Q2 Results for FY 2023
February 8, 2023
Pan Pacific International Holdings Corporation

Explanatory notes for these materials
1. The monetary values presented in these materials are rounded off 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 subsidiary as “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 aresections in these materials where the account items and other information have been simplified to an extent where they do not change theintent or meaning of the contents.

4. The exchange rates used for overseas operations are shown below. (Gelson's fiscal year ends in June, and therefore the exchange rate isdifferent. )Unit: Yen

USD
U.S. dollar

USD(Gelson’s)

SGD
Singapore dollar

THB
Thai baht

HKD
Hong Kong dollar

P/L

B/S

P/L

B/S

P/L

B/S

P/L

B/S

P/L

B/S

FY 2022110.13111.95112.31115.02

82.05

82.25

3.41

3.30

14.17

14.38

FY 2023135.31144.81139.65132.7097.13

101.07

3.79

3.87

17.24

18.44

1

INDEX

１

Fiscal year ending June 2023
Overview of Q2 results

2

Fiscal year ending June 2023
Initiatives for Q3 and onwards

3

Appendix2

Fiscal year ending June 2023
Overview of Q2 results3

Financial Results for Q2
 Net sales increased by 60.8 billion yen and operating profit rose by 13.8 billion yen from theprevious 1H. Both sales and operating profit reached record highs for 1H and Q2.

[Period: July 1, 2022 –December 31, 2022](Unit: 100 Million yen)

Result of 1H (6 months ended on Dec 31)
FY2022

FY2023Q2 Earnings Forecast*1

Forecast

ResultActual(Sales ratio)

Progress

Actual(Sales ratio)

Actual（Sales ratio）

Net sales

9,177

9,784

+608

+6.6%

9,583

102.1％

Gross profit

2,679

3,024

+346

+12.9%

2,949

102.6％

2,450

+207

+9.3%

2,412

101.6％

575+138＋31.6%

537

107.0％

572+127＋28.5%

478

119.7％

SG&A
Operating profit
Recurring profit
Net income
EPS (Yen)

ChangeYoY(29.2%)(30.9%)(24.4%)(25.0%)(4.8%)(5.9%)(4.9%)(5.8%)(3.3%)(3.8%)

368+66＋22.0%

330

111.4％

49.40

61.67

+12.3

＋24.8％

55.34

111.4％

2,242
436
445
301

4

Discount Store Business
FY2023 1H

The increase in SSS and the improvement of GPM continued.
Strong performance in 1H, sales up by 34.9 billion yen andoperating profit up by 13.2 billion yen YoY.

Change in Sales<100 Million Yen>

 SSS rose to 104.0% (and to 102.5% excluding tax-free sales) YoY
due to the increased opportunities to go out and demand in
events, as well as the recovery of inbound in Q2.
 Tax-free sales in 1H was 8.1 billion yen, and in Dec. alone,recovering to over 60% of the 2019 figure.

0

1H
FY2022

FY2023 1H*1

Existing
StoresNew Stores(DQ+UDR)

Head Office
Expenses& Adjustments

1H
FY2023

Change in Operating Profit

 GPM of existing store in 1H kept improving to 26.0% (up by 1.8%
YoY), contributed by continued strengthening of PB/OEM (details
mentioned later) and reduction of slow moving inventory with theuse of “interest expiration date” etc.
 Existing store inventory in 1H decreased by 24.2 billion yen
YoY.
 Despite the rise of utility costs, SG&A ratio was at the same level as
the previous year due to the continuous enhancement of cost
control and sales increase.

<100 Million Yen>

 6 stores opened and 1 store expanded and renovated in Q2,
steady progress towards 9 store openings in FY2023.

▶ GPM ratio at existing DS stores in Japan*loss estimates are not reflected

28.0%
26.0%
0

1H
FY2022

Existing
StoresNew Stores(DQ+UDR)

Head Office
Expenses& Adjustments*1. Effective from the fiscal year ending June 30, 2023,
the DS business includes Tachibana Departmentstore co.,ltd.

1H
FY2023

24.0%
22.0%

1Q

2Q

FY2021
21/6月期

3Q

FY2022
22/6月期

FY202323/6月期

4Q

5

DS Business: Strengthening of PB/OEM
 PB/OEM sales composition ratio in 1H increased further to 16.8% (+2.9% YoY).

 Sales reached a record high in December, boosted by the influence of media exposure.
[Initiatives in Q2]
Sales composition ratio of PB/OEM in Q2 improved further due
to the conversion of party goods for Halloween, Christmas, etc.
to PB/OEM and the growth of suitcases along with the increasein demand for travel.
Also strengthened media exposure to boost brand recognition.
 PB/OEM sales reached a record high (over 20 billion yen) inDec.
 Boost in GPM from the expansion of PB/OEM mix wasapprox. 0.36%, making positive progress compared to theforecast as well.
▶ PB/OEM ratio in the domestic DS business

Party goods
Sales composition ratio +7.1% QoQ
Costumes made in collaboration withpopular cosplayers ranked 1st in the
new non-food product category

Fashion & Bags
Sales composition ratio +8.5% QoQStrong sales of new macaron-coloredsuitcases targeting women, in addition torising demand in Japan and overseas▼ Example of increased visibility on media

TV commercial broadcast

18.0%

Aired the first TV commercial (Dec.16-Dec.31) since therebranding of JONETZ. Sales of the 6 products featured in the
TV commercial went up to 160% in a cumulative total comparedto the pre-broadcast figures, seeing an increase in recognition.
Going forward, measures will be taken to involve different
channels and target groups, including strengthening SNS.

