Tosei : Presentation Materials for the First Three Months of the Fiscal Year 2024

Financial Results for the First Three Months of the Fiscal Year 2024

Tosei Corporation

Tokyo Stock Exchange, Prime Market Code : 8923

Singapore Exchange, Mainboard Code : S2D

April 5, 2024

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

Index

Overview of Results for the First Three Months of FY2024			Appendix: Overview of Tosei Group
FY2024 1Q(3M) Summary & Topics	…	P3	Group Overview	…	P28
FY2024 1Q(3M) Highlights	…	P4	History of Tosei Corporation	…	P29
FY2024 1Q(3M) Overview	…	P5	Tosei Group's Mission	…	P30
Full-year Forecast & 1Q Progress by Segment	…	P6	Keywords about Tosei	…	P31
Business Results by Segment	…	P7	Business Overview	…	P32
Summary of Balance Sheet (Consolidated)	…	P15	Medium-Term Management Plan	…	P37
Inventories	…	P17
Fixed Assets	…	P19
Borrowings from Financial Institutions	…	P20
Overview of Segment P/L (Consolidated)	…	P21
Summary of Cash Flow Statements (Consolidated)	…	P23
Shareholder Returns Policy	…	P24
Indicators of Corporate Value	…	P25
Tosei Group's Synergies and Potential Shareholder Value	…	P26

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

2

FY2024 1Q(3M) Summary & Topics

Summary

Revenue ¥34.8B (37.9% of FY2024 forecast) and Profit Before Tax ¥9.1B (55.7% of the same) driven mainly by Development Business

Achieved 44.2% of full-year Revenue forecast for Trading Business thanks to the sales of 2 large properties including "T's Logi Ome" in Development Business

Assets under management (AUM) grew to over ¥2.4 trillion in Fund and Consulting Business

Topics

Revitalized an idle company housing in Kawasaki-shi into an energy-creating rental apartment as the 2nd launch of the "T's eco" series

Otemachi PLACE, which asset management is entrusted, received Japan's first highest ★5 rank in "ResReal Certification*1 (flood damage edition)"

Selected as a constituent of the MSCI Nihonkabu ESG Select Leaders Index*2

*1 ResReal Certification: A certification system that quantifies and visualizes the resilience of real estate against natural disasters *2 Tosei was selected for the above Index following the selection for FTSE Blossom Japan Index

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

3

FY2024 1Q(3M) Highlights

Revenue ¥34.8B (up 12.3% YoY), Profit Before Tax ¥9.1B (up 41.7% YoY), Profit for the Period ¥6.4B (up 45.8% YoY) Progress Ratio against full-year forecast is Revenue 37.9%, Profit Before Tax 55.7%

