FY2017 Financial Results Briefing:Results for the Year Ended
March 31, 2017
May 29, 2017

Takara Leben Co., Ltd.

Contents
Key Topics
for the Year Ended March 2017…………… P3

Summary of Business Results
for the Year Ended March 2017…………… P7

Business Progress
for the Year Ending March 2018…………… P16

Key Topics
for the Year Ending March 2018…………… P27

Projected Results, Dividends
and Capital Returns Policy
for the Year Ending March 2018…………… P31

Corporate Profile
Company name: Takara Leben CO., LTD.
Representative: Kazuichi Shimada, President
Established:

September 1972

Stock listing:Tokyo Stock Exchange Section 1(Code: 8897)

Paid-in capital:

4,819.8 million yen

Number of
employees:

265 (standalone), 690 (consolidated)(As of March 2017)

Address(Head Office):

16F Tekko Bldg., 1-8-2 Marunouchi
Chiyoda-ku, Tokyo 100-0005 Japan

Main business
operations:

Sales of own-brand condominiums,
real estate leasing, power generation,
etc.

Takara Leben Head Office(Tekko Building)1

Corporate History
1972

Established Takara Komuten Co., Ltd. (now Takara Leben)
Commenced sales and resales of detached houses

1982

Launched real estate leasing business

1988

Established Takara Management Co., Ltd.
(now Leben Community)
Launched real estate management business

1994

Announced "Leben Heim” series of own-brand condominiums
Launched condominium sales business

2000

Changed company name to "Takara Leben Co., Ltd.”

2001

Listed on the JASDAQ stock exchange
Established Tafuko Co., Ltd. and launched financial brokeringbusiness

2003

Listed on the second section of the Tokyo Stock Exchange

2004

Listed on the first section of the Tokyo Stock Exchange
Established AS Partners Co., Ltd.
Launched real estate sales agency business and nursing carebusinesses for seniors

2008

Celebrated 40th anniversary of the company’s founding

2012

Introduced two new condominium brands: LEBEN and THE LEBEN
Established Yokohama branch
Made Takara Housing Co., Ltd.(now Takara Property Co., Ltd.) a subsidiary
Launched rental management business2013

Launched mega solar business
Commenced operation of first mega solar site: LS Shiotani Power Plant
Established Takara Asset Management Co., Ltd.
Established Takara Investments Co., Ltd.
Made Sunwood Corporation an affiliate company (accounted for by the equity
method)2014

Established Hokuriku Office
Established Tohoku Office
Made Oasis Co., Ltd. (now Takara Leben Realnet) a subsidiary
Made Nikko Kensetsu Co., Ltd. a subsidiary

2015

Made Livenet Home Co., Ltd. (now Takara Leben Tohoku) a subsidiary
Relocated Tohoku Office to Sendai, Miyagi and closed old Tohoku Office
Made Jutakujyouhoukan Co., Ltd. a subsidiary

2016

Celebrated 45th anniversary of the company’s founding
Made Nikko Property Co., Ltd. a subsidiary
Changed company name of Nikko Kensetsu to "Nikko Takara Corporation”
Listed Takara Leben Infrastructure Fund, Inc. on the stock market, as the firstcompany to be listed on the infrastructure fund market

2017

Established Osaka Office
Established Sapporo Office
Changed company name of Jutakujyouhoukan to “Takara Leben West Japan”
Relocated Takara Leben head office to Marunouchi, Chiyoda-ku, Tokyo

Made Marunouchi Servicer Co., Ltd. a subsidiary
Launched debt collection businessAnnounced new Takara Leben brand (and corporate logo)

2010

2011

Launched new detached housing business (selling houses built
by Takara Leben)
Increased paid-in capital by rights issue (a first for Japan)

2

LEBEN Shiki EXECUTIAKey Topics
for the Year Ended March 20173

Key Topics for the Year Ended March 2017 (1)Stock market listing of Takara Leben Infrastructure Fund, Inc.

OutlineCompany name

Takara Leben Infrastructure Fund, Inc.

Representative

Masahide Kikuchi, Executive Officer

Address

16F Otemachi Nomura Building, 2-1-1 Otemachi, Chiyoda-ku, Tokyo

Operating company

Takara Asset Management Co., Ltd.

Account settlement period

May/November

History
Aug 03, 2015:

Submission of notice pertaining to the company’s establishment pursuant to Article 69(Paragraph 1) of the Act on Investment Trusts and Investment Corporations made by Takara
Asset Management (the company responsible for planning the establishment)

Aug 05, 2015:

Registration of the company’s establishment in accordance with Article 166 of the Act Takara
Leben Infrastructure Fund, Inc. is now an officially established entity.

