Feb. 2013 Fiscal Year Q1 (March – May 2012) Corporate ... · Feb. 2013 Fiscal Year Q1 (March –...

Feb. 2013 Fiscal Year Q1 (March – May 2012) Corporate Presentation

July 19, 2012

p

Ichigo Group Holdings Co., Ltd. (2337)g p g ( )

© 2012 Ichigo Group Holdings Co., Ltd. All rights reserved. www.ichigo-holdings.co.jp/english

Creating peace of mind through honest and committed managementand committed management.


Accelerating Significant Growth- Ichigo Growth Strategy- Feb. 2013 Q1 Consolidated Financial Results- Feb. 2013 Q1 Assets Under Management (AUM)

O i St t l P fit bilit- Ongoing Structural Profitability- Sound Financial Base- New Business DevelopmentsNew Business Developments- New Group Structure- Ichigo’s Hiromi Miyake Selected for 2012 London Olympics

© 2012 Ichigo Group Holdings Co., Ltd. All rights reserved. 4

Accelerating Significant Growth


Ichigo Growth Strategy

Having Achieved Structural Profitability, Entering Accelerated Growth Stage

Target: Tokyo Stock Exchange

First Section

Building Structural Profitability Accelerated Growth Stage

Stable Financial Base・Optimizing balance sheet

Compressing and strengthening・Optimizing interest-bearing debt

Significant Expansion of Structural Profitability・Growth in private equity RE fund AUM

- Launch new private equity RE funds- Expand investor base

Rescue AM

Growth InvestmentsReduction and term extension

Increase Structural Profitability・Increase real estate fee income・M&A of J-REIT AM companies・Value enhancement of assets

- Rescue AM・Organic growth of J-REIT・Acquisition and warehousing for J-REIT・Small-sized asset and ground lease products・Value enhancement of retail assets・Strengthening of BM business

Investments +

Increased Shareholder

100% Coverage

Ratio

・M&A of stable/profitable companies・SG&A cost-cutting

ShareholderDistributions

Structural Profitability


Feb 11 Feb 12 Feb 13* Beginning of each fiscal year.

Feb. 2013 Q1 Consolidated Financial Results

Driven by Stable Profitability

(Million yen)

Feb 13 Q1 Actual vs Feb 13 Full-Year ForecastRevenues 13.9%, Net Profit 26.4%

Feb. 2013 Q1 Financial Results(Million yen)

Feb 13Q1

FY 13Forecast

vs.Forecast

Revenues 2,362 17,000 13.9%

Revenues17,000

Operating Profit 335 1,500 22.3%

Recurring Profit 307 1,200 25.6%

Net Profit1,000

Revenues

g 307 1,200 25.6%

Net Profit 264 1,000 26.4%

Forecast Feb 13 Full-Year

(12 mos)

Actual Feb 13 Q1

(3 mos)

Net Profit264

2,362

Dividend per Share (Yen) - 200 -


( )( )

Feb. 2013 Q1 Assets Under Management (AUM)

Slight Decrease in Total AUM, but Higher Profitability- AUM decreased due to asset dispositions - However, AM fees from private equity RE funds increased by ¥14MM p.a. , p q y y p

[¥6MM decrease and ¥20MM increase]

(Billion yen)(Billion yen)PE RE FundAsset Sales

15.2

REIT A t S l 1 3

New PE RE Mandates

11.1

Others 0.3

379.6

REIT Asset Sales 1.3

374 5379.6 374.5


Feb 12 May 12

Ongoing Structural Profitability

Q1 Fixed Revenues at 122% of Fixed Costs

Fixed Revenues (“locked-in” revenues, excludes transaction fees, capital gains, etc.)

Coverage： 121.5%

Fixed Revenues ( locked in revenues, excludes transaction fees, capital gains, etc.)

