Consolidated Financial Highlights
for the Second Quarter Ended September 30, 2014

OPEN HOUSE CO.,LTD＜3288 TSE＞

Highlights of Consolidated Financial results for FY2014 2Q
Revision of earnings forecast

 Revenue progressed as planned.
 Gross profit exceeded the plan.

Consolidated forecasts for FY2014 havebeen revised accordingly, as shown in
the table below.

 SG&A Expenses were below the plan.

Revision of consolidated results forecast for the second quarter ended September 30, 2014 (YTD)（Millions of yen）

Previous forecast (A)Revised forecast (B)Change (B-A)

Revenue

55,00055,000±0± 0.0%

Operating income

6,000

7,500

＋ 1,500＋ 25.0%Ordinary income

5,400

7,000

＋ 1,600＋ 29.6%

Net income

3,200

4,200

＋ 1,000＋ 31.3%

EPS (Yen)

114.18149.87－% Change－

Revision of consolidated results forecast for the fiscal year ended September 30, 2014

（Millions of yen）

Previous forecast (A)Revised forecast (B)Change (B-A)

Revenue

115,000

115,000±0± 0.0%

Operating income

12,20013,700＋ 1,500＋ 12.3%

Ordinary income

11,00012,600＋ 1,600＋ 14.5%

Net income

6,700

7,700

＋ 1,000＋ 14.9%EPS (Yen)

239.07274.75－% Change－2

Consolidated Income Summary（ Millions of yen）

2013 Q2 YTD
Actual2014 Q2 YTD

Revenue ratio

ActualRevenue ratio

YOY %Revenue

35,669-54,993-154.2%

Gross profit

5,763

16.2%

10,94019.9%

189.8%

SG&A expenses

3,436

9.6%

3,382

6.2%

98.4%

Operating income

2,327

6.5%

7,557

13.7%

324.7%

Non-operating income

234

0.7%

81

0.1%

34.5%

Non-operating expenses

596

1.7%

566

1.0%

94.9%

1,965

5.5%

7,072

12.9%

359.8%

Extraordinary income

-

-

-

-

-

Extraordinary loss

0

0.0%

-

-

-

1,272

3.6%

4,203

7.6%

330.2%

Ordinary income

Net income＜Note＞ Though consolidated financial statements for the second quarter ended September 2013 were not prepared, the figures for thesecond quarter ended September 2013 and the percentage change from the same period for the second quarter ended September 2014
are presented for reference.

3

Consolidated Segment Revenue（ Millions of yen）

2013
Q2 YTD
ActualRevenue

Real estate brokerage
Real estate sales

2014
Q2 YTD
ActualYOY %2014
Q2 YTD
Compared toplan

Forecast

2,195

2,572

117.2%

96.3%

2,670

Single-family
homes

27,76431,505113.5%

98.7%

31,920Condominiums

2,563

14,768576.2%

100.5%

14,700Resale properties

3,230

7,026

217.5%

106.5%

6,600

701

129

18.4%

64.6%

200

34,25953,429156.0%

100.0%

53,420184

190103.2%

105.6%

180▲969▲ 1,198-

35,66954,993154.2%

OthersSub-total
Real estate financing

Adjustments
Total

100.0%▲ 1,270
55,0004

Real Estate Brokerage Business
Operating income（Millions of yen）

Revenue（Millions of yen）

3,000

1,500

＜Summary＞

Brokerage business remained solid.

2,572
Revenue
2,195 The reaction to the rush demand in advance of theconsumption tax hike was immaterial.

2,000

1,000
840

FY2013 Q4（From July 2013 to Sep 2013） 380 units（YOY 99.7％）

Operating income
652
1,000

500
Operatingincome margin
29.7％

402 units（YOY 123.7％）

FY2014 Q2（From Jan 2014 to Mar 2014）418 units（YOY 116.4％）

32.7％
0

2013
Q2 YTD2014
Q2 YTD

YOY %Revenue

2,195

2,572

117.2%

Operatingincome652840

128.7%

29.7%

32.7%

+ 2.9%

684

820

119.9%

Units soldFY2014 Q1（From Oct 2013 to Dec 2013）

 Opened Nishikasai brokerage office in November 2013 andKitasenju brokerage office in March 2014, and achieved a
11 sales-base structure.

