FY20/2 Q3 Corporate Presentation
January
11, 2020
2019
January 10,

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

www.ichigo.gr.jp/en

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

© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

Contents
FY20/2 Q3 Earnings‒ FY20/2 Q3 Summary‒ Operating Profit +22%, Net Income +24%, EPS +26% (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‒ SRE: Q3 Asset Sales‒ SRE: Value-Add Case – Tradepia Odaiba‒ AM: Growth Support for TSE REITs & YieldCo‒ CE: Scaling Rapidly (In-Development Plants +66%)‒ CE: FY18/2 – FY20/2 New Plant Development‒ Sustainable Infrastructure Initiative: Hotel Business
Expansion‒ Sustainable Infrastructure Initiative: Working Closely with
Local Communities‒ Launch of Ichigo J.League Shareholder Program‒ Share Buyback© Ichigo Inc. All rights reserved.

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

Financial & Real Estate Data
Ichigo 2030: Ichigo as a Sustainable Infrastructure
Company‒ Go for Growth‒ Go Beyond Real Estate to Address Broad Needs‒ KPI Targets‒ Shareholder Return Policy‒ FY20/2 Initiatives

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+

Power Up 2019 Mid-Term Plan Achievement

5FY20/2 Q3 Earnings© Ichigo Inc. All rights reserved.

6

FY20/2 Q3 Summary
Durable Earnings Model
Stock Earnings/Fixed Expenses

207%

Robust Stock Earnings
Depreciation

+4%
1,180

1,800

(Gross Profit: JPY M)

AssetManagement (AM)

Sustainable
Real Estate (SRE)395

Gross Profit
JPY 30.33B

12,504

12,4719,265

1,543
FY19/2 Q3

FY20/2 Q3

983

9,208

1,599

FY19/2 Q3 FY20/2 Q3

Clean
Energy (CE)FY19/2 Q3 FY20/2 Q3

784

816

1,695

1,662

FY19/2 Q3 FY20/2 Q3

SRE: Strong Flow Earnings

Share Buyback

Hotel AI System: PROPERA– Q3 Asset Sales: JPY 58B– Amount: JPY 3B– Gains on Sales: +39% YOY & 2.8X
Unrealized Gains– No. of shares purchased:
7,081,200 shares (1.4% shares
outstanding)– Average share price: JPY 424– AI-based hotel revenue
management system– GPM: 29%© Ichigo Inc. All rights reserved.

– Non-asset business contributing tostock earnings growth– Started sales to third-party hotel
operators

7

Operating Profit +22%, Net Income +24%, EPS +26% (YOY)(JPY million)

FY19/2 Q3Cumulative(9M)

FY20/2 Q3Cumulative(9M)

Operating Profit

20,55325,032+21.8%

26,500Recurring Profit

18,264

22,665+24.1%

22,800Net Income

12,183

15,141+24.3%

15,000

JPY 24.59

JPY 31.09+26.4%

JPY 30.39

EPS© Ichigo Inc. All rights reserved.

YOY

Full-Year
Forecast

8

Segment Earnings Details− Asset Management: Base AM Fees +2% YOY− Sustainable Real Estate: Rental Income -1% YOY (Pre-depreciation: +5%)
Gains on Sales +39% YOY− Clean Energy: Power Generation Revenue -2% YOY (Pre-depreciation: flat)(JPY million)

Operating Profit
Segment

Asset Management (AM)FY19/2 Q3
FY20/2 Q3Cumulative Cumulative
(9M)
(9M)

1,571

1,696

Gross Profit
FY19/2 Q3
FY20/2 Q3Cumulative Cumulative
(9M)
(9M)

Full-Year
Forecast

YOY

+7.9%

1,821

1,770

2,109

Earnings Drivers(Parentheses show YOY change in
Gross Profit)
Base AM Fees 1,530 (+54)
Acquisition/Disposition Fees 402 (+232)
Ichigo Office Cash Flow Performance Fees 106 (+48)
Ichigo Green Operator Fees 35 (-1)

Sustainable Real Estate (SRE)

17,761

22,232+25.2%

23,312

21,48326,558

Rental Income 9,208* (-56)*Net of Depreciation 983 (+587)
Gains on Sales 16,977 (+4,758)
Gains on Overseas Sales 373 (+373)

Clean Energy (CE)

1,253

1,131

-9.7%

1,367

1,695

1,662

Power Generation Revenue 1,662* (-32)*Net of Depreciation 817 (+33)

-32

-28

–

–

–

–

20,55325,032+21.8%

26,50024,95030,330Adjustment (including offsets ofcross-segment transactions)

Total© Ichigo Inc. All rights reserved.

9

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

10

Business Model (1) Stock + Flow Earnings
33.8

Stock Earnings (Primarily Rental Income, Base AM Fees, and Power Generation Revenues)
32.1
Flow Earnings (Primarily Gains on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expenses)

Gross Profit

27.9(JPY billion)

30.3

27.0
18.0

15.3
17.9

20.8

14.1

13.0

9.0

12.9
4.6
16.9

8.2
6.0

8.3
5.6
4.1

FY13/2

12.5

11.8

0.9
5.0

14.0

13.8

2.6

15.8

4.2

FY14/2© Ichigo Inc. All rights reserved.

5.1
FY15/2

5.8

6.5

6.4

FY16/2

FY17/2

FY18/2

7.1

FY19/2

6.0

FY20/2 Q3

8.2

FY20/2(Forecast)11

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

50.9
36.8

45.4

28.1
19.6
12.3
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

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

12

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
GPM = Gross Profit Margin

1.6X

JPY 16.9B

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 Q3
13

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

Net Income
Economic Operating Cash Flow

1.7X
1.4X

1.3X

1.2X
25.5
21.5

17.1
12.9

14.9

14.0

16.7

15.4

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.

14

Strong Financial Base
Average Interest Rate and Loan Term

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

(Interest Rate)(Loan Term, Years)

2.5%

12
10.8 years

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

7.8 years

1.71%

1.5%

6
5.5 years

1.41%
1.24%

1.04%

1.0%

0.97%

3
0.90%

0.5%

0
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2 Q3

Term Structure of Loans
Short-Term

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

10% (JPY 16.8B)

86%(JPY 26.1B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

90%(JPY 154.9B)

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2 Q3

14% (JPY 4.1B)

Long-Term© Ichigo Inc. All rights reserved.

