FY17/2 H1 (March-August 2016) Corporate Presentation
April 23,
October
14,20152016

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

www.ichigo.gr.jp/english

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

© 2016 Ichigo Inc. All rights reserved.

Contents
FY17/2 H1 (March-August 2016) Earnings‒ OP 3X, EPS 2.8X YOY‒ Earnings Growing Across All Segments‒ Robust Cash Flow and Cash-On-Hand‒ Strong Financial Position

Powerful Value-Add Business Model Underpins Growth‒ Ichigo Hotel REIT (3463) Growth‒ Ichigo Office REIT (8975): 12 Consecutive Periods of Dividend Growth – No. 1 vs. All J-REITs‒ Value-Add Driving Earnings‒ Hotel Value-Add Capex‒ Expanding Value-Add Business to Larger Buildings‒ Clean Energy Business Growth‒ National Solar Power Plant Portfolio‒ JPX-Nikkei 400 Index Inclusion
Appendices: Financial & Real Estate Data
Power Up 2019 Mid-Term Business Plan

© 2016 Ichigo Inc. All rights reserved.

4

FY17/2 H1 (March-August 2016) Earnings© 2016 Ichigo Inc. All rights reserved.

5

OP 3X, EPS 2.8X YOY‒ Revenue 5.9X YOY on Asset Sales to Ichigo Office REIT in Q1 and to
Ichigo Hotel REIT in Q2‒ 90% Progress in H1 vs. Full-Year EPS Forecast(Million Yen)
FY16/2 H1

FY17/2 H1

YOY

Full-Year
Forecast% of Full-Year
Forecast(Reference)
FY16/2 Actual

Revenue

14,60785,991+488.7%

125,600

68.5%

49,699Gross Profit

7,163

17,468+143.9%23,86773.2%

19,863Operating Profit

4,913

14,984+205.0%18,50081.0%

15,417

Recurring Profit

4,351

13,834+217.9%16,40084.4%

13,889Net Income

4,221

11,935+182.7%

13,30089.7%

12,925

8.46 yen

23.79 yen

+181.2% 26.43 yen

90.0%

25.86 yen

EPS

© 2016 Ichigo Inc. All rights reserved.

6

Earnings Growing Across All Segments‒ Value-Add OP 4.2X YOY (96% Progress vs. Full-Year Forecast)‒ Growth Across the Board in Durable, Ongoing Earnings(Million Yen)
Revenue
Segment

FY16/2 H1

FY17/2 H1YOYOperating Profit
Full-Year
Forecast% of FullYear
Forecast

FY16/2 H1

FY17/2 H1

YOY

Full-Year
Forecast% of FullYear
Forecast

Earnings Drivers(Parentheses show YOY change
in Gross Profit)

Asset Management

2,964

2,460

- 17.0%

5,079

48.4%

1,854

1,473

- 20.6%

2,386

61.7%

AM Fees: 731 (+255)
Acquisition/Disposition Fees: 359 (+41)
Performance Fees: 175 (-444)
Sponsor Credit Support Fee: 50 (-360)

Value-Add

10,75882,305 +665.0%

109,297

75.3%

3,142

13,092 +316.6%

13,53096.8%

Rental Income: 5,113 (+1,669)
Gain on Sale: 10,314 (+9,101)

13.5% Solar Electricity Sales: 584 (+150)

Clean Energy

870

1,214

+39.5%

11,152

10.9%

290

351

+20.7%

2,608

Other

13

10

- 18.5%

71

15.2%

- 31

- 135

－

- 84

－

Total

14,60785,991 +488.7%

125,600

68.5%

5,256

18,440

80.2%

－

－

- 343

125,600

68.5%

4,913

Adjustment (including
offsets of crosssegment transactions)

Total

－
14,607© 2016 Ichigo Inc. All rights reserved.

－－

85,991 +488.7%

14,781 +181.2%
202－

14,984 +205.0%

59
18,500－81.0%

7

Robust Cash Flow and Cash-On-Hand
FY17/2 H1
JPY +51.7B
Cash Flow fromOperating Activities

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

JPY +64.0B

Buy− Use cash
− Increase borrowings

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

JPY -26.0B

JPY -1.7B
Cash Flow from
Investing Activities

Acquisition of Solar Power Plants(Fixed Assets)

ValueAdd

JPY -4.5B

Cash Flow from
Financing Activities

Cash-on-Hand© 2016 Ichigo Inc. All rights reserved.

JPY -33.1B
JPY 43.2B (+14.8B）

Sell− Receive cash
− Repay borrowings

8Strong Financial Position
Weighted Average Interest Rate and Weighted Average Loan Term

Weighted Average Interest Rate
WeightedLoan
AverageLoan Term
Average
Period(Interest Rate)(Loan Term, Years)

2.5%

12.0
2.22%

10.6 years
1.96%

2.0%

9.0 years
9.0
8.7 years

1.71%
1.5%

6.0
4.7 years

1.41%

5.9 years

1.33%

1.0%

3.0

Term Structure of Loans FY13/2

FY14/221% (JPY 1.5B)

14% (JPY 4.1B)

79%(JPY 5.5B)

86%(JPY 26.1B)

FY15/2

FY16/2

FY17/2 H1

8% (JPY 4.9B)

10% (JPY 10.3B)

8% (JPY 6.5B)

92%(JPY 53.4B)

90%(JPY 94.4B)

92%(JPY 79.3B)

100%

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

9

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

10

Ichigo Hotel REIT (3463) Growth (1)Completed Sale of 10 Hotels (JPY 27.2B) to Ichigo Hotel REIT
2.3X Portfolio Size: JPY 20.4B  JPY 47.6B
Gain on Sale JPY 7.0B
JPY 27.2B
Ichigo Hotel REIT
Portfolio Growth

JPY 20.4B
Pre-Sale

July 22 Asset Sale

9 Assets 1,257 Rooms 10 Assets 1,726 Rooms
Assets Sold to Ichigo Hotel REIT

Comfort Hotel Kushiro

JPY 47.6B

Smile HotelTokyo Asagaya

Smile Hotel Asakusa

Post-Sale
19 Assets 2,983 Rooms

Hotel Livemax
Comfort Hotel
Comfort Hotel
Nihombashi Hakozaki Central International Airport
SuzukaSale of 10 Assets
JPY 27.2B
Comfort Hotel Okayama

Nest Hotel Matsuyama© 2016 Ichigo Inc. All rights reserved.

Further Growth

Nest Hotel
Osaka Shinsaibashi

Gain on Sale
JPY 7.0B

Nest Hotel Naha

11

Ichigo Hotel REIT (3463) Growth (2)14 Hotel Assets (JPY 38B) on Ichigo balance sheet & 7 Assets (JPY 11B)
in Highly-Likely Acquisition Pipeline as of Sep 30, 2016
 Major cities: Yokohama, Osaka, Nagoya, Fukuoka, Kumamoto, etc.
 New hotel development with operators in-place Acquiring existing assets via Ichigo proprietary
sourcing routes

Development Project 1
Central Tokyo

Development Project 2
Fukuoka

Yokohama

Fukuoka

Fukuoka
NagoyaOkinawa© 2016 Ichigo Inc. All rights reserved.

