FY19/2 Q3 Corporate Presentation
January
2019
January 11, 2019

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

www.ichigo.gr.jp/en

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

© Ichigo Inc. All rights reserved.

Contents
FY19/2 Q3 Earnings‒ FY19/2 Q3 Summary‒ Operating Profit +24%, Net Income +11%,
EPS +12% (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‒ Robust Financial Base

Building a Foundation for Sustainable
Growth‒ Core Business Growth Value-Add: Stock Earnings +41% Over3 Years (+15% YOY)
 Value-Add: THE KNOT +20~60% ADR
 Clean Energy: Scaling Rapidly(In-Development Plants +78%)
 Clean Energy: Wind Power Expansion
 AM: Ichigo Hotel REIT – First No Fixed
Fee J-REIT‒ New Business Entry Hotel AI Revenue Management System Smart Agriculture Ichigo Sustainable Lab‒ Share Buyback (JPY 381)

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

© Ichigo Inc. All rights reserved.

4

FY19/2 Q3 Earnings© Ichigo Inc. All rights reserved.

5

FY19/2 Q3 Summary
Durable Earnings Model

Stock Earnings Growth

Stock Earnings/Fixed Expenses

243%

16.1B

Stock Earnings Growing Across the Board(FY Forecast)

Fixed
Expenses
JPY 5.18B(Gross Profit: JPY B)+25%

Value-Add
12.6B

Asset
Management

Clean Energy(FY Forecast)

1.6B

2.0B

(FY Forecast)(FY Forecast)Gross Profit

Flow
JPY 24.95B
Earnings
JPY 12.36B
Stock
Earnings
JPY 12.59B

14.0B

FY18/2

Share Buyback
Amount: JPY 3B
No. of Shares: 7,869,700 shares
Average Share Price: JPY 381
Buyback Period: Oct 19, 2018 – Dec 4, 2018

© Ichigo Inc. All rights reserved.

12.6B
Q3

FY19/2

11.1B

FY18/2

9.3B
Q3

FY19/22.0B

FY18/2

1.6B
Q3

FY19/2

1.7B
Q3
0.9B

FY18/2

FY19/2RE TechSmart Agriculture

Ichigo’s AI-based hotel revenue
management system– Undergoing testing for full launch– Hotel Revenue Growth (2018)+11~38% (vs. pre-implementation)

Goal: Support higher Japanese
agricultural productivity– Build and rent greenhouses withsmart climate controls and smart
agriculture systems– No cost to farmer during production;
Ichigo receives variable rent in linewith shipment volumes– Leverage Ichigo’s network to sell
directly to consumers
6Operating Profit +24%, Net Income +11%, EPS +12% (YOY)On Track to Deliver Record Earnings in FY19/2(JPY million)

FY18/2 Q3Cumulative (9M)

FY19/2 Q3Cumulative (9M)

Operating Profit

16,541

20,553+24.3%

25,000Recurring Profit

14,46018,264+26.3%

22,000Net Income

10,944

12,183+11.3%

15,000

JPY 21.92

JPY 24.59+12.2%

JPY 30.10

EPS

YOY

Full-Year
Forecast

Note: From FY19/2, SPC-related non-recourse loan interest expenses are accounted as Fixed Non-Operating Expenses rather than COGS.
FY18/2 data has been adjusted to use this new accounting treatment to facilitate comparison.

© Ichigo Inc. All rights reserved.

7

Segment Earnings Details− Asset Management: Base AM Fees +11% YOY− Value-Add: Rental Income +15% YOY
Gains on Sale +35% YOY− Clean Energy: 7 New Plants = Power Generation Revenues +148% YOY(JPY million)

Operating Profit
Segment

FY18/2 Q3Cumulative(9M)

FY19/2 Q3Cumulative(9M)

Full-Year
Forecast

YOY

Earnings Drivers
vs. Full-Year (Parentheses show YOY change in
Gross Profit)
Forecast

Asset Management

1,592

1,571

-1.3%

1,752

89.7%

Base AM Fees 1,598 (+164)
Acquisition/Disposition Fees 84 (+7)
Ichigo Office Cash Flow
Performance Fees 57 (-306)

Value-Add

14,25817,761+24.6%

21,71981.8%

Rental Income 9,265 (+1,211)
Gains on Value-Add Sales 12,218 (+3,145)

Clean Energy

764

1,253

+63.9%

1,529

81.9%

Power Generation Revenues 1,695 (+1,017)
Gains on Power Plant Sales –(-467)

Adjustment (including
offsets of crosssegment transactions)

-74

-32

–

–

–

+24.3%

25,00082.2%

20 553
Total

16,541

20,553

Note: From FY19/2, SPC-related non-recourse loan interest expenses are accounted as Fixed Non-Operating Expenses rather than COGS.
FY18/2 data has been adjusted to use this new accounting treatment to facilitate comparison.
© Ichigo Inc. All rights reserved.

8

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

9

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

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

27.9

27.0
25.0
15.1

20.8

14.1

13.0
12.4

9.0

12.9
4.6
16.1

8.2
12.6

11.8

0.9
5.0

14.0

13.8

2.6

6.0

8.3
5.6
4.2

4.1

FY13/2

FY14/2

5.1
FY15/25.8

FY16/2

6.5

FY17/2

6.4

FY18/2

6.9
5.2

FY19/2 Q3

FY19/2(Forecast)

Note: From FY19/2, SPC-related non-recourse loan interest expenses are accounted as Fixed Non-Operating Expenses rather than COGS.
Data for FY13/2 and onwards has been adjusted to use this new accounting treatment to facilitate comparison.
© Ichigo Inc. All rights reserved.

10

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

36.8

45.4

28.1
19.6
12.3
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

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

11

Business Model (3) Value-Add Drives Durable Value Growth
Gains on Sales Consistently Exceed Appraisal Value-Based Unrealized Gains
Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

2.2X

4.4X

GPM
31%

GPM
34%

1.6X
GPM
14%

2.2X
GPM
23%

Unrealized Gains(vs. Book Value)
9%

GPM
32%

JPY 12.0B
Unrealized Gains(vs. Book Value)
12%

Unrealized Gains(vs. Book Value) JPY 12.1B
20%Q3

JPY 10.5B
JPY 7.2B

JPY 6.4B

Unrealized Gains(vs. Book Value)
14%

JPY 5.4B

Q3
JPY 3.3B

FY16/2© Ichigo Inc. All rights reserved.

JPY 2.7B
FY17/2

FY18/2

FY19/2 Q3
12

Robust 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
10.2 years
2.0%

1.96%

9.0 years

10.0 years

8.7 years
9

8.3 years
5.9 years

9.6 years

8.3 years

7.8 years

7.5 years

1.71%

1.5%

6

5.5 years

1.41%
1.24%

1.04%

0.96%

1.0%

3

0.5%

0

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2 Q3

Note: Shorter-term Ichigo Owners’ borrowings decreased average loan term.

