TSE Prime 7599

Contents

1 What is IDOM?

IDOM Group Profile

3 ESG

Environment / Social / Governance04

IDOM’ s Corporate Philosophy since Its Foundation

30

Message from the Chairperson of the Sustainability Committee

05

IDOM's History

32

Tasks That Idom Will Take on Towards the Achievement of the SDGs

06

Message from the Presidents

33

Circulation Cycle of Used Car Business08

Presidents' Dialogue

34

Sustainable Finance

35

Disclosure in Line with TCFD Recommendations
Related to Climate Change

36

IDOM Sustainability Declaration

37

Approach to Diversity

39

System to Promote Initiatives Based on the Concept of Diversity

40

Social Initiatives

41

Motivation Cloud42

IDOM's Governance System

43

Two-President System

44

Corporate Governance Diagram

45

Directors’ Skill Matrix

46

Directors, Auditors and Advisers

2 Business Model

Business model

11

IDOM’ s Model for Value Creation

12

Changes in IDOM's Business Models and Store Operations

13

Market Environment Analysis

14

Japan's Used Car Market with Much Lower Ratio
than Those in Europe and the United States

15

Used Car Retail Market with a Large Roomfor Growth of Market Share

16

Change in People's View of Used Cars

17

Expected Future Changes
in the Environment Surrounding the Used Car Industry

18

Five Strengths of IDOM's Business19

1. Brand Power20

2. Number of Customers

21

3. Sales Capabilities

48

Main Indicators

22

4. IT Utilization Capabilities

50

Principal Financial Data23

5. Ability to Respond to the Rnvironment

51

Consolidated balance sheets

24

Business Portfolio as a Medium- to Long-Term Goal

52

Consolidated statements of income

25

Key Management Indicators

53

Consolidated statements of cash flows

26

Positioning of the Medium-Term Business Plan and Its Three Themes

54

Financial, Non-Financial Highlights

27

Message from the CFO

56

Corporate Profile, Stock Data

4 Data Section

Data section2

1

What is IDOM?

IDOM Group Profile3

What is IDOM?

IDOM’s Corporate Philosophy since Its Foundation
What is IDOM?

IDOM Corporate Philosophy

Business Model

Growing Together
We aim to continue to grow together with our five key

ESG

stakeholder groups to achieve a prosperous future
through the embodiment of IDOM-ism.

Shareholders

Five Stakeholders

Data Section

Society

Partners

Customers
Employees

4What is IDOM?

History of IDOM
New Retail Model

Rapid growth as a used car purchasing specialty store witha unique business model that had never been seen before
Becoming the only hyper growth company in Japan

As purchase-only stores increased, we shifted to a more
proﬁtable retail business model, implementing different
retail initiatives including multi-channel operation.

In the 1980s, when trade-ins were still the mainstream in the used car
industry, IDOM rolled out the unique business model of the used carpurchase specialty store. We continued to grow through pioneering
initiatives, such as the introduction of an image-based sales system in
1998, which is now the mainstream approach, and in 2004 we became
one of only a handful of hyper-growth companies in the world, and theonly one in Japan; a title which we still hold today. (A hyper-growthcompany is one that achieves sales of one billion dollars—around 100
billion yen—within 10 years of its establishment).

From the 2000s onward, dealers backed by major manufacturers
began to participate actively in the used car industry, leading tointensified competition among used vehicle purchasers. IDOM
shifted to a more profitable retail business model. Our shift to aretail model can be divided into three phases: the early transition
phase, in which we began to engage in retail sales together withwholesale at car purchasing stores, the intermediate transition
phase, where we began opening dealerships rather thanpurchasing stores, and the final transition phase where we
engaged in a range of trial retailing initiatives, such as opening
dealerships with a multi-channel approach.

Release of “Medium-Term Business Plan
2023–2027” in April, 2022

Sale of the Australianbusiness in June, 2022
Kisarazu Kaneda store opened in
January, 2023

The ﬁrst store with only three
employees at the time offoundation(Koriyama, Fukushima)

Opened 500
stores in 1999

We have reviewed our business portfolio andformulated a growth strategy based on experience
gained and issues identified through various trials during ourtransition to a retail model, which will serve as a foothold for future
growth—such as confirming the high degree of capital efficiency oflarge-scale exhibition halls through our multi-channel approach.
IDOM has announced its medium-term business plan as a specificplan for achieving further growth. Going forward, we will continue toopen large-scale stores and maintenance shops, which are the pillarsof our growth strategy, by selecting and concentrating on
businesses with higher capital efficiency and growth potential. As
our most recent result, in the fiscal year ended February 2023, weovercame factors leading to a decrease in profit—around 5 billion
yen due to the sale of our Australian business—to achieve an
increase in profits for the fourth consecutive year.