Kumamoto

Osaka

Osaka

12

Ichigo Office REIT (8975)

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

1,890
yen

1,900
yen

(Forecast) (Forecast)

1,219
yen

737
yen
(*)

April
2010

899
yen
(*)

October
2010

979
yen
(*)

April
2011

1,387
yen

1,494
yen

1,537
yen

1,541
yen

1,547
yen

October
2013

April
2014

October
2014

1,603
yen

1,706
yen

1,740
yen
(Actual)

1,031
yen
(*)

October
2011

April
2012

October
2012

April
2013

April
2015

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

13

Value-Add Driving Earnings
In Addition to Rental Income from Value-Add Assets of JPY 5.1B,
Sale of 34 Value-Add Assets Generated JPY 10.3B Profit
FY17/2 H1 Value-Add Asset Sales

JPY 74.6B(34 Assets)
Sold to Third-Party

JPY 17.4B(11 Assets)

Sold to REIT

JPY 57.2B(23 Assets)

Revenue© 2016 Ichigo Inc. All rights reserved.

JPY 10.3B(34 Assets)
Sold to Third-Party

JPY 2.7B(11 Assets)

Sold to REIT

JPY 7.5B(23 Assets)

Gross Profit Margin
15.75%

Gross Profit Margin13.24%

Gross Profit
14Hotel Value-Add Capex (1)Comfort Hotel Osaka Shinsaibashi: JPY 250M Capex to add 21 new guest rooms− Centrally-located hotel close to tourist attractions, generating significant demand
from both business travelers and tourists− Moved the front desk from the 3rd floor to the 2nd floor, which was previously
occupied by a restaurant tenant, and added 9 new rooms on the 2nd floor− Renovation completed without interfering with regular hotel operations
Before Renovation
3F

After Renovation

 Lobby, Front Desk

 Guest Room Floor

 Moved lobby and front desk to the 2nd floor. Added 12 newguest rooms.
 Restaurant

 Conversion to Lobby and Front Desk

 Tenant move-out

 Breakfast corner 9 new guest rooms Dedicated elevator from lobby to guest room floors‒ Guests must pass in front of the front desk to reach

2F

guest room floors, thus improving security
 Entrance

1F Entrance Low visibility, facing the side street instead of the main street
After
Before Elevator directly from the entrance to guest rooms, resulting Moved entrance to face the main street, improving visibility
After Elevator connecting the entrance and lobby only

in security concerns

Changes in RevPAR and Revenue
Before Renewal
After Renewal(Sep 2015 - Mar 2016) (Apr 2016 - Aug 2016)

Change

RevPAR (JPY)

8,073

8,413

+4.2%

Monthly Revenue (JPY million)

48.0

55.9

+16.5%© 2016 Ichigo Inc. All rights reserved.

15

Hotel Value-Add Capex (2)Comfort Hotel Osaka Shinsaibashi
Before Renovation© 2016 Ichigo Inc. All rights reserved.

After Renovation

16

Expanding Value-Add Business to Large-Size Office Buildings
Acquisition of Tradepia Odaiba announced on October 11, 2016
Name
LocationTransportation
Land Area
Total Floor Area
ZoningStructure
Builder
Date Built

Tradepia Odaiba
2-Chome, Daiba, Minato-ku, Tokyo
3-minute walk from Tokyo Teleport Station on the Tokyo Rinkai Line
12,910.26 ㎡
76,580.43 ㎡
Commercial
Steel & Steel-Reinforced Concrete, 23 Floors plus 2 Basement Floors
Joint Venture of Shimizu, Taisei, and Obayashi
February 2001

Tradepia Odaiba© 2016 Ichigo Inc. All rights reserved.

17

Clean Energy Business Growth
Expected Listing of Ichigo Green Infrastructure Investment Corporation
 Tax-advantaged solar ETF that will offer shareholders an opportunity to invest in the rapidly
expanding green infrastructure asset class Green, safe, and contributes to Japan’s energy self-sufficiency
 Ichigo Investment Advisors, the asset manager of Ichigo Office REIT (8975) and Ichigo Hotel
REIT (3463), will be the asset manager
 Targeting listing on the ETF on TSE’s new infrastructure fund market by Feb 2017

New Public Bid Wins Ichigo ECO Energy was chosen by Tsu City (Mie Prefecture) in a public bid to develop asolar plant on city-owned land that was formerly an incineration plant (June 2016)– Construction start: April 2017 (forecast); Panel output: 2.8 MW– Charitable contributions to the local community: Ichigo donating 2% of annual solar power revenue,
clean energy vehicle, and fast-charging station to Tsu City

 First-ever Ichigo mandate for a floating solar power plant

Wind Power Development

No.

Location

Expected Output

Wind Data Survey

 All projects on track; Projects in Chiba and Yamagata
in detailed simulation/design phase

1
2

Chiba
Yamagata

4.0MW
7.5MW

Completed
In Progress

3
4

Iwate
Iwate

7.5MW
7.5MW

In Progress
In Progress Growing project pipeline

5

Mie

7.5MW

In Progress© 2016 Ichigo Inc. All rights reserved.

18

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

Ichigo Motomombetsu(1.40MW)

37 Plants (116MW)

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

Ichigo Abira Toasa(1.17MW)

Currently Operating

Ichigo Nakashibetsu
Midorigaoka(1.93MW)

Ichigo Muroran Hatchodaira(1.24MW)

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

Ichigo Engaru Higashimachi(1.24MW)

Ichigo Hamanaka Bokujo Tsurunokotai(2.31MW)

Ichigo Higashi-Hiroshima
Saijocho Taguchi (2.73MW)

Ichigo Betsukai Kawakamicho(0.88MW)

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

Ichigo Akkeshi Shirahama(0.81MW)

Ichigo Sera Tsukuchi(2.54MW) Online in 2017/2

Ichigo Yamaguchi Sayama(2.36MW )Ichigo Sera Aomizu(2.87MW) Online in 2017/3

Ichigo Toyokoro
Sasadamachi (0.61MW)

Ichigo Maebashi Naegashima(0.67MW)

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

Ichigo Fuchu Jogecho Yano
(0.99MW)

Ichigo Nago Futami(8.44MW)

Ichigo Toyokoro(1.03MW)

Ichigo Showamura Ogose(43.35MW) Online in 2018/1

Ichigo Yonago Izumi(2.61MW)

Ichigo Kiryu Okuzawa(1.33MW)

Ichigo Kasaoka Takumicho(1.12MW)

Ichigo Toride Shimotakai Kita
(1.03MW)

Ichigo Kijo Takajo(0.90MW)

Ichigo Toride Shimotakai Minami(0.54MW)
Ichigo Toki Oroshicho(1.40MW)

Ichigo Miyakonojo Takazakicho
Tsumagirishima (2.65MW)
Online in 2021/11
Ichigo Miyakonojo
Yasuhisacho (1.44MW)

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

Ichigo Takamatsu
Kokubunjicho Nii (2.43MW)

Ichigo Toyokawa Mitocho Sawakihama(1.80MW)

Ichigo Iyo Nakayamacho
Izubuchi (1.23MW)

As of October 14, 201619

National Solar Power Plant Portfolio (2) By Customer(Electric Power Utility Co)
Kyushu4%

 By Feed-in-Tariff By Operating Timeline

Chubu3%

Tohoku4%

32 yen11%

Shikoku
5%
Okinawa
7%

TEPCO
49%

Hokkaido
11%

36 yen59%

Chugoku17%>1 year inoperation
32%

0.5-1 year inoperation
8%
Starting
operation
within 0.5
years
5%

 By Output<0.5 year
year inoperation4%

 By Solar Intensity
B (In-Development)
5%

2-10MW
22%

2-10MW(In-Development)(InDevelopment)
9%© 2016 Ichigo Inc. All rights reserved.