16.0%
14.0%
12.0%
10.0%

▼ Examples of PB/OEM products sold well in Q2

1Q

2Q
21年6月期
FY2021

3Q
22年6月期
FY2022

23年6月期
FY2023

4Q

6

DS Business: Progress in store openings/renovations
Don Quijote Yonezawa (Yamagata Pref.)(Opened on October 7, 2022)

Don Quijote Nakasu (Fukuoka Pref.)（Reopened on November 11, 2022)

Aggressively proceeded with narrowing down of SKUs
and installation of self-checkouts to improve
productivity. Operating profit surpassed the forecast.

Expanded the PB section by increasing the 1st floor
space and created a new specialized area “Tokimeki
Donki.” Sales grew strongly with the recovery of
inbound sales.

・Aimed to differentiate the store from competitors bystrengthening product lineup and trendy products for young
people in a trade area with a high percentage of students.
・Seeking new operation models to achieve high productivity inthe future by promoting measures such as narrowing down of
SKUs by 30% (compared to the roadside Furukawa store),
reduction of regular ordering with an automated system, andintroduction of full-self-checkouts.

• Expanded the 1st floor of the store located in a commercial
complex in Nakasu and developed "Tokimeki Donki," which
offers cosmetics and Sanrio goods targeting the Gen Z and theMillennials, and expanded the section that offers only our PB,
JONETZ.
• Sales progressed well above forecast, supported by a recovery
in inbound sales.

7

GMS Business
FY2023 1H

GPM improved continuously from Q1, resulting in a
2.2 billion yen increase YoY in operating profit.
Progressing well towards the full-year performancetarget in line with the forecast.

Change in Sales<100 Million Yen>

 SSS in 1H landed at 98.1% (from 97.5% in Q1 to 98.6% in Q2), thesame level as in 2019.

0

1H
FY2022

FY2023 1H

Existing
StoresStore closuresdue toremodeling, etc.
*1

Head Office
Expenses& Adjustments

1H
FY2023

Change in Operating Profit<100 Million Yen>

 Analyzed that the pricing was the cause of lower sales at existing
stores and introduced a system same as DS in Q2 for improving
pricing accuracy at each store. Having seen a certain level ofsuccess, full-scale operation will be launched at all stores fromQ3, aiming to improve sales and gross profit through morebalanced pricing.
 Integrated MD function between DS and GMS business in Japan.
Promoting product enhancement by introducing productcategories that GMS should offer, as well as improving theefficiency of procurement and management operations.

 GPM at existing stores in 1H continued to improve to 26.6% (up by+1.6% YoY). The growth of apparel in Q2 contributed.

 SG&A ratio at existing stores showed improvement from +0.2% to 0.5% QoQ. Despite the ongoing rise in utility costs, the labor cost
ratio improved by -0.3%. Other cost controls were successful as well.

▶ GPM of SSS FY2021-FY2023
25.0%
0

1H
FY2022

Existing
StoresStore closuresdue toremodeling, etc.

Head Office
Expenses& Adjustments

1H
FY2023*1. "Store closures due to remodeling, etc.” refers to store closures due to format conversion to UDR andstores excluded from existing stores due to remodeling, etc. in the current and previous Q2 periods

20.0%

1Q

2Q
21年6月期
FY2021

3Q
22年6月期
FY2022

23年6月期
FY20234Q

8

Overseas Business
FY2023 1H<Progress of new store openings>

Change in SalesDON DON DONKI Whampoa Garden (HK)(Opened on August 17, 2022)
 First in Hong Kong to Introduce Wagyu Kushi, which havebeen successful in Taiwan and Malaysia, aiming to further
penetrate Japanese food culture. Also newly developed
Sen Sen Sushi with table seating and VIP rooms to offer aluxurious space unique to Japan.
 Cumulative sales from opening to Oct. were approx. 800
million yen, performing strongly.

<100 Million Yen>

0

1H
FY2022

FY2023 1H*2

Asia *2*1
North America *1

1H
FY2023

Change in Operating Profit

DON DON DONKI J-PARK Sriracha (TH)(Opened on September 9, 2022)
 Offers one of the largest selections of Japanese products ineastern Thailand, with the first Sen Sen Sushi in Thailand
opened together. Also provides other restaurant and retailbusinesses such as Wagyu Kushi and Kiwami Nama
Shokupan (“fresh” bread loaf) that are sold well in othercountries.
 Sales from opening to Oct. were at 165% of forecast.

