Investors’ Guide 2019

Business Philosophy of U.S.M.Holdings
Our corephilosophy

We● Offer customers healthy, valuable choices in food
● Cultivate deep relationships to build prosperous local communities● Constantly pursue innovation and move with the times

In our business, we aim to● Offer products and services tailored to various lifestyle choices that give customers
access to a range of healthy, valuable foods● Create a corporate culture that supports employee self-fulfillment by providing skills
Business
目指す姿
training and encouraging people to achieve their potential
vision（ビジョン） ● Continually develop and grow over time while seeking to maximize enterprise value● Create new value based on fair dealings with our business partners for customer benefit● Welcome new companies into the group to help us meet the needs of local communities
and engage in fair, transparent corporate governance while respecting the managementof each member company of U.S.M. Holdings.

Outline of U.S.M. Holdings

Take responsibility for functions and roles for overall optimization and offer new value

Molding the constituent members, including the holding company, into a single businessgroup and making the best use of the individual parts while considering the whole
The Maruetsu, Inc.
Maruetsu brand development

Kasumi Co., Ltd.
Kasumi brand development

MaxValu Kanto Co., Ltd.

Network

Achieving synergy throughintegration of threecompanies and promoting
store development responsive
to customer needs

Main new stores and refurbished stores

Maruetsu Shiki Saiwaicho Store(Opened in September 2018)⃝ Location: Shiki-shi,
Saitama Prefecture⃝ Sales floor area: 535 tsubo
Aiming to develop the number-one
store in the region through offering
sales floors, products, and service thatsatisfy customers, with an emphasis
on fresh foods and delicatessen

Targeting new supermarket store formats rooted inlocal communities
The U.S.M. Holdings Group’s operations are in the region ofTokyo and the adjacent prefectures. Although this is Japan’s
richest and most promising retail market with expectations forsustainable growth in the future, competition is intensifying asa result of the entry of new contenders from other industries.
U.S.M. Holdings has an overwhelming share of this affluent
regional market and operates 516 supermarkets in the region.
In pursuit of future growth, the three companies are pursuing
various forms of integration, including joint procurement and joint
sales promotion of merchandise, joint merchandising, and joint
development of private-brand products, from the viewpoint ofoverall optimization to ensure creation of synergy.
We also seek to upgrade the quality of our operations tomeet the needs of customers in each community, keeping atight focus on communities and paying attention to the needsof local customers. By developing stores that offer new value
while eyeing development of new business formats, U.S.M.
Holdings will develop new supermarket store formats thatgain the support of customers.

Food Square Kasumi Mito Horicho Store(Opened in June 2018)⃝ Location: Mito-shi,
Ibaraki Prefecture⃝ Sales floor area: 632 tsubo
Playing a key role in the local community
thanks to an expanded selection of local
vegetables and regional products andinstallation of an eat-in-corner with more than
100 seats, a simple kitchen, and a kids’ space

MaxValu Kisarazu Jozai Store(Refurbished and opened in July 2018)⃝ Location: Kisarazu-shi,
Chiba Prefecture⃝ Sales floor area: 669 tsubo
Located in Kisarazu City, where thepopulation and the number of households
are increasing. Evolving a store development
concept making customers’ meals moredelicious and more enjoyable

MaxValu Kanto brand development
Maruetsu

Fiscal year ended February 28, 2019: total of 13 newstores opened, expanding the network to 516 stores

The three formats are: “Maruetsu,” anenjoyable place to shop daily for fresh
food and other groceries; “Maruetsu
Petit,” an urban-format supermarket
tailored to city residents; and “Lincos,”a supermarket offering high-quality
merchandise and service (includes two
stores in China).

The three supermarket formats are theflagship “Food Square” brand marketing new delights for mealtimes, thecore “Food Market” brand supplying
groceries to suit local tastes and customs, and a discount format offering
everyday low prices under the “Food
Off Stocker” brand.

Stores trading under the “MaxValu”
format aim to maximize value for customers shopping for daily groceriesin terms of quality, price, range andservice, while the “MaxValu Express”
format offers convenience, competitive prices and surprising variety thatchanges daily for those shopping foreveryday necessities.

U.S.M. Holdings opened a total of 13 new stores in the fiscal
year ended February 28, 2019, split between Maruetsu (6)and Kasumi (7). A total of 8 stores were also closed (Maruetsu
5, Kasumi 2, MaxValu Kanto 1) as part of a scrap-and-build
policy to try to maximize operational efficiency.
Number of stores (graph)■Maruetsu■Kasumi

479
44

159

■MaxValu Kanto

494
39

170

503

(stores)

511

516

34

34

33

179

185

188

Kasumi
MaxValu Kanto

Gunma
Prefecture
6 storesTochigi
Prefecture
9 stores63
34

SaitamaPrefecture
55
92 stores

8

IbarakiPrefecture 101
102 stores

14

Tokyo 142
158 stores
276

Striving to be No.1 in the region, we develop store formats aimed at increasing customer satisfaction.

