J. Front Retailing Co., Ltd.
Summary of Q&A session at 16th Annual Shareholders Meeting

Date and time: 10:00 – 11:20 on Thursday, May 25, 2023
Venue: New Pier Hall
< Answers to questions at the venue on the day >Q. (1) As an individual shareholder, I want the dividend to be raised as much as possible.
(2) I would like to know the book value and market value of the land owned by J Front.
A. (Wakabayashi, Director)(1) The annual dividend for fiscal 2022 is 31 yen, an increase of 2 yen from the previous fiscal year. Our approachto dividends is decided based on the cash flow generation situation, future growth investment, improvement offinancial structure, stock price situation, etc. Our basic policy is to return profits stably and appropriately, aiming fora dividend payout ratio of 30% or more. The dividend forecast for fiscal 2023 is 33 yen, and we would like tocontinue increasing the dividend.
(2) The book value of the Group's land is approximately 410.0 billion yen, of which that of Daimaru Matsuzakaya
Department Stores and Parco each accounts for roughly half.
Q. This is a question about compliance. You should be aware that in the last six months or so, you havebeen warned many times by a public agency from the viewpoint of compliance. I have repeatedly pointed
out your company's dissemination of information via the Internet, social media, etc. One sales floor
manager told me not to call him and that he would respond if he was alerted by the public agency. In thepast six months, the public agency should have cautioned against this, but salespeople lack legal
knowledge. About cosmetics and food products, especially cosmetics. The law stipulates that theefficacy of cosmetics should be communicated within the scope of 56 items. Cosmetics salespeople
don't know this.
A. (Sawada, President of Daimaru Matsuzakaya Department Stores)
We recognize that proper labeling and guidance at stores is very important, and we are taking measures toensure that everyone is fully aware of it. Specifically, we use group training, e-learning, and other means, so that
our staff can acquire and consolidate knowledge about related laws and regulations, including the Pharmaceuticaland Medical Device Act, the Act against Unjustifiable Premiums and Misleading Representations, and the Food
Labeling Act. Furthermore, we are striving for proper labeling and proper guidance by utilizing a third-party
organization to conduct “on-site inspections of labeling” at each store.
We will continue to work together with the divisions in charge, each store, and each sales floor to ensure that all
salespeople are aware of the proper labeling. We will take the guidance from the government seriously andrespond to it.
A. (Yoshimoto, President)
We consider compliance to be of the utmost importance at all of the Group's operating companies and sites. We
will take firm measures to ensure compliance.
Q. I believe that you will be investing through CVC in the future, but what are your thoughts on
investment exits and investment returns?
A. (Ono, Executive Officer)
In fiscal 2022, we established our first CVC fund, JFR MIRAI CREATORS Fund. It has four main purposes. The
first is the creation of new businesses. We will create new businesses by collaborating with various startup
companies. The second is organizational culture reform. By coming into direct contact with people who are
constantly taking on new challenges, we will spread the Group Vision of “Create and Bring to Life ‘New Happiness’”1throughout the Group. The third is human resource development. In particular, we will train entrepreneur-typemanagerial talents. The fourth is financial returns.
In terms of return on investment, CVC is positioned as an R&D (research and development) investment, and wewould like to seek strategic returns first. Rather than sticking only to financial returns, we will manage while
focusing on how we can strategically contribute to the Group.
A. (Yoshimoto, President)
As for CVC, more investment projects than originally expected have been finalized, and we are announcing
them in our news releases one by one, so that you can understand what we are aiming for as a strategic return. Of
course, we are considering financial returns, but in the short term, we will keep a close eye on how effective theprojects have been as a whole, rather than individual projects, as we prioritize strategic returns.
Q. Regarding ROIC, you said that this year it would improve to about twice the level of the previous year,
but what exactly do you have in mind for the denominator and the numerator? How do you plan toimprove the capital structure and increase profits?
A. (Wakabayashi, Director)
ROIC has recently been adopted by many companies as a key performance indicator. It is an indicator thatshows how efficiently the company is able to generate profits by investing funds raised from shareholders, financial
institutions, and other sources in its business. We have set ROE (return on equity) as an important indicator, but inorder to improve ROE, we need to look at how to strategically and efficiently utilize borrowings in addition toshareholders' equity. Based on this recognition, we adopted this indicator in the current Medium-term BusinessPlan.
As you pointed out, we need to work on improving ROIC from both the denominator and the numerator. For thedenominator, we will consider continuously returning profits to shareholders through dividends and other means.
At the same time, the important point is to improve business profit, and it is necessary to look at ROIC not only on
a consolidated basis, but also on a business-by-business basis. The Company has the Department StoreBusiness, the SC Business, the Developer Business, and the Payment and Finance Business, but since thecharacteristics of each business are different, the profitability they should seek is also different. For example, theDeveloper Business, which is a future growth driver, is expected to require a large amount of capital, including