Aug 14, 2015:

Application for registration in accordance with Article 188 of the Act

Sep 02, 2015:

Registration by the Prime Minister in accordance with Article 187 of the Act (Kanto Local
Finance Bureau Chief No.105)

Apr 04, 2016:

Approval of the company’s listing on Tokyo Stock Exchange’s infrastructure fund market

June 2, 2016:

Listed the company on the stock market, as the firstcompany to be listed on the infrastructure fund market
4Key Topics for the Year Ended March 2017 (2)Participation in Greater Tokyo Area redevelopment projects,
in addition to regional (local) redevelopment projects● Examples of regional city redevelopment projects
Toyama City, Toyama
Chuo-dori Zone FType 1 Urban District Redevelopment
Project

Toyama City, Toyama
Front of Toyama sta. Sakura-machi
Redevelopment project

Takaoka City, Toyama
Suehiro West Zone
Lifestyle & Liveliness Regeneration
Project

LUCIDA TOWER● Examples of Greater Tokyo redevelopment projects
Edogawa City, Tokyo
Minamikoiwa 6-Chome
Type 1 Urban District Redevelopment Project

Zone I

Zone II

Takara Leben is currently engaged inredevelopment projects throughout Japan

Zone III5

Key Topics for the Year Ended March 2017 (3)Proactive development and expansion of investment projects

Mega solar power generation facilities

Revenue-generating real estateBusiness scale:approx. ¥5.1 billion projects acquired

Approx. ¥17 billion worth ofreal estate purchased
6

LEBEN Mito THE PREMIERE

Summary of Business Results
for the Year Ended March 20177

Consolidated Income Statement (Planned vs. Actual)(Units: million yen)

Year ended March
31, 2017(Initial planned)

Year ended March
31, 2017(Actual results)

PercentagechangeNet sales

105,000

103,599-1.3%

Operating profits

15,00010,349-31.0%

Ordinary profits

13,9009,496-31.7%Net income

9,000

6,107

-32.1%

8

Consolidated Income Statement (Planned vs. Actual)
Main factors in adjustment of business results

Power generation business

Factor
Shift in timing of sale of power generation facilities,
originally planned for the 2nd half of the year

Net sales-¥13 billion

Gross profits-¥5.2 billion

Real estate sales business

FactorChange in business plan for one new 64-unit
condominium building (shift from sale to rental use)

Net sales

Gross profits-¥3.4 billion-¥0.8 billion¥11.5 billion¥1.2 billion

Failure to meet planned targets (37 units)
Sale of fixed assets due to asset swapping9

Consolidated Income Statement (YoY Comparison)(Units: million yen)

Year ended March
31, 2016

Year ended March
31, 2017

Net sales

76,268103,599

35.8%

Operating profits

7,563

10,34936.8%

Ordinary profits

6,708

9,496

41.6%

Net income

4,308

6,107

41.8%

YoY change

Takara Leben set a new record for maximum profits this year10Consolidated Segment Information (Net Sales)(Units: million yen)

Year ended
March 31, 2016

Percentage
segment

Year ended
March 31, 2017

Percentage
segment

Real estate sales
business

63,383

83.1%

79,63876.9%

Real estate rentals
business

4,307

5.6%

5,056

4.9%

Real estate
management business

3,362

4.4%

3,665

3.5%

1.2%

(of which facility sales)

909
(-)

11,108(8,405)

10.7%(-)

Other businesses

4,305

5.6%

4,130

4.0%

Total

76,268100%

103,599

100%

Power generation
business

11

Consolidated Segment Information (Gross Profits)(Units: million yen)

Year ended
March 31, 2016

Percentage
segment

Year ended
March 31, 2017

Percentage
segment

Real estate sales
business

14,614

81.9%

15,126

69.2%

Real estate rentals
business

1,137

6.4%

1,296

5.9%

Real estate
management business

453

2.5%

520

2.4%

0.2%

3,419
(3,271)

15.6%(of which facility sales)

49(-)

Other businesses

1,580

8.9%

1,507

6.9%

Total

17,835100%

21,869100%

Power generation
business

12Consolidated Balance SheetYear ended March 31, 2016 Year ended March 31, 2017 YoY change