Feb. 2015

285

Feb. 2016

290

Feb. 2017292

Feb. 2018

295

2

1

14
Chiba
Prefecture 37
101 stores

50

Feb. 2019* The two Maruetsu stores in China are not included.
1

Kanagawa 2
Prefecture 46
48 stores

1(As of February 28, 2019)2

Message from the Management

We will create synergy from theintegration of the three companies
by further accelerating reforms
and continue the challenge ofestablishing a new supermarket
model.
Motohiro Fujita
President andRepresentative Directorof the initial forecast owing to a decrease in the number ofHoldings Group, as an operator of brick-and-mortar stores,

customers. A successful effort to control selling, general andimprove all points of contact with customers. This means

administrative expenses to within the budget by strengthening

not only responding to evolving IT technology, but also

cost controls was insufficient to compensate for stagnant

enhancing the humanity and diversity of the employees

sales. Consequently, sales increased yet profit declined. The Group

who come into direct contact with customers as well as ouropened 13 new stores and closed 8 stores in the interest ofpresence in society to better fulfill our role and mission in

operational efficiency, resulting in a net increase of 5 stores.

local communities. We think that it will be necessary for

We rejuvenated 56 existing stores, implementing measures toeveryone who works in our stores to adopt the customer’s

meticulously respond to changes in customer preferences by

perspective, consider what customers want, and autonomously

emphasizing variety in sales floor and merchandise changes. As aact for their benefit.

result, net sales, the number of customers and spending per
customer at rejuvenated stores exceeded the prior-year levels.

Consideration of a new business modelin response to an increasingly
challenging market environment andrenewed awareness of the importanceof the customer’s perspective

Creating value propositions froma variety of perspectives
Establishing a corporate culture that enables various people
to actively participate is necessary for boosting businessmodel innovation and increasing customer loyalty, and
it is essential that the Group invests in human resources
and technology. Therefore, in fiscal 2019 we set up three

The environment in which U.S.M. Holdings operates iscross-organizational study groups that extend across thechanging in a number of ways. The market is contracting

operating companies to pursue initiatives such as analysis

in food expenditures. In such an environment, the U.S.M.

due to unprecedented population decline and aging, whileof new store types and customer needs and consideration

Holdings Group implemented organizational changes inat the same time the population is concentrated in theof digital businesses, including a new online supermarket.

March 2018 to accelerate synergy creation. We establishedGreater Tokyo Area. A number of companies from otherWe believe that initiatives to engage in vigorous discussions

the Materials Procurement Department and the Purchasing

industries are entering the market, seeing consumption growththat elicit perspectives from frontline operating company

Integration Promotion Department and, to promote improved

among aged households and their increasing importance aspersonnel and insights from outside the Group as well as toefficiency through sharing of business infrastructure, we

a business opportunity. In view of these factors, we face a businessincrease customer loyalty from a variety of perspectives will

established the Finance and Accounting Department andenvironment that is more fiercely competitive than ever before.

become a growth engine.

United Super Markets Holdings Inc. (U.S.M. Holdings) was

the ICT Development and Operation Department to integrate

Other environmental changes include dramatic evolution of new

U.S.M. Holdings has shifted to a policy of accepting theestablished in March 2015 as a joint holding company for

functions of The Maruetsu, Inc. and Kasumi Co., Ltd. In thistechnologies, such as IoT and artificial intelligence, and growth indifferences between the operating companies and developing

The Maruetsu, Inc., Kasumi Co., Ltd., and MaxValu Kanto

way, we have expanded jointly planned products and joint

inbound tourist consumption.

a business platform to integrate them. The holding company

Co., Ltd. We have shifted from promoting harmonization

procurement while continuing to integrate purchasing for

To chart a course to future growth in these circumstances,

will redefine functions, play a role in the three areas of functional

among the three operating companies to integration and aresome merchandise sections and expanded the product lineup

we consider it necessary to reflect on the meaning and purpose

integration, information sharing, and new functions, andimplementing reforms necessary for continued growth underof “eatime” brand of private-label merchandise to a totalof supermarkets as food infrastructure and to rethink andfurther accelerate reforms by integrating functions andthe basic policies of “Maximization of synergy through shar-of 7 0 items by the end of February through the successive

rebuild the business model.

business processes common among the operating companies.

ing of business infrastructure” and “Establishment of a newlaunching of new products. Furthermore, we established theIn addition to considering the situation from a business

U.S.M. Holdings will also demonstrate leadership in promoting

supermarket model adapted to consumer changes.”

Business Development Department and the Digital Businessmodel perspective, in this changing environment it is importantthe creation of value propositions that will enable the operating

Planning Department and proceeded with consideration of ato adopt a customer-centric perspective and think aboutcompanies to take advantage of the individual characteristics of

new supermarket model.

what customers want now and in the future.

their stores as appealing local supermarkets optimized for their

Strengthening reforms and cost
controls that exploit integration synergy
Rejuvenated stores contributed to
year-on-year increases in net sales andthe number of customers

The fiscal year under review was a year clouded by uncertainty due to a series of major natural disasters that occurred3

across Japan, the repercussions on the Japanese economy ofTurning to the performance of existing stores, although

At a time of diversifying customer lifestyles and increasingly

areas and win the loyalty of large numbers of local customers.

the slowing tempo of overseas economies, and sluggish growth

gross profit exceeded the prior-year level, net sales fell shortwide-ranging customer needs, it is imperative that the U.S.M.