Fixed Costs (SG&A + Interest Expense)

(Million yen)

Dividends259

BM Fees 109

Interest 71

Target further expansion of fixed revenues and >120%

Interest and Other 18

Rental Income2541,017

coverage ratio for this FY

AM Fees376

SG&A766

837

Feb 13 Q1（3 mos）

376


* Pro Forma base (definition on p. 15)

Sound Financial Base

Shareholder Equity Ratio 68.9%

Balance Sheet

(Billi )

Shareholder Equity Ratio 66.1%

Liabilities11.8

A t

Liabilities13.6

Assets

Assets+2.0

・ Assets & Liabilities Increased with New Warehousing Fund for Ichigo

(Billion yen)

Net Assets26.1

Assets38.0 Net Assets

26.5

Assets40.0 REIT

・ Healthy Shareholder Equity Ratio

68 9% 66 1%Feb 12

Total Borrowings 11.1+1 8

May 1268.9% → 66.1%

Interest-Bearing Debt

Short-Term Debt1.9

Total Borrowings 9.3 Short-Term Debt2.2

+1.8

+0.3・ Debt Increased with New

Borrowings for Warehousing Fund

(Billion yen)

Long-Term Debt7.4

+1.5 Long-Term Debt8.9

・ Healthy Long/Short-Term Debt Ratio

79.3% → 79.8%


* Pro Forma base (definition on p. 15)Feb 12 May 12

New Business Developments

P t B t U C lti d Ad i (I hi E t t C Ltd )• Property Best-Use Consulting and Advisory (Ichigo Estate Co., Ltd.)- Brought in a Major Supermarket on Behalf of a Tokyo Property Owner

- Generating long-term stable rental income for owner- Ichigo Estate works for owner via a long-term service agreement

- Diversifying Revenue Stream via Consulting and Advisory Business in Addition to Existing Small-Sized Real Estate and Ground Lease Businessesg

• Standardize and Improve Quality of Service to Increase Tenant Satisfaction- Hands-On Approach to Deepen Understanding of Tenant needs

- Building direct relationships with tenants to improve satisfaction - Establish Ichigo Quality Standard to improve quality of service

- New Partnerships with Property Managers Who Meet Ichigo Quality Standard- Detailed evaluations and selection process of partner PMs- New PM partnerships start from September 2012- Ichigo PM Strategy Group set up last year to drive this processg gy p p y p- Will also reduce PM costs


New Group Structure

• On July 1, 2012, Reorganization Completed to Strengthen Ichigo’s Capabilities as a Full-Service Real Estate Asset Manager- Formed New Asset Management Company to Manage J-REIT and Private Equity RE Funds

C t t A t M t R t A l t G th- Concentrate Asset Management Resources to Accelerate Growth

Assets Under Management : c. 380 billion yen

Holding Company

Full-Service Real Estate Asset Manager

Ichigo Group Holdings Co., Ltd.Holding Company (Group Strategy, M&A)

AM for J-REIT and private equity RE funds

A i i S ll Si d A

Ichigo Real Estate Investment Advisors Co., Ltd.Formed via merger of Ichigo REIT (8975) and private equity RE fund asset managers

Formed ia merger of old Ichigo Estate andActive in Small-Sized Assets & Ground Leases

Property Management

100%subsidiaries

Ichigo Estate Co., Ltd.

Ichigo Marché Co., Ltd.

Formed via merger of old Ichigo Estate and Ichigo Solutions, a financial services subsidiary

Operates Matsudo Nanbu Wholesale Market in Chiba

Property Management

Building Maintenance

Miyako City Co., Ltd.

Takara Building Maintenance Co., Ltd.

Operates Miyako City, large-scale shoppingmall in Miyazaki Prefecture, Kyushu

• On July 2, 2012, Established Ichigo Global Capital Co., Ltd.

Building Maintenance and Security Services

Nichibei Building Services Co., Ltd.Nichibei Security Services Co., Ltd.


- Launch Venture Capital Fund for Asian Investors - Support Cross-Border M&A

12

Ichigo’s Hiromi Miyake Selected for 2012 London Olympics

We are committed to fulfilling our Corporate Social Responsibilities with respect to all stakeholders, society, and the earth that we share. As part of our support for excellence in all social activities, including athletics, Ichigo sponsors a weightlifting g g p g gteam.

Ichigo employee Hiromi Miyake will represent Japan at the London Olympics

Profile of Hiromi Miyake

represent Japan at the London Olympics.