Term Structure of Loans
Short-Term

14% (JPY 4.1B)

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

9% (JPY 14.1B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

91%(JPY 135.8B)

Long-Term

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

13

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

14

Core Business Growth

Value-Add: Stock Earnings +41% Over 3 Years (+15% YOY)
− Acquisitions & Organic Growth Driving Growth in Rental Income− Continuing to be Selective on Acquisitions
Value-Add Sales and Acquisitions

Value-Add Earnings (Q3 Cumulative)(JPY billion)

Stock Earnings (Rental Income)Flow Earnings (Gains on Sale)

21.5
18.5
17.1
14.2

12.2
10.6

6.6
FY16/2 Q3

FY17/2 Q3

8.1
FY18/2 Q3Gross Profit© Ichigo Inc. All rights reserved.

Total

27 Assets

JPY 39.8B

Office2 Assets

JPY

Hotel

6 Assets

JPY 19.6B

Retail2 Assets

JPY

5.4B

Residence

14 Assets

JPY

9.0B

Other

3 Assets

JPY 312M

5.5B

Acquisitions (Q3 Cumulative)

9.0

7.6

7.9

Sales (Q3 Cumulative)

9.3

FY19/2 Q3

Total

32 Assets

JPY 43.0B

Office1 AssetJPY 626M

Hotel

3 Assets

JPY

Retail5 Assets

JPY 12.8B

Residence

15 Assets

JPY 11.2B

Mixed

4 Assets

JPY

Storage

1 AssetJPY 119M

Other

3 Assets

JPY 235M

8.9B

9.1B

15

Core Business Growth

Value-Add: THE KNOT +20~60% ADR
Transformed & Rebranded a 33-Year-Old and 39-Year-Old Hotel to Drive
Significant ADR Increase+62%
ADR (Average Daily Rate)
Before Value-Add
After Value-Add (Nov 2018 Actual)+22%

JPY 15,700
JPY 11,300
JPY 9,700

JPY 9,300(Occupancy
95.0%)(Occupancy
97.3%)THE KNOT YOKOHAMA© Ichigo Inc. All rights reserved.

(Occupancy
93.5%)(Occupancy
95.3%)THE KNOT TOKYO Shinjuku
16Core Business Growth

Clean Energy: Scaling Rapidly (In-Development Plants +78%)
Operating Plants: 83.6MW In-Development Plants: 65.1MW (+78%)(Plus Ichigo Green Operating Plants: 29.4MW)
Power Generation (MW)137.2(+15%)

Operating

112.3(+34%)

In-Development

119.7
(+7%)
53.6

72.3
(+155%)

83.6(+16%)

28.7

148.7
(+8%)

36.1

65.1
(Wind 33.4)(Wind 21.9)(Wind 7.4)

83.6
28.4

Average FIT
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 33.7
JPY 31.0B

FY21/2
JPY 33.0
JPY 31.0B

FY22/2
JPY 31.8
JPY 31.6B

FY23/2
JPY 31.0
JPY 31.6B
17

Core Business Growth

Clean Energy: Wind Power Expansion
Ichigo’s First Wind Power Plant: Ichigo Yonezawa Itaya ECO Power Plant(Yamagata)− Output: 7.4MW (4 turbines)− FIT: JPY 22− Average Wind Velocity: 8m/s (wind power generally attractive at >6m/s)− NOI Yield: c. 12%− Forecast Operation Start Date: September 2020**Start date pushed back due to revised construction plans with EPCO client

Wind Power Plants In-Development (Total 33.4MW)
No.

Location

Expected
OutputWind Data
SurveyFIT

Forecast
Operation Start Date

1

Ichigo Yonezawa Itaya

7.4MW

Completed

JPY 22September 2020

2

Fukushima

7.0MW

In Progress JPY 21

March 2021

3

Mie

7.5MW

In Progress JPY 22

December 2021

4

Chiba

4.0MW

Completed

November 2022

5

Iwate

7.5MW

In Progress JPY 22© Ichigo Inc. All rights reserved.

JPY 22TBD

18

Core Business Growth

AM: Ichigo Hotel REIT – First No Fixed Fee J-REIT− Ichigo Hotel is the First J-REIT to Adopt a No Fixed Fee, Performance
Fee-Only Structure− Overwhelming Shareholder Support (99.3% Yes vote at AGM)
 Significantly increases alignment with shareholders
 Supports pro-active, dynamic (vs. static) management of Ichigo Hotel assets onbehalf of shareholders
Before Change(Until January 31, 2019)

Asset Management Fee Structure

Asset
SizeBased

EarningsBased

After Change(From February 1, 2019)

AM Fee I

Total Asset Value

X

0.4%

–

Asset
Acquisition Fee

Acquisition Price

X

1%

–

Asset
Sale Fee

Sale Price

X

0.5%

–

AM Fee II(NOI & Dividend
Performance Fee)NOI x Dividend

X

0.002%

0.0036%

Increased

Gains on Sale
Performance Fee

Gains on Sale

X

－

15%

New

EliminatedNote: The Gains on Sale Performance Fee has a high-water mark – it will only be paid if Ichigo Hotel’s cumulative Gains/Losses on Sales are positive.

© Ichigo Inc. All rights reserved.

19

New Business Entry

Hotel AI Revenue Management System
Undergoing Testing for Full Launch− Algorithms used manually at 9 hotels for testing since 2017
■ Manual Test Results (2018)

Hotel Revenue Growth(vs. pre-implementation)+11~38%− Development of fully AI-based revenue management system completed infall 2018, with live system tests now underway. The system uses AI both tomaximize hotel earnings and reduce manual processing of hotel pricing.
− After full launch, expect both to use internally and sell externally to create a
new hotel-based earnings stream.
Big Data

IoT
Increase
Customer
Satisfaction

Data
Collection

Analysis

Cloud
ServiceAI
Maximize
Hotel Earnings

AI
IoT© Ichigo Inc. All rights reserved.

(Artificial
Intelligence)

20

New Business Entry

Smart Agriculture
Help Farmers Increase Production and Adapt to Climate Change by
Supporting Introduction of Smart Greenhouses− IOT sensors make possible greenhouses that can adjust CO2, water, andtemperature to individual plants, raising productivity− However, farmers have been slow to adopt smart greenhouses due tochallenges in choosing systems and procuring funds to build them

Ichigo’s Acquisition of Tenuto (2017) Supports Entry− Build and rent out greenhouses installed with Tenuto’s leading CO2 andclimate-control technology− Minimize farmers’ financial burden by eliminating rent
during production; Ichigo receives variable rent inline with shipment volumes− Leverage Ichigo’s network to sell directly to consumers− Help farmers raise incomes and supply fresher
produce to stores, while contributing to Japan’s
food self-sufficiency© Ichigo Inc. All rights reserved.

21

New Business Entry

Ichigo Sustainable Lab– R&D focus on identifying new ways in which real estate and public
infrastructure can support a higher quality of life and a more sustainable
society– Develop an open-community platform to foster social networks that work
towards enhancing social and ecological sustainability– Launch ventures to promote sustainability and address societal needs
Ichigo Sustainable Lab

Community Lab• Investigate how to foster
interconnected and supportive
communities as a foundation ofa sustainable society• Develop an open platform tofoster social networks© Ichigo Inc. All rights reserved.

100-YearReal Estate Lab• Develop technologies to extend
the lifespans of buildings
beyond 100 years

Incubation Lab• Support Ichigo employees inlaunching ventures that promotesustainability and address
important societal needs• Address the deterioration ofJapan’s aging public
infrastructure

22

Share Buyback (JPY 381)
– Purpose: Grow Value for Ichigo’s Shareholders
Share Type
Common shares
Buyback Method
In-market purchases via trust bank
– October – December 2018 Share Buyback
No. of Shares
7,869,700 shares
Average Share Price JPY 381
AmountJPY 3B
Reference: 2017 Share Buybacks
April 2017 Share Buyback

October 2017 Share Buyback

Number of Shares
Average Share Price
AmountNumber of Shares
Average Share Price
Amount© Ichigo Inc. All rights reserved.