We request your continued support of the U.S.M. Holdings Group.

4Medium-term Business Plan

Create synergy through integration of three companies for growth into the future
In line with our medium- to long-term strategy covering the period up to fiscal 2025, U.S.M. Holdings will formulate and implement a medium-termbusiness plan every three years. Considering the three-year term of the first medium-term business plan launched in fiscal 2017 to be a period forlaying the foundation for realizing sustained growth in the future, which is based on the environmental change in the next ten years in the Greater Tokyo
area, we will offer new value attuned to customer needs.

For the new stageof growth into the future— Accelerate reforms by shifting from the harmonization to theintegration stage —Medium- to long-term strategic directions⃝ In-depth cultivation of the dominance strategy in<Basic policies>⃝ Maximization of synergy through sharing of business

infrastructure⃝ Challenge for establishment of a new supermarket model

adapted to consumer changes

the Greater Tokyo Area
⃝ Format development and merchandise strategies
adapted to a new consumer profile⃝ Construction of business infrastructure adapted to
the future business environment⃝ Across-the-board cost structure reform of selling,
general and administrative expenses

Transitioning to a next-generation business model
while reforming the existing model
U.S.M. Holdings faces a fiercely competitive business environment radically different from any that we have experienced previously due to suchfactors as market contraction resulting from unprecedented population decline and aging, market entry by a number of companies from otherindustries, and the dramatic evolution of new technologies. Accordingly, we recognize that transformation to a next-generation business model isessential for implementation of initiatives devised with the future market environment in mind.

Policies for Fiscal 2019

Strengthening of functional complementarity with the operatingcompanies and creation of customer experiences and value
propositions based on the customer’s perspective
In fiscal 2019, U.S.M. Holdings will advance toward new forms of integration by contributing to the enhanced management bases of operating companies
through creation of synergies and by pursuing further enhancements in the three areas of functional integration, information sharing, and new functions.
We will accelerate reforms and begin giving concrete shape to a new supermarket model by setting up three study groups as open discussion
forums for the purpose of learning and understanding what our customers want now and in the future and acting promptly with fresh ideas.

Initiative in fiscal 2018

Merchandising
Analysis Study Group

Three key areas for integration specified and initiatives implemented under a new structure

Investigate customer needsby analyzing sales data on
merchandise categories common
to the three operating companies.

In fiscal 2018, while respecting autonomous store management of each operating company, from among the areas of each company, the Group specified areas
for integration that will contribute to higher profit on a consolidated basis, and worked to ensure creation of synergy from the viewpoint of overall optimization.
The three areas for integration are the “area for functions to be shared,” the “area for information sharing,” and the “area for new functions.” We worked toensure creation of synergy also through the implementation of three projects: “merchandise reform,” “cost structure reform,” and “logistics reform.”
To accelerate synergy creation, we established the Materials Procurement Department and the Purchasing Integration Promotion Department. Finance andaccounting sections and ICT sections of the operating companies were integrated. Moreover, we established the Business Development Department and theDigital Business Planning Department for the purpose of transformation to a new supermarket model.

Area for functions to be shared

Area for information sharing

New Format
Study Group

Area for functions
to be sharedNewsupermarket
model

Obtain outside insights andconsider development of new
business formats.

Digital Channel
Study Group

Area fornew functions

Consider digital businesses,
including a new online
supermarket.

Area for new functions

Area forinformation sharing● Fiscal 2019 business model reform initiatives
Integration of purchasing
Materials procurement
IT integration
Accounting center

Merchandise Reform PT
Cost Structure Reform PT
Logistics Reform PT
Property Development MT

Development of new business formats
Digital businessTraining of experts
Consideration of PC functions

Existing model①C ontribute to store rejuvenation, profit margin improvement, and cost reduction at the operating companies through the additionof measures from an overall perspective (verification, modification, regulation).
②Ensure penetration and thorough implementation of overall measures.

Reformed model
Promotion of integration of purchasing
Enhancement of operational efficiency
through digitization
Integration of infrastructure, including theaccounting system
Reduction of systems costs

Joint merchandising, expansion of joint
procurement of products, materials, etc.
Enrichment of eatime products
Workshop for a next-generation
logistics system①Develop concepts, create roadmaps, and share them with the operating companies.
②Demonstrate leadership in implementing and verifying new initiatives and trials.
Consideration of a newsupermarket model

Plans

2019

2020

5

*PT: Project Team. MT: Meeting, PC: Process Center

2022

Steps for transformation into a new model
Warm Up

Approach Run

Implementation⃝Discussion of the concept⃝Strategy mapping⃝Trial & error⃝Verification of results⃝Implementation, verification, modification ⃝Evaluation of results and modification⃝Consideration of reinforcement systems ⃝Addition of systems⃝Analysis and data utilization

Key themes of the existing model

Creation of synergy: 1.9 billion yen achieved

2021

Strengthen

Organization⃝Strengthening of store vitalization⃝Promotion of profitability improvement⃝Strengthening of cost reduction⃝Strengthening of the promotion structure ⃝Cultivation of new relationships⃝Change of the investment allocation⃝Creation of new value

