Results for FY 2023
August 16, 2023
Pan Pacific International Holdings Corporation

INDEX
１
2
3

Fiscal year ended June 30, 2023
Overview of financial results

Fiscal year ending June 30, 2024
Strategies and initiatives
Appendix

Explanatory notes for these materials

1. The actual values presented in these materials are rounded to the nearest full unit.

2. The following abbreviations are used in these materials: Pan Pacific International Holdings (7532) as “PPIH,” Don Quijote Co., Ltd. and its stores as “DQ,”UNY Co., Ltd. as “UNY,” UD Retail Co., Ltd. as “UDR,” Singapore as “SG,” Singapore subsidiary as “PPRM (SG),” Hong Kong as “HK,” Hong Kong subsidiaryas “PPRM (HK),” Thailand as “TH,” Taiwan as “TW”, Malaysia as “MY”, Macau as “MO”and Group as “GP.”3. PPIH applies the “Ordinance on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements,” but there are sections in thesematerials where the account items and other information have been simplified to an extent where they do not change the intent or meaning of thecontents.

4. The exchange rates used for overseas operations are shown below. (Gelson's fiscal year ends in June, so the exchange rate is different. )Unit：Yen
FY 2022

FY 2023

P/L

USD

U.S. dollar

113.06136.00B/S

122.41133.54

USD(Gelson’s)

P/L

118.42138.09B/S

136.69144.99SGD

Singapore dollar

P/L

83.84

99.05

B/S

90.47

100.60

P/L

3.45

3.85

THB

Thai baht

B/S

3.68

3.91

HKD

Hong Kong dollar

P/L

14.52

17.35

B/S

15.64

17.01

1

Executive Summary （1/2）＜ Review of the fiscal year ended June 30, 2023 ＞


For the fiscal year ended June 30, 2023, PPIH achieved its 34th consecutive year of growth in bothsales and profits, with net sales of 1,936.8 billion yen (+105.5 billion yen/+5.8% YoY), operating profitof 105.3 billion yen (+16.6 billion yen/+18.7% YoY), and net income of 66.2 billion yen (+4.2 billion
yen/+6.8% YoY).
Operating profit exceeded 100 billion yen for the first time and the operating profit margin reached5.4% (the first time since FY2018 that it exceeded 5%), confirming that PPIH's "earning power" hasincreased, thanks to the reforms to its earnings structure that have been implemented over several
years.
Sales: We successfully adapted to changes in the external environment. By offering "CV+D+A"
through capturing going-out demand, developing attractive products, and appealing tocustomers with low prices, we were able to gain and increase the popularity . Domestic retailsales grew significantly, driven by a recovery in tax-free sales.

Gross profit: Despite rising procurement costs, our efforts to improve product procurement
capabilities, expand PB/OEM, improve pricing accuracy, and improve inventory turnover ratio
have been successful. Gross profit margin grew significantly to 31.0% (+1.3% YoY, +57.0 billion
yen in amount).

SG&A： Despite large increases in many costs, including labour and utilities, increases were
controlled by improving labour productivity, optimizing personnel allocation, and controllingother expenses (+40.4 billion yen YoY; SG&A to sales ratio remained at +0.8% YoY).

2

Executive Summary（2/2）＜Visionary 2025 (fiscal year ending June 30, 2025): achieving 120 billion yen in operating income＞
In the fiscal year ending June 30, 2024, we will maintain an operating margin of 5% or higher while
focusing on investments for growth and human resource development, based on the performance
expansion and improvement in profitability confirmed up to now.


We will continue to grow as a "profitable" retail company that is not only "deflation-proof" but also
"inflation-proof" in order to achieve an operating profit of 120 billion yen in the fiscal year ending
June 30, 2025.
In the DS business, in addition to further increasing tax-free sales, we will actively introduce
new products and prices that focus on "popularity" to attract more customers to existing stores.
In addition, we will open new stores more aggressively than before to further expand thebusiness.

In the GMS business, based on the success in improving the business structure (strengthening
profitability), we aim to increase the number of customers and sales by implementing new sales
promotions by business format and by customer, as well as strengthening non-foodmerchandising. In addition, we will promote further reforms such as integrating the Tenant
Division and the MD Development Division along with the expansion of PB and OEM productdevelopment.

Overseas business is on track to resolve short-term issues. We will now enter an aggressive
phase of business development through a series of hypotheses and verifications.
【Asia】 We will continue to open new stores, and at the same time, will work to improve
profitability of the stores which have opened by FY2023.
【North America】 We will put our new store opening plan into action and look forward to
significant growth from FY2025 onward3

Fiscal year ended June 30, 2023
Overview of Financial Results

4

Financial Results for the Year Ended June 30, 2023
【Period：July 1, 2022～June 30, 2023】

FY2023

FY2022

Amount(Ratio)Net sales
Gross profit
SG&A
Operating profit

Amount(Ratio)FY2023 Forecast*1

ChangeYoY

Amount(Ratio)Progress

1,831.3

1,936.8+105.5

+5.8％

1,920

100.9%(29.7％)(31.0％)+57+10.5％(30.6％)

102.2%(24.8％)(25.6％)

+40.4

+8.9％

(25.5％)

101.1%(5.4％)+16.6+18.7％(5.1％)

107.7%(5.7％)+10.6+10.5％(4.9％)

118.1%(3.4％)(3.4％)

+4.2

+6.8％

(3.2％)

106.7%

102.64 yen

110.94 yen+8.3 yen+8.1％

103.93 yen

106.7％

543.4
454.7
88.7

(4.8％)

Ordinary profit

100.4

Net income

61.9

EPS ( yen)

(Unit：Billion Yen)

(5.5％)

600.4
495.1

105.3
111

66.2

587.5

489.8

97.7
94

62

5

Evolution into a "profitable retailer" through management reform Over the past several years, sales and profits have continued to grow at a high rate, and we have achieved
an operating margin of over 5% for the first time in five years by reforming its earnings structure even in an
inflationary environment ( = "earning power" has been strengthened).

