Relo Group Investor Presentation

1 May 29, 2015

FY2015/3

Relo Group

Investor Presentation

2

Items Page◆ Financial Results & Overview

(Consolidated) 3

◆ Results & Overview by Segment 9Domestic Business 9Global Business 20

◆ Projection for FY2016/3 28◆ Appendix 31

Agenda

3

Financial Results & Overview

4

① 15 revenue growth

② 6 record profit

Overview

consecutive year of

consecutive year of

th

th

5

（Millions of yen）rounded down to the nearest million yen

FY2015/3 FY2014/3 YoYchange

FY2015/3projection

Change from

projection

Operating revenue 160,050 125,332 + 27.7% 142,000 + 12.7%

Operating profit 8,746 7,212 + 21.3% 8,250 + 6.0%

Recurring profit 9,863 8,252 + 19.5% 9,100 + 8.4%

Net income 6,085 4,819 + 26.3% 5,650 + 7.7%

EPS（yen） 413.15 329.61 + 25.3% 384.54 + 7.4%

Overview

6

FY2009/3 FY2010/3 FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3

Past Results

FY2015/3

¥9.86bil.

FY2011/3

¥5.23bil.

Recurring profit

“The First Olympic Plan”

7

FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3

ROE

FY2015/3ROE of Relo

21.2％

21.2％

Average of companies on TSE 1st section

ROE

8

FY2003/3 FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3

（¥ per share）

Dividend

Dividend

¥124

12th dividend increase

Payout Ratio30%

¥7.5

Consecutiveyear of

9

Results & Overview by Segment

Domestic Business

10

FY2012/3 FY2013/3 FY2014/3 FY2015/3

Operating profit Operating revenue

¥131.2 bil.

YoY change 31.6%

Operating profit

¥8,563 mil.

YoY change21.6%

Results of Domestic Business

11

Domestic Business

ResidentialProperty

Management

ResidentialProperty

Management

Corporate Housing

Management

Corporate Housing

Management

Corporate Fringe Benefit


12

FY2012/3 FY2013/3 FY2014/3 FY2015/3

Operating revenue

¥113.7 bil.

YoY Change 29.4%

Operating profit

¥4,611 mil.

YoY Change21.2%

Operating profit

※Former “Domestic Relocation Business” Segment

Results of Corporate Housing ManagementResidential Property Management

13

FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3

Number of units under management

102,559units

23.4%

Corporate Housing Management

No deposit feesRelo Deposit

Insurance

Undertake every burdensome procedureSub-leasing

Strengths of Relo

+Change from

previous FY end

14

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014


31,027units

10.5％FY2015/3 Operating profit

About ¥1,300mil.

Residential Property Management


FY2011/3 Operating profit

About ¥400mil.

Change from previous FY end

15


Stable income from current customer baseManagement

feeContract renewal

fee

Additional income

Leasing agency Real estate brokerage

Renovation and repair

16

FY2012/3 FY2013/3 FY2014/3 FY2015/3

Operating revenue

¥17.5 bil.

YoY change 47.8%

Operating profit

¥3,952 mil.

YoY change22.1%

Operating profit

※Former “Corporate Fringe Benefit Business” Segment

Results of Corporate Fringe Benefit

17

FY2012/3 FY2013/3 FY2014/3 FY2015/3

Number of fringe benefit program members

Corporate Fringe Benefit Program

Number of members

4.67 mil.

0.3 mil.

Corporate Fringe Benefit: Statistics

New entry and increase in current client companies led the membership growth.


18

The Second Growth Curve

New products with

lower price

Improve usability

Investment in IT system

Increase in service use

Growthin income from use

Expand the membership

base

19

FY2013/3 FY2014/3 FY2015/3 FY2016/3

(p)

Operating revenue

¥143.9 bil.

YoY Change 9.6%

Operating profit

¥9,700 mil.