<100 Million Yen>

0

1H
FY2022

Asia

North America

1H
FY2023*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 September 2022, while Gelson’s is from July to December 2022.
*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 September 2022.
*3. OP for Gelson’s does not include the amortization of good will (FY2023: 1.72 billion yen, FY2022: 1.39 billion yen)

9Overseas Business: Progress in 1H
 Overseas business fell short of forecast due to the heavy impact of COVID-19. Particularly in countries
and regions with a large number of downtown urban stores such as Hong Kong, Singapore, Macau, andHawaii were negatively impacted by the prolonged restrictions.

North America Business

Asia Business 1H performance resulted in increase in sales and operating
profit YoY: sales +10.0 billion yen (+2.3 billion yen vs.
forecast), operating profit +0.3 billion yen (-0.8 billion yen
vs. forecast).
 Despite 1.9% increase YoY in SG&A ratio due to theexternal environment of increased costs, GPM improvedin each country (+1.8% in Asia total) and OPM remainedat the same level as in the previous fiscal year. OPM atexisting stores continued to exceed 10%.
 SG&A ratio in Thailand improved YoY, and Taiwan turned
profitable, confirming successes in each country in 1H.
 Shortfall in operating profit from the forecast camemainly from Hong Kong and Macau (-0.7 billion yen).
<Current situations and challenges in Hong Kong and Macau>
 Sales were affected by the weaker-than-expected recovery
in foot traffic including tourists, especially at downtown
urban stores.
 GPM was about 2% lower than in Singapore, leaving room
for improvement. SG&A expenses will be managed more
efficiently in terms of logistics and overhead costs, inaddition to strengthening labor cost management.

 1H performance resulted in increase in sales but
decrease in profits YoY: sales +21.3 billion yen (+11.6
billion yen vs. forecast), operating profit -1.7 billion yen (1.5 billion yen vs. forecast).
Gelson's sales increased by 7.4 billion yen from theforecast, and operating profit was +/-0.0 billion yen.
Sales improved despite an expected decline indemand for alternatives to eating out.
GPM of MARUKAI (CA) also improved by 1.9% YoY,
and operating profit was roughly in line with theforecast.

Shortfall in operating profit was mainly due to the
Hawaii business (-1.4 billion yen).

＜Current situations and challenges in Hawaii＞

 Despite further efforts to integrate store and productrelated systems and operations, internal difficulties ininventory management and price control led to loss ofsales opportunities and a decline in GPM (-2%).

10

Earnings Forecast for FY2023
 The full-year forecast of 94 billion yen in operating profit remains unchanged.

 The breakdown by business segment was revised based on progress in each business up to 1H.
FY 2023 Earnings Forecast(Unit: 100 Million yen)

ActualSales Ratio

YoY

Net sales

18,900100.0％

103.2％

Gross profit

5,838

30.9％

107.4％

SG&A

4,898

25.9％

107.7％

Operating profit

940

5.0％

106.0％

Recurring profit

825

4.4％

82.1％

Profit attributableto owners of parent

569

3.0％

91.9％

EPS (Yen)

95.42

-

93.0％

Dividends per share
(Yen)

18.00

-

105.9％＜Exchange rate＞＜ Forecasts by Business Segment (YoY) ＞■DS Business: Initial target +3.7 bil. yen YoY ➡ +9.7 bil. yen

 As of Q2, the DS business has already exceeded theinitial target by over 5.0 bil. yen.

 In particular, tax-free sales reached 8.1 billion yen in 1H,
which already exceeded the forecast for the current term.
The full-year forecast has been raised to 24.0 billion yen
due to the recovery mainly among tourists from Asia.
■GMS business: No change■Overseas Business: The initial target +6.0 bil. yen YoY ➡
Same amount as the previous fiscal year As of Q2, progress was -2.3 billion yen against the initial
target.

 We assume that the external environment will remain
largely unchanged in 2H and that the effects of various
measures will be seen in the next fiscal year and beyond.

1USD＝122.41 yen, 1HKD＝15.64 yen, 1SGD＝90.47 yen, 1THB＝3.68 yen, 1MYR＝29.14yen, 1TWD＝4.29yen, 1MOP＝15.18 yen

11Status of major assets, liabilities and net assets(Unit: 100 Million yen)

(Unit: 100 Million yen)

June 2022
ActualJune 2022

December2022
Actual*2

ChangeActual

4,865

5,587

722

1,768

2,089

321

521

605

83

2,059

2,101

42

8,971

9,182

210

Buildings, etc.

