MID-TERM STRATEGIC PLAN 2021

May 11, 2021
0Copyright© 2021 ARUHI Corporation. All Rights Reserved.

EXECUTIVE SUMMARY

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

1

ARUHI’S SECOND STAGE STARTS TODAYARUHI will evolve from a mortgage loan company to a globally unique
one-stop homebuying service company. We aim to become a consumer brandwith second-to-none recognition and customer experience.
•Point 1
First pillar: further accelerate growth in the housing loan business;
aim at CAGR 15.8％ in the number of loans executed (FYE Mar 22 to FYE Mar 26)•

Point 2
Second pillar: start full-scale profitable real estate business (residential purpose only)•Point 3
Third pillar: start full-scale profitable consumer service business•

Point 4
Provide complete one-stop service to homebuyers and achieve complete business synergy.
The second and third are also our core businesses.

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

2

WHY WE ASPIRE TO BECOME
A ONE-STOP HOMEBUYING SERVICE COMPANY
In 2020, the world faced an unprecedented crisis.
Our mind set has changed. Our life/work-styles havechanged. Our society has changed.
Going forward, the population will decline, unoccupied
houses will increase. Our society, our people crave foreasier homebuying and relocation, utilizing the stock ofquality unoccupied properties.
However, there is not yet a company providing acomplete one-stop service for property, financeand life.
Then, let that be ARUHI.
After all, that was ARUHI’s first vision and mission.

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

3

GOING BACK TO OUR BASICS
2015: Old Mission Statement
Life is an accumulation of ARUHI, meaning “one day” in Japanese.
The “one day” a customer purchases a home, is very special.
To make that “one day” the very best for our customers, ARUHI provides housing loan products tomeet various customer needs, and we propose them in our diversified channels including ournationwide sales offices.
We also provide support to customers at each life stage; from searching an ideal home to services
that will reduce daily cost of living. It is our wish to make our customers’ new life enjoyable andfulfilling.
As a “Lifestyle Producing Company”, ARUHI will support customers to realize a better andcomfortable life, from the beginning and the life that continues.

2021: New Mission Statement“One-stop Homebuying Service Company”
Copyright© 2021 ARUHI Corporation. All Rights Reserved.

4

OVERVIEW OF OUR
NEW BUSINESS MODEL: A TRULY PURPOSE DRIVEN MODEL

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5

FROM GEOCENTRIC TO HELIO(CUSTOMER)CENTRIC
New business model(Consumer brand)

Past Business Model(Multi-platformer)
 Financing needs
 Home buying needs
 Relocation needs
 Renovation needs
 Home budget consultation needs

Housingloancustomers

BusinessPartners

Considerhomebuying

LivingMovingTown
searchFC
Channel×Web×

Living service×

RPA

Insurance

Housingloan
Financial
Institutions

Realtors

 Lending needs

 Financing needs

 Property selling needs

Consumer Goods &Service Companies

Financial
Institutions

BusinessPartners

Homesearch
Homebuying
Realtors

 Sell products / services

 Distribution needs
 Administration cost
reduction needs
Copyright© 2021 ARUHI Corporation. All Rights Reserved.

6

THREE BUSINESS PILLARS AS A CONSUMER BRAND:FOLLOWING THE CUSTOMER JOURNEY

I need a homethat suits mylife-style.
Which town isthe best to livein?

I want advice
from a reliable
realtor.

Homebuyingconcierge

I still have a loan Can I borrow ahousing loan forfor my current
my new home?
home and can’tsell the home yet.
What should I do?
Buy & Resell
Renovation
Prop tech
Interim loan

Home search

Town search

Real Estate Business

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Housing loan
Insurance

Housing Loan
Business

It’s costly andtroublesome.

MovingTidying up

For a betternew life andfuture!

MobilityLivingConsumer ServiceBusiness7COMPLETE SYNERGY BETWEEN THREE PILLARS
ImageRevenue in real estateand consumer service
business

Revenue generated inreal estate and consumer
service business

Increased revenue inhousing loan business

Increased revenue inhousing loan business

Revenue in housing loanbusiness

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Organic revenue inhousing loan business

8

PAST, PRESENT, FUTURE

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9

GROWTH IN THE PAST TEN YEARS (HOUSING LOAN BUSINESS)
Income before tax

Number of loan executions[FYE Mar 2011]*30,000

25,0002.9 JPY Bn

Grew approx. 1.8x in
the past ten years[FYE Mar 2021]
CAGR 10%+

7.7 JPY Bn*Former SBI Mortgage(JGAAP)

Number of sales offices

20,000[Mar end 2011]

