Natural hot spring Ryoun no Yu Onyado Nono Asakusa

Kotohira hot spring Onyado Shikishimakan

Consolidated Financial Results for FY3/20 Q3
February, 2020
Takumi Ueda
President

9616

Agenda01

Consolidated Financial Results for nine month
period ended December 31, 2019

P. 2

02

Forecast for Consolidated Financial Resultsfor FY3/20

P.17

03

Progress in Mid-term Management Plan
(FY3/18-FY3/22)

P.20

1

Natural hot spring Sansa no Yu
Dormy Inn Morioka

Consolidated
Financial Results
for nine month
period ended
December 31, 2019

Meiji Global Village
2

Executive Summary
The 9th straight year of the increased Q3 ordinary profit and
１ the 8th straight year of hitting a highest-ever Q3 ordinary profit

2

３

The opening of new facilities in the first three quarters in line with plan
➢ Dormitory business 14 facilities (1,505 rooms), Dormy Inn business 4 facilities (705 rooms),
Resort business 3 facilities (235 rooms)

Stable growth in Dormitory business：FY3/20 Q3 operating profit +5.7% vs. PY（Occupancy rate at the beginning of FY3/20 was 98.7%, an increase of 1.0pp vs.PY）

Hotel business was recovered from natural disasters, but operating profit declined
slightly

4➢ Dormy Inn business has continued to grow, by overcoming the impact of inbound tourism.
➢ In Resort business, although current condition has gradually improved, the effect of thetyphoon in October has still lingered in some regions and it did not cover the cost of
preparations to open new hotels.
3

FY3/20 Q3 Consolidated Financial Results and KPIs
(Unit: oku yen=100 MM yen)

ReveueFY3/19FY3/20Q3 ActQ3 Actvs. PY

1,238.8

1,330.9

+92.1

+7.4%

Operating Profit

120.4

122.2

+1.7

+1.5%

Ordinary Profit

117.5

121.4

+3.9

+3.3%

Net Profit

79.7

81.8

+2.1

+2.6%

EPS(Yen)

204.5

209.9

+5.3

+2.6%

Depreciation Expense

34.9

38.0

+3.0

+8.7%

Cash Flow*

114.6

119.8

+5.1

+4.5%

* Net profit + Depreciation expense4FY3/20 Q3 Revenue and Operating Profit by business segment
Revenue

357 370

369

393(Unit: oku yen=100 MM yen)

Hotel Business total- FY3/19 Q3 595- FY3/20 Q3 631

225 237
FY3/19 Q3

140 158

109 121

FY3/20 Q3

52
Dormitory

Dormy Inn

Resorts

55

Comprehensive Foods Service
Building
Business
Management
Business

Development
Business

92 100

Others66.4

Operating Profit
51.7

54.6

59.5

Hotel Business total- FY3/19 Q3 74.9
- FY3/20 Q3 74.0
△4.9 (incl. sales and lease back of real estate △5.1)

FY3/19 Q3
FY3/20 Q3

16.0

15.4
7.5
0.1

3.4

0.8

11.0

3.6

1.2
-0.5

Dormitory

Dormy Inn

Resorts

Comprehensive
Building
Management
Business

Foods Service
Business

Development
Business

Others5

Dormitory Business: FY3/20 Q3 Revenue and Operating Profit(Unit: oku yen=100 MM yen)

Operating Profit

Revenue+2.9 oku yen/ +5.7％ vs. PY+12.9 oku yen/ +3.6％ vs. PY

-2.1

+0.2

+13.9

-0.4

-0.2

+1.3

+2.2

+0.9

Profit from370

increased revenue

54

+0.2

357

357

FY3/19 Q3

FY3/19open

51

Cost-Saving etc.

