FY18/2 Q1 Corporate Presentation
January
2017
July 13,13,
2017

Ichigo (2337)© 2017 Ichigo Inc. All rights reserved.

www.ichigo.gr.jp/en/

Ichigo Preserves andImproves Real Estate© 2017 Ichigo Inc. All rights reserved.

© 2017 Ichigo Inc. All rights reserved.

Contents
FY18/2 Q1 Earnings‒ Operating Profit -48%, Net Income -60% YOY‒ Segment Earnings Details‒ Stock + Flow Earnings Model‒ Strong Financial Position

Powerful Value-Add Business Model Underpins Growth‒ Capital-Efficient Asset Turnover‒ Centro Acquisition‒ Large Q2 Value-Add Asset Sale
‒ Ichigo Office (8975) Strategic Portfolio Restructuring‒ Ichigo Green (9282) EPS Growth‒ Ichigo Office REIT and Ichigo Hotel REIT Dividend Growth‒ Value-Add: Ichigo Office (8975) Environmental Sustainability Initiatives‒ Value-Add: Ichigo Akasaka 317 Building‒ Clean Energy Business Growth‒ Share Buyback Completion

Appendices‒ Financial & Real Estate Data
‒ Power Up 2019 Mid-Term Business Plan
© 2017 Ichigo Inc. All rights reserved.

FY18/2 Q1 Earnings© 2017 Ichigo Inc. All rights reserved.

5

Operating Profit -48%, Net Income -60% YOY
Quiet P&L Quarter, but Business and Earnings On-Plan
 Drop out of FY17/2 Q1 JPY 29.2B asset sale to Ichigo Office REIT and
JPY 2.4B extraordinary gain from CIAM share sale
 Earnings to accelerate from Q2 on large Value-Add asset sale
(JPY million)

FY17/2
Q1

FY18/2Q1

YOY

Full Year
Forecast

vs. Full-Year
Forecast

Revenue

46,415

12,915-72.2%

75,50017.1%

Gross Profit

6,612

4,001

-39.5%

25,994

15.4%

Operating Profit

5,412

2,810

-48.1%

20,600

13.6%

Recurring Profit

4,806

2,097

-56.4%

18,30011.5%

Net Income

5,585

2,237

-59.9%

13,50016.6%

JPY 11.13

JPY 4.46-59.9% JPY 26.98

16.5%

EPS

© 2017 Ichigo Inc. All rights reserved.

6

Segment Earnings Details
Stock AM Fees Up
Value-Add and Clean Energy Down
(JPY million)
Revenue
Segment

FY17/2 Q1

FY18/2 Q1Operating Profit
Full-Year
Forecast

YOY

vs. Forecast

FY17/2 Q1

FY18/2 Q1Full-Year
Forecast

YOY

vs. Forecast

Earnings Drivers(Parentheses show YOY change in
Gross Profit)
AM Fees 454 (+112)
Acquisition/Disposition Fees 43 (-43)
Performance Fees 170 (+8)
PM/BM Fees -3 (-125)

Asset Management

1,185

681

-42.5%

2,485

27.4%

800

504

-36.9%

1,656

30.5%

Value-Add

44,667

11,773-73.6%

69,719

16.9%

4,404

2,269

-48.5%

18,304

12.4% Profits on Sale 908 (-2,004)

556

373

-32.9%

3,216

11.6%

143

52

-63.7%

620

Other

5

86

+1,356.0%

78

111.4%

-14

-43

–

-52

Total

46,415

12,915-72.2%

75,500

17.1%

5,334

2,782

-47.8%

20,529

–

–

–

–

–

77

27

-64.5%

70

46,415

12,915-72.2%

75,500

17.1%

5,412

2,810

-48.1%

20,600Clean Energy

Adjustment (including
offsets of cross-segment
transactions)Total© 2017 Ichigo Inc. All rights reserved.

Rental Income 2,278 (-431)

8.4% FIT Solar Power Sales 171 (-82)–

Shut-down costs for overseas fund -43(-43)

13.6%
–
13.6%

7

Stock + Flow Earnings Model
Stock Earnings (Primarily Rental Income, AM Fees, and FIT Solar Power Sales)
Flow Earnings (Primarily Profits on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expense)(JPY million)

26,806

19,86325,99414,011

12,94912,795

13,045

8,973

12,166
4,553
Gross
Profit

7,435
2,518

4,974

10,890

924
4,050

4,001

7,613
4,917
3,129

FY13/2

3,499

FY14/2© 2017 Ichigo Inc. All rights reserved.

4,342
FY15/2

4,876

5,382

1,090

6,045

2,911
FY16/2

FY17/2

1,271
FY18/2
Q1 Actual

FY18/2(Forecast)8

Strong Financial Position
Average Interest Rate and Loan Term

Weighted Average Interest Rate
WeightedLoan
AverageLoan Term
Average
Period(Loan Term, Years)(Interest Rate)
2.5%

12
10.8 years
10.6 years
9.0 years

2.0%
1.96%

9
8.7 years

1.71%

1.5%

5.9 years

6

1.41%
1.24%
1.14%

3

1.0%
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2 Q1

14% (JPY 4.1B)

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

6% (JPY 6.9B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

94%(JPY 105.5B)

Term Structure of Loans

Short-Term
Long-Term

86%(JPY 26.1B)© 2017 Ichigo Inc. All rights reserved.

9

Powerful Value-Add Business Model Underpins Growth© 2017 Ichigo Inc. All rights reserved.

10Capital-Efficient Asset Turnover
Acquired JPY 12.3B and Sold JPY 7.0B of Real Estate in Q1

Buy− Deploy cash
− Increase borrowings

ValueAdd

Acquisitions
Residential
OfficeRetailHotel
Logistics

Total 11 Assets JPY 12.3B
Sales
Residential
OfficeSell

5 Assets JPY 3.6B
1 Asset JPY 0.5B
1 Assets JPY 1.8B
2 Assets JPY 2.7B
2 Assets JPY 3.5B

1 Asset JPY 0.7B
3 Assets JPY 6.3B

Total 4 Assets JPY 7.0B

− Receive cash
− Repay borrowings© 2017 Ichigo Inc. All rights reserved.

11

Centro Acquisition
Tokyo-Based Real Estate Operator Acquired July 3, 2017
 JPY 5B Central Tokyo real estate assets
 Storage Plus (100% subsidiary): indoor self-storage business Tenuto (65% subsidiary): agri-venture that develops systems to reuseindustrially-generated CO2

Accelerate Growth via New Self-Storage Asset Class
 Industry’s leading security and air conditioning Experiencing rapid business growth Drive growth in Ichigo stock earnings

Ichigo Owners’ Synergies
 c. JPY 500M real estate assets well-matched to
Ichigo Owners’ client needs

Storage Plus Indoor Self-Storage・ Industry’s leading security system
・ High-grade air conditioning
・ 20 facilities (including 2017 openings)

Agricultural Business Entry with Future Growth Potential© 2017 Ichigo Inc. All rights reserved.