Insight

Establishment

Change⃝Transformation⃝Verification and modification⃝Consideration of the next model6

Business Efforts
Encounter with carefully selected excellent“eatime” products makes every-day dining a moreenjoyable experience

The Maruetsu, Inc.
Having positioned the fiscal year ended February 28, 2019 as a year for transformation to a new

October 2017 marked the debut of “eatime,” the Group’s first brand of private-label merchandisebusiness structure, Maruetsu undertook transformation to high-quality business operations,

at all Maruetsu, Kasumi, and MaxValu Kanto stores. Based on the concept of proposing newtransformation to highly productive workplaces, and the creation of an environment to succeed against

values to customers, “eatime” is a brand of original merchandise conceived by the three“eatime” website

https://www.usmh.co.jp/eatime/

tough competition. A key initiative was improvement of the gross profit margin through a review of thefood supermarket companies in pursuit of deliciousness, with a focus on food cultures ofpurchasing structure and greater accuracy in purchasing and sales planning. Maruetsu implemented

various regions and specialties rooted in regions.

labor-saving measures such as increasing the number of stores that use partial self-checkout systems,

We will accelerate product introduction and enhance the product lineup.

introducing the Total LSP System designed for efficient store operation, and introducing electronic shelflabels at urban stores. In addition, to respond to the trend toward delicatessen products, Maruetsu
expanded introduction of a fresh food delicatessen featuring seasonal fresh ingredients to 46 stores.

Kasumi Co., Ltd.
Kasumi is implementing initiatives to develop stores loved by the community that function as
community hubs. In the area of services, to increase customer convenience, Kasumi introduced
the KASUMI credit card with WAON and began Aeon’s WAON e-money payment service in March,issued the KASUMI-WAON e-money card in September, and began a completely cashless store
experiment at Kasumi Tsukuba University Store, which opened in October. It also launched a
project to promote business process reform and implemented a work standardization initiative toimprove service levels and productivity by restructuring store operations.

Making mealtimes more fun with eatime
In this section, we introduce some popular eatime products.
N o 001 Whole Tomatoes Delicious Eaten as Is

N o 010 Chocolate Ice Cream for Chocolate Lovers

Whole tomatoes that offer all the umami and sweetness of small San
Marzano tomatoes

Ice cream made using Belgian chocolate that features the slight bitternessof chocolate

MaxValue Kanto Co., Ltd.
Inspired by its vision of creating “pleasure of shopping,” MaxValu Kanto undertook evolution of its
stores into supermarkets whose merchandise is an inducement for customers to visit, productivity
improvement through systems, and strengthening of organizational capabilities and human resources
to move ahead with reforms. To establish a unique value proposition, MaxValu Kanto worked toincrease the number of customers by 1) increasing store visit frequency through strengthening of
the fresh foods offering, 2) merchandise intentionally selected as an inducement for customers

N o 018 Margherita Pizza that Harmoniously Combines
Water Buffalo Mozzarella and Tomatoes

Pizza made using milky, juicy buffalo mozzarella cheese and accented with thetartness of tomatoes and the savory flavor of Parmesan cheese. Enjoy the taste of
L’ARTE, a famous pizzeria in Sangenjaya, at home.

to visit stores, 3) rejuvenation of stores through continuous investment in revitalization and repair,N o 038 Soft Oboro Tofu that Fills the Mouth withand 4) customer-oriented, frontline-driven reforms based on store policy. To promote productivity

the Sweetness of Polished Soybeans

improvement, the company also undertook 1) development and horizontal deployment of a new input

Made using 100% Hokkaido soybeans. The extra touch of polishing the soybeans
suppresses off-flavors and accentuates their sweetness.

man-hour model at model stores and 2) headquarters-originated continuous cost structure reform.
Overview of financial closing by operating company on a non-consolidated basis

Soybean Natto for Natto Lovers with
N o 039 Domestic
Chunky Texture and the Umami of Soybeans

Yuyume Beef Curry with the Savory
N o 073 Choice
Taste of Meat

The use of natto bacterium obtained from the World Heritage site Shirakami Sanchi
accentuates the umami of soybeans, reduces the smell, and imparts a highly sticky consistency

Enjoy the mellow taste of this retort pouch curry made using slow-cooked Yuyume
beef subtly seasoned with coconut milk.

Fiscal year ended
February 28, 2019(non-consolidated)

ResultChange fromthe previous year

Result(Millions of yen, %)Change fromthe previous year

Change fromthe previous year

ResultOperating revenue

374,91099.8

271,663

100.9

43,777

100.7

Operating income

5,754

73.4

5,998

101.7

207

112.6

Ordinary income

5,776

73.3

6,371

103.0

206

113.7

Net income

2,651

48.9

3,525

86.3

100

80.8

*The product photos are simulated.
78

CSR Activities
U.S.M. Holdings’ Basic Policy on the Environment

Environmental Impact Reduction and CO2 Reduction

The United Super Markets Holdings Group recognizes that environmental problems constitute a critical global issue andmakes concerted efforts to protect the global environment, helping to build a sustainable recycling society through soundbusiness activities that foster social and economic development and harmonious coexistence with local communities.