+1.1

FY3/20open

Close

OthersFY3/20 Q3

FY3/19 Q3

FY3/19open

FY3/20open

Close

OthersFY3/20 Q3

6

Dormitory Business: Number of contracted rooms and occupancy rate at the beginning of FY (Historical data)

Number of contracted rooms at the beginning of FY – by category(Rooms)38,380(+1,285)

40,00030,000

4,372

4,586

4,810

5,097

5,263

8,050

8,682

9,387

10,068

11,31240,089(+1,709)

5,293

5,531

12,085

13,266(+773)

20,000

Domeal(+1,181)*

21,292
20,20010,00020,212

20,685

20,534*

20,520*21,002Mainly coming from anincrease in companies tointroduce a system of
dormitories for employees(+290)(+482)

Dormitories for
employees
Dormitories forstudents0

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18* Incl. Foreign 2,460(12.0%)
Students

FY3/19FY3/202,660(12.7%)

3,079(14.5%)

Occupancy rate at the beginning of FY
(%)

97.0

97.2

97.3

FY3/14

FY3/15

FY3/16

98.3

98.3

97.7

FY3/17

FY3/18

FY3/1998.7

Mainly driven byincrease incontracted rooms for
4 year university andcollege students incl.
foreign ones

FY3/207

Dormy Inn Business: FY3/20 Q3 Revenue and Operating Profit(Unit: oku yen=100 MM yen)

Operating Profit

Revenue+24.2 oku yen/ +6.6％ vs. PY

+12.6

-0.7

+6.9 oku yen/ +11.6％ vs. PY

-5.1

-1.0

+3.7

+0.7

-1.1

+16.9

+4.6

+0.5

Marginal profit from

393

+0.4

369

59

FY3/19 Q3

66

increase in RevPAR

Existing*
facilities

FY3/19open

FY3/20open

Renovation* Facilities opened by the end of March, 2018

OthersFY3/20 Q3

FY3/19 Q3 Existing*facilities

Cost-Saving etc.

+4.2

FY3/19open

FY3/20 Renovation
open

OthersFY3/20 Q3
8

Dormy Inn Business: Related data of inbound tourism
The number of inbound hotel guests

Share by country in inbound tourism – FY9/19

Source：Japan tourism agency Unit: Thousand People

hotel with more than 10 employees

Source：Japan tourism agency Unit: Thousand People

Others
9,494
8,488

5,536

9,626

Canada

8.0％

13.5％

America
5,163

3,987

FY3/19Q3 Act

4,492
7.0％

7.4％

Germany
France47,631

48,06956,061

69,39964,316

17,173England

Philippines

14.3％

FY12/18

FY12/19

The number of inbound guests - Dormy Inn

9,291

7.1％

Share by country in inbound tourism on a revenue basis
OthersEurope/in Asia
USA 5.3%

7.0%

1,349

607

South
Korea

21.9%
2.8%
3.4%
13.8%
42.7%

Taiwan

15.1%

14.7%
China

17.2%
FY12/15 FY12/16 FY12/17 FY12/18 FY12/19

4,914

Thailand

1,542

507

Hong Kong

13.4％

Unit: Thousand People

1,003

7.3％

TaiwanSingapore

FY12/17

20,784
29.9％

26.7％

9,165

Malaysia

FY12/16

China

4,723

VietnamIndonesia

FY12/15

FY3/20Q3 Act

8,676

8,422

5,232
4,145

South Korea

OthersAustralia

22.5%

FY3/19Q3 ActFY3/20Q3 ActHong Kong

33.5%
9

Third-party evaluation on Dormy Inn
Dormy Inn attained first place for the business hotel department at JCSI in 2019

Score of Customer Satisfaction in the Business Hotel Category
Ranking
1

2

3

4

5

FY2019FY2018FY2017

Dormy Inn

Richmond Hotels

Richmond Hotels

81.7

81.8

81.2

Richmond Hotels

Dormy Inn

Super Hotels

81.0

80.0

80.7

Comfort Hotels

Comfort Hotels

Daiwa Roynet Hotels

79.1

79.0

79.4

Super Hotels

Super Hotels

Dormy Inn

78.5

78.3

79.2

Daiwa Roynet Hotels

Daiwa Roynet Hotels

Comfort Hotels

77.4

77.3

76.6

“JCSI(Japanese Customer Satisfaction Index)” is a survey of the customer satisfaction index in the service industries.
Japan Productivity Center is conducting a survey at six times per year, approximately 30 industries, about 400
companies are targeted.