C (In-Development)
5%

Rank
A
B
C
D

A
15%

<2MW
23%
>10MW
(InDevelopment)
46%

Starting
operation
within 1-2
years
51%

40 yen30%

A(In-Development)
A (In46%
Development)
46%

B
28%

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

Unit: (kWh/m2 per day)C
1%

As of October 14, 2016
20

JPX-Nikkei Index 400 Inclusion
Index Composed of Companies that Meet Global Investor Standards
for Efficient Use of Capital and Strong Corporate Governance Ichigo successfully entered in August 2016
 In its new mid-term plan Power Up 2019, Ichigo targeting
ranking in the Index’s top 200 companies by August 2019 (the final
year of Power Up 2019)© 2016 Ichigo Inc. All rights reserved.

21

Appendix: Financial & Real Estate Data

© 2016 Ichigo Inc. All rights reserved.

22

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

Solar Plants
Buy

Ichigo GreenInfrastructure Fund

OfficeIchigo Office REIT
(8975)
Hotel

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

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
23

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

Value‐Add
DemolishandRebuild© 2016 Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

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

HighestEfficiency
LowestImpact24

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

Debt
Asset

JPY1.5B

JPY 2BNOI 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 )© 2016 Ichigo Inc. All rights reserved.

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

25

Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 254.3B(Book Value JPY 229.6B + Unrealized Gains JPY 24.7B)

Non-Recourse LoanRelated Assets

Non-Recourse Loans &Related Liabilities

Consolidated Risk-Based Balance Sheet
Assets JPY 174.4B

JPY 55.2B

JPY 74.3B

As of August 31, 2016

Non-Recourse Loan-Related
ICH Equity JPY 19.1B

Cash & Cash Equivalents

JPY 39.5B

Corporate Loans

JPY 85.9B

Debt
JPY
152.5B

Cash & Cash Equivalents

JPY 39.5B

JPY 85.9B

Operational Investments in Loans
JPY 1.3B

Operational Investments in Loans
JPY 1.3B

Operational Investments in
Securities JPY 0.9B

Operational Investments in
Securities JPY 0.9B

Security Deposits Received
JPY 3.6B

Real Estate For Sale

Power Plants for Sale
JPY 7.2B

Fixed Assets

JPY 27.9B
Investments in Securities
JPY 1.6B

Shareholder
EquityJPY 77.1B

Other JPY 6.7B

Unrealized Gains
JPY 24.7B

Security Deposits Received
JPY 3.6B

Real Estate For Sale

Other JPY 7.8B

JPY 70.2B

Unrealized Gains
JPY 24.7B

Corporate Loans

Debt
JPY
97.4B

JPY 70.2B

Mark-toMarket
Shareholder
Equity Ratio

40.0%

Power Plants for Sale
JPY 7.2B

Fixed Assets

JPY 27.9B
Investments in Securities
JPY 1.6B

Other JPY 7.8B

Shareholder
EquityJPY 77.1B

Other JPY 6.7B

Unrealized Gains
JPY 24.7B

Risk-Based
Shareholder
Equity Ratio
with
Unrealized Gains

51.1%

Unrealized Gains
JPY 24.7B

Note: Risk-Based Balance Sheet excludes client and non-recourse assets and liabilities.
© 2016 Ichigo Inc. All rights reserved.

26

Significant Unrealized Gains on Balance Sheet
Total Unrealized Gains: JPY 24.5B (Appraisal Value Basis)
Real estate directly held by Ichigo
LocationBook Value as of
Aug 31, 2016

(Million Yen)NOICap Rate

Appraisal ValueNOI/Book Value after write-down

as of Aug 31, 2016

Unrealized GainTokyo

67,204

3,963

5.9%

80,073+12,869

Outside Tokyo

77,729

5,125

6.7%

89,078+11,349

Total

144,933

9,088

6.3%

169,151+24,218

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

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

Book Value as of
Aug 31, 2016

Appraisal Value asof Aug 31, 2016

Unrealized Gains

Equity Investments(Non-consolidated)

－

－

－

Equity Investments(Consolidated)

1,032

1,350

+317

Total

1,032

1,350

+317

© 2016 Ichigo Inc. All rights reserved.

27

Business Segments

Asset Management

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

Value-Add

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

Clean Energy

Other© 2016 Ichigo Inc. All rights reserved.

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

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

28

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

FY 17/2 H1
OutsideInvestors'
Interest

B/S

Quarter-onQuarter

Market Value

Unrealized
Gain

Unrealized Gainon Listed
Securities

2

Cash and Cash Equivalents

28,77935,183

46,473557+11,290

46,473－－Operating Loans Receivable (Value-Add)

1,324

1,324

1,324

－

－

1,324

－

－

Operational Investments in Securities

1,784

2,617

880

－

-1,737880－+1Value-Add

844

1,707

134

－

-1,573

134

－

－

Other

939

910

746

－

-164

746

－

+1

172,833

159,384

135,193

3,013-24,191

158,800+22,832

－

－

－

7,251

－

+7,251

7,251

－

－

31,54633,02029,624－-3,396

31,472+1,848

－

39

37

29

－

-8

29

－

－

Value-Add

15,897

15,845

15,792－-53

17,640+1,848－

Clean Energy

15,56017,094

13,748－-3,346

13,748

－

－

Other

48

42

54

－

+12

54

－

－

Intangible Assets

2,373

2,398

2,032

－

-366

2,032

－

－

Investments in Securities

5,486

1,734

1,583

－

-151

1,583

－

+254

Other

7,628

8,373

5,247

8

-3,126

5,247

－

－

251,757

244,037

229,612

3,578-14,425

255,067+24,681+255

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

1

Total Assets

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

29

Consolidated Balance Sheet: Segment Breakdown(Million Yen)
Cash andCash
Equivalents

Operating
Loans
Receivable

432

－

－

－

－

Value-Add

12,3561,324

134

135,193

Clean Energy

1,970

－

－

98

－

Company-Wide Assets

31,616

Total

46,473

Segment

Asset Management

Other© 2016 Ichigo Inc. All rights reserved.

Operational
Real Estate
Investments
for Salein Securities

Power
Plants for
Sale

Intangible
AssetsInvestmentsinSecurities

29

1,578

－

559

2,599

－

15,792

167

－

2,787

167,756－

7,251

13,748

258

－

1,099

24,328

746

－

－

－

－

1,583

-417

2,011

－

－

－

－

54

27

－

1,218

32,9171,324

880

135,1937,251

29,624

2,032

1,583

5,247

229,612

Fixed
AssetsOther
AssetsTotal Assets

30

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

Revenue

Segment
FY16/2 H1Gross Profit

FY17/2 H1ChangeFY16/2 H1

FY17/2 H1

YOY(Gross Profit)

Change

2,964

2,460

-503

2,067

1,558

-509

- 24.6%

806

1,107

+301

800

1,102

+302

+37.8%

PM/BM Fees

1,080

1,119

+39

237

230

-7

- 3.0%

Other

1,077

233

-844

1,030

225

-804

- 78.1%

Value-Add

10,75882,305+71,546

4,656

15,428+10,772+231.4%

Rental Income

5,509

7,627

+2,118

3,443

5,113

+1,669+48.5%

Asset Sales

5,249

74,677+69,427

1,212

10,314+9,101+750.6%

Clean Energy

870

1,214

+344

434

584

+150

+34.6%

Other

13

10

-2

4

-102

-107

‐

Total

14,60785,991+71,384

7,163

17,468+10,305+143.9%Asset Management
Asset Management Fees

© 2016 Ichigo Inc. All rights reserved.