75,75386,585

14.3%

Cash and deposits/cash equivalents

28,51529,7804.4%

Inventory assets

40,20842,048

4.6%

4,073

9,658

137.1%

36,13432,390-10.4%

Fixed assets

53,94553,237-1.3%

Total assets

129,744

139,874

7.8%

Current liabilities

42,85950,48217.8%

Notes and accounts payable-trade

12,037

12,1730.8%

Loans payable (short-term borrowings andcurrent portion of long-term borrowings)

19,82329,58849.3%

53,20752,599-1.1%

50,14748,439-3.4%

Total liabilities

96,066103,081

7.3%

Net assets

33,67736,792

9.3%

Capital

4,819

4,819

-

Other shareholder equity

28,857

31,972

10.8%

Total liabilities and net assets

129,744

139,874

7.8%

Current assets

Real estate held for sale
Real estate for sale under construction

Fixed liabilities
Long-term borrowings

13

Shareholder Returns (Projected Dividends & Benefits)

1st half dividends

Year-end dividends

Total

Year ended
March 31, 2016
(Actual)

4 yen

9 yen

13 yenYear ended
March 31, 2017
(Forecast)

5 yen

10 yen15 yenBenefits (annual)

Gift certificates for rice

100~499 shares

1 kg equivalent500~999 shares

3 kg equivalent

1,000 shares or more

5 kg equivalent

14

Shareholder Return Rates
Acquisition oftreasury stock

Dividend amounts

2,471,000 shares

1st half dividends: 542,233k yen
Year-end dividends: 1,079,774k yen

1,754,214k yen

Shareholder benefits

Gift certificatesfor rice

Total dividends: 1,622,008k yen

Shareholder return rate

Year ended
March 2015
33.0%

Year ended
March 2016
55.7%

Year ended
March 201755.3%

Takara Leben continues to make proactive returns to shareholders
15

LEBEN Sendai THE GRANDE

Business Progress
for the Year Ending March 201816

Real Estate Market Trends
Condominium market conditions in the Greater Tokyo Area
- Fall in number of units being supplied- Prices remain high due to rising selling
prices- Construction costs also remain high- Increasing number of dual-working
households- Buyers receive financial support topurchase homes from parents, etc.
- Needs are compact properties are
increasing(10,000 households)

1,200
1,100
1,000
Dual-working households
共働き世帯(households with two working adults)（雇用者の共働き世帯）

900
800

専業主婦世帯Full-time housewife households(households comprising of a working（男性雇用者と無業の妻か
man and non-working wife)
らなる世帯）

700
600※Data proviided by
Cabinet office

500

Changes in buyer attributes
Rise in level of selection criteria

2005 2007 2009 2011 2013 2015

Polarization of strong and poor performance in the same area

Future outlook- Slight increase in supply of new units- Discount sales of poorly-performing
property inventory- Selling prices will remain highWe predict no major changes inthe state of the market
17

Progress of Condominium Contracts-1
Completion schedule and rate of progress for condominium contracts
Completion schedule

100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

Approx. 90% of completions
are concentrated around the
4th quarter (4Q)

Year ended
March 2016

44期

Year ended

45期
March 2017
Year ending
46期
March 2018

47期(予想)Year ending
March 2019
(Forecast)

1Ｑ

2Ｑ

3Ｑ

4Ｑ

This is the greatest weightingof the completion schedule
towards the second half ofthe year seen in recent years

Condominium contract acquisition rate
Units sold at
beginning offiscal year

%age of units forwhich sales havecommenced

Recoveredunits

Contracted
units

Progress rate
at beginningof fiscal year

Year ending

Unitscompleted

1,452

829

57.1%

March 2016

1,390

1,155

83.1%

1,600

714

44.6%

March 2017

1,731

1,124

64.9%

1,600

526

32.9%

March 2018

1,674

735

43.9%

Factors in fallingrate of progress

Timing of commencement of sales is later than for atypical year due to the weighting of the completion
schedule towards the second half of the year

Commencement of sales
is concentrated aroundthe first half of the year18

Progress with Condominium Contracts-2
Expected increase in condominium contracts secured(units)

2,100
2,000

1,900
1,800
1,700
1,600

戸建
Detached Houses

1,500

マンション
Condominiums

1,400
1,300
1,200
1,100
1,000
41期
Year ended

42期
Year ended

43期
Year ended

44期
Year ended

45期
Year ended

46期計画
Year ending

March 2013

March 2014

March 2015

March 2016

March 2017

March 2018

A major increase in condominium
contracts is expected in comparison
with the previous year

An increase in contracts expected
for next year and onwards
19

Condominiums: Gross Profit Margin Rate
Gross profit margin rate

Gross profit margin rate forecast
for this year: 20.5%

30.0%

Selling prices rise and remain high+Construction costs remain high also

25.0%
20.0%
15.0%
10.0%

Future target: 20~21%

5.0%
0.0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Unit selling price (average)

Average unit selling price:¥37.5 million

40,00038,000

Increase in number of dual-working
households+
Financial support from parents, etc.

