#1RELO GROUP FY2017/3 Relo Group Investor Presentation Jun 2, 2017#2& RELO GROUP Overview 17 8 consecutive year of th consecutive year of th Sales Growth Record Profit 2#3( RELO GROUP Overview Decline in the working population Work style reform Japanese companies Strengthen recruitment of employees Improvement in Acceleration of productivity overseas expansion Steady Demand for Outsourcing and Fringe Benefits 3#4& RELO GROUP Overview (Millions of yen) Rounded down to the nearest million yen FY 2017/3 FY2016/3 ΥΟΥ Change Sales 205,117 183,280 + 11.9% Operating profit 13,264 10,840 + 22.4% Recurring profit 14,238 11,854 + 20.1% " Net income 9,151 7,158 + 27.8% EPS (yen)* 61.47 49.26 + 24.8% (Note) The company conducted a 1-for-10 stock split of common shares with an effective date of 1st April, 2017. EPS is calculated based on the assumption that such stock split was implemented at the beginning of the previous fiscal year.#5& RELO GROUF Consolidated Financial Progress Sales ¥205.1 bn YoY change +11.9% FY2011/3 Recurring ¥14.2 bn profit YoY change +20.1% The First Olympic Plan The Second Olympic Plan FY2015/3 5 FY2017/3#6Results & Overview by Segment Domestic Business 121 622#7& RELO GROUF Domestic Business Segment Operating profit FY2014/3 FY2015/3 FY2016/3 FY2017/3 Sales ¥167.5 bn Operating profit ¥11.9 bn YoY change +21.5% 7#8& RELO GROUP Domestic Business Segment Corporate Housing Management Residential Property Management Corporate Fringe Benefits MAST#9& RELO GROUF Domestic Relocation Business Operating profit Sales ¥148.3 bn Operating profit ¥6.3 bn YoY change +22.1% FY2014/3 FY2015/3 FY2016/3 FY2017/3 6#10& RELO GROUF Corporate Housing Management Units under management Implementation of social security and tax number system 144,447 units ΥΟΥ change +23.3% FY2011/3 FY2013/3 FY2015/3 FY2017/3 10 Small and medium-sized competitors withdrawal Favorable New Acquisitions#11& RELO GROUP Corporate Housing Management Moving Acquiring New Revenue Opportunities Follow-up call ૉ. RELO GROUP + roposal of service related to Internet 11#12& RELO GROUF Residential Property Management 7 Block Development 4 Companies Joined Relo Group Units under management Expanded the Revenue Base 50,125 units +16.5% YOY change FY2014/3 FY2015/3 FY2016/3 FY2017/3 12#13RELO GROUF Residential Property Management Advance into Kinki Area Aim for Rollup Recrea Life Agent (Osaka) Shinwa Shoji (Miyagi) Housing Mate (Miyagi) Housing Chofu (Tokyo)#14RELO GROUF Residential Property Management FY18/3 2 Companies Already Joined Relo Group Life Fudosan (Fukuoka) Artha (Tokyo)#15& RELO GROUF Residential Property Management Relo Partners, Limited Tokyo Tokyo Tokyo Kanagawa Saitama Chiba Fukuoka Fukuoka Artha Chofu Housing TOHTO Group Room Group Fudosan Yoshida Daiko Group Bestus Group System Integration Life fudos Miyagi Miyagi Miyagi Housing Ma Expanding Hummy tiliza cale Sharing Best Practices (Success Model) 15#16& RELO GROUF Corporate Fringe Benefits Operating profit FY2014/3 FY2015/3 FY2016/3 FY2017/3 16 Sales ¥19.1bn Operating profit ¥5.6 bn ΥΟΥ change +21.0%#17& RELO GROUF Corporate Fringe Benefits Fringe benefit members FY2014/3 FY2015/3 FY2016/3 FY2017/3 17 Ranked first in number of regional menus Advantage in Local Region Fringe benefit program Membership 5.44 mil ΥΟΥ change +0.51mil#18& RELO GROUP Corporate Fringe Benefits Analyzation of customer data Extraction of withdrawal signs in advance Customer satisfaction in thdrawal 26.2% Prevention of Unsubscription 18#19& RELO GROUF Corporate Fringe Benefits E-magazine subscribers Number of accommodation menu users YoY change 1.2 times YoY 1.64 mil change +8.8% FY2014/3 FY2015/3 FY2016/3 FY2017/3 Usage Rate Grow Steadily 19#20& RELO GROUF Corporate Fringe Benefits Holding financial management seminars for welfare employees Obtaining Commission Income Improvement of Membership Satisfaction 20#21& RELO GROUP Operating profit Domestic Business FY2018/3 Projection Sales FY2015/3 FY2016/3 FY2017/3 FY2018/3 ¥184.7 bn Operating profit ¥13.9 bn YoY change +16.1% 21#22Results & Overview by Segment Global Business R22 622#23& RELO GROUP Global Business Operating profit FY2014/3 FY2015/3 FY2016/3 FY2017/3 Sales ¥33.6 bn Operating profit \2.5 bn YoY change +20.5% 23#24& RELO GROUF Global Relocation Support ⚫ US presidential election Completed global relocation support cases ⚫BREXIT Increase in Cost Consciousness 5,415 households FY2014/3 FY2015/3 FY2016/3 FY2017/3 YoY change +4.6% 24#25& RELO GROUP Global Relocation Support Decline in the working population in Japan Increasing Number of Foreign Employee Acceptance Support Manufacturing industry Acceptance of skills trainees Retail industry Recruitment of sales staff for tourist 25 25#26& RELO GROUF Global Relocation Support Number of RELO-AIRINC indices sold FY2014/3 FY2015/3 FY2016/3 FY2017/3 26 Expatriate Compensation Package Equalization Commodities & Services Housing & Utilities Education Comp Related Policies Incentive Fringe Hamelto Himise Hunt Salmry Base Salary for Equivalent Position HOME PAIRINC Premium Fringe Benefits Home Mane Haday HOST Number of RELO-AIRINC indices sold ΥΟΥ change+49.9%#27( RELO GROUP Global Destination Support AIRINC WORKFORCE GLOBALIZATION • Started in 1954 with a group of Harvard and MIT professors • Industry pioneer with establishment 50 years •Transactions with 60 companies of Fortune 100 • High continuity business in 85% of Sales • Transactions with many relocation companies 27#28& RELO GROUP Global Destination Support Housing brokerage mainly in North Americal • Service apartment operation US Presidential Election BREXIT Relocation Stagnation within USA 28#29RELO GROUP Global Destination Support Dallas Aggressive business attraction East coast Increase of relocation person. engaged in medicine industry San Francisco Detro Boston Chicago Westchester SJ LA NY NJ Irvine Dallas 29 29#30( RELO GROUP Global Destination Support Number of di ΥΟΥ housing brokerages 1,856 units Change +1.3% Number of corporate housing 2,901 units under management Number of sales Asset model ΥΟΥ change +13.1% 76 cases ΥΟΥ change +43.4% Operation of serviced apartment Occupancy rate 78.5% 30 30#31& RELO GROUP Operating profit Global Business FY2018/3 Projection FY2015/3 FY2016/3 FY2017/3 FY2018/3 Sales ¥37.0 bn Operating profit ¥2.9 bn YoY change +15.3% 31#32Projection for FY2018/3 །#33& RELO GROUF Consolidated Financial Projection for FY2018/3 (Millions of yen) Rounded down to the nearest million yen FY 2017/3 FY2018/3(P) YoY Change Operating 205,117 226,000 +10.2% revenue Operating profit 13,264 15,500 +16.9% Recurring profit 14,239 16,500 +15.9% Net profit 9,151 10,500 +14.7% EPS (yen) 61.62 70.50 +14.4% Dividend per 18.4 21 +2.6 share (yen) 33 33#34& RELO GROUF Dividends Projection 15th consecutive year of dividend increase Dividend amount (Yen/Share) ¥0.75 ¥21 FY2003/3 FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3 FY2017/3 34#35RELO GROUF 2017年3月期末 連結BS (Millions of yen) (Millions of yen) Assets Rounded down to nearest million yen Total liabilities and net assets Rounded down to nearest million yen FY2017/3 FY2016/3 Change FY2017/3 FY2016/3 Change Current assets 56,580 46,442 +10,138 Current liabilities 45,720 35,907 +9,813 Cash and deposits 13,309 12,928 +381 