[PPT] - TKP Corporation Earnings briefing materials for Q1 of the year PowerPoint Presentation

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TKP Corporation

Earnings briefing materials for Q1 of the year ending February 2021

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Executive summary Topics Business overview Management policy in FY02/21 Appendix

Contents

2 3 5 21 36

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Due to the spread of COVID-19, the Japanese government declared a state of emergency on April 7. This move greatly changed our business environment, prompting many of our customers to cancel

r postpone the use of rental conference rooms.

However, on May 25, the state of emergency was lifted across Japan and demand for conference rooms has been recovering since June. Owing to uncertainty over when the COVID-19 pandemic will end and how it will affect our performance, we have refrained from making full-year forecasts at this time.

Q1 FY02/21 (March–May)

Executive summary

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FY02/21 Q1 Highlights

Announced downward revision to full-year earnings forecast for FY02/20 and revisions to the medium-

term business plan

Announced a new management structure with executive appointments

Publicized “BCP support office” and other measures to address COVID-19 Signed a syndicated loan agreement with Sumitomo Mitsui Banking Corporation (¥2.5 billion) Signed a commitment line agreement with Mizuho Bank (¥5.0 billion) Entered into a special overdraft agreement with Sumitomo Mitsui Banking Corporation (¥10.0 billion)

Announced differences between actual and forecast results for FY02/20 and the decision to suspend the

medium-term business plan

Announced voluntary reductions in executive compensation (for May–July 2020, a 50% reduction in

representative director compensation and a 40% reduction for full-time directors)

Announced the issuance of preferred shares in a subsidiary to APA Holdings (¥1.8 billion increase in net

assets) On April 24, in response to investee First Cabin Co., Ltd. filing for bankruptcy with the Tokyo District Court, we announced details on the handling of and outlook for two facilities under franchise contracts (Extraordinary loss of ¥180 million in Q1)

Launched live broadcasting support packages for shareholders’ meetings
Opened APA Hotel Fukuoka Tenjin Nishi

Held our general shareholders meeting with live broadcasting. Shinichi Saijo appointed as new outside director Opened APA Hotel Ueno Hirokoji Announced Q1 earnings Concluded a capital and business alliance with bridal business operator Escrit Inc. (TSE1: 2196) for joint development of banquet halls for corporate clients in the COVID-19 era (shareholding ratio: 12.59%)

Mar. 6
Mar. 11, 12, 13
Mar. 31
Apr. 6
Apr. 10
Apr. 21
Apr. 27

May 5 May 29

Reference: Q2 FY02/21 Highlights

July 14 July 15 July 16

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4 Date Details

Mar. 11

The WHO declared a pandemic.

Mar. 20

A government expert panel opined that organizers should judge and response seriously to the risk of holding events.

Mar. 25

The Tokyo metropolitan government asked residents to refrain from non-essential, non-urgent outings and recommends working at home on weekdays.

Apr. 6

The Tokyo metropolitan government asked people to refrain from outings, where possible, as the national government prepares to declare a state of emergency.

Apr. 7

The Japanese government declared a one-month state of emergency, through May 6, for seven prefectures (Tokyo, Kanagawa, Saitama, Chiba, Osaka, Hyogo, and Fukuoka).

Apr. 10

Following the state of emergency declaration, the Tokyo metropolitan government asked some facilities to close.

Apr. 16

The Japanese government extended the state of emergency declaration nationwide.

May 4

The Japanese government extended the state of emergency through May 31.

May 14

The state of emergency is lifted in 39 prefectures.

May 21

The state of emergency is lifted in all except five prefectures.

May 25

The state of emergency is lifted in all of Japan

June 2

“Tokyo Alert” is issued in Tokyo.

June 11

“Tokyo Alert” is lifted.

June 19

Event restrictions are reduced to Step 2 (indoor and outdoor events limited to 1,000 attendees)

July 10

Event restrictions are reduced to Step 3 (indoor and outdoor events limited to 5,000 attendees)

COVID-19-related developments in Japan since March 2020

Measures to deal with COVID-19 gained steam in Japan in March. The April 7 declaration of a state of emergency prompted cancellation/postponement of conference room usage, but demand has been recovering since the state of emergency was lifted on May 25.

Q2 Q1 Recovery in conference room demand

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Financial highlights in Q1

f the year ending

February 2021

(March 1–May 31, 2020)

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Q1 FY02/21 Consolidated Results (March–May)

(Factors affecting non-operating income/expenses) ■Non-operating expenses Syndicated loan arrangement fees: ¥120mn Forex losses: ¥182mn (Factors affecting extraordinary income/losses) ■Extraordinary income Gain on sale of real estate: ¥128mn Employment adjustment subsidy: ¥218mn ■Extraordinary losses Impairment loss: ¥100mn Loss on valuation of investment securities: ¥180mn (First Cabin) Loss on liquidation of subsidiaries: ¥70mn

Main TKP Group sales fell substantially due to precipitous decline in demand following the state of emergency declaration. Despite reducing various costs, goodwill amortization caused losses at profit lines from operating profit on down. However, EBITDA (our most emphasized metric) was in the black thanks to the consolidation of Regus Japan.