0

Operatingincome margin

Units sold＜Nishikasai brokerage office＞＜FY 2014 Forecast＞
 Enhancing sales of single-family homes and lands
through a 12 sales-base structure after opening ofTsunashima brokerage office in April 2014.

（Millions of yen）

5

Real Estate Sales Business
Operating income（Millions of yen）

Revenue（Millions of yen）

60,00012,00053,429＜Summary＞

Revenue and operating income in realestate sales business expanded briskly .
 The proportion of condominium and resale properties

40,000

Revenue

8,000

34,259 The delivery of condominium units within March 2014
increased because of rush demand in advance of theconsumption tax hike.

6,705

20,0004,000
Operating income

0

1,643
Operatingincome margin
4.8%

2013
Q2 YTDin real estate sales business increased.

Proportion of revenue by segmentin the real estate sales business
2.0%

Others0.2%

Resale properties

12.6％

Condominiums

0

2014
Q2 YTD

YOY %Revenue

34,25953,429156.0%

Operatingincome

1,643

6,705

408.0%

Operatingincome margin

4.8%

12.6%

＋7.8%

（Millions of yen）

Single-family homes

FY2013 Q2

FY2014 Q2

6

Real Estate Sales Business : Single-family homes
Revenue（Millions of yen）

Gross profit（Millions of yen）

40,00010,00031,505

Revenue

Sustaining growth of the business Revenue maintained double-digit growth.

27,76420,000＜Summary＞

 Relatively low cost of land supported solid gross margin.
4,917

Gross profit
3,756

5,000

＜FY 2014 Forecast＞

Gross profit
margin13.5%

 Will continue to make progress in purchasing lands
for development.
15.6%

0

0

2013
Q2 YTD2014
Q2 YTD

 Construction costs will continue to rise but the impact
will be limited by cost reduction initiatives

YOY %Revenue

27,76431,505113.5%

Gross profit

3,756

4,917

130.9%

Gross profit
margin

13.5%

15.6%

＋ 2.1%

Units sold

758

858

113.2%（Millions of yen）

7

Real Estate Sales Business : Condominiums
Gross profit（Millions of yen）

Revenue（Millions of yen）

14,76816,000

6,000

4,000

3,554

＜Summary＞

Revenue increased steadily.
 Rush demand in advance of the consumption tax hike led
to the delivery of condominium units being concentrated
in 2Q, whereas it was concentrated in 4Q in FY2013.
 Gross profit margin improved, exceeding 20%.

8,000

Revenue
2,563

2,000
Gross profit

0

Revenue

674
Gross profit
margin 26.3%

24.1%

2013
Q2 YTD2014
Q2 YTD

2,563

0

YOY %

14,768576.2%

Gross profit

674

3,554

526.8%

Gross profit
margin

26.3%

24.1%

▲ 2.2%

No. of sales

43

224

520.9%＜FY 2014 Forecast＞<Open residencia Mejiro>

 Sales contract rate of condominiums for delivery in
FY2014 has reached 99.5%.（404 units out of 406 units
as of May 19, 2014)
 Gross profit margin will decline slightly.

（Millions of yen）

8

Real Estate Sales Business : Resale properties
Gross profit（Millions of yen）

Revenue（Millions of yen）

8,000

3,000
7,026

2,000

1,792
4,000

＜Summary＞

Revenue and gross profit increased
significantly .
 Revenue doubled year on year due to strong demandfor income producing properties.
 Gross profit trebled year on year due to sales ofproperties which were purchased on advantageous
terms.

Revenue
3,230
1,000

Gross profit
609

0Gross profit
margin
18.9%

25.5%

2013
Q2 YTD2014
Q2 YTD＜FY 2014 Forecast＞
0

YOY %

Revenue

3,230

7,026

217.5%

Gross profit

609

1,792

294.1%

Gross profit
margin

18.9%

25.5%

＋ 6.6%

No. of sales

919211.1%

 The real estate resale market is
expected to remain solid.
 Supply of properties for sale by steadily
making property purchases.