31

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

FY17/2 H1 (6M)ン
Segment

Revenue% of Full-Year
Forecast

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

Operating
Profit% of Full-Year
Forecast

Revenue

Gross
ProfitOperating
Profit

2,460

48.4%

1,558

52.0%

1,473

61.7%

5,079

2,999

2,386

Asset Management Fees

1,107

49.9%

1,102

49.9%

－

－

2,219

2,209

－

PM/BM Fees

1,119

43.2%

230

43.3%

－

－

2,588

531

－

233

86.2%

225

87.1%

－

－

271

259

－

82,30575.3%

15,428

86.6%

13,092

96.8%

109,297

17,82013,530Rental Income

7,627

57.2%

5,113

58.6%

－

－

13,346

8,727－

Asset Sales

74,67777.8%

10,314113.4%－－

95,950

9,093－

Clean Energy

1,214

10.9%

584

19.1%

351

13.5%

11,152

3,065

2,608

Other

10

15.2%

-102

－

-135

－

71

-18

-84

Total

85,991

68.5%

17,46873.2%

14,781

80.2%

125,600

23,86718,440

－

－

－

－

202

－

－

－

59

85,991

68.5%

17,46873.2%

14,98481.0%

125,600

23,86718,500Asset Management

Other
Value-Add

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

32

Asset Management AUM Detail

Ichigo Office REIT
(8975)

FY12/2(12M)

FY13/2(12M)

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 H1(6M)

JPY 106.1B

JPY 104.3B

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 191.9B

0.61%

0.63%

0.65%

0.65%

0.64%

0.67%

JPY 719mm

JPY 663mm

JPY 733mm

JPY 759mm

JPY 1,016mm

JPY 615mm

AUM (Fiscal Year End)

－

－

－

－

JPY 20.4B

JPY 47.6B

AM Fee % (Average)

－

－

－

－

0.59%*

0.78%

AM Fee Gross Profit (Actual)

－

－

－

－

JPY 30mm

JPY 97mm

JPY 213.3B

JPY 169.7B

JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 15.4B

0.15%

0.15%

0.26%

0.37%

0.32%

0.26%

AM Fee Gross Profit (Actual)

JPY 284mm

JPY 285mm

JPY 257mm

JPY 114mm

JPY 60mm

JPY 20mm

AUM (Fiscal Year End)JPY 319.3B

JPY 274.1B

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 255.0B

0.33%

0.33%

0.47%

0.59%

0.61%

0.66%

JPY 1,004mm

JPY 948mm

JPY 989mm

JPY 872mm

JPY 1,106mm

JPY 733mm

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

Ichigo Hotel REIT
(3463)

Private Equity Real
Estate Funds (excluding
consolidated funds)

Total

AUM (Fiscal Year End)AM Fee % (Average)

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

33

Ichigo-Owned Real Estate Portfolio
Ground
Lease
4%

Other
1%

Sendai
4%

Mixed
7%

Office26%

Residence
16%

Nagoya2%

Retail25%(Billion Yen)

Other
6%

Osaka
7%

Tokyo
47%

Fukuoka
17%

Hotel
21%

As of August 31, 2016

Assets by Location

Assets by Type

Kanto
17%
Tokyo

Sendai
5.8

68.3
Kanto
25.1

Assets by Size
JPY 5-10B
10%

JPY 0-1B
16%

JPY 1-5B
74%

Osaka
9.8
Fukuoka
24.7

Nagoya
3.4
Other
9.7

Total Ichigo-Owned Assets: JPY 146.8B
Including Ichigo-Managed AUM: JPY 407.6B(Acquisition price basis)© 2016 Ichigo Inc. All rights reserved.

34

Value-Add Asset Breakdown (1)86 Assets, Book Value JPY 146.8B, Forecast NOI JPY 9.0B (6.2% Yield)
No.

Asset TypeClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
1
Multiple

Forecast
2
IRR

1

Other

Fixed Asset

Matsudo City, Chiba

44 years

JPY 2B-3B

2005/06

JPY 230mm

JPY 1,900mm

－

－

2

RetailReal Estate for Sale

Minato-ku, Tokyo

47 years

JPY 2B-3B

2005/10

JPY 131mm

JPY 1,033mm

－

－

3

RetailReal Estate for Sale

Minato-ku, Tokyo

31 years≧JPY 3B

2006/03

JPY 167mm

JPY 1,356mm

－

－

4

RetailReal Estate for Sale

Yokohama City, Kanagawa

11 years

JPY 1B-2B

2006/09

JPY 57mm

JPY 1,157mm

－

－

5

OfficeReal Estate for Sale

Sendai City, Miyagi

8 years≧JPY 3B

2006/10

JPY 265mm

JPY 1,042mm

－

－

6

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

8 years≧JPY 3B

2006/12JPY 389mm

JPY 1,339mm

－

－

7

Other

Fixed Asset

Isumi City, Chiba－

JPY 1B-2B

2007/02－

JPY 1,055mm

－

－

9

Residence

Real Estate for Sale

Ota-ku, Tokyo

11 years<JPY 1B

2007/04

JPY 57mm

JPY 403mm

－

－

10

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

36 years<JPY 1B

2007/06

JPY 85mm

JPY 240mm

－

－

11

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

35 years<JPY 1B

2007/06

JPY 119mm

JPY 233mm

－

－

12

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

52 years

JPY 2B-3B

2007/06

JPY 249mm

JPY 554mm

－

－

13

OfficeReal Estate for Sale

Minato-ku, Tokyo

43 years≧JPY 3B

2007/11

JPY 314mm

JPY 2,049mm

－

－

14

Ground Lease

Real Estate for Sale

Atsugi City, Kanagawa－

JPY 1B-2B

2011/06

JPY 176mm

JPY 147mm

－

－

15

Mixed (Office/Retail) Real Estate for Sale

Hiratsuka City, Kanagawa

20 years<JPY 1B

2012/02

JPY 83mm

JPY 172mm

－

－

16

RetailYokohama City, Kanagawa

2 years<JPY 1B

2012/10

JPY 32mm

JPY 171mm

－

－

1
2

Real Estate for Sale

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

© 2016 Ichigo Inc. All rights reserved.

35

Value-Add Asset Breakdown (2)No.

Asset TypeClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1*

Forecast
IRR2

17

RetailFixed AssetToshima-ku, Tokyo

5 years≧ JPY 3B

2013/03

JPY 228mm

JPY 340mm

－

－

18

RetailReal Estate for Sale

Shibuya-ku, Tokyo

30 years<JPY 1B

2013/05

JPY 45mm

JPY 154mm

－

－

19

Mixed (Office/Retail)Real Estate for Sale

Chofu City, Tokyo

31 years

JPY 1B-2B

2013/06

JPY 112mm

JPY 310mm

－

－

21

Residence

Real Estate for Sale

Minato-ku, Tokyo

0 years<JPY 1B

2013/06

JPY 42mm

JPY 203mm

－

－

22

Residence

Real Estate for Sale

Osaka City, Osaka

13 years<JPY 1B

2013/07

JPY 32mm

JPY 81mm－－

23

Residence

Real Estate for Sale

Osaka City, Osaka

9 years<JPY 1B

2013/08

JPY 49mm

JPY 81mm－－

24

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

25 years

JPY 1B-2B

2013/08

JPY 86mm

JPY 520mm

－

－

25

Residence

Real Estate for Sale

Osaka City, Osaka

11 years<JPY 1B

2013/08

JPY 37mm

JPY 90mm－－

26

RetailFixed Asset

Kobe City, Hyogo

16 years

JPY 1B-2B

2013/09

JPY 145mm

JPY 616mm

－

－

27

RetailFixed Asset

Tokorozawa City, Saitama

8 years

JPY 1B-2B

2013/11

JPY 64mm

JPY 92mm－－

28

Ground Lease

Real Estate for Sale

Chiba City, Chiba－

JPY 2B-3B

2014/02

JPY 128mm

JPY 342mm

－

－

29

Ground Lease

Real Estate for Sale

Fujisawa City, Kanagawa－

JPY 1B-2B

2014/03

JPY 115mm

JPY 273mm

7.52 x44.5%30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo

32 years<JPY 1B

2014/03

JPY 39mm

JPY 108mm

6.95 x26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

5 years

JPY 1B-2B

2014/04

JPY 60mm

JPY 1,090mm

1.25 x12.0%

32

RetailFixed Asset

Fukuoka City, Fukuoka

10 years

JPY 1B-2B

2014/04

JPY 59mm

JPY 279mm

－

－

1
2

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

© 2016 Ichigo Inc. All rights reserved.