*EBITDA is calculated as operating profit/loss plus depreciation, goodwill amortization, amortization of long-term prepaid expenses, and amortization of intangible assets such as customer-related assets. **Quarterly profit/loss attributable to owners of the parent

(Million yen）

Q1 Q1 YoY Change (FY02/20) (FY02/21)

Sales 10,405 10,447 +0.4%

Gross profit 4,562 2,744

39.8%

(43.8%) (26.3%)

SG&A 2,475 3,712 +50.0%

(23.8%) (35.5%)

EBITDA* 2,383 367

84.6%

(22.9%) (3.5%)

Operating profit

2,087

968
(20.1%)

(-9.3%)

Ordinary profit

1,053

1,291
(10.1%)

(-12.4%)

Profit attributable to

wners of the

parent**

409

1,471
(3.9%)

(-14.1%)

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Consolidated results for Q1 FY02/21 (Regus results shown separately)

Main TKP Group performance was severely affected by COVID-19, but the pandemic’s impact on Regus was

limited. Regus Taiwan was in the red at the operating profit level due to the recording of goodwill amortization

associated with the acquisition, but Regus Japan was in the black (as in the previous quarter) with solid results absorbing goodwill amortization.

Notes: The main TKP Group refers to consolidated results minus figures for Regus Japan and Regus Taiwan. EBITDA is calculated as operating profit/loss plus depreciation, goodwill amortization, amortization of long-term prepaid expenses, and amortization of intangible assets such as customer-related assets. Regus Japan operating profit factors in deduction of goodwill amortization and amortization of customer-related assets Regus Taiwan operating loss factors in deduction of goodwill amortization (forex rate: TWD1 = JPY3.62)

(Million yen）

Q1 Q1 YoY change Q1 Q1 (FY02/20） (FY02/21） (FY02/21) (FY02/21) Main TKP Group Main TKP Group

Regus Japan Regus Taiwan

Net sales

10,405 5,693

45.3%

4,456 297

Gross profit

4,562 1,149

74.8%

1,547 47

(43.8%) (20.2%) (34.7%) (16.1%)

SG&A

2,475 2,321

6.2%

1,275 116

(23.8%) (40.8%) (28.6%) (39.1%)

EBITDA

2,383

828
1,034

161

(22.9%) (-14.6%) (23.2%) (54.2%)

Operating profit or loss

2,087

1,171
271
68

(20.1%) (-20.6%) (6.1%) (-23.0%)

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2,418 2,467 2,493 2,522 2,683 4,796 5,392 5,232 5,080 1,999 2,268 2,191 2,541 2,252 2,987 3,021 3,119 2,463 327 405 361 383 373 521 579 479 364 79 72 82 81 80 165 157 153 111 174 198 240 280 285 978 1,003 1,460 1,318 2,355 2,265 2,774 2,260 2,645 2,942 3,853 2,860 2,080 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1

Change in main expenses (consolidated）

Other

Consolidated Q1 FY02/21 (March–May): Main expenses

Rent and personnel expenses account for the greater part of expenses across the company, while advertising expenses are extremely low due to the high ratio of repeat customers. Amortization (mainly goodwill) has increased since the consolidation of Regus Japan. During Q1, personnel expenses decreased due to the temporary closure of some facilities.

(Million yen）

Consolidation of Regus Japan Consolidation of Regus Taiwan

advertising expense to sales ratio 1.1%

Q1 FY02/19 Q2 FY02/19 Q3 FY02/19 Q4 FY02/19 Q1 FY02/20 Q2 FY02/20 Q3 FY02/20 Q4 FY02/20 Q1 FY02/21

Amortization Advertising and depreciation Utilities Personnel Rent

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Location openings and closures in Q1 FY02/21 Opened six TKP facilities, two Regus facilities, and two joint facilities. Closed nine TKP facilities as lease agreements came to an end.

(Six new facilities) (Two new facilities)

TKP Garden City PREMIUM Yokohama Shin Takashima (from April 2020) TKP Garden City PREMIUM Shinagawa (from April 2020) TKP Shinagawa Conference Center New building (from April 2020) TKP Miyako City Osaka Tennoji (from March 2020) TKP Sapporo Ekimae Conference Room (from March 2020) *Regus opened in June 2020 (Q2) TKP STAR Rental Meeting Room Iidabashi 4-chome (from April 2020) TKP STAR Rental Meeting Room Higashi Ginza (from April 2020) Regus Kyoto Shijo Karasuma Business Center (from March 2020) Regus Takasaki Business Center (from April 2020) SPACES Sendai (from May 2020) *TKP opened April 2018

(One new TKP facility,

ne new Regus facility)

Joint openings TKP Garden City: One facility TKP Conference center: Five facilities TKP Business center: One facility TKP STAR rental meeting rooms: Two facilities

(Closed nine facilities)

GCP GCP CC CC

STAR STAR

CC SPACES Regus Regus

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Grade FY02/18 FY02/19 FY02/20 Q1 FY02/21 Garden City PREMIUM (GCP)

Locations

13 20 25 27

Rooms Seats

137 12,650 223 21,184 300 26,227 315 27,581

Garden City (GC)

Locations

45 55 56 55

Rooms Seats

480 43,461 557 50,433 561 49,348 551 48,246

Conference center (CC)

Locations

74 83 82 80

Rooms Seats

806 60,653 920 65,451 918 67,846 882 64,212

Business center (BC)

Locations

48 49 45 43

Rooms Seats

310 15,749 316 16,068 286 14,045 278 13,226

STAR rental meeting rooms

Locations

38 36 36 37

Rooms Seats

88 4,148 76 3,345 70 3,542 81 4,389

(Inside training facilities） LecTore, Ishinoya, etc.

Locations

7

22 1,199

10

52 2,358

13

72 3,679

13

72 3,679

Rooms Seats

TKP total

Locations

225 253 257 255

Rooms

1,843 2,144 2,207 2,179

Seats 137,860 158,839 164,687 161,333

m2 339,493 363,247 407,365 406,193

Number of meeting rooms, locations, and seats by grade (TKP)*

We offer 400,000 m2 of office space in 255 facilities with five grades to meet different purposes, scales, and budgets.

