may 13, 2019 hoosiers holdings (3284) fiscal year …fy3/17 fy3/18 fy3/19 results composition ratio...

Fiscal Year March 2019

Explanatory Materials on

Financial Results

May 13, 2019

Hoosiers Holdings (3284)

Agenda

Company overview

Group structure

History

Medium-Term Management Plan

Condominium Apartments for

Families and Singles/CCRC

Growth strategy

Real Estate Investment

(Healthcare/Energy)

Property Management and

Related Services/Other

ESG

Summary of results

Income statement (consolidated)

Net sales by segment

Balance sheet (consolidated)

Profit return

Policies on dividends and profit return

Area expansion

Condominium Apartments for Families and Singles

CCRC

Houses and Flats


Property Management and Related Services (Hotel Management)

International businesses

4. From FY3/20 onwards

5. Dividends plan

P3

P4

P5

P7

P9

P10

P11

P13

P16

P17

P18

P24

P25

P27

P26

P29

P30

3. FY3/19 topics

P22

P23

P19

P20

P14

1. Company information

2. FY3/19 highlights

2

1. Company information

Name Hoosiers Holdings

Representative Tetsuya Hirooka, CEO and President

Address Marunouchi-Nakadori Building, 2-2-3 Marunouchi, Chiyoda-ku, Tokyo, Japan

Employees 724 (group total) (approx. 41% of employees are women)

Established April 2013

Branches Hokkaido, Tohoku, Nagoya, Kyoto, Osaka,

Chugoku/Shikoku, Kyushu, Singapore, Portland

Listed on First Section, Tokyo Stock Exchange (securities code: 3284)

Main

businesses

Real estate development, continuing care retirement communities

(CCRCs), houses and flats, real estate investment, asset

management, condominium management, sports club operations,

hotel management, international businesses, energy businesses,

private finance initiative (PFI) businesses 3

Hoosiers founded December 1994

Company overview

(As of March 31, 2019)

Condominium Apartments

for Families and Singles Hoosiers Corporation

Houses and Flats Hoosiers Avenue

Real Estate Investment Hoosiers Asset Management

CCRC Hoosiers Care Design

H

old

ing

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Ho

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rs H

old

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s

Other businesses ■ Private finance initiative (PFI) business

Ideal Environment Advisers Co., Ltd.

Property Management and

Related Services

■ Condominium management

Hoosiers Living Service

■ Operation of sports clubs

Hoosiers Wellness & Sports

■ Hotel business

Hoosiers Accommodation Service

International businesses Hoosiers Asia Pacific Pte. Ltd.

Hoosiers, Inc.

Group structure

Asset Management Vermilion Capital Management

4

History 1994

Dec. Hoosiers Y.K. established

1995

Jan.Began real estate sales contracting business (planning/solutions

sales agent)

June Reorganized from limited liability company to joint-stock company

Renamed Hoosiers Corporation

2000 Number of condominium units surpassed 1,000 units2002

Oct.Shares listed on JASDAQ market (seven years, 10 months after

establishment)

Hoosiers Living Service established

2003

Oct.Shares listed on Second Section of Tokyo Stock Exchange (eight

years, 10 months after establishment)

2004Secured top position in number of condominium units supplied in

Saitama Prefecture

Sept.Shares listed on First Section of Tokyo Stock Exchange (nine years,

nine months after establishment)

2005 Number of condominium units surpassed 5,000 unitsSecured top position in number of condominium units supplied in

Chiba Prefecture

2007 Number of units managed surpassed 5,000 units2008 Number of condominium units surpassed 10,000 units

Secured top position in number of condominium units supplied in

Chiba Prefecture

2012

April Tohoku Branch opened

Oct. Kyoto Branch opened

2013

April Hoosiers Holdings established

Hoosiers Avenue established

2014 Number of units managed surpassed 10,000 unitsSecured top position in number of condominium units supplied in the

Tohoku/Sendai area

Jan. AM31 added to Group

(Now Hoosiers Asset Management)

Began real estate investment business

April Hokkaido Branch opened

2015

April Osaka Branch opened; Nagoya Branch opened

Ideal Environment Advisers Co., Ltd. established

July Hoosiers Care Design established

2016Secured top position in number of condominium units supplied in the

north Kanto area

April SPORTS ACADEMY Co., Ltd. added to Group

May Kyushu Branch opened

Aug. Miyanomori Sports Co., Ltd. added to Group

Dec. Crystal Sports Club added to Group

2017 Number of condominium units surpassed 20,000 unitsMay Hoosiers Asia Pacific Pte. Ltd. established in Singapore

Began overseas business

Sept. Vermilion Capital Management added to Group.