12

Large Q2 Value-Add Asset Sale
Central Tokyo Office Building (Acquired 2007)
 Originally purchased for ongoing rental income (Building met current earthquake
resistance standards, but did further seismic reinforcement) Building functional aging (built in 1973) and FAR allowance expansion
suggested redevelopment was best use of site
− Agreed with all tenants to convert lease contracts to fixed-term leases over anumber of years
 Strong buyer demand for the asset− Located in area where assets for sale are scarce− High potential with ongoing redevelopment in the area
 Sold to Japanese real estate company with strong redevelopment capability

Contract Date
Settlement Date

July 7, 2017
July 27, 2017 (expected)

Q2 Earnings Impact
Revenue JPY 14.2B, Gross Profit JPY 7.3B, Net Income JPY 5.0B
© 2017 Ichigo Inc. All rights reserved.

13

Ichigo Office (8975) Strategic Portfolio Restructuring
Increased Portfolio Scale, Quality, and Stability− Sold 3 prime location office assets in Tokyo to Ichigo Office (total JPY 7B)− Acquired from Ichigo Office 4 non-office assets with significant on-going costs− Increased Ichigo Office NOI (+JPY 129M), portfolio weighting of Office assets
with greater earnings stability (+3.0%), and portfolio scale (+JPY 2.4B)
Win Gotanda Building Ichigo Hongo Building

Oimachi Center Building

Ichigo Value-Add
・Rectified building code issues
・Upgraded equipment to higher environmental
standards
・Increased occupancy via leasing activities
・Renovated common areas
・Implemented Ichigo Property Management
Standard to raise service quality & lower costs
・Strengthened tenant relationships
・Fostered relationships among co-owners,
tenant & owner groups, and building
maintenance companies (Win Gotanda
Building and Oimachi Center Building)
Shinagawa-ku, Tokyo© 2017 Ichigo Inc. All rights reserved.

Bunkyo-ku, Tokyo

Shinagawa-ku, Tokyo

Deployed Ichigo’s Value-Add capabilities toimprove assets (make REITable) andincrease NOI

14

Ichigo Green (9282) EPS Growth
Sold 2 Solar Power Plants to Ichigo Green− Diversifies Ichigo Green’s portfolio by adding plants in Japan’s Chugoku Region− EPS +17.9% impact
Ichigo Yamaguchi Aionishi ECO Power Plant

Ichigo Yamaguchi Sayama ECO Power Plant

Panel Output

1.24MW

Panel Output

2.35MW

FIT

JPY 40FIT

JPY 36

Sale Price

JPY 544M

Sale Price

JPY 925M

Appraisal Value

JPY 470M to JPY 637M

Appraisal ValueJPY 785M to JPY 1,050M© 2017 Ichigo Inc. All rights reserved.

15

Ichigo Office REIT and Ichigo Hotel REIT Dividend Growth
Ichigo Office REIT (8975) Dividend Growth

Ichigo Hotel REIT (3463) Dividend Growth

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

Grow Dividend by Leveraging Ichigo’s
Value-Add Capabilities
Forecast
ActualApr 2017 DPS (Actual)

JPY 1,923

JPY 5,742

Oct 2017 DPS (Forecast) JPY 1,930
Apr 2018 DPS (Forecast) JPY 1,940

1,494 1,537

1,541 1,547

1,904 1,923
1,603

1,706

1,740

1,387

Jan 2017(Initial
Forecast)

JPY
2,917

+3.8%

+2.3%
JPY 5,962
Jan 2017(Actual)

JPY
3,137

JPY 6,101
Jan 2018(Forecast)

JPY
3,058

1,219
899*

1,031 *
979 *

737*

Jul 2016(Actual)Jul 2016(Actual)

JPY
2,825

JPY
2,825

Jul 2017(Forecast)

JPY
3,043

FY10/4 10/10 11/4 11/10 12/4 12/10 13/4 13/10 14/4 14/10 15/4 15/10 16/4 16/10 17/4

* Adjusted to reflect stock split on November 1, 2011

© 2017 Ichigo Inc. All rights reserved.

* Annualized dividend shown to offset seasonal volatility

16

Value-Add

Ichigo Office (8975) Environmental Sustainability Initiatives
CASBEE (Comprehensive Assessment System for Built Environment
Efficiency) Certification
 Ichigo Marunouchi Building: S Rank (Highest)
 Ichigo Kanda Nishikicho Building: A Rank

DBJ (Development Bank of Japan) Green Building Certification
 Ichigo Nihonbashi East Building: Three stars (Excellent Environmental andSocial Awareness)

BELS (Building-Housing Energy-Efficiency Labeling System) Certification
 Ichigo Akihabara North Building: Two stars
IchigoMarunouchi
Building
S Rank★★★★★

© 2017 Ichigo Inc. All rights reserved.

Ichigo Kanda
Nishikicho
Building
A Rank★★★★

IchigoNihonbashi
East
Building★★★

IchigoAkihabara
North
Building★★

17

Value-Add

Ichigo Akasaka 317 Building
Renovated Prime Location Office Building to Target Fast-Growing
Companies as Tenants, and Converted Floors to Retail Use
Opened Akasaka Bar Yokocho on First Floor, Gathering Nine Different
Bars in One Place (June 2017) Redesigned an irregularly-shaped floor to allow for multiple tenant leasing Successful in attracting new tenants, e.g., travel guidebook company seeking toenter the dining industry− Minimized risk for tenants by allowing them to start with very small space andminimal equipment− Successful customer acquisitions for new tenants
Floor Redesign
Split up an irregularly-shaped floor into 9 units to maximize leasable area

③
⑦

⑤

⑧
⑨

© 2017 Ichigo Inc. All rights reserved.

④

WC

①
②

Akasaka Bar
Entrance
Office Entrance⑥

18

Clean Energy Business Growth
Ichigo Showamura Ogose ECO Power Plant (43.3MW)
 Development ahead of schedule− Started full plant inspection andinstallation of monitoring terminals− Test-operation start date: July 3, 2017
− Forecast NOI: JPY 1.4B

New Solar Power Plant Development

Ichigo Showamura Ogose ECO Power Plant

 Ichigo Minakami Aramaki ECO Power Plant (10.3MW)− Approval obtained for development on former pasture in northern Kanto− Construction start in August 2017; operation start in April 2019

Wind Power in Detailed Power Plant Simulation & Design Phase
No.

Location

Expected Output

Wind Data Survey

1

Chiba

4.0MW

Completed2

Yamagata

7.5MW

In Progress

3

Iwate

7.5MW

In Progress

4

Iwate

7.5MW

In Progress

5

Mie

7.5MW

In Progress© 2017 Ichigo Inc. All rights reserved.

19

Share Buyback Completion
Purpose: Grow Value for Ichigo’s Shareholders
Number of Shares
AmountBuyback Period
Buyback Method
Average Share Price© 2017 Ichigo Inc. All rights reserved.

4,627,400 shares(0.92% of total shares outstanding)
JPY 1,499,979,200
April 24, 2017 – April 28, 2017
In-market purchases via trust bank
JPY 324

20

Appendix: Financial & Real Estate Data

© 2017 Ichigo Inc. All rights reserved.

21

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)
OfficeIchigo Office REIT
(8975)
Hotel

Ichigo Hotel REIT
(3463)© 2017 Ichigo Inc. All rights reserved.