10Resort Business: FY3/20 Q3 Revenue and Operating Profit(Unit: oku yen=100 MM yen)

Operating Profit

Revenue+12.0 oku yen/ +5.3％ vs. PY-7.8 oku yen/ -51.1％ vs. PY

-2.0
+7.1

-2.9

-5.5

+12.0

+7.9

+0.5

-9.7

+0.8

-1.4
Marginal profit from

237
225

-3.4

increase in RevPAR

15.4

+0.4

+0.8

Cost-Saving etc.

7.5

+7.5

FY3/19 Q3 Existing*facilities

FY3/19open

FY3/20open

NaturaldisasterRenovation* Facilities opened by the end of March, 2018

OthersFY3/20 Q3

FY3/19 Q3

Existing*
facilities

FY3/19open

FY3/20open

NaturaldisasterRenovation

OthersFY3/20 Q3

11

Other Businesses: FY3/20 Q3 Revenue and Operating profit(Unit: oku yen=100 MM yen)

Operating profit： +17.4% vs. PY

Revenue：+10.9% vs. PY
Comprehensive Building
Management BusinessFoods Service
Business

Development
Business

FY3/19 Q3OthersFoods Service Business

FY3/19 Q3

158

FY3/20 Q3

Comprehensive Building
Management Business

Development
Business

Others

16.0

FY3/20 Q3

140

121
109
+18.9
incl. sales and lease backof real estate +28.4

+12.8

52

55

92

11.0

100

+4.2
incl. PKP +0.1、Senior +0.7
-4.9
incl. sales and lease backof real estate -5.1

+3.2
+7.8
incl. PKP +5.9、Senior +0.4

3.4

+3.3

0.1

+0.3

3.6

0.8 1.2-0.5

12

Balance Sheet
As of Mar. 31, 2019

As of Sep. 30, 2019

As of Dec. 31, 2019
AssetsLiabilities

211.6 bn yen

125.8 bn yen

AssetsLiabilities(+2.7 bn yen)(+1.3 bn yen)208.9 bn yen

124.5 bn yen

Cash andInterest-bearing

AssetsLiabilities(+6.4 bn yen)(+1.6 bn yen)deposits

liabilities

202.5 bn yen

122.9 bn yen

Cash andInterest-bearing

15.0 bn yen

88.4 bn yen

Cash andInterest-bearing

deposits

liabilities(-5.4 bn yen)(-1.3 bn yen)deposits

liabilities

20.4 bn yen

89.7 bn yen

16.6 bn yen

82.9 bn yen(+3.8 bn yen)(+6.8 bn yen)

*Including 19.9
bn yen inconvertible bond*Including 19.9
*Including 19.9

bn yen in

Non-current

bn yen inconvertible bondassetsconvertible bondNon-current

162.2 bn yen

Non-current
assetsNet Assets(+1.7 bn yen)

Net Assets

assetsNet Assets

160.5 bn yen

84.3 bn yen

85.7 bn yen

160.7 bn yen

79.5 bn yen(-0.2 bn yen)(+4.8 bn yen)(+1.4 bn yen)

Treasury shares

Treasury shares

Treasury shares-0.3 bn yen-0.3 bn yen-0.3 bn yen

13

Our efforts against ESG• Enhancing Corporate Governance System➢ Appointment of outside directors（We will increase the number of outside directors by focusing on personality carefully.）
Outside director (not Audit and Supervisory Board Member, 1 director) : New position created in June, 2019. Former commissioner of
the Japan tourism agency. Personnel with seasoned knowledge of Japan transport/ tourism administration
Outside director (Audit and Supervisory Board Member, 2 directors) : Personnel with seasoned knowledge of finance, accounting,corporate management and economics－ Above 3 members have been already listed in TSE as “independent executive”. They attend our BOD meeting regularly andmonitor our management health carefully with some constructive opinions.
➢ Setting aside enough time for our shareholders to give a lot of thought to the bills of our shareholders meeting through early
electronic disclosure of notice of shareholders’ meeting• Gender Equality➢ Appointment of the first female director for us in the shareholders meeting to be held in June, 2019
➢ Underlying upward trend in the ratio of female full-time employees(47.5% at the end of Mar, 2019, +4.9pp compared to the end of Mar, 2016)➢ Moderately upward trend in both the ratio of female management positions to all management positions and that of female
management positions to female full- employees• Affordable and Clean Energy➢ Investment in renewables－ Actively participating in “local production of electricity for local consumption” by Nakanojo, Gunma (local government)➢ Activities for Environmental Conservation－ Environmental practice of “WECO*” as a Dormy Inn original effort－ The Introduction of business card made from limestone•