London Olympics Press ConferenceProfile of Hiromi MiyakeJoined Ichigo in April 2008Results of Major Tournaments- 2004 Athens Olympics, 48kg-Class 9th Place- 2008 Beijing Olympics, 48kg-Class 6th Place- 2010 Japan Weightlifting Championships,

53kg-Class 1st Place- 2011 Japan Weightlifting Championships,

53kg-Class 1st Place- 2011 World Weightlifting Championships, g g p p ,

53kg-Class 6th Place

Hiromi MiyakePlease visit Facebook & Twitter

[Facebook] www.facebook.com/#!/ichigo.weightlifting


Hiromi Miyake

13

[Twitter] https://twitter.com/#!/Ichigo_Group

Appendix: Pro Forma Financial Data


Pro Forma Disclosure to Improve Transparency

• Under Japanese accounting rules, SPCs in which Ichigo Group HoldingsUnder Japanese accounting rules, SPCs in which Ichigo Group Holdings (“IGH”) is a greater than 50% investor or SPCs for which IGH is the asset manager and no single equity investor holds more than 50% of the total investment must be consolidated onto IGH’s balance sheet.

• Our statutory consolidated and parent financial statements thus include client-related assets and liabilities and P&L which do not belong to IGH. In order to more accurately reflect the true economic exposures borne by our shareholders, we disclose Pro Forma financials which are intended to better reflect IGH’s actual corporate financial position.


Balance Sheet (Pro Forma)

(Million yen)

F b 12 Ch (Q Q)F b 13 Q1Feb 12 Change (QoQ)

Total Assets 37,980 40,038 2,058Cash and Cash Equivalents 5,713 5,730 17

Feb 13 Q1

Investment (Real Estate) 8,151 8,447 296Investment (Domestic companies) 600 551 -49Investment (Overseas companies) 4,598 4,573 -25Real Estate Held for Sale 3,785 5,890 2,105Fixed Assets 10,109 10,073 -36Intangible Assets 2,105 2,075 -30Other 2 919 2 699 220Other 2,919 2,699 -220

Liabilities 11,831 13,557 1,726Interest-Bearing Debt 9,351 11,189 1,838Other 2 480 2 368 112Other 2,480 2,368 -112

Net Assets 26,149 26,481 332


P&L (Pro Forma)

(Million yen)Breakdown

Feb 13 Q1

Revenues 1,736Real Estate Management Fees 467

Feb 12 Feb 13 Q1

Revenues 7,927 1,736

Cost of Revenues 4 101 663 g 467Advisory Fees 6Rental Income 468Real Estate Sales / Dividends 259Securities Sales / Dividends 15

Cost of Revenues 4,101 663

Gross Profit 3,826 1,073

SG&A 2,871 766Securities Sales / Dividends 15Building Maintenance Fees 517Other 4

Gross Profit 1,073

Operating Profit 954 306

　 Non-Operating Gain (Loss), net -70 -28

Recurring Profit 884 278Real Estate Management Fees 430Advisory Fees 6Rental Income 254Real Estate Sales / Dividends 259

Extraordinary Gain (Loss), net 997 0

Pre-tax Profit 1,881 279

Tax 159 16Securities Sales / Dividends 15Building Maintenance Fees 109Other 0

159 16

Minority Interests -48 -2

Net Profit 1,770 264


Balance Sheet NAV

Significant Unrealized Gains on Balance Sheet Assets

- Real Estate (Million yen)

Acquisition Value Book Value(As of May 12)

Appraisal Value(As of Feb 12) Unrealized Gain

Directly Owned on B/S 17,392 12,889 15,275 +2,384

Investment in IGH Funds 16,406 8,448 14,121 +5,674

Total 33,798 21,337 29,396 +8,058

- Private Equity(Million yen)

33,798 21,337 29,396 8,058

(Million yen)Book Value

(As of May 12)Market Value(As of Jun 12) Unrealized Gain

Domestic Securities 323 483 +160

Overseas Securities 960 982 +21

IPO (Overseas) Jun 13 49 368 +61

Total 1,332 1,833 +242


Appendix： Consolidated Financial Data


Balance Sheet (Consolidated)

(Million yen)

Feb 12 Feb 13 Q1 QoQ change

Total Assets 82,170 84,010 1,840Cash and Cash Equivalents 9,791 9,944 153Operating Investments in Securities 4,226 4,281 55Real Estate Held for Sale 49,674 51,838 2,164Fixed Assets 10,109 10,073 -36Intangible Assets 2,105 2,075 -30I t t i S iti 3 589 3 478 111Investments in Securities 3,589 3,478 -111Other 2,676 2,321 -355

