Hi everybody. I'm Scott Callon, Chairman of Ichigo.

I am joined today, on my right, by Ted Fujita, who is our Lead Independent Director, and on my left, Dan Morisaku, who is a senior member of our finance team and head of global IR for us. We are speaking against what's right in front of you, the FY26/2, the February 2026 full-year corporate presentation.

Let's jump into it. I think there's a summary page right before that.

There you go. I say there's a summary page.

I'm going to go relatively quickly through this presentation. Maybe I'm wrong, but we try to be consistent in the way that we present things.

Maybe I'm wrong element of is I feel like I say the same things every 3 months, which is probably better than not saying the same things every 3 months in terms of what our core business activity is and providing you the KPIs and our progress against KPIs. I'll go relatively quickly through this and go through questions and and and any comments on our business.

It is a very strong operating environment, and we're doing well. We've generated record business profit, net income, cash earnings, stock earnings.

We'll go through some of the details on this later. We've done both investments for growth and significant buyback activity.

We think the the shares are at at historically low levels on this year's earnings. The the year that I'm going to describe the forecast, the FY27/2 earnings, we're at 11 times P/E and 8 times cash P/E in an environment, and I'll talk talk about this also, where inflation is a is a strong driver of positive economics for the business model, which is unlike a lot of firms in the world.

It is an extraordinary time for us to deliver positive outcomes for our shareholders. Here are some of the details.

Again, I'm not going to go into I'm going to try to choose choose which areas to focus on. One things that you should you would notice is that we we were down year on year on cash net income relative to net income.

Cash EPS was flat because we were buying back the stock. Just to explain that, on occasion, it's pretty rare, but on occasion you have a mismatch between how you account for for earnings from a tax basis, and if you account for it on a tax basis, earnings, you have to pay taxes on it.

There's a cash hit to you. The accounting can be different.

What happened is we sold a real estate subsidiary at the end of last year. It was it was accounted for on a on a tax basis, but it's being accounted for on an accounting basis in this year.

All of you are saying that cash net income, because of a one-off tax effect, is showing down, when in fact it would have been up about also 10%. Nothing odd going on there.

We are We are relentlessly focused on driving high high cash flows for our our shareholders. That's what we believe in, not accounting earnings, but actual cash earnings.

This is also the reason why the multiple to accounting earnings is only 1.1 when it would have been something more like 1.3. Anyway, a one-off artifact.

You're going to see a a a significant increase in cash earnings this year, and I will also point to that later and and say look, this is not totally real because this is the this is the offset of the underreporting of our earnings from from from last from last period. One of the most important things to know is that we have a portfolio of businesses that move with different levels of activity.

They are all all rooted in our core capability and our core activity of value-add. It does mean that within any fiscal period, any year, you're going to have stuff going up and stuff going down.

This is this is just the same as it always is. On a total basis, we're up 13% on on business profit.

We've got asset management down a little bit. We've got Sustainable Real Estate up a lot.

We've got Hotel down a bit. Ichigo Owners up a bit, and Clean Energy down a lot.

That totally generates a +13% year on year. I'm not going to go into too much detail on any of these.

Hopefully, we we designed these presentations to be relatively self-explanatory. It's probably worth pointing out that on stock earnings are up in the asset management business, flow earnings were down a little bit.

None of these are are particularly material moves. SRE, Sustainable Real Estate, continues to be the the the major driver of our earnings.

Let me just speak to the inflation element that I touched on earlier. It is not a good thing for the world for everything to become more expensive.

The impact of the Iran war is proving to be very significant. There are There there are there are there are global risks to this.

There are country risks to this. There are company-specific risks to this as investors.

Where companies are going to take significantly higher input costs, and this is a negative for the world. It is a good thing for all of us that inflation actually is very positive for Ichigo.

It shows up in two ways. It shows up in our balance sheet.

We have already built assets on our balance sheet, about $2 billion worth, ¥300 billion right now, of real estate. It becomes more expensive to build new assets.

It means that our existing assets, already having kind of steel in the ground and buildings built, means that when when when new builders come in at higher costs and they're going to be they're going up at kind of 10% per annum in in Japan in terms of construction inflation, it means that our assets are extraordinarily competitive relative to any new assets that would compete with them. It means we can raise rents because it's it is Your ability to price rents is all about replacement costs.

What is the cost to replace the building and your asset as a as a competitive building? That's one element, but it's it's less dynamic.

It's a static element. We do have a balance sheet of of assets that we have added value to.

The dynamic element is when inflation goes up, raw development, which is the classic development model in Japan where you tear something down, you build it from nothing, is incredibly expensive. In our Sustainable Real Estate business, we will not we're in the business of not tearing down assets.

