2nd jpmc group’s financial results · jpmc brand logo3 circles+ α in cooperation with jpmc...

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2nd Quarter of Fiscal Year Ending December 2019

JPMC Group’s Financial Results

Q2 FY12/19Consolidated Financial Results

2

JPMC Results Briefing

3

Overview of Q2 of FY 2019

The number of units under management increased steadily.From the end of the previous term, it rose by 3,972 (5.3%) to 79,057.

Shareholder returns

The acquisition of treasury shares (536,300 shares, 599 million yen) was completed.

Occupancy rate remained high, standing at 91.8%.(Average occupancy rate in 2018 was 91.4%.)

Thanks to the growth of recurring revenue, the sales in Q2 increased for 8 consecutive terms since listing. Both sales and operating income achieved the targets.

The interim dividend for fiscal 2019 was 17.5 yen/share as expected in the announcement.

Consolidated Financial Results for Q2 FY12/19

4

(Million yen) FY12/18Q2

FY12/19Q2

YoY change YoY (%)

Vs. full-year

forecasts(%)

Net sales 20,649 21,304 655 3.2% 43,300

49.2%

Operating income 1,277 1,192 -84 -6.7% 2,200

54.2%

Ordinary income 1,284 1,195 -88 -6.9% 2,200

54.3%

Net income attributable to owners of parent

888 823 -65 -7.4% 1,500

54.9%

Net income per share (yen) 49.04 45.63 -3.41 -7.0%


Financial Highlights (consolidated)

5

Consolidated Statement of Cash Flows


FY12/19Q2

YoY change

Operating cash flow 391 405 14

Investing cash flow -80 -19 60

Financing cash flow -158 -1,095 -936 Acquisition of treasury stock

Increase in cash and cash equivalents 152 -709 -861

Beginning balance 4,700 5,170 470

Ending balance 4,852 4,460 -391



FY12/19Q2

FY12/19Forecast

Vs. forecast（％）

Income from real estate 19,730 20,103 40,952 49.1%

Income from real estate incidental business

574 938 1,950 48.1%

Guarantee of delinquency 157 199 442 45.2%

Insurance business 240 563 1,161 48.6%

JPMC Hikari 176 175 347 50.5%

Other income 344 262 398 65.9%

Net sales 20,649 21,304 43,300 49.2%

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Stock

Flow

Consolidated Sales


7

Status of Key Indicators

Income from real estate FY12/19Target

FY12/19Q2 Results

Vs. forecast（％）

Number of units under management at the end of the period (units)

80,000 79,057 98.8%

Net increase in number of units under management (units) 5,000 3,972 79.4%

Average occupancy rate (%) 91.0 91.8 ー

Revenue from real estate incidental business

Number of new delinquency guarantees (cases) 11,000 4,373 39.8%

Number of new insurance contracts (cases) 42,000 20,890 49.7%


Japan Property Management Center

Co., Ltd.

Subleasing/Rental Management

To become a leading PropTech company!Property Management Technology

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9

Three keywords for improving corporate value

To grow the top line by seizing chances

To become a leading PropTech companyAI × ICT = Property Management Technology

Differentiation from the real estate business

Emphasis on the growth of sustainable, stable recurring revenue, rather than short-term profits

Utilization of AI To tackle problems with management of rental housingBy utilizing our partner network, we will reform the rental housing industry.

Business administration without using BS

To become a leading PropTech companyAI × ICT = Property Management Technology

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基調講演

11Source: the Ministry of Internal Affairs and Communications, Statistical survey on housing and land in 2013 *Researched by our company

To reform the Japanese rental housing market with PropTech

No. of units managedabout 1 million*

No. of units managedabout 100,000

Japanese rental housing marketAbout 22.81 million units

PropTech

To solve problems with Property Managementwith AI×ICT!

AI call centerAI assessmentAI occupant screeningAutomatic production of contractsJPMC Hikari

JPMC Partner manages about 1 million units, and together with our company, it occupies a share of about 5% in the Japanese rental housing market. This scale is comparable to that of the largest prefabricated house maker. We offer PropTech-based solutions, to reform the Japanese rental housing market!

基調講演

12

0

5

10

15

20

25

30

35

0

10

20

30

40

50

60

70

80

90

100

0

2

4

6

8

10

12

0

2

4

6

8

10

12

14

16

130

190

12

115

To streamline business processes with PropTech

(Minutes) (Minutes) (Minutes) (Minutes)

Preparation of agreement

with one-click

Automatic rent assessment

by AI

Reduce timewith speech recognition

technology

Automatic reviewby AI

To work on the streamlining of back-office processes with PropTech

*Researched by our company

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Operation of serviced housing

for elderlyConstruction Renovation Management Brokerage

Construction of serviced housing

for elderly

FurusapoPartner

ConstructionPartner

Renovation Partner

J’s Partner E-VEST Partner

Silver Partner

Number of partners

1,407 companies nationwide

Utilization of Partner Networks

*As of the end of July 2019. Including associate partners.

