Fiscal Year Ended December 31, 2013 Results Briefing · Fiscal Year Ended December 31, 2013 Results...

Fiscal Year Ended December 31, 2013 Results BriefingFebruary 20th, 2014

ES-CON Japan Ltd.

Copyright ©2014 ES-CONJAPAN Ltd., All Rights Reserved 1

Table of Contents

Consolidated P/L summaryConsolidated B/S summaryResults by segment

Progress of Medium-Term Plan 2016Business strategyReal Estate Trading BusinessReal Estate Renting BusinessES-CON’s strengthsInquiries

Actions in FY ended December 31, 2013

Performance in the year ended December 31, 2013 (19th

term)

Medium-Term Plan 2016 and future business strategy

・・・ P. 4・・・ P. 5・・・ P. 6

・・・ P. 8・・・ P. 9・・・ P. 10, 11・・・ P. 12, 13・・・ P. 14・・・ P. 15

・・・ P. 2


Creation of new condominium brand “Le JADE” in Tokyo area

Work begins on Le JADE Kami-Kitazawa2013Jan

“Suke-san Udon”, “au Shop” and “SoftBank Shop” opened in Fukuoka KasugaProject

Neverland Namba Park Air sold out

Lawsuit ended with settlement

“Chanpon Hibiki” and “Hanakoume” opened in Fukuoka Kasuga Project

Transfer of fixed assets (Fukuoka Kasuga)

Raffine Joyo Station The First sold out

New business site purchased (Minamichioka, Minato-ku)

“One Karubi+” opened in Fukuoka Kasuga Project

Work begins on Neverland Himeji The Station Front

Neverland Abeno Nishi Tanabe sold out

Neverland Abeno Showacho Brahms sold out

New business site purchased (Higashimukojima, Sumida-ku)

Work begins on new condominium sales project in cooperation with Nissei build Kogyo Co., Ltd.

Rights offering (non-commitment type/free assignment of listed share warrants)

Creation of first city-type new condominium Le JADE IX in Kansai

Creation of management company (subsidiary: ES-CON PROPERTY Ltd.)

New business site purchased (Nakazakicho, Akashi)

Sale of commercial development site (Omine Minamimachi, Hirakata)

Introduction of system linking condominium system and parking system jointly developed by three companies in Japan-first at Le JADE IX

Bond extinguishment (first unsecured bonds)

Le JADE Esaka preliminary briefing held

Work begins on Le JADE Shimomeguro

Neverland Himeji The Station Front first term sold out

Started taking requests for materials on Neverland Bentencho Hagukumi Town

Commissioned sales of Wazac Edogawa/Funabori

Neverland Kawaguchi Honcho MELDIA sold out

Leaf Create Feel City sold out

Rights offering implemented (exercise rate: 98.2%)

Feb

Mar

Apr

May

Jun

Jul

Aug New Medium-Term Business Plan established – “Make The One for 2016”

Le JADE Kami-Kitazawa sold out

Sale in progress for the sale of real estate (Hirano, Koto-ku)

Neverland Bentencho Hagukumi Town sales commenced

Neverland Himeji The Station Front sold out

Sept

JADE Higashi Toyonaka I/II sold out

The Neverland Akashi Harbor Gate sales commenced

Profitable real estate acquired (Higashinada-ku, Kobe)

Oct

Dec

Issuance of paid stock options

Neverland Himeji The Station FrontLe JADE Kami-Kitazawa Le JADE IX

Neverland Bentencho Hagukumi Town

Grand Le JADE KYOTO KAWARAMACHI

Neverland Namba Park Air

(Fukuoka Kasuga: One Karubi+)

Le JADE Shimomeguro

The Neverland Akashi Harbor Gate

Main actions in FY2013


Performance in the year ended December 31, 2013 (19th term)


Consolidated P/L summary for year ended December 31, 2013

(million yen)

Full year ended Dec2013

(current term)


(previous term)

Amount ofincrease/d

ecrease

Compared withsame period inprev ious year

(％)


（ Initial forecast）

Differencebetween

forecast/actualresults

13,558 10,184 3,374 133.1% 11,700 1,858

1,703 1,642 61 103.7%

1,844 1,504 340 122.6% 1,720 124

Operating profit ratio 13.6% 14.8% -1.2point - 14.7% -1.1point

1,200 860 340 139.6% 920 280

499 0 499 -

0 459 -459 -

1,905 392 1,513 485.0% 910 995

31.14 7.72 23.42 403.4%

Extraordinary loss

Extraordinary income

Net income per share

Net sales

Net income

Marketing expenses/generalmanagement expenses

Operating income

Ordinary income

YOY sales increase of 33% thanks to condominium sales changing to favorable conditions, sales of real estate in Commercial Development Business, etc.