Liabilities 53,982 55,462 1,480Interest-Bearing Debts (excl Non-Recourse Loans) 9 351 11 189 1 838Interest Bearing Debts (excl. Non Recourse Loans) 9,351 11,189 1,838Non-Recourse Loans 37,694 37,392 -302Other 6,937 6,881 -56

Net Assets 28,187 28,548 361, ,Shareholders Equity 25,972 26,202 230Minority Interests and Other 2,215 2,346 131


Breakdown of Assets (Consolidated)(Milli )(Million yen)

AmountOutside

Investors'Interests

TheCompany's

InterestsAmount

OutsideInvestors'Interests

TheCompany's

Interests

QoQ Changein the

Company'sInterests

Feb 13 Q1Feb 12

Cash and Cash Equivalents 9,791 - - 9,944 - - -

Operating Investments in Securities 4,226 0 4,226 4,281 0 4,281 55

Domestic Real Estate 2,254 0 2,254 2,273 0 2,273 19

Listed Domestic Companies 0 0 0 0 0 0 0

Unlisted Domestic Companies 42 0 42 37 0 37 -5Unlisted Domestic Companies 42 0 42 37 0 37 5

Listed Overseas Companies 1,019 0 1,019 1,061 0 1,061 42

Unlisted Overseas Companies 911 0 911 910 0 910 -1

-288 - -288 -286 - -286 2Reference: Allow ance for Bad Debts forOperating Investments in Securities

3,938 - 3,938 3,995 - 3,995 57

Real Estate Held for Sale 49,674 40,066 9,608 51,838 40,058 11,780 2,172

Investments in Securities 3,589 0 3,589 3,478 0 3,478 -111

Operating Investments in Securitiesless Allowance for Bad Debts forOperating Investments in Securities

Domestic Companies 529 0 529 514 0 514 -15

Overseas Companies 2,955 0 2,955 2,889 0 2,889 -66

Others 105 0 105 75 0 75 -30

-75 - -75 -75 - -75 0Reference: Allow ance for Bad Debts forInvestments in Securities

3,515 - 3,515 3,404 - 3,404 -111

10,109 - - 10,073 - - -

Intangible Assets 2,105 - - 2,075 - - -

Fixed Assets

Investments in Securities lessAllowance for Bad Debts forInvestments in Securities


Other Assets 3,038 - - 2,681 - - -

Total Assets 82,170 - 17,061 84,010 - 19,179 2,118

P&L (Consolidated)

Breakdown (Million yen)

Feb 12 Feb 13 Q1 Full-YearForecast

vs.Forecast F b 13 Q1Forecast Forecast

Revenues 18,952 2,362 17,000 13.9%

Cost of Revenues 15,030 1,260 －－

Feb 13 Q1

Revenues 2,362Real Estate Management Fees 394Advisory Fees 6Gross Profit 3,921 1,102 －－

SG&A 2,871 766 －－

Operating Profit 1,050 335 1,500 22.3%

Advisory Fees 6Rental Income 1,421Real Estate Sales / Dividends 18Securities Sales / Dividends 15

　 Non-Operating Gain (Loss), net -70 -28 －－

Recurring Profit 979 307 1,200 25.6%

Extraordinary Gain (Loss), net 997 0 －－

Building Maintenance Fees 506Other 2

Gross Profit 1,102Real Estate Management Fees 356y ( ) 997 0

Pre-tax Profit 1,976 308 －－

Tax 159 16 －－

Mi it I t t 47 26

Advisory Fees 6Rental Income 628Real Estate Sales / Dividends 18Securities Sales / Dividends 15

Minority Interests 47 26 －－

Net Profit 1,770 264 1,000 26.4%Building Maintenance Fees 98Other -19


Appendix： Real Estate Data


Assets Under Management (AUM)

Net AUM Decreased by ¥ 5 Billion – Decrease of ¥16.4 Billion from Disposition of Assets and Increase of ¥11.4 Billion from Launching New Funds and New Rescue AM Mandate

(As of May 2012)

600

Development530.1

496 0

REIT28%

(Billion yen)