An effort to seek an environmental conservation by limiting a scope of our cleaning task under customers’ request

14

Awareness of our company■ Distributed corporate TV commercials to live broadcasting of the Hakone Ekiden– undoubtedly one of the well-known Ekiden races held in Japan■ TV Asahi Original Program/Provision of TBS radio program original corner■ Provision of Nippon Television "Sukkiri" and Fuji Television "Non-stop" programs(FebruaryMarch)■ Broadcasting the PR video of Kyoritsu Resort■ Acting as an official sponsor of the Japan Women’s Football League in 2019,
We have signed an official sponsorship agreement withthe“Nadeshiko League”, where strong and healthy womenshine brightly.
We will eagerly support popularization activities meant
to convey dreams of achievement and feelings ofinspiration from the hard-playing athletes inthe“Nadeshiko League”to as many people as possible.

■ Enhancement of IR activities - participating in various IR events- IR activities for domestic investors: Some briefing sessions for individual and institutional investors, participating in IR fairs
and one-on-one meeting with investors, etc.
- IR activities for overseas investors: IR Road Show, participating in some IR conferences - 5 times in FY3/19
15

Further improvement in customer satisfaction■ Setting up and enhancement of comprehensive customer network-

Utilization of comprehensive customer database that leads to very kind hospitality-

Designing a membership program so that customers can use our company over an extended period of time-

Starting point program so that our customers can enjoy the benefits by using of our site to reserve our hotels.
The number of members of our site at the end of Dec, 2019 was 790 thousand people, increasing +43.6%
compared to the end of March, 2018.

■ The development of an application named “Domico” for residents of ourdormitories (Introduced for all dormitories in 2020)
Offering the following convenient features for all residents “through mobile phone”
with Domico.
-

Much easier to have an order of board after being in visual contact with meals-

Easy access to daily events and useful information-

Close contact with host mothers and host fathers , etc.
16Forecast for
Consolidated
Financial Resultsfor FY3/20

Scene of dormitory for students

Akinomiya hot spring resort –Yukemuri no Yado Inazumi hot spring17

FY3/20 Consolidated Financial Forecast and KPIs
(Unit: oku yen=100 MM yen)

FY3/19FY3/20Act

Forecast

Reveue1,628.1

1,830.0

Key assumptions in FY3/20 Forecast

Dormitory Businessvs. PY+201.8+12.4%-

Occupancy rate at the beginning of FY3/20:
98.7%, +1.0pp vs. PY
Number of contracted rooms at the
beginning of FY3/20: 40,089, +4.5% vs. PY

Operating Profit

145.6

157.0 *

+11.3

+7.8%

Ordinary Profit

143.2

154.0

+10.7

+7.5%

Net Profit

95.6

102.0

+6.3

+6.6%

Dormy Inn Business

EPS(Yen)

245.4

261.6

+16.1

+6.6%

-

Capital Investments

174.8

153.4

-21.4

-12.3%

Depreciation Expense

47.5

50.0

+2.4

+5.0%

Resort Business

Cash Flow*

143.2

152.0

+8.7

+6.1%

-

DPS (Yen)

45

47

+2.0

+4.4%

18.3%

18.0%

-0.4pp

-

DPR

-

-

Number of hotels/rooms planned to open
in FY3/20:
・7 hotels/ 1,535 rooms (+11.6%)
RevPAR (thousand yen): 10.3, +3.0% vs. PY