2,684

2,693

9

Land

3,147

3,196

49

862

876

14

732

733

0

13,837

14,769932

Current Assets
Cash and
Deposits

Account
receivableinstallment
Products

Non-Current
AssetsIntangible Assets
Lease andGuarantee
Deposits

Total Assets＜Status of assets＞
・Non current asset*2▶ Tangible fixed assets: 682.4 bil. yen(17.4 bil. yen up )・ Investment related to store openings, etc.
30.5 bil. yen
・ Depreciation and amortization
16.6 bil. yen

Total Current
Liabilities

December2022
ActualChange

3,264

4,094

830

Accounts PayableTrade

1,529

2,116

587

Short-Term
Interest Bearing
*1
Debt

383

536

152

Total Noncurrent
Liabilities

6,581

6,308

(272)

Corporate Bonds

2,726

2,720

(6)

2,762

2,484

(278)

Total Liabilities

9,844

10,402558

Net Assets

3,992

4,367

375

13,837

14,769932

Long-Term
Interest Bearing
Debt

Liabilities and Net
Assets＜Status of major liabilities＞▶ interest-bearing debt : 5,73.9 bil. yen(13.2 bil. yen down)＜ Status of net assets＞▶ Net worth: 431.1 bil. yen（change from the previous year-end +38.8 bil. yen）
▶ Capital adequacy ratio: 29.2％（change from the previous year-end +0.8％）＜Others＞▶ Net D/E ratio: ： 0.85x（change from previous year-end -0.2x）▶ ROE： 17.9 ％(annualized/change from previous year-end +2.6％)*1. Short-term interest bearing debt = Short-term loans payable, long-term debt due within one year, and corporate bonds due within one year.

12Status of cash flows and capital expenditure▶ Cash Flow Status(Unit: 100 Million yen)

FY2022 1H
ActualBalance at Beginning of
Period▶ Positive items: 56.1 billion yen in income before

FY2023 1H
ActualChange

1,609

1,804

195

Cash Flows fromOperating Activities

659

1,032

373

Cash Flows from
Investing Activities

(233)

(376)

(143)

Cash Flows from
Financing Activities

(291)

(240)

52

Changes During the Period

164

434

270

Balance at the End of the
Period

1,773

2,238

465

425

656

231

Free Cash Flow

*1

*1. Free Cash Flow = CF from operating activities + CF from investing activities▶ Status of capital expenditures
Capital Expenditures＜ Operating CF：+103.2 bil. yen＞

income tax, 20.7 billion yen in depreciation andamortization, and increase of 56.9 billion yen inaccounts payable.
Negative items: Increase in installment
accounts receivable 8.4bil. yen, and income
taxes paid of 18.7 billion yen＜ Investment CF：-37.6 bil. yen＞

▶ Cash out factors included 29.1 billion yen for

tangible fixed assets acquisition associatedwith store openings and 4.4 billion yen for
intangible acquisition, and 3.4 billion yen
acquisition of shares in affiliated companies.

＜ Financing Activity CF：-24.0 bil. yen＞
▶ Cash out factors included 12.8 billion yen in

repayment of long-term debt, 8.3 billion yen in
dividends payment, 2.2 billion yen for theacquisition of shares of subsidiaries withoutchange the scope of consolidation and 0.8
billion yen in redemption of bonds.

＜ Breakdown of Q2 ＞

244

342

99

▶ DS business 12.1 billion yen , GMS Business3.8 billion yen, Overseas business 6.5 billion
yen, IT 1.6 billion yen, Others 10.4 billion yen

13

Status of shares
Dividends
Payout Ratio (%)

Dividends( yen)20.0

配当性向(右軸)(right axis)(left axis)

15.0

20.0

Payout ratio

Annual dividends
年間配当(左軸)

15.0

10.0
15.0

5.0
0.0

3.1

3.5

3.9

4.1

4.5

5.0

5.5

6.5

8.0

16.0

18.0

17.0

10.0
5.0

10.0

2010/6 2011/6 2012/6 2013/6 2014/6 2015/6 2016/6 2017/6 2018/6 2019/6 2020/6 2021/6 2022/6 2023/6

0.0（expected）**The Company 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.

 Dividends for FY2023 is expected
to be 18.0 yen (+1.0 yen YoY)
 It is expected to increase for20 consecutive terms
Payout Ratio
We will continue to return profits toshareholders based on a "progressive
dividend policy," with a dividend payout
ratio of 20% or more over the medium
term while maintaining a balance
between investment in growth andshareholder returns.

Shareholder Benefits
・Eligible shareholders： Shareholders who are listed or recorded in the shareholders'register as of the last day of June and December, and who hold at least 100 shares.

・Benefits： 2,000 yen worth of majica points will be awarded through the majica app.
*Download and registration to the majica app is required to receive the points.

・Delivery schedule： The coupon code to receive points will be enclosed in other dividendrelated documents at the end of September and March.

・How to receive benefits：Enter the coupon code enclosed with dividend-related
documents into the app.

