–

–

159

RetailFixed Asset

Shibuya-ku, Tokyo

JPY 2B-3B

2019/05

40 years

JPY 123M

JPY 210M

–

–

160

OfficeFixed Asset

Fukuoka

JPY 2B-3B

2019/06

22 years

JPY 129M

JPY 248M

–

–

161

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/07

25 years

JPY 368M

JPY 1,636M

–

–

162

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/07

21 years

JPY 353M

JPY 1,170M––

JPY 10,005M JPY 30,452M––

67 Fixed Assets

JPY 165,669M
JPY 167,186M (Book Value)

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

55

Sustainable Real Estate Asset Breakdown (6)No.

Asset TypeClassification

Location

Expected

AcquisitionPrice

Acquisition
Date

Building
Age

NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

61

RetailOperational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1256 years

JPY 120M

JPY 57M

15.26X

51.7%

89

OfficeReal Estate for Sale

Musashino, Tokyo>JPY 3B

2015/07

31 years

JPY 131M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2015/07

12 years

JPY 85M

JPY 353M

1.82X

17.7%

130

RetailReal Estate for Sale

Taito-ku, Tokyo

JPY 1B-2B

2017/04

26 years

JPY 100M

JPY 297M

4.42X

21.1%

135

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

28 years

JPY 114M

JPY 188M

6.18X

25.8%

136

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

28 years

JPY 152M

JPY 203M

8.75X

32.8%

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/0935 years

JPY 106M

JPY 223M

3.78X

19.9%

150

RetailReal Estate for Sale

Chuo-ku, Tokyo>JPY 3B

2018/1032 years

JPY 359M

JPY 1,161M

6.17X

24.7%

153

Hotel

Real Estate for Sale

Fukuoka<JPY 1B

2019/0226 years

JPY 110M

–

–

–

156

Logistics

Real Estate for Sale

Fukuoka

JPY 2B-3B

2019/0332 years

JPY 150M

JPY 651M

3.60X

30.0%

163

RetailReal Estate for Sale

Nagoya>JPY 3B

2019/08

22 years

JPY 479M

JPY 1,146M

3.47X

17.0%

JPY 1,905M

JPY 4,948M

4.29X

25.4%

JPY 11,911M JPY 35,401M––

11 Real Estate for Sale

Subtotal 78 Assets

JPY 30,832M
JPY 30,906M (Book Value)
JPY 196,502M
JPY 198,093M (Book Value)

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

56

Sustainable Real Estate Asset Breakdown (7)Acquisition
Price

Asset TypeNo.

vs. FY19/2 Q4

Ichigo Equity
Investment

Forecast
EquityMultiple

Forecast
IRR

JPY 1,722M JPY 13,386M––

Expected
NOI/Year

1

A

Ichigo Owners (Office & Residential)

49 Assets

JPY 36,634M+JPY 18,925M

B

Centro (Primarily Office & Residential)

21 Assets

JPY 6,828M-JPY 231M

JPY 467M

JPY 1,872M

–

–

C

Self-Storage

29 Assets

JPY 2,355M+JPY 360M

JPY 304M

JPY 710M––

JPY 14,405M

JPY 51,371M––

Total 177 Assets

JPY 242,321M
JPY 244,465M (Book Value)

Assets acquired in FY20/2 Q1 (3M)

Total 22 Assets

JPY 20,000M

JPY 964M

JPY 5,715M––

Assets acquired in FY20/2 Q2 (3M)

Total 14 Assets

JPY 24,670M

JPY 1,532M

JPY 5,896M––

Assets acquired in FY20/2 Q3 (3M)

Total 12 Assets

JPY 8,165M

JPY 357M

JPY 3,594M––*
Assets acquired in FY20/2 Q4 (3M)

Total 10 Assets

JPY 8,329M

JPY 370M

JPY 3,960M––

Assets acquired in FY20/2 (12M)

Total 58 Assets

JPY 61,164M

JPY 3,223M JPY 19,166M––

Assets acquired and sold in FY20/2 *Total 8 Assets

JPY 5,283M––

JPY 236M

JPY 2,314M* Sold 8 Ichigo Owners assets
1

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

© Ichigo Inc. All rights reserved.