Number of hotels/rooms planned to open
in FY3/20:
・3 hotels/ 235 rooms (+8.9%)
RevPAR (thousand yen): 36.7, +4.8% vs. PY* Net profit + Depreciation expense• Incl. negative impact of 14.5 oku yen vs. PY – opening expense +4.5 oku yen, huge renewal expense, etc. +8.0 oku yen and systemmodification fee +2.0 oku yen for customer satisfaction improvement
・The Company does not change the FY3/20 consolidated financial forecasts announced on May 15, 2019.
This decision was made because, although we continue to recover from typhoons and other natural disasters, and we expect
major improvements in consolidated earnings due to the sale and lease back of real estate, at this point it is difficult to predict
the impact that the novel coronavirus will have on the hotel business.
18

FY3/20 Development Plan
FY3/18

FY3/19FY3/20Results

Results

Plan+10 facilities

Dormitory+963 rooms+14 facilities+1,780 rooms+15 facilities+1,574 rooms

Noda ANNEX, Senjunakamachi,

Waseda, Hikifune, Keiotsunashima,

Sendaihigashiguchi Ⅴ,

Tsunashimaekimae, Higashiosaka,

Tsurugashima, Omoromachi,

Motoyama, Osakatenma, Kagoshima,

Kaihinmakuhari, Tokorozawa,

Tenjinminami, Kobe, Ichigaya,

MTMP**7,000 rooms Maihama, Minamikoshigaya,
Until FY3/20 Open

IrinakaⅡ, Koroen, KotoniⅡ,

Hakataekiminami Ⅱ, Kokuraekimae,

Komagome, Meiji global village,

Around 4,300 rooms

Pedal Hanakoganei

Hokudaimae2,

Setagayatodoroki, Kamishakujii,

Hanazonomarutamachi,

Minamiurawa, Dokkyodaigakumae,

Ryokuchikouen3, Ookurayama,

Kyotogoshominami, Kanazawaekinishi

Progression rate 61%

ShounanfujisawaⅡ+9 facilities

Dormy Inn

+1,571 rooms+9 facilities+1,530 rooms+7 facilities+1,535 rooms

PREMIUM Kanda,Miyazaki,

Honhachinohe, Osakatanimachi,

MaebashiApr

global cabinGL Suidobashi,

Korakuen, Oita,

Fukui

Jun

global cabin Hamamatsu,

MoriokaJul

MTMP**９,000 rooms Kofumarunouchi, Izumo,
Uintil FY3/20 OpenEXPRESS Sendai-Seaside,

global cabin Yokohamachukagai,

Nono Asakusa

Oct

Around 4,600 rooms

Nono Nara, Kochi, Matsuyama

Takamatsuchuokoenmae,

Kawasaki

Feb

PREMIUM Namba ANNEX,

FuranoMar

PREMIUM Osakakitahama

Mito

Mar

Progression rate 51%+4 facilities

Resorts+253 rooms

Keiun (Izumo),

MTMP**1,400 rooms Tsukiyo no Usagi (Izumo),
Until FY3/20 OpenLe Chien Kyu-Karuizawa,

Around 660 rooms

Suiun (Gora)+2 facilities+171 rooms+3 facilities+235 rooms

La Vista Kirishima (Kagoshima),

Echigoyuzawa

Apr

Shirakawago (Gifu)

Kotohira (Kagawa)

Sep

Inazumi (Akita)

Nov

Progression rate 47%

19

Echigo Yuzawa hot spring
Yukemuri no Yado Yuki no Hana

Progress in Mid-termManagement Plan
(FY3/18 - FY3/22)

Nankishirahama
Hamachidori no Yu Kaishu
20

Key quantitative targets of mid-term management plan and progress report
Name of MMP
Outline

Kyoritsu Jump Up Plan
1. Customer satisfaction improvement- Produce products and services that lead to better customer satisfaction, raise customers’ assessment of the Company
and get greater trust

2. Advanced development- Expand business bases and build a solid business foundation

Key Quantitative Targets/ Development Plan
Key Quantitative Targets

Starting FY for Mid-term Management Plan
(FY3/17)

Progress at the end of FY3/19

Final FY of Mid-term Management Plan
(FY3/22)

Revenue

1,358 oku yen

1,628 oku yen(CAGR: +10%)