46

15,000[Mar end 2021]+10/yr152

10,000Share of Flat 35 (inc. refinance)[FYE Mar 2011]

5,000[Mar 2021]

13％

30％

0
11/3

13/3

15/3

17/3

new loansrefinancing

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

19/3

21/3

+1.7%/yr10TRACK RECORD AS A CONSUMER BRAND
now46%ARUHI’s brand recognition rate*
42.8%30.9%

42.4%

36.8%

30.9%

2017Q4(IPO)
2.3%

19.6%

10.4%

2.8%

9.2%

2017Q4 2018Q1 2018Q2 2018Q3 2019Q1 2019Q2 2019Q3 2019Q4 2020Q2 2020Q3 2020Q4*Recognition rate: survey results by Macromill, Inc.

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

11

FROM IPO ROADSHOW PRESENTATION
MATERIAL IN 2017
ARUHI‘S UNIQUE POSITION
Positioned as a leading innovative company in the financial institutionsector, aiming to transform into a life solution platform company

Consumer brandTransformation 2 . 0p r o c e e di n g

Platform company

Transformation 1.0
completedMortgage loan
distributor

Leading innovative
financial institution

Phase 3 (future):“Life solution
platform company”

Second Stage:
Globally unique“One-stop homebuying
service company”

Phase 2:“Mortgage loan
marketing platformcompany”

Phase 1 (past):“Mortgage loan
distributor”

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

12

VISION OF MID TO LONG TERM GROWTH
Previous mid-term plan
(Aug 2018)(JPY Bn)
140.0

New mid-term plan
(May 2021)
140.0(JPY Bn)
120.0

120.0

120.0

100.0
100.0

100.0

80.0

80.0

61.0
60.0

60.0

40.0

40.026.8

20.4

20.4
20.0

17.0

20.0

12.0

5.2

40.0 +

38.0

40.0

38.0

5.2

12.0

7.7

0.0

0.0
FYE MarFYE MarFYE MarFYE MarFYE MarFYE MarFYE MarFYE Mar

2018

2023

2031

2018

2021

2023

2026

2031

results

previous

long-term

results

results

previous

Mid-term

long-termplantargetplan

Plan 2021

targetOperating revenue

Income before tax

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Operating revenue

Income before tax

13

REAL ESTATE BUSINESSI need a homethat suits mylife-style.
Which town is thebest to live in?

I want advice
from a reliable
realtor.

Homebuying
concierge

I still have a loan
for my current
home and can’t sell
the home yet.
What should I do?
Buy & Resell
Renovation
Prop tech
Interim loan

Home search

Town search

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

14

SUPPORT CUSTOMERS FROM THE VERY
BEGINNING: LEAD GENERATIONTown HomeCon
Realsearch search cierge estate

Loan Moving Living

Customers considering homebuying
NEW

ARUHI Magazine

Most Livable Town Award

Personal Livable Town

#1 website fortown search••••

Events taken place at sixareas
Several events each year
More than 500 times onmedia
Collaboration with local
governments•••

Comprehensive website on
homes, finance and living
Organic unique users: 1MM
Sales of book: #1@Amazon(home category)

Analyze by AI, propose
towns that meet eachindividuals’ life-style

Personalized town
recommendation

Recommended property
in this town

Enormous lead generation

Consult concierge
Copyright© 2021 ARUHI Corporation. All Rights Reserved.

15

HOMEBUYING CONCIERGE:NURTURING

Town HomeCon
Realsearch search cierge estate

Loan Moving LivingCustomers considering homebuying
NEW

ARUHI CareerNEW

Recruitment andtraining service

Personal Livable Town

[ARUHI Homebuying Concierge]• Organize real estate agents(1,000 members)

Consultconcierge

Enormous prospects anddata accumulated• Consult homebuying online andoff-line sites• Propose towns, properties andloan plans that meet eachcustomers’ life-style

Nurturing
Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Business
support
Referral(neutral)

Partnership

General realtors
General renovationcompanies

ARUHI Real EstateTechnologies
ARUHI (housingloan business)
16

CUSTOMIZED INTEGRATEDSOLUTION: CONVERSION

Town HomeCon
Realsearch search cierge estate

Loan Moving Living

Customers considering homebuying
General realtors, renovation companies
NEWARUHIHomebuying
Concierge

ARUHI Real Estate Technologies
NEWARUHI
Prop tech service
On-line simulation, VR/3D viewing

HousingloanDefine customers’
homebuying needs

Property purchase support (brokerage)
NEWBrokerage + Renovation
Sendcustomers

NEWNEWNEW

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Property sale support (brokerage) +Buy & Resell guarantee
Property purchase

InterimloanSendcustomers

Insurance,etc.

