B-Lot Company Limited
Q2 Financial Results Briefing for the Fiscal Year Ending December 2019
August 22B 2019

Event Summary[Company Name]

B-Lot Company Limited[Event Type]Earnings Announcement[Event Name]

Q2 Financial Results Briefing for the Fiscal Year Ending December 2019

[Fiscal Period]

FY2019 Q2[Date]

August 22B 2019

[Number of Pages]

19[Time]

10:00 – 11:00[Venue]Kabutocho Heiwa Building 3F
3-3 Kabutocho NihonbashiB Chuo-kuB Tokyo 103-0026(Hosted by The Securities Analysts Association of Japan)[Venue Size]

145 m2[Participants]

34[Number of Speakers]

1
Makoto Miyauchi

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

President

1.800.674.8375
support@scriptsasia.com
1

Presentation
Moderator: It is now time to commence an investor relations meeting for B-Lot Company Limited. I would
like to introduce Makoto MiyauchiB President and Representative Director from the Company.
TodayB Miyauchi will present for about 30 minutes before the question-and-answer session.
Miyauchi: Good morning. I am Miyauchi. Thank you for visiting the financial results briefing for the second
quarter of the fiscal year ending December 31B 2019 of B Lot Company LimitedB despite your busy schedule.
NowB please refer to the materials at your hand.
Let's skip the first page and proceed to the section on Financial Highlights. As shown in the bottom rightB
today's materials consist of three major parts. The second is the business summary and the third is theCompany profile which is the introduction of the Company. I would like to talk about the first part.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
2

NowB please turn to the page I-1B which is a summary page. I will explain the four major points for the period
up to the second quarter.
FirstB 36.2% progress toward the annual target of consolidated net income. We have not yet reached half ofit. HoweverB it has substantially grown with an increase of 285.8% year-on-year.
SecondB the balance of real estate for sale is 18.2 billion yen. The tight relationship with partner companies
and overseas investors has contributed to recurring deals.
ThirdB we invested in a company called Yokohama ShoenB which operates funeral facilities and columbarium.
We aim to establish a business model that is in line with the needs of an aging society.
FourthB we are building an organizational structure that will enable us to take action over the medium- tolong-term by developing diversified human resources and promoting women to management positions.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
3

Please refer to page I-2B Consolidated Earnings Forecasts and Medium-Term Management Plan for the Full
Year. For the fiscal year ending December 31B 2019B we forecast net sales of 26.3 billion yen and profit
attributable to owners of the parent of 2.357 billion yen. There is no change from the figures announced at
the beginning of the fiscal year.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
4

Now onto page I-3B the Consolidated Financial Highlights page. Our most important performance indicator or
so-called KPI is net income. With this in mindB we aim to achieve steady growth.
Please refer to the graph on this page. Top left shows net sales. It increased 47.5% to 7.375 billion yen.
Ordinary income is in the middleB which increased 242.1% to 1.211 billion yen. And to the rightB net income.
This is most important for us. This was 0.854 billion yenB an increase of 285.8% year-on-year.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
5Page I-4. This is a consolidated PL/BS summary page. ThankfullyB profits are growing steadily in all of ourbusinesses. Progress is also being made as planned compared to the budget for the current fiscal year.
Please see the left half. This is the consolidated PL Summary. We mentioned that both net sales and operating
income increased compared with the same period of the previous fiscal year. Looking at each of our threebusinessesB you can see that sales are growing in all: the first—Real Estate Investment and Development
Business; the second—Real Estate Consulting Business; and the third—Real Estate Management Business.
Please also look at operating income for each of the three businesses. All of the three businesses (1B 2B and 3)
are also growing. You can see that all three businesses contributed significantly to sales and profit growth.
Now look at the consolidated BS summary in the right half. FirstB regarding an assetB it has increased 24.8%
year-on-yearB to 30.281 billion yen. As you can seeB the majority of these assets are current assets. Current
assets consist mainly of cash and deposits and real estate for sale.
Looking at liabilitiesB we see a 30% increaseB to 23.714 billion yen. Current assets consist of the large portionof an assetB while fixed liabilities for liabilities. Most of the real estate for sale is financed with long-term debt
with the cooperation of financial institutions. The characteristics of such a balance sheet remain unchanged.
Net assets rose 9%B to 6.566 billion yen.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
6