2,200 oku yen(CAGR: +10%)

Operating Profit

118 oku yen

146 oku yen(CAGR: +11%)

190 oku yen(CAGR: +10%)

Net D/E Ratio

0.9x

0.8x

DPR

16.8%

18.3%

Advance gradually to more than 20%

ROE

11.7%

12.6%

More than 10%

Starting point for Mid-term Management Plan

Progress at the end of FY3/20 Q3

Final FY of Mid-term Management Plan

(At the end of Mar, 2017)(FY3/18 - FY3/20 Q3 end / cummulative)(At the end of Mar, 2022)

Development Plan

Maintain lower than 1.0x
for securing financial health- Opened: 4,248 rooms
Dormitory

37,000 rooms- Already decided: Around 6,000 rooms

7,000 rooms(Progression rate: 86%)
- Opened: 3,806 rooms
Dormy Inn

10,200 rooms- Already decided: Around 9,000 rooms

9,000 rooms(Progression rate: 100%)- Opened: 659 rooms
Resort2,200 rooms- Already decided: Around 1,500 rooms

1,400 rooms(Progression rate: 107%)21

Development plan of dormitories and hotels leading to sustainable growth
FY3/18

FY3/19FY3/20FY3/21Results

Results

Plan

Plan

FY3/22
Plan

Dormitory+10 facilities*+963 rooms*+14 facilities*+1,780 rooms*+15 facilities*+1,574 rooms*+16 facilities*+1,262 rooms*+5 facilities*+437 rooms*

FY3/17 :Available facilities

473 facilities

Available facilities

485 facilities

Available facilities

493 facilities

Available facilities

505 facilities

Available facilities

507 facilities

Lease ratio

88.5%

Lease ratio

88.5%

Lease ratio

87.4%

Lease ratio

87.7%

Lease ratio

87.5%

Available rooms

38,166 rooms

Available rooms

39,450 rooms

Available rooms

40,632 rooms

Available rooms

41,796 rooms

Available rooms

41,992 rooms

463 facilities/37,000 rooms[L]Waseda, [L]Hikifune,[L]Sendaihigashiguchi Ⅴ,[L]Sapporokita, [L]Nippori,[L]SakadoⅡ, NiigataⅡ,[L]Senjunakamachi,[L]Keiotsunashima,[L]Motoyama, [L]Osakatenma,[L]Sendaihigashiguchi,[L]Kyoto Kuinabashi,[L]Tsunashimaekimae,[L]Tsurugashima, Omoromachi,[L]Kagoshima, [L]Kobe, [L]Ichigaya,[L]Nagoyanisshin,[L]Hamadayama,[L]Hiraoekimae,[L]Iriya

Around 6,000 rooms

Higashiosaka, [L]Maihama,[L]Kaihinmakuhari, [L]Tokorozawa,[L]Komagome, Meiji global village,[L]Komazawakoen,[L]Esakakoen,

Progression rate[L]Minamikoshigaya,[L]Hakataekiminami Ⅱ,[L]Setagayatodoroki etc.

[L]Hyakumanben ANNEX[L]IrinakaⅡ, [L]Koroen etc.

[L]Kokuraekimae etc.

MTMP**7,000 rooms Noda ANNEX,→Already decided

86%[L]Hamadayama [L]Azabujuban etc.

Dormy Inn

+9 facilities+1,571 rooms+9 facilities*+1,530 rooms*+7 facilities+1,535 rooms+8 facilities+1,949 rooms+12 facilities+2,440 rooms