1.
2.
3.
4.

We actively work to conserve resources and energy through our business activities.
We work to develop and popularize environmentally friendly products and materials.
We promote waste reduction and The Three R’s: reuse, reduce and recycling.
We contribute to local environmental protection activities and strive for harmony withlocal communities.
5. We familiarize employees with this policy, nurture a spirit of environmental protectionin each individual, and engage in group-wide activities that involve all employees.
6. We announce this environmental policy to our employees and the public and strive toprovide information on our activities proactively.

U.S.M. Holdings engages in CSR
activities from three perspectives.

Environmental
impact reduction andCO2 reduction

The U.S.M. Holdings Group engages in CSR activities from three perspectives: “Environmental Impact Reduction
Safety and security

and CO2 Reduction,” “Safety and Security,” and “Contributions to Society.” We contribute to local communities■ Environmental Protection■ Recycling Activities

Kasumi has been engaged in a forest
revitalization project at Kasumi Empathy
Creation Forest located in Kasama City,
Ibaraki Prefecture, since fiscal 2011.
In fiscal 2018, Kasumi’s employees
together with local residents planted
about 3,000 trees. Kasumi has also
been engaged in a litter picking andclean-up campaign of the shore as partof environmental protection of Lake
Kasumigaura, in collaboration with civicorganizations and the local government,
since fiscal 2017.
Maruetsu has been engaged inforest preservation involving theplanting of trees with volunteers at aforest in Yokote, Hidaka City, Saitama
Prefecture, which is nicknamed“Maruetsu Forest.”

The Group companies install recycling bins at the front of each of
their stores and collect recyclable resources such as food trays,
milk cartons, and PET bottles. Kasumi, in particular, collects recycledresources at Recycling Stations
installed at all stores and sorts
and stores them at the Kasumi
Recycling C ent er, which
performs primary processing.

Contributions tosocietyand our stakeholders through our CSR activities.

Major initiatives in fiscal 2018

●Maruetsu ●Kasumi ●MaxValu Kanto

August 2018
●RikuzentakataTanabata Festival Experiential Learning●Donations to eel resource conservation activities

March 2018
●AEON Happy Yellow
Receipt Campaign●Guide dog training
center tours
2018年 3月

May 2018●Held the Kasumi Empathy
Creation Forest
tree-planting festival

4月

5月

April 2018
●Support for the Kasumigaura Marathon, setting
up of aid stations●Maruetsu forest conservation volunteer program●Promoted “nutrition day, nutrition week” incooperation with The Japan Dietetic Association●●●Sale of 24 Hour Television charity shirts
and fundraising

6月

7月

8月

October 2018
●Engaged in a carbon offset initiative

9月

July 2018●Dispatched delegates of the Natures Kids

10月

11月

2019年 1月

● 5 a DAY hands-on harvest tours● Dietary education classes for seniors at mobile sales centers● Guide Dog Friends Club
● Donation of an amount equivalent to 1% of drink vending machine sales for use as● Training of food educators and food instructors

purchasing vaccines●●● Bring your own shopping bag campaign●●● Collection of recyclable resources● Operation of a recycling center● Promotion of waste visualization and reduction of food product waste through theintroduction of a waste weighing and management system● Reduction of food product waste and donations to a food bank that effectively utilizes

food products with unexpired best-before dates and use-by dates●●● Recycling of food leftovers

Maruetsu has introduced at more than 200 supermarkets, mainly
its eponymous stores, a waste weighing andmanagement system that quantifies theamount of waste discharged at each store. By“visualizing” waste discharged from its stores,
Maruetsu is working to curtail waste emissions
by increasing employee commitment to waste
reduction.

■ Carbon Offsetting■ Food bankSince the previous year, Maruetsu has been engaged in a carbon
offset initiative to offset CO 2 emitted in the manufacture of theplastic grocery bags it provides for customers, purchasing the rightto emit CO 2 equivalent to the amountabsorbed in forest conservation activities
conducted by Iwate Prefecture, Tome Cityin Miyagi Prefecture, and Kitakata City
in Fukushima Prefecture. In addition tocontributing to global warming mitigation,
this initiative also supports environmental
protection activities and local communities
in areas that were stricken by the Great
East Japan Earthquake.

Kasumi has been donating foodproducts to a food bank sinceNovember 2016. From companies
and other donors, the food bankreceives safe food items with noquality issues that are discarded
for various reasons and donates
them to welfare facilities andother organizations that need food.
Through these food donations to a food bank in the region where
Kasumi has stores, Kasumi reduces wastage of food products with
unexpired best-before dates and use-by dates and effectively
utilizes food products.