36,00034,00032,00030,00028,000(thousand yen)

2013

2014

2015

2016

2017

2018

Trend towards rising prices
20

Condominium & Land Purchases
Nationwide expansion

Expanded into the Hokkaido andKansai areas for the first time

Takara Leben has a diverse lineup of
condominiums from compact units
targeting single people and DINKs tospacious (100m2 and up) properties forfamilies and wealthy buyers

Takara Leben has secured development land forapproximately 5,000 condominium units
21

Detached House Sales Business
Main features
Saitama- Targets: Tokyo and its three surrounding prefectures (mainly Tokyo)- Walking distance from station: within 15 mins (in Tokyo), within 10
minutes (areas other than Tokyo)- Product features: stylish, diverse designs, built by Takara Leben

Tokyo

Kanagawa

Chiba

Unit sales & unit selling priceYear ended March
31, 2017

Year ending March
31, 2018

Units

275 units (actual)

160 units (budgeted)

Selling priceapprox. ¥38 million

approx. ¥61 million

Our strategy is to draw a clear line between
Takara Leben and “Power Builders”
22Real Estate Rentals Business
Proactive acquisition of revenue-generating real estate and acceleration of asset
swapping

Expansion of rentals businessNet sales(million yen)

About REIT

Up until March 2017:

6,000- Acquisition of working properties- Progression of development projects- Swapping of assets (i.e. sale ofold properties)

5,000
4,000
3,000

From April 2017 onwards:
2,000- Increasing scale of assets- Inclusion of development projects- Securing pipelines- Clarification of growth strategies

1,000

0
Year ended
41期
March
2013

Year ended
42期
March
2014

Year ended
43期
March
2015

Year ended
44期
March
2016

Year ended
45期
March
2017

Initial target for formation of REIT 2017 → Postponed
23

Real Estate Management Business
Steady increase in number of units of property under management
 Key features of Takara Leben’s management business Number of units under management and proportionsof other properties

Management union

Total number of units under management
SupportTakara Leben brand
Other companies
Proportion owned by other companies(units)50000

43%

Leben Community Co., Ltd
45000

Financial management support
services- Accounting services- Incomings & outgoings- Reminder letters, etc.
- Tax consultations

Operational management support
services- Board meeting support services- General meeting support services- Union information management
services- Data gathering, analysis, feedback

Workplace management support
service- Manager/custodian services- Front (reception) desk services- Daily cleaning services- Regular cleaning services

Asset management support services- Long-term improvement planningproposal creation services- Inspection services- Remote monitoring andemergency response services- Smilax 24 call center services

42%

40000
41%
35000
40%

30000
25000

39%

20000

38%

15000
37%
10000
36%

5000
0

35%
2012

2013

2014

2015

2016

2017

Continuity rate for management outsourcing contracts: 99.7%
Takara Leben has secured a high level of support from its customers
24Power Generation Business
Main topics• Mar 31, 2016
• Jun 2, 2016
• Mar 31, 2017
• Jun 1, 2017
• Mar 31, 2020

Approx. 51MW of facilities in operation
Sold 17.88MW worth facilities toinfrastructure funds
Approx. 80MW of facilities in operation
Scheduled to sell 30.94MW of facilities
to infrastructure funds
Target: 200MW of facilities in operation

Market environment- Recognition of Takara Leben increasing due to stock market listing- Increase in number of projects being brought in (secondary / large-scale)

Our current pipeline is extensive

Falling FIT prices

We were also investigating and considering the possibilities of other forms ofrenewable energy aside from solar power
25

Strategies for the Future
Overseas business operations

House/condominium sales andproperty rentals

Real estate related businesses

Power generation
businesses

Takara Leben is considering participation in overseas businesses,
primarily in the Southeast Asia region.
We have established a new project team, under the direct supervision of the president,with a view towards participation in overseas business projects
26

LEBEN Nagaoka Vertlier

Key Topics
for the Year Ending March 201827

Key Topics for the Year Ending March 2018 (1)Strengthen organization
For expanding Investment business,
Newly established Specialized dept.
Investment Development headquarters【Investment Development dept.】【Eco & Energy dept.】

Purchase assets forformation of REIT

Purchase assets for
Infrastructure fundSpecialize in Investment business → Aim to expand asset scale28