			Revenue							Operating Profit
		■ 1Q ■ 2Q ■ 3Q ■ 4Q						■ 1Q ■ 2Q ■ 3Q ■ 4Q
		（¥million）		92,116 (Forecast)	（¥million）			17,702	(Forecast)
90,000			79,446		18,000			16,254
80,000						YoY					YoY
	70,953	12,736		16,000		13,514	1,804
70,000			+12.3%
		16,020		57,248	14,000			1,933	8,117	+41.4%
60,000		13,848	12,000		2,358
	11,380			5,735
50,000				Progress	1,798
		21,809		10,000					Progress
40,000				8,000
		17,236			Ratio against	3,672						Ratio
30,000				Full-year
				6,000					9,585	54.1%
20,000					Forecast
	26,315	31,052	34,868	4,000		5,685	6,781
10,000		37.9%
				2,000
0						0
	FY2022	FY2023	FY2024			FY2022	FY2023	FY2024
				1Q								1Q
			Profit Before Tax					Profit for the Year/Period
		■ 1Q ■ 2Q ■ 3Q ■ 4Q	16,500 (Forecast)	■ 1Q ■ 2Q ■ 3Q ■ 4Q		ROE
		（¥million）	15,310
							12.5%	13.6%	13.0%(Forecast)
		12,753	1,631
											7%
												4%
							YoY					14%
											6%
													3%
													2%
													1%
													0%
													9%
					13,500						8%
			1,606	7,308						1%
											5%
												11,209	5%
												9%
													3%
													2%
									（¥million）				(Forecast)6%
												1%
												7%
													0%
										10,508		-2%
											4%
					+41.7%						3%
										3%
		2,237											4%
				11,500						5%
										6%
													8%
													10%
													1%
									8,607				2%
														7% YoY
										1,143		7%
											8%
		1,515											8%
												9%
													9%
													20%
			5,584										1%
												2%
					9,500						2%
										1%
													3%
													4%
													5%
					Progress		1,201	4,770	6%
						8%
									1,431				30%
												3%
													3%
													4%
													5%
					7,500						6%		.8%
										+456%
		3,580											7%
						Ratio					8%
											7%
													9%
													40%
													1%
									1,068				2%
												3%
										3,746		5%
											6%
													9%
													50%
					5,500						1%
										60%
					55.7%						2%
										2%
													4%
									2,482				5%
												6%
														Progress4%
				9,191									7%
												8%
													8%
													9%
													1%
													3%
													5%
					3,500								4% Ratio
										5%
			6,488									6,439	7%
											8%
												9%
													9%
													70%
		5,420											1%
												2%
													2%
										4,416		3%
											6%
													6%
													7%
									3,625				9%	.4%
													578%
													80%
					1,500						1%
										90%
													3%
													4%
													7%
													1%
													2%
													3%
													4%
													5%
															6%
													7%
													8%
		FY2022	FY2023	FY2024					FY2022	FY2023	FY2024
				1Q								1Q

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

Operating Profit by Segment and Stable Business Ratio

■ Revitalization	■ Rental	■ PropertyManagement			Stable
■ Development	■ Fund and Consulting	■ Hotel							Business
					(Stock Business)
								FY2024 Target Ratio
(¥million)		49.2%
					16,254			47.2%
		43.0%
		990						Stable
	13,514
17,000	813					Business Ratio
878
		4,555		23.8%			* Calculated without head
	3,218									office expenses, etc.
13,000					9,585
				414 (Hotel)
	3,041		3,232
		1,036		925	289 (Property Management)
9,000
2,958			827 (Rental)
5,000				8,877		4,731
	6,102
					3,119
1,000	-315
-3,000	-2,369		-3,251		-722 (Head office expenses etc.)
		FY2022		FY2023	FY2024
							1Q

Fixed Cost Coverage by Profit from Stock Business

• Fixed Cost ■ Stable (Stock) Business Gross Profit

(¥million)		118.3%
16,957
	106.5%		14,336						Fixed Cost
12,589
							Coverage
11,818
											Ratio
											* Stable Business
								120.7%
											Gross Profit
							3,595 4,340		/ Fixed Cost
		FY2022		FY2023		FY2024 1Q

• Stable Business Gross Profit: The sum of gross profit (net of effects of internal transactions) of the 4 Stable Businesses (Rental, Fund & Consulting, Property Management, and Hotel)
• Fixed Cost = Selling, general and administrative expenses - property selling expenses +
  interest expense4

FY2024 1Q(3M) Overview

			FY2023 1Q	FY2024 1Q	YoY
(¥million)		Composition ratio		Composition ratio			%
Revenue	31,052	100.0%	34,868	100.0%	+3,816		+12.3%
	Cost of Revenue	21,148	68.1%	21,100	60.5%	-47		-0.2%
Gross Profit	9,903	31.9%	13,767	39.5%	+3,863		+39.0%
	Selling, General and	3,234	10.4%	3,633	10.4%	+398		+12.3%
	Administrative Expenses
		Property Selling Expenses	434	1.4%	444	1.3%	+9		+2.1%
		Expenses Excluding Above	2,799	9.0%	3,189	9.1%	+389		+13.9%
	Other Income	116	0.4%	10	0.0%	-105		-90.7%
	Other Expenses	4	0.0%	559	1.6%	+554		+13,405.8%
Operating Profit	6,781	21.8%	9,585	27.5%	+2,804		+41.4%
	Financial Income	3	0.0%	12	0.0%	+8		+215.5%
	Financial Costs	296	1.0%	405	1.2%	+108		+36.7%
Profit Before Tax	6,488	20.9%	9,191	26.4%	+2,703		+41.7%
	Income Tax Expense	2,071	-	2,752	-	+681		-
Profit for the Period	4,416	14.2%	6,439	18.5%	+2,022		+45.8%
	Owners of the Parent	4,416	-	6,435	-	+2,018		-
	Non-controlling Interests	-	-	3	-	+3		-
Comprehensive Income for the Period	4,369	14.1%	6,534	18.7%	+2,164		+49.5%
EPS (¥)	93.55		132.98		+39.43		+42.2%