Continuing on to the section on the second major part of the presentationB which is the business summary.
From hereB I will explain the business performance for each of three businesses for the period up to the second
quarter of the current fiscal year.
Page II-1 is about the Real Estate Investment and Development Business. Among our three businessesB this is
our main business. This business is engaged in real estate revitalization and development while taking on realestate risks.
Sales in this business increased 32.7% year-on-yearB to 5.253 billion yen. Segment income increased 82.9%B to
0.992 billion yen.lare
Please refer to the graph at the bottom left. The balance of real estate for sale reached 18.262 billion yenB a
record high. We believe this will be a much larger figure because it will be sold with an additional cost to
increase its valueB such as construction cost and furthermoreB our profit.
Please refer to the pie chart on the upper rightB which is the breakdown of non-consolidated inventory for BLot. This roughly 18.2 billion yenB consisting of 33 properties. It has increased by 8B from 25 at the end of
December 2018.
Looking at the pie chart for 33 different usesB you can see that the yellow green part with the number 10 at
the bottom left stands out. This is for housing and condominiums. This is an investment product with highliquidity and safety. ThereforeB this has been an extremely important property usage since the foundation of
the company. In factB the right-hand bottom of this page shows the example of large-scale condominiums
purchased in Nakano-kuB Tokyo.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
7

Coming back to the pie chartB another noticeable part is the figure 12 in blue on the upper rightB for the usage.
This is land. Out of those 12B we will develop hotel and accommodation-related facilities for four propertiesB
and residential condominiums for another four properties. We plan to sell the remaining four properties as
land.
HoweverB this is not simply to buy and sell land. For exampleB for the land with a old house and the land where
the border with the adjoining land or the survey are not establishedB we sell it with the increased value. We
make efforts for improving all of our projects.
NowB part of the reasons for the increase in real estate for sale is the increasing acquisition in this second halfof the fiscal year. In additionB the properties with completed construction show up in this pie chart in adifferent color. In other wordsB you can say that the products we will sell for the third and fourth quarters aregradually getting readyB or are already ready.
Although not listed on this pageB the area of investment is also expanding. By the end of the second quarterB
we have been investing in the Chubu regionB centering around Nagoya.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
8Moving on to the page which says Otaru Project is sold out. This page shows the projects that have made asignificant contribution to our business performance up to the second quarter of the fiscal year.
This is the Hotel Torifito Otaru Canal that opened in April 2018. In the middleB you see SG in yellow greenB
which means that B-Lot SingaporeB a subsidiary of the B-LotB has found a buyer. The sale was completed in
February of this year to the investor that B-Lot Singapore had found.
Although the sale has been completedB you see that it says AM and PM on the page. After the sale has been
completedB we have received an order from an investment company to continue the asset managementB
property managementB and management of real estate. Our desire is to have a long-term relationship withthe same real estate or customers over the medium- to long-termB and this is one of the best examples forsuch a case.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
9This is a page entitledB Building Relationships of Trust and Grow Together with Partner Companies. HereB I
would like to explain our relationship with AB ACOMO Co.B Ltd. which operates hotels and otheraccommodation facilities closely related to us.
WeB together with AB ACOMOB have opened five accommodation facilities since we first opened the hostel inShinjukuB TokyoB in 2015 together. OtaruB which I mentioned earlierB is also listed as No. 4 as a successful
example of our cooperation.
All five projects contributed significantly to the performance of our B-Lot business. These five cases are
extremely successful projects with the ones that were successfully soldB the ones we are continually providing
services forB and the ones that we own and that contribute to our net sales substantially.
We are currently engaged in joint projects of No. 6 and No. 7 with AB ACOMO.
The sixth is a project for the hotel that is tentatively called Hotel Torifito Hakata ReisenmachiB which isscheduled to be completed in July 2020. We have a branch office in Fukuoka. It is in a very good location near
the branch and in a walking distance from Hakata Station or Tenjin.
AlsoB there is the seventh project for the hotel that is tentatively called Torifito KanazawaB which is scheduled
to be completed in June 2021. This is in the very good location we rarely have which is just three minutes’
walk from Kanazawa StationB so we even put the aerial photograph here.
We have great expectations for building two hotels in good locations with trusted partners.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
10Page II-2 is the Real Estate Consulting Business. This is our second business. We are involved in real estate
brokerageB sales of newly built condominiums for residential useB and other businesses. We think this is anextremely low-risk business.
In this businessB net sales increased 9.1% year-on-yearB to 0.691 billion yen. Segment income increased 145.7%B
to 0.476 billion yen.
There are two reasons for the large increase in profits. FirstB the company succeeded in providing highly
profitable consulting services. The second is due to the so-called delay in the sales agency business for newly
built condominiumsB where some items included in the budget for the fiscal year ended December 31B 2018
were postponed to the current fiscal year.
We also have a good example of this business which is shown in the right half of this page; the part that says
comprehensive consulting service to fulfill clients’ needs.
In the fiscal year ended December 31B 2018B a wealthy overseas customer purchased the hotel condominiumB
the Kamui NisekoB which we developed in NisekoB Hokkaido. This customer is taken care of by our proud global
team with B-Lot. Not only in JapaneseB but also in English and ChineseB we are responding to the needs ofoverseas investors who demand diverse asset management.
As a result of the team's continuing efforts to cover this customerB we were able to obtain the second business
in which the customer successfully purchased the villa in Karuizawa that we introduced. In additionB there wasa request to rebuild this houseB so we are also providing support for project management and rebuilding.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
11