YoY change 13.3%

Operating profit

Domestic Business FY2016/3 Projection

20

Results & Overview by Segment

Global Business

21

FY2012/3 FY2013/3 FY2014/3 FY2015/3

Operating revenue

¥25.7 bil.

YoY change 13.0%

Operating profit

¥1,458 mil.

YoY change 2.3%

Operating profit

※1 The revenue generated by the sales of properties was excluded from operating profit for FY2012/3

※1

Results of Global Business

22

FY2012/3 FY2013/3 FY2014/3 FY2015/3

Global Relocation Support

Number of global relocation support cases

2,924 households

6.2%

(Number of households)


23

• Global HR function forPanasonic Group

• Know-how for launchingglobal businesses

• Wide variety of trainingmaterials

Large market share of global relocation support in Japan


Panasonic ExcelInternational

24

Chicago

Boston

Global Destination Support

NYLA

DetroitSJ

NJServiced apartments

Housing brokerage for transferee

Number of corporate housing under management

2,158units YoY change26.1%

Multi-lingual 24-hour emergency call support

Number of housing brokerage

1,610units YoY change8.6%

25


26


Corporate Housing - Brokerage- Management

Serviced apartmentsServiced offices, etc.

MexicoMexico

27

FY2013/3 FY2014/3 FY2015/3 FY2016/3

(p)

Operating revenue

¥30.0 bil.

YoY change 16.6%

Operating profit

¥1,900 mil.

YoY change 30.3%

Operating profit

Global Business FY2016/3 Projection

28

Projection for FY2016/3

29

(Millions of yen)Rounded down to the nearest million yen

FY2015/3 FY2016/3(p) YoY change

Operating revenue 160,050 177,000 +10.6%

Operating profit 8,746 10,500 +20.1%

Recurring profit 9,863 11,300 +14.6%

Net profit 6,085 7,000 +15.0%

EPS(yen) 413.15 469.23 +13.6%Dividend per share(yen) 124 141 +17 yen

Consolidated Financial Projection for FY2016/3

30


O p e r a t i n gr e v e n u e O p e r a t i n g p r o f i t

FY2016/3(p) FY2015/3 YoY

changeFY2016/3

(p) FY2015/3 YoYchange

Domestic business 143,950 131,292 +9.6% 9,700 8,563 +13.3%

Global business 30,000 25,736 +16.6% 1,900 1,458 +30.3%

Other 3,050 3,021 +0.9% 400 352 +13.6%

Elimination of intra-company transactions

- - - (1,500) (1,628) -

Consolidated 177,000 160,050 +10.6% 10,500 8,746 +20.1%

Financial Projection for FY2016/3 by Segment

31

Appendix

32

FY2015/3 Consolidated 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

FY2015/3 FY2014/3 Change FY2015/3 FY2014/3 ChangeCurrent assets 36,419 29,227 +7,192 Current liabilities 28,740 21,828 +6,912

Cash and deposits 11,001 9,276 +1,725 Notes and accounts payable-trade 3,256 2,604 +652Notes and accounts receivable-trade 9,388 7,602 +1,786 Short-term loans payable 4,583 1,924 +2,659Short-term investment securities 223 44 +179 Current portion of long-term loans payable 1,123 1,420 ( 297)Real estate for sale 1,860 1,471 +389 Income taxes payable 1,905 1,001 +904Supplies 331 278 +53 Advances received 11,479 10,616 +863Advance payments 8,532 7,373 +1,159 Allowance for bonuses 609 379 +230Deferred tax assets 645 470 +175 Deferred tax liabilities 19 14 +5Other 4,459 2,722 +1,737 Other 5,763 3,866 +1,897Allowance for doubtful accounts (23) (11) ( 12) Noncurrent liabilities 10,424 8,233 +2,191

Noncurrent assets 34,100 27,495 +6,605 Long-term loans payable 4,623 3,127 +1,496Property, buildings and equipment 6,158 3,983 +2,175 Long-term lease deposits 5,222 4,549 +673