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

5

Full-year Forecast & 1Q Progress by Segment

			FY2023 Result	FY2024 Forecast	YoY
				Composition		Composition
(¥million)	[A]	Ratio	[B]	Ratio	[B-A]		%
Profit Margin	Profit Margin
Revenue	79,446	100.0%	92,116	100.0%		+12,670		+15.9%
	Revitalization Business	47,535	59.8%	45,889	49.8%		-1,645		-3.5%
	Development Business	7,246	9.1%	18,650	20.2%		+11,403		+157.4%
	Rental Business	6,817	8.6%	7,979	8.7%		+1,161		+17.0%
	Fund and Consulting Business	7,384	9.3%	6,943	7.5%		-440		-6.0%
	Property Management Business	7,796	9.8%	8,558	9.3%		+762		+9.8%
	Hotel Business	4,180	5.3%	5,537	6.0%		+1,356		+32.4%
		Internal Transactions	-1,515	-	-1,441	-		+73		-
Gross Profit	30,285	38.1%	34,150	37.1%		+3,865		+12.8%
	Revitalization Business	11,183	23.5%	9,171	20.0%		-2,011		-18.0%
	Development Business	2,133	29.4%	6,249	33.5%		+4,116		+192.9%
	Rental Business	3,546	52.0%	4,114	51.6%		+567		+16.0%
	Fund and Consulting Business	7,040	95.3%	6,591	94.9%		-449		-6.4%
	Property Management Business	2,754	35.3%	3,021	35.3%		+267		+9.7%
	Hotel Business	4,036	96.6%	5,384	97.2%		+1,347		+33.4%
		Internal Transactions	-410	-	-381	-		+28		-
Operating Profit	16,254	20.5%	17,702	19.2%		+1,448		+8.9%
	Revitalization Business	8,877	18.7%	6,181	13.5%		-2,695		-30.4%
	Development Business	1,036	14.3%	5,030	27.0%		+3,994		+385.5%
	Rental Business	3,232	47.4%	3,727	46.7%		+494		+15.3%
	Fund and Consulting Business	4,555	61.7%	3,931	56.6%		-624		-13.7%
	Property Management Business	813	10.4%	841	9.8%		+27		+3.3%
	Hotel Business	990	23.7%	1,538	27.8%		+547		+55.3%
		Corporate Expenses, etc.	-3,251	-	-3,547	-		-296		-
Profit Before Tax	15,310	19.3%	16,500	17.9%		+1,189		+7.8%
	Income Tax Expenses	4,802	-	5,290	-		+487		-
Profit for the Year/Period	10,508	13.2%	11,209	12.2%		+701		+6.7%
	Owners of the Parent	10,507	-	11,209	-		+702		-
	Non-controlling Interest	1	-	-	-		-1		-
EPS (¥)	219.74		231.72			+11.98
ROA	6.7%		6.4%
ROE	13.6%		13.0%

• Full-yearforecast is as disclosed on Jan. 12, 2024
• Green portion shows gross profit margin and operating profit margin