We operated a wide range of sales
channels in the trial phase.

100

Fastest IPO in history
at the time in 1998
50

Founded in 1994

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96

97

The Company’ s name changed to IDOM, Inc.
from Gulliver International in 2016

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Data Section

Listed on the First Sectionof the TSE in 2003

ESG

Reviewing our business portfolio based on
experience gained during the transition
period, and aiming to make further leaps
forward by selecting and concentrating on
businesses with high capital efﬁciency andgrowth potential, based on our
medium-term business plan

200

150

Business Model

250

Transition to a Retail Model

What is IDOM?

Trend in consolidated
operating proﬁt
300

Founding—Purchasing and Wholesale Period

23

5What is IDOM?

Message from the Presidents
What is IDOM?

Takao Hatori

Creation of a recycling-oriented society
At IDOM, we aim to create a recycling-oriented society through ourused car business.
Cars require a lot of energy and materials in both manufacturing anddisposal. By reusing vehicles—which are valuable resources—rather
than discarding them, we can not only save resources but also reduce

waste. Through appropriate appraisals and maintenance, we support
safe long-term use of vehicles and work to make effective use ofresources.
Cars are also an important part of social infrastructure for life and work.
Due to the impact of the COVID-19 pandemic, we received many
requests from customers for cars that can be used for commuting toand from work, going to hospital, and shopping, etc.
On the reverse side, because of economic factors such as soaring
resource prices and temporary semiconductor supply shortages, newcar prices have risen, making it difficult for customers to purchase them.
Although supplies of semiconductors have now recovered, it is quitepossible that new car prices will continue to rise due to depletion of
resources. Even under such conditions, it is IDOM's mission to continue
providing safe and reliable cars at reasonable prices.

Data Section

Since its founding, IDOM has aimed to achieve continuous growth
together with its five stakeholder groups—society, customers, partners,
shareholders, and employees—based on its philosophy of "Growing
Together" in prosperous coexistence. We have recognized theimportance of earning the trust of customers since our founding. We
have been working to transform the vehicle distribution and retail sales
industry—such as by establishing a vehicle purchasing business modeland an Internet-based sales model to overhaul and increase thetransparency of automobile sales transactions, which have been
regarded as opaque in the past. In recent times, the businessenvironment surrounding the used car distribution industry is constantly
changing, as are consumer confidence and the social environment.
Through its business, IDOM will tirelessly tackle various issues
associated with these changes, free from preconceived notions.

Yusuke Hatori

ESG

A spirit of continuously taking onchallenges to revolutionize car distribution

Challenge

Earning the trust of our customers

President

Business Model

President

IDOM's goal of creating a recycling-oriented society is not just about
making effective use of resources.
We provide safe vehicles, allowing many people to drive, while making
the most of limited resources. To that end, we offer appropriate pricing
to enable customers to buy and sell with peace of mind, and provide
vehicles, services, and after-sales service that enable them to continue
driving safely.
6

What is IDOM?

Message from the Presidents

Ideas behind the company name IDOM

Two years ago, we introduced the Motivation Cloud, one of ourorganizational diagnostic tools, and set the Engagement Rating as oneof IDOM's important indicators. We conduct organizational diagnostics
and actively implement improvement measures to address the issues
highlighted by this indicator.

Formulation of the medium-term management plan

Expanding our share in the used car market

Data Section

By identifying issues and taking effective measures, our Engagement
Rating has improved to BBB. We will continue working to improve theworking environment so that IDOM employees can continue to take onchallenges while satisfying both their physical and spiritual needs.

ESG

As one of these improvement measures, we have started the Area
Employee System. The Area Employee System is an initiative to support
employees in working where they want to work. IDOM has 397 storesnationwide, with many employees working in each region. Various
employees are transferred around Japan depending on the opening of
new stores, hiring or retirement, and career paths. Many employees
wish to work in their familiar hometown area, or have become rooted in
the communities they are working in and offer to continue work in thesame area.
Being able to work where you want to work leads to increased
motivation, and we hope that employees who are rooted in their local
community will be trusted by their neighbors in the true sense of theword.

Since 2014, we have pursued a number of initiatives through a processof trial and error, based on our management policy of shifting from apurchase business model to a retail business model.
As part of these efforts, we are opening large-scale stores. By February2022, we had opened 29 large stores. Driven by these large stores, weachieved record-high retail unit sales and profits at each stage.
These results have assured us that the operation of large stores will
permit the steady growth of the retail business. Therefore, in themedium-term business plan formulated in April 2022, we have decided
to concentrate management resources on the growth driver of large
store development. We have also set targets of 170,000 retail units andoperating profits of 21 billion yen by opening 50 more stores in addition
to the existing 29 stores, and will continue making steady progress
toward achieving them.