＜Performance trends since FY2018＞

Sales<Trillion Yen>

2

1.5

Sales(LHS axis)

Gross Profit(LHS axis)

OPM

Operating Profit (RHS axis)

High growthcontinues

UNY became
a wholly owned subsidiary
▼

5.4%
5.4%

5.5%

4.7%

1

4.5%

4.8%

4.8%

OP
<Billion Yen>

200

150

100

50

0

0

FY2019FY2020

FY2021

FY2022

FY2023

 Especially in the past two years, we havestrengthened its "earning power" by growing profit
more than sales.

Growth of past 4 years
past 2 years（FY2019⇒FY2023） （FY2021⇒FY2023）

Sales

0.5

FY2018

 Continuous growth in sales and profit.

Gross Profit
Operating
Profit+607.9 bil. yen+228.1 bil. yen（CAGR +9.9％）（CAGR +6.5%）（CAGR +12.8％）（CAGR +9.9%）（CAGR +13.6%）（CAGR +13.8%）+229.9 bil. yen+42.1 bil. yen+103.1 bil. yen+24 bil. yen

 In light of the external environment of various cost

increases, we achieved an operating profit margin ofover 5% at a new composition ratio by improving

gross profit margin, productivity and SG&A control.
(= Reform of the profit structure is achieved)

GPM

SG&A ratio
OPM

FY2018FY2023

20.4%

25.6%

25.9%
5.5%

31.0%
5.4%

6

Discount Store Business
FY2023 Cumulative<Billion Yen>

Sales increased to 1.17 trillion yen (+76.7 billion yen YoY) andoperating profit to 55.6 billion yen (+19.3 billion yen YoY), driving asignificant increase in sales and profit to drive consolidated results.

Change in Sales

SSS were strong at 105.2% YoY due to increased demand for outings,
continued recovery in tax-free sales, and growth in seasonal products.
 In Q4, sales of travel goods, cosmetics, and seasonal cool-feelingaccessories continued to grow due to demand for outings, andsales reached 107.1%.

0

FY2022

Existing
Stores

FY2023 Cumulative<Billion Yen>

New Stores

Head Office
Expenses& Adjustments

Gross profit margin at existing stores was 26.0%, up 1.5% YoY, and
the PB/OEM ratio expanded to 17.3% for the full year (+3.1% YoY).
Favourable procurement conditions obtained by narrowing down
SKUs contributed to improved gross profit margin.

 In addition, a quick sale of slow-moving products continued to be
successful, and existing store inventories were down 19.6 billion
yen YoY (34.8 billion yen compared to FY2021), realizing an
improvement in gross profit margin due to a decrease in writedowns.

FY2023

Change in Operating Profit

SG&A expenses at existing stores increased by 3.5 billion yen YoY due
to higher utility costs and increased labour costs resulting from therevision of the HR system in April, but the SG&A to sales ratio declined
by 0.6% due to productivity improvements and cost controls in linewith sales growth.

▶ Gross profit margin at existing stores *before reflecting expected losses
27.0%

0

25.0%
FY2022

Existing
StoresNew Stores

Head Office
Expenses& Adjustments

FY2023

23.0%
21.0%

1Q

FY2021
21/6月期

2Q

FY2022
22/6月期

3Q

23/6月期
FY2023

4Q

7

Discount Store Business：Progress of initiatives

 The sales composition ratio of PB/OEM was 17.3% for the full year (up 3.1% YoY), about 0.5% above the initial
target, thanks to increased brand recognition and the development and sale of products that meet demand.


To improve the brand recognition of "Jonetz," we aired its firstever TV commercial and strengthened its SNS communications.
In addition to the efforts made in the previous fiscal year tostrengthen in-store promotions, the increased awareness of thebrand contributed to higher sales.

We have begun reviewing its product development process,including factories and raw materials, and improving theefficiency of direct trade logistics and other infrastructure
improvements. We will strengthen efforts to further improve
quality and control costs.

▶ A popular product▶ DS business: PB/OEM composition
18.0%
16.0%
14.0%
12.0%
10.0%

1Q

PB seasonal home appliances are afocus this summer. Mobile coolers
performed well due to risingtemperatures.

2Q

FY2022
22/6月期

21/6月期
FY2021

3Q

4Q

23/6月期
FY2023

 Tax-free sales recovered sharply to 38.3 billion yen for the full year; Q4 sales were 94.3% of pre-Covid sales, andfurther growth is expected in the next fiscal year.
 Immediately after the easing of entry restrictions, we began
aggressive efforts to acquire tax-free sales, and in Q4,
increased the number of cash registers and strengthened
staffing, resulting in a rapid recovery in sales to 38.3 billion yen
for the full year. Even with the recovery rate of foreign visitors
to Japan at just over 70%, the sales exceeded the pre-Covid
level in June.
Expansion of business in Asia also contributed to a sharp
recovery in sales by raising awareness of our products,
and sales of PB products also grew as a result ofstrengthened local distribution, creating synergistic
effects throughout PPIH group.

 The infrastructure will continue to be reviewed as appropriate
to meet changes in customer numbers and demand, with theaim of further increasing sales.

▶ DS business tax-free sales
660億円
bil. yen
4.5
bil. yen
45億円

tax-free
sales
免税売上

BeforeCOVID-19(FY2019)
コロナ前
2019年比Theratio of foreign
visitors ※訪日外客数
2019年比compared to 2019*

120%
100%
80%
60%

330億円
bil. yen40%

1.5
bil. yen
15億円
0 0億円

▶ Tax-free sales by nationality

20%
7月 Aug
8月 Sep9月 10月11月12月
Jul
Oct Nov Dec 1月
Jan 2月Feb 3月Mar 4月Apr 5月May 6月Jun*Source: Japan National Tourism Organization

0%

FY20196.1%

FY2023

22.5%

40.5%
13.6%

17.3%

7.8%
11.6%

South
韓国Korea

ASEAN
ASEAN

他
Other

米国
U.S.

台湾
Taiwan

中国
China

4.7%

19.7%

33.7%
21.3%

8

Discount store business：New stores and conversion
MEGA Don Quijote UNY Ina（Nagano）（opened on June 6 ）This is the 62nd store to change its business format. The latest
MD package was introduced and the products and store
concept matched the needs of the trade area, resulting in asignificant increase in sales over the forecast.