36

Value-Add Asset Breakdown (3)No.

Asset TypeClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
IRR2

33

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

27 years

JPY 2B-3B

2014/05

JPY 155mm

JPY 530mm

2.04 x20.0%

34

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

23 years

JPY 1B-2B

2014/05

JPY 131mm

JPY 515mm

2.27 x23.4%

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

7 years

JPY 2B-3B

2014/05

JPY 155mm

JPY 434mm

3.08 x15.2%

36

Residence

Real Estate for Sale

Kumamoto City, Kumamoto

9 years≧ JPY 3B

2014/06

JPY 213mm

JPY 476mm

3.52 x19.0%

37RetailReal Estate for Sale

Minato-ku, Tokyo

44 years<JPY 1B

2014/07

JPY 39mm

JPY 77mm

10.47 x23.9%

38

Mixed (Office/Retail)Real Estate for Sale

Shinjuku-ku, Tokyo

40 years≧ JPY 3B

2014/07

JPY 201mm

JPY 645mm

3.32 x21.1%

39

RetailFixed Asset

Fukuoka City, Fukuoka

12 years<JPY 1B

2014/07

JPY 47mm

JPY 213mm

－

－

40

RetailFixed Asset

Fukuoka City, Fukuoka

31 years<JPY 1B

2014/09

JPY 55mm

JPY 252mm

－

－

41

Hotel

Real Estate for Sale

Utsunomiya City, Tochigi

29 years

JPY 1B-2B

2014/09

JPY 138mm

JPY 400mm

1.97 x28.3%

42RetailReal Estate for Sale

Fukuoka City, Fukuoka

15 years<JPY 1B

2014/09

JPY 54mm

JPY 177mm

5.54 x26.2%

43RetailReal Estate for Sale

Osaka City, Osaka

14 years

JPY 1B-2B

2014/09

JPY 90mm

JPY 301mm

4.64 x24.3%

44RetailReal Estate for Sale

Machida City, Tokyo

30 years<JPY 1B

2014/10

JPY 51mm

JPY 82mm

11.34 x43.9%

45RetailReal Estate for Sale

Fukuoka City, Fukuoka

13 years

JPY 1B-2B

2014/11

JPY 68mm

JPY 135mm

10.70 x33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

13 years

JPY 2B-3B

2014/12JPY 119mm

JPY 332mm

2.18 x29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 96mm

JPY 270mm

1.56 x14.6%

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

© 2016 Ichigo Inc. All rights reserved.

37

Value-Add Asset Breakdown (4)No.

Asset TypeClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple

Forecast

1

2

IRR

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 79mm

JPY 238mm

1.67 x16.6%

49

Residence

Real Estate for Sale

Minato-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 61mm

JPY 185mm

1.63 x15.7%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 59mm

JPY 163mm

1.55 x15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo

14 years<JPY 1B

2014/12JPY 60mm

JPY 150mm

2.21 x35.7%

52

Residence

Real Estate for Sale

Osaka City, Osaka

8 years<JPY 1B

2014/12JPY 58mm

JPY 148mm

1.86 x24.8%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo

13 years<JPY 1B

2014/12JPY 38mm

JPY 99mm

2.96 x44.4%

54

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years<JPY 1B

2014/12JPY 38mm

JPY 123mm

1.97 x23.3%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

11 years<JPY 1B

2014/12JPY 29mm

JPY 82mm

2.05 x25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 87mm

JPY 270mm

2.00 x23.2%

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 57mm

JPY 186mm

1.90 x21.0%

58

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

11 years<JPY 1B

2014/12

JPY 49mm

JPY 157mm

1.89 x21.5%

59

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

11 years<JPY 1B

2014/12JPY 39mm

JPY 117mm

2.11 x27.2%

60

Residence

Real Estate for Sale

Setagaya-ku, Tokyo

10 years<JPY 1B

2014/12JPY 19mm

JPY 55mm

1.80 x21.1%

61

Mixed (Office/Retail) Operating Loan

Shinjuku-ku, Tokyo

53 years

JPY 1B-2B

2014/12JPY 103mm

JPY 57mm

15.26 x51.7%

62RetailFukuoka City, Fukuoka

12 years<JPY 1B

2014/12

JPY 42mm

JPY 212mm

－

－

1
2

Fixed Asset

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

© 2016 Ichigo Inc. All rights reserved.

38

Value-Add Asset Breakdown (5)No.

Asset TypeClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
1
Multiple

Forecast
2
IRR

63

RetailReal Estate for Sale

Meguro-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 67mm

JPY 129mm

3.98 x23.8%

64RetailReal Estate for Sale

Shinagawa-ku, Tokyo

62 years<JPY 1B

2015/01

JPY 16mm

JPY 0mm－－66

RetailReal Estate for Sale

Sendai City, Miyagi

12 years<JPY 1B

2015/02

JPY 47mm

JPY 8mm

42.58 x198.9%

67

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

25 years

JPY 1B-2B

2015/03

JPY 59mm

JPY 94mm

6.39 x54.4%

68

RetailReal Estate for Sale

Shibuya-ku, Tokyo

14 years<JPY 1B

2015/04

JPY 42mm

JPY 79mm

5.65 x

27.9%

69

Hotel

Real Estate for Sale

Osaka City, Osaka

13 years

JPY 2B-3B

2015/05

JPY 178mm

JPY 633mm

1.56 x

58.3%

70

Hotel

Real Estate for Sale

Aomori City, Aomori

9 years<JPY 1B

2015/06

JPY 45mm

JPY 113mm

2.10 x20.2%

71RetailReal Estate for Sale

Fujisawa City, Kanagawa

1 years

JPY 1B-2B

2015/07

JPY 99mm

JPY 126mm

6.80 x37.3%

85

OfficeReal Estate for Sale

Bunkyo-ku, Tokyo

24 years

JPY 2B-3B

2015/07

JPY 114mm

JPY 428mm

1.34 x16.8%

88

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

28 years

JPY 1B-2B

2015/07

JPY 96mm

JPY 355mm

1.32 x15.8%

89

OfficeReal Estate for Sale

Musashino City, Tokyo

27 years≧JPY 3B

2015/07

JPY 127mm

JPY 670mm

1.72 x13.3%

92

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

8 years

JPY 1B-2B

2015/07

JPY 87mm

JPY 353mm

1.82 x17.7%

93

OfficeReal Estate for Sale

Fukuoka City, Fukuoka

14 years

JPY 1B-2B

2015/07

JPY 87mm

JPY 358mm

1.92 x

18.8%

96

Hotel

Real Estate for Sale

Sapporo City, Hokkaido

23 years<JPY 1B

2015/08

JPY 26mm

JPY 2mm5.52 x291.5%

98

Hotel

Real Estate for Sale

Naha City, Okinawa

28 years

JPY 2B-3B

2015/11

JPY 166mm

JPY 640mm

1.91 x25.9%12Forecast Equity Multiple is based on the business plan of each asset and is the expected sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2016 Ichigo Inc. All rights reserved.

39

Value-Add Asset Breakdown (6)No.

