earnings briefing materials q2 fy2021
TRANSCRIPT
0
TKP Corporation
Earnings briefing materials Q2 FY2021
October 14th, 2021 TKP Garden City PREMIUM Kyobashi
1
Executive Summary Q2 FY2021
Performance Review & Business Review
Business Development
Appendix
Contents
FY2020:up to Feb. 21 Q1:Mar. - MayFY2021:up to Feb. 22 Q2:Jun. – Aug.
Q3:Sep. – Nov.Q4:Dec. – Feb.
Definition on periods
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(C) TKP Corporation 2021
Executive Summary Q2 FY2021
Business Performance
Management Topic
• Quarterly operating profit and ordinary profit turned around as rental meeting rooms were utilized as vaccination venues, and some of hotels were block-leased for COVID-19 mild case patients.
• Promoting new style leasing structures, where profitability risks are hedged, ahead of social & economic normalization, alongside with countermeasures to COVID-19.
• Revied full year guidance on October 6th as pandemic impacts to the rental meeting room business are getting to be longer than original anticipation.
• Announced business tie-up with Nikkei Inc.
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Performance ReviewQ2 FY2021
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(C) TKP Corporation 2021
Profit forecast revision for FY2021 announced on October 6thAlthough our measures to COVID-19 were effective, pandemic derived impacts became longer than our assumption. Therefore, we revised full year guidance. In addition, as we finished estimating tax amount for this year, resulting from internal reorganization, net profit guidance is newly introduced.
(million yen)Feb. 2021
actualFeb. 2022
initial forecastFeb. 2022
new forecastnew vs. initial
Net sales 43,138 48,000 43,800 (4,200)
EBITDA※1
(% to sales)3,073
7.1%5,800
12.1%3,600
8.2%(2,200)
Operating profit(% to sales)
(2,497)(5.8%)
7001.5%
(1,900)(4.3%)
(2,600)
Ordinary profit(% to sales)
(2,321)(5.4%)
1000.2%
(2,500)(5.7%)
(2,600)
Net profit attributable to
owners of parent(% to sales)
(3,503)(8.1%)
― (3,900)(8.9%)
―
※1 EBITDA is calculated by adding depreciation, goodwill amortization, amortization of long-term prepaid expenses, and amortization of intangible assets such as customer-related assets to theoperating profit/loss.
※2 Tax amount was not properly estimated as internal reorganization was not yet finished. Therefore, net profit was to be determined at the beginning of the fiscal year.
(TBD※2)
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(C) TKP Corporation 2021
(million yen) Feb. 2021 Feb. 2022 Y-Y change Feb. 2022
Q1 Q2 1H Q1 Q2 1H (%) Forecast
Net Sales 10,447 10,097 20,544 10,272 11,683 21,955 +6.9% 43,800
Gross profit 2,744 2,317 5,062 2,588 3,689 6,277 +24.0% -
(% to sales) 26.3% 23.0% 24.6% 25.2% 31.6% 28.6% +4.0pt -
SG&A 3,709 3,367 7,076 3,418 3,357 6,775 (4.2%) -
EBITDA 367 362 729 574 1,709 2,283 +212.9% 3,600
(% to sales) 3.5% 3.6% 3.6% 5.6% 14.6% 10.4% +6.8pt 8.2%
Operating profit (loss) (964) (1,049) (2,013) (829) 331 (498) - (1,900)
(% to sales) (9.2%) (10.4%) (9.8%) (8.1%) 2.8% (2.3%) +7.5pt (4.3%)Ordinary profit (loss) (1,288) (831) (2,119) (979) 233 (746) - (2,500)Profit (loss) attributable to owners of the parent
(1,464) (938) (2,403) (1,878) (255) (2,133) - (3,900)
Consolidated results Q2 FY2021• Net sales for Q2 significantly recovered from last year as well as from Q1, thanks
to vaccination center operation. • Quarterly operating profit turned around as some of our hotels were block-
leased out as accommodation facilities for COVID-19 mild case patients.
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(C) TKP Corporation 2021
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
OthersRegus JapanTKP
Quarterly trend in net sales/EBITDA
TKP Q2 sales recovered to JPY6.8 billion, recording post-pandemic new highEBITDA jumped by 4.7 times from last year and 3.0 times from Q1.