*As of May 31, 2020. Figures have been retroactively adjusted following review of the grade of some locations. 122,873 tsubo

Temporary offices in large, new buildings Banquet facilities in large, older hotels Temporary offices in large, older buildings Temporary offices in medium-sized,

lder buildings

Temporary offices in small, older buildings

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11 2,605 993 3,003 803 2,541 420 31 1,144 62 1,041 92 383 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Impact of COVID-19 on the rental conference room business

Since March, and especially after the state of emergency declaration, many customers cancelled and postponed their rental conference room bookings. Despite receiving a certain amount in cancellation fees, YoY rental conference room sales fell significantly. On May 25, the state of emergency was lifted across the country. Accordingly, demand for conference rooms has been recovering since June.

*Sales figures include room fees, options fees, and catering fees.

キャンセル料会議室売上

Cancellation fees

Monthly Rental Conference Room Sales*

(Million yen）

Cancellation fees Cancellation fees

March 2019 March 2020 April 2020 May 2020 April 2019 May 2019

Sales from actual use Sales from actual use Sales from actual use

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KPI for the Rental Conference Room Business Sales per square meter, the KPI for the rental conference rooms business, fell substantially YoY on the impact of the state of emergency declaration.

*Sales figures include room fees, options fees, and catering fees 12,654 11,118 12,025 11,686 7,404

100,000 120,000 140,000 160,000 180,000 200,000 220,000 240,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000

Q1 average Q2 average Q3 average Q4 average

Sales per square meter and conference room floor space

FY02/20 sales FY02/21 sales FY02/20 floor space FY02/21 floor space

Monthly sales/m2 (Yen) Conference room floor space (m2) 会議室面積(坪）

12,235 14,080 11,647 9,758 8,713 3,741

100,000 120,000 140,000 160,000 180,000 200,000 220,000 2,000 4,000 6,000 8,000 10,000 12,000 14,000

March April May

Sales per square meter and conference room floor space (Q1 only)

FY02/20 sales FY02/21 sales FY02/20 floor space FY02/21 floor space

Monthly sales/m2(Yen) Conference room floor space (m2)

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14.7% 20.9% 39.3% 7.4% 0.9% 11.8% 4.9% GCP GC CC BC STAR Accommodations / training facilities Others

Main TKP Group sales, by grade and service

(% of total）

Sales by grade “Others” mainly represents restaurant sales and sales for transactions at facilities

ther than those of the company.

GCP: Garden City PREMIUM, GC: Garden City, CC: Conference center, BC: Business center, STAR: STAR rental conference rooms Sales by service “Options” mainly represents sales for the use of conference room equipment. “Others” represents accommodations sales at facilities other than those of the company, service fees, and cancellation fees.

Sales by grade Sales by service

By grade, the ratio of conference center (CC) sales (mostly for training and exams) increased. By service, “Others” sales rose due to cancellation fees.

33.4% 4.3% 2.6% 7.0% 52.7% Room rent Options F&B Accommodations Others

Q1 FY02/21 JPY5.7bn

52.2% 9.7% 18.6% 12.1% 7.4%

Q1 FY02/20 JPY10.4bn Q1 FY02/21 JPY5.7bn Q1 FY02/20 JPY10.4bn

(% of total）

12.8% 26.4% 32.6% 6.0% 0.6% 15.7% 6.0%

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TKP conference room usage breakdown In COVID-stricken Q1, the use of conference rooms as venues for in-house training and exams was high. Meanwhile, usage involving food and beverage such as parties fell significantly. Q1 FY02/21 Q1 FY02/20

Meeting (20.7%） Training (17.8%） Seminar (12.2%） Recruiting (18.4%） Exam (2.9%） Party (4.9%） Conference (3.0%） Other (20.1%） Meeting (17.3%） Training (26.4%） Seminar (9.6%） Recruiting (19.7%） Exam (4.2%） Party (0.5%） Conference (0.7%） Other (21.6%）

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*As of May 2020 *Workstations (WS): Number of seats at Regus facilities Brand FY02/18 FY02/19 FY02/20 Q1 FY02/21

facilities

2 2

4 5

WS

1,144 1,144

2,483 2,784

facilities

75 81

100 102

WS 12,212 13,203

15,672 16,263

facilities

5 5

WS 165 165

165 161

facilities

36 44

47 47

WS 3,048 3,941

4,363 4,336

facilities

‐ 2

2 2

WS ‐ 667

667 667

facilities

9 11

11 11

WS

1,462 1,652

1,652 1,652

Regus(Japan）

facilities

118 132

156 159

WS 16,569 18,453 22,683 23,544

㎡

87,860 98,052

120,035 124,343

Regus(Taiwan）

facilities

9 13

13 13

WS

1,462 2,319

2,319 2,319 ㎡

11,809 20,368

20,368 20,368

Large community- type rental offices High-grade rental offices Rental offices adjacent to public transportation Reasonably priced unmanned rental

ffices

Large community- type rental offices High-grade rental offices

Total： 144,711 m2 (43,775 tsubo)

Regus: number of facilities and workstations by brand

We offer over 140,000 m2 of office space in 172 facilities with four brands in Japan and two in Taiwan to serve specific needs

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Reach cruising speed at around 18 months Reach the breakeven point at around 8 to 12 months Occupancy rate of 45%

60%
40%
20%

0% 20% 40% 60% 80% 100%

80,000,000
30,000,000

20,000,000 70,000,000 120,000,000

Typical occupancy rates and profit margins after opening Regus’ business model

On average, Regus facilities break even 8–12 months after opening and reach cruising speed after around 18

months. While it takes longer for these facilities to turn a profit compared to rental conference room facilities,

they employ a sublease-based recurring revenue model. We can expect them to achieve stability in the long term (after 10+ years) and maintain high profitability that is relatively unaffected by business conditions.