Oct. Hoosiers, Inc. established in Oregon, US.

2018

MarchIntegrated sports club operation companies and changed the name

to Hoosiers Wellness & Sports.

Executed Japan's first partial-commitment-type rights offering to

increase capital to \15.8 billion

Nov. Chugoku/Shikoku Branch opened

2019

Feb. Hoosiers Accommodation Service established 5

6

2. FY3/19 highlights

FY3/20

full-year

performance

forecasts

Net sales: ¥92,000 million YoY: 102.4%

Operating income: ¥8,500 million YoY: 91.5%

Ordinary income: ¥7,500 million YoY: 88.5%

Topics

✓ Record-high net sales

✓ Record-high ordinary income

✓Extraordinary loss (Impairment losses on goodwill and non-current assets of a subsidiary)

Consolidated

business

performance

Net sales: ¥89,882 million YoY: 141.8%

Operating income: ¥9,287 million YoY: 127.4%

Ordinary income: ¥8,478 million YoY: 122.2%

Income before income taxes:

Net income: ¥3,195 million YoY: 70.0 %

vs. Medium-Term Management Plan

Net sales: 102.1% Ordinary income: 106.0%

7

Summary of results

¥6,249 million YoY: 89.7%

Recognized extraordinary loss on the sports club operation business

8

Positive operating cash flow

Results fell below the plan at the acquisition

Partly due to natural disasters including

2018 Hokkaido Eastern Iburi earthquake

Reviewed the growth scenario

Recorded impairment losses on goodwill and non-current assets

Indispensable as operational assets

Promote scrap and build for future growth

FY3/17 FY3/18 FY3/19 YoY change

Results % Results % Results % Change %

Net sales 52,726 100.0% 63,364 100.0% 89,882 100.0% 26,518 41.8%

Gross profit 13,022 24.7% 16,041 25.3% 21,720 24.2% 5,678 35.4%

Selling, general

and administrative

expenses

7,432 14.1% 8,752 13.8% 12,432 13.8% 3,679 42.0%

Operating income 5,590 10.6% 7,289 11.5% 9,287 10.3% 1,998 27.4%

Ordinary income 5,325 10.1% 6,936 10.9% 8,478 9.4% 1,542 22.2%

Income before

income taxes 4,923 9.3% 6,963 11.0% 6,249 7.0% (714) -10.3%

Profit attributable

to owners of

parent

3,357 6.4% 4,564 7.2% 3,195 3.6% (1,368) -30.0%

Million yen

9

Income statement (consolidated)

Income before income taxes decreased ¥714 million YoY due to extraordinary losses consisting of impairment loss of ¥825

million on goodwill arising from the acquisition of shares of Hoosiers Wellness & Sports, a consolidated subsidiary, and

¥1,383 million on non-current asset (including impairment loss on goodwill of ¥393 million) owned by the company.

Net sales by segment

10

Million yen

FY3/17 FY3/18 FY3/19

Results Composition

ratio Results

Composition

ratio Results

Composition

ratio

Total 52,726 100％ 63,364 100％ 89,882 100.0%

Condominium

Apartments for

Families and

Singles

30,911 58.6％ 21,861 34.5% 53,107 59.1%

CCRC 4,285 8.1％ 14,639 23.1% 5,823 6.5%

Houses and Flats 8,975 17.0％ 9,188 14.5% 10,623 11.8%

Real Estate

Investment 4,484 8.5％ 11,074 17.5% 11,990 13.3%

Property

Management and

Related Services 4,029 7.6％ 6,555 10.3% 8,278 9.2%

Other 38 0.1％ 45 0.1％ 59 0.1%

Balance sheet (consolidated)

FY3/17 FY3/18 FY3/19 Change

Current assets 88,329 107,282 125,701 18,418

Cash and deposits 21,383 30,493 26,112 (4,380)

Real estate for sale 12,718 16,471 33,785 17,313

Real estate for sale in process 47,922 53,680 59,093 5,412

Non-current assets 16,331 27,985 29,030 1,045

Land 6,686 8,640 7,507 (1,132)

Buildings 5,310 9,629 7,608 (2,020)