●Maruetsu ●Kasumi ●MaxValu Kanto● Donation of 1% of pet food sales of maruetsu365 to the Japan Guide Dog Association●●● Donation of the proceeds from the sale of bottle caps collected at stores for use in

2月● Conduct of supermarket tours● Guide dog contact campaigns

greening funds

9

12月

November 2018
●Reconstruction assistance calendar “Ashita (Tomorrow)2019” charity activities●Set up aid stations at the Tsukuba Marathon●Litter picking at the shore of Lake Kasumigaura

Year-round continuous initiatives●● Donations to the Japan Guide Dog Association

February 2019
●Winning of the Carbon
Offset Gran Prix

■ “Visualization” of the amount of waste discharged● “Boxed Lunch Day” dietary education project for junior high school students● Health support, including measurement of health data and provision of advice

on nutrition● Training of service care-fitters●● Promotion of employment of persons with disabilities● Welcoming of social studies field trips● Participation in community events that place importance on ties with local communities● “Clean & Green Day” cleanup activities at stores and near the head office on theeleventh of each month● Donations to the World Wildlife Fund (presentation of donations)●● Voluntary inspections for radioactive substances

Safety and Security Initiatives■ Voluntary Inspections for Radioactive Substances■ ISO 22000 and ISO 9001 Quality Management Certification

The Group has put in place an inspection system for radioactive
substances to enable customers to purchase food products withconfidence and peace of mind. Maruetsu and Kasumi conduct
voluntary product inspections
and disclose on their websites
the results of sampling inspectionsof fresh produce, milk, tofu, andother products.

Maruetsu has obtained certification under the ISO 22000 international
standard for food safety management systems at its fresh foodprocessing centers for fresh meat and fresh fish and attests that itprovides customers with safe, high-quality food products. Rose
Corporation Co., Ltd., a Kasumi Group company that produces andprocesses boxed lunches and prepared foods, has obtained
certification under the ISO 9001 international standard for quality
management systems and engages in rigorous quality control that
ensures customer peace of mind.

● Litter picking and clean-up campaign at the shore of Lake Kasumigaura

10CSR Activities

Corporate GovernanceCorporate GovernanceContributions to Society■ Support for Guide Dog Training■ Great East Japan Earthquake Reconstruction Assistance

The Group supports guide dog training through monetary
donations and is conducting activities to raise understanding
and support for guide dogs. Maruetsu conducts events suchas guide dog training center tours for customers. Maruetsu
has continuously made donations to the Japan Guide Dog
Association (JGDA) since 1993 through activities to raise funds
for guide dog training, and the cumulative amount donatedby fiscal 2018 was approximately 294 million yen. Kasumi
periodically holds meetings of the Kasumi Guide Dog Friends
Club (Kasumi Modoken Friend Club) with JGDA support.

Since the Great East Japan Earthquake of 2011, Kasumi has continuously
engaged in activities to assist the city of Rikuzentakata, which wasdevastated in that disaster. Its companywide charity activities based on areconstruction assistance calendar, “Ashita (Tomorrow) Calendar,” are in
their seventh year, and the total amount of donations to the Rikuzentakata
Elementary and Junior High School Reconstruction Fund amounted to¥120.5 million. Rikuzentakata Tanabata Festival Experiential Learning(Rikuzentakata Tanabata Matsuri Taiken Gakushu) has been held since2012. At the time of the Tanabata Festival, held on August 7 each year,
elementary school students from areas where stores are located and new
Kasumi employees visit Rikuzentakata for two nights and three days.
By helping with the preparations for and joining in the Tanabata Festival,
the participants deepen theirinteractions with others andlearn the importance of bonds
between people.

■ Emergency assistance fundraising and donation to affected areas■ Happy Yellow Receipt Campaign

The Group engaged in emergency assistance fundraising activities
in the hope that victims of natural disasters that occurred in 2018
will be able to resume their normal lives as soon as possible, anddonated the funds raised from customers and Group company
contributions to municipalities in the affected area.
We donated a total of ¥6,462,702 to municipalities in Hiroshima,
Okayama, and Ehime prefectures, which were affected by torrential
rain in July 2018 and a total of \2,136,723 to municipalities in Osaka
Prefecture, Hokkaido, and Sapporo City, which were affected by
Typhoon Jebi (No. 21) of 2018 and the Hokkaido Eastern Iburi
Earthquake of 2018.

All MaxValu Kanto stores are continuing AEON’s “Happy Yellow
Receipt” initiative. Each year, during the three-day period from March
9 to 11 they participate in the “Happy Yellow Receipt Campaign”
t o support children in areas devastated by the Great East
Japan Earthquake. During
the campaign, customers
who visit the stores send
their wishes through theirpurchases.

Basic Policy on Corporate Governance

Board of Directors⑴ Respect the autonomy and independence of the operatingcompanies and ground corporate governance in the basic
principles, vision, and mission formulated at the time theCompany was established based on the common principles“Customer-first” and “Contribution to local communities.”

The Board of Directors consists of nine directors (including
three outside directors). The Board meets once a month, in principle, and holds extraordinary meetings as necessary. The five
Audit & Supervisory Board members attend Board of Directors
meetings. At Board meetings, the directors deliberate and resolve
matters prescribed by law and matters set forth in the Board of
Directors Regulations and oversee the execution of businessby the directors on the basis of regulatory compliance andappropriate risk management. As a pure holding company, theCompany requires the operating companies to report to theCompany important resolutions and governs the appropriate
execution of business operations by the operating companies.