62.0

400

500 OperatingREIT

379.6 374.5

330 6

496.0

426.5

335 9

385.3

Operating72%

123.4

257.0 335.0

320.7

56.0113.8 106.1 104.8

200

300

330.6 335.9

Breakdown of Equity Investors

Domestic FinancialInstitution

4% Domestic Operating Company

12%Domestic Insurance

Company1%

IGH30%

100.0151.2

211.1161.0

105.932.7

66.4

312.1

263.2 265.2 269.6

100

200

78.8

166.4

Overseas Pension Fund

30%

Overseas Financial

Overseas Fund17%

46.1100.0

23.8 8.3 8.30


Overseas Financial Institution

7%

24

Real Estate Portfolio

• Track Record Mainly in Office and Also Across a Wide Variety of Other Asset Types• Strong in Mid-Sized Assets in Tokyo, Which are Highly Liquid and Have Stable Cashflows

(As of May 2012)AUM by Type # of Properties by Type

Other10

Residential16%

Other 2%

Land with GroundLease

1%

(As of May 2012)

(Unit: # of buildings)(Unit: # of buildings)

AUM by Type # of Properties by Type

AUM by Location

Fukuoka5% Sendai

Other5%

Office77

RetailResidential

Land with Ground Lease

56Off ice59%

Mixed13%

16%

Retail Tokyo

Tokyo62%

Osaka

Kanto6%

Nagoya5%

5% Sendai2%

Retail16

Mixed17

44Retail

9%Tokyo100

Sendai 3

KantoAUM by Size # of Properties by Size

Osaka15%

0~1 bn yen10%

10 bn yen~20%

10 bn yen~11

5~10 bn yen

Osaka17

Fukuoka

Nagoya7

Land with

Ground Leases

&Others

56

15(Unit: # of buildings)

1~5 bn yen30%

5~10 bn yen40%

0～1 bn yen111

1～5 bn yen39

59 10 Others12


39

25

Real Estate Cap Rates

• Conservative assessment of cap rates, generally more conservative than market• Continually mark assets to market• Unrealized gains in both client and IGH assets

Real Estate Investments held by Funds (SPCs)(As of May 2012)

(Million yen)Book Value Cap rate (at Acquisition) Cap Rate (current) Appraisal ValueNOIBook Value Cap rate (at Acquisition) Cap Rate (current) Appraisal Value

(af ter write-down) NOI / Acquisition Value NOI / Book Value af ter write-down as of February 2012

Tokyo 150,494 134,139 6,768 5.3% 6.0% 135,396 +1,257

Outside Tokyo 83,431 64,214 4,200 5.4% 7.0% 73,459 +9,245

Total 233 925 198 353 10 968 5 3% 6 4% 208 855 +10 503

Unrealized GainLocation Acquisition Value NOI(current)

Real Estate Investments directly held by IGH

Total 233,925 198,353 10,968 5.3% 6.4% 208,855 +10,503

Book Value Cap rate (at Acquisition) Cap Rate (current) Appraisal Value(af ter write-down) NOI / Acquisition Value NOI / Book Value af ter write-down as of February 2012

Tokyo 7,647 6,754 467 6.6% 7.1% 7,961 +1,207

Unrealized GainLocation Acquisition Value NOI(current)

(Million yen)

*Excludes one development asset (c. ¥700M) which is not currently generating NOI

Outside Tokyo 7,462 5,428 587 6.2% 9.7% 6,607 +1,179

Total 15,109 12,182 1,054 6.4% 8.4% 14,568 +2,386


These materials were prepared to explain the Company’s businesses and are not for the purpose ofsoliciting investment in marketable securities issued by the Company. The Company does notguarantee the accuracy of the figures, information, estimates or other statements included herein, andg y g , , ,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 containp p , yforward-looking statements pertaining to the Company’s expectations, targets, plans and strategies.Such forward-looking statements are not facts, but are the result of management’s judgment based oninformation currently available. Actual operating results or developments concerning the Companymay differ substantially from those indicated by forward-looking statements. The information enclosedy y y gis also subject to revision without prior notice.

Contact:Ichigo Group Holdings Co., Ltd.Investor Relations

TEL: +81-3-3502-4818 FAX:+81-3-3502-4801E-mail： [email protected]/englishIchigo Group Holdings is Japan’s first zero carbon listed real estate company.


g p g p p yWe are taking responsibility for the carbon emissions we create, such as via this presentation material, by taking measures to create offsets to our carbon emissions and working with organizations to invest in low-carbon technologies.

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