Buildings and structures 5,613 4,320 +1,293 Liabilities for retirement benefits 255 221 +34Accumulated depreciation (2,180) (1,888) ( 292) Allowance for loss on guarantees 66 67 ( 1)Buildings and structures, net 3,433 2,431 +1,002 Negative goodwill 3 4 ( 1)

Tools, furniture and fixtures 1,293 1,077 +216 Deferred tax liabilities 91 0 +91Accumulated depreciation (945) (815) ( 130) Other 160 262 ( 102)Tools, furniture and fixtures, net 348 262 +86 Liabilities 39,164 30,061 +9,103

Land 2,170 1,193 +977 Net assets 31,355 26,661 +4,694Other 492 383 +109 Shareholders’ equity 30,437 26,430 +4,007

Accumulated depreciation (285) (286) +1 Capital stock 2,667 2,667 +0Other, net 206 97 +109 Capital surplus 2,859 2,883 ( 24)

Intangible assets 7,063 4,673 +2,390 Retained earnings 27,108 22,515 +4,593Software 1,284 1,275 +9 Treasury stock (2,197) (1,636) ( 561)Goodwill 5,720 3,344 +2,376 Total accumulated other comprehensive income 495 91 +404Other 58 53 +5 Valuation difference on available-for-sale securities 273 103 +170

Investments and other assets 20,878 18,837 +2,041 Foreign currency translation adjustment 235 39 +196Investment securities 8,946 7,946 +1,000 Adjustment for retirement benefits (13) (51) +38Lease and guarantee deposits 9,760 8,732 +1,028 Subscription rights to shares 127 93 +34Deferred tax assets 360 452 ( 92) Non controlling interests 294 46 +248Other 2,047 1,749 +298 Total liabilities and net assets 70,520 56,723 +13,797Allowance for doubtful accounts (236) (42) ( 194)

Total assets 70,520 56,723 +13,797

33

FY2015/3 Consolidated CF(Millions of yen)

Statements of Cash Flow Rounded down to nearest million yen

FY2015/3 FY2014/3 ChangeNet cash provided by (used in) operating activities 6,576 3,923 +2,653

Income before income taxes and minority interests 9,338 7,542 +1,796Depreciation and amortization 742 667 +74Amortization of goodwill 356 226 +130Equity in (earnings) losses of affiliates (927) (785) ( 141)Decrease (increase) in notes and accounts receivable-trade (104) 1,046 ( 1,150)Increase (decrease) in notes and accounts payable-trade (740) (1,198) +458Decrease (increase) in rental deposits and guarantees (657) (1,501) +843Increase (decrease) in tenants 450 249 +201Interest and dividends income received 420 331 +88Income tax paid (2,576) (2,791) +214Other, net 274 137 +136

Net cash provided by (used in) investing activities (4,650) (912) ( 3,738)Purchase of property, plant and equipment (1,488) (844) ( 644)Proceeds from property, plant and equipment 14 415 ( 401)Purchase of intangible assets (318) (554) +235Proceeds from sales of investment securities 137 237 ( 100)Collection of loans receivable 63 0 +0Purchase of investments in subsidiaries resulting in changein scope of consolidation (2,759) (14) ( 2,745)

Other, net (299) (152) ( 147)Net cash provided by (used in) financing activities (178) (466) +288

Proceeds from long-term loans payable 4,300 3,127 +1,172Net increase (decrease) in short-term loans payable 2,271 684 +1,586Repayment of long-term loans payable (4,499) (1,976) ( 2,522)Purchase of treasury stock (873) (1,440) +567Proceeds from sales of treasury stock 143 298 ( 155)Cash dividend paid (1,500) (1,137) ( 363)Other, net (20) (23) +3

Cash and cash equivalents at the end of the period 11,041 9,160 +1,880

May 29, 2015

FY2015/3

Relo Group

Investor Presentation

2FY2011/3 FY2013/3 FY2015/3 FY2019/3

～2015/3期～2019/3期

Recurring Profit

Operating Revenue

The Second Olympic Plan : Target

Recurring Profit：

¥20 bil.