15

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

16

Sustainable Real Estate

Selective on Acquisitions and Sales− Continuing Sellers’ Market – FY20/2 Q3 Cumulative GPM: 29%(H1 GPM also 29%)
− Ichigo Owners Continues High Level of Activity
Acquisitions: JPY 19.81B (36% of total); Sales: JPY 7.35B (13% of total)
FY20/2 Q3 Cumulative Net Sales: JPY 3.5B (Market-Value Basis)
Acquisitions
No. of Assets

Sales

Book Value (A)(JPY million)

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

2

7,182

+1,368Residential

28

22,62326

25,089-2,466

Logistics

1

2,374

－

－

+2,374Ground Lease

2

255

1

159

+96

Other

10

1,950

1

231

+1,719Total

48

54,33343

57,882-3,549Note: Book value of asset sales is JPY 40,954 million© Ichigo Inc. All rights reserved.

17

Sustainable Real Estate

Q3 Asset Sales
High Demand for Central Tokyo Residential Assets on Expected NOI Growth
Ichigo Owners Growth Further Strengthening SRE Business
Ichigo Estate

Ichigo Owners

Private Fund Business Growth

SRE Sales Channel Expansion

Ichigo Investment Advisors won long-term AM
mandate for these assets

Capturing demand via detailed understandingof global institutional investor needs

Assets9 Residential Assets

Assets9 Residential Assets

Revenue

JPY 16.2B

Revenue

JPY 6.9B

Buyer

Global Institutional
Investor

Buyer

Global Institutional
Investor

Area

Central Tokyo

Area

Central Tokyo

Avg Holding Period

4.9 years

Avg Holding Period

0.7 years

Gross Profit Margin 37%© Ichigo Inc. All rights reserved.

Gross Profit Margin 15%

18

Sustainable Real Estate

Value-Add Case – Tradepia Odaiba
Ongoing Tenant Satisfaction Activities− Carried out 2nd tenant survey (c. 5,000 tenants) to identify tenant needs− Conducted advanced first-aid training for tenants− Joint training, seminars, and social events for employees of building
maintenance (BM) companies

Ongoing Social Contribution Activities− Provided open space for World Cup Rugby viewing− Participating in environmental projects of Odaiba District Association
 Planted tulips for Flower Festival Participating in neighborhood clean-ups© Ichigo Inc. All rights reserved.

19

Asset Management

Growth Support for TSE REITs & YieldCo
OfficeHotel

Ichigo Office(8975)

Green Infrastructure

Ichigo Hotel(3463)

Ichigo Green(9282)

IPO

IPO

IPO

October 12, 2005

November 30, 2015

December 1, 2016

Portfolio

Portfolio

Portfolio

85 Assets JPY 203.2B

22 Hotels JPY 50.8B

15 Plants JPY 11.4B

Dividend Yield (as of 2020/1/6)

Dividend Yield (as of 2020/1/6)

Dividend Yield (as of 2020/1/6)

3.8%

5.5%

5.4%

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

・ Sold a hotel in Kyoto at 1.3x 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

・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%

・ 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© Ichigo Inc. All rights reserved.

20

Clean Energy

Scaling Rapidly (In-Development Plants +66%)
2 New Plants Began Operation this month– Ichigo Minakami Aramaki ECO Power Plant (12MW, FIT: JPY 36)– Ichigo Takashima Kutsuki ECO Power Plant (3.7MW, FIT: JPY 32)
Power Generation Growth126.1MW(+18%)

Operating
In-Development
IchigoOperating Plants: 105.1MW
In-Development Plants: 68.9MW (+66%)
Total: 174.0MW(Ichigo Green (9282): 29.4MW )72.3MW(+155%)

106.8 MW(+28%)
83.6MW 1.7(+16%)

21.0

148.5MW(+18%)

43.4(Wind 14.4)

174MW(+17%)

68.9(Wind 25.9)(Wind 7.4)

105.1
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 32.4
JPY 36.0B

FY22/2
JPY 30.6
JPY 42.0B

FY23/2 ~JPY 30.8
JPY 51.6B
21

Clean Energy

FY18/2 – FY20/2 New Plant Development
Total 5 New Plants (23MW) Online in FY20/2 (2X MW Growth YOY)
New Plants Will Drive FY21/2 Growth & Contribute to Stock Earnings
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 2020*

Solar Power Plant

FY18/2

FY19/2

FY20/2

Total Panel
Output
(MW)

FIT
(JPY)

Operation
Start Date

Aug 11, 2017
47.54

11.28

23.21

Sep 2, 2017

Mar 20, 2018

Jan 2, 2020

* Forecast
Note: Operation start date of Ichigo Hitachi Omiya ECO Power Plant has been pushed back one month from February 2020 to March 2020.

© Ichigo Inc. All rights reserved.

22

Sustainable Infrastructure Initiative – Real Estate x Tourism x IT

Hotel Business Expansion
Scaling Hotel Business Drawing upon Ichigo’s Hotel Management
Capabilities– Stock earnings growth via non-asset business– Synergies between Ichigo-owned and managed hotels
Asset + Non-Asset Business

Non-Asset Business
Hotel Operator

39 Hotel Platform
17 Ichigo Hotels
22 Ichigo Hotel (3463) Hotels

・Ichigo’s first hotel operator
・Speeds up decision-making &reduces costs
・Operates 6 hotels, 700 guest rooms
・Advantages asset acquisitions due toreduced operating costs

AI Revenue Management System

Driving Non-Asset
Stock Earnings

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

THE KNOTTOKYO Shinjuku© Ichigo Inc. All rights reserved.