⑵ Maintain transparency and fairness in decision-making toensure appropriate cooperation with shareholders andother stakeholders.
⑶ Regard shareholders with whom appropriate cooperation canbe achieved from a medium- and long-term perspective,
particularly customer shareholders who provide opinions
through their daily shopping, and other stakeholders asimportant partners. Create an environment that enables
constructive dialogue with these stakeholders and develop
a framework to reflect their feedback in management.

Audit & Supervisory Board
The Audit & Supervisory Board consists of five corporate
auditors (including three outside corporate auditors). The Board
meets once a month, in principle, and holds extraordinary
meetings as necessary. At Board meetings, the corporate
auditors receive reports on, discuss, and resolve important
audit-related matters. The corporate auditors audit the legalityof the execution of duties by the directors, the status ofassets, and other matters in accordance with the audit policy
and division of duties established by the Audit & Supervisory
Board. The Audit & Supervisory Board convenes meetings ofthe Group Auditor & Supervisory Board Liaison Committee forthe purpose of cooperating with the corporate auditors andinternal audit departments of the operating companies, strives
to ensure highly effective auditing, and works to reinforce thegovernance function and internal audit function.

⑷ On the basis of (1) to (3) above, demonstrate a healthy
entrepreneurial spirit by ensuring rationality in the
management decision-making process and strive for
the Company’s sustained growth and enhancement of
medium- and long-term corporate value by realizing promptand decisive decision-making.

(As of May 24, 2019)

Directors and Corporate Auditors

Corporate Governance Structure(as of May 24, 2019)

General Meeting of Shareholders
Election/Dismissal

The U.S.M. Holdings Group’s dietary education activities
Oversight
Collaboration

Supermarket tours

EATPIA cooking and culture school
Among the many classes offered at EATPIA, a cooking and culture school
Maruetsu has operated since 1991, Kid’s Cooking classes have been
continuously offered since the school first opened. Maruetsu’s national
registered dieticians and other dieticians serve as instructors for theseclasses, in which some 3,000 elementary school students in total havelearned about cooking, nutrition, and table manners.

11

Board of Directors(Directors)

Collaboration

Oversight

ReportingPresident andRepresentative
Director

Collaboration

Audit & Supervisory
Board Committee(Group corporate auditors)

Oversight/
Policyreinforcement

Election/
Dismissal

Management
CouncilReportingInternal Audit Department
・Internal control
・Auditing

Resolution/ Resolution/
Approval
ApprovalInternal
auditing

Corporate departments
Reporting

Auditing

Corporate auditors/
Audit departments

Management guidanceApproval of important matters

Subsidiaries

Reporting

Evaluation Advisory Committee

Accounting auditing

Human Resources and Compensation Advisory Committee

ReportingAccounting auditor/Audit corporation

Kasumi invites local children to its stores and provides opportunities for them tolearn about an enjoyable well-balanced diet in fun study sessions conducted by
Kasumi’s national registered dieticians or dietary education instructors. In fiscal
2018, 15,347 children participated in study sessions.

Audit &
Auditing
Supervisory Board(Corporate auditors)

President andRepresentative Director

Motohiro Fujita

Vice President andRepresentative Director

Daisuke Tezuka

Vice President andRepresentative Director

Ryota Furuse

Director

Toshiki Ishii

Director

Taketoshi Kawada

Director and Advisor(part-time)

Motoya Okada

Outside Director(part-time)

Akira Terakawa

Independent Outside Director(part-time)

Shigekazu Torikai

Independent Outside Director(part-time)

Naoko Makino

Corporate Auditor(Standing)

Tatsuo Mizuhashi

Corporate Auditor(Standing)

Tadayoshi Yoyogi

Outside Corporate Auditor(part-time)

Koichi Ihara

Outside Corporate Auditor(part-time)

Shigeru Koyama

Independent Outside Corporate
Auditor (part-time)

Shinobu Okamoto

12Consolidated Financial Statements (As of February 28, 2019)

Stock Information (As of February 28, 2019)

Consolidated Balance Sheet
Account

18’ 2(Millions of yen)

19’ 2Assets26,239389

414

Inventories

16,964

17,072

Accounts receivable - other

18,19818,886

2,469

1,842

Deferred tax assets
Other

3,337

2,972

Provision for doubtful accounts

(124)

(123)

66,94567,305

Total current assets

131,681,356 shares

485,287484,601

Number of shareholders

68,346

192,269

194,674

14,691

15,047

206,961

209,721

Selling, general and administrative expenses 192,892

197,910

14,068

11,811

677,557

Cost of sales
Gross profit

5,000

4,000

Operating revenue

Current portion of long-term loans payable

3,400

7,100

Operating gross profit

Income taxes payable

2,150

822

Provision for bonuses
Provision for loss on liquidation ofbusiness of subsidiaries and associates

1,997

2,052

1,373

ー

Non-operating income

521

605

Provision for loss on store closings

239

44

Non-operating expenses

402

163

Provision for shareholder benefit program

278

274
20,202

12,253

Other

21,04014,18881,779ー

1,591

Total current liabilities

82,922Extraordinary income
Extraordinary losses

6,255

5,667

24,50019,400

Income before income taxes and minority interests

7,932

8,177

150

150

Income taxes - current

4,689

2,537

Provision for loss on subleases

99

55

Income taxes - deferred(4,203)

307

485

2,845

7,446

5,331

(5)