57

Ichigo Solar Power Plant Portfolio
Ichigo (In-Development)

Ichigo (Operating)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

JPY 40Aug 2013

Ichigo Hokota Aoyagi

Kanto

Panel
Output(MW)
2.48

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

JPY 40Mar 2014

Ichigo Yubetsu Barou

Chugoku
Chubu

2.66
1.29

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 24

Apr 2020

JPY 21
JPY 18Apr 2020
Aug 2020

Hokkaido

0.80

JPY 40

Apr 2014

Ichigo Kasaoka Osakaike
Ichigo Minokamo Hachiyacho Kamihachiya

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Seto Jokojicho

Chubu

1.45

JPY 18Aug 2020

Ichigo Betsukai Kawakamicho
Ichigo Toyokoro Sasadamachi

Hokkaido
Hokkaido

0.88
0.60

JPY 40JPY 40

Oct 2014
Oct 2014(Wind) Ichigo Yonezawa Itaya

Tohoku7.39

JPY 22

Dec 2020

Ichigo Toride Shimotakai Nishi

Kanto

2.85

JPY 18Apr 2021

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Sera Shimotsuda

Chugoku

2.93

JPY 18Aug 2021

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015

Ichigo Ueda Yoshidaike

Chubu

1.01

JPY 18

Oct 2021

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Yonago Izumi
Ichigo Kasaoka Takumicho

Chugoku
Chugoku

2.61
1.11

JPY 40
JPY 32

Jan 2016
Mar 2016

Ichigo Obu Yoshidamachi
Ichigo Kobe Pompuike

Chubu
Kansai0.98
2.45

JPY 18JPY 18

Jan 2022
Jan 2022

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.96

JPY 32

Feb 2022

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Ichigo Kasaoka Idachiike

Chugoku

2.66

JPY 18Mar 2022

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Komagane Akaho Minami

Chubu

0.74

JPY 14

Jan 2023

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Komagane Akaho Kita

Chubu

0.39

JPY 14

Jan 2023

Ichigo Toride Shimotakai Minami
Ichigo Hamanaka Bokujo Kajibayashi

Kanto
Tohoku0.54
2.31

JPY 32
JPY 36

Jul 2016
Oct 2016

Ichigo Chiba Wakaba-ku Omiyacho Nishi

Kanto

0.74

JPY 14

Jan 2023

Ichigo Chiba Wakaba-ku Omiyacho Higashi

Kanto

0.74

JPY 14

Jan 2022

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Tatsunomachi Sawasoko
Ichigo Ebino Suenaga

Chubu
Kyushu0.74
14.00

JPY 14
JPY 40Jan 2023
Jun 2023

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Total (In-Development)

18 Plants 48.56MW

Ichigo Memuro Nishi-Shikari
Ichigo Kure Yasuuracho Nakahata

Hokkaido
Chugoku

1.32
2.90

JPY 40
JPY 36

Feb 2018
Mar 2018

Total (Operating & In-Development)

49 Plants 158.40MW

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Mar 2018

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

JPY 24

Apr 2018

Ichigo Itoshima Iwara
Ichigo Sakahogi Fukagaya

Kyushu
Chubu

1.48
2.89

JPY 36
JPY 21

Jan 2019
May 2019

Ichigo Sennan Kitsuneike

Kansai

2.86

JPY 21

Jul 2019

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Jan 2020

Ichigo Takashima Kutsuki
Ichigo Toki Tsurusatocho Kakino Higashi

Kansai
Chubu

3.74
1.67

JPY 32
JPY 21

Jan 2020
Feb 2020

Ichigo Hitachiomiya

Kanto

2.99

JPY 24

Mar 2020

Total (Operating)

31 Plants 109.84MW

Total 188MW© Ichigo Inc. All rights reserved.