Ownership of the shares
100%
80%
60%
40%
20%
0%

19.3%
1.6%

18.1%
2.3%

17.8%

18.6%

59.9%

59.4%

1.4%

1.6%

18.5%
3.1%

12.9%

19.7%
2.7%

12.8%

57.2%

56.6%

2.3%

2.3%

20/6月期
21年/6月期
23年6月期
FY2021 22年6月期
FY2020
FY2022
FY2022Q2
2Q
Financial institutions ■ Financial instrument business operators■ Other Japanese corporations ■ Foreign corporations andindividuals ■ Japanese individuals and others ■ Treasury stocks

14

Fiscal year ending June 2023
Initiatives for Q3 and onwards

15

Initiatives for the 2H and onward

DS business Continue to strengthen PB/OEM. From spring/summer, further promote PB of
seasonal home appliances and apparel.
 With the recovery of inbound sales, review store layouts and personnel assignments,
particularly at station front stores, to prepare for further growth and maximize sales.

GMS business The system to improve pricing accuracy is now in full-scale operation at all stores,
and we will also work to improve sales and profitability by strengthening productappeal through merchandising integration.
 We will also continue to improve productivity and control SG&A expenses throughthe implementation of individual store management.

Overseasbusiness

Others Management structure for Asia business was changed in January. The company will
work to improve profits through the roll out of successful cases in each country (fresh
food, delicatessen, and PB products).
 The integration of HQ functions, which could not be undertaken due to COVID-19's
cross-border restrictions, will also be initiated to improve efficiency of SG&A
expenses.

 In the North America business, we will work to improve and restructure the supply
chain by sharing and integrating warehouse operations, central kitchen operations,and integrating suppliers, etc., to curb costs and improve GPM in response toinflation, which is expected to be prolonged.
 The company has also begun to improve GPM by improving the accuracy of pricing
for direct trade products and for the Hawaii business.

 CRM measures will be implemented for the expanded majica app members to
expand the number of people using the company's in-house payment system and to
reduce additional costs.

16

(Reference) Flash report of domestic DS/GMS business inJanuary YoY same-store sales in January were 104.2% in DS business and 99.0% in GMS business,maintaining the Q2 trend.
 Due to disaster preparation and last-minute demand, both businesses saw growth in foodproducts despite the high hurdles from the previous year.

▶ Year on Year sales of same-store■ DS business

Unit：％

Q1

Oct

Nov

Dec

Q2

Jan

Japan

101.7

102.4

102.5

103.4

102.8

102.7

DS

103.3

104.0

105.3

104.7

104.7

104.2

GMS

97.5

98.6

96.4

100.3

98.6

99.0

▶ Number of price increases on food items by major manufacturers
and YoY sales of DS and GMS existing store
8,000

106.0%
104.0%

6,000

102.0%

4,000

100.0%

2,000
0

98.0%

Jul
7月

Aug
8月

Dec JanSep
Oct Nov
9月 10月11月 12月
1月
Number of

食品値上げ品目数
price increased foods

DS

Feb
2月

Mar
3月

96.0%

GMS

*Number of food price increases is calculated from the Teikoku Databank survey.

 Despite a high hurdle due to the bulk buying driven by theprevious year's COVID-19 restrictions, food sales reached106.1% thanks to New Year's demand and last-minutedemand before the February price hikes.

 In addition to the continuing travel-related demand growth,
cosmetics and apparel sales grew on the back of special
occasion demand, and non-food items also saw positive
growth.
 Tax-free sales increased in tourists from South Korea andTaiwan due to the Chinese New Year holidays.
■ GMS business Food products, which have been on a recovery trend sinceQ2, posted 100.6% thanks to hoarding demand due to thesnowfall and last-minute buying before price hikes, as in
the case of DS.
 In non-food products, sales of toys struggled due to areactionary decline in sales of games and cards, but salesof apparel were on par with the previous year due togrowth in seasonal items and a recovery in school
demand.

17

DS Business: Initiatives to address the forthcoming recovery in
inbound demand Based on the recovery in 1H, the forecast for tax-free sales for FY 2023 has been revised upward to
24.0 billion yen. Aim to maximize sales in 2H by establishing a system to respond to a further recovery
in demand.
Status and Trends of Recovery in Tax-Free Sales

Maximize Sales by Strengthening the Sales Structure in 2H

 Sales recovered rapidly after the easing of border control in Oct.
1H sales totaled 8.1 billion yen, already exceeding the initial
forecast of 8 billion yen.

 Invest in infrastructure, such as additional tax-freecheckouts and a better payment environment, assumingthat the number of customers and sales will increase in the
future with further easing of border controls.

 South Korea leads by nationality at approx. 35%.
 Average sales per customer increased by approx. 1.2x from 2019.
Customer spending grew, which reflects a tailwind from the longawaited lifting of the overseas travel ban and the weak yen.
 As for sales by product category, while there is no major change
from 2019, sales of high-end products are expected to growslightly due to the weak yen, and cosmetics, which has been
reinforced aggressively in the DS business, are performing well.
▶ Composition of tax-free sales▶ Composition of tax-free sales
by nationality

22.5%

40.5%

17.3%
13.6%
■
■
■

South Korea
TaiwanOther

19/6月期
FY201923/6月期Q2
FY2023 Q2 5.5%

FY20196.1%

by product category

■
■
■

ASEAN
China
U.S.