By comparison, TKP has lower initial costs than Regus and reaches the breakeven point more quickly. Through joint launches, we can achieve profitability faster for facilities as a whole.

Rent incurred Takes an average of three to four months to open a location after concluding a contract Location opens

High occupancy rates maintained over the long term

Occupancy rate of 65%

Time elapsed after opening CBIT margin (operating profit margin of location) Occupancy rate

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Impact of COVID-19’s spread on Regus

Regus’ customer contracts, compared to those for rental conference rooms, tend to be long-term (12–18 months), with facilities serving as satellite offices in cases. Since March, sales have been essentially unaffected by the spread of COVID-19.

1,351 1,386 1,398 1,416 1,458 1,459 1,457 1,454 1,460 1,511 1,491 1,453 200 400 600 800 1,000 1,200 1,400 1,600 1,800

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

Regus’ monthly sales (FY02/21)

Regus Japan Regus Taiwan FY02/20 FY02/21

106 (Million Yen）

Start of consolidation for Regus Taiwan Start of consolidation for Regus Japan

100 98 98 102 96

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Regus (Japan) performance indicators

Occupancy rate is a KPI for Regus. The occupancy rate dipped in May due to: (1) a decrease in preliminary visits and contracts due to the government’s stay-at-home request, and (2) natural decline as contract periods for existing customers came to an end. Since June, preliminary visits have been on a recovery trend.

82.3% 82.9% 83.6% 85.2% 86.2% 86.3% 83.6% 82.8% 82.9% 83.2% 83.1% 81.5% 44.7% 46.7% 48.9% 46.3% 48.7% 49.3% 60.6% 66.9%68.6% 71.7% 72.4% 72.2% 0.0% 0.7% 6.8% 5.2% 10.3% 8.7% 14.7% 19.2% 23.2% 27.8% 31.9% 31.4% 75.8%76.2% 77.1%77.4%77.2% 74.4%74.2%74.3%74.5%75.6%76.0% 74.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May.
May. 2018 and earlier
Jun. 2018 to May. 2019
Jun. 2019 and later

Overall average

5,000 10,000 15,000 20,000 25,000

Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May.
May. 2018 and earlier
Jun. 2018 to May. 2019
Jun. 2019 and later

(Seats)

損益分岐稼働率

(FY02/21) (FY02/21)

Occupancy rate by year opened Workstations by year opened

Note: As Regus Taiwan is small in scale, the figures above are calculated using Regus Japan only.

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Sales by Regus (Japan) brand and service

(Sales Composition） (Sales Composition）

Sales by brand Sales by service

By brand, Regus accounts for about 75% of Regus Japan sales. SPACES locations, which are about four times as large as those of Regus, devote roughly 75% of floor space to rental offices and the remaining 25% to coworking space. By service, revenue from subleasing rental offices accounts for the majority of sales.

Q1 FY02/21 JPY4.5bn Q1 FY02/21 JPY4.5bn

*Non-office represents meeting room usage fees and options fees.

SPACES (11.6%) Regus (74.6%) Regus Express (0.6%) OpenOffice (13.2%) Office (76.6%) Non-office (23.4%)

SLIDE 21 ｘ

20 (Million yen） FY02/20 Q1 FY02/21 YoY change Current assets 16,854 17,374 520 (Cash and deposits） 9,131 12,745 3,613 (Accounts receivable） 4,114 1,793

2,320

Non-current assets 100,618 100,007

611

(Property, plant and equipment）

39,049 39,154 105

(Intangible fixed assets）

44,875 44,196

678

Total assets 117,473 117,381

91

Current liabilities 20,221 20,480 259 Non-current liabilities 61,448 61,467 18 Total liabilities 81,670 81,948 277 (Interest-bearing debt） 65,747 66,541 793 Total net assets 35,802 35,433

369

Total liabilities and net assets 117,473 117,381

91

Equity ratio 30.4% 29.3%

1.1pp

Summary of consolidated balance sheet

As of the end of Q1, the TKP Group had ¥12.7 billion in cash and deposits. At present, our cash and deposits and fundraising capacity exceeds ¥35 billion, well over our annual working capital needs.

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Outlook

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Pursue business selection and concentration Maintain sufficient working capital and reduce fixed costs Respond to future changes in demand

Management policies until the COVID-19 pandemic subsides

In line with the spread of COVID-19, we determined our general approach toward the three policies we outlined for FY02/21 and are already implementing measures accordingly.

Secured a total of ¥35 billion in cash and deposits, and fundraising capacity Suppressed personnel expenses, including through voluntary reductions in executive compensation (May–July 2020)

Under the state of emergency declaration, we aimed to differentiate peripheral businesses through selection and concentration, and decided to suspend or reduce operations at non-core businesses as appropriate. Operations have resumed for the most part with the lifting of the state of emergency, yet some facilities were closed permanently. We will continue to focus on our core flexible workspace business moving forward.

The COVID-19 pandemic has created new demand such as for spaces to hold examinations, host shareholders’ meetings, and deliver webinars. We will continue to enhance new services around the keywords “remote” and “decentralized.”