Operating Revenue：

¥270 bil.

The Second “Start‐Up” Stage : First 12 Years

3


FY2015/3 FY2019/3Target

Change from FY2015/3

Operating revenue 160,050 270,000 +68.7%

Recurring profit 9,863 20,000 +102.8%

EPS(yen) 413.15 800.00 +93.6%Dividend per share(yen) 124 240 +116

19th consecutive year of revenue growth 10th consecutive year of record profit16th consecutive year of dividend hike

The Second Olympic Plan : Target

4

OurMission

◆Support non-core operation of Japanese companies

◆Support global expansion of Japanese companies

The Second “Start-Up” Stage

◆Cornerstone for the paradigm shift of the Japanese economy

World-Class Relocation Company

5

・Corporate Housing Management

・Relocation House Rental Management

・Corporate Fringe Benefit

Achieved renewed growth by visualizing procedures

Achieved the target of 100 thousand units undermanagement

Drove profits with “the second growth curve”

Results of the First Olympic Plan

・Global Relocation SupportSuccessfully launched the business

6

・Contents of Corporate Fringe Benefit

・Residential Property Management

・Global Destination Support

Profit tripled at TOHTO, one of the mainsubsidiaries

Smoothly launched new businesses, such as the hotel business

Profit quadrupled at Relo Redac

Results of the First Olympic Plan

Favorable for our core business fields7

Transition of Market Environment

Decrease in population

Weaker domestic demands

Toughercompetition with

global companies

Inefficient business systems will have to be abandoned

Increase in the outsourcing of fringe benefits

Accelerate the demerging of non-core businesses

8


Increased debt in national treasury

Fiscal deterioration

Paradigm shift in the Japanese

economy

Globalization of companies

Domestic relocation

Inbound from outside of

Japan

Need to attract people/goods/capital from all over the world

Decrease inPopulation

Weaker DomesticDemands

Harder Competition with Global Companies

Decrease in population

Weaker domestic demands

Tougher competition with

global companies

9

100 Units ⇒ 200 Units

Corporate Housing Management: Target


FY2019/3

60 thousand

FY2019/3Target

200thousand


FY2015/3

100 thousand

thousand thousand

FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2019/3

10


Our Strength：Sub-Leasing

Companies• Contract

management• Temporary

advance ofdeposit

• Clearingsettlements, etc.

Landlords

• Minimize the workload of client companies• High entry barrier because a certain amount of

capital is required11


Price &

Service Variety

High-end

Middle priced

Entry

Acquire customers in large company market with middle priced services

During the First Olympic Plan (FY2012/3-2015/3)

Add new services, such as mid-range services, in addition to the original

high-end services.

12

Corporate Housing Management: Market

Cooperate with our

corporate fringe benefit business to

cultivate new market

Acquire new customers

in large company

market with middle priced

service

Corporate Housing Managementabout 1 million units

Already Outsourced

Not Outsourced

Yet

13

Promote middle Range

priced service

Improve usability

Invest in IT System

Increase use of

“Relo Net”

Boostrevenues

from “ReloNet”

Raise the number of units under

management

“The Second Growth Curve“to be expanded

14

FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2019/3 FY2023/3

Corporate Housing Management: Target

200,000 units under management andNo.1 in the Market


FY2023/3Target

400thousand

The Second Olympic Plan target

FY2015/3100

thousand

FY2019/3200

thousand

15

FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3

Number of units under Management by TOHTO

The number of units under Management

Compared to FY2011/3:

About1.5 times

FY2011/3About 400mil.

FY2015/3About 1,300mil.