(million yen) (million yen)EBITDANet sales
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(C) TKP Corporation 2021
Consolidated balance sheet Shareholders’ equity rose to 34.6%, as share subscription rights were exercised, and certain non-current assets were divested. Operating cash flow was negative as we paid two-year equivalent tax, as tax payment last year was deferred.
End of Aug. 2020 End of Aug. 2021 Change from last yearCash flow from operation 3,112 (3,028) (6,141)Cash flow from investment 438 2,007 +1,568Free Cash Flow 3,551 (1,021) (4,572)Cash flow from finance 1,234 (1,887) (3,122)
(million yen) End of Feb. 2021 End of Aug. 2021 ChangeCurrent assets 21,373 19,337 (2,035)(Cash & deposits) 15,195 12,312 (2,882)(Accounts receivable) 3,318 2,846 (472)
Non-current assets 95,573 89,696 (5,877)(Property, plant and equipment) 38,735 35,757 (2,977)(Intangible fixed assets) 42,196 39,159 (3,036)
Total assets 116,946 109,033 (7,912)Current liabilities 26,955 19,008 (7,946)Non-current liabilities 54,849 50,457 (4,392)Total liabilities 81,804 69,465 (12,338)
(Interest-bearing debt) 62,676 54,677 (7,998)Total net assets 35,142 39,567 +4,425Total assets & liabilities 116,946 109,033 (7,912)
Shareholders’ equity ratio 28.4% 34.6% +6.2pt
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(C) TKP Corporation 2021
Progress on new share subscription rights
In January, we allocated moving strike new share subscription rights to a third party in order to finance additional flexible office related capital investment (exercise started in February). 7th tranche was completed on September 27th.The 8th tranche commencement is currently under deliberation.
7th new share subscription right(allocated on Feb. 4th, 2021)
New capital:c. 8.3 bn.8th new share subscription right
Expected new capital:c. 10 bn※2
※1:We have options to decide the commencement day, numbers of the rights to be exercised, as well as termination day. ※2:Calculated based upon the closing price of ¥2,672 as of January 13th as the base price for the strike price. Expected capital amount
could change in accordance with the strike price, which is moving strike structure.
Option to commence※1
Period (M or Q) Exercised share Fresh capital (¥ million)FY20 Q4 (February) 294,600 728FY21 Q1 (Mar. to May) 1,637,900 3,709FY21 Q2 (Jun. to Aug.) 1,339,400 2,711FY21 Q3 (September) 702,400 1,146
Total 3,974,300 8,296
finished
9
Business ReviewQ2 FY2021
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(C) TKP Corporation 2021
FY Feb. 2021first half
FY Feb. 2021second half
FY Feb. 2021full year
FY Feb. 2022Q1
FY Feb. 2022Q2
Opened 10(4,453 tsubo) 2(373 tsubo) 12(4,826 tsubo) 1(653 tsubo) 2(266 tsubo)
Closed 21(6,349 tsubo) 25(5,448 tsubo) 46(11,797 tsubo) 11(5,275 tsubo) 2(333 tsubo)
Opened 8(2,319 tsubo) 1(764 tsubo) 9(3,083 tsubo) 2(833 tsubo) 3(558 tsubo)
Closed - 3(706 tsubo) 3(706 tsubo) - -
Opened - 1(1,000 tsubo) 1(1,000 tsubo) - -
Closed - - - - -
TKP closed 2 facilities due to contract expiry and termination request. TKP opened two accommodation facilities through revenue sharing agreements. Regus Japan opened in two new cities and started its 17th location in Osaka.
(Japan)
(Taiwan)
TKP Conference CenterTKP Business Center
(Breakdown of 2 closures)1 facility1 facility
TKP onsen hotel omoto (Asama)
LecTore LecTore
TKP Resort Hotel Tateshina
(Japan)
Openoffice
OpenofficeMidosuji
(Opened in August 2021)
Regus Shizuoka Aoi TowerBusiness Center
(Opened in June 2021)
Regus
Regus Koriyama EkimaeBusiness Center
(Opened in June 2021)
Regus
Facility openings and closures in core operations
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TKP(C) TKP Corporation 2021
Temporary offices in large, new buildings
Banquet facilities in large, older hotels
Temporary offices in large, older buildings
Temporary offices in medium-sized, older buildings
Temporary offices in small, older buildings
Brand with Escrit Inc.