We keep them. We improve them.

You're putting in several percent of CapEx relative to building costs in order to improve the asset. Then the competition is facing inflation, which is against 100%, and we're facing inflation against only a small percentage points relative to the asset value.

It's a way of saying we become extraordinarily more competitive in our core Sustainable Real Estate business when there is high inflation. This is playing out in very powerful economics, and we're forecasting for for next year a significant amount of growth, and and and that and that is durable.

Again, inflation for an Ichigo shareholder is our friend. Hotels were down.

That's primarily, as you can see, stock earnings were up year on year. It's primarily because we we we we did less asset selling during the year, it's part and parcel.

This This the upcoming year, we're forecasting down a little bit again on hotels, which is fine. There's going to be times where we we generate a huge amount of profitability off the hotel business and times when it's going to come in less.

The The point is that we manage on a portfolio basis, and we make choices around again, the core capability and the core activity, adding value between different asset classes. SRE, Sustainable Real Estate, is primarily about off- offices and and and and retail.

Hotel is broken out in in this category. Let's turn to Owners, which is primarily residential.

In Owners' case, business profit was up 13% year on year. It did, however, come in under forecast, as you can see.

That's because we pushed out some asset sales to the year that we're currently in, fiscal year 27/2, February. The earning environment remains very strong.

There has been no backing off from a desire to own Japanese real estate assets. It's linked in part because Japan is is recognized as being incredibly safe and secure in a world that feels not as safe and secure as we all want it to be.

It's because you still have the powerful economics despite Japanese interest rates have gone up, of being able to fund below your your cap rate, your NOI coming off an asset. Because inflation, as I just pointed out, is increasing replacement costs, meaning which is a fundamental driver of your ability to raise rents, because new assets have to come in at higher rents.

You now have this phenomenon where you're able to raise rents on an ongoing basis, and that makes obviously real estate more attractive. Clean Energy down just a little bit on some higher operating costs.

This is how it shapes out. As you can see, it's a relatively nice chart.

Every year, earnings going up. That is not only our goal, it's really what we need to be deliver to all of you.

Again, we're going to We see we see a lot of secure growth of going forward, and I'll touch on that later. What's most important to us is that we are structurally profitable.

That shows up in the left-side pie graph. As you can see, our stock earnings, these are contractually embedded earnings, are about twice our fixed expenses.

That means you This is a firm that almost went dead, but did survive the Global Financial Crisis. One of the things we learned is that we need to be systematically and structurally profitable, and we are.

Just going to touch on some elements of the business model. We have both stock and flow earnings.

Our cash earnings, that shows up in cash earnings. Again, we're focused on on on cash, not just accounting profit, but genuine cash in the door for all of us.

Our cash earnings hit a record a record high this year. Similarly, we have a record high in our on our stock earnings.

You can see they're diversified among among a number of categories. It it is the case, and this is not something we should run run away from and is very, very powerful.

Our Sustainable Real Estate business is it's an extraordinary, powerful growth and earnings engine. There there are elements of us diversifying around it, but certainly not away from it.

This is a very, very, very powerful engine. As I just told you, one of the things that can go horribly wrong in the world for investors and consumers is inflation.

As I just told you, this model is is is antifragile in that sense. It it gets stronger during an inflation environment.

This is a very, very powerful business model. We're selling these assets that we add value to.

We generate and monetize gains on them, and yet, year after year, we'll continue to generate to create higher unrealized gains in our business, which effectively create forward earnings. At the current point in time, third-party appraisal values put our unrealized gains at about ¥83 billion.

Our total shareholder equity is only about 100. It's The The appraisers say that there's actually another 80% of value underpinning our balance sheet in terms of shareholder equity.

If you look at the reality, you can see what the multiple looks like. It is It is manifestly clear that the third-party appraisals underestimate the amount of actual value that we we derive when we when we go ahead and monetize and sell assets.

This year was a big year. We We We generated 2.9x on actual gains on sales relative to appraisal value.

We think that number's high. However, we think consistently we've been, as you can see, we generate about two times.

I just told you the appraisers think we have 80 billion plus of of of unrealized gains on our balance sheet, meaning kind of equity, equity value. In reality, it's probably twice that.

We have stated equity of ¥100 billion. We actually probably have genuine equity of ¥260 billion.

That makes us less proud of what our ROE looks like. It goes both ways.

It tells you that there's a there's a ton of embedded forward earnings, and we're beginning monetizing for ourselves. You should know that by pushing out our sales of some of the Ichigo Owners assets into this this current year, the FY27/2, we we actually ended up with the year with a slight increase in our balance sheet because we didn't do the sales that we expected.