THE KNOTYOKOHAMA

・Increase customer satisfaction &maximize revenue
・Generating 10 to 40% revenue
increases p.a. in deployment
・No initial cost & no new system
deployment required→ Started sales to third-party hotel
operators

AgricultureEntertainment

Public WorksSportsCultureEnergyOther

23

Sustainable Infrastructure Initiative – Real Estate x Agriculture x Tourism x Entertainment x Culture x Energy x Public Works

Working Closely with Local Communities
Selected as Operator of Yokosuka Port Market– Deploying Ichigo’s value-add real estate capabilities torenovate a 30-year old building with partner companies
 Public-private partnership to invigorate the community
 Working closely with local community to create new employment
 Renewal opening in Spring 2021

Agricultural Theme Park
– Signed agreement in public-private partnership with
Inashiki (Ibaraki), OSMIC, & NEC
 Total area of 51 hectares
 Hands-on farming experience for guests
 Opening in 2021

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

AgricultureEntertainment

Public WorksSportsCulture© Ichigo Inc. All rights reserved.

EnergyOther

24

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 (55 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.

25

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

Reference
FY19/2
Number of Shares
Average Share Price
Amount

7,869,700 (1.6% 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% shares outstanding)
JPY 355
JPY 3B
26

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

27

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.

28

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
140,167,036 kWh

Annual CO2 Reduction
92,510,242 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
40,200 cars

Equivalent to annual
energy consumption of
46,700 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(FY19/2 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

29

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.

30

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

FY17/2
 Takashi Kawamura (former CEO of Hitachi; stepped down from Ichigo’s board in May 2017upon appointment as Chairman of TEPCO) Masatoshi Matsuzaki (former CEO of Konica Minolta)
 Kosuke Nishimoto (former CEO of Meitec)
FY18/2 onward Masatoshi Matsuzaki (former CEO of Konica Minolta)
 Nobuhide Nakaido (former CEO of SCSK) 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.

31

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

32

Significant Unrealized Gains on Balance Sheet
JPY 47.8B (Appraisal Value Basis), -3.69% vs. FY19/2-end
Real Estate Directly Held by Ichigo(JPY million)

Book Value as ofNovember 30, 2019
(A)

Appraisal NOI
(B)

Tokyo

95,242

5,056

5.3%

121,706+26,463

Outside Tokyo

105,804

6,630

6.3%

127,193+21,389

Total

201,046

11,686

5.8%

248,899+47,853

Location

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

UnrealizedGains(C) - (A)

Note: Excludes Ichigo Owners, Centro, and self-storage assets (book value JPY 40.8B)© Ichigo Inc. All rights reserved.

33

Net Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 390.8B(Book Value JPY 340B + Unrealized Gains JPY 50.8B)
Cash & Cash Equivalents

JPY 34.0B

Non-Recourse Loans &Related Liabilities

JPY 44.8B
Non-Recourse Loans &Related Assets

JPY 59.8B

Net Consolidated Risk-Based Balance Sheet:
JPY 311.9B(Book Value JPY 261B + Unrealized Gains JPY 50.8B)
Non-Recourse Loan-Related ICH Equity

JPY 14.9B

Operational Loan Investments
JPY 1.3B
Operational Securities Investments
JPY 8.7B

Corporate Loans & Bonds

JPY 171.8B

Debt
JPY
232.5B

Operational Loan Investments
JPY 1.3B
Operational Securities Investments
JPY 8.7B

Corporate Loans & Bonds

JPY 137.7B
Debt
JPY
153.5B

Real Estate for Sale
Real Estate for Sale

JPY 137.4B

Fixed Assets

JPY 84.3B
Securities Investments
JPY 4.8B

JPY 137.4B
Security Deposits Received
JPY 5.4B

Security Deposits Received
JPY 5.4B

Other JPY 10.3B

Other JPY 10.3B

Shareholder
EquityJPY 107.5B

36.5%

Other JPY 9.2B

Unrealized Gains
JPY 50.8B

Mark-toMarket
Shareholder
Equity Ratio

Post-Tax Unrealized
Gains JPY 35.2B
Tax JPY 15.5B**30.62% effective tax rate

Fixed Assets

JPY 84.3B
Securities Investments
JPY 4.8B

Shareholder
EquityJPY 107.5B

Other JPY 9.2B

Unrealized Gains
JPY 50.8B

Net Risk-Based
Shareholder
Equity Ratio

45.8%

Post-Tax Unrealized
Gains JPY 35.2B
Tax JPY 15.5B*

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.

34

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.

35

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

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor Sale

–

–

–

–

–

–

789

162

1,163

2,114

Sustainable Real Estate (SRE)

16,089

1,324

8,743

172,001–

75,370

1,280

2,921

4,413

282,146

Clean Energy (CE)

3,198

–

–

–

–

26,893

207

–

1,054

31,353Company-Wide Assets

21,165

–

–

–

–

65

242

1,791

1,164

24,430Total

40,453

1,324

8,743

172,001–

102,330

2,519

4,875

7,796

340,045

Segment

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

Power
Plants for
Sale

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
AssetsTotal Assets

36

Consolidated P&L: Segment Breakdown(JPY million)

Gross Profit
Segment

FY19/2 Q3

FY20/2 Q3Operating Profit
YOY Change

FY19/2 Q3

FY20/2 Q3YOY Change

FY20/2Full-Year
Forecast

1,770

2,109

+19.2%

1,571

1,696

+7.9%

1,821

1,543

1,599

+3.6%

–

–

–

–

227

509

+123.7%

–

–

–

–

21,48326,558+23.6%

17,761

22,232+25.2%

23,312

Rental Income

9,265

9,208

-0.6%

–

–

–

–

Asset Sales

12,21816,985+39.0%

–

–

–

–

–

364

–

–

–

–

–

1,695

1,662

-1.9%

1,253

1,131

-9.7%

1,367

–

–

–

-33

-28

–

–

24,95030,330+21.6%

20,55325,032+21.8%

26,500Asset Management (AM)
Stock Earnings (Base AM Fees)
Flow Earnings (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.

37

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 Q3(9M)

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 1,072M

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

JPY 547M

JPY 349M

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 68M

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 75M

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 1,565M

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.

38

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
39

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
LowestImpact40

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.

41

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

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2 Q3

GPM(vs. Revenue)

23.0%

13.6%

33.7%

25.5%

29.2%

GPM
(Vs. Book value)

29.9%

15.8%

50.9%

34.3%

41.3%

Revenue(JPY M)

31,67477,50235,73358,69357,882Gross Profit(JPY M)

7,283

10,562

12,05014,986

16,928© Ichigo Inc. All rights reserved.