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
22

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© 2017 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
LowestImpact23

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 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
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 )© 2017 Ichigo Inc. All rights reserved.

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

24

Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 312.0B(Book Value JPY 275.1B + Unrealized Gains JPY 36.9B)

Non-Recourse Loans &Related Liabilities
Non-Recourse LoanRelated Assets

JPY 74.2B

JPY 106.3B

Cash & Cash Equivalents

Corporate Loans

JPY 36.2B

JPY 112.5B

Consolidated Risk-Based Balance Sheet: JPY 237.8B(Book Value JPY 200.9B + Unrealized Gains JPY 36.9B)
Debt
JPY
196.6B

Non-Recourse LoanRelated ICH Equity

JPY 32.0B
Cash & Cash Equivalents

JPY 36.2B

Operational Loans
JPY 1.3B

Operational Loans
JPY 1.3B

Operational Securities
Investments JPY 1.9B

Operational Securities
Investments JPY 1.9B

Security Deposits Received
JPY 4.2B

Real Estate for Sale

JPY 76.8B

JPY 76.8B
Power Plants for Sale
JPY 0.9B

Fixed Assets

JPY 43.5B
Investments in Securities
JPY 1.4B

Shareholder
EquityJPY 78.4B

Other JPY 6.4B

Unrealized Gains
JPY 36.9B

Unrealized Gains
JPY 36.9B

JPY 112.5B

Debt
JPY
122.4B

Security Deposits Received
JPY 4.2B

Other JPY 5.5B

Real Estate for Sale

Corporate Loans

Mark-toMarket
Shareholder
Equity Ratio

37.0%

Power Plants for Sale
JPY 0.9B

Fixed Assets

JPY 43.5B
Investments in Securities
JPY 1.4B

Other JPY 5.5B

Shareholder
EquityJPY 78.4B

Other JPY 6.4B

Unrealized Gains
JPY 36.9B

Risk-Based
Mark-toMarket
Shareholder
Equity Ratio

48.5%

Unrealized Gains
JPY 36.9B

Note: Risk-Based Balance Sheet excludes client and non-recourse assets and liabilities.
© 2017 Ichigo Inc. All rights reserved.

25

Significant Unrealized Gains on Balance Sheet
Total Unrealized Gains: JPY 36.9B (Appraisal Value Basis)
Real estate directly held by Ichigo(JPY million)
LocationBook Value as of
May 31, 2017NOI

Cap Rate
NOI/Book Value after Write-dow n

Appraisal Value as of
May 31, 2017

Unrealized GainsTokyo

105,194

5,809

5.9%

124,977+19,783

Outside Tokyo

86,525

5,703

6.9%

103,346+16,821

Total

191,718

11,512

6.4%

228,323+36,604* Cap rate is the simple average of the cap rates for each asset. 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(JPY million)
Book Value as of
May 31, 2017

Appraisal Value as of
May 31, 2017

Unrealized Gains

Equity Investments(Non-consolidated)

–

–

–

Equity Investments(Consolidated)

1,054

1,383

+328

Total

1,054

1,383

+328

© 2017 Ichigo Inc. All rights reserved.

26

Business Segments

Asset Management

Asset Management generates fee income via management of Ichigo
Office REIT (8975), Ichigo Hotel REIT (3463), and Ichigo Green(9282), and providing 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 is carrying out its value-add,
along with earning profits on sale that reflect the real estate’s higher
value after the value-add is complete.

Clean Energy

Other© 2017 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.

27

Consolidated Balance Sheet(JPY million)
FY18/2 Q1
FY17/2

OutsideInvestors'
Interest

B/S

MarketValue

YOY

Unrealized
Gains

Unrealized
Gains on
ListedSecurities 2

Cash and Cash Equivalents

47,67845,542567-2,13645,542––

Operational Loan Investments (Value-Add)

1,324

1,324

–

–

1,830

+505

–

Operational Securities Investments

1,433

1,960

–

+527

1,960

–

–

Value-Add

84

658

–

+574

658

–

–

Clean Energy

512

512

–

–

512

–

–

Other

837

789

–

-48

789

–

–

167,805

170,799

3,014+2,994

203,720+32,120

–

–

996

–

+996

996

–

–

45,65445,299–-355

49,596+4,296

–

30

–

–

-30

–

–

–

Value-Add

25,92025,858–-6230,154+4,296–

Clean Energy

19,62019,356–-264

19,356––

Other1

82

84

–

+2

84

–

–

Intangible Assets

1,956

1,391

–

-565

1,391

–

–

Securities Investments

1,426

1,416

–

-10

1,416

–

+135

Other

6,178

6,423

6

+245

6,423

–

–

273,459

275,154

3,588+1,695

312,877+36,921+135

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

Total Assets

1 Other refers to company assets that are not allocated to the three business segments
2 Unrealized Gains on Listed Securities is recorded in Unrealized Gains on Securities Investments.

© 2017 Ichigo Inc. All rights reserved.

28

Consolidated Balance Sheet: Segment Breakdown(JPY million)
Segment

Cash andCash
Equivalents

Operational
Loans

Operational
Securities
Investments

Real Estatefor SalePower
Plantsfor Sale

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
AssetsTotal Assets

–

–

–

–

–

–

964

–

919

1,884

Value-Add

14,407

1,324

658

170,799–

25,858

156

–

3,348

216,553

Clean Energy

661

–

511

–

996

19,356

246

–

957

22,731

Other

102

–

789

–

–

–

–

1,416

-472

1,836

Company-Wide Assets

30,370

–

–

–

–

84

24

–

1,669

32,148

Total

45,542

1,324

1,960

170,799996

45,299

1,391

1,416

6,423

275,154

Asset Management© 2017 Ichigo Inc. All rights reserved.

29

Consolidated P&L: Gross Profit Segment Breakdown(JPY million)

Revenue

Segment
FY17/2 Q1

Gross Profit

FY18/2 Q1ChangeFY17/2 Q1

FY18/2 Q1ChangeYOY(Gross Profit)

1,185

681

-503

734

670

-64

-8.7%

Asset Management Fees

438

511

+73

435

508

+73

+16.8%

PM/BM Fees

567

–

-567

122

-3

-125

-103.0%

Other

179

170

-9

176

165

-11

-6.5%

44,667

11,773-32,893

5,621

3,186

-2,435-43.3%

Rental Income

4,086

3,714

-372

2,709

2,278

-431

-15.9%

Asset Sales

40,581

8,059-32,521

2,912

908

-2,004-68.8%

Clean Energy

556

373

-183

254

171

-82

-32.4%

Other

5

86

+80

1

-27

-29

–

Total

46,415

12,915-33,499

6,612

4,001

-2,610-39.5%

Asset Management

Value-Add© 2017 Ichigo Inc. All rights reserved.