Business Model

expand our market share by continuing to provide services in line withcustomer needs and trends.
Resistance to buying used cars is also diminishing, especially among
young people, and more customers are choosing used cars.
Based on the pricing know-how we built up during our years ofspecializing in vehicle purchasing, we have been highly appraised by ourcustomers for providing the true value of used cars. Going forward, we
will continue to increase our presence by working to provide used carsthat are valuable to our customers.

What is IDOM?

The company name "IDOM" is derived from the Japanese word
"idomu" which means "to challenge" or "to take on," and expresses ourdesire to share the spirit of continuing to take on challenges—which has
remained unchanged since our founding—within the company and to
spread it to the outside world.
To realize this ideal, it is necessary to build an environment where
everyone can take on challenges.

Continuing to grow together with stakeholders
Thanks to the support of its stakeholders, IDOM is now in its 30th year.
Although there were some difficult times, such as demands for
self-restraint on movement due to the COVID-19 pandemic, we havebeen able to achieve steady growth by transforming our businessmodel and selling our Australian business. We hope that you will lookforward to IDOM's continued growth as we work to transform the huge
automobile market. Thank you in advance for your continued support.

IDOM is said to be the largest company in the used car market in Japan,
but our market share is only around 5%. We believe it is important to7

What is IDOM?

Presidents' Dialogue
What is IDOM?

A. Takao: Typically, in companies where problems arise,
there are many cases where governance becomesineffective due to the concentration of authority in one
person. Considering such cases, we believe that this systemof two presidents who can discuss important issues witheach other—while at the same time deciding who is themain person in charge of a particular issue—is a goodsystem for the company.

Q. How was this two-president structure decided?
A. Takao: It was decided that we would proceed with a
two-president system after several discussions with ourfather, representative director Kenichi Hatori, and finallyafter discussions by the Board of Directors.
After all, it is a hereditary succession, and I was worried thatpeople would say that we were taking over the company forourselves. But we eventually arrived at the management
style of having two representative directors based on our
experience in supporting Gulliver from its initial founding.

Yusuke Hatori

Q. What efforts do you make with respect tointernal governance aspects, such as the Board of
Directors?

Data Section

A. Yusuke: My brother and I had been working at Gulliver
since its founding. We also had experience as store
managers, and as we proceeded with discussions in pursuitof our ideal vision for the company, we arrived at theconclusion that the company would be more stable if there
were two top executives with the same authority, rather
than a president and vice president.

Takao Hatori

ESG

Q. I think that it is very rare for two brothers toserve as joint presidents. How did you arrive at thissystem?

Business Model

In 2008, the brothers Yusuke Hatori and Takao Hatori took
over leadership of IDOM from its founder, their father
Kenichi Hatori, as joint presidents. This two-president
system was unusual, and the first of its kind for a company
listed on the Tokyo Stock Exchange. Why did IDOM arriveat this system, and what efforts are being made to maintainappropriate governance? We asked the two presidents.

A. Yusuke: The Board of Directors is very important.
Considering the need for agility in order to proceed withcompany decision-making, it is difficult to have discussions
with a large number of people, and from that perspective, I
believe that the Board of Directors should have set
functions based on its necessary roles. If there is a time
when our business becomes more diversified, we will
increase the number of board members according tonecessary functions and skills.
8What is IDOM?

Presidents' Dialogue

were also needed for the expansion and maintenance ofstores. We discussed many times whether we should
continue to invest further and grow our Australian businessor concentrate our investments on the domestic used carmarket, which has high efficiency and future growthpotential in terms of capital costs. Based on those
discussions, we formulated a medium-term management
plan to develop large-scale stores in Japan, and decided towithdraw from the Australian business.

A. Takao: There is a lot of exciting news coming in theautomobile industry at the moment. In addition to EVs,
there are various technological developments such as forautonomous driving and safe driving, and many new vehicle
models are emerging. I think this is a great opportunity for
IDOM to distribute and sell automobiles.
We will continue to provide these technologies to

A. Yusuke: Overseas businesses are very sensitive toadvanced technologies, and new businesses are starting up
right now. To date, we have made good use overseas of thedealership business know-how that we have cultivated inJapan, but we also believe that, by quickly graspingoverseas trends, we can further revitalize our domestic
business. Looking ahead, we will continue working to growtogether with customers around the world, based on theoriginal spirit of IDOM: "Growing Together."