42

Ichigo-Owned Real Estate Portfolio
By Location

By Asset TypeGround Lease 1%

Other
3%

Logistics
2%

Hokkaido 2%
Sendai 3%
Osaka 3%
Nagoya 3%

Residence
14%

Retail31%(JPY billion)

Hokkaido
3.5

Other
5%

Tokyo
Metro*
11%

Tokyo
52%
Tokyo
122.5

Hotel
23%
Office26%

Fukuoka
21%

Sendai
5.9*Ex-Tokyo

By Asset Size

Nagoya
7.3
Osaka
7.0

>JPY 10B
12%<JPY 1B
18%

Fukuoka
50.7

Tokyo
Metro
(exTokyo)
26.5

Other
12.8

JPY 5B-10B
23%
JPY 1B-5B
47%

Total Ichigo-Owned Assets: JPY 236.0B
Including Ichigo-Managed AUM: JPY 538.5B* Acquisition price basis
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 244.7B© Ichigo Inc. All rights reserved.

43

Sustainable Real Estate Asset Breakdown (1)171 Assets, JPY 236B, Forecast NOI JPY 11.6B (5.8% Yield)
No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected

Ichigo Equity
Investment

NOI/Year1

Forecast Equity
Multiple 2

Forecast
IRR3

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/0647 years–

JPY 1,900M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo>JPY 3B

2006/0334 years

JPY 165M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/09

14 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––

17

RetailFixed AssetToshima-ku, Tokyo>JPY 3B

2013/038 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––

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––

Note: 5.8% 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.

44

Sustainable Real Estate Asset Breakdown (2)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

13 years

JPY 58M

JPY 279M––

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––

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/12

13 years

JPY 85M

JPY 129M––

64

RetailFixed Asset

Shinagawa-ku, Tokyo<JPY 1B

2015/01–

JPY 26M

–

–

–

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

18 years

JPY 46M

JPY 79M

–

–

111

Hotel

Fixed Asset

Yokohama

JPY 2B-3B

2016/0335 years

JPY 207M

JPY 228M

–

–

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

31 years

JPY 63M

JPY 86M

–

–

120

Hotel

Fixed Asset

Shinjuku-ku, Tokyo>JPY 3B

2016/0940 years

JPY 554M

JPY 349M

–

–

146

RetailFixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2018/08

29 years

JPY 32M

–

–

–

149

RetailFixed Asset

Chiyoda-ku, Tokyo>JPY 3B

2018/0929 years

JPY 308M

JPY 2,269M

–

–

154

Residential

Fixed Asset

Kita Kyushu, Fukuoka

JPY 1B-2B

2019/035 years

JPY 83M

JPY 181M

–

–

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–––

JPY 3,571M

JPY 12,848M––

29 Fixed Assets

JPY 61,033M
JPY 63,951M (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.

45

Sustainable Real Estate Asset Breakdown (3)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

2

RetailReal Estate for Sale

Minato-ku, Tokyo

JPY 2B-3B

2005/1050 years

JPY 136M

JPY 1,033M

–

–

16

RetailReal Estate for Sale

Yokohama<JPY 1B

2012/10

6 years

JPY 34M

JPY 171M––

30

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2014/0335 years

JPY 51M

JPY 108M

6.95X

26.0%

35

RetailReal Estate for Sale

Minato-ku, Tokyo

JPY 2B-3B

2014/05

10 years

JPY 144M

JPY 434M

3.08X

15.2%

40

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/09

34 years

JPY 49M

JPY 252M

1.88X

14.7%

41

Hotel

Real Estate for Sale

Utsunomiya, Tochigi

JPY 1B-2B

2014/0932 years

JPY 143M

JPY 400M

1.97X

28.3%

42

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/09

19 years

JPY 60M

JPY 177M

5.54X

26.2%

43

RetailReal Estate for SaleOsaka

JPY 1B-2B

2014/0917 years

JPY 117M

JPY 301M

4.64X

24.3%

45

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2014/1116 years

JPY 92M

JPY 135M

10.70X

33.8%

57

Residential

Real Estate for Sale

Minato-ku, Tokyo

JPY 1B-2B

2014/1215 years

JPY 56M

JPY 186M

1.90X

21.0%

61

RetailOperational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1256 years

JPY 120M

JPY 57M

15.26X

51.7%

62

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/1215 years

JPY 41M

JPY 212M

1.81X

14.4%

66

RetailReal Estate for Sale

Sendai<JPY 1B

2015/0215 years

JPY 65M

JPY 8M

42.58X

198.9%

69

Hotel

Real Estate for SaleOsaka

JPY 2B-3B

2015/05

17 years

JPY 170M

JPY 633M

1.56X

58.3%

71

RetailReal Estate for Sale

Fujisawa, Kanagawa

JPY 1B-2B

2015/07

4 years

JPY 99M

JPY 126M

6.80X

37.3%

1

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

46

Sustainable Real Estate Asset Breakdown (4)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

89

OfficeReal Estate for Sale

Musashino, Tokyo>JPY 3B

2015/0730 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%

110

Hotel

Real Estate for Sale

Fukuoka>JPY 3B

2016/0334 years

JPY 273M

JPY 905M

2.05X

104.5%

112

Hotel

Real Estate for Sale

Yokohama>JPY 3B

2016/0332 years

JPY 239M

JPY 354M

10.64X

36.2%

113

Hotel

Real Estate for Sale

Yokohama>JPY 3B

2016/0332 years

JPY 288M

JPY 344M

5.84X

25.5%

114

Hotel

Real Estate for Sale

Fukuoka>JPY 3B

2016/04

29 years

JPY 183M

JPY 550M

1.73X

72.6%

115

Hotel

Real Estate for SaleOsaka

JPY 2B-3B

2016/04

12 years

JPY 130M

JPY 274M

2.96X

30.7%

118

RetailReal Estate for Sale

NagoyaJPY 1B-2B

2016/06

22 years

JPY 83M

JPY 102M

7.71X

32.6%

119

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2016/06

32 years

JPY 42M

JPY 136M

3.91X

17.4%

121

OfficeReal Estate for Sale

Minato-ku, Tokyo>JPY 3B

2016/1018 years

JPY 1,540M

JPY 3,450M

2.87X

43.5%

122

Hotel

Real Estate for Sale

Shima, Mie<JPY 1B

2017/01

21 years

JPY 78M

JPY 73M

5.49X

43.1%

130

RetailReal Estate for Sale

Taito-ku, Tokyo

JPY 1B-2B

2017/04

26 years

JPY 100M

JPY 297M

4.42X

21.1%

132

Residential

Real Estate for Sale

Minato-ku, Tokyo<JPY 1B

2017/04

16 years

JPY 51M

JPY 190M

2.66X

38.3%

133

Hotel

Real Estate for Sale

Minato-ku, Tokyo<JPY 1B

2017/04

17 years

JPY 46M

JPY 152M

3.85X

32.7%

134

Residential

Real Estate for Sale

Chuo-ku, Tokyo

JPY 1B-2B

2017/04

17 years

JPY 58M

JPY 197M

2.88X

26.2%

1

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

47

Sustainable Real Estate Asset Breakdown (5)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