Renovation + Property sales

17HOUSING LOAN BUSINESSCan I borrow a
housing loan for
my new home?

Housing loan
Insurance

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

18

FURTHER STRENGTHEN POSITION
AS A LEADING MORTGAGE BANK

Town HomeCon
Realsearch search cierge estate

Loan Moving Living

FYE Mar 2018

FYE Mar 2021

Target by FYE Mar
2026

Share in Flat 35
market1

23％

approx. 30％

over 40％

Share in housing
loan market23％

4％over 7％

Amount of loan
executions (annual)

0.6 JPY Tn0.8 JPY Tn

1.6 JPY Tn

Number of loan
executions (annual)

21K

25K

53K

Number of sales
offices (nationwide)

133

152

250

Business modelContinue fee business model with minimal balance sheet risk

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

1. Share in Flat 35 market: includes both new loans and refinancing, data for FYE Mar 2021 is as of Mar 2021
2. Share in housing loan market: survey by ARUHI

19FURTHER ACCELERATE HOUSING LOAN
BUSINESS WITH NEW BUSINESS IN ADDITIONTO CURRENT THREE STRENGTHSStrengths
Second-to-none processingspeed utilizing technology; RPAand AI

Wide product lineup, both fixedand variable rate

Town HomeConRealsearch search cierge estate

Loan Moving Living

Strategic Initiatives
Further expand market share in pre-owned
property segment

NEW
Promote bundle sales strategy

Nationwide sales network:
152 sales offices +15/yr

NEW

NEW
Customers from Real EstateBusiness and Consumer
Service Business
Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Change to a customer segment driven salesorganization

20

NEW PRODUCT STRATEGY AS A
CONSUMER BRAND: PROMOTE BUNDLESALES STRATEGYTown HomeCon
Realsearch search cierge estate

Loan Moving Living

NEWMoving
Tidying up

Flat 35

One-stop service

NEWMobility

Super Flat

Flat 35 α＋NEW

Energy service

Variablerate loan
Flat 35
renovation

NEW

Variousloans＝Reduce living cost

Bridge to consumer
service businessInsurance
More to comeCopyright© 2021 ARUHI Corporation. All Rights Reserved.

21

SHIFT FROM CHANNEL DRIVENORG TO CUSTOMER SEGMENT
DRIVEN ORG

Town HomeCon
Realsearch search cierge estatePrevious

Now

Customers

Customers

Realtors

Franchise(FC)StoresDirectlyManaged(DM)
Sales
Offices

Realtors

WebFCDMRegion A
Head Quarters
Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Regionalbanks

FC

Loan moving living

Onlinepartners

DMRegion B

Kashiwanoha Lab

Virtualchannel

Head Quarters
22

ACCELERATE GROWTH OF
STOCK-TYPE BUSINESS

Town HomeCon
Realsearch search cierge estate

Loan Moving Living

Recurring revenue instock-type businessInsurance
Wide selectionof insurances;
life, sickness,
fireLoanServicing

Over 12.0
JPY BnBalance ofservicing
assets:4.6 JPY Tn (Mar end2021) expands to8.0 JPY Tn (Mar end2026)

4.9 JPY Bn

ARUHI RPASolutions
Moreoutsourcing
from financial
institutions

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

FYE Mar 2021(results)

FYE Mar 2026(target)
23

CONSUMER SERVICE BUSINESS

It’s costly andtroublesome.

MovingTidying up

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

For a betternew life andfuture!

MobilityLiving

24

Town HomeCon
Realsearch search cierge estate

NEW BUSINESS: MOVING SERVICE•
Customer ••Difficult to compare
Troublesome
Costly•••Loan Moving Living

Best plan provided
Easy, no negotiation
Special deals

Bundle withloans

Know timingARUHIIntroduce

Nationwide sales
network•Movingcompany •Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Costly to findcustomers
Gap between peakseason and off-season••

Improve sales
efficiency
Normalize operationrate25

TARGET FOR MID-TERM STRATEGIC PLAN 2021
Unit: JPY Bn

Mid-term Strategic Plan 2021
FYE March
2021

FYE March
2022

FYE March2026 (plan)

CAGR
FYE Mar 21
to FYE Mar
26

FYE March2031(target)

note

Operating revenue

26.8

29.5

61.0

17.9％

Housing loanbusiness

21.6

-37.0

11.3％

- Loan origination, financing
Loan servicing, insurance,- real estate, consumer
service