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Both TKP and Regus employ various types of contracts to minimize risk. Almost all conventional office contracts are fixed-term lease agreements, but for many of our facilities, we conclude standard lease agreements that can be canceled with six months’ notice. Variable rent, which accounts for about 40% of our facilities, also helps to suppress rent risk.

Analyzing the Group’s real estate risk

Contract type Main characteristics Rent risk

Outsourcing agreement No fixed rent 94 facilities (36.9%） 11 facilities (6.9%） Standard lease agreement Contract can be cancelled with six months’ notice 56 facilities (22.0%） 84 facilities (52.8%） Fixed-term lease agreement Many restrictions on cancelling the contract prematurely 97 facilities (38.0%） 64 facilities (40.3%） Ownership No fixed rent ８ facilities (3.1%）

(Japan）

Fixed rent 56.6% Variable rent 43.4% Fixed rent 60.7% Variable rent 39.3%

(Japan）

Very low Low Medium

(1) Rent risk based on early cancellation conditions (2) Rent risk based on rent payment structure

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Core businesses

Faced with the state of emergency declaration, we promptly implemented business selection and

concentration. We have mostly resumed operations at non-core businesses that had been suspended and

are working toward changing their business formats based on the shape of the post-COVID economy.

Office space (rented by the month) Office space (rented by the hour)

Non-core businesses Non-core businesses

Pod hotels1 APA Hotel1 New city (business) hotels Hot spring inn City hotel Accommodation and training facilities Event production Medical academic conferences Call centers Prepared lunchboxes Staffing service

1. Operated as a franchise business

Pursue business selection and concentration

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Overview of trends in peripheral businesses

Business/company name Under state of emergency Current status APA Hotel *operating as a franchise

Continued regular operation. Maintained high occupancy rates although at low pricing Continuing regular operation. Average daily rate is gradually rising

Tokiwaken

Scale greatly reduced and

perations suspended.

Adjusted orders Resumed limited operations providing bento lunches for conference room users

LecTore; Ishinoya

Partial closures Operations resumed. Some locations closed (Hakata Hisayama Onsen）

Shinagawa Haizennin Shokaijo

Dispatching to hotel banquet facilities declined. Dispatching to hotels accepting COVID-19 patients with light symptoms increased Demand for hotel banquet dispatching recovering. Also dispatching to Escrit Inc.

Azur Takeshiba

Operated at a reduced scale Resumed regular operation

TKP Communications

Continued regular operation. Increased call center demand from food delivery clients Continuing regular operation. Robust call center demand from food delivery clients continues

First Cabin

Suspended Nagoya location closed. Resumed operations at Ichigaya

Majors

Operated at a reduced scale Transferred head office to TKP. Operating on a limited scale

TKP Medicalink

Regular operation Regular operation

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3. Measures in the hotel and accommodations business
Check-in/check-out: Measures to prevent infection from droplet

transmission, measures to limit crowding

Meals: Prohibit buffet-style dining in principle, develop menus based

around individual servings, ensure social distancing

Bathing facilities: Measures to limit crowding
Clean with EPA detergent and disinfectants, provide disinfecting alcohol

solutions, ensure proper air circulation

We have established company guidelines to combat COVID-19 and give utmost priority to safety and security in the COVID era.

Company guidelines to combat COVID-19

1. Measures at all businesses
Manage employee health, regularly disinfect facility interiors,

have employees engaged in customer service wear masks

2. Measures in the flexible workspace business
Use air purifiers and control humidity inside rooms
Recommend layouts informed by social distancing principles
Manage air circulation to avoid creating closed spaces
Disinfect conference halls, thoroughly circulate air,

avoid concentrated gatherings

Prohibit buffet-style dining in principle, propose solitary dining

and (bento-style) individual servings.

“School” layout (120 people) Dispersed layout (60 people)

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As COVID-19 spreads, in addition to our traditional optional services, we have launched services that add value through infection prevention measures to provide safe environments.

New products at core businesses

Training facilities Rental meeting rooms Banquet halls Seminars

Main conference room equipment up to the present Wireless routers Microphones Projectors Whiteboards Screens

Various uses of company conference rooms

Plastic screens to prevent droplet transmission Plastic sheets at reception desks Disinfectant spray for microphones Thermometer guns Ziaino air purifiers Face shields Thermography

Partitions

A strong lineup of equipment to counter COVID-19

AI Thermography

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Changes in demand at core businesses

Sales of live webcast packages for general meetings of shareholders

One-stop support from specialized staff that includes rehearsal, day-before and day-of preparation, and provision of the necessary equipment for live streaming and on-demand broadcasting.

Live/on demand broadcasting (image)

Increase in exam hall demand

Since June, we have enjoyed significant demand for use of our facilities as exam halls (for the Eiken exam, etc.) due to the difficulty of holding exams on university campuses. There has also been an increase in use as venues for general meetings of shareholders compared to a typical year, and sales of live webcast packages have also been robust. The shift to decentralized workspace is accelerating, evidenced in part by increasing use of conference rooms as studios (packaging web seminars with streaming service). In June 2020, the ratio of usage of TKP rental conference rooms as exam halls was up 2.2x YoY.