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%

138

Hotel

Real Estate for Sale

Ogaki, Gifu

JPY 1B-2B

2017/05

30 years

JPY 116M

–

–

–

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/0935 years

JPY 106M

JPY 223M

3.78X

19.9%

144

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

JPY 1B-2B

2018/0231 years

JPY 129M

JPY 268M

8.00X

34.7%

145

Hotel

Real Estate for Sale

Fukuoka

JPY 2B-3B

2018/031 yearJPY 194M

JPY 301M

3.37X

102.4%

147

Hotel

Real Estate for Sale

Kyoto

>JPY 3B

2018/08

1 yearJPY 327M

JPY 1,666M

1.59X

27.2%

148

Office (Ground Lease)

Real Estate for Sale

Chiyoda-ku, Tokyo<JPY 1B

2018/08–

JPY 54M

JPY 166M

3.93X

104.4%

150

RetailReal Estate for Sale

Chuo-ku, Tokyo>JPY 3B

2018/1032 years

JPY 359M

JPY 1,161M

6.17X

24.7%

151

OfficeReal Estate for Sale

Fukuoka<JPY 1B

2018/1021 years

JPY 33M

JPY 38M

5.08X

43.1%

152

OfficeReal Estate for Sale

Fukuoka

JPY 2B-3B

2019/0232 years

JPY 174M

JPY 382M

5.07X

19.6%

153

Hotel

Real Estate for Sale

Fukuoka<JPY 1B

2019/0226 years

JPY 110M

–

–

–

155

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

JPY 2B-3B

2019/0334 years

JPY 169M

JPY 616M

3.44X

14.8%

156

Logistics

Real Estate for Sale

Fukuoka

JPY 2B-3B

2019/0331 years

JPY 150M

JPY 651M

3.60X

30.0%

159

RetailReal Estate for Sale

Shibuya-ku, Tokyo

JPY 2B-3B

2019/05

40 years

JPY 123M

JPY 210M

13.11X

44.3%

1

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

48

Sustainable Real Estate Asset Breakdown (6)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple 2

Forecast
IRR3

160

OfficeReal Estate for Sale

Fukuoka

JPY 2B-3B

2019/06

22 years

JPY 129M

JPY 248M

3.11X

39.6%

161

Hotel

Real Estate for Sale

Fukuoka>JPY 3B

2019/07

25 years

JPY 368M

JPY 1,636M

2.88X

12.9%

162

Hotel

Real Estate for Sale

Fukuoka>JPY 3B

2019/07

21 years

JPY 353M

JPY 1,170M

3.68X

15.8%

163

RetailReal Estate for Sale

Nagoya>JPY 3B

2019/08

22 years

JPY 479M

JPY 1,146M

3.47X

17.0%

JPY 8,341M

JPY 22,554M

3.62X

38.1%

JPY 11,911M

JPY 35,401M––

49 Real Estate for Sale

Subtotal 78 Assets

JPY 135,468M
JPY 140,039M (Book Value)
JPY 196,502M
JPY 203,990M (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.

49

Sustainable Real Estate Asset Breakdown (7)Acquisition
Price

Asset TypeNo.

vs. FY20/2 H1

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast Equity
Multiple

Forecast
IRR

A

Ichigo Owners (Office & Residential)

43 Assets

JPY 30,315M+JPY 12,605M

JPY 1,441M

JPY 6,479M

–

–

B

Centro (Primarily Office & Residential)

22 Assets

JPY 6,894M-JPY 165M

JPY 467M

JPY 1,881M

–

–

C

Self-Storage

28 Assets

JPY 2,349M+JPY 353M

JPY 304M

JPY 686M––

JPY 14,125M

JPY 44,448M––

Total 171 Assets

JPY 236,060M
JPY 244,755M (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 4,948M––

Assets acquired in FY20/2 Q3 (9M)

Total 48 Assets

JPY 52,835M

JPY 2,853M

JPY 16,559M––

Assets acquired and sold in FY20/2 *Total 7 Assets

JPY 4,384M

JPY 192M

JPY 2,131M––* Acquired & Sold 7 Ichigo Owners assets
Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.

1© Ichigo Inc. All rights reserved.

50

Ichigo Solar Power Plant Portfolio
Ichigo (In-Development)

Ichigo (Operating)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

JPY 40Aug 2013

Ichigo Toki Tsurusatocho Kakino Higashi

Chubu

Panel
Output(MW)
1.67

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

JPY 40Mar 2014

Ichigo Hitachi Omiya

Kanto

2.99

JPY 24

Mar 2020

Ichigo Yubetsu Barou

Hokkaido

0.80

JPY 40

Apr 2014

Ichigo Kasaoka Osakaike

Chugoku

2.66

JPY 21Mar 2020
Apr 2020

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 21

Feb 2020

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Minokamo Hachiyacho Kamihachiya

Chubu

1.30

JPY 18

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Hokota Aoyagi

Kanto

2.48

JPY 24

Apr 2020

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Seto Jokojicho

Chubu

1.50

JPY 18Aug 2020

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Obu Yoshidamachi

Chubu

0.98

JPY 18

Sep 2020

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015(Wind) Ichigo Yonezawa Itaya