10.3%

11.0%

3.6%

3.9%

0.5%

18.8%

32.9%

23/6月期Q2
FY2023 Q2

■
■
■
■
■
■

Miscellaneous household goods

Watches and fashion merchandise
Food productsSporting goods and leisure goods
Home electrical appliances
Other▶ Changes in tax-free performance and future outlook
4.0 billion yen

2.0 billion yen
22.6%

17.8%
24.2%

 The flagship stores will increase the number of employees
considerably and promote the rearrangement of layouts
and product shelves to better respond to inboundcustomers.

4.0% 0.0%

5.2%

52.5%

19.1%

 Staffing will be reviewed to increase the number of MDs andsupport staff specialized in inbound operations to ensure
an adequate supply of products that are in high demand fortax-free shopping.

23.4%

44.8%

0.0 billion yen

Jul.

Aug.

Sep. Oct. Nov. Dec. Jan. Feb. Mar.

tax-free sales

Apr.

May Jun.

Compared to before COVID-19 (FY2019)18

Overseas Business：Outlook for the 2H and onward
Asia Business Asia business, which started in December 2017,
continued opening stores during COVID-19 and reacheda store count of 33 stores in 6 countries and regions inabout 5 years. Sales have grown to approx. 80 billion yen.

 Going forward, in addition to improving GPM, which is a
key measure in the mid-term plan, the company will also
strengthen control of SG&A expenses.

 The management structure was changed from Jan. 2023.
The President of SG, which is performing well, willsupervise the entire Asia region and seek to improve
profits by rolling out successful cases in each country.


E.g.: Proactively introduce successful examples
from SG and Thailand in Hong Kong and Macau.
Work to improve GPM by strengthening fresh
foods and delicatessen (GPM +2.0%) and cost
efficiency by improving labor cost control,
reviewing cash registers and warehouses, etc.

 Cross-border restrictions by COVID-19 have been eased,
and a recovery in human flow is also expected. The labelchange from “new stores” to “existing stores” this fiscal
year is also expected to contribute to future profit
growth.

North America Business Hawaii business will begin improving pricing accuracy
in February to improve sales and GPM.

 In addition, through supply chain development andrestructuring, the company will strengthen inventory
management (including reducing write-downs), curb
distribution costs, and improve the efficiency of store
operations.

 For the business in California, existing businesses andGelson's will share and integrate warehouse operations,central kitchen operations, and integration of suppliers
to further improve GPM and cost efficiencies.

 In the external environment in North America, inflation
remains at high levels, and there are concerns that
consumption will weaken in the future. In an
environment where it is difficult to expect a rapid
recovery in sales for a certain period of time, we willaddress internal issues to improve profitability andprepare for a future phase of sales expansion.

19

"CV+D+A“ Update through Evolution of “Customer Touchpoint”

 The number of majica app members reached 11 million and credit card members 3.1 million, developing amembership base.
 Unlike the point strategy of platformers, we will update our own unique "CV+D+A" that combines
store/product and digital "customer touchpoint." In addition to the majica app, digital, including SNS, will become the new "customer touchpoint" forcustomers, products, and stores. By updating and improving the customer experience in a way that is
unique to us, we will expand our earnings opportunities.
Changes in Customer Experience

Current customer
experience

New customer experience
with apps and SNS

Our Earnings Opportunities

 CRM measuresCVDA

 (Number of customers x increase in frequency ofstore visits)• Store has everything youneed (large number of
SKUs)• Open anytime (late-night
service)• Easy access to special
deals• More top-up features• Able to use outside ourstores• Low price (compared tonearby competitors)• Prices seem lower(display andpresentation)• Great deals throughcombined
coupon/points sales
promotions

 Payment segment• Interesting discovery(=spot)• Sense of exploration tofind products (magicalplace feeling)• Products that reflect
customer feedback froma variety of media• Allows customers toparticipate

 Media/advertisement segment

 Acquisition of new customers

The basic payment

 Promoting sales increase for strategy mentioned in
the following pages
existing customers
 Reducing outflow of payment fees Increasing finance business revenue

 New measures to improve gross profit for NB
 Acquisition of new customers

 Products segment

 Brush up on products

Product andmedia/advertisingsegments to beannounced in the future20

Finance business: basic strategy for payment and marketing

Expand the number of customers using the in-house payment system to increase financial revenue opportunities and reduce costs(from approx. 40% to over 50%).

Improve the payment/membership ratio to deepen understanding of customers and increase store visits by utilizing CRM measures.

We will continue to enhance our services for customers, while at the same time offering unique services to our stores which is one of
our strengths, and to corporate clients in and around our stores.