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

FY2023 1Q	FY2024 1Q		Progress
				YoY	Ratio
	Composition		Composition
		against
	Ratio		Ratio	%
		Full-year
	Profit Margin		Profit Margin		Forecast
31,052	100.0%	34,868	100.0%	+12.3%	37.9%
23,717	76.4%	15,487	44.4%	-34.7%	33.8%
1,752	5.6%	13,034	37.4%	+643.7%	69.9%
1,600	5.2%	1,810	5.2%	+13.1%	22.7%
1,655	5.3%	1,578	4.5%	-4.7%	22.7%
1,869	6.0%	1,993	5.7%	+6.7%	23.3%
787	2.5%	1,369	3.9%	+73.9%	24.7%
-330	-	-405	-	-	-
9,903	31.9%	13,767	39.5%	+39.0%	40.3%
5,684	24.0%	4,425	28.6%	-22.2%	48.2%
503	28.7%	5,000	38.4%	+893.3%	80.0%
826	51.6%	908	50.2%	+9.9%	22.1%
1,568	94.7%	1,478	93.7%	-5.7%	22.4%
655	35.1%	722	36.3%	+10.2%	23.9%
753	95.7%	1,337	97.6%	+77.5%	24.8%
-88	-	-105	-	-	-
6,781	21.8%	9,585	27.5%	+41.4%	54.1%
5,061	21.3%	3,119	20.1%	-38.4%	50.5%
215	12.3%	4,731	36.3%	+2,092.5%	94.1%
759	47.4%	827	45.7%	+9.0%	22.2%
1,060	64.1%	925	58.6%	-12.7%	23.5%
263	14.1%	289	14.5%	+9.9%	34.4%
142	18.1%	414	30.3%	+191.4%	26.9%
-721	-	-722	-	-	-
6,488	19.1%	9,191	26.4%	+41.7%	55.7%
2,071	-	2,752	-	-	-
4,416	13.1%	6,439	18.5%	+45.8%	57.4%
4,416	-	6,435	-	-	-
-	-	3	-	-	-
93.55		132.98		+42.2%

6

Revitalization Business

ComponentRatio

Operating Profit

30.3%

Revenue ¥15.4B (down 34.7% YoY), Operating Profit ¥3.1B (down 38.4% YoY)

Although Operating Profit decreased due to loss on retirement of held asset of ¥559M, achieved high profit margin for the properties sold

Sold 20 whole buildings (up 4 properties YoY), out of which 2 properties were sold to Tosei Reit

Revenue/Gross Profit Margin

Example of Sold Properties

■ Whole Building to General Customers ■ Whole Building to Tosei Reit

■ Pre-owned Condo Units Gross Profit Margin

(¥million)

Breakdown of Gross Profit Margin*

	FY2023	FY2024 1Q
Pre-owned Condo Units	16.2％	17.8％
Whole Building	24.8％	31.9％
Total	22.8％	28.6％

* Excluding valuation loss and reversal of valuation loss under LCM

	24.0%	26.3%	20.3%		21.1%	28.6%
28,000
24,000	23,717	FY2023
3,708
20,000	GPM 23.5%
			15,487
16,000		10,299
12,000		7,579			3,637
20,008				3,686
	2,454		5,939
8,000
		3,245
4,000		7,845		2,006	8,164
	4,333		3,932
0
FY2023 1Q	FY2023 2Q	FY2023 3Q	FY2023 4Q	FY2024 1Q
(¥million)	FY2023 1Q	FY2023		FY2024 1Q	FY2024 Forecast
Revenue	23,717	47,535		15,487	45,889
Gross Profit	5,684	11,183		4,425	9,171
Operating Profit	5,061	8,877		3,119	6,181
No. of Sales	39		106		30	163
(Pre-owned CondoUnits)
No. of Sales	16		45		20	50
(WholeBuilding,Other)

• The Gross Profit includes the following valuation loss and reversal of valuation loss under LCM: FY2023; +¥365M, FY2024 1Q; +¥3M

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

Yokohama-shiIncome-generating Apt.	Yokohama-shi
(Sold to Tosei Reit)	Income-generating Apt.