4,627,400 shares
JPY 324
JPY 1.5B

3,809,100 shares
JPY 394
JPY 1.5B

23

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

24

Significant Unrealized Gains on Balance Sheet
JPY 44.7B (Appraisal Value Basis), -0.9% vs. FY18/2-end

Real Estate Directly Held by Ichigo(JPY million)

LocationBook Value(FY19/2 Q3)Expected NOIAppraisal Value(FY19/2 Q3)

Cap Rate(NOI/Book Value)

Unrealized
Gains

Tokyo

134,950

7,074

5.2%

161,966+27,015

Outside Tokyo

101,725

6,746

6.6%

119,440+17,715

Total

236,675

13,8205.8%

281,406+44,730* Excludes development assets (c. JPY 78 million) which are not currently generating NOI.

© Ichigo Inc. All rights reserved.

25

Net Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 368.9B(Book Value JPY 324.1B + Unrealized Gains JPY 44.7B)
Cash & Cash Equivalents

JPY 36.6B

Non-Recourse Loans &Related Liabilities

JPY 62.8B
Non-Recourse Loans &Related Assets

Net Consolidated Risk-Based Balance Sheet:
JPY 269.4B(Book Value JPY 224.6B + Unrealized Gains JPY 44.7B)

JPY 79.0B

Operational Loan Investments
JPY 1.3B

Operational Securities Investments
JPY 5.1B

Real Estate for Sale

JPY 133.8B

Corporate Loans

JPY 150.0B

Debt
JPY
228.3B

Non-Recourse Loan-Related ICH Equity

JPY 16.1B
Operational Loan Investments
JPY 1.3B

Operational Securities Investments
JPY 5.1B

Real Estate for Sale

Security Deposits Received
JPY 5.4B

JPY 133.8B

Other JPY 10.1B

Fixed Assets

JPY 58.9B
Securities Investments
JPY 2.3B

Shareholder
EquityJPY 95.6B

Other JPY 6.9B

Unrealized Gains
JPY 44.7B

Post-Tax Unrealized
Gains JPY 31.0B
Tax JPY 13.6B

Corporate Loans

JPY 113.4B

Debt
JPY
128.9B

Security Deposits Received
JPY 5.4B

Other JPY 10.1B

Mark-toMarket
Shareholder
Equity Ratio

34.4%

Fixed Assets

JPY 58.9B
Securities Investments
JPY 2.3B

Shareholder
EquityJPY 95.6B

Net Risk-Based
Shareholder
Equity Ratio

47.0%

Other JPY 6.9B

Unrealized Gains
JPY 44.7B

Post-Tax Unrealized
Gains JPY 31.0B
Tax JPY 13.6B

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.

26

Business Segments

Asset Management

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

Value-Add

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

Clean Energy

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

Note: From FY19/2, the Other segment has been eliminated.
© Ichigo Inc. All rights reserved.

27

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

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor SalePower
Plants for
Sale

–

–

–

–

–

Value-Add

18,153

1,324

5,166

192,786

Clean Energy

3,465

–

–

Company-Wide Assets

23,447–

Total

45,067

1,324

Segment

Asset Management© Ichigo Inc. All rights reserved.

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
Assets

–

859

129

934

1,923

–

46,291

942

878

2,363

267,906––

23,095

222

–

949

27,733

–

–

–

65

38

1,324

1,754

26,6305,166

192,786–

69,452

2,062

2,332

6,001

324,193

Total Assets

28

Asset Management – Ichigo REITs and YieldCo
OfficeHotel

Ichigo Office(8975)

Green Infrastructure

Ichigo Hotel(3463)

Ichigo Green(9282)

Listing Date

Listing Date

Listing Date

October 12, 2005

November 30, 2015

December 1, 2016

Portfolio

Portfolio

Portfolio

85 Assets JPY 203.0B

21 Hotels JPY 50.7B

15 Plants JPY 11.4B

Current Yield (as of 2018/12/28)

Current Yield (as of 2018/12/28)

Current Yield (as of 2018/12/28)

4.4%

6.3%

6.4%

Characteristics

Characteristics

Characteristics

・Specialized Office REIT focused on
mid-size offices with return stability
and upside potential
・17 consecutive periods of dividend
growth, No. 1 among all J-REITs

・Specialized Hotel REIT focused on
driving shareholder value via income
stability and earnings growth・Portfolio growth via Ichigo sponsor
support・Solar YieldCo focused on driving
shareholder value via income stability
and earnings growth・Offers investors an opportunity toinvest in Japan’s rapidly expanding
green infrastructure asset class
・The second TSE-listed YieldCo© Ichigo Inc. All rights reserved.

29

Asset Management AUM Detail

Ichigo Office(8975)FY 14/2(12M)

FY 15/2(12M)

FY 16/2(12M)

FY 17/2(12M)

FY 18/2(12M)

FY 19/2 Q3(9M)

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 194.5B

JPY 196.9B

JPY 199.9B

JPY 733M

JPY 759M

JPY 1,016M

JPY 1,291M

JPY 1,373M

JPY 1,053M

AUM (Fiscal Year End)––JPY 20.4B

JPY 47.6B

JPY 50.9B

JPY 50.7B

Base AM Fee Gross Profit (Actual)––

JPY 30M

JPY 287M

JPY 450M

JPY 443M

AUM (Fiscal Year End)

–

–

–

JPY 10.0B

JPY 11.4B

JPY 11.4B

Base AM Fee Gross Profit (Actual)

–

–

–

JPY 11M

JPY 77M

JPY 71M

AUM (Fiscal Year End)JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 6.4B

JPY 12.3B

JPY 12.3B

Base AM Fee Gross Profit (Actual)

JPY 257M

JPY 114M

JPY 60M

JPY 27M

JPY 12M

JPY 30M

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 258.6B

JPY 271.7B

JPY 274.5B

JPY 989M

JPY 872M

JPY 1,106M

JPY 1,617M

JPY 1,914M

JPY 1,598M

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

Ichigo Hotel(3463)

Ichigo Green(9282)

Private Equity
Real Estate Funds(excluding
consolidated funds)
Total(excluding
consolidated funds)

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.

30

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

Solar Plants
Buy

Ichigo Green(9282)
OfficeSell

Value-Add

Ichigo Office(8975)
Hotel

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

Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
31

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

Value-Add
DemolishandRebuild© Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

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

HighestEfficiency
LowestImpact32

Value-Add Sample Earnings Model
5.5% NOI Yield, JPY 2B Purchase, LTV 75%, 1.5% Interest Rate on
Borrowings, JPY 50M Capex, 15% Increase in NOI, 3-Year Value-Add
PeriodNOI at Acquisition(JPY 110M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 87.5M NOI/yearNOI÷ Initial Investment ＝17.5% NOI return during investment period
.