Asset TypeClassification

Location

Building Age

Acquisition Price

Acquisition
Date

Expected
NOI/Year

Ichigo Investment

Forecast Equity
Multiple1

Forecast
2

IRR

105

Hotel

Real Estate for Sale

Kumamoto City, Kumamoto

32 years

JPY 1B-2B

2015/12JPY 117mm

JPY 453mm

1.61 x

61.2%

* 109

Hotel

Real Estate for Sale

Nagoya City, Aichi

7 years

JPY 2B-3B

2016/03

JPY 130mm

JPY 525mm

1.84 x

37.7%

110

Hotel

Real Estate for Sale

Fukuoka City, Fukuoka

31 years≧JPY 3B

2016/03

JPY 274mm

JPY 905mm

2.05 x104.5%

111

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

32 years

JPY 2B-3B

2016/03

JPY 207mm

JPY 228mm

5.32 x

23.3%

112

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

29 years≧JPY 3B

2016/03

JPY 319mm

JPY 354mm

10.64 x

36.2%

113

Hotel

Real Estate for Sale

Yokohama City, Kanagawa

29 years≧JPY 3B

2016/03

JPY 260mm

JPY 344mm

5.84 x

25.5%

114

Hotel

Real Estate for Sale

Fukuoka City, Fukuoka

26 years≧JPY 3B

2016/04

JPY 175mm

JPY 550mm

1.73 x

72.6%

115

Hotel

Real Estate for Sale

Osaka City, Osaka

9 years

JPY 2B-3B

2016/04

JPY 130mm

JPY 274mm

2.96 x30.7%

116

RetailReal Estate for Sale

Sendai City, Miyagi

27 years<JPY 1B

2016/04

JPY 70mm

JPY 86mm

7.50 x28.4%

118

RetailReal Estate for Sale

Nagoya City, Aichi

19 years

JPY 1B-2B

2016/06

JPY 83mm

JPY 102mm

7.71 x32.6%

119RetailReal Estate for Sale

Shibuya-ku, Tokyo

29 years<JPY 1B

2016/06

JPY 42mm

JPY 136mm

3.91 x17.4%

JPY 9,088mm JPY 32,455mm

2.95 x

37.5%

Total

86 Assets JPY 146,831mm

Assets acquired in FY17/2 Q1 Total 9 Assets

JPY 23,485mm

JPY 1,603mm

JPY 3,392mm

3.66 x85.8%

Assets acquired in FY17/2 Q2 Total 2 Assets

JPY 2,100mm

JPY 125mm

JPY 238mm

5.54 x25.0%

Assets acquired in FY17/2 H1 Total 11 Assets

JPY 25,585mm

JPY 1,729mm

JPY 3,630mm

3.78 x74.8%

Note: Assets acquired and sold in FY17/2 Total 1 Asset

JPY 670mm

JPY 38mm

JPY 126mm

1.57 x413.7%* Assets acquired in FY17/2
1
2

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

© 2016 Ichigo Inc. All rights reserved.

40

Reference: Japan’s Feed-in-Tariff (FIT)
What is a FIT?
‒‒

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

Tariff per
1kWh*Guarantee
PeriodContract Date

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

40 yen20 years

FY2015 (4/1-6/30)

29 yen20 years

FY2013 (4/1-3/31)

36 yen20 years

FY2015 (7/1-3/31)

27 yen20 years

FY2014 (4/1-3/31)

32 yen20 years

FY2016 (4/1-3/31)

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

Current Regulatory Framework and Ichigo Plant Status‒‒‒

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

© 2016 Ichigo Inc. All rights reserved.

41

Clean Energy Earnings
Revenue Growth via New Plants Coming Online
OP +21% YOY (JPY 351mm in FY17/2 H1 vs. JPY 290mm in FY16/2 H1)(Million Yen)

FY16/2(12M)

Revenue

FY17/2 Q1(3M)

FY17/2 H1(6M)

FY17/2 Full-Year
Forecast (12M)% of Full-Year
Forecast

1,628

556

1,214

11,152

10.9%

Cost of Goods Sold

945

302

629

8,087

7.8%

Gross Profit

683

254

584

3,065

19.1%

SG&A

358

110

233

456

51.2%

(including offsets of crosssegment transactions)

－

－

－

－

－

Operating Profit

323

143

351

2,608

13.5%

30 Plants Online
49.32MW

32 Plants Online
54.17MW (Forecast)

Adjustments

Solar Power Plant
Schedule

24 Plants Online
41.97MW

27 Plants Online
46.35MW

37 Plants Online
115.95MW (Forecast)(Forecast)

Total operating and in-development: 37 plants, 115.95MW© 2016 Ichigo Inc. All rights reserved.

42

Individual Solar Power Plant P&L Breakdown (1)Total 20-Year Forecast IRR for All Plants: 40.7% p.a.
Panel
Output(MW)

Fixed
Tariff(Pre-tax,
JPY)

Operation
Start Date

Expected
NOI/Year

Forecast Equity
Multiple (If heldfor 20 years) 1

IchigoInvestment

Forecast
IRR2

No.

Solar Power Plant

Area

1

Ichigo Tokushima Higashi Okinosu

Shikoku

2.52

40

Aug-13

JPY 84mm

JPY 36mm

JPY 129mm

7.46 x26.2%

2

Ichigo Kiryu Okuzawa

Kanto

1.33

40

Sep-13

JPY 42mm

JPY 20mm

JPY 94mm

4.77 x17.6%

3

Ichigo Motomombetsu

Hokkaido

1.40

40

Feb-14

JPY 44mm

JPY 21mm

JPY 134mm

3.84 x15.2%

4

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

40

Mar-14

JPY 28mm

JPY 15mm

JPY 102mm

3.09 x12.4%

5

Ichigo Muroran Hatchodaira

Hokkaido

1.24

40Mar-14

JPY 41mm

JPY 20mm

JPY 138mm

3.29 x12.3%

6

Ichigo Engaru Kiyokawa

Hokkaido

1.12

40Mar-14

JPY 35mm

JPY 16mm

JPY 93mm

4.17 x16.5%

7

Ichigo Yubetsu Barou

Hokkaido

0.80

40

Apr-14

JPY 23mm

JPY 13mm

JPY 31mm

5.30 x15.0%

8

Ichigo Iyo Nakayamacho Izubuchi

Shikoku

1.23

40

Apr-14

JPY 43mm

JPY 19mm

JPY 73mm

6.58 x25.3%

9Ichigo Maebashi Naegashima

Kanto

0.67

40

Apr-14

JPY 25mm

JPY 9mm

JPY 40mm

8.57 x34.3%

10

Ichigo Betsukai Kawakamicho

Hokkaido

0.8840

Oct-14

JPY 29mm

JPY 14mm

JPY 42mm

6.31 x23.0%

11

Ichigo Toyokoro Sasadamachi

Hokkaido

0.61

40

Oct-14

JPY 23mm

JPY 10mm

JPY 31mm

7.27 x27.4%

12

Ichigo Nakashibetsu Midorigaoka

Hokkaido

1.93

40

Nov-14

JPY 64mm

JPY 29mm

JPY 175mm

4.09 x15.3%

13

Ichigo Abira Toasa

Hokkaido

1.1740

Dec-14

JPY 39mm

JPY 19mm

JPY 36mm

10.12 x35.2%

14Ichigo Toyokoro

Hokkaido

1.03

40

Dec-14

JPY 41mm

JPY 16mm

JPY 65mm

7.59 x33.0%

15

Ichigo Higashi Hiroshima Saijocho Taguchi

Chugoku

2.73

40

Jan-15

JPY 97mm

JPY 41mm

JPY 241mm

5.15 x20.3%

16

Ichigo Nago Futami

Okinawa

8.44

40

Feb-15

JPY 308mm

JPY 132mm

JPY 1,189mm

3.48 x12.0%

17

Ichigo Engaru Higashimachi

Hokkaido

1.24

40

Feb-15

JPY 40mm

JPY 19mm

JPY 32mm

10.90 x37.5%

18

Ichigo Akkeshi Shirahama

Hokkaido

0.81

40Mar-15

JPY 23mm

JPY 13mm

JPY 43mm

4.21 x14.6%

19

Ichigo Takamatsu Kokubunjicho Nii

Shikoku

2.43

36

Jun-15

JPY 85mm

JPY 32mm

JPY 59mm

16.72 x37.9%

20

Ichigo Miyakonojo Yasuhisacho

Kyushu1.44

36

Jul-15

JPY 46mm

JPY 20mm

3

3

N/A3

Depreciation

N/A

N/A

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

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

43

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

Solar Power Plant

Area

Panel
Output(MW)

