The progress of Mid-term Management Plan
‘Next Stage 2020’May 29th, 20191

JALUX Group Corporate policy

Policy“Contributing to Tomorrow”

Your Best Partner to create the happiness bybringing to the people, society and environment abright future.

Culture“Challenge ＆ Change”

Business
concept

We will create high-quality, innovative business,
products and services founded in safety andsecurity cultivated in the aviation field.
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Long-term Vision & Mid-term Management Plan
【Establishment of Long-term vision】
A business leader creating ‘JALUX-VALUE’ with partners
all over the world

Mid-term management plan “Next Stage 2020”
New challenge for sustainable growth～To become a global corporate group with its own strengths
in the aviation & airport business domains～
External environment

Internal environment

Increase of the airline demand ・Expansion of the aviation industry

Expansion of the existing businessperformance (Organic growth)

Deregulation/Increase of inbound demand

Making profit by the activity of overseas
strategic locations

Diversification of consumption market
Decrease of domestic population
Change of generation structure
Economic growth of Asian countriesContinuous strive to create a core businessTermination of a non-profitable business
Maintenance of healthy financial condition andinvestment allowance
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Mid-term business plan ‘Next Stage 2020’
Long-termvision

Key Strategy（For 2030）

Mid-term management
plan / Target ofmanagement（For 2020）

Significant
strategy・Overseassignificant area

Foundation of the promotion ofstrategies

１ Expand our revenue base
２ Create and develop a new core business
3 Optimize the business portfolio

Overseas
key area

ASEAN region

Cultivate HR andenhance ourorganizational
powerAchieve strong
funding capacity
and sound financial
standingU.S.A

Deepen the Groupmanagement

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4 Business segments
4 Business units have started to meet each segment since FY2017

Aviation &Airport

LifeService

Food &Beverage

RetailAviation & airport field

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Road Map for the Achievement of the Target[Long-term vision]

A business leader creating “JALUX-VALUE” with partners all over the world

NextStage2020[Mid-term management plan]~New challenges for sustainable growthA global corporate group with its own strengths in theaviation & airport business domain ~〔Second Step〕① Expand our revenue base
② Establish the new core business③ Optimize the business portfolio〔First Step〕
Enhance our revenue base

① Making steady progress
mainly in the aviation &airport segment② Increasing overseas
business profitability③ Selling off unprofitablebusiness

Create and develop a new core businessScrap & build

6
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Business Policy and Strategy: Aviation & Airport Segment
Strategy
Enhance the coordination ofdomestic and overseas
locations

Develop the aviation-related
asset business

Expand the airport operation
business and associated areas

FY2020 Segment profit 2.5bn(unchanged)（JPY bn）

Segment profit(Operational profit before
allocating common expense)

0.8

FY2017
Results

0.6

FY2018Results

2.0
FY2019Estimate◆Outlook from FY2017 to FY2020
・Write-down of used aircraft for sale caused
temporary losses in FY2018

2.5・Growth of aircraft components-supply businesswith increase in global aircraft demand

FY2020Target・Expansion of the aircraft and aircraft engine leasebusiness

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Strategic Initiatives: Aviation & Airport Segment① Enhance the coordination of the domestic and overseas locations
Expand the aircraft components-supply and related business by enhancing local cooperation(Japan, U.S.A, Europe, and ASEAN region)
Reinforce the sales structure in the Nagoya Chukyo area
Expand the aircraft components-supply business in the mass production
phase of the new line of aircraft engines② Develop the aviation-related asset business
Expand the aircraft and engine-lease business
Consult on purchase & sale of aircraft and engines③Expand the airport operation business and around the business
Expand the business in our existing operating airports with the JAL group (Laos, Myanmar)
Participate in new airport operation

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Business Policy and Strategy: Life Service Segment
Strategy
Develop real estate aroundairports/
Promote the seniors business

Deepen and broaden
insurance business

Enhance production and sale ofenvironmentally friendly materials
and machinery

FY2020 Segment profit 2.0 bn(unchanged)◆Outlook from FY2017 to FY2020

Segment profit（JPY bn）(Operational profit before
allocating common expense)

1.1

1.1

1.2FY2017
Results

FY2018Results

FY2019Estimate

2.0
FY2020Target・Accelerating real estate development
around airports for FY2020
・Making a profit from the BPO (BusinessProcess Outsourcing) service in the insurance
business・Expanding overseas sales of environmentallyfriendly products
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Strategic Initiatives: Life Service Segment① Develop real estate around airports/
Promote the seniors business