Grade Feb. 2019 Feb. 2020 Aug. 2021
CIRQLocations 24 24
RoomsTsubo - 51
-51
19,776Garden City
PREMIUM(GCP)
Locations 25 27 26RoomsTsubo
300-
296-
30615,896
Garden City(GC)
Locations 58 54 50RoomsTsubo
563-
522-
46937,059
ConferenceCenter(CC)
Locations 82 66 66RoomsTsubo
918-
780-
76929,654
BusinessCenter(BC)
Locations 45 34 31RoomsTsubo
286-
223-
2125,524
STAR rentalMeeting rooms
Locations 36 32 28RoomsTsubo
70-
71-
551,641
LecTore and Ishinoya(accommodations & training venue)
Locations 15 14 16RoomsTsubo
101-
90-
9923,430
TKP TotalLocations 261 251 241
Rooms 2,238 2,033 1,961Tsubo 133,193 142,002 132,980
Number of meeting rooms, locations by grade (TKP)We provide rental meeting rooms in grades according to the purpose of use, scale, budget, and other factors. These comprise 241 facilities and over 130,000 tsubo of floor space.
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TKP(C) TKP Corporation 2021
(million yen) Feb. 2021 Feb. 2022 Y-Y change
Q1 Q2 1H Q1 Q2 1H (%)
Net sales 5,410 5,261 10,672 5,466 6,859 12,325 +15.5%
Gross profit 1,266 891 2,158 1,368 2,449 3,817 +76.9%
(% to sales) 23.4% 16.9% 20.2% 25.0% 35.7% 31.0% +10.8pt
SG&A 2,150 1,884 4,035 1,860 1,893 3,753 (7.0%)
EBITDA (674) (744) (1,418) (275) 797 521 -
(% to sales) (12.5%) (14.1%) (13.3%) (5.0%) 11.6% 4.2% +17.5pt
Operating profit (loss) (884) (993) (1,877) (491) 555 64 -
(% to sales) (16.3%) (18.9%) (17.6%) (9.0%) 8.1% 0.5% +18.1pt
Business performance in 1H FY2021 for TKP (non-consolidated) Hotel business, a major loss-making reason last year, turned around in Q2EBITDA and OP both achieved quarterly profit as vaccination center operation, to some extent, positively contributed to the profit during the quarter.
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TKP(C) TKP Corporation 2021
5,391 4,687 5,078
4,549
1,881 3,157
4,166 3,628
2,871 2,763
1,001
953 1,105
831
243
580
1,133 965
890 841
1,510
1,813
1,734 1,878
1,717
114
187
328
224
227
153
1,258
1,396
1,344
1,141
391
590
833
701
867
1,095
398
299
328
218
213
72
137
157 282
269
92
76
105
739
2,569
676
291
603
329
229
0
2,000
4,000
6,000
8,000
10,000
12,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
Room rent Option Vaccination center F&B Accomodations Others Cancellation fee※“Option” mainly represents sales for the use of meeting room equipment.
Sales by serviceAlthough the mainstay rental room business continued to struggle during Q2, the saviors were vaccination centers and hotel block-lease deals for COVID-19 mild case patients.
(Million yen)
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TKP(C) TKP Corporation 2021
41,831
36,755
39,776 38,358
24,476
20,255
26,654 25,032
22,825
29,687
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
Sales per tsubo and meeting room gross leasable area※
面積
坪あたり売上高
■GLA(tsubo)sales / tsubo
※ Sales include room charge, options and catering revenues※ GLA indicates gross leasable area as meeting room function
Meeting room GLA (tsubo)
Trend in KPI of the rental meeting room businessSales per tsubo recorded post pandemic highest number partly thanks to vaccination center operation related top line.We will continue to provide one stop solution, combining venues and services.
Monthly Sales / tsubo Quarterly average (yen)
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TKP(C) TKP Corporation 2021
Sales ratio by usage: TKP meeting roomsDuring Q2, utilization as vaccinations either as simple vaccination venues or by our own vaccination centers increased, which is included into “Others.”