基調講演

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Owners

Occupants

JPMC brand logo

3circles + αIn cooperation with JPMC partners, we form a large circle under the theme of “rental housing,” and keep providing owners and occupants with wealth, peace of mind, safety, and stability.

The logo was infused with the above mentionedambition of our company.

イーベストパートナー

Brand logo


15

■Vs. Market■Vs. Prefab house

manufacturers■Vs. Business sentiment

Market scale

Rental housing

22.81 million units

Annual revenue from rents

About 15 trillion yen

Rental housing accounts for 37.6% of all housing units in Japan. It constitutes social infrastructure. From the number of rental housing units, the annual revenue from rents can be estimated to be over 15 trillion yen. This market is huge.

16

Market scale

2015 2020 2025 2030 2035 2040 2045

125

120

115

110

105

100

(Million people)

Japan's Future Population Trends (Nationwide)

102,210 thousand people

17

Future Population Changes

Change in households2000 2030

Total No. of households: 46.78 million

Total No. of households: 53.48 million

BreakdownNo. of single households: 12.91 millionNo. of two-person households (married couples only): 8.83 millionNo. of other general households: 25.04 million

BreakdownNo. of single households: 20.25 million (up 7.34 million)No. of two-person households (married couples only): 11.13 million (up 2.29 million)No. of other general households: 22.10 million (down2.94 million)

Due to the trend toward nuclear families, the number of one/two-person households is estimated to increase by 9.63 million by 2030.

(Source: National Institute of Population and Social Security Research, Overview of estimation of the number of households in Japan (nationwide) 【in Jan. 2018】)

Expected change in the population

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396,404 buildings

(Buildings)

450,000

400,000

300,000

200,000

350,000

250,000

150,000

New construction starts for rental housing (nationwide)

2013 2014 2015 2016 2017 2018

Current Condition of Rental Housing Market

19

Daito Trust Construction16.5%

Daiwa House

12.7%

Sekisui House12.2%

Others33.7%

Rati of prefab house manufacturers

75.1 ％

396,404 buildings

2020*According to our research

Current Condition of Rental Housing Market

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Ethics in construction vanished away.22

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Sublease of ethics in construction

OwnersPrefabricated home maker

Let’s build housing, because the sublease system ensures returns.

Securing profitsby cutting down onconstruction cost

Post-prefabricated home maker

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Super sublease of ethics of living

Professionals in rental will manage real estate on behalf of owners, so there will be no worries.

Securing profits for ownersand our company throughrental housing management

Post-prefabricated home maker

Owners

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Difference from prefabricated home makers

Prefabricated home makers

Construction Sublease, management,and investment

Securing profits for makers by cutting down on construction costs

Securing profits forowners and our companythrough “rental management only”

Rental management with super sublease(construction will not be conducted)

Recurring-revenue business model that allows sustainable growth!

Profit

Profit

Difference from prefabricated home makers

Prefabricated home makers Business model

focused on constructionSetting of rents

with reference toconstruction costs

Ethics of construction

Business model focused on rental management

Ethics of living

Setting of appropriaterents considering

the market environment

An overwhelmingly high occupancy rate achieved!

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Problems with the sublease of prefabricated home makers

They do not want to disclose profits

Guaranteed rents

Revenue from

rentsRevenue from

rents

Owners’ income affected by revision to rents

For profit-earning real estate

Profit of prefabricated home makers

Lossmargin

For money-losing real estate

Income and expenditure in a black box

They do not want to disclose deficits

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Prefab house manufacturers

Construction & RenovationManagement＆Brokerage＆Serviced housing for elderly

Subleasing

Post-Prefab House Manufacturers

Logic of building

Vertical integration of construction companies

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Prefab house manufacturersLogic of living

Construction & RenovationManagement＆Brokerage＆

Serviced housingfor elderly

サブリースLogic of living

Super subleasing

Management

Management of serviced housing

for elderly

Construction

Renovation

Constructionof serviced housing

for elderly


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Operation of serviced housing

for elderlyConstruction Renovation Management Brokerage

Construction of serviced housing

for elderly

FurusapoPartner

ConstructionPartner

Renovation Partner

J’s Partner E-VEST Partner

Silver Partner

Number of partners

1,407 companies nationwide

JPMC Partners

*As of the end of July 2019. Including associate partners.

