Hoosiers : Quarterly Earnings Document

Hoosiers Holdings Co., Ltd.

Fiscal Year March 2024 Explanatory Materials on Financial Results

Stock code：3284

May 14, 2024

Table of

contents

１. FY3/24 overview of results

２. FY3/25 full-year performance forecasts

３. Summary of segment results

４. Renewal of our logo and Group message

(30th anniversary of foundation)

５. Sustainability

６. Appendix

Hoosiers Holdings Co., Ltd.

１. FY3/24 overview of results

Executive summary

4

○FY3/24 full-year financial results

・Delivered full-year results in line with the plan and achieved a record-high profit attributable to owners of parent ・Acquisition of land for future projects is progressing steadily, with approx. ¥100 billion, up ¥1.3 billion YoY, on total investment basis

・Dividend per share is ¥55, up ¥3 from FY3/23, as planned *Interim: ¥27, Year-end: ¥28

○FY3/25 full-year financial forecasts

・Plan to increase net sales and profit vs FY3/24

・While FY3/25 may be a transition period that could be most affected by the further rise in construction costs since the pandemic and Russia's invasion of Ukraine, we aim to record a record-high profit

（Secured all properties as planned for FY3/26 onward by taking into account rising construction costs at the time of procurement）

・Dividend per share is expected to be ¥58, up ¥3 from FY3/24

Consolidated income statement

5

・Both net sales and profit increased YoY. Steadily progressing in line with the Medium-Term Management Plan

・Profit attributable to owners of parent hit a record high

							FY3/22						FY3/23							FY3/24				YoY	FY3/24		Change vs.
						Results		Composition		Results		Composition			Results		Composition	change	forecasts		forecasts
(Million yen)								ratio						ratio						ratio
Net sales				79,542							79,286								86,418						7,131	90,000		(3,581)
Gross profit				16,681		21.0%		19,083		24.1%			20,437		23.6%	1,354
Selling, general and		9,986		12.6%		10,657		13.4%			11,494		13.3%	836
administrative expenses
Operating income		6,694		8.4%		8,425		10.6%			8,943		10.3%	517	8,600		343
Non-operating income		698		0.9%		669		0.8%			860		1.0%	190
Non-operating expenses	1,700		2.1%		1,815		2.3%			2,203		2.6%	388
Ordinary income		5,692		7.2%		7,280		9.2%			7,599		8.8%	319	7,500		99
Extraordinary income		11		0.0%		76		0.1%			18		0.0%	(58)
Extraordinary losses		553		0.7%		69		0.1%			105		0.1%	35
Income before income taxes	5,151		6.5%		7,286		9.2%			7,512		8.7%	225
Income taxes - current	1,238		1.6%		2,204		2.8%			2,906		3.4%	702
Income taxes	- deferred		643		0.8%		271		0.3%			(398)		(0.5)%	(670)
Profit attributable to owners of	3,068		3.9%		4,557		5.7%			4,806		5.6%	248	4,800		6
parent

Segment information

6

・Real Estate Development: Operating income decreased YoY affected by lower gross profit margin due to an absence of irregular factors recorded in FY3/23 (large-scale development projects)

・CCRC: Operating income increased YoY due to an improvement of gross profit margin despite a decrease in the number of delivered units as a result of a decrease in finished inventory at the beginning of the year

・Real Estate Investment: Operating income increased YoY due to increased number of income producing properties sold and higher gross profit margin

・Condominium Management and Related Services: Operating income decreased YoY mainly due to active investment in human resources