Fixed
Tariff(Pre-tax,
JPY)

Operation
Start Date

Expected
NOI/Year

Depreciation

Ichigo Investment

Forecast Equity
Multiple (If heldfor 20 years) 1

Forecast
IRR2

21

Ichigo Toyokawa Mitocho Sawakihama

Chubu

1.80

32

Sep-15

JPY 41mm

JPY 22mm

JPY 10mm

32.63 x97.1%

22

Ichigo Yamaguchi Aionishi

Chugoku

1.24

40

Dec-15

JPY 42mm

JPY 19mm

JPY 13mm

29.44 x87.0%

23

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

36

Dec-15

JPY 74mm

JPY 31mm

JPY 22mm

30.84 x92.6%

24

Ichigo Yonago Izumi

Chugoku

2.61

40

Jan-16

JPY 89mm

JPY 34mm

N/A3

N/A3

N/A3

*25

Ichigo Kasaoka Takumicho

Chugoku

1.12

32

Mar-16

JPY 26mm

JPY 14mm

JPY 10mm

20.48 x59.6%

26

Ichigo Yamaguchi Sayama

Chugoku

2.36

36

Apr-16

JPY 74mm

JPY 33mm

JPY 19mm

36.82 x127.7%

27

Ichigo Kijo Takajo 4

Kyushu0.90

40

May-16

JPY 35mm

JPY 18mm

JPY 141mm

3.01 x18.2%

28

Ichigo Toki Oroshicho

Chubu

1.40

36

Jun-16

JPY 41mm

JPY 20mm

JPY 9mm

38.04 x96.1%

29

Ichigo Toride Shimotakai Kita

Kanto

1.03

32

Jul-16

JPY 25mm

JPY 13mm

JPY 8mm26.18 x67.7%

30

Ichigo Toride Shimotakai Minami

Kanto

0.54

32

Jul-16

JPY 12mm

JPY 6mm

JPY 3mm32.29 x75.3%

31

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

36

Oct-16

JPY 74mm

JPY 33mm

JPY 45mm

15.13 x35.3%

32

Ichigo Sera Tsukuchi

Chugoku

2.54

32

Feb-17

JPY 68mm

JPY 30mm

JPY 50mm

6.93 x22.2%

33

Ichigo Sera Aomizu

Chugoku

2.87

32

Mar-17

JPY 83mm

JPY 33mm

JPY 29mm

32.63 x111.9%

34

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.65

36

Aug-17

JPY 70mm

JPY 35mm

JPY 88mm

7.43 x19.8%

35

Ichigo Showamura Ogose

Kanto

43.35

36

Jan-18JPY 1,405mm

JPY 608mm

JPY 479mm

31.14 x44.0%

36

Ichigo Minakami Aramaki

Kanto

10.26

36

Jul-18

JPY 347mm

JPY 176mm

JPY 329mm

9.40 x14.9%

37

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.65

32

Nov-21

JPY 56mm

JPY 30mm

JPY 55mm

8.62 x22.3%

JPY 3,722mm

JPY 1,669mm

JPY 4,057mm

13.83 x40.7%

Total 115.95MW* Plants that started operation in FY17/2
1 Forecast Equity Multiple is based on the P50* business plan of each plant and is the forecast 20-year NOI divided by Ichigo Investment.
2 Forecast IRR is the internal rate of return based on each plant’s P50 forecast cash flow.
3 The consumption tax rebate that Ichigo receives as the operator of these renewable power plants is greater than Ichigo’s equity investment.

Therefore, Ichigo Investment is negative and Forecast Equity Multiple and Forecast IRR are not meaningful.
4 Ichigo acquired Ichigo Kijo Takajo ECO Power Plant in May 2016. The plant began operation in April 2014.

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

Updates・Plants expected to start operation in FY17/2: Ichigo Sera Tsukuchi Jan-17→Feb-17, Ichigo Sera Aomizu Feb-17→Mar-17
・Panel output change: Ichigo Showamura Ogose 43.01MW→43.35MW Ichigo Sera Aomizu 2.75MW→2.87MW・Expected NOI/Year, Depreciation, Ichigo Investment, Forecast Equity Multiple, and Forecast IRR have been updated on an individual plant basis, as
appropriate, to reflect current forecast operating conditions.
© 2016 Ichigo Inc. All rights reserved.

44

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

FY14/2

FY15/2

FY16/2

FY17/2 Q1

FY17/2 H1Change
(QOQ)

9,713
548
3,636
4,271
46,176－369
2,042-3,177
63,581

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

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

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

35,183
1,494
1,324
2,617
159,384
－
1,173
4,669
-447
205,401

46,473
1,021
1,324
880
135,193
7,251
407
2,954
-414
195,093+11,290-473－-1,737-24,191+7,251-766-1,715+33-10,308

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

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

3,773
13,09912,192
3,953
33,0203,734
6,850
12,1096,929
29,624-39-6,249-83+2,976-3,396

2,203
－
20
2,223

2,221
392
71
2,686

2,082
392
27
2,502

1,942
392
38
2,373

1,969
392
35
2,398

1,935
62
33
2,032

-34
-330
-2
-366

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

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

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

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

1,734
10
33
1,532
-93
3,217
38,635244,037

1,583
10
40
1,322
-92
2,862
34,519229,612

-151
－
+7
-210
+1
-355
-4,116-14,42545

Consolidated Balance Sheet: Liabilities & Net Assets(Million Yen)
FY13/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term borrowings
Short-term non-recourse loans
Bonds (due within one year)
Long-term borrowings (due within one year)
Long-term non-recourse loans (due within one
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term borrowings
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Negative goodwill
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on hedges
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© 2016 Ichigo Inc. All rights reserved.