Debt
Asset

JPY1.5B

JPY
2.0B

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

EquityJPY 0.5B

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

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

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

33

Ichigo-Owned Real Estate Portfolio
By Location

By Asset Type
Logistics 2%

Ground Lease
1%(JPY billion)

Nagoya 1%
Other
1%

Mixed
9%

Okinawa 1%
Hokkaido 2%
Sendai 3%

Hokkaido
4.6

Other
7%

Osaka 3%
Office25%

Tokyo
Metro *
12%

Residence
17%

Hotel
24%

Retail
21%

Tokyo
57%
Tokyo
128.9

Fukuoka
14%

Sendai
5.9*Excludes Tokyo

By Asset Size

Okinawa
2.2
Osaka
7.0

>JPY 10B
13%

Fukuoka
32.7

Nagoya
1.2

Tokyo
Metro
(exTokyo)
27.1

Other
16.6

<JPY 1B20%

JPY 5B-10B
16%

JPY 1B-5B
51%

Total Ichigo-Owned Assets: JPY 226.2B
Including Ichigo-Managed AUM: JPY 504.6B* Acquisition price basis.
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 234.4B© Ichigo Inc. All rights reserved.

34

Value-Add Asset Breakdown (1)171 Assets, JPY 226.2B, Forecast NOI JPY 13.7B (5.8% Book Value Yield)
No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/0646 years

JPY 73M

JPY 1,900M

–

–

2

RetailReal Estate for Sale

Minato-ku, Tokyo

JPY 2B-3B

2005/1049 years

JPY 148M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo≧JPY 3B

2006/0333 years

JPY 192M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/09

13 years

JPY 75M

JPY 1,157M

–

–

5

OfficeReal Estate for Sale

Sendai≧JPY 3B

2006/10

10 years

JPY 287M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka≧JPY 3B

2006/12

10 years

JPY 406M

JPY 1,339M

–

–

9

Residence

Real Estate for Sale

Ota-ku, Tokyo<JPY 1B

2007/04

13 years

JPY 57M

JPY 403M––

10

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/0638 years

JPY 84M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/06

37 years

JPY 126M

JPY 233M––

14

Ground Lease

Real Estate for Sale

Atsugi, Kanagawa

JPY 1B-2B

2011/06–

JPY 175M

JPY 147M––

15

Mixed (Office/Retail)Fixed Asset

Hiratsuka, Kanagawa<JPY 1B

2012/0223 years

JPY 84M

JPY 172M––

16

RetailReal Estate for Sale

Yokohama<JPY 1B

2012/10

5 years

JPY 33M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo≧JPY 3B

2013/03

7 years

JPY 236M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2013/05

32 years

JPY 47M

JPY 154M––

19

Mixed (Office/Retail)Fixed Asset

Chofu, Tokyo

JPY 1B-2B

2013/06

33 years

JPY 125M

JPY 310M

–

–

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains 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 are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

35

Value-Add Asset Breakdown (2)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

21

Residence

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2013/06

3 years

JPY 49M

JPY 203M––

27

RetailFixed Asset

Tokorozawa, Saitama

JPY 1B-2B

2013/11

11 years

JPY 62M

JPY 92M––

29

Ground Lease

Real Estate for Sale

Fujisawa, Kanagawa

JPY 1B-2B

2014/03–

JPY 115M

JPY 273M

7.52X

44.5%

30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2014/0334 years

JPY 39M

JPY 108M

6.95X

26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

JPY 1B-2B

2014/04

8 years

JPY 60M

JPY 1,090M

1.25X

12.0%

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

12 years

JPY 60M

JPY 279M––

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

JPY 2B-3B

2014/05

9 years

JPY 164M

JPY 434M

3.08X

15.2%

37

RetailReal Estate for Sale

Minato-ku, Tokyo<JPY 1B

2014/0746 years

JPY 41M

JPY 77M

10.47X

23.9%

38

Mixed (Office/Retail)Real Estate for Sale

Shinjuku-ku, Tokyo≧JPY 3B

2014/0743 years

JPY 168M

JPY 645M

3.32X

21.1%

39

RetailFixed Asset

Fukuoka<JPY 1B

2014/07

14 years

JPY 48M

JPY 213M––

40

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/09

33 years

JPY 51M

JPY 252M

–

–

41

Hotel

Real Estate for Sale

Utsunomiya, Tochigi

JPY 1B-2B

2014/09

31 years

JPY 181M

JPY 400M

1.97X

28.3%

42

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/0918 years

JPY 54M

JPY 177M

5.54X

26.2%

43

RetailReal Estate for SaleOsaka

JPY 1B-2B

2014/09

16 years

JPY 104M

JPY 301M

4.64X

24.3%

45

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2014/1115 years

JPY 74M

JPY 135M

10.70X

33.8%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains 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 are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

36

Value-Add Asset Breakdown (3)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

JPY 2B-3B

2014/1215 years

JPY 119M

JPY 332M

2.18X

29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

JPY 1B-2B

2014/12

12 years

JPY 94M

JPY 270M

1.56X

14.6%

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

JPY 1B-2B

2014/12

14 years

JPY 81M

JPY 238M

1.67X

16.6%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

JPY 1B-2B

2014/12

12 years

JPY 63M

JPY 163M

1.55X

15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo<JPY 1B

2014/1216 years

JPY 57M

JPY 150M

2.21X

35.7%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo<JPY 1B

2014/1215 years

JPY 40M

JPY 99M

2.96X

44.4%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo<JPY 1B

2014/12

13 years

JPY 28M

JPY 82M

2.05X

25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

JPY 1B-2B

2014/12

12 years

JPY 89M

JPY 270M

2.00X

23.2%

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

JPY 1B-2B

2014/12

14 years

JPY 57M

JPY 186M

1.90X

21.0%

59

Residence

Real Estate for Sale

Setagaya-ku, Tokyo<JPY 1B

2014/12

13 years

JPY 42M

JPY 117M

2.11X

27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo<JPY 1B

2014/12

12 years

JPY 20M

JPY 55M

1.80X

21.1%

61

Mixed (Office/Retail)Operational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1255 years

JPY 118M

JPY 57M

15.26X

51.7%

62

RetailReal Estate for Sale

Fukuoka<JPY 1B

2014/12

14 years

JPY 43M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/12

12 years

JPY 84M

JPY 129M––

64

RetailReal Estate for Sale

Shinagawa-ku, Tokyo<JPY 1B

2015/0164 years

JPY 40M

–

–

–

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains 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 are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

37

Value-Add Asset Breakdown (4)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

66

RetailReal Estate for Sale

Sendai<JPY 1B

2015/02

14 years

JPY 48M

JPY 8M

42.58X

198.9%

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

17 years

JPY 47M

JPY 79M

–

–

69

Hotel

Real Estate for SaleOsaka

JPY 2B-3B

2015/05

16 years

JPY 194M

JPY 633M

1.56X

58.3%

70

Hotel

Real Estate for Sale

Aomori<JPY 1B

2015/06

11 years

JPY 50M

JPY 113M

2.10X

20.2%

71

RetailReal Estate for Sale

Fujisawa, Kanagawa

JPY 1B-2B

2015/07

3 years

JPY 97M

JPY 126M

6.80X

37.3%

89

OfficeReal Estate for Sale

Musashino, Tokyo≧JPY 3B

2015/0729 years

JPY 130M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2015/07

11 years

JPY 92M

JPY 353M

1.82X

17.7%

93

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2015/0716 years

JPY 91M

JPY 358M

1.92X

18.8%

105

Hotel

Real Estate for Sale

Kumamoto

JPY 1B-2B

2015/1234 years

JPY 154M

JPY 453M

1.61X

61.2%

110

Hotel

Real Estate for Sale

Fukuoka≧JPY 3B

2016/0333 years

JPY 288M

JPY 905M

2.05X

104.5%

111

Hotel

Real Estate for Sale

Yokohama

JPY 2B-3B

2016/0334 years

JPY 166M

JPY 228M

5.32X

23.3%

112

Hotel

Real Estate for Sale

Yokohama≧JPY 3B

2016/0331 years

JPY 261M

JPY 354M

10.64X

36.2%

113

Hotel

Real Estate for Sale

Yokohama≧JPY 3B

2016/0331 years

JPY 231M

JPY 344M

5.84X

25.5%

114

Hotel

Real Estate for Sale

Fukuoka≧JPY 3B

2016/04

28 years

JPY 210M

JPY 550M

1.73X

72.6%

115

Hotel

Real Estate for SaleOsaka

JPY 2B-3B

2016/04

11 years

JPY 117M

JPY 274M

2.96X

30.7%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains 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 are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