Total assets 104,660 135,359 154,792 19,432

Liabilities 80,129 92,767 110,814 18,047

Total interest-bearing debt 63,625 79,237 93,466 14,228

(Short-term) interest-bearing debt 14,888 24,537 28,027 3,490

(Long-term) interest-bearing debt 48,736 54,700 65,438 10,737

Net assets 24,530 42,592 43,977 1,385

Total liabilities and net assets 104,660 135,359 154,792 19,432

Million yen

Equity ratio 23.4％ 31.4％ 28.2％

Net equity ratio 29.4％ 40.5％ 33.9％

* Net equity ratio= Shareholders’ equity / (total assets ‐cash and deposits, etc.) 11

12

3. FY3/19 topics

Suburbs of Tokyo metropolitan area

Other regions

Tokyometropolitanarea

Family-friendly condominiums by region:

Tokyo metropolitan area and other regions

(based on completed projects)

82％

18％

71％

29％

73％

27％

*Tokyo, Kanagawa,

Chiba, Saitama

Areas along the

Tsukuba Express line

13

Growing to cover all cities in Japan

(As of March 31, 2019)

Target 131 cities

70 cities Now

* 61 cities as of March 31, 2018

●

Area expansion - Review of FY3/19 -

FY3/14 FY3/19 FY3/20

Regional city centers

Expanding condominium business to reginal cities

Exceeded the plan significantly

Strong sales in regional cities

1,315 units

1,389 units

Number of units to be

delivered

Number of units

delivered

Duo Hills Hineno The Premium

(Izumisano City, Osaka, 88 units)

(To be delivered in June 2020)

Progress of contracts: 83%

From FY3/21: Secured 3,000 units in the pipeline 14


- Review of FY3/19 -

CLARS KURE HONDORI (Kure City, Hiroshima Prefecture, 70 units)

CLARS TOWER MATSUYAMA EKIMAE (Matsuyama City, Ehime Prefecture, 92 units)

Okayama Omote-cho Redevelopment Project

(Okayama City, Okayama Prefecture, TBD)

Duo Hills WAKAYAMAJO (Wakayama City, Wakayama Prefecture, 38 units) 15



Established Chugoku/Shikoku Branch (November 2018) /

Nishinippon Redevelopment Project Office (April 2019)

Hokkaido Branch

Tohoku Branch

Nagoya Branch

Osaka Branch

Kyoto Branch

Chugoku/Shikoku Branch

Kyushu Branch

Head office

Enhanced expansion into West Japan

Enhanced expansion into

West Japan area

0

400

800

1200

1600

2000

0

200

400

600

As a Leading Company

CCRC


FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22

Number of units delivered and managed * Number of units managed: cumulative (Units) (Units)

Delivered units (left axis)

Number of units managed (right axis)

FY3/20: 346 units in two buildings to be completed and put into operation

From FY3/21: Secured 1,000 units in the pipeline

16

Secured

1,000

units Completed

346 units

17

Net sales (Million)

FY3/18 FY3/19

Houses and Flats


FY3/17

Increased YoY but fell below the plan

Achieved constant growth due to the

target/area changes

As the results fell below the plan, review future sales strategy and growth plan

Need to improve the pace of sales

We have pipeline in good location

8,975 9,188

10,623

6,000

8,000

10,000

12,000

18



Started replacement of holding assets

Increase stock assets unique to Hoosiers

Replacement of holding assets progressed

Sales of properties with high unrealized capital gains progressed with

the benefit of favorable market condition

Accelerate acquisition of

“well located and high yield” property in regions

The Tourist Hotel Kasai

(Number of rooms: 41, To be opened in May 2019)

19

Operational assets

■ Future lineups

- Sendai Business Hotel Ekimae (To be opened in June 2019)

- Akihabara Hotel (tentative name) (To be opened in June 2020)

Property Management and Related Services (Hotel Management)


Sendai Business Hotel

(Number of rooms: 142)

Established a hotel management company

February 2019: Established Hoosiers Accommodation Service

Increase added value of developed properties

Secure stable earnings

■ Vietnam

■ Cambodia

Skyline

AnGia Skyline

(Condominium, 471 units)

AnGia Riverside


Arata Garden Residences

(Town house, 773 units)

Vietnam: 8 projects

Indonesia: 2 projects

Thailand: 2 projects

Cambodia: 1 project

North America: 3 projects

International businesses development

International businesses


■ Indonesia

■ Thailand ■ Number of projects in progress

Kawana Golf Residence


Serpong Garden

(Condominium, 5,293 units)