Point １

Point ２

Point ３

Likewise in terms of income, there was a YOY increase of 22% in operating income and a 39% YOY increase in ordinary income

There was a 385% YOY increase in net income thanks to appropriation of special income of 420 million yen from settlement of lawsuit, etc.

Point１

Point２

Point３


Consolidated B/S summary for year ended December 31, 2013(million yen)

FY ended Dec2013

(current term)

FY ended Dec2012

(previous term)

Amount ofincrease/decrease

15,947 16,900 -953

4,161 2,234 1,927

2,050 5,716 -3,666

Real estate for sale in progress 7,898 8,055 -157

Fixed assets 27,615 29,007 -1,392

Tangible fixed assets 26,693 28,202 -1,509

Intangible fixed assets 17 11 6

904 792 112

43,695 45,910 -2,215

Current liabilities 8,978 8,718 260

Short-term borrowings 280 570 -290

6,814 6,521 293

557 607 -50

Fixed liabilities 25,128 32,979 -7,851

Bonds 1,115 1,822 -707

　Long-term debt 22,903 29,941 -7,038

Total liabilities 34,107 41,697 -7,590

Shareholders' equity (total) 9,587 4,212 5,375

43,695 45,910 -2,215

21.9% 9.2% +12.7 points

Long-term debt to be repaidwithin one year

Capital Adequacy Ratio

Bonds scheduled within one year

Investments and other assets

Total assets

Current assets

Cash and deposits

Real estate for sale

Total liabilities and net assets

Point1

Housing Sales Business changed to favorable conditions, while real estate for sales decreased

Point １

Point ２

Point ３

Net Interest-Bearing Liabilities decreased by 7.7 billion yen

Shareholders’ equity increased by 5.3 billion yen YOY thanks to rights offeringCapital adequacy ratio improved to 21.9%

Point ２

Point ３

Point ３

Point2


Results by segment

Increase in income thanks to condominium sales changing to favorable conditions, sales of real estate in Commercial Development Business, etc.

Point １

Point ２

Point ３

Contributed to profit as business with stable profits

Contributed to profit as business with high profit ratio thanks to company’s strengths, including planning and business construction

Condominium sales　Contract/sale results

No. of properties(residences)

Amount (millionyen)

No. of properties(residences) Amount (million yen) No. of completed

houses (residences)Amount

(million yen)

FY ended Dec 2012(previous term) 194 5,495 75 1,971 166 4,769

FY ended Dec2013

(current term)316 10,036 167 5,232 224 6,775

Contracts agreed during term Balance of contracts at end of term Sales results


Medium-Term Business Plan 2016 and future business strategy


Progress of Medium-Term Plan “Make The One for 2016”

20142nd year

2015

2016Final year

Maximization of corporate value and returns to shareholders

Establishment of firm management foundation able to withstand all kinds of economic environments

Target

2013 (results)1st year of Medium-Term Plan

Establish position as Integrated Real Estate Development EnterpriseMake free use of strengths of linked development/management system for Housing, Commercial

Development, and PMCatching up with planning of selected products

Strengthen Planning & Sales Division to propose what lies ahead in terms of quickly diversifying customer needs

Establishment of corporate entity resilient against changing market conditionsPromotion of business management with awareness of optimum balance between three

businesses: “Real Estate Development”, “Real Estate Renting”, and “Real Estate Planning agency Consulting”

Construction of strong business management systemFurther enhance precision of P/L management for each Business Division and implement strict

controlsChange into challenging group

All employees to become challengers, changing into an enterprise group that resolutely engages in new business areas without neglecting daily self-development

Aim to increase equity and improve financial structure by means of rights offering. Capital adequacy ratio to reach 21.9%.

First resumption of dividends in six years, since year ended December 31, 2007.

In the second year of the Medium-Term Plan “Make The One for 2016”, which is also to be commemorated as the 20th anniversary year of ES-CON Japan’s founding, the company will aim to promote sound business.