• The store concept is a discount supermarket for food and daily
necessities on weekdays, while on weekends it is to offer anamusement and interactive shopping experience to capture a wide
range of customers by offering a variety of experiences.
• Considering the local trade area, we aim to maximize customer
acquisition by focusing on fresh produce, home electronics, pet goods,
and kids' clothing.
• In particular, the consumer electronics corner offers a wide variety of
PB and surprisingly low-priced products. The store is performing wellthanks to its different approach from a conventional home electronics
store.

Don Quijote Akabane Higashiguchi（Tokyo）（opened on June 30 ）A test was conducted at the Akabane store for the purpose ofcreating a highly profitable model store in a narrow property inthe station-front area. Sales and gross profit continued to
exceed forecasts, leading to future growth.

• Experienced mate employees*are recruited and assigned fromneighbouring stores. In order to create a store that suits the customer's
needs, the store is managed primarily by the mate employees who areclosest to the customer. By delegating the responsibility from the startup of a new store, we have realized management with the mateemployees taking the initiative.
• The Akabane area is a trade area with many bars, so the store offers avariety of highly compatible products, such as supplements andnutritional tonic products. In the basement, a retro Showa-era space
has been created to capture local needs with an alcoholic beveragecorner that combines the atmosphere of a shopping arcade.

*Mate employee＝A contract employee who work on a part-time basis

9

GMS Business
FY2023 Cumulative<Billion Yen>

Promoted profit-oriented measures in light of the external
environment. Operating profit increased significantly by 2.5 billion
yen from the previous year (2.1 billion yen higher than the forecast)due to improved gross profit margin and continued control of SG&A
expenses.

Change in Sales SSS were 97.8% of the previous year's level. Gross profit was maintained
throughout the year due to a sales promotion policy that refrained fromexcessive price reductions given the high prices of commodities.

0

FY2022

Existing
Stores

FY2023 Cumulative<Billion Yen>

Store closures
Head Officedue toExpenses
Remodeling etc & Adjustments

 The gross profit margin at existing stores increased significantly to
26.9% (+1.4% YOY), contributing to higher operating profit. In addition
to the promotion of pricing and sales promotion methods thatemphasize added value, the PB/OEM ratio exceeded the forecast at
20.9% (+3.0% YoY), which also contributed to the increase.


FY2023

Change in Operating Profit

To increase sales, in addition to improving pricing accuracy andstrengthening merchandising, sales promotions to increasecustomer numbers will be introduced in Q4. Preparations areunderway to increase sales and customer numbers from the next
fiscal year.

Existing stores SG&A expenses decreased by 2.9 billion yen (SG&A ratio-0.3% YoY) to contribute to operating income despite higher utility
costs, due to a review of personnel allocation, including MD
integration, and continued control by individual stores.

▶ Gross profit margin at existing stores *before reflecting expected losses
29.0%
27.0%

0

25.0%
FY2022

Existing
StoresStore closuresdue toRemodeling etc

Head Office
Expenses& Adjustments

FY202323.0%

1Q

21/6月期
FY2021

2Q

FY2022
22/6月期

3Q

23/6月期
FY2023

4Q

10

Overseas Business
FY2023 Cumulative<Billion Yen>

Due to the severe external environment and issues to be addressed,
full-year operating profit declined. On the other hand, operating
income in the Q4 was 0.5 billion yen higher than the previous year,
and progress was as expected compared to the revised forecast.
Continue to aim for profit growth in the mid- to long-term.

Change in Sales■Asia Business Although net sales continued to grow by 13.4 billion yen YoY, operating
income remained at the same level due to the lower-than-expected
recovery of human flow, mainly in HK and MO, and higher costs during
the inflationary phase.


0

FY2022

FY2023 Cumulative<Billion<億円> Yen>

Asia
Asia

North
America

FY2023

Change in Operating Profit

Continued to expand business scale by opening 8 new stores (in 4areas).

SG and HK operating profit margin at existing stores remained
above 10% as in the previous period and also achieved profitability
in TW.

 We started various improvements under a new management structure at
the beginning of the year, including organizational changes to strengthen
merchandising, competing against competitors with NB products andnew products, and horizontal expansion of the ordering and inventory
management system operated by SG, which should lead to higher profits
in FY2024.

■North America Business Net sales increased 35.1 billion yen YoY, while operating profit declined
2.2 billion yen YoY(Q4 operating profit increased 0.5 billion yen YoY).

 QSI, which was mentioned as an issue in Q2, resulted in operating incomeof -0.9 billion yen y-o-y, but improvements have already been initiated.
Gross profit margin improved from 26.9% in Q3 to 30.4% in Q4 ( Q4operating profit increased 0.8 billion yen YoY) due to progress ininventory control and other measures.

0

FY2022

Asia
Asia

North
America

FY2023

 Gelson's landed on an operating profit of -1.1 billion yen YoY but +0.1
billion yen above forecast, and is also preparing for new store openings
and future growth in FY2024.

*1. Figures for North America are the simple aggregate of DQ USA, MARUKAI, QSI and Gelson’s. Results are for the period from April to March 2023, while Gelson’s is from July 2022 to June 2023.
*2. Figures for Asia are the simple aggregate of PPRM (SG), PPRM (HK), DONKI Thailand, PPRM(TW), PPRM(MY), and Macau PRRM(MO). Results are the period from April to March 2023.
*3. Gelson's operating profit is calculated after deducting amortization of goodwill(FY2023: approx. 3.41 billion yen, FY2022: approx. 3 billion yen)11

Status of major assets, liabilities and net assets
June 2022
Current Assets
Cash and
Deposits

Account
receivableinstallment
Products

Non-Current
AssetsBuildings, etc.
Land

Intangible Assets
Lease andGuarantee
Deposits

Total Assets

Actual

*2

486.5
176.8

52.1

205.9

(Unit: Billion Yen)