We are we are actually going into balance sheet shrinkage. We will have a shrinkage in our balance sheet this We would have had it last year.

We're going to have it more this year. The business is going to become more asset-light and more capital-efficient.

High economic operating cash flow. Again, we're focused on on on cash flow.

It's systematically higher than net income. Again, we're a cash-driven firm.

We have a very strong financial base, overwhelmingly long-term borrowings. As you can see, interest rates have gone up.

That is That is a reality. We're up 43 basis points relative to where we were 2 years ago.

As you can see at the bottom of the page, 61% of our borrowings are fixed. We use interest rate swaps and caps to to to to hedge interest rate exposure.

We generally borrow for about 10 years, and very specifically, we borrow 10 years plus in the in the in the SRE, Sustainable Real Estate, and Hotel businesses. We tend to borrow 15 to 20 years in our Clean Energy business.

We borrow generally about 7 years in the Owners business. We've had some coming in of of the loan terms because we're doing increasing amounts of uncollateralized borrowing with no amortization.

It's really, really nice borrowing with no covenants, and that generally is like 3 to 5 years, but it's a very, very durable capital structure for the firm, both in terms of equity and debt. We continue to to work on behalf of the world.

Global warming is real. The actions we take, the core activity of the firm is deeply sustainable.

We're not in the business of tearing down buildings and wasting assets and and and and wasting value and wasting and creating environmental effects from it. Because we are significantly sustainable in our activity and Japanese financial institutions also believe in sustainability, it enables us to borrow through ESG as a as a sustainable loan activity at very, very good terms, and we continue to expand this activity.

As you can see on the page, we had net acquisitions of about ¥6 billion. We thought we were actually going to be net sellers for the year, but because, again, we pushed out Ichigo Owners activity on some sales into to this current year that we're in right now, we ended up being relatively flat for the year.

You've got some, buying and selling in various asset classes. The The core activity of the firm is value-add.

We We add value to assets, and when when we add value to them, we we we sell them on. This breaks out the activity among the various, key key key groups.

Owners is the highest turnover model. We generally have a hold of of of of a year or so.

That's extended just a little bit to give us some some more opportunity to rents are going up, we financed really, really well to optimize kind of the the the final cap rate when we sell the asset to a brand new owner at at at the highest possible rent. It's a very high-turnover business, and so you you generally have a large offset buying, selling within within within about a year.

Hotel earnings were down year on year. That is, as I said earlier, is not because of stock earnings, which continued to grow.

As you can see, RevPAR, revenue per available year was up per available room was up 12% year on year, but because we we we didn't do a large hotel sale in the year and some some impact from hotel REIT performance fees, flow earnings were down. We have very little China inbound exposure, we're not seeing really any effect of that.

We, of course, should all be concerned about what's happening in Middle East right now, its impact on high airfares and how that affects things. On the positive, it probably makes Japan a a a a better and easier destination.

On the negative, airplane costs are going up. We we we are kind of modeling for some negative impact on our hotel businesses this year.

It's about 15% of our earnings. Something happens there.

It's just going to be fine. FYI, this is something we're, of course, focused on.

Owners continues to do do well, and it it's it's it it has diversified its sales channels in order for it to be able to sell well. I think that's on the next page.

No, on the next page was is shows shows us this business profit. We We We came in in the last 2 years, we're going to see a significant increase, really actually a a a doubling year on year in in this year.

Look, we we we have high visibility on this already, this is going to happen. This is the slide where we show the diversified sales channels.

That's that's super powerful. The the, different segments and different parts of the market will have some cyclicality to them.

We always want to sell at the highest possible price. We do.

We we work for our shareholders. Which is to say, our buyers have alternatives.

Because Ichigo is really, really good at at delivering high-quality assets, we we we we we we have an active bid from from from from buyers, and we want to have the broadest set of buyers as for what we can meet their needs and deliver the highest possible returns for our shareholders. AM growth on diverse growth drivers.

I say it's growth, but on the the truth of the matter is this year we were down a little bit. That's That's that kind of that that was a one-off.

Some of the Owners activity was expected to be security tokens, which will increase again. We we expect to have growth in our and and you'll see visible you'll see it visibly in our asset management business.

Clean Energy, we've shifted towards battery storage. It is The economics have become very, very powerful.

One of the There is a negative impact on our solar business, which is there's effectively some overproduction right now relative to the ability for the grid to accommodate the solar power production. This actually gets solved with battery storage, not not just by us, but broadly.