Tohoku7.39

JPY 22

Dec 2020

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Toride Shimotakai Nishi

Kanto

2.99

JPY 18Apr 2021

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Ichigo Kobe Pompuike

Kansai

2.95

JPY 18Jul 2021

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Ichigo Sera Shimotsuda

Chugoku

2.81

JPY 18Aug 2021

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Ichigo Ueda Yoshidaike

Chubu

1.01

JPY 18

Oct 2021

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Kasaoka Idachiike

Chugoku

2.66

JPY 18

Nov 2021

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.96

JPY 32

Feb 2022

Ichigo Ebino Suenaga

Kyushu14.00

JPY 40Jun 2023

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Total (In-Development)

15 Plants 50.41MW

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Total (Operating & In-Development)

44 Plants 155.58MW

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Ichigo Memuro Nishi-Shikari

Hokkaido

1.32

JPY 40Feb 2018

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.90

JPY 36

Mar 2018

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Mar 2018

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

JPY 24

Apr 2018

Ichigo Itoshima Iwara

Kyushu1.48

JPY 36

Jan 2019

Ichigo Sakahogi Fukagaya

Chubu

2.89

JPY 21

May 2019

Ichigo Sennan Kitsuneike

Kansai

2.86

JPY 21

Jul 2019

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Jan 2020

Ichigo Takashima Kutsuki

Kansai

3.74

JPY 32

Jan 2020

Total (Operating)

Total
185MW
© Ichigo Inc. All rights reserved.

29 Plants 105.16MW* 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

51

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

59 Plants (185MW*)
Currently Operating

44 Plants (134MW)
Okinawa
Ichigo Nago Futami

8.44MW

KyushuIchigo Kijo Takajo

0.89MW

Ichigo Itoshima Iwara

1.48MW

Ichigo Miyakonojo Yasuhisacho

1.44MW

Ichigo Miyakonojo
Takazakicho Tsumagirishima

2.96MW

Ichigo Ebino Suenaga

14.00MW

Total

Hokkaido

Chugoku

IchigoIchigo Green (9282)
In-Development

2.61MW

Ichigo Akkeshi Shirahama

0.80MW

Ichigo Kasaoka Takumicho

1.11MW

Ichigo Toyokoro Sasadamachi

0.60MW

Ichigo Fuchu Jogecho Yano

0.99MW

Ichigo Memuro Nishi-Shikari

1.32MW

Ichigo Sera Tsukuchi

2.54MW

Ichigo Motomombetsu

1.40MW

Ichigo Sera Aomizu

2.87MW

Ichigo Engaru Higashimachi

1.24MW

Ichigo Higashi-Hiroshima Saijocho
Taguchi

2.72MW

Ichigo Kasaoka Iwanoike

2.64MW

Ichigo Muroran Hatchodaira

1.24MW

Ichigo Kure Yasuuracho Nakahata

2.90MW

Ichigo Toyokoro

1.02MW

Ichigo Yamaguchi Aionishi

1.24MW

Ichigo Nakashibetsu Midorigaoka

1.93MW

Ichigo Yamaguchi Sayama

2.35MW

Total

13.57MW

Ichigo Kasaoka Osakaike

2.66MW

Ichigo Kasaoka Idachiike

2.66MW

Ichigo Sera Shimotsuda

2.81MW

Total

30.16MWKansai

Ichigo Engaru Kiyokawa

1.12MW

Ichigo Abira Toasa

1.16MW

TohokuChubu
Ichigo Toki Oroshicho

1.39MW

Ichigo Tsu

2.94MW

Ichigo Sennan Kitsuneike

2.86MW

Ichigo Toki Tsurusatocho Kakino

Ichigo Takashima Kutsuki

3.74MW

Ichigo Sakahogi Fukagaya

Ichigo Kobe Pompuike

2.95MW

Total

9.56MW

Ichigo Hamanaka Bokujo Tsurunokotai

2.31MW

Ichigo Hamanaka Bokujo Kajibayashi

2.31MW(Wind) Ichigo Yonezawa Itaya

7.39MW

Total

12.01MW(Wind – Pipeline) Iwate

7.50MW(Wind – Pipeline) Fukushima

7.00MW

Kanto
Ichigo Maebashi Naegashima

0.67MW

1.31MW

Ichigo Showamura Ogose

43.34MW

2.89MW

Ichigo Toride Shimotakai Kita

1.03MW

Ichigo Toride Shimotakai Minami

0.54MW

Ichigo Minakami Aramaki

12.02MW

Ichigo Kiryu Okuzawa

1.33MW

Ichigo Toyokawa Mitocho Sawakihama 1.80MW

Ichigo Tokushima Higashi-Okinosu

2.52MW

Ichigo Toki Tsurusatocho
Kakino Higashi
Ichigo Minokamo Hachiyacho
Kamihachiya
Ichigo Seto Jokojicho

Ichigo Takamatsu Kokubunjicho Nii

2.43MW

Ichigo Obu Yoshidamachi

0.98MW

Ichigo Toride Shimotakai Nishi

2.99MW

Ichigo Iyo Nakayamacho Izubuchi

1.23MW

Ichigo Ueda Yoshidaike

1.01MW

Total

67.43MW

Total

6.19MW

Total

16.84MW(Wind – Pipeline) Chiba

4.00MW

Shikoku© Ichigo Inc. All rights reserved.

0.80MW
0.88MW

Ichigo Yonago Izumi

20.79MW* Excludes wind power
plants underdevelopment (18.5MW)

Ichigo Yubetsu Barou
Ichigo Betsukai Kawakamicho

1.67MW
1.30MW

Ichigo Hitachi Omiya

2.99MW

1.50MW

Ichigo Hokota Aoyagi

2.48MW

52

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 43 Plants (148MW)
By Feed-In Tariff

By Customer(Electric Power Utility Co)
Tohoku3%

By Operating Timeline

Shikoku
2%

Hokkaido3%

JPY 1811%
JPY 21
7%

Kyushu
13%
TEPCO
45%

Kansai6%

JPY 24
8%
JPY 32
10%

Chubu
10%

JPY 4020%

JPY 3644%

Chugoku18%

C(In-Development)
4%>10MW (In- <2MW
Development) 9%
10%

<2MW
(In-Development)
5%

2-10MW(In-Development)
15%

>10MW
37%

© Ichigo Inc. All rights reserved.