* Excludes wind power plants under development (18.5MW)

Ichigo Green (9282)
Area(Number ofPower Plants)
Hokkaido (7)Kanto (1)Chubu (1)Panel
Output
(MW)
9.14
1.33
1.80

Chugoku (2)Shikoku (2)Kyushu (1)

3.60
3.67
1.44

Okinawa (1)
Total

FIT
(Pre-tax)
JPY 40JPY 40
JPY 32
JPY 36, JPY40
JPY 36, JPY40
JPY 36

8.44
JPY 4015 Plants 29.43MW

58

Ichigo Solar & Wind Power Plant Portfolio
Hokkaido

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

64 Plants (188MW*)
Currently Operating

46 Plants (139MW)
Okinawa
Ichigo Nago Futami

8.44MW

KyushuIchigo Kijo Takajo

0.89MW

Chugoku

Ichigo Yubetsu Barou

0.80MW

Ichigo Betsukai Kawakamicho

0.88MW

Ichigo Akkeshi Shirahama

0.80MW

Ichigo Yonago Izumi

2.61MW

Ichigo Toyokoro Sasadamachi

0.60MW

Ichigo Kasaoka Takumicho

1.11MW

Ichigo Memuro Nishi-Shikari

1.32MW

Ichigo Fuchu Jogecho Yano

0.99MW

Ichigo Motomombetsu

1.40MW

Ichigo Sera Tsukuchi

2.54MW

Ichigo Sera Aomizu

2.87MW

Ichigo Engaru Higashimachi

1.24MW

Ichigo Higashi-Hiroshima Saijocho
Taguchi

Ichigo Engaru Kiyokawa

1.12MW

2.72MW

Ichigo Kasaoka Iwanoike

2.64MW

Ichigo Kure Yasuuracho Nakahata

2.90MW

Ichigo Yamaguchi Aionishi

1.24MW

Ichigo Nakashibetsu Midorigaoka

1.93MW

Ichigo Yamaguchi Sayama

2.35MW

Total

13.57MW

Ichigo Kasaoka Osakaike

2.66MW

TohokuIchigo Abira Toasa

1.16MW

Ichigo Muroran Hatchodaira

1.24MW

Ichigo Toyokoro

1.02MW

Ichigo Itoshima Iwara

1.48MW

Ichigo Kasaoka Idachiike

2.66MW

Ichigo Hamanaka Bokujo Tsurunokotai 2.31MW

Ichigo Miyakonojo Yasuhisacho

1.44MW

Ichigo Sera Shimotsuda

2.93MW

Ichigo Miyakonojo
Takazakicho Tsumagirishima

2.96MW

Total

30.28MW

Ichigo Hamanaka Bokujo Kajibayashi 2.31MW(Wind) Ichigo Yonezawa Itaya
7.39MW
Total
12.01MW

Ichigo Ebino Suenaga

14.00MW

Chubu

Total

20.79MW

Ichigo Toki Oroshicho

1.39MW

Ichigo Tsu

2.94MW* Excludes wind power
plants underdevelopment (18.5MW)

Kansai

Ichigo Toki Tsurusatocho Kakino

1.31MW

Ichigo Sakahogi Fukagaya
Ichigo Toki Tsurusatocho
Kakino Higashi

2.89MW
1.67MW

Ichigo Toyokawa Mitocho Sawakihama 1.80MW
Ichigo Minokamo Hachiyacho
1.29MW
Kamihachiya
Ichigo Seto Jokojicho
1.50MW

IchigoIchigo Sennan Kitsuneike

2.86MW

Ichigo Green (9282)
In-Development

Ichigo Takashima Kutsuki

3.74MW

Ichigo Kobe Pompuike

2.45MW

Total

9.07MW

Ichigo Obu Yoshidamachi

0.98MW

Ichigo Ueda Yoshidaike

1.01MW

Ichigo Tokushima Higashi-Okinosu

2.52MW

Ichigo Komagane Akaho Minami

0.74MW

Ichigo Takamatsu Kokubunjicho Nii

2.43MW

Ichigo Komagane Akaho Kita

0.39MW

Ichigo Iyo Nakayamacho Izubuchi

1.23MW

Ichigo Tatsunomachi Sawasoko

0.74MW

Total

6.19MW

Total

18.68MW

Shikoku© Ichigo Inc. All rights reserved.