基調講演

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Owners

Occupants

JPMC brand logo

3circles + αIn cooperation with JPMC partners, we form a large circle under the theme of “rental housing,” and keep providing owners and occupants with wealth, peace of mind, safety, and stability.

The logo was infused with the above mentionedambition of our company.

イーベストパートナー

Brand logo

32




33

4,7875,246

6,035

7,007 6,862

8,535

4,968

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2007 2008 2009 2010 2011 2012 2013

Net increase in the number of leased units

Economic Downturn would be an Opportunity!

AbenomicsEconomic recovery

(Units)

Lehman ShockRecession

3,552

6,505

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

2018 2019

(Units)


Vs. previous year approx. 183％

6,505 units

Comparison on a half-year basis (January - June) 34

Trends in the number of new housing orders

73,000

75,000

77,000

79,000

81,000

1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月

2018年 2019年

Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Monthly Trends in the Number of Units Under Management

[units]

In the period of the current mid-term plan, the company focuses on the increase of units under management.The number of units under management started growing again!

The company has already achievedthe target for this term: 80,000 units!!

35

Jan.

36

Variation in the number of rental units under management

Mid-term Management Plan

In order to develop a structure for growth, we strengthened our recurring-revenue business by expanding the platform and the resources of sales staff, and increased the number of rental units under management to over 100,000 early.

48,715

56,819

66,275

73,165 74,277 75,085

80,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Over 100,000 units

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Ranking Company name Number of houses

1st SOMPO care groups 7,678

2nd Cofan, Institute of Studies 5,983

3 ジ・アメニティサービス 4,753

4th Vatty 3,822

5th Central Bank Group 3,199

6th La Charite 1,904

7th Sekiwa Grand Mast 1,738

8th Yamame Medical Co., Ltd. 1,709

9th Gold Age 1,504

10th Welloff 1,483

Number of elderly housing units

Ranking

33rd Japan Property Management Center 152 buildings 5,145 units

Ranked rd Plan

Including plans to open as of the end of July 2019

152 buildings 5,145 units

Source: Housing for the Elderly ShinbunAugust 7, 14, 2019 Issue "Elderly Housing Ranking 2019"

*Calculated based on the number of managed units as of the end of March 2019.

902 1,129 1,553

2,142 2,609

3,177

4,200

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

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Over 10,000 units

Leasing of rental housing for the elderly is proceeding steadily.We will manage 10,000 housing units by the end of 2022, aiming to be Japan's No. 1 in the number of rental housing for elderly.

Trends in the number of rental housing for elderly

Medium-term Management Plan (Rental Housing for Elderly)

※ we call our services “Furusapo” collectively that sublease Rental Housing for Elderly

Measures to accelerate growth of the Furusapo businessUtilization of Japan Housing Finance Agency

JPMC provides bridge financing for rental housing for the elderly.After the property is completed, you will receive lump-sum repayment at the loan is provided by Japan Housing Finance Agency.

30%

Timing of financingof the Japan Housing Finance Agency

30% 30% 10%

Loan approval

Sale of land

Start of construction

Com

pletion offram

ework

Com

pleting

Final loan

Sale of land

JPMC’s bridging financefor land-only

Rental Housing for Elderly

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Measures to accelerate growth of the Furusapo business“Furusapo Renaissance”

6420 108(Million)

12 6 4 2 010 8

10510095908580757065605550454035302520151050

Aged2017

127.09 million people2055

91.93 million people

Source: National Institute of Population and Social Security Research website

Revitalize company dormitories and student dormitories, where demand is declining, to rental housing for the elderly

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Scheduled to be opened in April 2020

One of the largest facilities in Tokyo with 156 units

Conversion work of an empty company dormitory for singles in Tokyo


41

Kit for constructing housing for seniors with services under the supervision of JPMC

Anyone can build housing for seniors with services just like a plastic model.

JPMC Furusapo Kit

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JPMC Furusapo Center Depo

Development of parts and materials that can be constructed easily and at low cost by the two-by-four methodMass-produced Furusapo package

Conventional complex procedures, knowledge, and special skills are unnecessary! It is possible to realize construction easily.

JPMC Furusato Kit

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Anyone can build highly profitable housing for seniors with services just by combining parts just like a plastic. model!!*Schematic diagram of JPMC Furusapo Center Depo

2nd floor

1st floor

Residential room package

Restroom package

Staircase set

Cafeteria package

Elevator

Example of use of materials of JPMC Center Depo

Structural members (2×4 construction method) Siding (Moenexcelado 16) Other available materials

Anyone can build housing for seniors with services by using the materials of JPMC Center Depo and JPMC’s know-how to construct it!