Increasing use as studios

50 100 150 200 250 300 350 3月 4月 5月 6月

FY02/21 webcast/ teleconference orders

月別問い合わせ件数月別予約数

Monthly inquiries Monthly reservations Monthly reservations Monthly inquiries

March April May June

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29

Changes in demand at core businesses

We secured an agreement to provide support centers for rent relief benefits application at around 60

f our directly managed facilities across Japan for a period of approximately two months starting

July 15. We have leased rooms at roughly 60 of our directly managed facilities across Japan as support centers for those applying for rent relief benefits

Rent relief benefits processing business

Recruit Holdings Co., Ltd. was awarded a contract and formed a consortium of five companies: Deloitte Tohmatsu Consulting LLC, Toppan Printing Co., Ltd., BELLSYSTEM24, Inc., TMJ, and newsbase, inc.

newsbase, inc. is responsible for setting up and operating support centers for offline applications. The TKP Group entered an agreement with the company for the provision of application support venues for those applying for rent relief benefits (with a start date of July 15). We have leased rooms in around 60 directly managed facilities (approximately 16,500 m2) for roughly two months.

Secured orders at locations across Japan through a single agreement subcontracted

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30

To date, office space has been leased under long-term (essentially permanent) arrangements requiring the payment of fixed rent, large deposits, and funds for interior work. The future will see an increase in flexible agreements that focus on office use, when and in the quantity needed.

Note: Figures assume the market for office space in the Tokyo metropolitan area has a value of ¥20 trillion (estimates based on research by Mitsui Fudosan, JLL, and CBRE)

¥200 billion (1%) as of 2019 JLL forecast: ¥6 trillion (30%) by 2030

FIX FLEX FIX FLEX

Scale of the flexible workspace market in the Tokyo metro area

Office building

Lease agreements (long-term, fixed) Temporary use (flexible)

Affected by the coronavirus

A major business

pportunity for TKP

Future Increasing office vacancies in central Tokyo The office redefined for flexibility

Office building

Cancel Cancel Cancel Sourcing Operation

Workspace redefined as a result of COVID-19

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Increase in demand for satellite offices

Vacancy rates in city centers are increasing. At the same time, the trend toward renting less office floor space is accelerating. Cases of companies utilizing satellite offices are on the rise.

The average vacancy rate of the Tokyo business area (five central wards: Chiyoda, Chuo, Minato, Shinjuku, Shibuya) in June was 1.97 %, an increase of 0.33pp from May. In June, a new building was completed with some space left unfilled, and existing buildings were affected by contract cancellations as companies reduced floor space. The number of new contracts also fell sharply during the month such that unused floor space increased by roughly 86,000 m2. The average vacancy rate of the Tokyo business area has risen for the fourth consecutive month Source: Miki Shoji Co, Ltd., Latest Office Building Market Report (July 2020)

On June 6, Fujitsu officially announced that it will halve its office space by March 31, 2023, including for group companies in Japan. It owns about 60 offices nationwide and leases about 380 offices. It plans to halve its total floor space of 1.2 million m2 over three years. The company will shift to telework for most of its employees and

ffer a new telework subsidy of ¥5,000 per month.

In response to the COVID-19 pandemic, Fujitsu began recommending working from home for its roughly 80,000 employees in Japan. Excluding factories, the company is still working to reduce the ratio of employees commuting to work to a maximum of 25%. It plans to revise its former work style system, which was premised on commuting. In an online press conference on the 6th, Fujitsu’s Hiroki Hiramatsu (Corporate Executive Officer) emphasized the company would “promote work styles that are not bound by time or place,” indicating the company intends to give employees the flexibility to choose where and when they work. The company will gradually reduce its fixed offices throughout Japan so that employees can work flexibly from home. Specifically, it plans to set up core offices and satellite offices in each region of the country, and make all workstations freely available to employees. It will also expand the scope of the “super flex system,” which eliminates core hours, to all group employees in Japan.a

Fujitsu announces it will reduce office space by half

July 6, 2020 (The Nikkei Morning Edition)

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Location opening plans

Workspace will transition toward a “hub and spoke” model in which companies maintain a head office and multiple satellite offices. In addition to areas with many head offices, our group targets the areas around “hub” stations— which connect residential areas to the city center—as candidates for new openings.

Areas we have focused on up to the present Areas in which we will increase openings

赤坂・六本木市ヶ谷・四谷

Areas for particular focus: ◇Tokyo/Shimbashi area ◇Shinagawa area ◇Shibuya area ◇Shinjuku area ◇Akasaka/Roppongi area

Ichigaya/Yotsuya Akasaka/Roppongi

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Formed capital and business alliance with Escrit Inc.

On July 15, 2020, we signed a capital and business alliance with Escrit Inc. (TSE1: 2196), which operates a bridal

business. We plan to acquire 1.7 million shares from Escrit founder Hiroshi Iwamoto (Blocks Co., Ltd.) for a price
f ¥334.4 per share (total value of ¥568 million), which will yield a shareholding ratio of 12.59%.

We will provide details at a joint press conference to follow

Joint development of banquet halls targeting corporate customers in the COVID era

Outline of the business alliance

(1) TKP will help acquire corporate customers for use of Escrit’s banquet services during the weekdays. (2) TKP will outsource new openings, renovations, maintenance and repair work, and property management of our group’s facilities to Shibutani & Co. (Escrit’s consolidated subsidiary), which provides comprehensive real estate solutions. (3) The companies will jointly develop the infection prevention- based business including satellite offices employing the anti- bacterial and anti-viral interior construction technologies held by Container Bank and Shibutani & Co.

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34

A model of fully optimized office building use Moving forward, we will develop large compound locations incorporating our group’s many services and brands. We also plan to form busines tie-ups with bridal companies such as Escrit to leverage unused space at their facilities on weekdays.