23

7,452

5,308

Deferred tax liabilities

Operating income

Ordinary income

Buildings and structures, net

64,95664,671

Land

43,811

44,828Net defined benefit liability

1,039

1,058

Other, net

20,726

19,816

Asset retirement obligations

5,485

5,717

8,310

7,978

Income (loss) attributable tonon-controlling interests

39,58534,359Profit attributable to owners of parent

Total property, plant and equipment

129,494

129,317

Intangible assets

Other
Total non-current liabilities
Total liabilities

Goodwill

13,84313,023

Other

2,711

3,224

Total intangible assets

16,554

16,248104,320 104,321
30,846(3,751)(3,745)

Cash flows frominvesting activities

Treasury stock

Deferred tax assets

8,554

9,134

Total shareholders' equity

218

207

Accumulated other comprehensive income

Guarantee deposits

32,15932,174

Other

1,616

Provision for doubtful accounts
Total investments and other assets

138,159 141,423

Valuation difference on available-for-sale securities

(54)

(184)

Foreign currency translation adjustment

238

207

1,295

Remeasurements of defined benefit plans

774

388

(299)

(71)

Total accumulated other comprehensive income

958

411

49,05345,595

Share acquisition rights

52

111

Non-controlling interests

369

379

195,102 191,161
262,047 258,466

Account

27,5902,856

Total assets

10,000Retained earnings
6,804

Total non-current assets

10,000Cash flows fromoperating activities

Investment securities

Net defined benefit asset

Net income

Consolidated Statement of Cash Flows (Millions of yen)

Shareholders' equity
Capital stock

Total income taxes

122,507 116,139

Net assets

Capital surplus
Investments and other assets

13

Number of shares issued

Net sales

Short - term loans payable

Long-term loans payable

Property, plant and equipment

679,276

18’ 2

47,283

Non-current liabilities

Non-current assets

500,000,000 shares

18’ 247,443

Notes and accounts payable - trade

Total net assets

139,539 142,326

Total liabilities and net assets

262,047 258,466

Stock Information
Number of shares authorized

Account

19’ 2

Current liabilities
25,709Notes and accounts receivable - trade

18’ 2Liabilities

Current assets
Cash and deposits

Account

Consolidated Statement of Income (Millions of yen)

Cash flows fromfinancing activities
Effect of exchange rate change on
cash and cash equivalents
Net decrease in cash andcash equivalents

18’ 2

19’ 2

21,06018,309(16,238) (13,153)(4,270)(4,561)

(13)

(63)

538

530

Cash and cash equivalents
at beginning of period

25,16925,708Cash andcash equivalents at end of period

25,70826,238Major Shareholders
Number ofshares held
(thousand shares)

Percentage ofshares held(%)

Aeon Market Investment Co., Ltd.

67,15952.35

U.S.M.H. Group Business Partners
Shareholding Association

2,954

2.30

The Kambayashi ScholarshipFoundation

2,300

1.79

Aeon Co., Ltd.

1,629

1.27

Nippon Access Inc.

1,500

1.16

The Master Trust Bank of Japan, Ltd.
(Trust Account)

1,385

1.07

Japan Trustee Services Bank, Ltd.
(Trust Account 9)

1,151

0.89

Japan Trustee Services Bank, Ltd.
(Trust Account 5)

1,133

0.88

KOKUBU GROUP CORP.

1,099

0.85

Mitsubishi Shokuhin Co., Ltd.

1,080

0.84

Shareholder nameNote: Percentages of shares held are calculated excluding 3,409,768 shares oftreasury stock.

Distribution of Shares by Shareholder Type
Foreign corporations etc.

5.81％

Securities firms

2.59％

Financial institutions

7.82％

Treasury stock

0.18％
Individuals and other19.33％

Other Japanese corporations

64.27％

14

Corporate Data (As of February 28, 2019)
Corporate Data

Our Website

EstablishedMarch 2015

Capital10 billion yen

Visit U.S.M. Holdings Website and find out more about us.
Our website offers a variety of content, including the latest

Business

Management of supermarket business

news from us, introduction of our businesses, IR information,

Head office

1 Kanda Aioi-cho, Chiyoda-ku, Tokyoand financial information.

https://www.usmh.co.jp/
Group Companies

united super markets holdings inc.

The Maruetsu, Inc.
Business

Supermarket business for retail sales of foods,
household goods, apparel, etc.

Head office: 5-51-12 Higashi-Ikebukuro, Toshima-ku, Tokyo

Kasumi Co., Ltd.
Business

Supermarket business for retail sales of foods,
household goods, apparel, etc.

Head office: 599-1, Nishiohashi, Tsukuba-shi, Ibaraki Prefecture

MaxValu Kanto Co., Ltd.
Business

Supermarket business for retail sales of foods,
household goods, apparel, etc.

Head office: 5-30-3 Kameido, Koto-ku, Tokyo“eatime” website

https://www.usmh.co.jp/eatime/
eatimeStock Exchange Code: 3222

1 Kanda Aioi-cho, Chiyoda-ku, Tokyo 101-0029, Japan
TEL: +81-3-3526-4761
URL: http://www.usmh.co.jp/