Data Section

Q. Finally, please tell us about the future prospects
for IDOM.

consumers with their current diverse needs, and continue totake on the challenges of matching them with appropriate
solutions to satisfy them.

ESG

A. Yusuke: The starting point for both is what kind ofcompany IDOM should be. Based on the respective roles ofJapan and overseas, I believe that we were able to proceedwith the discussions on this matter in a very objective
manner. By focusing on one side or the other, one asks aquestion and brings the discussion to the most important
point. I believe that this decision was made precisely
because of our two-president system.

Business Model

A. Takao: That was a proposal from President Yusuke, but
we spent a lot of time discussing it. At the time, theAustralian business was growing significantly as a result of
successfully injecting our Japanese know-how. However,new car dealers needed licenses, large amounts of funds
were required to purchase stock, and large investments

What is IDOM?

Q. One big decision was the decision to sell IDOM's
Australian business in 2022. How did you arrive atthat decision?

9

2

Business Model

Business model

10

Business model

IDOM’s Model for Value Creation
Value Creation Process

Output (*1)

Financial Capital- Products:- Sales volume: 247,000 units- Retail sales: 136,000 units- Number of employees:- Creating an environment

for taking on new challenges- Number of store locations:397- Social contribution activities
such as Gulliver car support- IT investments (*2) :over five years- Motivation Cloud: BBB- Diversity declaration

to enable

pricing know-how- Cumulative number of customers:

to continue

since our- Development of AI appraisal systemdeveloped

customers

founding

drivingsafelyOffering products- Pricing know-how
developed since our founding

to matchcustomer needs

Manufacturing CapitalRet

14
5.8 billion yen- Number of maintenance shops:

4.6 million- Development of

Gulliver Auction system- CO2 emissions: 15,000 tons

2 billion yen- Capital investment:- ROIC: 9.9%a il B u s i n e s s- Used car market share:approx. 5.0%

Harmonious developmentwith local andinternational communities

Customers
Providing thrilling experiences
to customers

Shareholders

Enhancement of corporate valuePartners
Sound developmentof the used car industry

Employees

Data section

Intellectual Capital

Appropriate

Support system- Operating profit: 18.7 billion yen

Society

ESG

Social Capital

s
es

iness
Bus
se
ha

3,132

Pu
rc

Maintenan
ce
Bu
sin

Human Capital- Vehicle purchases: 166,000 units

Growing Together
Business model

84.4 billion yen
36%- Equity ratio:

OutcomeWhat is IDOM?

Input (*1)

Creating opportunities
for pursuingmaterial and spiritual happinessand achieving self-growth

Natural Capital- Electric power consumption (*3) :32.08 million kwh- SDGs initiatives*1 Financial results for the fiscal year ended February 2023
*2 As of the medium-term business plan
*3 March 2021 - February 2022 data11

Business model

Changes in IDOM's Business Models and Store Operations
2008~

Purchase Model

What is IDOM?

1994~

2014~

2020~

Purchase and Retail Model

Retail Model

Purchase

RetailPurchase

RetailPurchase

RetailIncidental

Promoted the retail modelutilizing purchased vehicles

Full-scale expansion of the retail model
Launched incidental services

Brand

GulliverGulliverStoresSize

The stores were small
because purchasing was the main business.

Multiple brands(Gulliver and up to ten other brands)

Replaced with medium-sized stores
to secure spaces for displaying cars

Data section

Added a retail modelto the purchase-onlystore model

ESG

Started with apurchase-onlystore model

Purchase

Changing in responseto the needs of the times

Business
Model

Business model

convertGulliver
Replaced with large stores
to secure space for comparison.

12

Business model

Market Environment Analysis
What is IDOM?

Automobile-related market in Japan

About

5.4

Business model

Automotive supplies

Maintenance

1.7

About

trillion yen

trillion yen

Used car use

2.1

trillion yen

ESG

About

Used car retail(Owning)

3.7

trillion yen

Used car sharing
New cars

13.8

About

About

0.04

trillion yen

Data section

About

trillion yen

New cars: Japan Automobile Dealers Association
Vehicles other than new cars: 2018 overview of automobile aftermarket by Yano Research Institute13

Business model

Japan's Used Car Market with Much Lower Ratio than Those in Europe and the United States
Ratio of used cars in Europe and the United States

Business modelJapan

What is IDOM?