Dividend 1 yen 2 yen

Results from year ended December 31,

2013Per shareForecast for year

ending December 31, 2014

(Units: million yen)

*ROIC (Ratio Of Invested Capital): Operating income after tax/(Shareholders’ equity + Net Interest-Bearing Liabilities）

Q2 Full year

Capital Adequacy Ratio 21.9％ 30.0％　min.ROE (Return On Equity) 27.7％ 12.0％　min.ROA (Return On Assets) 2.7％ 3.6％　min.ROIC (Return On Inv ested Capital)* 4.5％ 5.8％　min.EPS (Net income per share) 31.14 yen 22 yen　min.BPS (Shareholders' equity per share) 137.14 yen 190 yen　min.Dividend payout ratio 3.2％ 24.0％　min.


Net sales 13,558 3,120 17,600 17,700～20,000

18,500～22,500

Real Estate Trading Business 10,991 1,960 15,050 15,200～17,500

16,000～20,000

Real Estate Renting Business 2,234 1,100 2,250 2,200 2,300Real Estate Planning Agency ConsultingBusiness 331 60 300 300 300

Operating income 1,844 510 2,300 2,200～2,600

2,300～2,800

Ordinary income 1,200 160 1,600 1,500～1,850

1,700～2,100

Net income 1,905 170 1,550

20th term (ending Dec 2014)19th term (endingDec 2013) (actual

results)

21st term (endingDec 2015)

22nd term (endingDec 2016)

Management goals andperformance plan


ES-CON Japan’s business strategy2014 (20th term)Le JADE IX (Kansai)Neverland Himeji The Station Front (Kansai)Le JADE Esaka (Kansai)Neverland Bentencho Hagukumi Town (Kansai)Le JADE Shimomeguro (Kanto)Le JADE Higashi-Mukojima (Kanto)Housing Project in Suginami-ku, Tokyo (Kanto)

332residences

2015 (21st term)The Neverland Akashi Harbor Gate (Kansai)Grand Le JADE KYOTO KAWARAMACHI(Kansai)Project in Tsurumi-ku, Yokohama (Kanto)Housing Project in Suginami-ku, Tokyo (Kanto)

400residences

2016 (22nd term)500

residences

Garden Mall SeiwadaiGarden Mall Minami-SenriAEON Minami-SenriHotel Vista Premio KyotoHakuyukai Kuzuha HospitalFukuoka Kasuga ProjectProject in Higashinada-ku, Kobe

Profitable real estate currently owned

Plans for Renovation Business, etc.

Promotion of multifaceted business development, including Condominium Sales, Housing, Renovation and Commercial Facilities, etc.Pursuing product planning with proposals for things that lie ahead of customer needs

Continued focus on business with stable income

Focus on expansion of business in renting high-yield commercial sites

Aiming to further increase value of assets by strengthening leasing activities

Taking into account the time period and special characteristics of properties, etc., and aiming to optimize assets by means of asset replacement, etc.Planning and business

construction as greatest strengths, and enabling development of various businesses. Aiming for differentiation from other companies

Continued focus on businesses with high-profit ratio in short-term requiring little prior investment

Synergy effects


Real Estate Trading Business

Neverland Sakasegawa NogamiNeverland Nishinakajima-MinamigataNeverland Kawaguchi Hommachi MELDIALeaf Create Feel CityNeverland Namba Park AirNeverland Abeno Nishi TanabeNeverland Abeno Showacho BrahmsJADE Higashi Toyonaka (residential)

Neverland Sakasegawa NogamiLe JADE IXNeverland Himeji The Station FrontLe JADE EsakaNeverland Bentencho Hagukumi TownLe JADE ShimomeLe JADE Higashi-MukojimaProject in Suginami-ku, Tokyo (residential)

Neverland Sakasegawa NogamiNeverland Nishinakajima-MinamigataNeverland Momoyama EgzesNeverland Awaza AliveNeverland Kawaguchi Hommachi MELDIA

Fukuoka Kasuga residential area

Nihonbashikabuto-cho Tokiwa, Urawa-ku, etc.

Itachibori Fukuoka Kasuga commercial

area Omine-cho, Hirakata Matsue, Edogawa Kabuki-cho, Shinjuku Uematsu-cho, Shimogyo-ku, etc.

Housing

Other

Using ES-CON Japan’s strengths in business construction, speed and ideas, to actively develop multifaceted businesses in real estate, not only in Housing sales but also in Commercial Facilities, etc.