ActualJune 2023

551.8
242.1

Total Current
Liabilities

194.5(11.4)*1 Short-Term
*1

288

19.6

55.4

929.2

314.7

318.7

86.2
73.2

1,383.7

65.3
65.3

897.1
268.4

June 2022*2

Change88.5
71.8

1481.1＜Status of major assets＞
・Non current asset▶ Tangible fixed assets： 689.2 billion yen(+24.1 billion yen)・ Investment related to store openings, etc.
61.4 billion yen
・ Depreciation and amortization
34 billion yen

3.2

32.1
4

2.3

(1.4)

97.4

Accounts PayableTrade

Liabilities

Actual

326.4
152.9
38.3

(Unit: Billion Yen)

June 2023

Actual

368.4

15.8

(9)

45.3

658.1

649.1

Long-Term
Borrowings

276.2

272.5

272.6

42

168.7

Total Noncurrent
Liabilities

Corporate Bonds

Change7261.6(10.9)(3.7)

Total Liabilities

984.4

1,017.5

33.1

Liabilities and Net
Assets1,383.7

1,481.1

97.4

Net Assets＜Status of major liabilities＞

399.2▶ Interest-bearing debt： 579.4 billion yen(- 7.7 billion yen)
＜Status of net assets＞▶ Net worth: 453.3 billion yen(+61.1 billion yen from the previous year-end)▶ Capital adequacy ratio: 30.6 ％)(+2.3% from the previous year-end)*1. Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds

463.5

64.3

＜Others＞▶ Net D/E ratio： 0.74 x(-0.31 x from the previous
year-end)▶ ROE: 15.7 % (+0.4% fromthe previous year-end)

12

Status of cash flows and capital expenditure▶ Cash Flow Status(Unit：Billion yen)

FY 2022
ActualBalance at Beginning of
Period160.9

Cash Flows fromOperating Activities

95.1

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Balance at the End of the
PeriodFree Cash Flow

*1

Actual

180.4

138.0

Capital Expenditures

Change19.5

42.8(62.0)(17.2)

19.5

65.8

46.2

180.4
50.4

(18.2)

246.2
76.0*1. Free Cash Flow = CF from operating activities + CF from investing activities▶ Status of capital expenditures＜ Operating CF：+138.0 bil. yen＞

(44.8)(53.9)

Changes During the Period

FY 2023

520

612

35.6
65.8

25.6

92

▶ Positive items: 100.7 billion yen in income
before income tax, 42.3 billion yen in
depreciation and amortization, and 14.3 billion
yen in accounts payable.
Negative items: 6.4 billion yen in foreignexchange losses and 31.9 billion yen in income
taxes paid.

＜ Investment CF：-62 bil. yen＞

▶ Cash out factors included 51.7 billion yen for
tangible fixed assets acquisition associatedwith store openings and 7.9 billion yen for
intangible acquisition, and 3.4 billion yen
acquisition of shares in affiliated companies.

＜ Financing Activity CF：-18.2 bil. yen＞

▶ Positive items: 30 billion yen in proceeds fromlong-term loans payable.

Negative items: 27.2 billion yen in repayment oflong-term debt, 11.4 billion yen in redemptionof bonds, 10.7 billion yen in dividends payment.

＜ Breakdown of Capex ＞▶ DS business 17.7 billion yen, GMS Business6.9 billion yen, Overseas business 13.3 billion
yen, IT 4 billion yen, Others 19.3 billion yen

13Shareholder Returns
Dividends

 For FY2023, we plan to increase the dividend from the initial forecast of 18 yen per shareto 20 yen per share, marking the 20th consecutive year of dividend increases.

 For the next fiscal year, we expect to further increase the dividend to 21 yen, making it
21st consecutive fiscal year of dividend increases.

 We will continue to return profits to shareholders based on its "progressive dividend
policy," aiming for a dividend payout ratio of 20% or more over the medium term, while
maintaining a balance between investment in growth and shareholder returns.
Payout Ratio (%)

Dividends (yen)
25.0

Payout ratio

Annual dividend

年間配当(左軸)

配当性向(右軸)

18.0(right axis)(left axis)

20.0

20.0

15.0

12.0

5.0
0.0

3.1

3.5

3.9

4.1

4.5

5.0

5.5

10/6

11/6

12/6

13/6

14/6

15/6

16/6

6.5
17/6

8.0

18/6

10

19/6

15

16

20

17

21

10.0
8.0
6.0
4.0
2.0

20/6

21/6

22/6

23/6

24/6

0.0

（planned）（planned）**PPIH conducted a 2-for-1 common stock split on July 1, 2015 and a 4-for-1 common stock split on September 1, 2019.

*For prior periods, figures are retroactively adjusted.

Shareholders who are listed or recorded in theshareholders' register as of the last day ofJune and December, and who hold at least
100 shares are awarded 2,000 yen worth ofmajica points through the majica app.
* Download and registration to the majica app
are required to receive the points.
*The coupon code to receive points is
enclosed with dividend-related documents

which we send out at the end of September
and March.

16.0
14.0

10.0

Shareholder Benefits

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

Share Ownership
19.3%
1.6%

18.1%
2.3%

17.8%

18.6%

59.9%

59.4%

1.4%

1.6%

FY2020

FY2021

18.5%

18.8%

12.9%

12.8%

57.2%

56.9%

2.3%
6.0%

2.6%
6.0%

3.1%

FY20222.9%

FY2023Financial institutions ■ Financial instrument business operators■ Other Japanese Corporations ■ Foreign corporations andindividuals ■ Japanese individuals and others ■ Treasury stocks

14

Fiscal year ending June 30, 2024
targets and initiatives

15

Forecast of consolidated financial results for FY2024

 In the 2nd year of Visionary 2025, we target sales of 2,062.1 billion yen and an operating profit of 111
billion yen for FY2024, aiming to maintain the operating profit margin of over 5% and to increase sales
and profits for 35 consecutive years.
FY2023
ActualNet sales

Gross profit
SG&A
Operating profit
Ordinary profit
Net income

EPS ( yen)
CAPEX

1,936.8
600.4

FY2024 1H

Actual

1,031.8
321.9(31.0%)(31.2％)(25.6%)(25.5％)(5.4%)(5.7％)(5.7%)(5.4％)(3.4%)(3.4%)

495.1

105.3
111

66.2

110.94 yen
61.2

263

58.9
56
35

58.67 yen

(Unit：Billion yen)