Others include temporary offices, workshops, AGMs, press conferences and vaccination centers
20.7% 23.2% 24.7% 24.1%17.2% 18.3% 20.4%
14.9% 14.4% 12.8%
18.4% 11.7% 4.9% 6.0% 19.5%7.9% 3.9%
2.3%8.3%
4.4%
17.8%16.0%
15.5% 11.7%
27.1%
9.2%7.9%
4.6%
21.7%
7.3%
15.2%18.0%
21.0%18.0%
10.2%
10.9% 19.4%
17.5%
17.9%
13.9%
4.9%4.3%
3.9%8.4%
0.6%
1.0%0.5%
0.3%
0.2%
0.4%
2.9%3.5% 5.9% 11.3%
4.2%
13.6%
18.9%34.0%
11.8%
10.7%
20.1% 23.4% 24.1% 20.5% 21.3%
39.2%29.1% 26.3% 25.6%
50.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
Meeting Recruiting Training Seminar Party Exam Others
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Regus(C) TKP Corporation 2021
Brand Feb.2020 Feb.2021 Aug. 2022
Location 4 6 7Tsubo - - 5,752
Location 100 105 108Tsubo - - 28,406
Location 5 4 4Tsubo - - 288
Location 47 47 48Tsubo - - 7,360
Location 2 3 3Tsubo - - 3,027
Location 11 11 11Tsubo - - 4,134
Regus (Japan)Location 156 162 167Tsubo 36,311 39,885 41,806
Regus (Taiwan)Location 13 14 14Tsubo 6,161 7,161 7,161
JapanTaiw
an
Large community-type rental offices
High-grade rental offices
Rental offices adjacent to public transportation
Reasonably priced unmanned rental offices
Large community-type rental offices
High-grade rental offices
Regus Japan and TaiwanTotal:48,967tsubo
Regus: number of Locations by brand
We operate four brands in Japan and two brands in Taiwan suited to different needs. We provide a total of 181 facilities with 50,000 tsubo of workspace.
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Regus(C) TKP Corporation 2021
New nine-story building1-9F SPACES
SPACES Roppongi
October 1, 2020
2-9F SPACES10F TKP
SPACES Shinjuku
Total:764.3 tsubo
March 22, 2021
SPACES Akasaka
Total:991.5 tsubo Total:921.5 tsubo
We decided to open one-building format under SPACES brand, as flexible offices are so much in demand. By having symbolic large-scale buildings, we can expect top line synergy effects to the smaller Regus facilities through traffic funneling.
Opening on Nov. 1, 2021
Regus Shibuya KoendoriBusiness Center
1-6F Regus7-8F TKP
Total:415.1 tsubo
September 1, 2021
New development of one-building facilities
3-6F SPACES7-8F TKP
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Regus(C) TKP Corporation 2021
※SG&A, and operating profit (loss) are calculated after deducting amortization of goodwill & customer related assets
Business performance in 1H FY2021 for Regus JapanNet sales finally started to rise, after bottoming out from declining trend last year, which was because of large scale tenant departures. Recent cost hike is related to our active investment for flexible office expansion in the future.
(million yen) Feb. 2021 Feb. 2022 Y-Y change
Q1 Q2 1H Q1 Q2 1H (%)
Net sales 4,456 4,375 8,831 4,208 4,376 8,585 (2.8%)
Gross profit 1,547 1,439 2,987 1,111 1,177 2,289 (23.3%)
(% to sales) 34.7% 32.9% 33.8% 26.4% 26.9% 26.7% (7.2pt)
SG&A 1,275 1,274 2,549 1,397 1,329 2,727 +7.0%
EBITDA 1,034 941 1,975 492 578 1,071 (45.8%)
(% to sales) 23.2% 21.5% 22.4% 11.7% 13.2% 12.5% (9.9pt)
Operating profit (loss) 271 165 437 (286) (151) (437) -
(% to sales) 6.1% 3.8% 5.0% (6.8%) (3.5%) (5.1%) (10.1pt)
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Regus(C) TKP Corporation 2021
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
Office Others Membership Meeting room
Sales by serviceOffice, which is mainstay business of Regus Japan, is now rising, after being in a declining trend from Q1 last year.
(Millions of yen)
※Membership: Monthly subscription service where the members are entitled to use all the Regus lounges & co-working spaces located in Japan
※
20
Regus(C) TKP Corporation 2021
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2019 FY2020 FY2021
Regus SPACES Open Office Others
Sales by brandsSales at SPACES grew a lot, thanks to new large-scale facility openings. SPACES Roppongi that newly opened in September is now attracting many non-Japanese companies.