38

Value-Add Asset Breakdown (5)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

30 years

JPY 47M

JPY 86M––

118

RetailReal Estate for Sale

NagoyaJPY 1B-2B

2016/06

21 years

JPY 87M

JPY 102M

7.71X

32.6%

119

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2016/06

31 years

JPY 33M

JPY 136M

3.91X

17.4%

120

Hotel

Real Estate for Sale

Shinjuku-ku, Tokyo≧JPY 3B

2016/0939 years

JPY 548M

JPY 349M

2.70X

39.9%

121

OfficeReal Estate for Sale

Minato-ku, Tokyo≧JPY 3B

2016/1017 years

JPY 1,526M

JPY 3,450M

2.87X

43.5%

122

Hotel

Real Estate for Sale

Shima, Mie<JPY 1B

2017/01

20 years

JPY 48M

JPY 73M

5.49X

43.1%

123

Hotel

Real Estate for Sale

Shibuya-ku, Tokyo≧JPY 3B

2016/1223 years

JPY 170M

JPY 1,123M

1.25X

25.4%

124

Hotel

Real Estate for Sale

Asahikawa, Hokkaido<JPY 1B

2016/1229 years

JPY 73M

JPY 593M

1.48X

48.5%

126

Hotel

Real Estate for Sale

Fukuoka

JPY 1B-2B

2016/1228 years

JPY 71M

JPY 505M

1.25X

25.4%

127

Hotel

Real Estate for Sale

Ishigaki, Okinawa

JPY 2B-3B

2017/0215 years

JPY 173M

JPY 544M

1.80X

80.2%

128

Hotel

Real Estate for Sale

Mito, Ibaraki

JPY 1B-2B

2017/0225 years

JPY 103M

JPY 602M

1.47X

47.0%

130

RetailReal Estate for Sale

Taito-ku, Tokyo

JPY 1B-2B

2017/04

25 years

JPY 91M

JPY 297M

4.42X

21.1%

132

Residence

Real Estate for Sale

Minato-ku, Tokyo<JPY 1B

2017/04

15 years

JPY 54M

JPY 190M

2.66X

38.3%

133

Hotel

Real Estate for Sale

Minato-ku, Tokyo<JPY 1B

2017/04

16 years

JPY 31M

JPY 152M

3.85X

32.7%

134

Residence

Real Estate for Sale

Chuo-ku, Tokyo

JPY 1B-2B

2017/04

16 years

JPY 48M

JPY 197M

2.88X

26.2%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains 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 are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

39

Value-Add Asset Breakdown (6)No.

Asset TypeClassification

Location

Acquisition Price

Acquisition
Date

Building
Age

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

135

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

27 years

JPY 97M

JPY 188M

6.18X

25.8%

136

Logistics

Real Estate for Sale

Narashino, Chiba

JPY 1B-2B

2017/04

27 years

JPY 163M

JPY 203M

8.75X

32.8%

138

Hotel

Real Estate for Sale

Ogaki, Gifu

JPY 1B-2B

2017/05

29 years

JPY 96M

–

–

–

139

OfficeReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2017/05

2 years

JPY 28M

JPY 600M

1.15X

15.1%

142

Hotel

Real Estate for Sale

Kanazawa

JPY 1B-2B

2017/11

1 year

JPY 95M

JPY 372M

2.12X

54.2%

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/09

34 years

JPY 90M

JPY 223M

3.78X

19.9%

144

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

JPY 1B-2B

2018/0230 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%

146

RetailFixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2018/08

28 years

JPY 31M

JPY 375M

–

–

147

Hotel

Real Estate for Sale

Kyoto

≧JPY 3B

2018/08

1 yearJPY 328M

JPY 1,666M

1.59X

27.2%

148

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo<JPY 1B

2018/08

50 years

JPY 54M

JPY 166M

3.93X

104.4%

149

RetailFixed Asset

Chiyoda-ku, Tokyo≧JPY 3B

2018/0928 years

JPY 308M

JPY 2,269M

–

–

150

Mixed (Office/Retail)Real Estate for Sale

Chuo-ku, Tokyo≧JPY 3B

2018/1031 years

JPY 354M

JPY 1,161M

6.17X

24.7%

151

Mixed (Office/Retail)Real Estate for Sale

Fukuoka<JPY 1B

2018/1020 years

JPY 37M

JPY 38M

5.08X

43.1%

JPY 11,676M

JPY 38,713M

2.99X

37.8%

Sub-Total 89 Assets

JPY 192,010M
JPY 199,030M (Book Value)

12

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and gains 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 are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.

© Ichigo Inc. All rights reserved.

40

Value-Add Asset Breakdown (7)Acquisition
Price

Asset TypeNo.

vs. FY18/2 Q4

Expected
NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple

Forecast
IRR

A

Ichigo Owners (Office & Residence)

43 Assets

JPY 26,508M+JPY 11,256M

JPY 1,368M

JPY 7,938M

–

–

B

Centro (Primarily Office & Residence)

15 Assets

JPY 5,709M+JPY 766M

JPY 376M

JPY 2,163M

–

–

C

Self-Storage

24 Assets

JPY 1,996M+JPY 119M

JPY 282M

JPY 491M––

JPY 13,701M

JPY 49,306M––

Total 171 Assets

JPY 226,222M
JPY 234,448M (Book Value)

Assets acquired in FY19/2 Q1 (3M)

Total 7 Assets

JPY 6,007M

JPY 341M

JPY 2,251M––

Assets acquired in FY19/2 Q2 (3M)

Total 14 Assets

JPY 15,644M

JPY 750M

JPY 4,020M––

Assets acquired in FY19/2 Q3 (3M)

Total 9 Assets

JPY 18,979M

JPY 871M

JPY 5,124M––

Assets acquired in FY19/2 Q3 (9M)

Total 30 Assets

JPY 40,630M

JPY 1,962M

JPY 11,395M––

Assets acquired and sold in FY19/2

Total 3 Assets*

JPY 1,126M

JPY 32M

JPY 406M––* Sold 1 Ichigo Owners asset and 2 Centro assets© Ichigo Inc. All rights reserved.