<Kagurazaka: Ebisu-tei Bldg.>（Millions of yen）

9

SG&A Expenses（ Millions of yen）

2013 Q2 YTD
ActualSG&A
Expenses2014 Q2 YTD

Revenue ratio

ActualRevenue ratio

YOY%

Personnel expenses

837

2.3%

910

1.7%

108.6%

Advertising expenses

468

1.3%

384

0.7%

82.2%

Sales commissions

164

0.5%

322

0.6%

195.7%

Sales promotion
expenses

575

1.6%

268

0.5%

46.6%

1,389

3.9%

1,496

2.7%

107.7%

3,436

9.6%

3,382

6.2%

98.4%

OthersReduced advertising expenses and sales promotion expenses.

10Non-operating expenses（ Millions of yen）

2013 Q2 YTD
ActualNon-operating
incomeNon-operating
expenses2014 Q2 YTD

Revenue ratio

ActualRevenue ratio

YOY%

Foreign exchange
gain

201

0.6%

50

0.1%

24.8%

Others

33

0.1%

31

0.1%

94.0%

234

0.7%

81

0.1%

34.5%

Interest expenses

438

1.2%

410

0.7%

93.8%

Commission

123

0.3%

86

0.2%

70.2%

Others

35

0.1%

69

0.1%

196.2%

596

1.7%

566

1.0%

94.9%

Decreased Non-operating income and reduced interest expenses.

11

Consolidated Balance Sheet Summary（ Millions of yen）

FY2013
ActualTotal assets

Total liabilities
and net assets

FY2014 Q2

Ratio %

ActualRatio %

ChangesCash and cash
equivalents

26,07733.4%

21,656

24.9%▲ 4,420

Inventories

42,73054.7%

56,04364.5%＋ 13,312

Others

9,261

11.9%

9,218

10.6%

▲ 42

78,069100.0%

86,918100.0%＋ 8,848

Current liabilities

35,65545.7%

40,87847.0%＋ 5,222Long-term liabilities

12,45015.9%

12,573

14.5%

＋ 123

Total net assets

29,963

38.4%

33,46638.5%＋ 3,50278,069100.0%

86,918100.0%＋ 8,848

 Inventories increased 13.3 billion yen, reflecting steady progress in property purchases.
 Interest-bearing liabilities increased by 5.5 billion yen year-on year, to 41.7 billion yen.
 Maintained stable financial position, with the equity ratio above 30%.
12

Break down of Inventories（ Millions of yen）

FY2013Inventories

FY2014 Q2
Ratio%

Inventories

Ratio%

ChangesSingle-family
homes

21,47650.3%

30,01853.6%＋ 8,542

Condominiums

14,30933.5%

13,773

24.6%

▲ 536

Resale properties

6,741

15.8%

11,77921.0%＋ 5,038

203

0.5%

471

0.8%

＋ 268

42,730100.0%

56,043100.0%＋ 13,312

OthersTotal（ Millions of yen）

60000

53.6%

40000
50.3%
20000
33.5%
0

15.8%
FY2013 Inventories

Single-family homes

Condominiums
Resale properties

24.6%
21.0%
FY2014 Q2 Inventories

13

Forecast of consolidated operating results for FY2014 and Dividends（ Millions of yen）

FY2013

FY2014

Full year (actual)

Full year (forecast)

YOY %Revenue

96,999115,000

118.6%

Operating income

10,185

13,700134.5%

Ordinary income

9,179

12,600137.3%Net income

5,661

7,700

136.0%EPS (Yen)

287.82274.75

95.5%

Dividend per share (Yen)

25.00

35.00

＋10.00 Annual dividend for FY 2014 is planned to pay 35 yen per share.
In addition to a common dividend of 30 yen per share, an increase of 5 yen per share from last year,
we plan to pay a commemorative dividend of 5 yen per share in a commemorative of our listing on TSE.
NOTE:
Average number of shares issued
September 30, 2014: 28,025,000 shares