TOHTO


Operating profit

Operating profit

16

• Utilize the needs of companies for leased corporatehousing

• Know-how for improving occupancy rate acquiredthrough successful practices

◆ Growth Factors of TOHTO


Expand our “TOHTO Model” nationwide to seven blocks, and reach

100,000 units under management

• Offer renovation/repair through an installment plansupported by a sufficient amount of capital

17

Residential Property Management: Market

• Scattered into smaller service providers

Residential property management companies

Less than 500 units under management

M&A Investment ¥40bil.

“Seven Block Expansion Nationwide”

• Business succession issues due toaging owners

18

Leased Corporate Housing


Special economic zones

for local revitalization

Corporate relocation/Inbound

Transfer of people

Seven block expansion nationwide oｆresidential property management

Seven block expansion nationwide oｆresidential property management

Provide comprehensive support related to the transfer of people

19

FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2019/3 FY2023/3

Residential Property Management: Target

“Seven Block Expansion Nationwide” and100,000 units under management


The Second Olympic Plan target

FY2015/330

thousand

FY2019/3100

thousand

FY2023/3Target

300thousand

20FY2001/3 FY2003/3 FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3


Operating profit

“The Second Growth Curve”

The First Olympic PlanAverage annual growth rate

16.6％

21


Improve economicenvironment

Decrease in working Population

The demands for outsourcing corporate fringe benefits are expected to remain stable

Increased inquiries from small and midsize

enterprises

Stronger need to convert part-time Workers to full-

time workers

22


Small and Midsize Enterprises Large Companies

• Reinforce promotion at local branches• Expand the variety of local contents

menus

• New products for large companies• Offer menu for reducing expenses for

mandatory employee fringe benefitprogram

The leading provider of support forhealthcare insurance societies

Use IT system to offer “healthmanagement service”

23

Our core businesses

Attract more customers to core business fields

Reduce expenses through saving on

insurance premiums, etc.

Monetize company owned recreation

facilities for employees

Cooperation with Related Businesses

24

FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3

Number of global relocation support cases


FY2011/31,529households

FY2015/32,924households

FY2015/3About 400 mil.

Global relocation support and

Global destination service

Operating profit

(Number of households)

25

Lay the foundation for our global expansion

Panasonic Excel International

• Expand the service menu Utilize the reputation and know-how of Relo Panasonic Excel

Language lessons

Orientation before transfer

26

Lay the foundation for our global expansion

Utilize the reputation and know-how of ReloPanasonic Excel

Target of the Second Olympic PlanNumber of households supported :

FY2019/3 10,000 households

Strengthen the Inbound Relocation Business

Panasonic Excel International

27

North America

Global Destination Service



RELO REDAC, INC.

Operating profit

Operating profit

28


・ Send customers from JapanCooperate with Japan

・ Develop serviced apartments business on the West Coast

・ Utilize “JAN”, the 24hour-multi lingual interpretation service

・ Build up the number of units under management of overseas corporate housing of Japanese companies

North America

◆ Growth Factors

29


Take advantage of global destination services from

Relo Panasonic Excel

Global Expansion of “Relo Redac Model”

30

0

2,000

4,000

6,000

8,000

10,000

Share Price

Share Price of Relo Feburuary 23, 2015Highest price since IPO

The First Olympic Plan

31

The Third Olympic Plan

Explore the way to become a world-class relocation company

The Second Olympic PlanEstablish

No.1 Position in core businesses

The Second “Start-UP” Stage

32

Contact

Planning and IR Group, Relo Holdings, Inc.

TEL: +81-3-5312-8704E-Mail: [email protected]

URL : http://www.relo.jp/

The information in this document is provided for informational purposes and should not be construed as a solicitation of an investment in our securities.This document was made based on currently available information as of May, 2015, and contains forward-looking statements that reflect Relo' s plans and expectations at that time. Relo shall bear no responsibility or liability for the accuracy of the information, or any actions arising from the use of the information in this document.In addition, the content of this document is subject to change without any notice.

Documents

Relo Group Investor Presentation