Break buildings into zones (upper, middle, lower) and optimize usage by zone to limit close-quarters contact (i.e., in elevators)

Large compound location

レンタルオフィス (リージャス）ウェディングバンケット

Upper Middle Lower

APAホテルウェディングバンケット

Upper Middle Lower Weekends and holidays Weekdays

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35

Our mission for FY02/21 and the AAA strategy

Anytime, Anywhere

for All workers

Become Japan’s leading corporate group in the flexible workspace market and an infrastructure company that supports corporate work style reform

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36

Appendix

SLIDE 38 ｘ

37

Corporate profile (as of May 31, 2020)

Name Businesses Executives Headquarters Established Representative director Capital Listed Employees TKP Corporation Flexible workspaces Food and beverage/banquets Hotels and resorts Event production BPO Takateru Kawano Representative director/CEO Shingo Nishioka Director/COO Koji Nakamura Director/CFO Haruo Tsuji Director Kohei Watanabe Director Shinichi Saijo Director Mark Dixon Director Yoshinori Sogabe Standing auditor Takanori Shige Auditor Takayuki Hayakawa Auditor TKP Ichigaya Building 2F 8 Ichigaya-Hachimancho, Shinjuku-ku, Tokyo August 15, 2005 Takateru Kawano ¥12 billion (as of May 31, 2020) March 27, 2017: TSE Mothers (3479) 1,680* (as of May 31, 2020) *Excluding part-time employees

Convenistation Co., Ltd. TKP Properties Corporation TKP Communications Corporation Tokiwaken Corporation TKP Medicalink Corporation Regus Taiwan

(Collective name for the 13 entities operating the Regus business in Taiwan)

Regus Japan

(Collective name for the 55 entities operating the Regus business in Japan)

TKP Corporation

Majors Inc. Shinagawa Haizennin Shokaijo Y.K. TKPSPV 1–4 / 6–10

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38

2017

Listed on the TSE Mothers exchange Opened Azur Takeshiba in Minato-ku, Tokyo Began providing Cloudspace, a space matching service Majors Inc. became a subsidiary

2018

Opened CIRQ Shinjuku, a large multipurpose event hall Opened LecTore Hayama Shonan Kokusaimura, a large resort training hotel Opened APA Hotel TKP Sendai Ekikita Number of directly managed meeting rooms exceeded 2,000 2005

Opening of first facility, TKP Roppongi Kaigishitsu TKP Corporation established in Hamamatsu-cho, Minato-ku, Tokyo

2006

Expanded into the Hokkaido, Kansai, and Kyushu regions Monthly sales exceeded ¥100 million

2007

Expanded into the Tohoku and Tokai regions

2008

Registered as a Class 2 travel operator Established Convenistation Co., Ltd. (consolidated subsidiary)

2009

Established TKP Properties Corporation (consolidated subsidiary)

2010

Established current TKP Communications Corporation (consolidated subsidiary) Established TKP New York, Inc. (consolidated subsidiary) Expanded into the Chugoku region

2011

Opened TKP Garden City Shinagawa (banquet hall facility inside a hotel)

2012

Number of directly managed meeting rooms exceeded 1,000

2013

Established Tokiwaken Corporation (consolidated subsidiary) Joined Keidanren (Japan Business Federation) Expanded into the United States (New York)

2014

Registered as Class 1 travel operator Opened APA Hotel TKP Sapporo Ekimae

2015

Opened TKP Izu Nagaoka Onsen Villa Garden Inshinoya

History

2019

Regus Japan became a subsidiary Opened APA Hotel Osaka Umeda (Osaka) Shinagawa Haizennin Shokaijo Y.K. became a subsidiary Increased capital through public offering Regus Taiwan became a subsidiary

A company that revitalizes and redistributes space

2005

TKP Corporation established

2017

Listed on the TSE Mothers exchange

2019

Regus Japan became a subsidiary

2005 2021 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0.18 0.75 2.03 2.65 3.39 3,02 5.99 8.29 11.65 14.16 17.94 21.97 28.68 35.52 54.34 (Billions of yen)

2020

Opened APA Hotel Fukuoka Tenjin Nishi in Fukuoka Established guidelines to fight COVID-19 Opened APA Hotel Ueno Hirokoji in Tokyo Entered a capital and business alliance with Escrit Inc.

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39

Shareholder composition

70.1% 4.0% 12.4% 8.0% 3.4% 0.7% 1.5% Shareholder distribution

Takateru Kawano (including asset management company) Individuals and others Financial institutions Japanese corporations Foreign investors Brokerage firms Treasury stock

59.8% 10.9% 10.2% 7.9% 7.9% 2.0% 1.3% Shareholder

distribution

Takateru Kawano (including asset management company) Individuals and others Financial institutions Japanese corporations Foreign investors Brokerage firms Treasury stock

Issued shares: 33,171,600 Shareholders: 2,909

As of February 29, 2020 As of February 28, 2019

Issued shares: 38,056,985 Shareholders: 10,837

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40

Flexible Workspace

(Rental meeting rooms, hotel banquet facilities, serviced offices, co-working spaces)

Event Production BPO Hotel/ Accommodation and Training Food & Beverage/ Banquet

Business areas

In the mainstay flexible workspace business, TKP provides temporary office space to companies.

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Business model and sourcing strategy

Real estate owners Corporate users

Revitalize space Secure rental income Utilize vacant properties Reduce rent burden Reduce CAPEX One-stop booking of office space across Japan Flexible workstyles

TKP and Regus’ sourcing strategy is to complement each other’s strengths and pursue joint location openings. By doing so, we can advance into areas not covered by TKP while opening locations of a size Regus could not achieve on its own.