Creating value that is unique in the world, based on the key phrase: “Make The One”

Development of Housing Sales and Renovation Business in both Kansai and Kanto areas, and expansion of business areas



Lineup of ES-CON Japan developments

Le JADE Esaka

Location: Chuo-ku, OsakaAccess: 2 mins walk from Matsuyamachi Station on Nagahori Tsurumi-ryokuchi LineTotal no. of residences: 76 (plus 1 management office)Opening: End of November, 2014

Location: Suita, OsakaAccess: 8 mins walk from Esaka Station on Midosuji LineTotal no. of residences: 43 (plus 1 management office)Opening: End of September, 2014

Location: Shimomeguro, Meguro, TokyoAccess: 12 mins walk from Musashi-Koyama Station on Tokyo Meguro LineTotal no. of residences: 21Opening: End of July, 2014

Le JADE Shimomeguro

Le JADE IX

Neverland Bentencho Hagukumi TownLocation: Minato-ku, OsakaAccess: 9 mins walk from Bentencho Station on Chuo LineTotal no. of residences: 112Opening: End of December, 2014

Neverland Himeji The Station FrontLocation: Himeji, Hyogo PrefectureAccess: 2 mins walk from Himeji Station on JR Sanyo Main Line/Sanyo Shinkansen LineTotal no. of residences: 55Opening: End of November, 2014

Le JADE Higashi-MukojimaLocation: Sumida-ku, TokyoAccess: 6 mins walk from Higashi-Mukojima Station on Tobu Skytree LineTotal no. of residences: 36 (plus 1 management office)Opening: End of December, 2014

Grand Le JADE KYOTO KAWARAMACHILocation: Nakagyo-ku, KyotoAccess: 4 mins walk from Kawaramachi Station on Keihan Kyoto LineTotal no. of residences: 135 + store (plus 1 management office, 1 meeting room, 1 owner’s room, and 1 owner’s salon)Opening: End of December, 2015

▼ The Neverland Akashi Harbor Gate

Location: Akashi, Hyogo PrefectureAccess: 8 mins walk from Akashi Station on JR Kobe LineTotal no. of residences: 149 (plus 1 management office, 1 meeting room, and 1 kids’ room)Opening: End of October, 2015


Real Estate Renting Business

Aiming to improve value of assets owned and optimize assets, focusing on this area as a secondary profitable business

Aiming for further improvement of asset value by securing rental income of around 2 billion yen per year, strengthening leasing activities, and cultivating know-how in PM Business, etc.

Aiming to optimize asset contents by replacing owned assets

Owned assets(million yen) 29,805 26,594



Lineup of assets owned by ES-CON Japan

AEON Minami-Senri Hotel Vista Premio KyotoGarden Mall Minami-SenriGarden Mall Seiwadai Hakuyuka Kuzuha HospitalLocation: Suita, OsakaAccess: 1 min walk from Hankyu Minami-Senri Station

Location: Kawanishi, Hyogo PrefectureAccess: 1 min walk from Seiwadai Chuo Station on Hankyu Bus

Location: Nakagyo-ku, KyotoAccess: 5 mins walk from Keihan Kyoto Sanjo Station

Location: Suita, OsakaAccess: 10 mins walk from Hankyu Minami-Senri Station

Location: Hirakata, OsakaAccess: 7 mins walk from Keihan KuzuhaStation

Fukuoka Kasuga ProjectLocation: Kasuga/Onojo, Fukuoka PrefectureAccess: Approx. 5 mins by car from JR Hakata-Minami Station

1. K’s Denki

8. Showa Shell Sekiyu 11. Kura-Zushi

Lineup of tenants opened to date

17. One Karubi+

2. Nafco 3. MrMax SC

15. Suke-san Udon 16. Chanpon Hibiki14. Hanakoume13. Konpiramaru

12. DoCoMo Shop7. Mini-Stop

6. Shimamura5. Avail4. UNIQLO

10. SoftBank9. au


The future of ES-CON Japan

Integrated Real Estate

Development Business

Condominium Business

PM

Condominium Management

Planning Consulting

Investment Consulting

Housing Business

Renovation

Commercial Developments

Development of multi-faceted real estate-related businesses, constructing a management system that be maneuvered with flexibility to deal with changes


Tokyo Head Office4th floor, Uchikanda 282 Building, 2-15-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047

Osaka Head Office13th floor, Meiji Yasuda Life Building, 4-1-1, Fushimimachi, Chuo-ku, Osaka-shi, Osaka 541-0044

http://www.es-conjapan.co.jp

13th floor, Meiji Yasuda Life Building

4-1-1, Fushimimachi, Chuo-ku, Osaka-shi, Osaka

Public Relations and Investor Relations Officer of Administrative

Department, Management Division

Tel.: 06-6223-8055

E-mail: [email protected]

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