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential room

Residential roomResidential

room

Residential room

Sanitary room

Washing room

Machine-aided bathroom

Undressing room

Sanitary room

Washing room

Staff room

Visiting nursing care

Clerical office Windbrea

k room KitchenPassage

PantryWaiting room

warehouseTea room

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Trends in Stock Income

Focus on growth of stock businessesGrowth in stock income leads to stable and sustainable top-line growth

18,760

19,879 20,305

21,042

8.8%

9.5%

10.4% 10.4%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

2016年 2017年 2018年 2019年 2020年 2021年 2022年

ストック収入(単位:百万円) 利益率

Comparison on a half-year basis (January - June)

Stock income (million yen) Profit rate

Differentiation from the real estate industry

45

Existing traditional Japanese inn business

Our Business Model

Investment Management

President of traditional Japanese inn

Our Business Model

Investors/fundsHoshino Resorts


President of traditional Japanese inn

Existing traditional Japanese inn business


Existing leasing operations


Apartments and condominiums’

Owner

Our Business Model

Apartments and condominiums’

Owner

Our Business Model

JPMC+Partners

Partners

ManagementInvestment

OwnerApartments and condominiums’


Existing leasing operations

50

Differentiation from the real estate business

General realty(Business administration

using BS)

(Business administration without using BS)

Start from zero at the beginning of each fiscal year

Start from the number of units under management accumulated in the previous year

Totally different business model from the general real estate business

Investment/procurement

Operation/sale Profit

Improvement in asset value

ProfitOperation

Achieve high ROE while maintaining the equity ratio!

自己資本比率

38.0%45.2%

42.4%

37.0%44.2% 49.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2013年 2014年 2015年 2016年 2017年 2018年

30.5% 30.3% 33.0%38.9% 41.7%

37.9%

ROE

45.2％ 42.4％ 38.0％ 37.0％ 44.2％ 49.1％

51

Shareholders' equity ratio

Appendix

52

Smart Leasing

53

基調講演

The age of smart intermediary business will come. Strengths of our company as a “real estate provider”

54

フォレントで

探すVisit to

a real estate firmPreview of rooms

with a real estate firm

To sign a contractat a real estate firm

平均訪問数

3.5店舗平均内見数

9.1件探し始めて平均

44日で契約Average number of

firms visited:

1.6

Average number oftimes of preview

3.1

Contracts signed in

18.7days on average

after starting search

Search with a smartphone

55

Near future of the rental field【Future】

Search with a smartphone

To contact a real estate firm

by LINE

Preview by yourself

To sign a contractin a website

The age of smart intermediary business will come.56

Managementfirm

Customers use a smartphone or a tablet PC to search for housing.

Request preview by LINE

57

Properties UnlockingSmart key

Managementfirm

Preview by yourself

Google map

58

ｚ

IT-based explanation of important items at home

59

Cloud

Electronic payment

Five major brands covered

Customers can sign a contract by using a credit card without

visiting a shop.

Allocating resources to sales and proposals

In-house work

Sales force

In-house work

Sales force

Use of AI and IoT

By promoting the use of AI and IoT to lay the foundation to support business growth, we aim to create a "small backyard" that allows it to allocate personnel more heavily to its sales force while maintaining the current ratio of in-house staff.

60

In order to facilitate two-way communication within the company,we use Internal SNS as Salesforce and communications tools

Acceleration of internal communication speed

Use of SNSImproving communication speed

Use of Cloud SystemsPromoting efficient communicationamong managements and sales staffs

Development of human resources

61

Disclaimer

62

This material contains forward-looking statements regarding the future performance of the Company and its consolidated subsidiaries, as well as plans and targets.These forward-looking statements are based on information available at the time of preparation and certain subjective assumptions regarding uncertain factors. They involve inherent risks and uncertainties, and there can be no guarantee that these forward-looking statements will be realized as described in the statements.

Actual results may differ from these forecasts due to changes in economic conditions, market trends, and the business environment.

Although the contents of this document are subject to great care, with respect to all matters relating to this document, with respect to novelty, validity, usefulness, fitness for a particular purpose, functionality, and safety,Please note that we are unable to provide any warranties.

These materials are not intended to solicit investment.Any final investment decision is the sole judgment and responsibility of the user.

2nd jpmc group’s financial results · jpmc brand logo3 circles+ α in cooperation with jpmc...

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