YoY
105.4％
106.4％
107.3％

102.5％
97.9％
95.1%
95.1%

FY2024 full-year

Actual

2,062.1
648.3(31.4％)

537.3(26.1％)

111(5.4％)

107.4(5.2％)

66.7(3.2%)

111.86 yen

70+αAssumed exchange rate：1USD＝133.40 yen, 1HKD＝17.04 yen, 1SGD＝99.85 yen, 1THB＝3.95 yen, 1MYR＝30.66 yen, 1TWD＝4.47 yen, 1MOP＝16.63 yen

YoY
106.5％
108.0％
108.5％

105.5％
96.7％
100.8%
100.8%

16

Assumptions of the Forecasts for FY2024
Sales<Billion yen>

■Sales New store opening
Domestic：25 stores+α, Oversea：12 stores
 SSS

DS business：104.0％ YoY（Tax-free sales target＝over 80 billion yen）
GMS business：101.0％ YoY■Gross profit margin：31.4％（+0.4％）

 DS business：26.5％ (+0.1％) ：The PB/OEM sales composition ratio will
increase to 21.1% (+3.8%). At the same time, we will work to acquire morecustomers by developing strategic products.

0

Operating Profit<Billion yen>

 GMS business：35.1％ (+0.7％) ：Work to improve gross profit margin bystrengthening PB/OEM and improving pricing accuracy.
■SG＆A ratio：26.1％（+0.5％）

 DS business：We have factored in an approximately 3 billion yen increase inpersonnel expenses due to the new HR system implemented in April as wellas continuing increase in utility costs. We will continue to control SG&A
expenses and expect the ratio of SG&A expenses to be at about the same level
as last year.
 North America：We invest approximately 2 billion yen in preparation andstart-up costs for new stores, as well as upfront investments in warehouses,
central kitchens, and human resources at the head office.

■CAPEX：70 billion yen +α Domestic DS business: approx. 26 billion yen, GMS business: approx. 10 billion
yen, Overseas business: approx. 22 billion yen (including approx. 7 billion yen
for new stores in Guam and Kapolei), Finance business: approx. 2 billion yen,
Others: approx. 10 billion yen.

0<Assumed exchange rate> 1USD＝ 138.09 yen, 1HKD＝ 17.64 yen, 1SGD＝ 103.35 yen,
1THB＝ 4.09 yen, 1MYR＝ 31.73 yen, 1TWD＝ 4.62 yen, 1MOP＝ 17.21 yen

17

Initiatives for FY2024

 In addition to further earning tax-free sales (sales target of over 80 billionyen), strengthen SSS by aggressively introducing merchandise that
attracts customers.

DS business Gross profit margin is expected to be +0.1% as a result of strategicallydeveloping merchandise that attracts customers, secured by grossprofit earned through the continuation of key initiatives such as
strengthening PB/OEM.

 Aggressively opening 25 new stores + α to expand business scale（Approx.
1.5 times increase when compared to 16 stores + format conversion in
FY2023.） Despite the continued rise in labour and utility costs, SG&A expenses willremain under control, and the operating profit margin will be maintainedat the same level as in FY 2023.
 Aim for continuous improvement in gross profit margin(+0.7% YoY) bystrengthening PB/OEM and other measures.

GMS business Reinforce sales promotions to improve sales. We aim to increase sales andcustomer traffic through sales promotions and members-only programsfor the entire building, including tenants.
 We will continue its efforts to control SG&A expenses, with a focus on
labour costs, aiming for an operating margin of +0.4%.

18Initiatives for FY2024

Asia business In response to declining demand for eating in and increasing opportunities
to go out, we will expand non-food products, mainly cosmetics, andstrengthen products that meet the tax-free demand of tourists. We will also
continue to improve gross profit margin by strengthening PB/OEM anddirect trade products to improve the profitability of existing stores.

 Business expansion through new store openings will continue. Plans toopen 10 new stores based on a cost-cutting store-opening model.

 Operating profit is expected to increase due to SG&A expenses controls,
such as productivity improvement by reassigning personnel. Profit
contributions can also be expected from the new stores opened in FY2023
which turns into existing stores.

North America
business At the store level, although labour costs are expected to increase due to cost
inflation, profit is expected to increase due to higher sales fromstrengthened prepared foods, and improved gross profit margin fromexpanded PB/OEM and direct trade products.

 New store openings are planned for future business expansion (Gelson's,Guam), and we expect to incur approximately 2.0 billion yen, including
preparation costs for new stores from FY2025 onward.

 In addition, we will make upfront investments in the establishment of acentral kitchen, expansion of warehouses, and hiring of human resources
for further business expansion.

19Flash report of domestic DS/GMS business in July

 In the domestic retail business, both the DS and GMS businesses performed well throughout the monthdue to growth in seasonal products and outing demand. Overall customer numbers for the domestic
retail business exceeded the previous year's levels.

▶ Year on Year sales of existing store
Q1

Unit：％Q2

Q3

Q4

FY2023

Jul

Japan

101.7

102.8

103.1

104.5

103.0

108.5

DS

103.3

104.7

105.6

107.1

105.2

111.0

GMS

97.5

98.6

97.1

98.0

97.8

101.8

▶Number of Foreign Visitors to Japan and Tax Free Sales

While the number of foreign visitors* to Japan was 72% in June
compared to 2019, the number of customers in our DS businessexceeded the 2019 July level and monthly sales reached a record high.

8 bil.
yen
80億円

80.0%

60億円
6 bil.
yen

70.0%

40億円
4 bil.
yen

60.0%

2 bil.
yen
20億円
0
0億円

1月
Jan

2月
Feb

2019年
2019

3月
Mar

4月
Apr

2023年
2023

*Source: Japan National Tourism Organization

5月
May

6月
Jun

7月
Jul

8月
Aug

Number of Visitors
訪日外客数2019年比compared to 2019

50.0%

■ DS business Sales of cosmetics, sunscreen, antiperspirants, portable fans,and other products were strong, as demand for going out inthe hot weather continued to rise from June. In addition, thenumber of beach openings, fireworks festivals, and outdoor
events increased from the previous year, contributing tosales growth of seasonal products such as Japanesesummer kimonos, swimsuits, marine products, andfireworks, which are our speciality.
 Demand for travel and homecoming trip also increased, andsales of mobile batteries, carry-on bags, and instant cameras
grew.

