Medium-Term Management Plan Overview

ValuesOverview and Promotion System of Third Medium-Term Management Plan

Business Model

Third Medium-Term Management Plan: Fiscal 2025 numerical targets and notional fiscal 2030 targets(Unit: Millions of yen)

550,000

900,000

Gross profit margin

33.3%

35.0%

38.0%

Net sales

433,000

469,782

Gross profit margin

33.6%

33.3%

Operating profit

30,06838,00063,000Operating profit margin

6.4%

6.9%

7.0%

Operating profit

25,00030,068Operating profit
margin5.8%

6.4%

Ordinary profit

29,55537,50063,000Ordinary profit

24,40029,555

Profit attributable toowners of parent

18,13522,80040,000

Profit attributable toowners of parent

16,40018,135

ROE

7.5%

8.5%

Continuously 10.0% or more

ROE

7.5%

7.5%

Evaluation

Mission ❶Evolve with the goal of enabling local customers to enjoy a convenient and fulfilling lifestyle

Mission ❸Promote a digital shift strategy to enhance customer convenience

Mission ❷Aim to support professionals and support DIY by strategically developing multiple businesses, including new business models

Taking on the challenge of creatinga new-generation of home
improvement retailers
Revitalizing stores and expanding the areasin which we do business(1) Growth investments with emphasis on investment
profitability(2) Management that is aware of capital efficiency(3) Consideration given to flexible acquisition of treasury stocks(4) Strengthening of human capital management andsustainability

Financial Highlights

Sustainability creating both corporate
and shareholder value(1) Store strategy(2) Further pursuit of low-cost operations(3) Creation of our own unique BOPIS style(4) Better in-house brand product development structure(5) E xpanding the areas in which we do business throughpromotion of mergers and acquisitions

Risk Management and Compliance(5) Expansion of business domains by M&A promotion	We aim to expand the home center area and expand
sales channels for private brand products. Towardachieving our goal of becoming an integrated group ofbusinesses that help people live more comfortably,	we will also actively promote collaboration and cocreation through M&A with the aim of expanding
business domains by means of collaborations withdifferent industries and functional enhancements.
(6) Human capital strategies	We will work to create a culture that respects individualvalues and an environment that facilitates growth andself-fulfillment. In addition to fostering in employees anawareness of the benefits of raising corporate value, forexample through the introduction of an employee stock
ownership plan (ESOP) trust, we will work to encourage
health management among employees.
(7) Sustainability	Aiming to remain a company that creates value by helping
people make their lives and homes more comfortablethrough the DIY approach, we contribute to social issues
such as environmental protection and social mission,
which are linked to the eight objectives and 22 material
goals (materialities) of the SDGs, as home centers. At thesame time, we will strive to build a managementfoundation that supports sustainable growth.

Move from being a company that sells products to a company that comprehensively provides fulfilling lifestyles

Corporate Governance*2 Quick Parts: This is a parts zone that provides electrical materials andplumbing parts for craftsmen and DIYers. Having more than 10,000 items instock, if a customer places an order by phone, we will prepare those items thatare in stock within 60 minutes.

Transforming into an integrated business that comprehensively makes people’s lives more comfortable

Sustainability*1 DIY Reform: This is a store zone where customers who are carrying out
renovation or repair work by themselves can gather together the tools andmaterials they will need. They can also receive renovation assistance, such as
wallpaper replacement experience, for free.

* In the case of the (notional) fiscal 2030 targets, expansion of the scale of sales is expected through M&A, etc.

Long-term business planFiscal 2022results

Medium-Term Management Plan

DCM Holdings Co., Ltd. Integrated Report 2023

469,782(Unit: Millions of yen)
Fiscal 2022
targets

Based on the concepts of “Taking on the challenge of creating a new-generation of home improvement retailers” and “Revitalizing
stores and expanding the areas in which we do business,” under our third medium-term management plan (fiscal 2023 to 2025)
we aim to achieve net sales of ¥550 billion, operating profit of ¥38 billion, and ROE of 8.5% in fiscal 2025.

18Net sales

Second Medium-Term Management Plan: Results

Overview and promotion system of third medium-term management plan

Priority Measures(1) Store strategies	Pursuing a store strategy centered on enhancing existing
stores by the clarification of roles by store size and theforming of in-store remodeling teams, we will strive tocreate stores that have a more familiar feel and are moreconvenient.
(2) Further pursuit of low-cost operations	Creating a rational system through shelving allocationand logistics reforms as well as DX promotion andactively developing store IT tools, we will devise ways toreduce store duties and improve efficiency and engage in
low-cost operations.
(3) Building of unique BOPIS style	We built our unique Buy Online Pick-up In Store (BOPIS)
style by promoting the seamless integration of stores andonline businesses. We will strive to improve conveniencefor our customers by creating new forms of home centers.
(4) Deepening of private brand product development system	
Focusing on the development of products in areas with
distinct business characteristics (DIY, gardening, pet
supplies, SDGs-related) and products in the mid-pricerange, we will work to expand the proportion of sales ofprivate brand products and improve the gross profit margin.

Fiscal 2030 targets (image)*

Message from the President

The second medium-term management plan (fiscal 2020 to2022) was positioned as the final finishing touches to theintegration of the home center business companies under
DCM Holdings and preparations for growth. Due to theunexpected outbreak of the COVID-19 pandemic, there weresocial factors such as complete changes in people’s lifestyles
and behavior patterns, but the Company responded flexibly
and appropriately to these changes and was able to achieve
results that exceeded our expectations.
In particular, with regard to DIY, gardening, and pet
products, areas in which we had been focusing onstrengthening product development and on proposals atstores since before the pandemic, business performance
grew significantly following the changes in lifestyles and theemergence of latent needs, including 1) Increases in timespent at home and leisure time; and 2) Growing awarenessof health and healing needs. As store enhancements, we also
worked on the remodeling and introduction of, for example,
the highly specialized home improvement (HI) DIY Reform*1and Quick Parts*2 zones primarily in large stores. Through theacquisition of shares of XPRICE Inc., which operates one of
the largest home appliance-focused EC sites in Japan,
we believe that we were also able to form the foundation forstrengthening the EC business, integrating EC and store
business, and for sending customers each other’s way.

Fiscal 2025 targets

Third medium-term management plan
(Fiscal 2023 to 2025)

Review of the second medium-term management plan

Fiscal 2022 results

The 36-Month Project, an in-house, cross-company organization that promotes the achievementof the medium-term management plan and long-term business plan
Mandala chart
Development of new typesof business/Enhanceexisting stores

Human resource strategy

Raising of corporate value

Construction of nextgeneration logistics

Realization of Long-TermBusiness Plan

DX promotion

Construction of HI
comprehensive type ofbusiness and service system

Product reforms

Expansion of customer
points of contact

The 36-month project, which consists of eight tasks,
will serve as the engine for achieving the plans in thethird medium-term management plan. Each task is led
by an executive officer, who takes responsibility forcarrying out the task. Since each task is also linked tothe priority issues of the SDGs, promoting the 36-monthproject will not only contribute to the achievement of
the medium-term management plan but also toenhancing the Company’s sustainability.

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