Key Topics for the Year Ending March 2018 (2)Acceleration of nationwide expansion, through the establishment of new business locations

Takara Leben
Sapporo Office

Takara Leben
Hokuriku Office
Takara Leben
Tohoku Head Office

Takara Leben West Japan
Head Office

Takara Leben
Head Office
Takara Leben
Osaka Branch
Dispersal of supply areas and increase of supply volume in regional cities
29Key Topics for the Year Ending March 2018 (3)Sale of mega solar power generation facilities (i.e. disposal by sale)

June 2016
IPO

June 2017
PO

Number of facilities sold

10 facilities

7 facilities

Scale of selloff

17.88 MW30.94 MW

Sale amount¥7,870 million¥12,607 million

Profit from sale

¥3,136 million¥4,670 million

Profit margin

39.9%

37.1%

30

LEBEN KAWASAKI SUZUKI CHO GRAN’NEX

Projected Results, Dividends
and Capital Returns Policy
for the Year Ending March 201831

Outlook (Consolidated)(Units: million yen)

Year ended
March 2017(actual)Year ending
March 2018
(forecast)

YoY change

Condominiums (units)
Detached houses (units)

1,503
275

1,600
160

6.5%
-41.8%Net sales(millions of yen)

103,599

110,000

6.2%

Operating profits(millions of yen）

10,34910,5501.9%

Ordinary profits(millions of yen)

9,496

9,500

0.0%

Net income(millions of yen)

6,107

6,300

3.2%

32

Outlook (by Business Segment)(Units: million yen)
Year ended March 2017(actual)
Net sales
Real estate sales
business(condominiums)(detached houses)(other real estate)

Year ending March 2018
(forecast)Gross profits

Net sales

Gross profits

79,63815,12678,972

15,02552,988
11,237
15,413

10,9251,701
2,499

60,4009,307
9,265

12,3801,177
1,468

Real estate rental
business

5,056

1,296

4,755

1,167

Real estate
management business

3,665

520

4,296

652

Power generation
business(of which facility sales)

11,1083,419

15,987

4,806(8,405)(3,271)(12,607)(4,671)Other businesses

4,130

1,507

5,990

2,900

Total

103,599

21,869110,000

24,55033

Sales, General & Administrative Costs (SG&A)
Main factors in increase of sales, general and administrative (SG&A) costs◆ Increase in number of housing unit contracts
An increase of 500 units is anticipated in comparison with the previous year.

◆ Increase in fixed costs with the establishment of new business locations
Osaka Branch, Sapporo Branch. Fukuoka Branch…

◆ Increase in personnel costs with an increase in employee numbers
Mainly due to infrastructure and REIT-related personnel

Takara Leben is making upfront investments in future growth, aperiod of change for the company
34

Midterm Management Plan
Year ended
March 2018
(midtermmanagement plan)

Year ending
March 2018
(forecast)Difference

Condominiums (units)
Detached houses (units)

1,850
400

1,600
160

-250
-240

Net sales(millions of yen)

103,400

110,000

6,600

Operating profits(millions of yen）

15,90010,550-5,350Ordinary profits(millions of yen)

14,9009,500-5,400Net income(millions of yen)

8,900

6,300

-2,600Adjustments and/or renewals are under consideration
35

Projected Dividends & Benefits

1st half dividends

Year-end dividends

Total

Year ended
March 31, 2017
(Actual)

5 yen

10 yen15 yenYear ending
March 31, 2018
(Forecast)

5 yen

10 yen15 yenBenefits (annual)

Gift certificates for rice

100~499 shares

1 kg equivalent500~999 shares

3 kg equivalent

1,000 shares or more

5 kg equivalent36

Points for Attention and Enquiries Relating to These Materials

For inquiries:
IR Office, General Planning Division

TEL: 03-6551-2130
FAX: 03-6551-2139
E-mail: irinfo@leben.co.jp
These materials were prepared for the purpose of providing information regarding business performance for the year ended March
31, 2017, and do not constitute a solicitation for investment in securities issued by Takara Leben Co., Ltd. These materials wereprepared based on data available as of March 31, 2017. These materials, as well as answers, projections, estimates, and otherinformation provided in the subsequent question and answer session are based on Takara Leben's best judgment at the time of the
preparation of these materials, and do not constitute a guarantee or promise that anything contained herein will be realized or
achieved, nor do they provide any guarantees or promises with regard to the accuracy or completeness of the information
contained herein. The content of these materials is subject to change without prior notice.