20

Full-scale contribution to earnings from FY3/22

IMPRESSION EKKAMAI


21

4. From FY3/20 Onwards

Aim at steady growth to prepare for change in the market

Changed profit plan for FY3/20

Medium-Term Management Plan

22

Before revision After revision

Net sales 110,000 92,000

Ordinary income 11,500 7,500

Profit attributable to

owners of parent 7,800 4,900

Million yen

-Condominium Apartments for Families and Singles: Partial reschedule of cooperative-type

redevelopment project

-CCRC: Change in a construction schedule due to a plan to lease some units in one property,

eying healthcare REIT -Houses and Flats: Reviewed the plan conservatively in light of market conditions

[Reasons for revision]

No change in policy and strategy in the Medium-Term Management Plan and shareholder return policy

23

CCRC

Condominium

Apartments for

Families and Singles

FY3/20

Delivery plan of condominiums

Contract progress ratio at

beginning of year (As of March 31, 2019)

38％

40％ 1,047 units

292 units

Steady progress in contracts

Condominium Apartments for Families and Singles/CCRC

Continue to maintain stable supply

Monetization of CCRC business

Monetization of large redevelopment

projects in regions New contribution to earnings by international businesses

Current Medium-Term Management Plan

Next Medium-Term Management Plan

Contribution to earnings by biomass/healthcare REIT

Secure ¥100 billion in sales and shift to a new earnings structure

Growth strategy ―from securing ¥100 billion in sales to new earnings structure―

Growth strategy

24

3/20 3/19 3/18 3/21 3/22 3/23 3/24 3/25

Existing businesses

Stage to secure ¥100 billion in sales Stable growth

Launch peripheral businesses Growth stage of peripheral businesses

Stock business

Biomass/REIT/International/Hotels

Multipurpose

CCRC facility

Healthcare REIT

25

Sports clubs

(34 existing facilities)

Hospitals/Clinics

Lease-type CCRC

condominiums

Renewable energy

Biomass power generation

Solar power generation

Wind power generation

Real Estate Investment (Healthcare/Energy)

Optimization of balance sheets

Synergy of stock business contents with management

business unique to Hoosiers

Secure earnings from AM fees and dividends

Contribute to increase added value of main development projects

26

■ Condominium management ■ Operation of sports clubs ■ Service for seniors (Nursing care)

Property Management and Related Services/Other

【34 facilities】【15,800 units】【620 units】 (Number of units managed)

■ Hotel management ■ PFI

【183 rooms】【5 projects】 * Inside【】: As of March 31, 2019

Enhance operation business

Secure stable earnings

ESG initiatives

ESG

Response to revision of the work-style reform bills

Initiatives for employees’ health and safety

Response to diversity

Respect for human rights

Environment

Enhancement of corporate governance

Internal control

Corporate governance

Reduction in electricity

usage by all Group

companies

Promotion of

renewable energy

Social Governance

27

28

5. Dividends plan

Profit return

29

From FY3/20 onwards

Total return ratio

of

over 40%

Proactive profit return

Toward total return ratio of 40%

FY3/17 FY3/18 FY3/19 FY3/20

Net income (Million yen)

3,357 4,564 3,195 4,900 (planned)

Dividends per share ¥24 ¥24 ¥25 ¥35 (planned)

Total dividends (Million yen)

669 971 1,444 2,007 (planned)

Payout ratio 19.7% 20.2% 44.9% 40.7%

Purchase of treasury

shares (Million yen)

285 237 753 ―

Total return ratio 29.0% 26.5% 68.5% 40.7%

Interim: ¥17; year-end: ¥18

Policies on dividends and profit return

30

Opinions, forecasts, statements regarding future outlook, and other forward-looking statements in

this document are estimates based on the information available at the time this document was

prepared. They are subject to significant change due to uncertainties in future economic conditions, the competitive climate, and extent of the success of new services.

Please note that actual business performance, strategies, and other results and aspects may differ substantially from that described in this document.

No reproduction, duplication, or reuse of this document is permitted without prior consent.

■ IR inquiries ■

Hoosiers Holdings

Business Planning Office; tel. +81-3-3287-0704

E-mail [email protected]

URL https://www.hoosiers.co.jp

31

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may 13, 2019 hoosiers holdings (3284) fiscal year …fy3/17 fy3/18 fy3/19 results composition ratio...

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