FY14/2

FY15/2

FY16/2

FY17/2 Q1

FY17/2 H1Change
(QOQ)

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

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

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

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

81
1,425
79
－
10,171
931
250
75
155
3,906
17,077

72
1,410
79
112
5,066
902
747
48
123
5,350
13,912

-9
-15
－
+112
-5,105
-29
+497
-27
-32
+1,444-3,165

－
－
－
－
5,456
32,776
277
3,230
270
46
42,05649,361－－－
26,12624,178
1,213
4,770
180
44
56,51364,102－－100
53,40943,004
1,402
6,391
90
96
104,494
114,367－－100
94,40956,193
1,543
8,707
－
475
161,430
179,591－100
91,011
52,447
1,590
6,965
－
742
152,857
169,934

688
100
78,69947,621
1,398
6,239
－
881
135,627
149,539+688－-12,312-4,826
-192
-726
－
+139
-17,230-20,395

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

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

26,58910,98333,534-39
71,06826,594
10,98839,885-39
77,429+5+5+6,351－+6,361

160
－
－
16
177
143
2,466
31,06680,428

400
－
9
409
121
2,261
50,842
114,944

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

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

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

178
-534
6
-349
419
2,573
80,072
229,612

-325
-94
-14
-432
+54
-13
+5,969-14,42546

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

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 H1(6M)

FY16/2 H1(6M)

Change(YOY)

FY17/2Full-Year
Forecast

vs
Forecast

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

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

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

49,69929,835
19,863
4,446
15,41785,991
68,522
17,4682,484
14,984

14,607
7,443
7,163
2,250
4,913

+71,384+61,079+10,305+234+10,071

125,600－
23,867－18,500

68.5%
－
73.2%
－
81.0%

3
24
90
36
155

4
112
90
31
238

5
78
90
39
213

2
79
90
43
215

－
11
－
14
26

1
13
45
25
85

-1
-2
-45
-11
-59

－
－
－
－
－

－
－
－
－
－

238
－
26
265
1,734

370
89
93
553
3,597

943
－
202
1,146
7,255

1,277
－
465
1,743
13,889

722
－
453
1,175
13,834

577
－
69
647
4,351

+145
－
+384
+528
+9,483－－－－
16,400

－
－
－
－
84.4%

9
72
－
－
83

7
204
434
33
680

－
－
－
57
57

－
223
－
－
223

－
2,427
－
－
2,427

－
223
－
－
223

－
+2,204－－+2,204

－
－
－
－
－

－
－
－
－
－

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

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

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

－
49
9
－
－
31
89
14,022
1,330
-369
960
13,062
136
12,925

－
－
－
－
242
－
242
16,019
2,535
1,277
3,812
12,206271
11,935

－
－
9
－
－
－
9
4,565
509
-219
289
4,275
53
4,221

－
－
-9
－
+242
－
+233
+11,454+2,026+1,496+3,523+7,931+218+7,714

－
－
－
－
－
－
－
－
－
－
－
－
－
13,300

－
－
－
－
－
－
－
－
－
－
－
－
－
89.7%

47

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

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 H1
(6M)

1,693
230
49
114
-90
3

3,933
304
69
139
-90
-11

7,220
565
112
139
-90
1

14,022
792
174
139
-90
-3

16,019
460
114
70
－
110

195

33

65

3

-33

-11
-28
238
-72
-8
33
62
515
-1,100

－
-116
370
-204
-6
307
－
97
218

－
-83
943
－
－
－
－
-68
-1,230

－
-81
1,277
-223
－
－
49
-172
1,006

－
-11
722
-2,427
－
－
－
-330
－

723

1,635

1,110

1,239

2,571

63
2,556
119
1
－－
-380
-39
519
11
-253
-239
4,908
28
-220
-106

114
-6,729
－
12
－－
-255
-139
137
38
1,230
522
1,611
116
-378
-94

－
-42,991－
91－-1,079
388
16
211
1,391
-407
-33,693
83
-843
161

19
-63,070－11-990-1,140
535
42
317
2,380
435
-43,324
81-1,226-186－
37,642
－
－
10
-318
-581
17
－
-2,466
197
51,767
11
-634
604

4,609

1,254

-34,292-44,654

51,74848

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

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2 H1
(6M)

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

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

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

－
－
-671
296
3
-6,628
－
-21
-9
6
-37
－
－
9
-7,052-3,000
201
-300
6,021
－
-4,541
－
－
-2
－
－
-93
－
5
-1,708

314
－
－
5,440
-8,19912,346-13,885
－
48
－
20
-19
－
-3,935465－－
26,777-5,388
5,675-19,030
16,387
242
-445
－
－
－
24,682466
48－
47,203-19,557
19,900-5,958
－
99
-543
－
－
－
41,658771
31－64,866-19,192
18,150-2,772
－
153
-646
2,000
－
-43
63,318-778－
785
32,277-51,323
4,350-14,994－29-1,499－-2,000-39-33,19349

Appendix: Power Up 2019 Mid-Term Business Plan

© 2016 Ichigo Inc. All rights reserved.

50

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

FY16/2 (Actual)

FY17/2 (Forecast)

Operating Profit

15,41718,50025,000+62.2%

Recurring Profit

13,88916,40021,400+54.1%

6.9%

27.8%

30.0%

－

12,925

13,30014,800+14.5%

EPS

25.86 yen

26.43 yen

29.00 yen

+12.1%

DPS

3.00 yen

5.00 yen

7.00 yen+133.0%

ROE

21.0%

18.1%

15.6%

Tax Rate
Net Income

CapitalEfficiency© 2016 Ichigo Inc. All rights reserved.

ROE>15%

Shareholder
ReturnFY19/2 (Plan)

vs FY16/2－

DOE>3%
51

Target: Top 200 Ranking within the JPX-Nikkei 400
Ichigo targeting ranking within the Index’s top 200 companies
by August 2019 (the final year of Power Up 2019)
Note: While the JPX-Nikkei Index 400 does not provide an official ranking of its 400 constituents, it can becalculated based upon the JPY-Nikkei 400’s publically-available quantitative ranking formula, whichrank orders the joint set of the 1,200 highest market capitalization and 1,200 highest value-traded
Japanese companies by:(a) 3-year average ROE (40% weighting)(b) 3-year cumulative operating profit (40% weighting)(c) Market capitalization (20% weighting)© 2016 Ichigo Inc. All rights reserved.

52

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

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

• Support employee health and wellness• Goal: Japan’s number one company inproviding opportunities for employees• Grow Ichigo’s hotel business synergisticallywith Ichigo Hotel REIT
• Launch one or more REtech businesses,
fusing Ichigo’s Real Estate and IT
capabilities© 2016 Ichigo Inc. All rights reserved.

(6) Global Best Practice Governance and Compliance53

Adoption of Progressive Dividend & DOE Policy
 Progressive Dividend: The previous year’s dividend is the floor for the current
year’s dividend. Dividend will be raised (or kept flat) but not cut, providing
shareholders with downside dividend protection
 Newly set a minimum DOE (dividend on equity) payout ratio of >3 %‒ Dividend payout ratio policy: Dividends based on annual earnings
 More Volatile‒ DOE policy: Dividends based on shareholder equity
 More Stable The combination of a Progressive Dividend and DOE policy will significantly
increase the stability, certainty, and visibility of Ichigo’s dividend to the benefitof Ichigo’s shareholders
 Adoption of this policy also underscores Ichigo’s commitment to driving
continued organic earnings growth and dividend growth for its shareholders© 2016 Ichigo Inc. All rights reserved.

54

Corporate Name Change on September 1, 2016
To further focus on its core identity and unify its Japanese and English
corporate names, Ichigo simplified its Japanese corporate name to Ichigo
Inc. on September 1, 2016.
Ichigo also simplified the name of its REIT asset management subsidiary toreflect the expected TSE listing of the Ichigo Green Infrastructure Fund.
 New Japanese Company Name
- Ichigo Inc. from Ichigo Group Holdings(No change to the English corporate name, which is already Ichigo Inc.)
 New Asset Management Subsidiary Name
- Ichigo Investment Advisors Co., Ltd from Ichigo Real Estate
Investment Advisors Co., Ltd.

© 2016 Ichigo Inc. All rights reserved.

55

MEMO

© 2016 Ichigo Inc. All rights reserved.

56

MEMO

© 2016 Ichigo Inc. All rights reserved.

57

MEMO

© 2016 Ichigo Inc. All rights reserved.

58

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

Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.
© 2016 Ichigo Inc. All rights reserved.

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

FAX:+81-3-3502-4801

59