FY3/17 :Available facilities

72 facilities

Available facilities

80 facilities

Available facilities

87 facilities

Available facilities

95 facilities

Available facilities

107 facilities

64 facilities

Lease ratio

98.8%

Lease ratio

98.9%

Lease ratio

99.0%

Lease ratio

99.2%

Lease ratio

99.3%/10,200 rooms

Available rooms

11,811 rooms

Available rooms

13,248 rooms

Available rooms

14,783 rooms

Available rooms

16,732 rooms

Available rooms

19,172 rooms

MTMP**９,000 rooms→Already decided
Around 9,000 rooms

Progression rate

100%[L]PREMIUM Kanda,[L]Honhachinohe, [L]Osakatanimachi,[L]Maebashi, [L]Fukui,[L]Nono Kyotoshichijo, [L]Kobe,[L]Nono Matsumoto,[L]Miyazaki,[L]Korakuen, [L]Oita,[L]Morioka, [L]Nono Asakusa,[L]PREMIUM Ginza,[L]Nono Sendai, [L]Tokyo bay(Toyosu),[L]global cabin Suidobashi,[L]global cabin Hamamatsu,[L]Kawasaki, [L]Furano,[L]Ikebukuro, [L]Nagasakiekimae,[L]Mito[L]Toyohashi, [L]Gotenba,[L]Kofumarunouchi, [L]Izumo,[L]EXPRESS Sendai-Seaside,[L]Nono Nara, [L]Kochi,[L]global cabin Yokohamachukagai,[L]Takamatsuchuokoenmae,[L]Nono Kanazawa[L]PREMIUM Namba ANNEX,[L]Hiroshima ANNEX, [L]Enoshima,[L]Nono Yodoyabashi,[L]Okayama, [L]Nono Matsue,[L]Nono Kumamoto,[L]Nono Asakusabettei,[L]Yokohama[L]PREMIUM Osakakitahama[L]Fukuyama,[L]Matsuyama
Resorts+4 facilities+253 rooms+2 facilities+171 rooms+3 facilities+235 rooms+6 facilities+486 rooms

FY3/17 :Available facilities

29 facilities

Available facilities

31 facilities

Available facilities

34 facilities

Available facilities

40 facilities+359 rooms
Available facilities

45 facilities

24 facilities

Lease ratio

58.7%

Lease ratio

60.2%

Lease ratio

61.6%

Lease ratio

60.4%

Lease ratio

66.9%/2,200 rooms

Available rooms

2,478 rooms

Available rooms

2,649 rooms

Available rooms

2,884 rooms

Available rooms

3,370 rooms

Available rooms

3,729 rooms

MTMP**1,400 rooms Keiun (Izumo),

Tsukiyo no Usagi (Izumo),→Already decided[L]Le Chien Kyu-Karuizawa,

Around 1,500 rooms[L]Suiun (Gora)[L]La Vista Kirishima (Kagoshima),[L]Echigoyuzawa (Niigata),[L]La Vista Kusatsu (Gunma),[L]Kawazu Onsen (Shizuoka),[L]Shirakawago (Gifu)[L]Kotohira (Kagawa),[L]Nasushiobara Rengetsu(Tochigi),[L]Ninnaji (Kyoto),

Inazumi (Akita)[L]Wakuraonsen (Ishikawa),[L]La Vista Hakodate bay ANNEX,

Kikuyabettei Suigetsu (Shizuoka) etc. [L]Jozankei etc.

Progression rate

107%
Lease ratio（Total）

89.4%

89.7%

89.1%

89.3%

89.8%

* The number of increase in development facilities/rooms (not available facilities/rooms at the end of FY) ** Mid-term Management Plan
(Note) Red-highlighted parts mean the development facility with higher inbound ratio than our average. Underlined parts mean the developing facilities for sales and lease back of realestate not only complied with but also planned. ［L］parts mean the facilities for lease.

22

Acceleration of Sales and Lease Back of Real Estate
Development
profit(estimated)

The effect of profit leveling by
development profit

The amount of sales and lease back of realestate which has already decided
significantly exceeds ¥30 bn of the
expectation in mid-term management plan

¥3.2 bn

Expanding how to use the funds
by increasing resources¥1.0 bn(Initial plan)¥30 bnDevelopment
margin 3%

Already sold
Sumitomo Mitsuifor ¥30 bn
Finance and leasing
as of
14 properties ¥65 bn
FY3/20 Q3 Development margin 5%
end
CAP 4.5～5.5%【Mid-term Management Plan】
Investmentsindevelopment

Raising
Funds

Others8 properties¥35 bnThe amount of sales
and lease back ofreal estate (estimated)