September 30, 2013 : 19,668,562 shares

14

FY 2014 Consolidated Segment Revenue（ Millions of yen）

Segment

Sub-segment

FY2013

FY2014

Full year (actual)
Revenue

YOY %

4,704

5,730

121.8%

Single-family
homes

58,62869,720118.9%

Condominiums

27,13625,00092.1%

Resale properties

6,968

16,220232.8%

Others

1,349

700

51.9%

94,082

111,640118.7%

369

360

97.4%

▲ 2,157▲ 2,730

126.6%

96,999115,000

118.6%

Real estate brokerage
Real estate sales

Full year (forecast)

Sub-total
Real estate financing
Adjustments
Total

15

OHG Business Strategies

Trend in the housing market for Tokyo’s 23 wards＜Market ＞

Number of Net-migration for Tokyo’s 23 wards,
Yokohama and Kawasaki: 1985-2013100

 While the Japanese population is shrinking, the net-migration to
Tokyo’s 23 wards is increasing.
 The numbers of households in Tokyo’s 23 wards is increasing.
＜Competitor＞

Tokyo's 23 wards"(Thousands of Person)

 Increasing demand from singles and Dual-income couples for
returning to the urban center for residences closer to the work place.

Yokohama-shi

50

Kawasaki-shi

0-50Concentrating management
resources in core business
東京に、家を持とう。
＜Our strength ＞
 Strong relationships with local real estate brokers.
Expanding network for land procurement in Tokyo’s 23 wards.
 Able to provide modestly-priced three-story houses by planning
those with wider living spaces to make the most of limited site areas.

 By taking advantage of our integrated development and sales
structure, we continue to provide products sought by customers.

-100
1985

1989

1993

1997

2001

2005

2009

2013
（year）

Number of households in Tokyo’s 23 wards
1985-2014

6(Millions of household) Affordable housing developers like POWER BUILDER focus on thebusinesses for the suburbs of the Tokyo metropolitan area,
meanwhile most of affordable housing developers do not focus on
the businesses for Tokyo’s 23 wards.
 We have first-mover advantage with few major competitors.

4

2

0
1985

1989

1993

1997

2001

2005

2009

2013
（year）

Source: Ministry of Internal Affairs and Communications[Report on Internal Migration in Japan]

17

Business strategy: Single-family homes/Condominiums
Single-family homes

Continuing to strengthen
its business base Accelerating brokerage office development to further expand its share within themarket of Tokyo's 23 wards, Yokohama and Kawasaki area.
 Bolstering the recruitment, development, and utilization of personnel.

Condominiums

Cautious stance Focusing on lands major companies rarely deal with.
 Most of condominiums to be scheduled delivery in FY2014 have been completed of thecontracts.

18

Trend in the real estate investment market environment
Lending Attitude of Financial institutions(%point)＜Market＞(Diffusion index of "Accommodative" minus "Severe“)40 The "Quantitative and qualitative monetary easing“ by BOJ under“Abenomics”. (economic and monetary policies of Prime Minister Shinzo
Abe).

 The flow of funds into the real estate investment market would
continue to increase.
 Increasing actual demand for office buildings by economic recovery.

All industries

20
0
-20

Real Estate

-40

3

9

2003

3

9

3

2004

9

2005

3

9

2006

3

9

2007

3

9

3

2008

9

2009

3

9

3

2010

9

2011

3

9

2012

3

9

2013

Source：Bank of Tokyo 「TANKAN」＜Risk management> As selling prices as well as acquisition prices have been rising, it has
become possible to secure a certain level of profit.
 Reducing the price fluctuation risk by shortening holding period.
 Holding properties in the condition of available-for-sale properties
to respond promptly to changes in the business environment.

Change in market cap rate ofclass A building and residential property(%）
8

Nihonbashi/Class A building
Nishi-shinjuku/Class A building

7

Southern Tokyo/Standard StudioSouthern Tokyo/Standard Multifamily

65Investing certain
resources
Establishing and growing the third core businesses＜Our business domain＞
 Building networks with deepening relationships with real estate
brokers, while leveraging our accumulated know-how and ourstrong sales capabilities.
 Dealing with investment properties of three to five hundred million
yen which are easily accessible to individual investors.
 Renovating the minimum necessary to sale.