30

Consolidated P&L: Results vs. Forecast(JPY million)

FY18/2 Q1 (3M)ン
Segment

vs. FullYear
Forecast

Revenue

Gross
ProfitFY18/2 Full-Year Forecast (12M)

vs. FullYear
Forecast

Operating
Profitvs. FullYear
Forecast

Gross
ProfitRevenue

Operating
Profit

681

27.4%

670

27.3%

504

30.5%

2,485

2,457

1,656

511

22.1%

508

22.2%

–

–

2,315

2,293

–

–

–

-3

–

–

–

–

–

–

170

100.0%

165

100.8%

–

–

170

164

–

11,773

16.9%

3,186

14.3%

2,269

12.4%

69,71922,33618,304

Rental Income

3,714

22.7%

2,278

21.4%

–

–

16,37910,625–

Asset Sales

8,059

15.1%

908

7.8%

–

–

53,34011,711–

Clean Energy

373

11.6%

171

15.3%

52

8.4%

3,216

1,122

620

Other

86

111.4%

-27

–

-43

–

78

78

-52

Total

12,915

17.1%

4,001

15.4%

2,782

13.6%

75,50025,994

20,529

–

–

–

–

27

–

–

–

70

12,915

17.1%

4,001

15.4%

2,810

13.6%

75,50025,99420,600Asset Management
Asset Management Fees
PM/BM Fees
Other
Value-Add

Adjustm ent (including
offsets of cross-segm ent
transactions)Total© 2017 Ichigo Inc. All rights reserved.

31

Asset Management AUM Detail
Ichigo Office REIT
(8975)

FY13/2(12M)

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2 Q1(3M)

JPY 104.3B

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 194.5B

JPY 196.9B

0.63%

0.65%

0.65%

0.64%

0.69%

0.70%

JPY 663M

JPY 733M

JPY 759M

JPY 1,016M

JPY 1,291M

JPY 339M

AUM (Fiscal Year End)

–

–

–

JPY 20.4B

JPY 47.6B

JPY 49.1B

AM Fee % (Average)

–

–

–

0.59%

1

0.90%

0.86%

AM Fee Gross Profit (Actual)

–

–

–

JPY 30M

JPY 287M

JPY 106M

AUM (Fiscal Year End)

–

–

–

–

JPY 10.0B

JPY 10.0B

AM Fee % (Average)

–

–

–

–

0.21%1,2

0.35%1,2

AM Fee Gross Profit (Actual)

–

–

–

–

JPY 5MJPY 8MJPY 169.7B

JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 6.4B

JPY 6.4B

0.15%

0.26%

0.37%

0.32%

0.25%

0.16%1

JPY 285M

JPY 257M

JPY 114M

JPY 60M

JPY 27M

JPY 2MJPY 274.1B

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 258.6B

JPY 262.5B

0.33%

0.47%

0.59%

0.61%

0.68%

0.70%1JPY 948M

JPY 989M

JPY 872M

JPY 1,106M

JPY 1,611M

JPY 456M

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

Ichigo Hotel REIT
(3463)

Ichigo Green(9282)

Private Equity Real
Estate Funds(excluding
consolidated funds)

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

Total(excluding
consolidated funds)

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

1

1

1 Annualized
2 In addition to the above AM fee, operator fees received from Ichigo Green (0.4% p.a. of AUM) will be recorded separately in the Clean Energy segment.

© 2017 Ichigo Inc. All rights reserved.

32

Asset Management – Ichigo REITs and YieldCo
Ichigo Green IPO Expands Ichigo’s J-REIT and YieldCo Line-Up
REIT/YieldCo

Ichigo Office REIT
(8975)

Ichigo Hotel REIT
(3463)

Listing Date

Characteristics

Forecast Dividend Yield(Based on Closing Share Price onJune 30, 2017)85 assets JPY 196.9B

・Specialized Office REIT focused on midsize offices with return stability and upside
potential
October 12, 2005

5.5%
・14 Consecutive periods of dividend
growth, No.1 among all J-REITs

20 hotels JPY 49.1B

・Specialized Hotel REIT focused on driving
shareholder value via income stability andearnings growth
November 30, 2015

5.3%
・Portfolio growth via Ichigo'ssponsor support

・Offers investors an opportunity to invest inJapan's rapidly expanding green
infrastructure asset class
Ichigo Green(9282)

Portfolio

December 1, 2016

・Solar YieldCo focused on driving shareholder
value via income stability and earnings growth

15 power plants JPY 11.4B(29.43MW)
7.1%

・The second TSE-listed YieldCo* Forecast dividend yield is based on the most recent dividend forecast. Ichigo Green includes Dividend in Excess of Earnings from operating cashflow.
© 2017 Ichigo Inc. All rights reserved.

33

Ichigo-Owned Real Estate Portfolio
Asset Location

Asset Type

Mixed
5%

Sendai3%

Office31%

Residence
11%

Retail20%

Nagoya
2%

Other
4%

GroundLease 3%

Hotel
26%

Osaka
4%

(JPY billion)

Other
7%

Fukuoka
14%

Tokyo
52%
Tokyo
99.7

Kanto
18%

Kanto
35.4

Asset Size
Osaka
8.0

≧10B

14%

Sendai
5.8<JPY 1B
14%

Nagoya3.4

Fukuoka
27.3

Other
12.6

JPY 5B-10B
12%

JPY 1B-5B
60%

Total Ichigo-Owned Assets: JPY 192B
Including Ichigo-Managed AUM: JPY 460B
* Acquisition price basis.
Ichigo-Managed AUM includes JPY 10B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 192B

© 2017 Ichigo Inc. All rights reserved.

34

Value-Add Asset Breakdown (1)98 Assets, JPY 192.2B, Forecast NOI JPY 11.5B (6.4% Yield)

No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

45 years

JPY 2B-3B

2005/06

JPY 74M

JPY 1,900M

–

–

2

RetailReal Estate for Sale

Minato-ku, Tokyo

48 years

JPY 2B-3B

2005/10

JPY 147M

JPY 1,033M

–

–

3

RetailReal Estate for Sale

Minato-ku, Tokyo

31 years≧JPY 3B

2006/03

JPY 191M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

12 years

JPY 1B-2B

2006/09

JPY 73M

JPY 1,157M

–

–

5

OfficeReal Estate for Sale

Sendai9 years≧JPY 3B

2006/10

JPY 275M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka

8 years≧JPY 3B

2006/12JPY 391M

JPY 1,339M

–

–

7

Land

Fixed Asset

Isumi, Chiba–

JPY 1B-2B

2007/02–

JPY 1,055M

–

–

9

Residence

Real Estate for Sale

Ota-ku, Tokyo

12 years<JPY 1B

2007/04

JPY 56M

JPY 403M––

10

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

37 years<JPY 1B

2007/06

JPY 85M

JPY 240M––

11

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

36 years<JPY 1B

2007/06

JPY 123M

JPY 233M––

12

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

53 years

JPY 2B-3B

2007/06

JPY 252M

JPY 554M––

13

OfficeReal Estate for Sale

Minato-ku, Tokyo

43 years≧JPY 3B

2007/11

JPY 388M

JPY 2,049M

–

–

14

Ground Lease

Real Estate for Sale

Atsugi, Kanagawa–

JPY 1B-2B

2011/06

JPY 176M

JPY 147M––

15

Mixed (Office/Retail)Fixed Asset

Hiratsuka, Kanagawa

21 years<JPY 1B

2012/02

JPY 86M

JPY 172M––

16

RetailReal Estate for Sale

Yokohama

3 years<JPY 1B

2012/10

JPY 33M

JPY 171M

–

–

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.