(Wind – Pipeline) Iwate(Wind – Pipeline) Fukushima

7.50MW
7.00MW

Kanto
Ichigo Maebashi Naegashima
Ichigo Showamura Ogose

0.67MW
43.34MW

Ichigo Toride Shimotakai Kita
Ichigo Toride Shimotakai Minami

1.03MW
0.54MW

Ichigo Minakami Aramaki

12.02MW

Ichigo Hitachiomiya
Ichigo Kiryu Okuzawa

2.99MW
1.33MW

Ichigo Hokota Aoyagi
Ichigo Toride Shimotakai Nishi
Ichigo Chiba Wakaba-ku
Omiyacho Nishi
Ichigo Chiba Wakaba-ku
Omiyacho Higashi
Total(Wind – Pipeline) Chiba

2.48MW
2.85MW
0.74MW
0.74MW
68.79MW
4.00MW

59

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 48 Plants (151.01MW)
By Feed-In Tariff

By Customer(Electric Power Utility Co)
Hokkaido
Tohoku 3%

Shikoku2%

JPY 142%

3%

JPY 18
10%

Kyushu13%

JPY 21
7%

TEPCO
44%

Kansai
6%
Chubu
11%

JPY 4019%

JPY 24
8%
JPY 32
10%

Chugoku18%

JPY 36
44%

By Solar Intensity

By Output

C (In-Development)
2%

>10MW
(In-Development)
9%<2MW(In-Development)
5%

By Operating Timeline

<2MW
10%

2-10MW(In-Development)
13%

>10MW
37%

© Ichigo Inc. All rights reserved.

2-10MW
26%

B(In-Development)
19%
A(In-Development)
6%
C
8%
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

60

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

Solar Power FIT
Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2017 (4/1~9/30)

JPY 2220 years

FY2013

JPY 3620 years

FY2017 (10/1~3/31)

JPY 2120 years

FY2014

JPY 3220 years

FY2018JPY 2020 years

FY2015 (4/1~6/30)

JPY 2920 years

FY2019JPY 1920 years

FY2015 (7/1~3/31)

JPY 2720 years

FY2020

JPY 1820 years

FY2016

JPY 2420 years

FY2017

JPY 21 1

20 years

FY2018JPY 18 1

20 years

FY2019JPY 14 2

20 years

FY2020

JPY 13 3
JPY 12 4

20 years

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

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

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

FIT for >0.5MW non-residential solar power production determined via auction process61

Consolidated Balance Sheet: Assets(JPY million)

FY16/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2

vs. FY19/2

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

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

41,067
2,308
1,324
902
68,290–3,721-6
117,608-9,158+964–-316-93,032–+1,565-4-99,982

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
58,55820,33819,05849,924
5,655
94,97655,05023,425
122,114
5,607
206,198+34,712+4,367+72,190-48+111,222

1,942
392
38
2,373

1,864
62
29
1,956

1,600
135
233
1,968

1,346
316
331
1,993

1,090
687
705
2,482

-256
+371
+374
+489

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

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

4,321
510
568
2,128
-91
7,436
216,118
333,726+1,866
+500
+391
-103
–
+2,654+114,366+14,38362

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

FY16/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders' Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders' Equity
Accumulated Other Comprehensive Income
Valuation gains (losses) on other securities
Deferred gains (losses) on long-term interest rate
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2

vs. FY19/2

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

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

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

–
-189
–
+162
+4,396-488-1,344–+2-165+2,375–100
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

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

6,082–
151,483
39,156
1,890
8,118
1,107
207,838
232,119+5,544–+19,914-11,912
-274
-174
+161
+13,259+15,635

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

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

26,723
11,11354,324-2,99589,16526,820
11,207
66,730-5,98898,76926,885
11,272
71,505-8,988100,674+65+65+4,775-3,000+1,905

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

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

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

-228
+11
–
-218
+161
-3,099-1,252+14,38363

Consolidated P&L(JPY million)
FY16/2
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Negative goodwill amortization
Mark-to-market gains on long-term interest
rate hedges
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expenses
Mark-to-market losses on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gains on sales of securities investments
Gains on sales of shares in affiliates
Gains on sales of subsidiary shares
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on disposal of fixed assets
Valuation losses on securities investments
Office move expenses
Impairment loss
Earthquake-related damages
Covid-19 writedown of real estate for sale
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2Full-Year
Forecast