Ratio of domestic directly managed store
sales (1.6 trillion yen) by payment type

Member registration

About
50％

• Acquisition of app
members• Leading to inhouse payment
For customers

Promote the use
at tenants

who keep using
third-party payment…

• Issued at stores orapp• App-based store
revisit measures• Started merchantService（0.9 bil. down）• Improved incommission rate
（0.6 bil. down）

About
45％

Done

Membership system/
Review sales promotion

Customers who do not use
majica service at all（cash/third-party
payment）

About
5％

Future initiatives

Top-up/Payment function

majica： 5 million ppl• Leading to inhouse payment• Points given by
manufactures• MyNa point• Strengthen sales
promotion• Price discountgiven by points

Over
50％

Top up・Payment

About
10％

• Measures
regarding top-up
for retention• Expand membersonly services

Cost
reduction

Customers who only uses
majica as a point card
（cash/third-party payment）

Initiatives in progress

CouponCredit Card：3.1 million ppl

Increase• new customers• frequency of store
visits• per capita
spending

TargetRatio（FY2025）

Pointsmajica：6 million ppl

About
40％

Items implemented

Top-up
Payment

Customers who pay by
PPIH in-house payment(paid by majica or
PPIH credit card)

Ratio of
Payment(FY2023)• Able to use outsideof PPIH group• Top-up from bankaccount• Top-up by deferredpayment• Paid by credit card
• Revision of ranksystem• Consolidation ofservices to majica
payment• Sales promotion
activities using
points• Services forcorporations

21

Exclusive measure for majica members at the pre-opening of the
Beppu store A pre-opening for majica members only was held at Beppu.

 In addition to acquiring members, strengthen incentives and guidance for "top-up," which
has become a hurdle in promoting in-house payment.
 By implementing CRM measures through the app in the future, we will provide customers
with a more " value-for-money, convenient, and enjoyable" customer experience.
Future Initiatives

Initiatives
 Promote MAJICA membership at store entrances Installation of more top-up machines and employees
outreach Conduct top-up campaign (points awarded) The pre-opening for app members only was as successful
as the non-exclusive pre-opening, and the payment ratio
by majica increased markedly.
 Various measures will be put in place at stores andthrough the app, including to inform customers of thebenefits of majica payment and cashiers encouragecustomers to use majica.

 This will be implemented at new and renovated stores in
the future.
Pre-opening
at Beppu

Pre-opening
Average

Paid by majica

50%

23.5%

Top-up per
customer

6,316 yen

4,059 yen

22

Appendix

23

Q2 and 1H results by businesses[Q2 Period: October 1, 2022～ December 31, 2022]
DS business

Sales
Gross Profit
GPM
SG&A
Operating
ProfitOPM(Unit: 100 Million yen)

GMS businessNorth America
business

Asia business

Others・Adjustments

Q2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

Change

2,831

3,017

186

1,281

1,262

(19)

159

205

46

497

612

115

(46)

(49)

(3)

694

24.5％

585

811

26.9％

117
2.4％

433

33.8％

639

54

340

109

172

63

3.9％

5.7％

1.8％

435

2

34.5％

0.7％

56

35.1％

332

(8)

49

93

104

11

7.3％

8.2％

0.9％

76

21

37.2

2.1％

190

38.1％

70

21

157

6

6

(0)

4.0％

3.0％

(1.0％)

223

36.4％

33
(1.7％)

31
-

36

4

-

-

202

45

(3)

3

4

33

21

(12)

34

33

0

6.6％

3.5％

(3.1％)---[1H Period: July 1, 2022 – December 31, 2022]
DS business

Sales
Gross Profit
GPM
SG&A
Operating
ProfitOPM

GMS businessNorth America
business

Asia business

Others・Adjustments

Q2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

ChangeQ2
FY2022Q2
FY2023

Change

5,548

5,897

349

2,441

2,395

(46)

303

403

100

956

1,170

213

(71)

(80)

(9)

1,353

24.4％

1,181

1,559

26.4％

206
2.0％

797

32.6％

1,256

75

677

172

303

132

3.1％

5.1％

2.0％

812

33.9％

16
1.3％

105

34.8%

147

36.6%
135

42

1.8%
39

362

37.8%

670

(7)

96

306

120

142

22

9

12

3

56

4.9％

5.9％

1.0％

3.1%

3.0%

(0.1%)

5.9%

433

37.1%
394

72

(0.7%)

62
-

72
-

10
-

88

(17)

(6)

12

40

(17)

80

78

(2)

3.4%

(2.5%)---*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 September 2022, while Gelson’s is from July to December 2022.
*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 September 2022.
*3. Operating profit for Gelson’s include the amortization of goodwill (Q2 FY2023:0.86 billion yen, Q2 FY2022: 0.69 billion yen, 1H FY2023: 17.2 billion yen, 1H FY2022: 13.9 billion yen )24

1H results by consolidated businesses[Period： July 1, 2022 –December 31, 2022](Unit: 100 Million yen)