Ratio of used cars in Japan

United States

Germany

United Kingdom

France

ESG

New
cars

Used cars*1: New cars: 2019 data from Japan Automobile Dealers
Association Used cars: 2020 overview of used car
distribution by Yano Research Institute*2: New cars: 2019 MarkLines Automotive Industry Portal
Used cars: edmunds 2019 Used Vehicle Report

Used cars

Used cars

New
cars

New
cars

Used cars

Used cars

Data section

New
cars

New
cars

*3: 2019 Statistics of Vehicles from Kraftfahrt-Bundesamt (KBA)*4: 2019 vehicle data from the Society of Motor Manufacturers and Traders (SMMT)*5: 2017 data on automotive industry in France from Comité des Constructeurs Français d'Automobiles (CCFA)

14

Business model

Used Car Retail Market with a Large Room for Growth of Market Share
What is IDOM?

Growing domestic market share of IDOMFY2023

Domestic
retail used carmarketDomestic
retail used carmarketBusiness model

FY2012
About

ESG

1%

11

(*1)

years later

About

5%

Data section(*1)*1: Market share for FY2012 was calculated based on the proportion of IDOM's domestic retail unit sales to the size of the used car retail market in 2008, which was 2.40 million cars (data from Yano Research Institute).
*2: Market share for FY2023 was calculated based on the proportion of IDOM's domestic retail unit sales to the size of the used car retail market in 2019, which was 2.62 million cars (data from Yano Research Institute).

15

Business model

Change in Young People's View of Used Cars

2022

65.2%

Less hesitantto accept used cars

Less hesitant
than before

21.7%

29.0%

39.7%

Less hesitant
than before

2*1: Result of an online questionnaire conducted in December 2020 (1,000 respondents)

More hesitant
than before

30.0%

(*2)
Data section

9.6%

Have never been hesitant

Have been
hesitant

24.6%

(*1)

More hesitant
than before(+3.8 up)10.2%

years later

ESG

Have been
hesitant

61.4%

Business model

2020

Less hesitantto accept used cars

What is IDOM?

Are you hesitant to accept used cars compared to before (several years ago - up to ten years ago) ?

Have never been hesitant

35.2%*2: Result of an online questionnaire conducted in March 2022 (1,000 respondents)

16

Business model

Expected Future Changes in the Environment Surrounding the Used Car Industry

Subscription and leasing: Limited-time use / Early switching

Evolution into connected cars

C to C: Trades between individuals are possible for cars as well

Automated driving technologies

E-commerce: Seeing the car at the store -->Doing negotiations and placing the order online

IDOM's response (2)The business model of used car sales
will remain unchanged
even though products changeStore infrastructure as a place fordisplaying used cars and doing maintenance work
is necessary

Improving brand powerand sales capabilities

Building a nation-wide networkof stores

IDOM's response (3)Upfront investments
in new businesses

Data section

IDOM's response (1)ESG

Popularization of electric vehicles (EVs)Business model

Changes in the method of selling used cars
associated with changes in the consumer mindset

What is IDOM?

Changes in products (cars)
resulting from technological evolution

NOREL, Gulliver FleMa,
and EC Trial

17

Business model

Five Competitive Edges of IDOM's Businesses
Ability to attract customers

using the well-known Gulliver brand4.

IT utilization
capabilities

Ability to
5. respond to theenvironment

Promotion of DX and shift to AI

From purchasing to retailing(Cumulative total)
Number of cars purchased + Number of cars sold:

4.6million cars

- Cumulative total retail unit sales: More than
- Enhanced services incidental to retailing

1.2million cars

Concentrated human resources on the retail business

Data section

Development and improvement oflong-term human resource development plan
focused on recruitment of new graduates

94.9%

ESG

3.

Sales
capabilities

2. customers

Recognition rate of the “Gulliver” brand:

Business model

Number of

Number of customers
based on the huge number of carsthat IDOM has traded since its foundation(IDOMs own survey and surveys by research companies)

What is IDOM?

1. Brand power

Brand recognition surveys

by automating the operation of the purchase businessand inventory management

Shifted from purchase-oriented business to retail businessby responding flexibly to changes in the business environment18

Business model

Five Competitive Edges of IDOM's Businesses

Recognition rate of the “Gulliver” brand:

94.9%

IDOM stores across the country

Gulliver is aligned
closely with the car life
needs of customers
in 47 prefecturesnationwide.

ESG
Data section

68(IDOMs own survey and surveys by research companies)

Business model

Since the time of its founding in 1994, IDOM has opened stores in 47
prefectures across Japan, and has continued to provide services thatare in touch with the contemporary needs of customers. Through 30
years of working together with customers, the Gulliver brand has
gained widespread recognition. This is one of IDOM's strengths.
Thanks to this high level of recognition, IDOM's natural customer
attraction rate is now close to 70%, making it possible for us to attract
customers without relying on
advertising.
Passive attraction of customers
using owned media
During our transition from a wholesalemodel to a retail model, we developed
multiple channels as part of a trial
32%
effort. In the future, though, we will
drive brand integration and maximize%
use of the well-recognized Gulliver
Discretionary
brand with the aim of further
visitors
improving proﬁtability.