4
3
05/10

06/08

07/06

08/04

09/02

09/12

10/10

11/08

12/06

13/04

Source： Miki Shoji 「Tokyo (5 Central Wards) Office Building Market Research Reports 」(Yen/ tsubo)
24,000Change in the average office rent and the averagevacancy rate of Tokyo’s five central wards

21,000(%）
10

Average vacancy rate / Right5

18,000
Average rent / Left
15,000005/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10 13/10
Source：Japan Real Estate Institute 「The Japanese Real Estate Investor Survey 」(1tsubo=3.3m²）

19

Business strategy : Real estate resale
Resale properties

Accelerating business expansions

 Ensuring suitable quantity of investment properties for expanding sales.
 Strengthening the structure for purchase and sale of properties.

Business operation flow: Example
property
ownersPurchase

Renovation:requisite minimum
Project period: average 6 months

Sale

Mainlyindividual
investors

20

Business strategy M&A

 Complementing existing businesses Expanding geographical business areas
 Entering new businesses

21AppendicesConcentration of population in Tokyo’s 23 wards
Number of Net-migration for major cities: 1985-2013

PersonNumber of the households change of ku-area of Tokyo: 1985-2014
Million of household

80,000Ku-areaof Tokyo

660,0005
40,00020,000

4

0

Yokohama
Kawasaki3-20,000-40,000

2-60,000

Ku-area of Tokyo
Kawasaki-shi
Osaka-shi
Fukuoka-shi-80,000

1

Yokohama-shi
Nagoya-shi
Kobe-shi0-100,000
1985

1989

1993

1997

2001

Source: Ministry of Internal Affairs and Communications[Report on Internal Migration in Japan]

2005

2009

2013

Year

1985

1989

1993

1997

2001

Source: Statistics Division Bureau of General Affairs

2005

2009

2013
Year

23
©2014 Open House Co.,Ltd All rights reserved.

Change in the real estate investment market
Change in the average office rent and the average vacancy rate of Tokyo’s five central wards(Yen/ tsubo =3.3m²）(%）

24,00010
821,000

6

Average vacancy rate / Right4

18,0002

Average rent / Left
15,0002005/100
2006/07

2007/04

2008/01

2008/10

2009/072010/04

2011/01

2011/10

2012/072013/04

2014/01

Source： Miki Shoji 「Tokyo (5 Central Wards) Office Building Market Research Reports 」

Change in market cap rate of class A building and residential property

(%）

7

6

5

4

Nihonbashi/Class A building
Nishi-shinjuku/Class A building
Southern Tokyo/Standard Multifamily

Roppongi/Class A building
Southern Tokyo/Standard Studio3
2005/10

2006/04

2006/10

2007/04

2007/10

2008/04

2008/10

2009/04

2009/102010/04

2010/10

2011/04

2011/10

2012/04

2012/102013/04

2013/10Source：Japan Real Estate Institute 「The Japanese Real Estate Investor Survey 」

24Change in “Amounts outstanding of loans and bills
discounted” and “New loans for fixed investment”
Amounts outstanding ofloans and bills discounted(Million of yen)

New loans for fixed
investment(Million of yen)

700,000

40,000New loans for fixed investment

Amounts outstanding of loans and bills discounted

600,000

30,000500,000

20,000400,000

3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12
2003

2004

2005

2006

2007

Source：Bank of Tokyo 「Loans and Bills Discounted by Sector」

2008

2009

2010

2011

2012

10,0002013
25

Lending Attitude of Financial institutions(Diffusion index of "Accommodative" minus "Severe“)（％ point)
40
30

All industries

20
10
0
-10

Real Estate
-20
-30

-40

3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source：Bank of Tokyo 「TANKAN」

26

This document and reference materials may contain forward-looking statements, but please understand that actual results may differ
significantly from these forecasts due to various factors.
This document is prepared for the purpose of information only, and subject to change without notice.