Accounts payable-trade 3,425 3,295 +130 Notes and accounts receivable-trade 12,094 10,479 +1,615 Short-term loans payable 12,663 7,468 +5,195 Real estate for sale 6,729 5,321 +1,408 Current portion of long-term loans payable 1,695 1,584 +111 Supplies 501 393 +108 Income taxes payable 2,490 2,096 +394 Advance payments 13,291 10,647 +2,644 Advances received 16,067 13,808 +2,259 Other 9,929 5,987 +3,942 Allowance for bonuses 761 645 +116 Allowance for doubtful accounts (40) (25) (15) Noncurrent assets 40,668 36,953 +3,715 Property, buildings and equipment 7,486 6,183 +1,303 Buildings and structures 6,749 5,675 +1,074 Other Noncurrent liabilities Corporate bond Long-term loans payable 8,564 7,009 +1,555 13,883 14,028 (145) 1,800 2,400 (600) 5,440 5,472 (32) Accumulated depreciation (2,503) (2,229) (274) Long-term lease deposits 5,867 5,608 +259 Buildings and structures, net 4,246 3,446 +800 Allowance for loss on guarantees 60 62 (2) Tools, furniture and fixtures 1,794 1,471 +323 Liabilities for retirement benefits 326 265 +61 Accumulated depreciation (1,312) (1,062) (250) Negative goodwill 2 2 +0 Tools, furniture and fixtures, net 482 408 +74 Other 159 96 +63 Land 2,340 2,103 +237 Total liabilities 59,604 49,935 +9,669 Other 783 567 +216 Net assets 39,742 33,475 +6,267 Accumulated depreciation (365) (343) (22) Shareholders' equity 38,634 32,682 +5,952 Other, net 417 224 +193 Capital stock 2,667 2,667 +0 Intangible assets Software 10,524 8,468 +2,056 Capital surplus 2,871 2,871 +0 1,485 1,173 +312 Retained earnings 36,342 30,421 +5,921 Goodwill 8,862 7,070 +1,792 Treasury stock (3,246) (3,278) +32 Other 176 224 (48) Total accumulated other comprehensive income 677 387 +290 Investments and other assets 22,727 22,301 +426 Valuation difference on available-for-sale securities 459 282 +177 Investment securities 10,585 9,644 +941 Foreign currency translation adjustment 222 112 +110 Lease and guarantee deposits Other 11,627 10,543 +1,084 Adjustment for retirement benefits (4) (7) +3 2,131 1,874 +257 Subscription rights to shares 39 71 (32) Allowance for doubtful accounts (72) (151) +79 Deferred assets 12 15 (3) Non controlling interests Total liabilities and net assets 390 334 +56 99,347 83,410 +15,937 Bond issuance expenses 12 15 (3) Total assets 99,347 83,410 +15,937 35#36& RELO GROUP 2017年3月期末 連結CF Statements of Cash Flow (Millions of yen) Rounded down to the nearest million yen FY2017/3 FY2016/3 Change Net cash provided by (used in) operating activities 1,023 3,993 (2,970) Income before income taxes and minority interests Depreciation and amortization 13,587 11,172 2,415 908 813 95 Amortization of goodwill 640 537 103 Equity in (earnings) losses of affiliates (941) (973) 32 Decrease (increase) in notes and accounts receivable-trade 1,276 1,360 (84) Increase in inventories (898) (1,474) 576 Increase (decrease) in notes and accounts payable-trade (2,558) (2,257) (301) Decrease (increase) in rental deposits and guarantees (1,083) (780) (303) Increase (decrease) in tenants 203 245 (42) Interest and dividends income received 373 349 24 Income tax paid Other, net Net cash provided by (used in) investing activities Purchase of property, plant and equipment Proceeds from property, plant and equipment Purchase of intangible assets (5,585) (3,844) (1,741) (927) (1,516) 589 (4,158) (4,381) 223 (1,614) (2,620) 1,006 42 6 36 (591) (298) (293) Proceeds from sales of investment securities 29 114 (85) Purchase of investments in subsidiaries resulting in change in scope of consolidation (1,770) (1,475) (295) Other, net (254) (108) (146) Net cash provided by (used in) financing activities Net increase (decrease) in short-term loans payable 3,613 2,634 979 4,521 2,814 1,707 Proceeds from long-term loans payable Repayment of long-term loans payable Purchase of treasury stock Proceeds from sales of treasury stock 1,064 2,884 (1,820) (1,432) (1,643) 211 (1,699) (3,785) 2,086 4,039 1,241 2,798 Other, net Cash dividend paid Cash and cash equivalents at the end of the period (2,236) (1,855) (381) (44) (5) (39) 13,309 12,828 481 36#37RELO GROUP • - ♦ FY2017/3 Relo Group Investor Presentation Jun 2, 2017#38& RELO GROUF FY2017/3 Summary The 50th anniversary Profit growth Of more than 20% A new step for the next 50 years 38 38#39( RELO GROUF FY2017/3 Summary AIRINC joined RELO Group Started Managing the Global Company#40RELO GROUF FY2017/3 Summary Our Mission Support the non-core businesses for people working in the world to help enable them to perform to their full potential Our Vision The Top Global Relocation Company#41RELO GROUF FY2017/3 Summary Attracting global companies in countries and regions around the world E Creating employment and middle classes Correcting disparity Growth of the Role for the Global Companies#42. RELO GROUP FY2017/3 Summary Solving all the problems associated with the movement of people in global companies Let's Create the World's Largest Group!#43& RELO GROUP FY2012/3 The Second Start-Up The Second Start-up Stage Second half started The First Olympic Plan The Second Start-up Stage ~FY2015/3 The Second Olympic Plan ~FY2019/3 The Third Olympic Plan ~FY2023/3 43 The Global Start-up Stage#44( RELO GROUP The Second Start-Up Top of Profit Scale & Share at Main Business Strengthen domestic management base FY2012/3 The First The Second Start-up Stage ~FY2015/3 The Second Olympic Plan ~FY2019/3 The Third Olympic Plan ~FY2023/3 Olympic Plan 44 The Global Start-up Stage#45RELO GROUF Progress of The Second Olympic Plan FY2019/3 Plan Recurring profit \20.0 bn Going smoothly Plan Segment FY15/3 FY 19/3 Corporate Housing ¥3.3bn Management \5.0bn As planed Residential Property Management ¥1.3bn ¥4.7bn Uncertainty of M&A Corporate Fringe Benefits ¥4.0bn ¥6.8bn Beyond the plan Global Business ¥1.5bn ¥4.0bn Unsatisfactory performance 45#46RELO GROUP Corporate Housing Management The Second Olympic Plan Operating profit Units under management FY15/3 FY19/3 Plan ¥3.3 bn ¥5.0 bn 100K units 200K units Units under management FY2011/3 FY2013/3 FY2015/3 FY2017/3 46 144,447 units#47& RELO GROUF Corporate Housing Management Increase the number of approaches with brokerage as front products Increase of Management Units Corporate Housing Management Relocation Japan Management Dormitory / Corporate Housing Brokerage Corporation 47 Relo Estate#48& RELO GROUP Corporate Housing Management IT investment Improv a Improve Usability of Relo-Net Start Contribution Enethe Second halfse of FY20 Commission Income Improve Prof. Margin Increase Profit 48#49RELO GROUP Corporate Housing Management The Second Olympic Plan FY 15/3 FY19/3 Plan Operating profit ¥1.2 bn ¥4.7 bn Rising trend for prices of large projects Delay in Progress of M&A 49#50( RELO GROUP Residential Property Management Operating profit Existing companies Existing Company Daikou & Room & Yoshida Fudosan New Company with Group. 