(million yen)
※Others: Sales unrelated to the brands such as membership sales
※
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Regus(C) TKP Corporation 2021
80.1% 81.5%79.0%
76.2%74.2% 73.4% 74.4%
75.1% 75.8%
71.5%68.5% 67.5% 67.4% 69.8%
36.2%
42.1%
37.3% 37.6%
42.2%
46.7%
54.4%
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
23,000
24,000
25,000
30%
40%
50%
60%
70%
80%
90%
Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY2020 FY2021
Occupancy and GLA (gross leasable area) of Regus JapanAverage occupancy rate of facilities longer than two year track recordAverage occupancy rate of all the facilitiesAverage occupancy rate of facilities below two year track record
KPI trends for Regus Japan
Despite active new facility openings, occupancy rates are improving in both new and existing facilities. We expect continuous occupancy improvement, although we may experience temporary drop because of large-scale new facility openings.
FY2019
GLA (tsubo)Occupancy(%)
22
Business Development
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(C) TKP Corporation 2021
Key developments in major segments for FY2021
• After hitting the bottom in Q1, the occupancy rate has been steadily recovering and is now moving up to 70%
• Started business tie-up with Nikkei Office Pass, which utilizes our nation-wide office space network. Together, we will lead Japan’s working style reform
• More than half of APA Hotel rooms (four hotels) are block-leased out for mild cases of COVID-19 patients
• Also serving as antibody cocktail treatment centers
• Implemented COVID-19 vaccination projects and achieved 900,000 vaccinations
• Continue promoting service developments which appropriately reacting to the social & economic needs
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(C) TKP Corporation 2021
Plan to accelerate new leasing style, avoiding occupancy risk
Raising utilization rate by providing unique contents
Promoting alliances to propel Japan’s new working style
Progress of TKP Group business development
①Leasing
②Sales
③Alliance
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(C) TKP Corporation 2021
Advantageous leasing contracts under the pandemic
Renovation Rent
CancellationsRent free Deposit
Leasing strategy at TKP GroupSharing with property owners
Sales link, profit link or fixed
Basic strategy is to share risk & initial cost with property owners, also to move monthly rent into variable cost by striking all the measures above
At the pandemic
1 Rent has been renegotiated
achieving more than JPY600 million cost reduction mostly next year
2 New favorable leasing conditions
New contracts are with longer free rent & initial cost sharing
①Leasing
26
(C) TKP Corporation 2021
New leasing styles – TKP
A banquet hall at Kyoto Tower Hotel was changed to “TKP Garden City Kyoto Tower” from October • In addition to existing space already in operation, we
started to manage two new floors.• Since this leasing is under revenue sharing scheme,
we can manage with reduced fixed cost, eyeing for post pandemic economic recovery.
4 new TKP accommodations opened to cope with rising demand for work-cation and accommodation training• Realizing network expansion with limited
additional cost by rebranding existing facilities• Under revenue sharing agreement, eyeing for rising
demand for face-to-face off-site meetings and accommodation trainings
①Leasing
TKP Resort Hotel Tateshina TKP onsen hotel omoto
AOTS Kansai Training Center(KKC) TKP Workshop Resort
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(C) TKP Corporation 2021
New style leasing – Hybrid, Regus Japan
14th hybrid style entire-building type TKP & Regus will start in Nov. 2021• Extremely convenience location, two-minute
walking distance to Shibuya station surrounded by many commercial facilities
• Large scale flexible working office with serviced offices, co-working spaces and rental meeting rooms, all in one building from 1F to 8F
Consistently branching out to local cities with risk shared leasing style
• Decided to branch out to regional area quickly but with limited risk as flexible working style is getting popular even in regional cities
• Clients can easily setup branch offices with cozy working setup for their workers. This will help revitalizing regional economy of Japan Shizuoka Aoi
Busines CenterDai Nagoya Building
Busines CenterKoriyama EkimaeBusiness Center
①Leasing
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(C) TKP Corporation 2021
Providing venues with proper solutions & contents
Based upon unrivaled locations, network of clients &operating capacity as TKP Platform, we continue proposing appropriate contents to our clients
ContentsServices
②Sales
OperationService
Humanmore than
