Ichigo Inc. · TSE:2337
Ichigo — FY2013 Earnings Presentation
35 slides from Ichigo's earnings presentation, Apr 25, 2013
Slide 1: Corporate Presentation, February 2013 Fiscal Year
February 2013 Fiscal Year (March 2012 – February 2013) Corporate p Presentation April 25, 2013 Ichigo g Group p Holdings g Co.,, Ltd. (2337) ( ) © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. www.ichigo-holdings.co.jp/english
Slide 2: © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.
© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.
Slide 3: © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.
© 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.
Slide 4: Creating peace of mind through honest and committed management
Creating peace of mind through honest and committed management. management © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved.
Slide 5: Transformational Growth
Transformational Growth - Shift Up Strategy Shift-Up - February 2013 Full-Year Consolidated Financial Results - Structural Profitability - Strengthened Lender Base - Improved Debt Terms - Significant Capacity to Invest for Growth - Ichigo Estate Expansion - Ichigo REIT (8975) Growth - p Roll Out of
Slide 6: Transformational Growth
Transformational Growth © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 6
Slide 7: Shift-Up Strategy
Shift-Up Strategy Capitalizing on Changes in Market Environment to Radically Accelerate Growth Accellerated Growth Build Profitabiility P ding Strructural Stage Shift-Up p e Investing for Growth x Speed x Market Environment h 100% Expense Coverage Ratio Structural Profitability Feb 2012 Feb 2013 Feb
Slide 8: February 2013 Full-Year Consolidated Financial Results
February 2013 Full-Year Consolidated Financial Results Outperformed Net Profit Forecast by 64% & Resumed Dividend (Million yen) Feb 2013 Full-Year Financial Results F b 2013 A Feb Actual t l vs. F Feb b 2013 F Forecastt (Million yen) Revenues 96.5%, Net Profit 163.7% Feb 13 FY 13 vs. Feb 12 Actual F
Slide 9: Structural Profitability
Structural Profitability Fixed Revenues > 120% of Fixed Costs Fixed Revenues (“Locked-in” revenues; excludes one-off transactions, capital gains, etc.) Fi d C Fixed Costs t (SG&A + Interest I t t Expense) E ) Expense Coverage: 120% +22% BM Fees 469 (Million yen) Expense Coverage: 98% Dividends 1,110
Slide 10: Strengthened Lender Base
Strengthened Lender Base Increased Borrowing from Megabanks from 34% to 49% of Total +2.6 billion yen 5.8 billion yen 3.2 billion yen Feb 2012 Mar 2013 * Pro Forma (definition on p. 22) © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 10
Slide 11: Improved Debt Terms
Improved Debt Terms Extended Loan Maturities while Lowering Interest Rates Increased Loans with >5 Year Maturities from 7% to 45% Decreased average interest rate from 2.56% (Feb 2012) to 2.23% (Feb 2013) Feb 2012 Mar 2013 Over O Less Less than 3-5 5 than 1 year years years 1 year 4% 7% 8% 4% 1-3
Slide 12: Improved Debt Terms (2)
Improved Debt Terms (2) Three Large-Scale Fund Refinancings Totaling JPY 14 Billion in FY 2013 Decreased by 149bpt (Before Refinancing)) Weighted- Average Interest Rate (After Refinancing) IGH annual profit Weighted- contribution of 210 Average million yen Interest e es Rate ae © 2013 Ichigo Group H
Slide 13: Significant Capacity to Invest for Growth