■ GMS business Due to the rising demand for summer seasonal products,
sales of clothing in particular increased 114.1% YoY, with awide range of growth in outerwear, loungewear, innerwear,
etc., for both women's and men's wear.
 Seasonal home appliances such as electric fans and coolfeeling bedding continued to sell well due to a strong
energy-saving desire as a result of the heat wave that has
been continuing since June. In food products, sales ofchilled products such as beverages, ice cream, and coldramen noodles grew.

20

（Reference ①） ESG initiatives （1/2）

 Continue to promote and strengthen ESG initiatives to realize a sustainable society and company
 Aim to receive high scores from external evaluation organizations in order to ensure objectivity in the
promotion of ESG initiatives.
Medium-term target

・Reduce 50% of CO₂ emissions from storescompared to the FY2013 level (by FY2030)

E・Calculate CO₂ emissions of the each category of
Scope 3 and set reduction targets

・Reduce waste and plastic, and enhance recycling(targets to be set by the end of FY2023)

・Enforce compliance with the Sustainable
Procurement Policy and the Supply Chain Code of
Conduct

S・Increase the number of female Store Managers to 100(by FY 2030)
・Improve the retention rate of female employees:
reduce turnover rate to 5.0% (by FY 2030)

・Promote the operation of next-generation executive
development programG・Establish and operate the Nominating and Compensation
Committee
・Design business continuity planning (BCP) and disclosure

Progress（FY2023）













Reduction of CO₂ emission : approx. 17%(*) reduction(compared to FY2013)*Flash report
Calculated and disclosed data on emissions in each
Scope 3 category
Set the reduction target on the use of plastic

Conducted a self-check survey on human rights, labour,
health and safety, etc. at approximately 2,200 factories
of PB/OEM manufacturing contractors; 99.6% of thequestionnaires have been collected.
Number of female store manager: 31（18 increased fromFY2021）
Improve the retention rate of female employees: turnover rate
9.7％（1.9％ improvement from FY2021）
Next-generation executive development：Conducted training
for executives and executive candidates, with 120 participants
Nomination and Compensation Committee established toenhance transparency of processes, and held 7 meetings

Designed and disclosed the business continuity plan (BCP)

21

（Reference①）ESG initiatives（2/2）
Evaluations fromexternal evaluation organizations

A leading ESG index in which Japanesecompanies that practice excellent ESG
initiatives are selected. PPIH has been
selected as a part of this index
consecutively since 2022.

MSCI Japan Empowering
Women (WIN) Select Index

An index composed of Japanese companies
that excel in gender diversity. In June 2023,
PPIH was selected as a constituent for the
first time. In August 2023, PPIH received
an overall ESG rating of "AA" from MSCI.

The index focuses on Japanese companies

Morningstar Japan ex-REIT that are committed to equal opportunities
Gender Diversity Tilt Index for all employees regardless of gender.

PPIH has been selected as a part of thisindex consecutively since 2022.

The Gender Equality Index evaluatestransparency of ESG data and efforts toward
gender equality. PPIH has been selected asa part of this index consecutively since
2019.

Assesses the degree to which a company
is exposed to significant ESG risks andscores it according to its risk
management capabilities. PPIH has been
rated Low Risk since 2021.

Initiatives for FY2024

Implementation of off-site CPPA

Recognizing the sourcing of renewable energy as an important
initiative to achieve CO₂ emission reduction targets, PPIH is
promoting the introduction of off-site CPPA.

In addition, we are considering
expanding the introduction of onsite CPPA to stores that have notbeen able to do so in the past, as
good contract terms are now
available.

Setting a plastic reduction target and initiatives
Set a target to reduce the amount of plastic used in-store
services, believing that it is our social responsibility as aretailer to address the global warming and ocean plastic
waste problems caused by one-way plastic.

 Target： 50% reduction in plastic use by 2040
（Compared to FY2022, Domestic retail companies）

1. Thinning of the plastic portion of POP for
store displays and change of material(started in May 2023)
2. Change cutlery materials and charge forcutlery to encourage customers to decline(scheduled to start in September 2023).

22

（Reference②）Trends in various management indexes
18%
17%

ROE

ROE

120%

16%
15%
14%
FY2022

FY2023

FY2024（Forecast）

FY2025（Forecast）• The rate will be stable at around 14-15% despite the large
foreign exchange gains in FY2022 and FY2023, and the decline
in FY2024/6 due to foreign exchange losses.

ROIC

10%

5%
4%

DS
Oversea

GMS
Consolidated

1200

FY2022

FY2023

FY2024（Forecast）

FY2025（Forecast）• Consolidated ROIC is expected to continue to improve as per
Visionary 2025.
• In particular, the DS and GMS businesses, which performed well in
FY2023, are expected to improve significantly from FY2022.
Overseas business is expected to temporarily decline due to the
opening of new stores in FY2024, but is expected to improve fromFY2025.

1000

80%

800

60%

600

40%

400

20%

0%

1400

（Billion yen）

100%

13%
12%

Net D/E Ratio・
Capex to operating CF ratio

200

FY2022

FY2023

Interest-bearing debt
Capex/Operating CF

FY2024（Forecast）

FY2025（Forecast）

0

Net worth
Net D/E ratio• Net assets are expected to increase steadily each year, and interest-bearing
debt is expected to decrease significantly in FY2024. The net D/E ratio will
temporarily rise in FY2022 due to the acquisition of treasury stock, but
steadily improve in FY2023 and beyond.

• Capital expenditures are expected to be 65-75 billion yen per year during the
medium-term management plan period. The ratio of free CF to operating CF
will remain at around 60%, ensuring sufficient free CF.