300,000
Clients
Unrivaledchoices of locations
Venue
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(C) TKP Corporation 2021
Helped office-wide vaccinations at TKP vaccination center
Vaccinated 900,000 people,
working for 1,500 companies
at c. 20 facilities nation-wide
By keeping in touch with them after vaccinations, we are enjoying growth of business inquiries for next year and beyond
②Sales
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(C) TKP Corporation 2021
Utilization of APA Hotel for COVID-19 patients
APA Hotel TKP Nippori Ekimae
APA Hotel TKPSendai Ekikita
APA Hotel HakataHigashi Hie Ekimae
APA Hotel FukuokaTenjin Nishi
Four hotels are block-leased for mild cases of COVID-19 patients:Representing c. 53% (1,058 out of 2,013 rooms) of APA Hotel we manage
At “APA Hotel TKP Sendai Ekikita,” beds & facilities for antibody cocktail treatments have been installed. Capacity is max. 16 patients / day
②Sales
block-lease for mild case patients
anti-body cocktail treatment
31
(C) TKP Corporation 2021
Converting meeting rooms to rental office:Work X Office
TKP rental office
Meeting Rooms
Quickly convertible
1 2
3 4
Hub & Spoke Temporary projects
Satellite offices Satellite CampusStudy Hall
②Sales
Examples of usage : ・Office for year-end tax adjustment
40 officers / 3 months(service)・Call Centers
4months / multiple locations(travel)・Election campaign office
50 officers / 1 month
32
(C) TKP Corporation 2021
New contents: Examination management system “AOT”
Complete solution for entities to conduct examinations. TKP provides entire management solution from applications, examinations, to the result notifications. Upgraded from previous version, CBT Test Centers
Examination management systemdeveloped uniquely by TKP Group
• Completely paperless• Adopted in national exams• Can be used for major hiring
events, trainings and workshops
受験票発行
採点
②Sales
Managementoffice
Computersystem
Venue setup / staffing
Bookingexamination
venue
Navigation applicants
Arranging proctors
Inquiries from
applicants
Office utensils
Scoring
Office control Certificate proctors
Examination fee reception
Scoring
Posting admission
slips
Applications
33
(C) TKP Corporation 2021
Announced our tie-up with Nikkei Inc.③Alliance
Tie-up between TKP Group and Nikkei Inc.Working together to promote working style reform efforts bythe companies and to improve the conveniences for all thebusinesspersons.
34
(C) TKP Corporation 2021
Details of Joint operation
We promote & sell membership, where holders are entitled to use c. 100 Regus facilities 300 Nikkei OFFICE PASS locations
more than
300 locations
Co-working space
c.100 facilities
New OFFICE PASS as joint operation
Largest network of more than 400 facilitiesSubscription with unlimited usage or pay-per-use
Vacancy info. available online, no booking required
③Alliance
※2021年10月時点
35
(C) TKP Corporation 2021
Business strategy: toward post-pandemic economic normalization
Optimizing Costs
Securing stable profit
actively promote development of contents & services, uniquely derived from platform of TKP Group,
comprised of Venue, Clients, & Operation
Back to Growth by improving profitability per area space
Forming alliances
• F&B outsourcing• Renegotiating rent• Fixed cost reduction
• Flexible office growth• Hotel demand recovery
• Unique locations• Unrivaled contents
36
(C) TKP Corporation 2021
Our rental meeting rooms can be quickly converted into serviced officesand vice versa and this enables us to flexibly accommodate to the demandchanges. We will also solidify Regus and APA Hotel (FC) business tofurther enlarge TKP Group profit base
Conversion canbe quickly done
Regus
Serviced office
Hourly rental meeting room
Contentssolution
February 2020 With COVID-19 After COVID-19
APA Hotel (FC)
Scenario for demand expansion
37
Anytime, Anywhere, for All workers
Anytime, Anywhere, for All workers
38
Appendix
39
(C) TKP Corporation 2021
Real estate owner Users
Lease
TKP handles contracts and all other tiresome procedures
Divide space into smaller units with value added services
etc.
Training
temporary office
Conferences
Banquets
Sub-lease
Business model: flexible office business
Asset light - we do not own the assets, rather we lease them. Then, we sub-lease in hourly manner with value-added services. This is our value creation.
×
Real estate
Equipment rentals
Lunch boxes and catering
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(C) TKP Corporation 2021
Source of our profit are leasing contracts we conclude advantageously at the time of recession. We typically reduce rent payment risk by combining Japanese traditional lease agreements, fixed-term contracts with cancellation options, as well as revenue sharing agreements.