Other businesses

120.0

5.2

-

24.0

35.8％

Income before tax

7.7

8.5

17.0

17.0％

40.0+

margin

29％

29%

28％

-30%+

ROE

18％

-18％

-18%

25,00030,00053,00015.8％-

Number of housing
loan executions

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

26

SYNCHRONIZATION BETWEEN BUSINESS MANAGEMENT AND
ESG POLICY

Environment

SocialGovernance Revitalize stock assets by focusing on
pre-owned property business Leverage the “Most Livable TownAward”

 Management placing value on thecorporate governance code Issue Green RMBS to finance mortgage
loans exclusive to energy saving homes

 Collaboration with several local
governments/companies to promote
town development and relocation

 Three External Directors on Board Utilize technology, accelerate paperlessoperation

 Promote new, diversified work styles
under the new normal• Utilizing the “Most Livable Town Award”, promote town development and relocation• Collaborating with local governments and local companies, contribute to societies
by their revitalization such as providing solutions to unoccupied home, etc.
Most Livable
Town Award

Collaboration
with local gov

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

Unoccupiedhomes

 Operate fraud transaction detection
system utilizing AI Hired special advisors from National
Police Agency to strengthen compliance

Innovation lab@Kashiwanoha

Regional
revitalization

27

RETAIN HIGH CAPITAL PRODUCTIVITY, MAXIMIZE SHAREHOLDER
VALUE
12

Improve shareholder value

Targeted ROE: 18％

Stable shareholder return(stable increase individends)

Targeted dividend payout ratio: 35 to 40％

3
Maintain healthy balance
sheet

Share buyback to be considered depending on environment•••

Optimal financial leverage
Keep mortgage loan assets off the balance
sheet through securitization
Net D/E ratio1 under 1.0

1: Net D/E ratio＝{Borrowings (consolidated)－(cash & cash equivalents – deposits received) - operating loans receivable (non-consolidated)} / Total Equity (consolidated)

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

28

THE KEY TAKEAWAYS
1Evolve from a mortgage loan company to a globally unique one-stop homebuying service
company– Let us leave behind the self-defined platformer idea, and transform to a consumer brand completely
focusing on homebuyers.

2One-stop Homebuying Service– Three pillars: provide a complete one-stop service to homebuyers, complete synergy in business– Real Estate Business– Housing Loan Business– Consumer Service Business

3

Achieve high growth and high profitability with minimal balance sheet risk
– Continue high growth in all three business pillars– Maintain high profitability, aim 18% in ROE

4

ESG: Leverage the “Most Livable Town Award” for S– Collaborate with local governments and local companies on unoccupied home solution, take regional
revitalization measures and contribute to our society.

Copyright© 2021 ARUHI Corporation. All Rights Reserved.

29

DISCLAIMER
The Presentation Materials are based on various conditions, economic, regulatory, market or otherwise, which were valid at the time of writing. ARUHI
makes no representations or warranty as to the accuracy, reliability or completeness of the Presentation Materials. Trends going forward may potentially

impact the information contained in the Presentation Materials. ARUHI has no obligation to update, revise or confirm the information contained herein.
The information contained herein is subject to change without notice. The changes to this information may be significant. Neither the Presentation
Materials nor any of its contents may be disclosed or used without the prior written consent of ARUHI. The Presentation Materials may contain forwardlooking statements (including estimates, forecasts, targets and plans). Any forward-looking statements contained herein are not management’s
guarantee of future earnings performance. Forward-looking statements include, but are not limited to, statements containing words such as "aim",“projected”, “believes”, “continue”, “tests”, “estimated”, "predict", “measures”, “intends”, “potential”, “planned”, “expected”, “probable”, “risk”, “pursued”,“supposed”, “effort”, "target", "foresee", “scheduled", and similar expressions. Also, forward-looking statements can sometimes be identified by discussion
related to strategies, plans and intentions. The forward-looking statements in the Presentation Materials are based on management’s assumptions andbeliefs at the time of writing taking into account the information available at the time. By their nature, such forward-looking statements involve known
and unknown risks, uncertainties and other important factors which may cause the actual results, performance or achievements of the Company to bematerially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Information
pertaining to a company other than ARUHI or related to an interested party, or information prepared by either entity is based on generally available
information and other information quoted herein. ARUHI and its advisors have not independently verified the accuracy or appropriateness of theinformation herein and do not make any warranties with respect to this information. The financial information used in the Presentation Material, unlessotherwise expressly stated, was prepared in accordance with International Financial Reporting Standards (IFRS) that were developed by theInternational Accounting Standards Board (IASB).

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30

A NEW JOURNEY BEGINS

Copyright© 2021 ARUHI Corporation. All Rights Reserved.