Expand real estate business centered on roads to airports
Purchase and develop valuable new property② Deepen and broaden the insurance businessBroaden operations in BPO* and improve efficiency*BPO (Business Process Outsourcing)③ Enhance production and sale of environmentally friendlymachinery

Construct sales network for Aqua patch* in the U.S.A and expand
to other areas such as Asia and Europe
Develop other new road-related materials and equipment such as Aqua black***AQUA PATCH ：Road repair materials formed with only water**AQUA BLACK：Plant facility of warm mix asphalt

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Business Policy and Strategy: Retail Segment
Strategy
Improve MD & service to meeta variety of customer needsDevelop global retailbusiness

Plan & develop original
products and brands

FY2020 Segment profit 4.5bn(updated +0.5)
Segment profit（JPY bn）(Operational profit before
allocating common expense)

3.7

3.9

FY2017
Results

FY2018Results

3.9
FY2019Estimate

4.5

FY2020Target◆Outlook from FY2017 to FY2020

・Growth of airport retail business due toincreasing demand from air passengers,
especially in inbound tourism
・Change of ownership (51%→49%)
in subsidiary operating duty-free shops
in Vietnam in FY2019
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Strategic Initiatives: Retail Segment① Increase MD & service to meet a variety of customer needs
Develop attractive stores to meet customers’ expectations
Create contents titled “Travel, Gourmet”② Develop global retail business
Develop new duty-free shops in the ASEAN region
Develop the overseas market for confectionery shops③ Plan & develop original products and brands
Plan original products and enhance manufacturer structure through an alliance ofcooperating factories and groups
Promote original products such as the private brand TABITUS*Enhance marketing capability by consolidating our two subsidiariesin May 2019

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Business Policy and Strategy: Food & Beverage Segment
Strategy
Expand imports and sales ofglobal high quality foodExport high value foodsoverseas

Enhance the processing
and manufacturing fields

FY2020 Segment profit 1.5bn(updated ▲0.5)（JPY bn)

Segment profit(Operational profit before
allocating common expense)

0.8

0.9

FY2017
Results

FY2018Results

1.2
FY2019Estimate◆Outlook from FY2017 to FY2020

・Growth in sales of original souvenir sweets

1.5・Making a profit on export business such as
the Japanese fresh wholesale market inThailand

FY2020Target・Rebuilding the agricultural business model
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Strategic Initiatives: Food & Beverage Segment① Expand imports and sales of global high quality food
Create a highly evaluated wine list and enhance distribution channels
Develop new products and growth areas in the agricultural business② Export high value foods overseas
Export & sale of Japanese fresh fish to overseas markets
Export of high-quality sake
③ Enhance the processing and manufacturing fields
Develop highly processed marine products
Develop original products such as souvenir sweets,
lunchboxes (sora-ben) and frozen dishes
14
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FY2020 Target
FY2018FY2019FY2020JPY5.09bn

JPY6.5bn

JPY8.0bn

ROE

12.9％

13.9％

15.0％

ROA

9.6％

11.0％

12.0％

Sales

JPY185.7bn

JPY190bn

JPY200bn

Segment profit＊

JPY6.5bn

JPY8.3bn

JPY10.5bn

Results

Ordinaryincome（Net income toshareholders equity）（ordinary income tototal assets ratio）

Estimate

Target（FYI）＊Segment profit : Total of operation profit before
allocating common expense

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Commitment
Society

Strive to do business with CSR
based on keeping complianceby protecting environment andcontributing to society

Shareholder

Strive to return stableprofit to shareholders bydeveloping the longterm relationship

Customer

Aim to be partner
creating happiness by
striving to do for theirsatisfaction

New challenges for sustainable growth～ A global corporate group with its own strengths in the aviation & airport business domains ～Supplier

Aim to create new value,and build the relationshipto grow and develop eachother for the futureEmployee

Preserve happiness for
employees and theirfamily, and create theprideful and rewarding
environment

16

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Caution regarding Forward-looking Statements
This document contains forward-looking statements basedon information available to the company at the time of
disclosure and certain assumptions that management
believes to be reasonable.
JALUX makes no assurances as to the actual results
and/or other outcomes, which may differ substantiallyfrom those expressed or implied by such forward-looking
statements due to various factors including changes in
economic conditions in key markets, both in and outside ofJapan, and exchange rate movements.
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