TOPICS Tosei's Real Estate Revitalization Brand "T's eco"

The concept of "T's eco" is the revitalization of real estate by enhancing energy saving performance, installing renewable energy, and capitalizing the surrounding environment such as preserving nature

Revitalized an idle company housing in Kawasaki-shi following "T's eco Chofu Shibasaki"

・Our first ever energy-creating rental apartment installed with solar panels

・Reduced annual CO2 emissions by approx. 35 tons (our estimation)

compared to pre-renovation thanks to value-adds such as installing T's eco Kawasaki solar panels and LED lightings etc.

7

Development Business

ComponentRatio

Operating Profit

45.9%

Revenue ¥13B (up 643.7% YoY), Operating Profit ¥4.7B (22 times YoY, FY2023 1Q ¥0.2B)

Sold own developed logistics facility "T's Logi Ome" and commercial facility "T'S BRIGHTIA Jiyugaoka"

Revenue/Gross Profit Margin

Example of Sold Properties

■ Detached House,

Land Lot, Housing Construction ■ Condominium

■ Whole Building

(Rental Apt., Commercial Facility, Logistics Facility)

Breakdown of Gross Profit Margin*1

	FY2023	FY2024 1Q
Property for End Users*2	27.2％	23.0％
Whole Building	31.9％	38.7％
Total	29.4％	38.4％

		Gross Profit Margin		*1 Excluding valuation loss and reversal of valuation loss under LCM
						*2 Condo, detached house etc.
												38.4%
17,000		28.7%	30.2%	31.5%
	(¥million)
15,000										13,034
					FY2023			14.1%
13,000
11,000			GPM 29.4%
9,000
7,000			4,644							12,772
5,000
3,000		1,752	2,154
				827	154	617	160	232
1,000		2,335	232		261
				924		455			1
			FY2023 1Q	FY2023 2Q	FY2023 3Q	FY2023 4Q	FY2024 1Q
	(¥million)	FY2023 1Q	FY2023		FY2024 1Q	FY2024 Forecast
	Revenue		1,752		7,246			13,034	18,650
	Gross Profit		503		2,133			5,000	6,249
	Operating Profit	215		1,036			4,731	5,030
	No. ofSales		13				52			5	63
(DetachedHouse,etc.)
	No. ofSales		18				21			-	-
	(Condominium)
	No. of Sales		-				2			2	2
	(Whole Building)

• The Gross Profit includes the following valuation loss and reversal of valuation loss under LCM: FY2023; +¥5M, FY2024 1Q; -

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

T's Logi Ome	T'S BRIGHTIA Jiyugaoka
(Logistics Facility)	(Commercial Facility)

Comodo CASA Tama-ku Kuriya

(Detached House, ZEH)

8

Development Business -Future Development Plan-

Development Pipeline (holding / scheduled to be completed)

Completed

Logistics Facility ・T's Logi Sano

Condominium

・THE PALMS Kashiwa

・THE PALMS Chiba-chuo

・THE PALMS Nishi-chofu

Rental Apartment ・THE PALMS Higashi-ōi

・THE PALMS Kinshicho

・THE PALMS MachidaⅡ

・T's Cuore Shiinamachi

Wood-frameRental ・T's Cuore UkimafunadoⅠ

Apartment ・T's Cuore UkimafunadoⅡ

・T's Cuore Yotsugi

・T'S BRIGHTIA KichijojiⅡ

Rental Office / ・T'S BRIGHTIA Oyamadai

Commercial Facility ・T'S BRIGHTIA JiyugaokaⅡ

・Kojimachi Tosei Building

Hotel

Detached House

• Names are subject to change
• Development plans for detached houses are not shown

Copyright © 2024 TOSEI CORPORATION, All Rights Reserved.