23

Appendix

24

Financial Results for Q4[Period: April 1, 2023 – June 30, 2023](Unit: Billion yen)Previous Q4 Results
ActualNet sales

460.8

Ratio

100.0％

Current Q4 Results
Actual

479.6

Ratio

100.0％*1

Change+18.8

YoY

104.1％

Gross profit

143.1

31.0％

149.9

31.3％

+6.8

104.8％

SG&A

117.5

25.5％

126.4

26.3％

+8.9

107.6％

Operating profit
Ordinary profit
Net income

25.6
32.7
15.9

5.6％
7.1％
3.5％

23.5
30.3
14.7

4.9％
6.3％
3.1％

(2.1)
(2.4)
(1.3)

91.9％
92.6％
92.1％

25

Q4 results by business segment▶ Q4 [Period: April 1, 2023 – June 30, 2023]
DS business

Sa le sGross profit

GMS business

FY2022Q4FY2023
Q4

Change

74

79.7

5.7

277.3

299.6

22.3

Asia business

FY2022Q4FY2023
Q4

Change

39.8

39

(0.7)

113.6

110.6

(3)

FY2022Q4FY2023
Q4

Change

6.4

7.5

1.1

20.1

20.4

0.3

(Unit : Billion yen)

North America
business

Others・Adjustments

FY2022Q4FY2023
Q4

Change

19.6

21.6

51.7

56.0

FY2022Q4FY2023
Q4

Change

2.1

3.3

2

(1.3)

1.6

0.6

0.9

0.3

0.6％

-

-

4.3

Gross profit
ratio

26.7％

26.6％

(0.1％)

35.0％

35.3％

0.3％

31.8％

36.6%

4.8％

37.9％

38.7％

0.8％

Op e ra t in g
p ro fit

13

13.2

0.2

8.6

7.4

(1.1)

(0.2)

(0.2)

(0)

1.5

2

0.5

SG&A

Op e ra t in g
p ro fit ra t io

61

4.7％

66.5

4.4％

5.5

(0.3％)

31.2

7.5％

31.6

6.7％

▶FY2023 [Period: July 1, 2022 – June 30, 2023]
DS business

Sa le sGross profit(0.8％)

GMS business

FY2022Q4FY2023
Q4

Change

274.9

311

36.2

1,100.8 1,177.5

0.4

76.7

FY2023
Q4

Change

157.4

158.9

1.5

461.9

(0.9％)

7.7(1.0％)

1.1(0.1％)

Asia business

FY2022
Q4

472.7

6.6

(10.8)FY2022Q4FY2023
Q4

Change

23.4

30.3

6.9

69

82.5

13.4

18

2.9％

19.6

3.6％

North America
business
FY2023
Q4

Change

74.9

87.2

12.2

233.4

35.1

Gross profit
ratio

25.0％

26.4％

1.4％

33.3％

34.4％

1.1％

33.9%

36.8%

2.9%

37.8%

37.4%

(0.4%)

Op e ra t in g
p ro fit

36.3

55.6

19.3

25.5

28.1

2.5

1.7

1.6

(0.1)

10.4

8.2

(2.2)

SG&A

Op e ra t in g
p ro fit ra t io

238.5
3.3％

255.4
4.7％

16.9

1.4％

131.9
5.4％

130.8
6.1％

(1)

0.7％

21.7

2.5%

28.7

2.0%

7

(0.5%)

64.5

5.3%

78.9

3.5%

-

2.7

(7)
-

1.1

(5)
-

(1.6)
-

(Unit : Billion yen)

Others・Adjustments

FY2022
Q4

198.2

(2)

FY2022Q4FY2023
Q4

Change

12.8

13.0

0.2

1.3

3.2

-

-

(9.5)
-

14.4

(1.9)

(1.7%)-

14.7(18.4)-

11.7*1. Figures for North America are the simple aggregate of DQ USA, MARUKAI, QSI and Gelson’s. Results are for the period from April 2022 to March 2023, while Gelson’s is from July 2022 to June 2023.
*2. Figures for Asia are the simple aggregate of PPRM (SG), PPRM (HK), DONKI Thailand, PPRM(TW), PPRM(MY), and Macau PRRM(MO). Results are the period from April to March 2023.
*3. Gelson's operating profit is calculated after deducting amortization of goodwill (860 million yen in the Q4, 890 million yen in the previous Q4, 3.41 billion yen for FY2023, and 3 billion yen for FY2022).

(9)
-

(3)

26

Overview of results by consolidated businesses[Period: July 1, 2022 – June 30, 2023]

AmountDiscount store business

Home electrical appliances

FY20221060.4
85.2

Ratio

57.9%

4.7%

Amount(Unit：Billion yen)

FY20231133.3
82.4

Ratio

YoY

58.5%

106.9%

4.3%

96.8%

Miscellaneous household goods

263.1

14.4%

300.8

15.5%

114.4%

Watches and fashion
merchandise

141.2

7.7%

150.2

7.8%

106.4%

Food productsSporting goods and leisure
goods

487.7
64.7

3.5%

429.6
65.8

18.5

Other

GMS business

50

Clothing

Household goods

26.6%

520.5

26.9%

106.7%

62.6

3.2%

23.5%

417.7

21.6%

97.2%

3.6%

74.3

3.8%

112.9%

0.1%

95.0%

1.0%

2.7%

16.8

48.7

0.9%

2.5%

96.7%
91.0%

97.3%

Food products

311.3

17.0%

292.4

15.1%

Overseas business

267.1

14.6%

313.6

16.2%

117.4%

68.9

3.8%

82.0

4.2%

119.1%

100.0%

105.8%

2.4

Other

North America Business
Asia Business

Other businesses
Total

*1

198.2

74.2

1831.3*1. Other businesses include tenant leasing business, credit card business, etc.

