Open House : Annual Select 2021

For the Fiscal Year Ended September 30, 2021

Annual Select® 2021

Open House Group Co., Ltd.

2-4-1 Marunouchi, Chiyoda-ku, Tokyo

(Securities Code: 3288)

Corporate Profile

Open House Co., Ltd. changed its trading name to Open House Group Co., Ltd. (hereinafter the "Company") on January 1, 2022. At the same time, it completed an absorption-type company split by separating its business divisions into another company to become a pure holding company.

The Company and its 35 subsidiaries and associates (32 consolidated subsidiaries and 3 equity method affiliate; hereinafter collectively with the Company, the "Group") are engaged in the following businesses:

(1) Single-family homes related business

In the single-family homes related business, the Group has established an integrated system from purchase of land and construction to brokerage and sales in order to consistently ensure a stable and efficient supply of affordable single-family homes in urban areas.

(2) Condominiums business

In the condominiums business, the Group is engaged in the development and sale of newly-built condominiums. We develop and offer compact condominiums targeted principally at single- or two-person households, which show a high preference for condominiums, in convenient and valuable locations mainly in urban areas in Tokyo metropolitan, Nagoya and Fukuoka areas.

(3) Property resale business

In the property resale business, the Group is engaged in the purchase, management and sale of real estate for investment. We mainly purchase income-generating real estate properties such as small office buildings and rental condominiums in Tokyo metropolitan area and, after increasing their asset value through such means as leasing and renovation, resell them to wealthy individuals and operating companies as real estate for investment.

(4) Others

In others segment, the Group is mainly engaged in the U.S. real estate business, through which we sell U.S. real estate properties and offer related services, including consulting, property management and financial services, to wealthy class of customers residing in Japan.

1. PRESSANCE CORPORATION

PRESSANCE CORPORATION Co., Ltd. (hereinafter "PRESSANCE CORPORATION") is engaged in the planning, development and sale of studio apartments (for rent for single persons for investment) and condominiums for families (for family use).

This segment operates its business mainly in Kansai, Tokai, Kanto, and Okinawa areas. PRESSANCE CORPORATION engages mainly in the planning and development of condominiums and the sales of studio

apartments. PRESSANCE JYUHAN Co., Ltd. engages in sales agency in condominiums for families and the sales of single-family homes. PRESSANCE REALTA Co., Ltd. engages in the brokerage, purchases, and sales of secondhand properties. SANRITSU PRECON Co., Ltd. engages in the sales of condominiums for families in Tokai area. Besides real estate sales, PRESSANCE CORPORATION engages in rental management business for studio apartments (tenant placement and rent collection on behalf of owners) and rental business (rental of condominiums held by PRESSANCE CORPORATION). PRESSANCE COMMUNITY Co., Ltd. engages mainly in the building management for condominiums sold by PRESSANCE CORPORATION.

Note: PRESSANCE CORPORATION is listed on the First Section of the Tokyo Stock Exchange.

I. Summary of Selected Financial Data (Consolidated)

Fiscal year	21st business		22nd business	23rd business	24th business	25th business
term		term	term	term	term
Year end		Sept. 2017		Sept. 2018	Sept. 2019	Sept. 2020	Sept. 2021
Net sales	(Millions of yen)	304,651		390,735	540,376	575,951	810,540
Ordinary profit	(Millions of yen)	36,131		46,052	54,928	77,357	97,590
Profit attributable to	(Millions of yen)	24,797		31,806	39,407	59,491	69,582
owners of parent
Comprehensive income	(Millions of yen)	24,894		32,096	38,540	58,812	74,483
Net assets	(Millions of yen)	83,379		113,486	138,067	233,695	347,143
Total assets	(Millions of yen)	256,736		393,367	445,904	569,038	879,913
Net assets per share	(Yen)	743.60		960.22	1,246.15	1,855.66	2,329.72
Earnings per share (EPS)	(Yen)	221.71		285.08	351.22	525.36	552.40
Diluted earnings per	(Yen)	220.38		282.88	349.11	522.37	550.41
share (Diluted EPS)
Equity ratio	(%)	32.3		27.0	30.9	41.0	33.4
Return on equity (ROE)	(%)	33.8		33.6	32.3	32.1	26.4
Price earnings ratio	(Times)	8.86		9.82	7.33	7.23	11.98
Net cash provided by
(used in) operating	(Millions of yen)	(799)		(10,017)	14,344	48,793	50,123
activities
Net cash provided by
(used in) investing	(Millions of yen)	(1,337)		(12,582)	(4,800)	(24,054)	23,541
activities
Net cash provided by
(used in) financing	(Millions of yen)	25,181		50,696	7,186	59,430	40,588
activities
Cash and cash
equivalents at end of	(Millions of yen)	90,910		118,978	135,345	219,218	334,506
period
Number of employees		1,522		2,263	2,642	2,876	4,087
(Average number of	(Persons)	(173)		(248)	(240)	(242)	(286)
temporary employees)
Notes: 1. Net sales do not include consumption and other taxes.