Generating profit from further
strengthening of business fundation\140 bn↑↑

Operating CF / Financing

Sales and leaseback of real estate\110 bn

Additional investments in development\30 bnExceeding the amount of sales andlease back of real estate expectedin mid-term management plan
\20～30 bn

23Stable hiring of personnel
Hiring of new
graduates

April 2019

April 2020

April 2021

2019年4月
296(Act)

300(Plan)

2021年4月
300～320(Plan)

Comprehensive work: 31
Hotel: 260
Senior Life Business: 5Comprehensive work: 22
Hotel: 270
Senior Life Business: 8Comprehensive work: 20
Hotel: 270～290
Senior Life Business: 10

Incl. foreign students: 57(Nepal, Vietnam, China, Republic of Korea)

Hiring route

We can get universities and colleges to introduce
many graduates to us with good relationship that wehave been building through our dormitory businesswith them

No restriction in the number of foreigners hired
Hiring talented foreigners actively

Share of new employees from theuniversities and colleges that used ourdormitories to total in April, 2019 :
49.7% (147 employees)

Dormy Inn
Staff forforeigners➢ Supported by our own call-talkers➢ Always positioning our counter clerk (available for English, Chinese and Korean guidance) at Dormy Inn in Tokyo andKansai region where the inbound ratio is higher than the others

Staff for cleaning ➢ For 18 hotels of Dormy Inn : In house (taking advantage of our high recruitment ability/ hiring without making/ linen exchange
any distinction according to people’s nationality/ providing the highest quality education from us directly)
For the other hotels of Dormy Inn : Outsourcing (more than one outsourcing companies per 1 facility)➢ Promoting the efficiency of cleaning/ linen exchange without diminishing the quality through work restructuring

24

Important Notice

For the purposes of this notice, “presentation” means this document, any oral presentation, any question and answer session and any written or oral material discussed or
distributed by Kyoritsu Maintenance Co., Ltd. (“Kyoritsu”) during the presentation. This presentation (including any oral briefing and any question-and-answer in connection
with it) is not intended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for,exchange, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction. No shares or other securities are being offered to the publicby means of this presentation.
The companies in which Kyoritsu directly and indirectly owns investments are separate entities. In this presentation, “Kyoritsu” is sometimes used for convenience wherereferences are made to Kyoritsu and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who workfor them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

Forward-Looking Statements
This presentation and any materials distributed in connection with this presentation may contain forward-looking statements, beliefs or opinions regarding Kyoritsu’s futurebusiness, future position and results of operations, including estimates, forecasts, targets and plans for Kyoritsu. Without limitation, forward looking statements often include
the words such as “targets”, “plans”, “believes”, “hopes”, “continues”, “expects”, “aims”, “intends”, “will”, “may”, “should”, “would”, “could” “anticipates”, “estimates”,“projects” or words or terms of similar substance or the negative thereof. Any forward-looking statements in this document are based on the current assumptions and beliefsof Kyoritsu in light of the information currently available to it. Such forward-looking statements do not represent any guarantee by Kyoritsu or its management of future
performance and involve known and unknown risks, uncertainties and other factors, including but not limited to: the economic circumstances surrounding Kyoritsu’s business,
including general economic conditions in Japan and worldwide; competitive pressures and developments; applicable laws and regulations; decisions of regulatory authorities
and the timing thereof; natural disasters, any of which may cause Kyoritsu’s actual results, performance or financial position to be materially different from any future results,
performance, achievements or financial position expressed or implied by such forward-looking statements. Neither Kyoritsu nor its management gives any assurances that the
expectations expressed in these forward-looking statements will turn out to be correct, and actual results or performance could materially differ from expectations. Persons
receiving this presentation should not place undue reliance on forward looking statements. Kyoritsu undertakes no obligation to update any of the forward-looking statements
contained in this presentation or any other forward-looking statements it may make. Past performance is not an indicator of future results and the results of Kyoritsu in thispresentation may not be indicative of, and are not an estimate, forecast or projection of Kyoritsu’s future results.

25

Further accelerating priority measures of FY3/18-FY3/22 Mid-term Management
Plan and delivering stellar results

Thank you!

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