We think that it's getting ratified because battery storage has become incredibly compelling in its economics. Our major activity you're going to see from us in the near term is going to be around that, as opposed to kind of new new activity in in in solar.

When we could pick that up again when the battery infrastructure is in place. We we were a J.League top partner.

J.League is Japan's soccer league. As you say, I'm an American, we pronounce football soccer.

The Japanese football league, if you want to put it that way, for a number of years. We're effectively shifting our activity towards the the the the club that we bought, Tegevajaro Miyazaki.

We bought in 2023. It was in J3.

It got promoted last year. We just think that's a that's a that's a better place to build the brand and build kind of kind of our our activities in the sports area.

This is not done as as charitable enterprises. These are businesses.

We have returns along with brand value creation coming from the sports activity, and that's going to continue to be the case. On the shareholder side, we we actually announced a ¥5 billion share buyback right at the end of the previous period, which began execution in the last year.

Total of actually ¥15 billion of of buyback execution during the February 2026 period, of of which we've got about ¥10 billion done, the other ¥5 billion is is in execution right now. We bought a bunch of stock in.

We think that was a very, very good use of of of capital for our shareholders. We're going to grow EPS both both through kind of bottom-line growth and through shrinking the number of shares outstanding.

Cash generation is significant. We can afford to do it.

As I just told you, we're at 11 times earnings on an accounting basis. We're at 8 times EPS earnings on a cash EPS basis.

The shares are very, very good value. That's why we've been buying them buying them with a bucket.

We have raised our DOE target, and we might well raise it again, which is to say, if you look over the last 5 years, we've had double-digit dividend increases. We shrunk shares outstanding.

We want to continue to reward shareholders. The ability to fund growth, we're very capital-efficient and becoming more capital-efficient.

The ability to fund growth through growth investments and at a capital-efficient way, and also to increase our dividends and do buybacks is the highest it's ever been. We're affecting that in a in a in a structural, permanent dividend increase by raising our DOE target.

On based on today's today's closing price, we've got a above a 3% yield on the stock. As I said earlier, global climate change is is real, and we're focused on doing our best to assuage the effects of that.

We've gone to 100% renewable energy at this point. The next page shows how we're climate-positive.

Our our CO2 reduction activity is 9 times our CO2 emissions. To turn to the forecast, this is meant to be a summary of it.

Hopefully, it's relatively understandable. As you can see, business profit, so that's kind of the best measure of of operating income of the firm, is is forecasting up 21% year on year.

The other key metrics we're focused on, EPS, which we have up 13%, cash EPS, which will be up 35%. Again, that's in part because we underreported cash earnings because of that because of this one-off tax effect, tax and accounting mismatch during last year.

Robust growth in our business that will deliver us a 15% ROE and a cash ROE of 20%. This is how it breaks down.

I think I've already spoken to this. Let's go to the next page.

Again, we have a portfolio of businesses. One of the things you should know is that every year we announce like a terrible forecast for asset management.

It's not because we expect to have a terrible year in asset management. It's that, we just put in the stock asset management fees.

Our primary asset management business is is is the REITs. We do get performance fees on when we generate value and and gains on sales in in that business.

Of course, we do that systematically on an ongoing basis, but this is a decision that's going to be made by the by the by the REITs, not by us. It is a completely different shareholder set, or completely different boards.

It's completely separate, independent governance. If there is value-add monetization activity in the REITs, we will earn performance fees, but we're not going to forecast them as as as us as Ichigo because in a sense, it's not our right to do so and we have no visibility on it.

Anyway, the number shows down year on year. We think we'll do a lot better than that.

Sustainable Real Estate, we're forecasting up 42%. Hotel down down 29%, that's again, we had some gains on sale we're not forecasting for for this year.

Owners, we expect, as I said earlier, to be a double. Clean Energy, I I just touched a little bit, we're having more power suspensions, meaning you have to turn off your your delivery of power from solar power plants when there's too much power in the grid.

We're going to have some impact from that this year. We think that resolves itself over time.

We have some some SG&A increase also. This is how it breaks out in terms of the various segments and in business profit, again, continuing growth growth and and we think this is durable and and will be long-lasting.

Again, cash earnings, what we expect to be a record. Business profit, of course, is a record also.

I think the next slide is the last one, which shows what stock earnings looks like. A little bit some balance sheet shrinkage will push down some of the stock earnings, but but again, that's fine because that's balance sheet shrinkage and and we expect, as I say, to have very high capital-efficient earnings for you over the over the next year.

Thank you very much, everybody. It is an honor and a privilege to work for you.

We look forward to delivering the strong results that you deserve. Thank you so much.