1. Starting with the 23rd business term, the Group has applied ASBJ Statement No. 28 "Partial Amendments to Accounting Standard for Tax Effect Accounting" and ASBJ Guidance No. 28 "Implementation Guidance on Tax Effect Accounting." Accordingly, the figures for the 22nd business term represent results after retrospectively applying the said accounting standard and guidance.
2. Starting with the 23rd business term, the Group has applied ASBJ Statement No. 29 "Accounting Standard for Revenue Recognition" and ASBJ Guidance No. 30 "Implementation Guidance on Accounting Standard for Revenue Recognition." Accordingly, the figures for the 23rd business term represent results after applying the said standard.
3. The number of employees represents the number of persons in employment (excluding individuals seconded form the Group (the Company and its consolidated subsidiaries) to companies outside the Group and including individuals seconded from companies outside the Group to the Group), and the average number of temporary employees (including temporary employees staffed from staff agencies) for each fiscal year is excluded from the number of employees and shown in parentheses.
   The Group temporarily employs individuals planned to be regularly employed in April to provide them with training before they formally join the Group. However, they are not included in the average number of temporary employees above.
4. The Company conducted a 2-for-1 stock split of common stock with an effective date of October 1, 2019. Net assets per share, EPS and Diluted EPS were calculated assuming the stock split was conducted at the beginning of the 21st business term.

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II. CEO Message

Consolidated financial results for the fiscal year ended September 30, 2021

Record high net sales and income for the ninth consecutive year

As for the consolidated financial results for the fiscal year ended September 30, 2021, the Group achieved significant growth with net sales of 810.5 billion yen (up 40.7% year on year) and ordinary income of 101.1 billion yen (up 62.7% year on year). In particular, net sales jumped at once from 575.9 billion yen for the previous fiscal year to 810.5 billion yen, reflecting three upward revisions of financial forecasts from the initially forecasted net sales of 634.0 billion yen.

The strong performance was mainly driven by the strong net sales from the single-family homes related business of 446.9 billion yen (up 17.7% year on year).

The demand for single-family homes has been high in urban areas where the number of households is increasing due to the rising prices and declining supply of newly-built condominiums, which started several years ago.

In addition, the spread of the new lifestyle under the COVID-19 pandemic has brought more attention to single-family homes as they better meet needs such as for securing a working place to work from home. As a result, sales of single-family homes remained strong.

In January 2021, the Company acquired shares of PRESSANCE CORPORATION, accounting for 64.45% of the aggregate number of voting rights, and converted it to a consolidated subsidiary. As a result, PRESSANCE CORPORATION has contributed to the consolidated financial results of the Company from the second quarter of the fiscal year ended September 30, 2021 onwards.

Mid-term Business Plan

"Ikouze 1 cho, 2023!" - "Jump to 1 trillion, 2023!"

Toward the achievement of the management targets set by the Mid-term Business Plan "Ikouze 1 cho, 2023!" - "Jump to 1 trillion, 2023!" (from October 2020 to September 2023), the Group raised the net sales target for the fiscal year ending September 30, 2023, the final year of the Plan, by 250.0 billion yen from 800.0 billion yen announced in November 2020 to 1.05 trillion yen through two upward revisions.

Solid demand is expected for real estate for actual use, which is handled by the single-family homes related business (our core business) and the condominium business. In addition, real estate for investment, which is handled by the property resale business and the U.S. real estate business in others segment, is also expected to benefit from sustained demand on the back of the continued easy monetary policy. In such a business environment, the Group will aim to achieve balanced growth through portfolio management that consists of both real estate for actual use and real estate for investment.

Initiatives for the fiscal year ending September 30, 2021

We aim to achieve net sales of 920.0 billion yen.

In the fiscal year ending September 30, 2022, the Group aims to achieve net sales of 920.0 billion yen (up 13.5% year on year) by further expanding its businesses in all segments, centered on the single-family homes related business.

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In the single-familyhomes-related business, we will increase our market share in the existing Tokyo metropolitan, Nagoya and Fukuoka areas while expanding our business into Kansai area. We will also aim at continued growth of the business by taking advantage of the Group's strength of the integrated system from land purchase to construction and sales while strengthening cooperation with group companies.

In the condominiums business, we will strive to return to growth, especially of condominiums with compact room layouts targeted at single- or two-person households in convenient locations in urban areas.

In the property resale business, as the demand for income-generating real estate properties is expected to be strong against the backdrop of the continued easy monetary policy, we will aim to continue to achieve further growth.

In the U.S. real estate business in others segment, we will strengthen the sales of secondhand single-family homes and other properties in the U.S. to Japanese corporations and wealthy individuals as pure investment products mainly for diversified asset allocation.

PRESSANCE CORPORATION will focus on the development of studio apartments in the Tokyo metropolitan area as well as its existing areas including Kansai area, leveraging the ample real estate information collected by the Group.

Through the above initiatives, we once again aim to achieve record high net sales and income for the tenth consecutive year in the fiscal year ending September 30, 2021.

Shareholder return

The Company planned to pay a year-end dividend of 62 yen per share for the fiscal year ended September 2021.

Based on the plan mentioned above, the full-year dividend for the fiscal year ended September 30, 2021 is 112 yen per share (consisting of an interim dividend of 50 yen per share and a year-end dividend of 62 per share), an increase of 32 yen per share from the previous fiscal year. The payout ratio increased by 5.1 percentage points from the previous fiscal year to 20.3%.

Furthermore, the Company plans to pay a full-year dividend of 124 yen per share (of which an interim dividend of 62 yen per share) for the fiscal year ending September 30, 2022.

Open House Group will make an all-out effort to achieve further growth. Therefore, we sincerely ask our shareholders for their continued and further support for the Group.

Masaaki Arai, President & CEO, Open House Group Co., Ltd.

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