1H FY2022
ActualDomestic DS Business

1H FY2023
Ratio

Actual

Ratio

YoY

5,324

58.0%

5,672

58.0%

106.5%

434

4.7%

424

4.3%

97.8%

Miscellaneous household goods

1,297

14.1%

1,515

15.5%

116.8%

Food products

2,440

26.6%

2,581

26.4%

105.8%

Watches and fashion merchandise

720

7.8%

763

7.8%

106.0%

Sporting goods and leisure goods

353

3.8%

301

3.1%

85.2%

80

0.9%

88

0.9%

109.7%

2,223

24.2%

2,181

22.3%

98.1%

Clothing

258

2.8%

250

2.6%

97.1%

Household Goods

353

3.8%

374

3.8%

105.9%

Foods

1,601

17.4%

1,543

15.8%

96.4%

Other

12

0.1%

15

0.1%

120.3%

1,259

13.7%

1,560

15.9%

123.9%

North America Business

956

10.4%

1,160

11.9%

121.3%

Asia Business

303

3.3%

400

4.1%

132.3%

371

4.0%

372

3.8%

100.2%

9,177

100.0%

9,784

100.0%

106.6%

Home electrical appliances

Other
Domestic GMS Business

Overseas Business

Other Business
Total

*1

*1. Other Business includes tenant leasing business, holding company management, credit card business, etc.

25

Breakdown of SG&A
[Period: October 1, 2022～ December 31, 2022](Unit: 100 Million yen)

Q2 FY2022
ActualSG&A

Q2 FY2023
Ratio

Actual

Ratio

YoY

1,128

23.9%

1,246

24.7%

110.4%

Salaries and allowances

436

9.2%

464

9.2%

106.3%

Rent

135

2.9%

148

2.9%

109.5%

Commission paid

151

3.2%

162

3.2%

107.2%

Depreciation

76

1.6%

85

1.7%

112.2%

Other

330

7.0%

387

7.7%

117.3%

 Utilities: Q2 8.2 billion yen (155.5% YoY)
(Unit: 100 Million yen)

[Period: July 1, 2022 – December 31, 2022]
1H FY2022
ActualSG&A

1H FY2023
Ratio

Actual

Ratio

YoY

2,242

24.4%

2,450

25.0%

109.3%

Salaries and allowances

867

9.5%

923

9.4%

106.4%

Rent

271

2.9%

293

3.0%

108.1%

Commission paid

296

3.2%

306

3.1%

103.7%

Depreciation

148

1.6%

167

1.7%

113.0%

Other

661

7.2%

761

7.8%

115.1%

 Utilities: 1H 17.8 billion yen (150.6% YoY)26

Store openings/Renovations

Business

Discount Store
GMS

Overseas*2

Format

Q1
Jul

Aug

Q2

Q3

Sep

Oct

Nov

Dec

Arao
(Kumamoto)

Yonezawa(Yamagata)

Kyobashi(Osaka)Beppu（Oita）

Kyoto
Karasuma
Shichijo(Kyoto)Kichijoji（Tokyo）

DQ

Jan

Feb

Q4
Mar

Apr

May

Jun

2 stores1 storeNew：9 stores +α

Susukino(Hokkaido)
Niigata
Kameda(Niigata)

*1

UDR
UNY

（Renovation）

Asia

North
America

Full Year Target

Daikakuji(Shizuoka)

Ina(Nagano)Format conversion：4 stores

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）

3 stores【Retail Store】
New：12 stores

SunwayPyramid（Malaysia）

1 store*1. A store framed in a solid line frame in UDR format is tenant-in type business conversion. *2. Overseas stores are indicated in the opening months.
＝Format conversion

27

Store network
Number of Domestic Retails Stores
FY2021

FY2022

Discount store business444

Don Quijote
MEGA Don Quijote
MEGA Don Quijote UNY*1*1

Number of Overseas Stores
FY2023
Q1

Q2

468

470

476

226

237

238

244

139

140

140

140

52

59

60

60

Picasso etc.

*2

27

32

32

32

GMS business

*3

139

136

134

134

583

604

604

610

Domestic Total

North America Business

Sunway Pyramid(Malaysia)

HawaiiAsia Business

Oct.

Oct.

*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), thenumber of stores for each quarter is adjusted for the applicable fiscal year.

65

65

28

28

Hong Kong*5

Thailand

*6

*4

37
28

65

37
28

33

7

9

9

10

2

-

Overseas Total

65

Q2

31

1

Macau

Q1

30

1

Taiwan37

FY202319
8Singapore

Total

FY202237

California

Malaysia

Northpoint City
(Singapore)

FY2021

12

12

4

5

2

6

2

2

1

12

2

2

1

2

1

84

95

96

98

667

699

700

708

FY2021

FY20220

1*5. Peak Galleria in Hong Kong is counted as a store, which was renovated to Sen Sen
Sushi in 2022, April.
*6. The store count for Thailand includes Sen Sen Sushi（J-PARK Sriracha)【Reference】Number of
Sen Sen Sushi Stores
Total
Hong Kong
Thailand0

1

FY2023
Q1

Q2

3

3

6

4

1

28

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 Q3 results for the fiscal year ending June 2023
Date of announcement: May 9, 2023 (Tuesday)
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.

29

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/