As it was the case we previously mentionedB we are able to build the medium- to long-term relationship on
the same real estate or with same customers in overseas as well.

Now onto II-3B the Real Estate Management Business. This is our third business. This business includes realestate managementB collection of rental incomeB and real estate asset management. The same as our second
businessB real estate consultingB I think this is a very low-risk business.
Sales in this business rose 250.7%B to 1.43 billion yen. Segment income increased 70.1%B to 0.466 billion yen.
In this businessB net sales have shown substantial growth. This was mainly attributable to the consolidationof the subsidiary T&K Co.B Ltd.B which was acquired in the fiscal year ended December 31B 2018.
We would like to introduce two good examples of this business.
FirstB see the upper right section of this page that shows the second project of the “Nine Hours Nakasu
Kawabata Station” in Fukuoka. In April 2019B we opened the “Nine Hours Namba Station Capsule HotelB” andin AugustB we will open this “Nine Hours Nakasu Kawabata Station.”
For both projectsB we lease some of the large-scale real estate in exceptionally good locationsB invest in thefacilities of the capsule hotelB and our business partnerB Nine Hours Co.B Ltd.B operates it.
Until nowB we have collaborated with Nine Hours on real estate owned by us. HoweverB Namba and the
Nakasu Kawabata are real estate that we do not own. We do want to own the real estate in such extremelyrich locations as Nakasu and NambaB but we have not had an opportunity.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
12

Using a method of leasing in such a favorable location enables us to leverage the know-how we have cultivatedin real estate investment and development. In additionB we believe that we will be able to generate stableearnings over the medium- to long-term in this business.
Continuing on to the bottom right of this page which talks about concluding the agreement of AM service ona large-scale development project in Niseko. This is about accepting an order of asset management businessfrom a company called SC Global Developments Pte. Ltd.B a major real estate developer in Singapore.
The Niseko area in Hokkaido is also undergoing very large-scale development. This is a high-end condominium
called Setsu Niseko. We are based in Singapore and encourage customers in Southeast Asia to invest in realestate in Japan. In additionB our business performance in Niseko. The combination of these two has helped us
to obtain large-scale development business from such a major corporation.
Now continuing on to the page that says close upB aiming to expand our business portfolio and create new
businesses that have social significance.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
13

Please see the page that says Yokohama Shoen acquired a 50% stakeB adding the columbarium “property
revitalization business” to our portfolio. As it saysB this yearB we have obtained a 50% stake in the company
called Yokohama Shoen. This is the business to revitalize the columbarium.
This is what it will look like after the renewal of the columbariumB or funeral service facilityB is competed in
April 2020. It uses a fairly large amount of woodB which produces a modern but calm and solemn atmosphere.
We are looking forward to the establishment of such a facility.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
14