Sell in small lots (space sharing) Open large facilities concentrated around major stations in major cities Spread locations all over Japan including in regional areas and around airports

Regus’s sourcing strategy

TKP’s sourcing strategy Joint openings

Share costs of operating facilities Possible to operate as a TKP facility until Regus occupancy rate rises

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Currently, the Regus brand is essentially unaffected by the novel coronavirus pandemic. Except for large banquet facilities, TKP’s existing conference room spaces can also be repurposed into distributed offices, earning revenue even amid the corona crisis. Large hotel banquet facilities, which are most affected, account for only around 6% of total sales.

Repurpose space to create offices in high demand even amid the Corona pandemic

TKP brands

High-grade Long-term Rental meeting rooms, hotel banquet facilities Serviced offices and co-working spaces Short-term Budget-priced

Garden City

Large hotel banquet facilities and banquet facilities in office buildings

Garden City PREMIUM

Mainly in new and relatively new

buildings. Highest grade banquet

facilities in office buildings

Conference Center

Large office building facilities suitable for conferences and training

Business Center

Mid-sized office building facilities suitable for meetings and training

STAR rental meeting rooms

Small office building facilities for meetings and training Entrepreneurial communities Large serviced offices High-grade serviced offices available when needed Unmanned rental spaces in good locations provided economically

Regus brands (in Japan)

5 locations 107 locations 47 locations 27 locations 55 locations 80 locations 43 locations 37 locations No negative impact Small negative impact Major negative impact Negative impact

Note: Numbers of locations are in Japan as of May 31, 2020.

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Sapporo Obihiro Aomori Sendai Morioka Niigata Koriyama Mito Nagano Karuizawa Hachinohe Akita Tokyo Chiba Hayama Utsunomiya Kawasaki Yokohama Hamamatsu Hakone, Yugawara Atami Izu Matsumoto Kobuchizawa Toyama Kanazawa Nagoya Kyoto Shiga Osaka Kobe Himeji Okayama Hiroshima Yamaguchi Takamatsu Matsuyama Kokura Hakata, Tenjin Oita Kumamoto Miyazaki Kagoshima Naha Nagasaki

TKP facilities Regus Japan facilities

Omiya

TKP Group network

Facilities Seats (seats in TKP conference rooms +

workstations at Regus facilities)

Contracted floorspace

427 187,196 550,720

facilities seats m2

As of May 31, 2020

The TKP Group has an extensive network of temporary office space in Japan. We are expanding

ur amount of flexible workspace, centering on urban areas.

Domestic target for 2030:

approx. 1.4 million m2

(approx. 1,500 locations)

As of May 31, 2020 As of May 31, 2020

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Usage of TKP rental conference rooms FY02/20 usage breakdown (by sales)

円グラフ予定

Meeting (23.2%） Training (15.3%） Seminar (14.2%） Recruiting (10.4%） Exam (5.8%） Party (5.3%） Conference (3.8%） Others (22.0%）

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Global collaboration with IWG (CEO: Mark Dixon1; listed on the London Stock Exchange)

IWG provides workspaces globally under the Regus brand and is the overwhelming global leader in the flexible workspace market. Regus members are free to use the business lounges at all locations, which number more than 3,300.

1. Mark Dixon, IWG’s CEO, is also an outside director at TKP.
2. Figures are for FY12/19.

1,100+

cities Global network

3,388+

locations

110+

countries/ regions Diverse brands

2.5mn

members Robust Group performance Sales2: ￡2,653mn

(Approx. ¥380.7bn)

EBITDA2: ￡428mn

(Approx. ¥61.4bn)

Operating profit2:

￡176mn

(Approx. ¥25.3bn) Europe, Middle East, Africa

Approx. 1,100

locations UK

Approx. 320

locations Asia Pacific

Approx. 690

locations Americas

Approx. 1,300

locations

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Accommodation/training facilities operated by TKP ( As of May 31, 2020)

Facility Guest rooms Opened Building Land

APA 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 Owned APA Hotel TKP Tokyo Nishikasai 124 December 2017 Leased ― APA Hotel TKP Keikyu Kawasaki Ekimae 143 June 2018 Owned Leased APA Hotel TKP Sendai Ekikita 306 October 2018 Owned Owned APA Hotel Osaka Umeda 162 May 2019 Owned Leased APA Hotel Hakata Higashi Hie Ekimae 206 February 2020 Owned Owned APA Hotel Fukuoka Tenjin Nishi 268 May 2020 Owned Owned APA Hotel Ueno Hirokoji 215 July 2020 Owned Owned LecTore 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 Owned LecTore Hayama Shonan Kokusaimura 160 April 2018 Owned Owned LecTore 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 ― ― LecTore Hakata Hisayama Onsen (Closed) 44 June 2019 Owned Owned Izunagaoka Villa Garden Ishinoya 22 January 2015 Leased ― First Cabin TKP Nagoya Station (Closed) 199 September 2017 Owned Owned First Cabin TKP Ichigaya (Reopened on July 1st) 165 November 2018 Leased ―

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This English translation is only intended for reference. In cases of discrepancies, data contained within the original Japanese version shall take precedent over data contained herein. This material has been prepared to improve the understanding of our Group, and no information contained herein shall be construed as solicitation for purchase or sale of

ur shares. This material has not been prepared for investment advisory purposes.

Forecasts and related information contained in this material are estimates which were based on information available to the TKP group at the time when the material was

prepared. They will be impacted by uncertainties including market conditions and future

business progress. Please be aware that the actual results and other information may differ significantly from what is stated in this material. Important Notice