41

Ichigo Solar Power Plant Portfolio
Ichigo (In-Development)

Ichigo (Operating)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

JPY 40Aug 2013

Ichigo Sennan Kitsuneike

Kansai

Panel
Output(MW)
2.86

JPY 21Mar 2019

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

JPY 40Mar 2014

Ichigo Sakahogi Fukagaya

Chubu

2.90

JPY 21

May 2019

Ichigo Yubetsu Barou

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Hokkaido

0.80

JPY 40

Apr 2014

Ichigo Toki Tsurusatocho Kakino Higashi

Chubu

1.77

JPY 21

Jul 2019

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Oct 2019

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Hitachi Omiya

Kanto

2.96

JPY 24

Nov 2019

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Takashima Kutsuki

Kansai

3.75

JPY 32

Nov 2019

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Kasaoka Osakaike

Chugoku2.39

JPY 21

Dec 2019

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015(Wind) Ichigo Yonezawa Itaya

Tohoku7.39

JPY 22

Sep 2020

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.64

JPY 32

Nov 2021

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Total (In-Development)

9 Plants 39.02MW

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Total (Operating & In-Development)

34 Plants 122.66MW

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Kiryu Okuzawa

Kanto

Panel
Output(MW)
1.33

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Ichigo Motomombetsu

Hokkaido

1.40

Ichigo Memuro Nishishikari

Hokkaido

1.32

JPY 40Feb 2018

Ichigo Muroran Hatchodaira

Hokkaido

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.90

JPY 36

Mar 2018

Ichigo Engaru Kiyokawa

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

Ichigo Itoshima Iwara

Kyushu1.48

Total (Operating)

Total
152MW

Ichigo Green (9282)
FIT(Pre-tax)

Operation
Start Date

JPY 40

Sep 2013

JPY 40Feb 2014

1.24

JPY 40Mar 2014

Hokkaido

1.12

JPY 40Mar 2014

Ichigo Iyo Nakayamacho Izubuchi

Shikoku

1.23

JPY 40

Apr 2014

Mar 2018

Ichigo Nakashibetsu Midorigaoka

Hokkaido

1.93

JPY 40

Nov 2014

JPY 24

Apr 2018

Ichigo Abira Toasa

Hokkaido

1.16

JPY 40Dec 2014

JPY 36

Jan 2019

Ichigo Toyokoro

Hokkaido

1.02

JPY 40Dec 2014

Ichigo Nago Futami

Okinawa

8.44

JPY 40Feb 2015

Ichigo Engaru Higashimachi

Hokkaido

1.24

JPY 40Feb 2015

Ichigo Takamatsu Kokubunjicho Nii

Shikoku

2.43

JPY 36

Jun 2015

Ichigo Miyakonojo Yasuhisacho

Kyushu1.44

JPY 36

Jul 2015

Ichigo Toyokawa Mitocho Sawakihama

Chubu

1.80

JPY 32

Sep 2015

Ichigo Yamaguchi Aionishi

Chugoku

1.24

JPY 40Dec 2015

Ichigo Yamaguchi Sayama

Chugoku

2.35

JPY 36

Apr 2016

25 Plants 83.63MW

Solar Power Plant

Total© Ichigo Inc. All rights reserved.

Area

15 Plants 29.43MW42

Ichigo Solar & Wind Power Plant Portfolio
Serving Local Communities and the Environment
Chugoku

Hokkaido

Ichigo Yonago Izumi

2.61MW

Ichigo Yubetsu Barou

0.80MW

Ichigo Kasaoka Takumicho

1.11MW

Ichigo Betsukai Kawakamicho

0.88MW

49 Plants (152MW)

Ichigo Fuchu Jogecho Yano

0.99MW

Ichigo Akkeshi Shirahama

0.80MW

Ichigo Sera Tsukuchi

2.54MW

Ichigo Toyokoro Sasadamachi

0.60MW

Currently Operating

Ichigo Sera Aomizu

2.87MW

Ichigo Memuro Nishishikari

1.32MW

Ichigo Motomombetsu

1.40MW

Ichigo Engaru Higashimachi

1.24MW

Total Operating and In-Development
Ichigo Solar Power Plants

40 Plants (113MW)
Okinawa
Ichigo Nago Futami

8.44MW

KyushuIchigo Higashi-Hiroshima Saijocho
Taguchi

2.72MW

Ichigo Kasaoka Iwanoike

2.64MW

Ichigo Engaru Kiyokawa

1.12MW

Ichigo Kure Yasuuracho Nakahata

2.90MW

Ichigo Abira Toasa

1.16MW

Ichigo Yamaguchi Aionishi

1.24MW

Ichigo Muroran Hatchodaira

1.24MW

Ichigo Yamaguchi Sayama

2.35MW

Ichigo Toyokoro

1.02MW

Ichigo Kijo Takajo

0.89MW

Ichigo Kasaoka Osakaike

2.39MW

Ichigo Nakashibetsu Midorigaoka

1.93MW

Ichigo Itoshima Iwara

1.48MW

Total

24.41MW

Total

13.57MW

Ichigo Miyakonojo Yasuhisacho

1.44MW

Ichigo Miyakonojo Takazakicho
Tsumagirishima

2.97MW

Total

6.79MW

Kansai
Ichigo Sennan Kitsuneike
Ichigo Takashima Kutsuki
Total

Tohoku2.86MW
3.75MW

Ichigo Hamanaka Bokujo Tsurunokotai

2.31MW

6.61MW

Ichigo Hamanaka Bokujo Kajibayashi

2.31MW

IchigoIchigo Green (9282)
In-Development© Ichigo Inc. All rights reserved.

Ichigo Tokushima Higashi-Okinosu

2.52MW

Ichigo Takamatsu Kokubunjicho Nii

2.43MW

Ichigo Iyo Nakayamacho Izubuchi
Total

1.39MW

Ichigo Tsu

2.94MW

Ichigo Toki Tsurusatocho Kakino

1.31MW

Ichigo Toyokawa Mitocho Sawakihama

Shikoku

Ichigo Sakahogi Fukagaya

7.39MW

Total

12.01MW(Wind) Iwate

7.50MW(Wind) Fukushima

7.00MW

Kanto

Chubu
Ichigo Toki Oroshicho(Wind) Ichigo Yonezawa Itaya

1.80MW
2.90MW

Ichigo Maebashi Naegashima

0.67MW

Ichigo Showamura Ogose

43.34MW

Ichigo Toride Shimotakai Kita

1.03MW

Ichigo Toride Shimotakai Minami

0.54MW

Ichigo Kiryu Okuzawa

1.33MW

Ichigo Minakami Aramaki

12.02MW

1.77MW

Ichigo Hitachi Omiya

2.96MW

1.23MW

Ichigo Toki Tsurusatocho
Kakino Higashi
Total

12.13MWTotal

61.91MW6.19MW(Wind) Mie

7.50MW(Wind) Chiba

4.00MW43

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 33 Plants (115.26MW)
By Customer(Electric Power Utility Co)
Tohoku4%

Hokkaido
4%

By Feed-In-Tariff

Shikoku
2%

Kyushu5%

JPY 21 JPY 40
9%13%
JPY 248%

Kansai
6%
Chubu
9%

TEPCO
52%

>10MW (InDevelopment)
10%
2-10MW(In-Development)
15%

>10MW
38%

© Ichigo Inc. All rights reserved.