We believe that the next page will help you understand why this facility looks so fabulous. Mr. Kengo KumaB
a world-famous architectB has designed it.
Mr. Kuma is a well-known personB so I believe no introduction is necessary. What keeps him busy currently is
being involved in designing a new National StadiumB which will become the main venue for the 2020 Tokyo
Olympics.
This page shows the images of the renovated facilities of Yokohama Shoen. As you can seeB we believe thatthe facility looks exactly as we described.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
15

Now moving on to the page that says “Columbarium featuring superior designB affordable pricesB andproximity to central Tokyo.”
There are three main reasons why we have been involved in this business. The first is social responsibility. The
second is that we can leverage our know-how. And the third is that we believe we are able to generate stableB
long-term earnings.
Let’s think about the social aspect. To begin withB I believe that the funeral-related business has gone throughquite a change. We probably have many cases where people are not able to visit a grave located locallyB due
to time constraints. In factB some questionnaires say that the type of funeral business in demand is thereasonably priced one in an urban areaB which is easier to manage.
This Yokohama Shoen is located in Yokohama City. These are long-standing columbarium and funeral service
facilities. There is high demand from the local public body as well to expand such business in the location withgood accessB such as this one. ThereforeB we believe that these are truly businesses that society demands.
And our know-how. This page shows the current columbarium. We have just started constructionB so it is not
until the spring of next year that it becomes like the one in the picture.
I think you can see from the picture that this is an aging facility. Because this is oldB there may be a lack ofmaterials for buildings. For this type of propertyB we can leverage the know-how of our B-Lot businessB which
we have built through our long experience in revitalization development. We would like to continue such
revitalization business.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
16

The revitalization know-how we have developed in our Real Estate Investment and Development Business isbasically based on short-term businesses that are listed as real estate for sale on our balance sheet. HoweverB
this columbarium and funeral service business is different. We expect that we will use our expertise in realestate investment and development to generate stable earnings over an extremely long period of time.

Now please see the page that says “rapid growth through business development ahead of the needs of thetimes and trends in business performance.” This section presents trends in business performance.
As we explained earlierB we forecast net sales of 26.3 billion yen and net income of 2.357 billion yen for the
fiscal year ending December 31B 2019.
We also disclose our forecastsB for the fiscal year ending December 31B 2020B of net sales of 30 billion yen andnet income of 2.843 billion yen.
Thanks to the support to dateB our business performance has been growing steadily. In additionB the numberof branches and subsidiaries is increasing. We will continue to develop a diverse range of businesses.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
17Moving on to the third major partB which is the company profile. As this page onward is only for your referenceB
I would appreciate it if you look at it whenever you have time.
NowB we are sorryB but if you could go back to the fourth page from the beginning. This is page I-2B
Consolidated Earnings Forecasts and Medium-Term Management Plan for the Fiscal Year.

Our forecast for the fiscal years ending December 31B 2019 and 2020 are as we mentioned already. We havemade up a large part of this figure by selling 20 to 30 real estateB basically.
There are only 20 to 30B and moreoverB some are with a scale of 3 billion yen and some with 0.1 billion yen.
What it means to us is that the stability in the quarter is still insufficient.
NeverthelessB we are steadily achieving results every year. We are constantly keeping in mind thatB despite
quarterly fluctuationsB there is no absolute fluctuation in the year.
Please refer to the bottom right of this page. The lighter blue indicates the expected net income at the
beginning of the fiscal year. Dark blue indicates actual net income.
Since our listing in 2014B we have far exceeded the amount of net income we announced at the beginning of
the fiscal year for the fourth consecutive year. We still have some materials for this fiscal year. We are awarethat we have not yet reached to half of the targetB but as I explainedB we have a fairly good amount of products
coming up.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
18

We are going to carefully finish each productB sell themB and also close steadily the business for the property
sold July onwards. By doing soB we would like to achieve solid business performanceB exceeding net incomeof 2.357 billion yen for this fiscal year.
I would like to ask for your continuous support and guidance.
I would like to conclude my presentation here. I would be happy to take any questions. Thank you very much.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
19