11/3期 13/3期 15/3期 17/3期 Big Growth of both Existing Proceed with M&A Centered on SMEs 50#51( RELO GROUP Residential Property Management Recurring profit Target ¥4.7bn 0.4bn Companies acquired during FY19/3 Companies acquired during FY18/3 Companies acquired during FY16-17/3 Companies acquired during FY15/3 1.2bn Achievable FY2011/3 FY2013/3 FY2015/3 FY2017/3 FY2019/3 51#52& RELO GROUF Residential Property Management SMEs founder owner Having a business succession issue Increasing consultation number mainly in local regions Catch up with the Residential Property Management Business Plan 52 62#53RELO GROUP Residential Property Management The Start of a Brand Strategy リロの賃貸 住むこと、まるごと 53#54RELO GROUF Corporate Fringe Benefits The Second Olympic Plan FY15/3 FY19/3 Plan Operating profit ¥4.0 bn ¥6.8 bn Improve Competitiveness by IT Investment Increase Contracting of SMEs and Local Companies 54 549#55& RELO GROUP Corporate Fringe Benefits Growth pace of present + Significantly Exceed Improve operation officiency by IT investmen + Hotel Management Business 55#56( RELO GROUP Corporate Fringe Benefits Units under management Management consignment Possession FY2010/3 FY2012/3 FY2014/3 FY2016/3 Management Basis Expansion Steadily Expanding Hotel Management Business 56#57RELO GROUF Global Business The Second Olympic Plan FY 15/3 FY19/3 Plan Operating profit ¥1.5 bn ¥4.0 bn Present issues: Low outsourcing rate of large companies Prospect for accelerating outsourcing against the backdrop of operation efficiency and shortage of workers 57#58& RELO GROUF Global Business Front-End Products Visa RELO-AIRINC Index Pre-Assignment Training Services Application BTM Arrangement Support abbour Juqex Vilgudeweut etc.. Strengthening Proposal of Full Services Aiming to Expand Contracting from Existing Customers 58#59( RELO GROUP Relocation International Strength: Global Business Acquisition of new clients New company Relo Panasonic Excel International Strength: Expand contracting from Global Relocation Support Relo Excel existing customers External International sales Division Aim for the Potential of Upsell Earning New Profit by Starting Support System of Relocation 59#60( RELO GROUP Global Business Increase Business Opportunities by Expanding Asset Model Area REDAC リダック Delegate management Tenant placement Purchase house Investor Sell house Purchase price Rent 60#61& RELO GROUP Global Business AIRINC Visualization of Operation WORKFORCE GLOBALIZATION Various Investments Expansion of Transactions with Global Companies Achievement of Plan by Increase Revenue 61#62Cost reduction of corporate housing management RELO GROUF Cross Sell of cross cell Overlap Rate <Case study> Insurance review Introduce Corporate Fringe Benefits Service Strengthen Sales with Comprehensive Capabilities Global Business Corporate Fringe Benefits Management orporate Housing 62#63RELO GROUP Forecast of The Second Olympic Plan FY2019/3 Plan Recurring profit ¥20.0 bn Achievable Segment FY15/3 Plan FY 19/3 Corporate Housing Management ¥3.3bn ¥5.0bn As planed Residential Property Management ¥1.3bn ¥4.7bn Corporate Fringe Benefits ¥4.0bn ¥6.8bn Global Business ¥1.5bn ¥4.0bn Catch-up Beyond the plan Catch-up 63#64RELO GROUP Strengthening Domestic Business ✓ Accelerate Global Expansion A Top of Global Relocation Company#65Contact Planning and IR Group, Relo Group, Inc. TEL: 03-5312-8704 E-Mail: [email protected] URL: http://www.relo.jp/ The information on this material is provided for informational purposes and should not be construed as a solicitation of an investment in our securities. This material was made based on currently available information as of June, 2017, and contains forward-looking statements that reflect Relo's plans and expectations at the time above mentioned. Relo shall bear no responsibility or liability for the accuracy of the information, or any actions arising from the use of information on this material. Besides, the contents of this material are subject to change without any notice. 65#66་་་ RELO GROUP 99 66