Brand recognition surveys

What is IDOM?

1. Brand power

Ability to attract customers
using the well-known Gulliver brand

Large stores

Other stores

19

Business model

Five Competitive Edges of IDOM's Businesses

4.6 million cars

After-sales
services

Phone calls

E-mailWEB/SNS

Product
development
Utilization· Reasonable prices· Determination of thelineup of cars in stock

Services

AdvertisingStore
improvement· Services
for customers· Changes to services· Advertising content· Layoutof cars for sale

· Advertising method

Data section

Integration, and analysis

Data integration, management and analysis

ESG

Sales andPurchases

Business model

Information

IDOM will leverage the large amounts of of
information obtained to develop products, enrichservices and better serve customers in a constanteffort to increase customer satisfaction.

Number of cars sold :Utilization of accumulated customer data

To stay in touch with the changing needs ofcustomers, IDOM is constantly experimenting
through trial and error.
In order to meet a wide range of customer needs,
IDOM has ﬂexibly changed its business model
together with its customers, through experimenting
with multi-channel approaches in the past, andcurrent efforts in developing large-scale stores.
Many years of trial and error in working to stayclosely in touch with customers has been
accumulated as customer feedback and transaction
data, and is being utilized to the fullest possible
extent.

Number of cars purchased +What is IDOM?

2. Number ofcustomers(Cumulative total)

Number of customers
based on the huge number of carsthat IDOM has traded since its foundation· Store design20

Business model

Five Competitive Edges of IDOM's Businesses- Enhanced services incidental to retailing

Data section

Since an SP's work is close to the customer's car life, we also place
importance on CS (Customer Satisfaction) as an indicator of whether thecustomer was satisﬁed after the delivery of their vehicle. After delivery,
we conduct questionnaire surveys to determine the level of customer
satisfaction with the vehicle condition and staff service. We have set up
a dedicated CS page on our internal website to constantly monitor the
status of CS, and are working continuously to create a culture in which
each member of staff can be fully self-aware of their roles as SPs, suchas awarding not only stores with top sales performance but also top
stores with top-ranking customer satisfaction, through our internalawards system, the IDOM Cup.

1.2 million cars

ESG

At IDOM, we call salespeople Smart Car Life Planners (SP). This isbecause we want them to be partners who are in touch with customers'
lives and think about their car life together—rather than just buying andselling used cars.

More thanBusiness model

Sales = Smart Car Life Planner (SP)- Cumulative total retail unit sales:

What is IDOM?

3. Sales capabilities

Development and improvementof long-term human resource development plan
focused on recruitment of new graduates21

Business model

Five Competitive Edges of IDOM's Businesses

by automating the operation of thepurchase business and inventory management

Business model
ESG
Data section

Since our founding, we have been actively engaged inpioneering initiatives that are ahead of the times, such as
adopting an image-based sales system for used car sales. In
2022, we obtained certiﬁcation under the DX Certiﬁcation
System: a system established by the Japanese government tocertify companies that are prepared to promote digitaltransformation (DX) through a range of initiatives such as theformulation of a management vision and establishment ofstrategies and systems in line with the basic items of theDigital Governance Code based on the Act on Facilitation ofInformation Processing.
Currently, we are pursuing a number of initiatives to improvethe efﬁciency of our purchasing business at stores nationwide,such as electronic sales contracts using digital technologies,
introducing AI into used vehicle appraisals in the purchasebusiness (AI appraisals), and introducing the in-house auction
system Gulliver Auction, made possible by the use of IT. We
will continue to engage in active IT investment and digitaltransformation

Concentrated human resources on the retail business

What is IDOM?

4. IT utilization capabilities

Promotion of
DX and shift to AI

22

Business model

Five Competitive Edges of IDOM's Businesses

From purchasing to retailingby responding flexibly to changes
in the business environment

Operation of the
Gulliver Flea Market,
mediating the sale of used cars
between individual customers

Business model
ESG

In 1994, when vehicle trade-ins accompanying used car purchases werestill the mainstream, IDOM started out as a used car purchase specialty
store, and grew rapidly with a unique business model that did not exist
at that time. Later, in light of changes in the business environment andcustomer needs, we shifted from a wholesale purchasing model to aretail model.

Shifted from purchase-oriented business to retail business

What is IDOM?

5.