FY2024	FY2025	FY2026 and after	No. of Buildings
Expected Disposition Value
			1 building
			¥5,600M
		・Tanmachi, Yokohama-shi PJ	2 buildings
		・Kozukue, Yokohama-shi PJ	¥7,780M
	・Kamirenjaku, Mitaka-shi PJ	・Higashi-ogu,Arakawa-ku PJ	15 buildings
・Isogo, Yokohama-shi PJ	・Ojima, Koto-ku PJ	・Toyotama-kita,Nerima-ku PJ
・Shinmaruko, Kawasaki-shi PJ	・Haramachida, Machida-shi PJ
	¥17,574M
	・Yono, Saitama-shi PJ	・Kamirenjaku, Mitaka-shi PJⅡ
	・Haginaka, Ota-ku PJ		11 buildings
	・Nogata, Nakano-ku PJ	・Anamori-Inari,Ota-ku PJ
	・Nagasaki, Toshima-ku PJ
	・Yagisawa, Nishitokyo-shi PJ
	・Kamiishiwara, Chofu-shi PJ	¥2,405M
	・Koenji-minami,Suginami-ku PJ
・Eitaibashi, Koto-ku Office PJ			8 buildings
・Asakusa, Taito-ku Office PJ	・Fujimi, Chiyoda-ku Office PJ
・Morino, Machida-shi Office PJ
		¥12,359M
			－
			－
			309 units
			¥22,430M
			37 buildings + 309 units
		Total
			¥68,150M

9

Progress of Acquisitions

-Acquisition Amount and Inventories-

Acquired and delivered properties (10 whole buildings, 27 pre-owned condo units, 20 units worth land lots for detached houses) worth ¥10.4B in expected disposition value

Acquisition progressed to ¥50.2B (progress ratio 50.2%), including delivered + contracted properties planned in March as well as 2 real estate M&A projects to be executed this fiscal year

Trends in Annual Acquisition Amounts (expected disposition value)

Example of Acquired Properties

Revitalization: Stripes, Development: Filled				Delivered +		Delivered
■ Detached House, Land Lot ■ Land Lot etc.				Contracted
				¥10.4B
■ Whole Apt./Rental Apt.		■ Office				including those
■ Condominium		■ Pre-ownedCondoUnits			in March
■ Logistics Facility										+ 2 Real Estate
			(Delivered)				M&A PJs to be	Delivered +
100,000
■ Hotel							92,831				executed this FY	Contracted*1
■ Commercial Facility										¥50.2B		¥19.1B
(¥million)	(Delivered)					13,464
	80,841
80,000
	3,842
		3,226						8,080								Detached House,
		12,107						7,780									Land Lot (D)
																1,869
1,018				(Delivered)				1,519					Rental Apt. (D)
60,000		3,810
1,502			53,150					Delivered +			1,157
								17,220			Contracted
487		7,939			7,211				including those
										in March
										+ 2 Real Estate	Pre-owned Condo Units (R)
					4,414
									M&A PJs to be
		10,307									4,956
40,000				3,392					executed this FY
1,999					1,482			25,620		50,277			Whole Apt. (R)
				10,828
							(Delivered +
												632
										Contracted)
					10,207					19,150
20,000							1,181								Commercial Facility (R)
		34,599								(Delivered)
												1,273
					1,538			17,963			10,416
				14,074
																Office (R)
0																		525
	FY2021		FY2022		FY2023	FY2024 1Q
*1 Contracted: Properties before delivery but already contracted
*2 Includes property acquired as Fixed Assets (Investment Properties and PPE)

• For more details on the Inventories (expected disposition value), please see P17-18
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FY2024

Acquisition

Target

¥100B

(delivery basis)

Development*2

¥3.0B

（down 5.7％ YoY）

Revitalization

¥7.3B

（down 48.0％ YoY）

Chiba-shi,	Nerima-ku, Income-
Commercial Facility	generating Apt.

Promotion of Acquisition Utilizing M&A

Track Record

Company/Business M&A 4 PJs

Expand the scope and scale of business by M&A in real estate-related businesses

Real estate M&A 14 PJs, 62 properties

Projects in Progress (to be executed this FY) Real estate company in Chiba-shi, Chiba Income-generating apartments etc. 25 properties Real estate company in Nakano-ku, Tokyo Land lot etc. 2 properties

10