© 2017 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 Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

*

17

RetailFixed AssetToshima-ku, Tokyo

6 years≧JPY 3B

2013/03

JPY 230M

JPY 340M––

18

RetailReal Estate for Sale

Shibuya-ku, Tokyo

30 years<JPY 1B

2013/05

JPY 46M

JPY 154M––

19

Mixed (Office/Retail)Fixed Asset

Chofu, Tokyo

32 years

JPY 1B-2B

2013/06

JPY 122M

JPY 310M––

21

Residence

Real Estate for Sale

Minato-ku, Tokyo

1 year<JPY 1B

2013/06

JPY 45M

JPY 203M––

24

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

26 years

JPY 1B-2B

2013/08

JPY 86M

JPY 520M––

26

RetailFixed AssetKobe

16 years

JPY 1B-2B

2013/09

JPY 149M

JPY 616M––

27

RetailFixed Asset

Tokorozawa, Saitama

9 years

JPY 1B-2B

2013/11

JPY 62M

JPY 92M––

28

Ground Lease

Real Estate for Sale

Chiba, Chiba–

JPY 2B-3B

2014/02

JPY 128M

JPY 342M––

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

33 years<JPY 1B

2014/03

JPY 39M

JPY 108M

6.95X

26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

6 years

JPY 1B-2B

2014/04

JPY 61M

JPY 1,090M

1.25X

12.0%

32

RetailFixed Asset

Fukuoka

11 years

JPY 1B-2B

2014/04

JPY 60M

JPY 279M––

34

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

24 years

JPY 1B-2B

2014/05

JPY 133M

JPY 515M

2.27X

23.4%

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

8 years

JPY 2B-3B

2014/05

JPY 162M

JPY 434M

3.08X

15.2%

37

RetailReal Estate for Sale

Minato-ku, Tokyo

45 years<JPY 1B

2014/07

JPY 39M

JPY 77M

10.47X

23.9%

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.

© 2017 Ichigo Inc. All rights reserved.

36

Value-Add Asset Breakdown (3)Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Shinjuku-ku, Tokyo

41 years≧JPY 3B

2014/07

JPY 188M

JPY 645M

3.32X

21.1%

Fixed Asset

Fukuoka

13 years<JPY 1B

2014/07

JPY 47M

JPY 213M––

RetailFixed Asset

Fukuoka

32 years<JPY 1B

2014/09

JPY 52M

JPY 252M

–

–

41

Hotel

Real Estate for Sale

Utsunomiya, Tochigi

30 years

JPY 1B-2B

2014/09

JPY 144M

JPY 400M

1.97X

28.3%

42

RetailReal Estate for Sale

Fukuoka

16 years<JPY 1B

2014/09

JPY 54M

JPY 177M

5.54X

26.2%

43

RetailReal Estate for Sale

Osaka, Osaka

15 years

JPY 1B-2B

2014/09

JPY 102M

JPY 301M

4.64X

24.3%

44

RetailReal Estate for Sale

Machida, Tokyo

31 years<JPY 1B

2014/10

JPY 51M

JPY 82M

11.34X

43.9%

45

RetailReal Estate for Sale

Fukuoka

14 years

JPY 1B-2B

2014/11

JPY 76M

JPY 135M

10.70X

33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

14 years

JPY 2B-3B

2014/12JPY 116M

JPY 332M

2.18X

29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 90M

JPY 270M

1.56X

14.6%

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years

JPY 1B-2B

2014/12JPY 79M

JPY 238M

1.67X

16.6%

49

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 64M

JPY 185M

1.63X

15.7%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 60M

JPY 163M

1.55X

15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo

15 years<JPY 1B

2014/12JPY 57M

JPY 150M

2.21X

35.7%

52

Residence

Real Estate for SaleOsaka

9 years<JPY 1B

2014/12JPY 58M

JPY 148M

1.86X

24.8%

No.

Asset TypeClassification

38

Mixed (Office/Retail)Real Estate for Sale

39

Retail40

1
2

Location

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

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.

© 2017 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 Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo

14 years<JPY 1B

2014/12

JPY 40M

JPY 99M

2.96X

44.4%

54

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years<JPY 1B

2014/12JPY 39M

JPY 123M

1.97X

23.3%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

12 years<JPY 1B

2014/12JPY 28M

JPY 82M

2.05X

25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 85M

JPY 270M

2.00X

23.2%

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years

JPY 1B-2B

2014/12JPY 57M

JPY 186M

1.90X

21.0%

58

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

12 years<JPY 1B

2014/12

JPY 49M

JPY 157M

1.89X

21.5%

59

Residence

Real Estate for Sale

Setagaya-ku, Tokyo

12 years<JPY 1B

2014/12

JPY 42M

JPY 117M

2.11X

27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

10 years<JPY 1B

2014/12JPY 19M

JPY 55M

1.80X

21.1%

61

Mixed (Office/Retail)Operational Loan

Shinjuku-ku, Tokyo

54 years

JPY 1B-2B

2014/12JPY 118M

JPY 57M

15.26X

51.7%

62

RetailReal Estate for Sale

Fukuoka

13 years<JPY 1B

2014/12

JPY 43M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

10 years

JPY 1B-2B

2014/12JPY 83M

JPY 129M––

64

RetailReal Estate for Sale

Shinagawa-ku, Tokyo

63 years<JPY 1B

2015/01

JPY 17M

–

–

–

66

RetailReal Estate for Sale

Sendai13 years<JPY 1B

2015/02

JPY 49M

JPY 8M

42.58X

198.9%

68

RetailReal Estate for Sale

Shibuya-ku, Tokyo

15 years<JPY 1B

2015/04

JPY 39M

JPY 79M

5.65X

27.9%

69

Hotel

Real Estate for SaleOsaka

14 years

JPY 2B-3B

2015/05

JPY 194M

JPY 633M

1.56X

58.3%

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.

© 2017 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 Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