up-front investments, and we would like to set a firm target for profitability relative to invested capital and use thisas a basis for making decisions when investing. It is a key performance indicator for each business, and each
operating company takes the initiative in tackling it, but as the finance division of the holding company, we will
carefully determine whether the judgment of the operating company is appropriate. Through these efforts, we will
improve ROIC and, as a result, improve ROE, to meet the expectations of our shareholders.
A. (Yoshimoto, President)
Although we have just started business management using ROIC, I think it will be a long-term initiative. We will
firmly incorporate it into our strategy and put it into practice for improvement.
Q. JFR Card Co., Ltd. issues the Daimaru Matsuzakaya Card, while the GINZA SIX Card and PARCO Card
are issued by different companies. If a single card company issues these cards, they will become easier
to use and points will be able to be shared. Also, I am afraid that revenues such as settlement fees areflowing out of the company. There may be some reason why they are issued by separate companies, butsince these facilities are now part of the same group, it would be simpler and easier to understand if they
were made into one card.
A. (Ono, Executive Officer)
As you have pointed out, currently the cards for some of our commercial facilities are issued by card companies
outside the Group. We recognize that if we can incorporate them into the Group, it will lead to further improvementof convenience for our customers and also provide growth opportunities for the Company. Recently, we havedecided internally on the direction of switching to the issuance of these cards by JFR Card.
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On the other hand, these cards are closely tied to the customer base of each commercial facility, and werecognize that there is a risk of losing the customer base depending on how we proceed. For this reason, wecannot proceed too quickly, but we will move forward with the plan so that we can generate benefits from the card
consolidation at an early stage.
A. (Yoshimoto, President)
When we announced our financial results in April, we first mentioned our direction regarding the consolidation ofcards within the Group. Each operating company needs to take detailed measures, but we will proceed with thisinitiative speedily.
Q. I would like to express my gratitude to the management team and employees for producing results insuch a difficult situation. Regarding shareholder benefits, I would like you to consider issuing Daimaru
Matsuzakaya Card with no annual membership fee for shareholders. Or can you consider rewarding
shareholders who hold Daimaru Matsuzakaya Card with points equivalent to the annual membership fee
or issuing a shopping card? Also, could the Parco shopping discount card, currently issued exclusively
to shareholders, be made available for use at Daimaru and Matsuzakaya stores as well? In that case, Iwould like you to allow shareholders to register the card on the app as well.
A. (Matsuda, Executive Officer)
First, regarding the integration of Daimaru Matsuzakaya and Parco's discount cards, the business models andsystems of Daimaru Matsuzakaya and Parco are significantly different, and the integration is expected to take aconsiderable amount of time and money. In addition, registration and use of shareholder benefits on the Daimaru
Matsuzakaya app are not currently supported. We apologize for any inconvenience this may cause and ask foryour understanding.
We would like to refer to the opinions of our shareholders when reviewing them for future shareholder benefits
and improving the convenience of the app.
A. (Yoshimoto, President)
Going forward, when considering the cards of the Group as a whole, we will think about how we can meet theneeds of our shareholders and other customers.
Q. There was a question about compliance earlier, and I got the impression that the responsibility of theperson in charge for the points raised by the shareholder and his concern was obscured. Shouldn't thePresident have shown remedial measures to address the issue before the public agency pointed it out?
A. (Sawada, President of Daimaru Matsuzakaya Department Stores)
With regard to the labeling stipulated in the Pharmaceutical and Medical Device Act, we recognize that it
includes in-store POPs, information posted by salespeople on social media, and sales pitches by salespeople. It isvery difficult to check all of them, but we recognize that the most important thing is that the person in charge fully
understands the content of the Pharmaceutical and Medical Device Act. Due to the wide variety of labeling, it isessential to improve the level at the site, and we educate and share with new employees and suppliers laws andregulations through classroom lectures and e-learning to ensure that they are thoroughly familiar with them.
A. (Yoshimoto, President)Labeling is very diverse and in some cases legally difficult to understand. The cosmetics sections of ourdepartment stores are working on this issue as a matter of the utmost importance, and we will continue to makefirm efforts to comply with the laws.
Q. That comment was about the cosmetics sections of your department stores. Is it correct to understandthat this is a problem that also occurs in other department stores?
A. (Yoshimoto, President)
In the cosmetics sections of department stores, many salespeople from suppliers are engaged in customer
service and sales operations, and each supplier is also involved in sales and advertising activities. At the same3

time, we also proactively advertise and disseminate information. I am not in a position to make comments aboutother companies, but we are aware of the issues that we face and will thoroughly address them.

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