<6 months inoperation
1%

JPY 3657%

By Solar Intensity
B(In-Development)
9%

By Output>1 year inoperation
62%

0.5-1 year inoperation
10%C(In-Development)
3%

<2MW
12%

2-10MW
23%

Starting
operatiion
after +6
months21%

Starting operation
within 6 months
6%

JPY 32
13%

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

By Operating TimelineA(In-Development)
15%
C
8%

A
44%

Rank
A
B
C
D

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

Unit: kWh/m² per day

B
21%

44

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

FY2018JPY 18*20 years

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

* FIT for >2MW non-residential solar power production determined via auction process45Sustainable Real Estate (1)Ichigo Sustainable Real Estate Recognition
CASBEE: Three Assets (S Rank and A Rank)
Kakyoin Plaza

Hakata Ekimae Square

Rank:

S

Rank:

Hakata MST

A

Rank:

A

CASBEE Assessment Key Points:

CASBEE Assessment Key Points:

CASBEE Assessment Key Points:(1) Equipped with seismic dampers toincrease earthquake and wind resistance(1) Reduced water consumption via
increased use of recycled water(1) Reduced water consumption via
increased use of recycled water(2) Extensive natural light availability for
tenants(2) Equipped with high-grade isolation
devices for seismic safety(2) Extensive natural light availability for
tenants(3) Close to and encourages the use of public
transportation(3) Close to and encourages the use of public
transportation(3) Close to and encourages the use of public
transportation© Ichigo Inc. All rights reserved.

46

Sustainable Real Estate (2)Ichigo Office (8975) Sustainable Real Estate Recognition− GRESB (ESG Performance): Ichigo Office – Green Star (2 years in a Row)GRESB Assessment Key Points(1) Environmental Monitoring
Ichigo Office is actively engaged in environmental impact reduction via implementation of an
Environmental Monitoring System (EMS).
(2) Policy & Disclosure
Ichigo Office has developed and implemented an asset management structure that promotes
sustainability.
(3) Stakeholder Engagement
Ichigo Office is partnering with a broad range of stakeholders, including tenants, suppliers, and local
communities.

− CASBEE Rankings: Four Assets (S Rank and A Rank)
S RankA Rank

★★★★★

★★★★

Ichigo Marunouchi Building

Ichigo Takamatsu Building

Ichigo Kanda Nishikicho Building

Ebisu Green Glass− BELS Rankings: Two Assets (2 Stars and 1 Star)− DBJ Green Building Certifications: Two Assets (3 Stars and 2 Stars)© Ichigo Inc. All rights reserved.

47

Disaster Response & Recovery
No injuries or damages at any Ichigo asset or power plant from 2018 natural
disasters
Robust Assets− Real estate: Continuous improvements to safety & functionality via value-add
capex− Power plants: Power plant 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-sitechecks− Overwhelming priority is safety of tenants – on-the-ground confirmation & on-theground response− Ichigo engineering team immediate response: same-day on-site safety andengineering inspections to prevent secondary damage and losses© Ichigo Inc. All rights reserved.

48

JPX-Nikkei 400 Index Inclusion
Selected for inclusion in the JPX-Nikkei 400 in the 2018 annual constituent
rebalance for the third year in a row (2016, 2017, 2018)

Note: The JPX-Nikkei 400 rank orders the top 1,000 companies from 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)© Ichigo Inc. All rights reserved.

49

Consolidated Balance Sheet: Assets(JPY million)
FY15/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Power plants for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/2

FY19/2 H1

FY19/2 Q3

vs. FY19/2 H1

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

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

47,678
913
1,324
1,433
167,805
–
516
3,125
-453
222,344

45,510
1,097
1,324
2
180,789
–
342
2,643
-28
231,681

46,676
1,550
1,324
1,212
196,922
–
361
1,856
-2
249,90245,067
1,440
1,324
5,166
192,786
–
344
1,674
-2
247,802-1,609-110–+3,954-4,136–-17-182–-2,1004,021
9,168
12,142989
26,321

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

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

10,60019,773
26,993
1,190
58,558

10,937
19,272
28,2602,13860,60912,636
19,01334,3403,461
69,452+1,699-259+6,080+1,323+8,843

2,082
392
27
2,502

1,942
392
38
2,373

1,864
62
29
1,956

1,600
135
233
1,968

1,506
316
277
2,100

1,459
316
286
2,062

-47
–
+9
-38

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

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

1,426
10
339
1,820
-92
3,504
51,115
273,459

2,184
10
68
2,132
-91
4,303
64,831
296,512

2,026
10
103
2,463
-91
4,511
67,220317,123

2,332
10
145
2,479
-91
4,876
76,391
324,193

+306
–
+42
+16
–
+365
+9,171+7,07050

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)
FY15/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Negative goodwill
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate hedges
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/2

FY19/2 H1

FY19/2 Q3

vs. FY19/2 H1

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

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

110
805
611
112
5,209
6,825
1,655
62
36
4,119
19,548

–
1,042
–
112
4,449
3,921
1,609
494
34
4,652
16,316

–
6,985
–
112
8,613
1,703
1,367
493
282
4,329
23,887

–
6,096
–
112
7,938
1,687
3,353
482
495
3,916
24,082

–
-889
–
–
-675
-16
+1,986
-11
+213
-413
+195

–
100
53,40943,004
1,402
6,391
90
96
104,494
114,367–100
94,40956,193
1,543
8,707
–
475
161,430
179,591

632
100
91,60468,319
1,147
8,038
–
624
170,467
190,015520–
112,366
63,588
1,744
8,492
–
758
187,470
203,787464–
128,316
58,656
1,734
7,840
–
688
197,700
221,588534–
135,348
54,043
1,734
8,038
–
742
200,440
224,523+70–+7,032-4,613–+198–+54+2,740+2,93526,49910,873
17,201-78
54,496

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

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

26,723
11,11354,324-2,99589,16526,804
11,18956,958-2,98891,96526,806
11,19163,540-5,83895,700+2+2+6,582-2,850+3,735

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

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

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

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

437
-365
–
71
729
2,769
95,535317,123

352
-354
–
-1
776
3,195
99,670324,193

-85
+11
–
-72
+47
+426
+4,135+7,07051

Consolidated P&L(JPY million)
FY15/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Amortization of negative goodwill
Mark-to-market gain on long-term interest
rate hedges
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gains on sale of fixed assets
Gains on sale of securities investments
Gains on sale of shares in affiliates
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on sale/disposal of fixed assets
Valuation loss on securities investments
Office move expenses
Impairment loss
Earthquake-related damages
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY18/2(12M)

FY17/2(12M)

FY16/2(12M)

FY19/2 Q3(9M)

FY18/2 Q3(9M)

FY19/2Full-Year
Forecast

Change(YOY)

vs.
Forecast

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

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

57,84631,92025,925
5,067
20,85858,28233,332
24,950
4,396
20,55344,755
24,597
20,1583,617
16,541+13,527+8,735+4,792+779+4,012––
31,200–25,000

–
–
80.0%
–
82.2%

5
78
90

2
79
90

–
85
–

3
57
–

2
62
–

3
52
–

-1
+10
–

–
–
–

–
–
–

–

–

–

–

5

1

+4

–

–

39
213

43
215

32
118

100
161

80
151

104
160

-24
-9

–
–

–
–

943

1,277

1,303

1,266

1,742

1,674

+68

–

–

–

–

38

244

220

262

-42

–

–

–
202
1,146
7,255

86
379
1,743
13,889

585
216
2,144
19,755

159
165
1,835
19,185

295
183
2,441
18,264

205
97
2,240
14,461

+90
+86
+201
+3,803–––22,000

–
–
–
83.0%

–
–
–
57
57

–
223
–
–
223

–
2,466
–
–
2,466

–
–
1,221
41
1,263

–
2
–
–
2

–
–
1,221
41
1,263

–
+2
-1,221-41-1,261

–
–
–
–
–

–
–
–
–
–

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

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

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

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

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

11
–
–
327
–
–
338
15,385
4,381
11,00357
10,945

-11
–
–
-327
–
–
-338
+2,881+1,319+1,563+326+1,238

–
–
–
–
–
–
–
–
–
–
–
15,000

–
–
–
–
–
–
–
–
–
–
–
81.2%

52

Consolidated Cash Flows from Operations(JPY million)
FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 (12M)

FY19/2 Q3 (9M)

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 expense
Loss (gain) on sale of shares in affiliates
Loss (gain) on sale of securities investments
Impairment loss
Valuation loss on securities investments
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational loans receivable
Decrease (increase) in operational securities investments
Valuation loss on operational securities investments
Decrease (increase) in real estate for sale
Decrease (increase) in solar power plants for sale
Valuation loss on SPC capital contributions
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expense paid
Income taxes paid and refunded

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

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

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

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

18,266
1,217
155
140
–
461
-25
-65
1,742
–
-2
–
–
-343
–
-437
–
-11,997
–
–
-50
-228
-1,265
56
–
-518
1,340
8,444
65
-1,545-3,495Net Cash from (Used for) Operations-34,292-44,654

21,547

10,603

3,469© Ichigo Inc. All rights reserved.