Ability to respondto the environment

Data section

We are constantly engaging in new trials to respond to contemporaryneeds, and continue to take on new challenges without limiting
ourselves to our existing businesses, such as the operation of the
Gulliver Flea Market, mediating the sale of used cars between individual
customers, and the development of the subscription service NOREL, as
well as the purchase and sale of used cars at our stores.
With many years of experience, ﬂexibility, and our spirit of engaging in
new challenges, IDOM will continue working to offer optimal services intouch with the changing business environment and customer needs.
Development of the subscription service “NOREL” .

23

Business modelBusiness Portfolio as a Medium- to Long-Term Goal
Medium- and Long-term Aspirations

Large stores
Medium-sized stores
Stores for purchasing
New businessesNewbusinesses

Stores forpurchasing

Changing
store format

Data section

Stores forpurchasing(withdrawn)

Capital efficiency (ROIC)

ESG

Medium-sized
storesNew cardealerMedium- andLong-term
Aspirations

Business model

New car dealer
business (withdrawn)
Note:
The size of the circle
indicates sales

Medium-sized
stores(withdrawn)

New car businessin Australia(withdrawn)

Large storesNew
businesses

New carbusiness
in Australia

What is IDOM?

Large
storesGrowth potential of business

Growth potential of businessCurrent portfolio

Capital efficiency (ROIC)

We will focus on businesses with high growth potential and capital efﬁciency to redistribute management resources.
Moving forward, we will invest intensively in expanding large stores with high growth potential and capital efﬁciency.
24

Business model

Key Management Indicators

1.

2. Operating proﬁt

Increase sales

mainly through the opening of large stores.

Steadily increase operating proﬁt

170 thousand vehicles
21billion yen

Business model

Retail unit sales
at directly
managed stores

What is IDOM?

FY2027 Target

ESG

Increase margins through the opening of large stores

5.0% or higher

4. ROICAim at 10% for the time being

while paying attention to capital costs.

10.0% or higher

Grow in the medium to long term
while clearly recognizing the investment phaseand recovery phase.

About

Operating5.

Free cash ﬂows
(FCF)

and the improvement of efﬁciency.

Data section

3. proﬁt margin

30 billion yen
in 5 years

25Business model

Positioning of the Medium-Term Business Plan and Its Three Themes
IDOM aims to improve asset efﬁciency and facilitate growth simultaneouslywith an eye on a mobility-based society in the future

3

Increasing value
for customers

Brand strategy

Contribute to the realizationof a sustainable society

Provide safe and secure used cars

Improving profitability

Contribution

ESG

2

Business model

1

What is IDOM?

Position of Medium-TermBusiness PlanThree themes

to as many customers(1) Expanding large storeshigh visibility of the Gulliver brand(1) Integrating brand andshifting to large stores

Speciﬁc initiatives(2) Expanding

maintenance shops(2) Enhancing owned media

to environmental issues
through business

Data section

as possible.

by taking full advantage of the(1) Encouraging consumers to
replace their cars
with usedEVs(2) Promotion of switching

to new EVs

26

Business model

Message from the CFO

In pursuit of continued growth and efﬁciency
in attractive markets
Ryo Nishihata

Ryo Nishihata

In the used car purchase business, pricing is a decisive
factor. Amid the competitors that have entered this market,
we launched a retail business. We started a business modelof retailing purchased vehicles before wholesaling them.
While we tried different store and sales frameworks, there
were ups and downs in operating profit.

When we specified the growth drivers in April 2021, we alsoannounced three management indicators that we wouldemphasize. They are:· Operating profit (margin);· Return on invested capital (ROIC) index inconsideration of capital cost; and· Cash.

After overcoming the uncertain business environment
during the COVID-19 pandemic that started in 2020, we
defined two future growth drivers in April 2021. One is large
stores for sales where customers can compare a large
number of used cars in person. The other is maintenanceshops that guarantee the quality of used cars. On the other
hand, we spent several years withdrawing from new car
dealer businesses in Japan and in Australia.
The first growth driver, large stores for sales, was so helpful
in the improvement of our revenue structure that operating

As operating profit has risen for four consecutive fiscal
years, operating profit margin surged from the 2% level inthe fiscal year ended February 29, 2020 to the 4% level inthe fiscal year ended in February 28, 2023. We estimate
our capital cost ratio at a level in the range of 4-5%. Whilecontinuing to invest in large stores for sales and inmaintenance shops, we will maintain the ROIC at the 10%
level.