Significant Capacity to Invest for Growth Shareholder Equity Ratio Continues to Increase Shareholder Equity Ratio Shareholder Equity Ratio 69% 75% Liabilities (Billion yen) Liabilities 9.7 11.8 Assets Assets 38.6 Net Assets 38 0 38.0 Nett A N Assets t 28.9 26.1 Feb 2012 Feb 2013 * Pro Forma (definit
Slide 14: Significant Capacity to Invest for Growth (2)
Significant Capacity to Invest for Growth (2) Rapidly Increasing Growth Investments (Billion yen) 11.9 Short-Term 2.3 9.3 Short Term Short-Term 1.9 6.9 Short-Term Long-Term o g e 15 1.5 Growth 9.5 Long-Term 7.4 Investments Long-Term 55 5.5 Feb 2012 Feb 2013 Mar 2013 * Pro Forma base (definition on p
Slide 15: Ichigo Estate Expansion
Ichigo Estate Expansion • Have Acquired 6 Assets (JPY10 B) Since Ichigo Estate Launch in January 2011 – Focused on Prime Location, Small/Mid-Sized Small/Mid Sized Retail Atsugi: June 2011, Retail ground lease (development project) —Completed and opened in March 2013 Hiroo: November 2011 2011, St
Slide 16: Ichigo REIT (8975) Growth
Ichigo REIT (8975) Growth • Entering Stage II: Full-Scale Growth Oct 2012 dividend of JPY1,387 yen, 16% above JPY 1,200 target Provided growth support to Ichigo REIT and funded a major refinancing — Strengthened Ichigo REIT’s lender base and reduced interest costs • Pursuing g Further Synergies
Slide 17: Rapid Roll Out of Ichigo ECO Energy Megasolar
Rapid Roll Out of Ichigo ECO Energy Megasolar • 17 Projects Underway (30 MW Output) that Qualify for 20-year Fixed Feed-in Tariff of 42 yen/kwh Highly diversified diversified, primarily1-2MW size Largest is Okinawa (8MW) Hokkaido 7 projects 8.72MW • Large Deal Pipeline 7 potential projects (46
Slide 18: Forward Growth Drivers
Forward Growth Drivers • Asset Management Business Stable and growing income from Ichigo REIT — Ichigo g Group p know-how and network facilitates asset acquisitions q and debt financing g New debt financing and equity investors to expand AUM New Real Estate Services Division increasing quality
Slide 19: February 2014 Earnings & Dividend Forecast
February 2014 Earnings & Dividend Forecast • Large Increase in Profitability & Further Strengthening of Stable Earnings Base Expense coverage ratio target: >130% (from 120%) Principal investment to take advantage of positive real estate market 10% dividend increase (Million yen) FY 14 Forecast
Slide 20: Stock Split to Promote Share Ownership & Liquidity
Stock Split to Promote Share Ownership & Liquidity 1:200 Stock Split Minimum trading g lot becomes 100 shares, so equivalent q to 1:2 split p Halves minimum investment required to become Ichigo shareholder Effective date: September 1, 2013 Before After Stock Split Stock Split 100 200 Shares 1
Slide 21: Appendix: Pro Forma Financial Data
Appendix: Pro Forma Financial Data © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 21
Slide 22: Pro Forma Disclosure to Improve Transparency
Pro Forma Disclosure to Improve Transparency • Under 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 IG
Slide 23: Balance Sheet (Pro Forma)
Balance Sheet (Pro Forma) (Million yen) Feb 12 Feb 13 Change (YoY) Total Assets 37,980 38,565 585 Cash and Cash Equivalents 5,713 5,744 31 Investment (Real Estate) 8,151 10,256 2,105 Investment (Domestic companies) 600 696 96 Investment (Overseas companies) 4,598 4,815 217 Real Estate Held for Sale
Slide 24: P&L (Pro Forma)
P&L (Pro Forma) Breakdown (Million yen) Feb 12 Feb 13 Feb 13 Revenues 7,927 13,341 Revenues 13,341 Cost of Revenues 4 101 4,101 8 486 8,486 Real Estate Management Fees 1 758 1,758 Advisory Fees 52 Gross Profit 3,826 4,855 Rental Income 1,910 SG&A 2,871 3,130 Real Estate Sales / Dividends 6,467 Secur