																				YoY
											FY3/22		FY3/23			FY3/24
						(Million yen)										change
						Real Estate Development	36,520	50,009		50,949			940
		Net sales by		CCRC				20,781	13,314		12,145			(1,168)
			Real Estate Investment		16,948	9,726		16,553			6,827
			segment
					Condominium			6,738	7,103		7,967			863
						Management and Related
						Services
						Real Estate Development	7,646	12,518		11,168			(1,349)
	Gross profit by	CCRC		5,156	3,364		3,587			223
	Real Estate Investment		2,965	1,635		4,028			2,393
			segment
					Condominium			1,621	1,902		1,901			(1)
						Management and Related
						Services
						Real Estate Development	20.9%	25.0%		21.9%				(3.1)pt
		Gross profit		CCRC		24.8%	25.3%		29.5%				4.3pt
		margin by		Real Estate Investment		17.5%	16.8%		24.3%				7.5pt
			segment
					Condominium
						Management and Related	24.1%	26.8%		23.9%			(2.9)pt
						Services

																												YoY
																				FY3/22		FY3/23			FY3/24
																								change
													(Million yen)
													Real Estate Development	2,686		6,415			4,166		(2,248)
				Operating			CCRC					2,502		1,559			2,193		633
			income by			Real Estate Investment	1,123		56			2,259		2,203
						segment
										Condominium
													Management and Related	291		406			346		(60)
													Services
													(Unit)
													Total					1,386		1,472			1,374		(98)
		No. of units		Condominiums		811		1,146			1,066		(80)
			Condominiums for
					delivered			484		287			256		(31)
													seniors
													Houses			91		39			52		13
													(Building)
	No. of buildings	Income producing		10		4			9		5
	property
							sold
												Flats						8		5			9		4

*(1) Net sales, gross profit, and operating income are before elimination of intersegment transactions. (2) Effective April 1, 2023, we changed our reportable segments from five segments of "Real Estate Development," "CCRC," "Real Estate Investment," "Condominium Management and Related Services" and "Other" to four segments of "Real Estate Development," "CCRC," "Real Estate Investment" and "Condominium Management and Related Services." Figures before FY3/23 are also restated retrospectively to present under the four segments.

Consolidated balance sheet and cashflows																	7
																				FY3/22		FY3/23			FY3/24				YoY	Major factors
																									change
	(Million yen)
		Current assets											96,672	117,527		132,643		15,115
																									Breakdown of B/S by segment
		Cash and deposits					32,035	30,640	30,709		68
							✓Finished inventory of property for sale is at the				■ Real estate for sale
		Real estate for sale				23,659	22,455		19,279		(3,176)
							lowest level (182 units)						¥8.0		¥6.0	¥5.0		Approx. ¥19.0 billion
		Real estate for																			✓Procurement of income-producing properties
																							billion	billion	billion
								33,599	55,627		75,748		20,121	and land procurement for condominium
		sale in process
																			apartments progressed					■ Real estate for sale in process
		Other											7,377	8,804	6,907		(1,897)
		Non-current assets				31,233	29,977	31,756		1,779									¥28.0 billion						¥45.0 billion	¥	2.0	Approx.
																																											billion	¥75.0
		Land										9,423	9,158		10,870		1,712																								billion
		Buildings							14,411	14,232		12,701		(1,531)
																							¥13.0										¥	2.0	Approx. ¥56.0 billion
																																									¥41.0 billion
		Other														7,397	6,586	8,184		1,598									billion					billion	(End of FY3/23)
																																						■ Property, plant and equipment (land/buildings, etc.）
	Total assets								127,905	147,504		164,399		16,895
		Liabilities								88,945	104,840		117,541		12,700									¥20.0 billion	¥	3.5		Approx. ¥23.5 billion
		Total interest		-bearing			72,656	85,785	90,664		4,878	✓While interest-bearing debt increased due to an				billion
		debt
																			increase in procurement, D/E ratio is maintained									Real Estate Investment (Income-producing
			Short-	term interest-
				23,874	19,445		25,914		6,468	at around 2.0 level, a standard level						Legend				properties / flats)
			bearing debt																			Real Estate Development/CCRC/ (Residences
			Long-	term interest-		48,782	66,340		64,750		(1,589)														for sale）
			bearing debt																					Other (overseas etc.)
		Other					16,288	19,054	26,876		7,821
																																	FY3/20					FY3/22	FY3/23		F3/24
		Net	assets				38,960	42,663	46,858		4,194		(Million yen)			FY3/21
																															Operating CF		16,110			10,722	20,259	(7,532)	186	✓Decreased due to
		Equity				31,263	34,794	38,795		4,000
																																																increased procurement
	Total liabilities and net assets	127,905	147,504		164,399		16,895
				Investing CF		(670)			(3,058)	(4,172)	(178)	(2,407)
	Equity ratio		24.4%	23.6%		23.6%
							Financing CF		(10,159)		(15,077)	(9,896)	5,932	2,413
	D/E ratio	1.9 times	2.0 times	1.9 times							✓An increase in loans payable
	ROA		4.3%	5.3%		4.9%