2-10MW
24%

B(In-Development)
22%
A(In-Development)
13%
C
6%

<6 months inoperation
11%>1 year inoperation
56%

0.5-1 year inoperation
4%

By Solar Intensity

By Output

Starting
operation within
6 months
9%

Starting
operation after+6 months
20%

A
36%

Rank
A
B
C
D

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

Unit: kWh/m² per day
B
19%

53

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 142

20 years

Source: METI, Agency for Natural Resources and Energy

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© Ichigo Inc. All rights reserved.

54

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 H1

FY20/2 Q3

vs. FY20/2 H1

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

40,448
1,582
1,324
4,654
181,264–3,522-3
232,793

40,453
1,924
1,324
8,743
172,001–
3,056-5
227,499+5+342–+4,089-9,263–-466-2-5,294

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
94,97622,126
19,421
52,255
6,756
100,560

22,32919,212
52,871
7,915
102,330

+203
-209
+616
+1,159+1,770

1,942
392
38
2,373

1,864
62
29
1,956

1,600
135
233
1,968

1,346
316
331
1,993

1,493
403
575
2,471

1,450
435
634
2,519

-43
+32
+59
+48

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

4,247
10
188
2,157
-91
6,511
109,543
342,337

4,875
510
152
2,249
-91
7,695
112,545
340,045

+628
+500
-36
+92
–
+1,184+3,002-2,29255

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
hedgesForeign 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 H1

FY20/2 Q3

vs. FY20/2 H1

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

–
5,115
–
274
10,179
1,696
2,174
–
279
3,741
23,461

–
4,244
–
274
12,317
1,171
3,111
–
504
3,921
25,545–-871––+2,138
-525
+937
–
+225
+180
+2,084–100
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

3,219–
151,869
48,069
2,168
8,253
1,087
214,667
238,128

6,179–
148,798
39,674
2,035
8,188
932
205,809
231,355+2,960–-3,071-8,395
-133
-65
-155
-8,858-6,773

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
66,730-5,98898,76926,822
11,20871,916-6,755
103,192

26,841
11,22878,445-8,988
107,526+19+20+6,529-2,233+4,334

761

117

543

386

314

412

+98

-251

-365

-372

-408

-437

-438

-1

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

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

–
171
666
2,722
92,725296,512

–
-21
827
3,283
102,859
319,343

–
-122
951
187
104,208342,337

–
-26
1,004
185
108,690
340,045

–
+96
+53
-2
+4,482-2,29256

Consolidated P&L(JPY million)
FY16/2(12M)
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
Losses on sales/disposal of fixed assets
Valuation losses on securities investments
Office move expenses
Impairment loss
Earthquake-related damages
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY17/2(12M)

FY18/2(12M)

FY19/2(12M)

FY20/2 Q3(9M)

FY19/2 Q3(9M)

FY20/2Full-Year
Forecast

Change(YOY)

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
26,27978,15347,82330,3305,298
25,03258,28233,332
24,950
4,396
20,553+19,871+14,491+5,380+902+4,479––––26,500

–
–
–
–
94.5%

2
79
90

–
85
–

3
57
–

3
68
–

4
74
–

2
62
–

+2
+12
–

–
–
–

–
–
–

–

–

–

5

53

5

+48

–

–

43
215

32
118

100
161

70
147

29
162

80
151

-51
+11

–
–

–
–

2,234

2,278

2,249

2,328

1,734

1,742

-8

–

–

–

53

270

491

55

220

-165

–

–

98
380
2,713
13,889

714
217
3,263
19,755

207
168
2,895
19,185

327
203
3,350
23,076

522
215
2,529
22,665

295
183
2,441
18,264

+227
+32
+88
+4,401–––22,800

–
–
–
99.4%

223
–
–
–
223

2,466
–
–
–
2,466

–
1,221
–
41
1,263

2
–
–
–
2

11
–
169
35
215

2
–
–
–
2

+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
–
–
–
–
–
27
22,853
6,775
16,077936
15,141

–
–
–
–
–
–
–
18,266
5,700
12,566383
12,183

+27
–
–
–
–
–
+27
+4,587+1,075+3,511+553+2,958

–
–
–
–
–
–
–
–
–
–
–
15,000

–
–
–
–
–
–
–
–
–
–
–
100.9%

57

Consolidated Cash Flows from Operations(JPY million)
FY16/2 (12M)
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
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 loss on operational securities investments
Decrease (increase) in 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.

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

FY17/2 (12M)
20,630
778
223
141
–
23
-3
-85
1,303
–
–
-2,466
1,090
–
-367
–
2,727
–
-6,303
7,251
16
-190
-193
204
92
-49
-667
1,304
25,46085-1,146-2,852
21,547

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

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

FY20/2 Q3 (9M)
22,853
1,888
187
130
–
473
2
-79
1,734
-169
–
-11
–
–
-519
–
3,842
–
-10,046
–
–
136
9
-675
83
–
-99
224
19,96579-1,524-7,548
10,97058

Consolidated Cash Flows from Investments & Financing(JPY million)
FY16/2 (12M)
Cash Flows from Investments
Payments into time deposits
Proceeds from withdrawal from time deposits
Payments for securities investments
Proceeds from sales of securities investments
Proceeds from redemptions of securities investments
Acquisitions of property, plant, and equipment
Acquisitions of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisitions of subsidiary shares resulting in change ofconsolidation scope
Sales of subsidiary shares resulting in change ofconsolidation scope
Acquisitions of consolidated subsidiary
Other
Net Cash from (Used for ) Investments
Cash Flows from Financing
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
Redemption of non-recourse bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Share buyback
Proceeds from minority interests
Payments to minority interests
Sales of subsidiary shares resulting in no change ofconsolidation scope
Dividends paid to minority interests
Dividends paid
Net Cash from (Used for ) Financing© Ichigo Inc. All rights reserved.

FY17/2 (12M)

FY18/2 (12M)

FY19/2 (12M)

FY20/2 Q3 (9M)

–
–
-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

-111
5,033
-2,332
111–-10,306
-464
-2
–
-34

–

-93

-2,619

–

–

–

–

2,096

–

–

–
9
-7,052–
11-11,933–-32-5,645–-181-15,602-187-720-9,015

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
–

969
–
5,828
-96
–
44,898-23,445
5,300-17,18831-2,999–-1,276

–

–

–

100

–

-43
-646
63,318-39-1,501
6,377–-2,513-6,124–-2,972
4,346-5-3,415
8,598

59

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

60

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.