Change(YOY)

FY20/2

vs.
Forecast

49,69928,865
20,833
4,446
16,387109,253
81,32727,925
5,025
22,90057,84630,86026,986
5,067
21,91983,54051,41332,126
5,847
26,27987,36052,851
34,5096,787
27,721+3,820+1,438+2,383+940+1,442––––
26,500––––104.6%

2
79
90

–
85
–

3
57
–

3
68
–

8
78
–

+5
+10
–

–
–
–

–
–
–

–

–

–

5

–

-5

–

–

-8
+3

–
–

–
–

43
215

32
118

100
161

70
147

62
150

2,234

2,278

2,249

2,328

2,293

-35

–

–

–

53

270

491

336

-155

–

–

98
380
2,713
13,889

714
217
3,263
19,755

207
168
2,895
19,185

327
203
3,350
23,076

538
307
3,476
24,395

+211
+104
+126
+1,319–––22,800–––107.0%

223
–
–
–
223

2,466
–
–
–
2,466

–
1,221
–
41
1,263

2
–
–
–
2

11
–
169
35
215

+9
–
+169
+35
+213

–
–
–
–
–

–
–
–
–
–

–
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

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

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

+27
+229
–
+319
–
+7,487–+8,065-6,534+73-6,607+565-7,172

–
–
–
–
–
–
–
–
–
–
–
–
15,000

–
–
–
–
–
–
–
–
–
–
–
–
54.7%

64

Consolidated Cash Flows from Operations(JPY million)
FY16/2
Cash Flows 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 expenses
Losses (gains) on sales of subsidiary shares
Losses (gains) on sales of shares in affiliates
Losses (gains) on sales of securities investments
Impairment loss
Valuation losses on securities investments
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational loans receivable
Decrease (increase) in operational securities investments
Valuation losses on operational securities investments
Decrease (increase) in real estate for sale
Covid-19 writedown of real estate for sale
Decrease (increase) in power plant for sale
Valuation losses on SPC capital contributions
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-TotalInterest and dividend income received
Interest expenses paid
Income taxes paid and refunded
Net Cash from (Used for) Operations© Ichigo Inc. All rights reserved.

FY17/2
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

FY18/2
20,630
778
223
141
–
23
-3
-85
1,303
–
–
-2,466
1,090
–
-367
–
2,727
–
-6,303
–
7,251
16
-190
-193
204
92
-49
-667
1,304
25,46085-1,146-2,852
21,547

FY19/2
20,109
1,015
215
111
–
32
-355
-61
2,249
–
-1,221
–
327
–
-468
–
1,663
–
-8,112
–
996
–
871
-10
573
-47
30
125
585
18,62861-2,231-5,854
10,603

FY20/2
23,079
1,696
213
254
–
-3
-26
-71
2,328
–
–
-2
–
–
-247
–
3,509
–
-3,163
–
–
–
-333
-399
-332
25
269
-264
1,887
28,42071-2,118-4,61021,762

16,545
2,630
194
174
–
2
4
-86
2,293
-169
–
-11
319
229
-903
–
11,682–-17,447
7,487
–
–
16
29
201
-36
-285
-169
600
23,30486-2,068-9,43011,89265

Consolidated Cash Flows from Investments & Financing(JPY million)
FY16/2
Cash Flows from Investments
Payments into time deposits
Proceeds from withdrawal from time deposits
Payments for securities investments
Proceeds from sales of securities investments
Proceeds from redemptions of securities investments
Acquisitions of property, plant, and equipment
Acquisitions of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisitions of subsidiary shares resulting in change ofconsolidation scope
Sales of subsidiary shares resulting in change ofconsolidation scope
Acquisitions of consolidated subsidiary
Other
Net Cash from (Used for ) Investments
Cash Flows from Financing
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
Redemption of non-recourse bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Share buyback
Proceeds from minority interests
Payments to minority interests
Sales of subsidiary shares resulting in no change ofconsolidation scope
Dividends paid to minority interests
Dividends paid
Net Cash from (Used for ) Financing© Ichigo Inc. All rights reserved.