70

Hotel

Real Estate for Sale

Aomori9 years<JPY 1B

2015/06

JPY 51M

JPY 113M

2.10X

20.2%

71

RetailReal Estate for Sale

Fujisawa, Kanagawa

2 years

JPY 1B-2B

2015/07

JPY 97M

JPY 126M

6.80X

37.3%

89

OfficeReal Estate for Sale

Musashino, Tokyo

28 years≧JPY 3B

2015/07

JPY 128M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

9 years

JPY 1B-2B

2015/07

JPY 91M

JPY 353M

1.82X

17.7%

93

OfficeReal Estate for Sale

Fukuoka

14 years

JPY 1B-2B

2015/07

JPY 90M

JPY 358M

1.92X

18.8%

96

Hotel

Real Estate for Sale

Sapporo24 years<JPY 1B

2015/08

JPY 27M

JPY 2M

5.52X

291.5%

98

Hotel

Real Estate for SaleNaha, Okinawa

28 years

JPY 2B-3B

2015/11

JPY 232M

JPY 640M

1.91X

25.9%

105

Hotel

Real Estate for Sale

Kumamoto, Kumamoto

32 years

JPY 1B-2B

2015/12JPY 142M

JPY 453M

1.61X

61.2%

109

Hotel

Real Estate for Sale

Nagoya, Aichi

8 years

JPY 2B-3B

2016/03

JPY 124M

JPY 525M

1.84X

37.7%

110

Hotel

Real Estate for Sale

Fukuoka

31 years≧JPY 3B

2016/03

JPY 273M

JPY 905M

2.05X

104.5%

111

Hotel

Real Estate for Sale

Yokohama

33 years

JPY 2B-3B

2016/03

JPY 192M

JPY 228M

5.32X

23.3%

112

Hotel

Real Estate for Sale

Yokohama

29 years≧JPY 3B

2016/03

JPY 249M

JPY 354M

10.64X

36.2%

113

Hotel

Real Estate for Sale

Yokohama

29 years≧JPY 3B

2016/03

JPY 223M

JPY 344M

5.84X

25.5%

114

Hotel

Real Estate for Sale

Fukuoka

27 years≧JPY 3B

2016/04

JPY 177M

JPY 550M

1.73X

72.6%

115

Hotel

Real Estate for Sale

Osaka

10 years

JPY 2B-3B

2016/04

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 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.

© 2017 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 Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

116

RetailReal Estate for Sale

Sendai28 years<JPY 1B

2016/04

JPY 48M

JPY 86M

7.50X

28.4%

118

RetailReal Estate for Sale

Nagoya20 years

JPY 1B-2B

2016/06

JPY 84M

JPY 102M

7.71X

32.6%

119

RetailReal Estate for Sale

Shibuya-ku, Tokyo

30 years<JPY 1B

2016/06

JPY 31M

JPY 136M

3.91X

17.4%

120

Hotel

Real Estate for Sale

Shinjuku-ku, Tokyo

37 years≧JPY 3B

2016/09

JPY 288M

JPY 349M

2.70X

39.9%

121

OfficeReal Estate for Sale

Minato-ku, Tokyo

16 years≧JPY 3B

2016/10

JPY 1,352M

JPY 3,450M

2.87X

43.5%

122

Hotel

Real Estate for Sale

Shima, Mie

19 years<JPY 1B

2017/01

JPY 47M

JPY 73M

5.49X

43.1%

123

Hotel

Real Estate for Sale

Shibuya-ku, Tokyo

22 years≧JPY 3B

2016/12JPY 152M

JPY 1,123M

1.25X

25.4%

124

Hotel

Real Estate for Sale

Asahikawa, Hokkaido

27 years<JPY 1B

2016/12JPY 74M

JPY 593M

1.48X

48.5%

125

Hotel

Real Estate for Sale

Kurashiki, Okayama

24 years

JPY 1B-2B

2016/12JPY 93M

JPY 484M

1.53X

53.0%

126

Hotel

Real Estate for Sale

Fukuoka

26 years

JPY 1B-2B

2016/12JPY 67M

JPY 505M

1.25X

25.4%

127

Hotel

Real Estate for Sale

Ishigaki, Okinawa

14 years

JPY 2B-3B

2017/02

JPY 162M

JPY 544M

1.80X

80.2%

128

Hotel

Real Estate for Sale

Mito, Ibaraki

24 years

JPY 1B-2B

2017/02

JPY 97M

JPY 602M

1.47X

47.0%

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.

© 2017 Ichigo Inc. All rights reserved.

40

Value-Add Asset Breakdown (7)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

129

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

31 years<JPY 1B

2017/03

JPY 21M

JPY 416M

1.14X

14.2%

130

RetailReal Estate for Sale

Taito-ku, Tokyo

24 years

JPY 1B-2B

2017/04

JPY 99M

JPY 297M

4.42X

21.1%

131

Hotel

Real Estate for Sale

FukuokaNew

JPY 1B-2B

2017/04

JPY 101M

JPY 236M

2.07X

49.9%

132

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years<JPY 1B

2017/04

JPY 51M

JPY 190M

2.66X

38.3%

133

Residence

Real Estate for Sale

Minato-ku, Tokyo

15 years<JPY 1B

2017/04

JPY 46M

JPY 152M

3.85X

32.7%

134

Residence

Real Estate for Sale

Chuo-ku, Tokyo

14 years

JPY 1B-2B

2017/04

JPY 58M

JPY 197M

2.88X

26.2%

135

Logistics

Real Estate for Sale

Narashino, Chiba

25 years

JPY 1B-2B

2017/04

JPY 114M

JPY 188M

6.18X

25.8%

136

Logistics

Real Estate for Sale

Narashino, Chiba

25 years

JPY 1B-2B

2017/04

JPY 153M

JPY 203M

8.75X

32.8%

137

Residence

Real Estate for Sale

Meguro-ku, Tokyo

1 year<JPY 1B

2017/05

JPY 26M

JPY 647M

1.13X

12.9%

138

Hotel

Real Estate for Sale

Ogaki, Gifu

27 years

JPY 1B-2B

2017/05

JPY 137M

–

–

–

139

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

New<JPY 1B

2017/05

JPY 28M

JPY 600M

1.15X

15.1%

JPY 11,512M

JPY 41,170M

2.72X

37.9%

JPY 833M

JPY 3,126M

2.65X

26.9%

Total

98 Assets

JPY 192,255M

Total

98 Assets

JPY 192,089M

Assets acquired in FY18/2 Q1 (3M) Total 11 Assets

JPY 12,392M(Book Value)* Assets acquired in the current FY18/2 Q1 period12Forecast 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.

© 2017 Ichigo Inc. All rights reserved.

41

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.

Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2015 (7/1～3/31)

JPY 2720 years

FY2013

JPY 3620 years

FY2016

JPY 2420 years

FY2014

JPY 3220 years

FY2017

JPY 21*20 years

FY2015 (4/1～6/30)

JPY 2920 years

Pre-consumption tax FIT for power plants with output of >10kW
Source: METI, Agency for Natural Resources and Energy© 2017 Ichigo Inc. All rights reserved.

* FIT for >2MW non-residential solar power production determined via auction process42Clean Energy Earnings
Gross Profit Decrease Due to Solar Power Plant Sales toIchigo Green (9282)
FY17/2(12M)

FY18/2 Q1(3M)

FY18/2 Full-Year
Forecast (12M)

vs. Full-Year
Forecast

Revenue

JPY 12,352M

JPY 373M

JPY 3,216M

11.6%

Cost of Goods Sold

JPY 8,580M

JPY 201M

JPY 2,094M–

Gross Profit

JPY 3,772M

JPY 171M

JPY 1,122M

15.3%

SG&A

JPY 470M

JPY 119M

JPY 501M

–

–

–

–

–

JPY 3,301M

JPY 52M

JPY 620M

8.4%

Adjustments(including offsets of intersegment transactions)Operating Profit

Solar Power Plant
Schedule

Ichigo19 Plants Online
28.39MW

19 Plants Online
28.39MW

28 Plants (Forecast)
98.97MW

Ichigo Green(9282)

13 Plants Online
25.83MW

13 Plants Online
25.83MW

15 Plants (Forecast)
29.43MW

Total operating and in-development: 43 plants, 128.40MW© 2017 Ichigo Inc. All rights reserved.