Slide 25: Significant Unrealized Gains on Balance Sheet
Significant Unrealized Gains on Balance Sheet - Real Estate (Million yen) Book Value Appraisal Value Acquisition Value Unrealized Gain (As of Feb 13) (As of Feb 13) Directly Owned on B/S 12 143 12,143 8 436 8,436 10 185 10,185 +1 749 +1,749 Investment in IGH Funds 16,207 8,831 14,447 +5,617 Total 28
Slide 26: Appendix: Consolidated Financial Data
Appendix: Consolidated Financial Data © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 26
Slide 27: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) (Million yen) Feb 12 Feb 13 YoY change Total Assets 82,170 80,428 -1,742 Cash and Cash Equivalents 9,791 9,713 -78 Operating Investments in Securities 4,226 4,271 45 Real Estate Held for Sale 49,674 46,176 -3,498 Fixed Assets 10,109 10,047 -62 Intangible Assets 2,105 2,2
Slide 28: Breakdown of Assets (Consolidated)
Breakdown of Assets (Consolidated) (Million yen) Feb 12 Feb 13 YoY Change Outside The Outside The in the Amount Investors' Company's Amount Investors' Company's Com pany's Interests Interests Interests Interests Interests Cash and Cash Equivalents 9,791 - - 9,713 - - - Operating Investments in Secur
Slide 29: P&L (Consolidated)
P&L (Consolidated) Breakdown (Million yen) Full Year Full-Year vs. Feb 12 Feb 13 Forecast Forecast Feb 13 Revenues 18,952 16,397 17,000 96.5% Revenues 16,397 Cost of Revenues 15,030 11,422 - - Real Estate Management Fees 1,394 Advisory Fees 52 Gross Profit 3,921 4,974 - - Rental Income 5,857 SG&A 2,
Slide 30: Appendix: Real Estate Data
Appendix: Real Estate Data © 2013 Ichigo Group Holdings Co., Ltd. All rights reserved. 30
Slide 31: Historical Assets Under Management (AUM)
Historical Assets Under Management (AUM) (As of February 2013) (Billion yen) 600 530.1 Development Operating 496.0 REIT 500 62.0 REIT 32% Operating 426 5 426.5 68% 400 385.3 379.6 330.6 257.0 335.9 327.9 335.0 113.8 106.1 300 56.0 104 3 104.3 320.7 123.4 200 166.4 312.1 Breakdown of Equity Investors
Slide 32: Feb 2013 Assets Under Management (AUM)
Feb 2013 Assets Under Management (AUM) Managing Down Unprofitable Asset Management Mandates Termination of AM (Billion yen) 37.5 New PE RE Fund PE RE Fund AM Mandate Asset Sales 20.4 32.9 New REIT AM Mandate 2.1 REIT Asset Sales 3.9 379.6 327.9 Feb 2012 Feb 2013 © 2013 Ichigo Group Holdings Co., Ltd
Slide 33: Real Estate Portfolio
Real Estate Portfolio AUM b by Type T pe # of Properties by b Type T pe (As of February 2013) (Unit: # of buildings) (Unit: # of buildings) Land with Ground Lease AUM by Location Other 1% 9 Other Sendai 2% Kanto 2% Residential 18% Other 5% Office Land with 6% 71 Ground Lease Fukuoka Mixed 55 6% 10%
Slide 34: Real Estate Cap Rates
Real Estate Cap Rates • Conservative assessment of cap rates vis-à-vis market cap rates • Continually mark assets to market • Unrealized gains in both client and IGH assets (As of February 2013) Real Estate Investments held by Ichigo Funds (SPCs) (Million yen) Book Value NOI Cap rate (at Acquisition
Slide 35: Disclaimer
These materials were prepared to explain the Company’s businesses and are not for the purpose of soliciting investment in marketable securities issued by the Company. The Company does not guarantee the accuracy g y of the figures, g , information,, estimates or other statements included herein,, and