Procurement and Owned assets / Inventories

8

・In FY3/24, newly secured income-producing properties and land for condominiums worth approx. ¥100 billion* on a decision-making basis (up ¥13 billion YoY)

・Income-producing properties and land for condominiums to be secured at the beginning of FY3/25 will be approx. ¥330 billion* on an estimated sales basis (secure approx. 3 years' worth of consolidated net sales)

・While procurement is progressing steadily toward future topline growth, inventories/real estate for sale is decreasing, creating a virtuous cycle

Secured income-producing properties and land for				Inventories: Income-producing properties and condominiums
condominiums on estimated sales basis				recorded on B/S as real estate for sale

*Excluding property, plant and equipment

*(1) Decision-making basis: including properties for which contracts have been signed but not yet settled (2) Scope: Property in Real Estate Development, CCRC, Real Estate Investment (excluding overseas)

Business environment

9

・Pay attention to changes in environment surrounding the overall business such as a rise in construction costs and interest rate fluctuations

・Promote the company-wide and segment-specific strategies and aim at sustainable growth by accurately

understanding the external environment

Business environment

■ Rise in construction costs

(1) Properties to be completed in FY3/25

・Gross profit margin will drop to some extent as construction costs rose after land was purchased

Focus on cost management and price increase to secure profit

(2) Properties to be completed after FY3/26

・Made investment decision at the time of land procurement based on the upward trend of constrcution costs

■ Concerns over interest rate rise

1. Funding costs

・The impact of the lifting of negative interest rate policy is not yet evident, but we will closely monitor the financial institutions' lending stance (rise in funding interest rates and leveraged lending policy)

(2) Mortgage rates

・No impact at present due to limited rise in variable rates

・While the impact is limited on the business with customers with a high self-funding ratio, such as regional redevelopment property and condominiums for seniors, close attention must be paid to the trend as the business will be affected by a rise in variable rates

■ Soaring housing price

Real Estate

Development

CCRC

Real

Estate

Investment

Business environment and initiatives by segment

・Development of condominiums in regional cities accounts for 90% ・No impact at present due to limited rise in variable mortgage rates ・Carefully select and purchase land with high potential to absorb cost ・Focus on development in regional city centers such as redevelopment

projects

・The majority of the purchase funds are self-funded as target customers are seniors and the wealthy

・While there once was a large excess of inventory in the early stages, the proper business cycle has been realized

・Considering to increase procurement and expand areas toward the market expansion in future

・Focus on procurement of land for condominiums for lease in prime locations in central Tokyo and development of high-quality products as demands for condominiums in this area are rising

・Expect investors' demand will continue to be strong while continuing to closely monitor interest rate trends

・Replace owned properties appropriately by monitoring market changes and focusing on B/S efficiency

・In overseas, carefully monitor market conditions to make decisions

・Prices for condominiums (new and second-hand) are soaring in central Tokyo, and as a result, demand for high-quality condominiums for lease is also rising

・In major regional cities, a bipolarized tendency between rare locations and suburbs has become evident

Demand for rare locaions remains strong while their unit price continues to rise

Condominium

Management

and Related

Services

・Business with stable growth such as condominium management ・The hotel business has captured inbound demand

・The sports club operation has recovered to the pre-pandemic level

・Aim at further improvement of profit through aggressive investment, etc. in human resources and IT in each business

Hoosiers Holdings Co., Ltd.

2. FY3/25 full-year performance forecasts