43

Solar Power Plant Portfolio (1)Ichigo (In-Development)

Ichigo (Operating)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

Ichigo Yubetsu Barou

Solar Power Plant

Area(As of July 13, 2017)

JPY 40Aug 2013

Ichigo Sera Aomizu

Chugoku

Panel
Output(MW)
2.87

JPY 40Mar 2014

Ichigo Memuro Nishishikari

Hokkaido

1.32

FIT
Operation(Pre-tax) Start Date

Solar Power Plant

Area

FIT
Operation(Pre-tax) Start Date
JPY 32Aug 2017

JPY 40Dec 2017

Hokkaido

0.80

JPY 40

Apr 2014

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Jan 2018

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Kasaoka Iwanoike

Chugoku2.61

JPY 24

Jan 2018

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.65

JPY 36

Jan 2018

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Tsu

Kinki

2.94

JPY 24

Feb 2018

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Toki Tsurusatocho Kakino

Chubu

1.26

JPY 24

Mar 2018

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015

Ichigo Itoshima Ihara

Kyushu1.29

JPY 36

Jul 2018

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Minakami Aramaki

Kanto

10.26

JPY 36

Apr 2019

2.96

JPY 24

Nov 2019

2.64

JPY 32

Nov 2021

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Ichigo Hitachi Omiya

Kanto

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Ichigo Miyakonojo Takazakicho Tsumagirishima

KyushuIchigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Total (Operating & In-Development)

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

Total Solar Plant Output
128.40MW

Ichigo Green (9282)

Ichigo Kiryu Okuzawa

Kanto

Panel
Output(MW)
1.33

Ichigo Motomombetsu

Hokkaido

1.40

Solar Power Plant

Area

FIT
Operation(Pre-tax) Start Date
JPY 40

Sep 2013

JPY 40Feb 2014

Ichigo Muroran Hatchodaira

Hokkaido

1.24

JPY 40Mar 2014

Ichigo Engaru Kiyokawa

Hokkaido

1.12

JPY 40Mar 2014

Ichigo Iyo Nakayamacho Izubuchi

Shikoku

1.23

JPY 40

Apr 2014

Ichigo Nakashibetsu Midorigaoka

Hokkaido

1.93

JPY 40

Nov 2014

Ichigo Abira Toasa

Hokkaido

1.16

JPY 40Dec 2014

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

Total© 2017 Ichigo Inc. All rights reserved.

98.97MW

29.43MW44

Solar Power Plant Portfolio (2)(As of July 13, 2017)

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

Ichigo Motomombetsu(1.40MW)43 Plants (128MW)

Ichigo Yamaguchi Sayama(2.35MW )Ichigo Itoshima Ihara(1.29MW) Online in 2018/7
Ichigo Kijo Takajo(0.89MW)

Ichigo Akkeshi Shirahama(0.80MW)

Ichigo Sera Tsukuchi(2.54MW)

Ichigo Memuro Nishishikari(1.32MW) Online in 2017/12

Ichigo Sera Aomizu(2.87MW) Online in 2017/8
Ichigo Maebashi Naegashima(0.67MW)

Ichigo Minakami Aramaki(10.26MW) Online in 2019/4

Ichigo Fuchu Jogecho Yano
(0.99MW)

Ichigo Showamura Ogose(43.34MW) Online in 2018/1

Ichigo Yonago Izumi(2.61MW)

Ichigo Kiryu Okuzawa(1.33MW)

Ichigo Kasaoka Iwanoike(2.61MW) Online in 2018/1

Ichigo Toyokoro
Sasadamachi (0.60MW)
Ichigo Toyokoro(1.02MW)

Ichigo Hitachi Omiya(2.96MW) Online in 2019/11
Ichigo Toride Shimotakai Kita
(1.03MW)

Ichigo Kasaoka Takumicho(1.11MW)

Ichigo Toride Shimotakai Minami(0.54MW)
Ichigo Toki Tsurusatocho Kakino(1.26MW) Online in 2018/3
Ichigo Toki Oroshicho(1.39MW)
Ichigo Tokushima
Higashi-Okinosu (2.52MW)
Ichigo Takamatsu
Kokubunjicho Nii (2.43MW)
Ichigo Iyo Nakayamacho Izubuchi(1.23MW)© 2017 Ichigo Inc. All rights reserved.

Ichigo Betsukai Kawakamicho(0.88MW)

Ichigo Hamanaka Bokujo Kajibayashi(2.31MW)

Ichigo Miyakonojo Takazakicho
Tsumagirishima (2.64MW)
Online in 2021/11
Ichigo Miyakonojo
Yasuhisacho (1.44MW)

Ichigo Nakashibetsu
Midorigaoka(1.93MW)

Ichigo Hamanaka Bokujo Tsurunokotai(2.31MW)

Ichigo Higashi-Hiroshima
Saijocho Taguchi (2.72MW)

Ichigo Yamaguchi Aionishi(1.24MW)

Ichigo Yubetsu Barou(0.80MW)

Ichigo Muroran Hatchodaira(1.24MW)

32 Plants (54MW)

Ichigo Nago Futami(8.44MW)

Ichigo Engaru Kiyokawa(1.12MW)

Ichigo Abira Toasa(1.16MW)

Currently Operating

Ichigo Kure Yasuuracho Nakahata(2.65MW) Online in 2018/1

Ichigo Engaru Higashimachi(1.24MW)

Ichigo Tsu(2.94MW) Online in 2018/2

Ichigo Toyokawa Mitocho Sawakihama(1.80MW)

IchigoIchigo Green (9282)
45

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 28 Plants (98.97MW)(As of July 13, 2017)

 By Feed-In-Tariff By Customer(Electric Power Utility Co) By Operating Timeline

Kyushu5%

Chubu
6%
Tohoku5%
Shikoku
3%
Hokkaido4%

JPY 24
10% JPY 40
15%
JPY 3211%>1 year inoperation
Starting operation 20%
within 1-2 years
19%<0.5 year inoperation
5%

TEPCO
59%

Chugoku
18%

Starting operation
within 0.5 year54%

JPY 3664%

 By Output

0.5-1 year inoperation 2%

 By Solar Intensity
C(In-Development)
1%

B(In-Development)
13%

A
3%

<2MW
10%

>10MW
(In-Development)
54%

B
18%

2-10MW18%

C 7%

2-10MW(In-Development)
14%

<2MW
(In-Development)
4%© 2017 Ichigo Inc. All rights reserved.

Rank
A
B
C
D

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

Unit: kWh/m² per day

A(In-Development)
58%

46

Consolidated Balance Sheet: Assets(JPY million)
FY14/2
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© 2017 Ichigo Inc. All rights reserved.