FY17/2

FY18/2

FY19/2

FY20/2

–
–
-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

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

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

–

-93

-2,619

–

–

–

–

2,096

–

–

–
9
-7,052–
11-11,933–-32-5,645–-181-15,602-187
902-10,263

771
31
–
–
–
64,866-19,192
18,150-2,772
153
–
2,000
–

-1,383
532
785
-56
–
55,674-61,22130,850-15,400
137––-2,000

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

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

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

–

–

–

100

–

-43
-646
63,318-39-1,501
6,377–-2,513-6,124–-2,9724,346-8-3,416
9,537

66

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

67

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

Infrastructure

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

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

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

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

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

68

Go Beyond Real Estate to Address Broad Needs

AssetsResidential
Office

Needs

Live
Work

Nursing Care

Responding
to Diverse
Needs

Child Care

Education

Senior Business

Tourism

RetailBuy, Dine

Medical Care
Agriculture

Hotel

Stay, Travel

Solar Power
Plant

Power Lives &Businesses

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

Entertainment
Public WorksSportsCultureOther
Energy69

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

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

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

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

70

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

Dividend growth via
DOE > 3% Policy

7 Consecutive Years of
Dividend Growth
JPY 5

JPY 6

JPY 7

JPY 7

TBD

FY19/2

FY20/2

FY21/2(Forecast)

JPY 3
JPY 1*

JPY 1.1 JPY 1.3

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

FY16/2

FY17/2

FY18/271

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

72

Real Estate x Sports

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

Ichigo’s Mission:Serve Important Social Needs

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

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

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

73

Real Estate x Tourism

Hotel Operator Market Entry: Hakata Hotels
Hotel Operator in Kyushu/Yamaguchi Region
Seeing Inbound Tourism Growth– Started operations at 3 hotels on June 1, 2019
and 7 hotels in August

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

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

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

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsCultureEnergyOther

74

Real Estate x Entertainment x Culture X Tourism

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

New Earnings via Anime Content Streaming & Sales of DVDs, CDs, and Goods
Promote Ichigo’s AKIBA CULTURES ZONE (ACZ) as Global Anime Landmark– Increase ACZ’s value by integrating anime content & events(anime, dance, music, entertainment, retail, tourism, etc.)
 Anime-related events and sales of goods at ACZ will drive
both customer traffic & higher earnings

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment×
AKIBA CULTURES ZONE
© Ichigo Inc. All rights reserved.

Public WorksSportsCultureEnergyOther

75

Real Estate x Entertainment x Sports x Tourism

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

Game Features

Integrates real-world stadiums around the world
Users can play on-line with professional soccer players
Scheduled for global release in 2020, starting in Europe, Asia, &South America
Sales royalties

Business
Opportunity

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

Development by MIRAIRE Inc.

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

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment

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

EnergyOther

76

These materials were prepared to explain Ichigo’s businesses and are not for the purpose of soliciting investment inmarketable securities issued by Ichigo. Ichigo does not guarantee the accuracy of the figures, information, estimates, orother statements included herein, and accepts no responsibility for damages or losses arising through the use of the
figures, information, estimates, or other statements contained herein.
These materials are based upon information available as of the publication date, and may contain forward-looking
statements pertaining to Ichigo’s expectations, targets, plans, and strategies. Such forward-looking statements are notfacts, but are the result of management’s judgment based on information currently available. Actual operating results ordevelopments concerning Ichigo may differ substantially from those indicated by forward-looking statements. The
information enclosed is subject to revision without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation,
the Japanese version shall prevail.

Make The World
More Sustainable

Contact:
Ichigo (TSE First Section 2337)
Investor Relations
TEL: +81-3-3502-4818
E-mail： ir@ichigo.gr.jp
www.ichigo.gr.jp/en
Ichigo is Japan’s first zero-carbon listed real estate company.
We are taking responsibility for our environmental footprint by offsetting ourcarbon emissions and investing in low-carbon technologies such as solar energy.

© Ichigo Inc. All rights reserved.

77