Main feature of the business model
Contract Main features ofthe contracts Rent risk
Revenue sharingagreement
Flexibly negotiated with asset owners
87 facilities(40.1%)
8 facilities(4.8%)
Traditional leaseagreement
Contract can becancelled with sixmonths’ notice
42 facilities(19.4%)
88 facilities(52.7%)
Fixed-term leaseagreement
Many restrictions oncancelling the contract before expiry date
80 facilities(36.9%)
71 facilities(42.5%)
Ownership No fixed rent 8 facilities(3.7%) ー ー
(Japan)
Ichigaya Conference center :4,058 tsubo
Shimbashi Conference center :2,813 tsubo
Garden City Osaka Umeda :2,152 tsubo
cost
Very low
Low
Medium
※As of August 31, 2021
(Japan)
Fixed rent
58.7%
Variable41.3%
Fixed rent
59.9%
Variable40.1%
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(C) TKP Corporation 2021
Leasing in accordance with the market changes – breakeven pointsBetween TKP and Regus, the timings of breakeven are different. By conducting hybrid operation and mutual conversion, we control profit & loss at one location.
Improving P/L balance by joint openings
Initial cost(average of 3–4 months from the
start of a contract to opening)
Contract start;construction
begins
Facility opening
Break-even occupancy rate(approx. 45%)
Regus occupancy rate
Time
Reach break-even point after approx. 8–12 months
*Stable demand
Larger initial costLonger time to break evenLittle influenced by market conditions
Initial cost
TKPoccupancy rate
Time
Facilityopening
Reach break-even point soon after opening
(within 2–3 months)
Break-even occupancy rate (approx. 20%)
*Fluctuating demand based on market conditions
Smaller initial costShorter time to break evenGreatly influenced by market conditions
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(C) TKP Corporation 2021
Facility Guest rooms Opened Building LandAPA Hotel TKP Sapporo Ekimae 203 August 2014 Leased ―APA Hotel TKP Sapporo-Eki Kitaguchi EXCELLENT 108 August 2016 Leased ―APA Hotel TKP Nippori Ekimae 278 December 2016 Owned OwnedAPA Hotel TKP Tokyo Nishikasai 124 December 2017 Leased ―APA Hotel TKP Keikyu Kawasaki Ekimae 143 June 2018 Owned LeasedAPA Hotel TKP Sendai Ekikita 306 October 2018 Owned OwnedAPA Hotel Osaka Umeda 162 May 2019 Owned LeasedAPA Hotel Hakata Higashi Hie Ekimae 206 February 2020 Owned OwnedAPA Hotel Fukuoka Tenjin Nishi 268 May 2020 Owned OwnedAPA Hotel Ueno Hirokoji 215 July 2020 Owned OwnedLecTore Atami Koarashi 20 November 2013 Leased ―LecTore Hakone Gora 23 January 2014 Leased ―LecTore Karuizawa 14 July 2014 Leased ―LecTore Atami Momoyama 31 July 2014 Leased ―AZUR Takeshiba (managed on contract) 122 April 2017 Leased ―LecTore Yugawara 108 May 2017 Owned OwnedLecTore Hayama Shonan Kokusaimura 160 April 2018 Owned OwnedLecTore Takamatsu Airport(banquet hall rental/ business alliance) 124 June 2018 ― ―
LecTore Yatsugatake (managed by a third party) 32 November 2018 ― ―LecTore Toyama Jiyukan (managed by a third party) 40 March 2018 ― ―ISHINOYA Izu Nagaoka 22 January 2015 Leased ―ISHINOYA Atami 34 September 2020 Leased ―First Cabin TKP Ichigaya 165 November 2018 Leased ―
Tohan seminar house Iidabashi(managed by a third party) 15 March 2016 ― ―
FUKUICHI(Ikaho Onsen) (managed by a third party) 64 April 2019 ― ―TKP Onsen hotel OMOTO (Asama Onsen) (managed by a third party) 29 Jun 2021 ― ―TKP Resort hotel Tateshina (managed by a third party) 58 July 2021 ― ―
Accommodation/training facilities operated by TKP ※As of August 31, 2021
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(C) TKP Corporation 2021
This English translation is only intended for reference. In cases of discrepancies, datacontained within the original Japanese version shall take precedent over datacontained herein.
This material has been prepared to improve the understanding of our Group, and noinformation contained herein shall be construed as solicitation for purchase or sale ofour shares. This material has not been prepared for investment advisory purposes.
Forecasts and related information contained in this material are estimates which werebased on information available to the TKP group at the time when the material wasprepared. They will be impacted by uncertainties including market conditions and futurebusiness progress.
Please be aware that the actual results and other information may differ significantlyfrom what is stated in this material.
Important Notice