FY15/2

FY16/2

FY17/2

FY18/2 Q1

vs. 17/2

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

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

45,542
1,250
1,324
1,960
170,799
996
515
3,105
-445
225,049-2,136+337–+527+2,994
+996
-1
-20
+8
+2,705

4,901
2,044
12,433
1,922
21,3004,021
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

7,296
6,193
18,89912,90845,299-79-1,053
+272
+506
-355

2,221
392
71
2,686

2,082
392
27
2,502

1,942
392
38
2,373

1,864
62
29
1,956

1,301
62
27
1,391

-563
–
-2
-565

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

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

1,416
10
343
1,735
-91
3,413
50,105275,154

-10
–
+4
-85
+1
-91
-1,010+1,69547

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)
FY14/2
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© 2017 Ichigo Inc. All rights reserved.

FY15/2

FY16/2

FY17/2

FY18/2 Q1

vs. 17/2

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

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

–
1,385
611
112
5,439
6,271
731
68
138
3,163
17,922

-110
+580
–
–
+230
-554
-924
+6
+102
-956
-1,626––
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

632
100
91,60468,319
1,147
8,038
–
624
170,467
190,015632
100
104,962
59,950
1,146
7,986
–
833
175,610
193,532––+13,358-8,369
-1
-52
–
+209
+5,143+3,517

26,443
10,808
10,891-92
48,05026,49910,873
17,201-78
54,496

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

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

26,654
11,05742,561-1,51178,762+4+1-279-1,496-1,770

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

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

90
-401
35
-275
541
2,593
81,622
275,154

-27
-36
-20
-83
+50
-19
-1,821+1,69548

Consolidated P&L(JPY million)
FY14/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Amortization of negative goodwill
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Stock issuance cost
Valuation loss on derivatives
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of fixed assets
Gain on sale of securities investments
Loss (gain) on shares in affiliate
Receipt of share trading proceeds
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on sale/retirement 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© 2017 Ichigo Inc. All rights reserved.

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2 Q1(3M)

FY17/2 Q1(3M)

Change(YOY)

FY18/2Full-Year
Forecast

vs.
Forecast

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
15,417109,253
82,44626,806
5,025
21,781

12,915
8,914
4,001
1,191
2,810

46,41539,803
6,612
1,200
5,412

-33,500-30,889-2,611-9-2,60275,50025,99420,600

17.1%
15.4%
13.6%

4
112
90
31
238

5
78
90
39
213

2
79
90
43
215

–
85
–
32
118

–
20
–
17
37

–
3
–
5
8

–
+17
–
+12
+29

–
–
–
–
–

–
–
–
–
–

370
89
–
–
93
553
3,597

943
–
–
–
202
1,146
7,255

1,277
–
–
86
379
1,743
13,889

1,303
–
38
585
216
2,144
19,755

288
–
256
156
48
750
2,097

381
–
–
202
30
614
4,806

-93
–
+256
-46
+18
+136
-2,709––––––18,300

–
–
–
–
–
–
11.5%

7
204
–
434
33
680

–
–
–
–
57
57

–
223
–
–
–
223

–
2,466
–
–
–
2,466

–
–
1,135
–
–
1,135

–
2,427
–
–
–
2,427

–
-2,427+1,135––-1,292

–
–
–
–
–
–

–
–
–
–
–
–

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

–
–
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

–
–
–
–
–
–
–
3,232
1,001
2,231
-6
2,237

–
–
–
–
242
–
242
6,990
1,103
5,886
301
5,585

–
–
–
–
-242
–
-242
-3,758-102-3,655-307-3,348

–
–
–
–
–
–
–
–
–
–
–
13,500

–
–
–
–
–
–
–
–
–
–
–
16.6%

49

Consolidated Cash Flows from Operating Activities(JPY million)
FY14/2 (12M)

FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 (3M)

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
Interest and dividend income
Interest expense
Loss (gain) on sale of securities investments
Loss (gain) on sale/retirement of fixed assets
Impairment loss
Valuation loss on securities investments
Loss (gain) on shares in affiliate
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

3,933
304
69
139
-90
-11
33
-116
370
-204
-6
307
–
–
97
218
1,635
114
-6,729
–
12
–
-255
-139
137
38
1,230
522
1,611
116
-378
-94

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

3,232
189
53
25
–
138
-4
-20
288
–
–
–
–
-1,135-623–
73–-2,991
–
–
200
26
-777
-168
–
-52
122
-1,42420-216-1,747

Net Cash from (Used for) Operating Activities

1,254-34,292-44,654

21,547-3,368© 2017 Ichigo Inc. All rights reserved.

50

Consolidated Cash Flows from Investing & Financing Activities(JPY million)
FY14/2 (12M)
Cash Flows from Investing Activities:
Payments into time deposits
Redemptions of time deposits
Payments for securities investments
Proceeds from sale of securities investments
Proceeds from redemptions of investments
Acquisition of property, plant, and equipment
Proceeds from sale of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Redemption 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) Investing Activities
Cash Flows from Financing Activities:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Redemptions of corporate 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 issuance of common shares
Proceeds from employee exercise of stock options
Payments received from minority interests
Payments to minority interests
Share buyback
Dividends paid
Dividends paid to minority interests
Net Cash from (Used for) Financing Activities© 2017 Ichigo Inc. All rights reserved.

FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 (3M)

–
–
–
282
2
-7,150
72
-389
-5
7
-5

-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

–
–
-29
–
–
-879
–
-2
–
–
-10

-1,389

–

–

-93

–

–

–

–

–

1,665

–
-35
-8,610-1,3494-12,485–
9-7,052–
11-11,933

–
-16
727

465
–
–
–
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
2,000
–
–
-646
-43
63,318-1,383532
785-56
55,674-61,22130,850-15,400–
137–-2,000–-1,501
-39
6,377

580
–
–
–
18,630-5,093–-9,023–
6––-1,499-2,402–
1,198

51

Appendix: Power Up 2019 Mid-Term Business Plan

© 2017 Ichigo Inc. All rights reserved.

52

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)(JPY million)

FY16/2 (Actual)

FY17/2 (Actual)

FY18/2 (Forecast)

Operating Profit

15,417

21,781

20,60025,000+62.2%

Recurring Profit

13,88919,75518,30021,400+54.1%

6.9%

26.4%

30.0%

30.0%

–

12,925

14,894

13,50014,800+14.5%EPS

JPY 25.86

JPY 29.66

JPY 26.98

JPY 29.00+12.1%DPS

JPY 3.00

JPY 5.00

JPY 6.00

JPY 7.00+133.0%

ROE

21.0%

20.2%

15.9%

15.6%

–

Tax Ratio
Net Income© 2017 Ichigo Inc. All rights reserved.

FY19/2 (Plan)

vs. FY16/2

53

Target: Top 200 Ranking within the JPX-Nikkei 400 Index
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 top 1,000 companies from the joint set of the 1,200 highest market capitalizationand 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)© 2017 Ichigo Inc. All rights reserved.

54

Power Up 2019 Key Initiatives
Profitability• List Ichigo’s solar assets on the TSE’s new
Infrastructure 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© 2017 Ichigo Inc. All rights reserved.

(6) Global Best Practice Governance and Compliance55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© 2017 Ichigo Inc. All rights reserved.

56

MEMO

© 2017 Ichigo Inc. All rights reserved.

57

MEMO

© 2017 Ichigo Inc. All rights reserved.

58

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 (TSE1 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.

© 2017 Ichigo Inc. All rights reserved.

59