0.1%

10.8%
4.1%

100.0%

2.3

231.5

72.3

1936.8

12.0%
3.7%

93.9%

116.8%
97.4%

27

Breakdown of SG&A

[Period: April 1, 2023 – June 30, 2023]
Q4 FY2022

Amount

SG&A

117.5

44.8

Salaries and allowances

14.2

Rent

15.9

Fees and commissions

8.7

Depreciation

33.9

Other

 Utilities: Q4 7.7 billion yen (116.7 % YoY)

[Period: July 1, 2023 – June 30, 2023]
Amount

SG&A

Salaries and allowances

Rent

FY2022
454.7

175.4

55

Fees and commissions

59.6

Other

133.5

Depreciation

31.3

 Utilities: FY2023 33.5 billion yen (137.6％ YoY)

Ratio

25.5%

Amount

9.7%

8.9

7.4%

Amount

9.6%

185.5

3.3%

61.5

1.7%

7.3%

3.0%

90.9%

8.5%

59.5

34.4

154.4

106.9%
102.4%

120.2%(Unit：Billion yen)

FY2023495.1

107.6%

105.1%

1.9%

40.8

YoY

9.8%
3.2%

14.4

1.9%

3.0%

26.3%

15.1

3.4%

24.8%

126.4

Ratio

47.1

3.1%

Ratio

Q4 FY2023(Unit：Billion yen)

Ratio

25.6%

YoY

108.9%

9.6%

105.7%

3.2%

103.1%

3.1%

1.8%

8.0%

108.2%

110.0%

115.6%

28

New Store/Renovation
Business

FormatJul

Discount
*2

Q2

Sep

Oct

Nov

Dec

Arao
(Kumamoto)

Yonezawa(Yamagata)

Kyobashi(Osaka)Beppu（Oita）

Kyoto
Karasuma
Shichijo(Kyoto)

Jan

Q3

Feb

Mar

Apr

Q4

May

UNY

（Renov
ation）Asia

Jun

Sunny-SideMall
Kokura（Fukuoka）

Kirakira Donki
Kintetsu
Pass'e（Aichi）

Kichijoji（Tokyo）

Chiba
Port Town（Chiba）

SatsumaSendai（Kagoshima）

Susukino(Hokkaido)

HakataStationMinami（Fukuoka）

AkabaneHigashiguchi（Tokyo）
Sannomiya
Opa
Center Street（Hyogo）

Atsubetsu（Hokkaido）
Niigata
Kameda(Niigata)

UDR

Over
seas

Aug

DQ

*1

GMS

Q1

Daikakuji(Shizuoka)

Ina(Nagano)ResultNew Store：16
Conversion：3

Ureshino(Mie)
Niigata
Kameda(Niigata)

Higashi-kariya（Aichi）

Kagamihara(Gifu)
Whampoa
Garden(Hong Kong)

J-ParkSriracha(Thailand)

North Point(Singapore)

Jurong Point(Singapore)

Jewel Changi
Airport(Singapore)

Thaniya Plaza（Thaiand）

SunwayPyramid（Malaysia）

MBK Center（Thailand）
IOI City Mall

（Malaysia）

Plaza
Paya Lebar
Hollywood
Quarter（Singapore）（Hong Kong）

New Store：8
*3

North
America* 1. Solid lines in the UDR format indicate a tenant-in type format conversion.
* 2. Overseas stores are indicated in the opening months.
* 3. For Gelson’s, the period is July 2022 - June 2023. For all the others, the period is April 2022 - March 2023

＝Format conversion

29

Store network
Number of Domestic Retails Stores
Discount store business
Don Quijote

MEGA Don Quijote

MEGA Don Quijote UNY
Picasso etc.

GMS business

Domestic Total

*1

*1

*2
*3

Number of Overseas Stores

FY2023

FY2021

FY2022

444

468

470

476

475

486

139

140

140

140

140

140

226
52
27

139
583

Plaza Hollywood(Hong Kong)

May

237
59
32

136
604

Q1

238
60
32

134
604

Q2

244
60
32

134
610

Q3

243
60
32

134
609

Q4

250

California
Hawaii

63

Asia Business

131

Hong Kong

33

617

Kirakira Donki Kintetsu Pass'e（Aichi）

Jun

North America BusinessTaiwan

*5
*6

65

65

28

28

37

Overseas Total

*4

65

37
28

Q2

65

37
28

Q3

65

37
28

Q4

65

37
28

30

31

33

38

40

7

9

9

10

10

10

2

2

2

2

2
1
-

Macau

37

Q1

FY2023

19

1

Malaysia

Total

FY20228Singapore
ThailandFY2021

12
4
2
2

1

12
5

12
6

2

1

2

1

15
7
3

1

15
9
3

1

84

95

96

98

103

105

667

699

700

708

712

722

*5. Peak Galleria in Hong Kong is counted as a store, which was renovated from a retail store to
Sen Sen Sushi in 2022, April.
*6. The store count for Thailand includes Sen Sen Sushi（J-PARK Sriracha, DONKI Mall Thonglor,
and Thaniya Plaza)*1.“MEGA Don Quijote” includes NEWMEGA.

*2. “Picasso etc.” includes Picasso, Essence, Kyoyasudo, Ekidonki, Soradonki, JonetzShokunin and Nagasakiya etc.
*3. “GMS Business” includes Apita/Piago, U-STORE, PiagoPower , Power Super Piagoetc.

*4. As the fiscal year ends in March for overseas corporations except Gelson’s (ends in June), the number of stores for each quarter is adjusted for the applicable fiscal year.

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IR information
IR inquiries

Pan Pacific International Holdings Corporation, IR Department
2-19-10 Aobadai, Meguro-ku, Tokyo, 153-0042
TEL: 03-5725-7588

FAX: 03-5725-7024

e-mail : ir@ppih.co.jp

IR Calendar

Announcement of Q1 results for the fiscal year ending June 2024
Date of announcement: November 10, 2023 (Friday)
Venue: TBD

Cautionary information regarding forward-looking statements

The purpose of these materials is solely to provide information to investors, and not for the solicitation of purchases and sales. The
forward-looking statements set out in these materials are based on targets and forecasts, and do not provide any commitments orguarantees. While forward-looking statements are prepared based on various data that we consider to be reliable, we do not provide

any guarantees on their accuracy or safety. These materials are presented based on the premise that they will be used at discretion

and responsibility of the investor, regardless of the purposes that they use these materials for, and Pan Pacific International Holdings

Corporation bears no responsibility in any circumstances.

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2-19-10 Aobadai, Meguro-ku, Tokyo, 153-0042

TEL: 03-5725-7588 / FAX: 03-5725-7024 / e-mail: ir@ppih.co.jp
https://ppih.co.jp/