61

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
Energy62

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.

63

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

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

7 Consecutive Years of
Dividend Growth
JPY 5

JPY 6

JPY 7

JPY 7

FY19/2

FY20/2(Forecast)

JPY 3
JPY 1*
FY12/2

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

FY18/264

FY20/2 Initiatives
Deepen Capabilities in Sustainable Real Estate− Expand into new asset types (e.g., dormitories, sports facilities)− Seek to be “Best Partner” to tenants via continually improving tenant services andsolutions− Strengthen group operating structure to deliver best-in-class outcomes
Accelerate Creation of New Businesses− Further develop Ichigo Sustainable Lab− Develop first-in-class and best-in-class Ichigo apps and other software solutions toaddress client needs and launch new businesses
Pro-Actively Deploy IT to Drive Higher Productivity− Build integrated SRE asset database− Deploy BPA solutions− Streamline tasks and increase asset managementbusiness productivity© Ichigo Inc. All rights reserved.

65

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

66

Real Estate x Sports

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

Ichigo’s Mission:Serve Important Social Needs

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

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

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

67

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

68

Real Estate x Entertainment x Culture X Tourism

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

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

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care

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

Public WorksSportsCultureEnergyOther

69

Real Estate x Entertainment x Sports x Tourism

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

Game Features

Integrates real-world stadiums around the world
Users can play on-line with professional soccer players
Scheduled for global release in 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

70

Power Up 2019 Mid-Term Plan Achievement© Ichigo Inc. All rights reserved.

71

Power Up 2019 Achievement Details (1)Beat All KPI Targets
3-Year Growth: OP +60%, RP +66%, NI +19%** Ichigo’s effective tax rate normalized from FY16/2’s 6.9% to FY19/2’s 31.8%, so NI grew less than OP.
FY16/2 (Actual)(Shift Up 2016) (A)FY19/2 (Actual)(Power Up 2019) (B)1(JPY million)

FY19/2 (Plan)(Power Up 2019)(B) - (A)vs. Plan

Operating Profit

16,387

26,279+60.4%

25,000105.1%

Recurring Profit

13,88923,076+66.1%

21,400107.8%Net Income

12,925

15,373+18.9%

14,800103.9%

JPY 25.86

JPY 31.14+20.4%

JPY 29.00

107.4%

JPY 3

JPY 7

+133.3%JPY 7

100.0%

2

16.3%

–

15.6%

–

223.3%

239.6%–

191.4%–EPS

Dividend

ROE
Stock Earnings/
Fixed Expenses

21.0%(15.3% )1 From FY19/2, SPC-related non-recourse loan interest expenses are accounted as Fixed Non-Operating Expenses rather than COGS.

FY16/2 Operating Profit has been restated using this new accounting treatment to facilitate an accurate YOY comparison.

2 At Ichigo’s FY19/2’s normalized 31.8% tax rate, FY16/2 ROE would have been 15.3%.

© Ichigo Inc. All rights reserved.

72

Power Up 2019 Achievement Details (2)••Profitability

Core Business
Growth•••New Business
Creation••

Extend Ichigo’s REIT-focused asset
management business into the much larger
physical real estate market
Grow Ichigo’s hotel business synergisticallywith Ichigo Hotel
Launch one or more REtech businesses,
fusing Ichigo’s Real Estate and IT capabilities✓✓• Listing of Ichigo Green (9282) on Dec 1, 2016
• Asset sales to Ichigo Office (8975) and Ichigo Hotel(3463)• Created a long-term private fund (JPY 8.3B)• Expanded the engineering team• Spun out a dedicated leasing team and strengthened
marketing functions to drive asset acquisitions andvalue-add••••

Launched Ichigo Owners & Ichigo Land businesses
Launched 2 THE KNOT lifestyle hotels
Developed AI hotel revenue management system
Launched new real estate content businesses (storage,
laundry, & study spaces)• Entered business alliance with Phil Company• Established Sports & Entertainment group• Launched Community Lab and 100-Year Real Estate Lab••

Grow both financial stability and earnings
De-collateralize loans, lengthen loan
maturities, lower debt costs, get credit ratings,
and issue bonds to diversify funding profile✓• 24% of corporate loans are uncollateralized via
commitment lines and other credit lines (JPY 32.5B total)• Average Loan Period: 10.3 years, Average Interest Rate:
0.97%, Long-Term Loan Ratio: 92%

High Capital
Efficiency andOrganic Growth•

ROE >15%✓• Achieved ROE >15% for all 3 MTP years

Best Place to
Work

•
•

Support employee health and wellness
Goal: Japan’s number one company inproviding opportunities for employees✓• 100% return rate for employees who take child leave• Annual stock option grants (fully expensed) to all
employees to align their interests with Ichigo
shareholders• Launched Incubation Lab to support internal startups✓• 6 of 9 Board Members are Independent Directors• Former CEOs of TSE 1st Section companies serve as
Independent Directors

Finance as aStrategic
MeasureSustainability

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

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

73

Power Up 2019 Achievement Details (3) JPX-Nikkei 400 Index– Included in the JPX-Nikkei 400 All Three Years of Power Up 2019(2016, 2017, 2018)– Ranked within the Index’s Top 200 Companies in August 2019

Ranking Calculation:
While the JPX-Nikkei 400 does not provide an official ranking of its 400 constituents, theranking can be calculated based upon the JPX-Nikkei 400’s publically-available
quantitative ranking formula, which rank orders the top 1,000 companies from the joint
set of the 1,200 highest market capitalization and 1,200 highest value-traded Japanesecompanies by:(a) 3-year average ROE (40% weighting)(b) 3-year cumulative operating profit (40% weighting)(c) Market capitalization (20% weighting)Total Score = 0.4×(a) + 0.4×(b) + 0.2×(c)© Ichigo Inc. All rights reserved.

74

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 byoffsetting our carbon emissions and investing in low-carbon
technologies such as solar energy.

© Ichigo Inc. All rights reserved.

75