53

Consolidated Cash Flows from Investments & Financing(JPY million)
FY15/2 (12M)
Cash Flows from Investments
Payments into time deposits
Redemptions of time deposits
Acquisition of securities investments
Proceeds from sale of securities investments
Proceeds from redemptions of securities investments
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisition of subsidiary shares resulting in change ofconsolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Payments for acquisitions of newly consolidated subsidiaries
Other
Net Cash from (Used for) Investments
Cash 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
Proceeds from share issuance to minority shareholders
Payments to minority shareholders for redemption of common shares
Share buyback
Dividends paid
Dividends paid to minority interests
Net Cash from (Used for) Financing© Ichigo Inc. All rights reserved.

FY16/2 (12M)

FY17/2 (12M)

FY18/2 (12M)

FY19/2 Q3 (9M)

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

–
–
-671
296
3
-6,628
-21
-9
6
-37

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

-6
–
-140
–
–
-4,796
-83
-28
–
-36

-63
1,010
-466
32
–
-12,130
-374
–
32
-15

–

–

-93

-2,619

–

–

–

–

2,096

–

-1,3494-12,485–
9-7,052–
11-11,933–-32-5,645–-168-12,142

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

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

-306
-611
–
-112
-100
32,660-13,402
3,518-22,366
110––-2,999-2,513–-6,124

5,053
–
69
-56
–
40,153-13,606
3,500-15,478122
90–-2,849-2,971–
14,02654

Appendix: Power Up 2019 Mid-Term Business Plan

© Ichigo Inc. All rights reserved.

55

Power Up 2019 Key Goals & KPIs
Key Goals
1. Drive Further Sustainable Growth in Ichigo’s Core Businesses
2. Develop New Ichigo Businesses
3. Record Earnings Forecast for FY19/2
Power Up 2019 KPIs (Key Performance Indicators)(JPY million)

FY16/2 (Actual)

FY17/2 (Actual)

FY18/2 (Actual)

Operating Profit

15,417

21,781

20,85825,00025,000+62.2%

Recurring Profit

13,88919,755

19,185

21,40022,000+58.4%

6.9%

26.4%

30.0%

30.0%

30.0%

–

12,925

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

JPY 25.86

JPY 29.66

JPY 28.12

JPY 29JPY 30.10+16.4%

DPS

JPY 3

JPY 5

JPY 6

JPY 7

JPY 7

133.3%

ROE

21.0%

20.2%

16.5%

15.6%

15.7%

–

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

FY19/2 (Plan)

FY19/2 (Forecast)vs. FY16/2

56

Target: Top 200 Ranking Within the JPX-Nikkei 400 Index
Ichigo Targeting Ranking Within the Index’s Top 200
Companies by August 2019
Ranking Calculation:
While the JPX-Nikkei 400 does not provide an official ranking of its 400 constituents, it
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 Japanese companiesby:(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.

57

Power Up 2019 Key Initiatives
Steady Progress to Achieve Mid-Term Plan•

Profitability•
Core Business
Growth•••New Business
Creation•

Sustainability•

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
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(As of February 28, 2018)

•
•
•
•

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

Launched Ichigo Owners: JPY 21.4B acquisitions,
JPY 2.3B sales in the first year
Launched Ichigo’s first lifestyle hotel, THE KNOTYOKOHAMA, on Dec 1, 2017 and the second, THE KNOTTOKYO Shinjuku on Aug 8, 2018
Partnering with Fujitsu Kyushu Systems to develop AI hotelrevenue management system

•

•

•
•

Grow both financial stability and earnings
De-collateralize loans, lengthen loan
maturities, lower debt costs, get credit ratings,
and issue bonds to diversify funding profile•••

Average Loan Period: 10.0 years
Average Interest Rate: 0.96%
Long-Term Loan Ratio: 91%

High Capital
Efficiency andOrganic Growth•

ROE >15%••

FY17/2 20.2%
FY18/2 16.5%

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••

6 of 9 Board Members are Independent Directors
Former CEOs of TSE 1st Section companies serve as
Independent Directors

Finance as aStrategic
MeasureGlobal Best Practice Governance and Compliance© Ichigo Inc. All rights reserved.

58

Dividend +20% – 7 Consecutive Years of Dividend Growth
Ichigo Dividend Policy: Growth, Certainty, and Stability− DOE (Dividend on Equity) Payout Ratio of >3%
 Stable and growing dividend unaffected by short-term earnings volatility− Progressive Dividend Policy
 Previous year’s dividend is floor for the current year’s dividend. Dividend will be raised(or kept flat) but not cut, providing shareholders with downside dividend protection. The
policy underscores Ichigo’s commitment to driving continued earnings growth for its
shareholders(Dividend)

7 Consecutive Years of Dividend Growth(Including FY19/2 Forecast)
JPY 7
JPY 6
JPY 5
JPY 3

FY12/2

JPY 1*

JPY 1.1

JPY 1.3

FY13/2

FY14/2

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

FY16/2

FY17/2

FY18/2

FY19/2(Forecast)59Effective Governance Structure‒ Early adoption of the Company with Committees governance structure− Adopted in 2006 with a focus on global best practices− Voluntarily established a Compliance Committee in addition to the Nominating, Audit,
and Compensation Committees• Nominating Committee: 5 (of whom 3 are Independent Directors)• Audit Committee: 3 (all of whom are Independent Directors)• Compensation Committee: 5 (of whom 3 are Independent Directors)• Compliance Committee: 4 (of whom 2 are Independent Directors)‒ Appointment of Independent Directors to strengthen governance− Of the 9 Directors, 6 are Independent Directors− Appointed former CEOs of TSE First Section-listed companies• February 2017
– Takashi Kawamura (former CEO of Hitachi, Ltd., stepped down from Ichigo’s board
upon appointment as Chairman of Tokyo Electric Power Company)– Masatoshi Matsuzaki (former CEO of Konica Minolta, Inc.)– Kosuke Nishimoto (former CEO of Meitec Corp.)• February 2018 – February 2019
– Masatoshi Matsuzaki (former CEO of Konica Minolta, Inc.)– Kosuke Nishimoto (former CEO of Meitec Corp.)– Nobuhide Nakaido (former CEO of SCSK Corp.)© Ichigo Inc. All rights reserved.

60

MEMO

© Ichigo Inc. All rights reserved.

61

MEMO

© Ichigo Inc. All rights reserved.

62

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

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

© Ichigo Inc. All rights reserved.

63