Data section

CFO

Key Management Indicators

ESG

We were founded in 1994. Our new business specializing in
the purchase of used cars grew. We were first listed on thestock market in 1998. In 2006, we moved the focus of theused car sales business from sales to purchases. In
recognition of our creation of a new strategy for achieving
high customer satisfaction and high revenue, we wereawarded a Porter Prize. After that, our operating profit grewto 11.1 billion yen in the fiscal year ended February 28, 2007.

profit has risen for four consecutive fiscal years from thefiscal year ended February 28, 2019, when the figure hit
bottom, to the fiscal year ended February 28, 2023. I
believe that maintenance shops, after being certified as
designated automobile maintenance facilities, will be
another growth driver in terms of maintenance and vehicle
inspections in the long run.

Business model

IDOM's history

What is IDOM?

Chief Financial Ofﬁcer

27

Business model

Message from the CFO

Target operating profit: 21.0 billion yen
Operating profit margin: 5% or more
ROIC: 10% or more
Five-year cumulative total free cash flow: 30.0 billion yen
Cash allocation

During this Medium-Term Business Plan, we are planning toopen 50 large stores for sales. The operating profit target
considers the increase in the number of cars that is
expected to happen following the opening of these stores.
We expect that maintenance shops will have positive effecton profit after they obtain certification as designatedautomobile maintenance facilities and become ready to
perform same-day vehicle inspections.

As for cash allocation for the five years, we will earmark 20.0
billion yen for growth investment and 2.0 billion yen for IT
investment. For new business investments, we will continue
business development, or exploratory investment, within acertain limit, in preparation for future changes in theenvironment surrounding the industry. Apart from that, we
will pay performance-based dividends and keep the payout
ratio at 30%. We will appropriate the remaining funds to
debt reduction.

In Conclusion
In used car sales, three leading companies including us havea total market share of approximately 15%. The market isstill not oligopolized. And used cars are 30% of all
automobiles sold in Japan. This percentage is lower than inother developed countries. In this environment, our large
stores for sales enable customers to compare manydifferent used cars and our maintenance shops ensure thequality of the cars. I believe they will continue to serve as
growth drivers for us. We intend to work hard to achieve
continuous growth.

Data section

·
·
·
·
·

Regarding ROIC, we will increase profit as a numerator
instead of cutting the denominator, invested capital. Thus,
our policy is to keep ROIC above 10% while making
investing.
The free cash flow figure is positive in some years andnegative in others. Its five-year cumulative total was apositive 30.0 billion yen.

There are four years left before the end of theMedium-Term Business Plan. We will work to win morecustomers for incidental services that are not mentioned in
the initial plan and for vehicle inspection services after
maintenance shops are recognized as designatedautomobile maintenance facilities. In doing this, we will
steadily meet the financial targets in the Medium-TermBusiness Plan.

ESG

In April 2022, we announced a Medium-Term Business Plan
to set financial targets for the next five years, specifically forthe fiscal year ending February 28, 2027.

Business modelMedium-Term Business Plan

Incidental services are services other than carsthat are matched to customers' needs.
Sales in this category include insurance sales and salesof maintenance guarantees.
The target is based on the actual sales results ofthese services at the time of announcement.
In the past two years or so, we conducted campaigns,
proposed bundles and carried out many different efforts tostrengthen incidental services.
For the fiscal year ended February 28, 2023, a part of these
efforts produced positive results and profit exceeded thelevel we expected.
Operating profit margin goes down when the used carmarket price rises, and vice versa. Despite these market
conditions, we are aiming to keep operating profit margin at
5% or higher.

What is IDOM?

Asset compression associated with the sale of the new car
dealer business will help improve ROIC.
In accordance with the accounting rules, cash flows fromoperating activities include an increase or decrease in
vehicles in stock. Opening of large stores for sales means anincrease in vehicles on display and it compresses the cash
flow from operating activities. At the pre-inventory stage,
we will firmly produce operating profit and control
inventories as well as investments in large stores for sales
and in maintenance shops in a bid to avoid a negative free
cash flow for a second straight year. Since the fiscal year
ended February 28, 2021, we have been investing ininventories and in growth drivers. Free cash flow is positive.

28

3

ESG

Environment / Social / Governance

29

ESG

Message from the Chairperson of the Sustainability Committee
What is IDOM?

IDOM's business itself has a circulatory form.
The Chairperson of the Sustainability Committee

Masaru Ota

In addition to reducing greenhouse gas emissions from ourown business, our greatest contribution to the creation of asustainable society will be to create a society in which cars

This is true even with EVs.
Many new EVs—in particular—are expensive, and vehicle
types are limited. In the car market, where customer needs
are prioritized, it is considered very difficult for everyone toswitch to a new EV.
The widespread adoption of EVs is important for achievingcarbon neutrality. However, the immediate widespread
adoption of these vehicles will be disadvantageous to

Data section

In May 2022, IDOM announced its support for the TCFD
recommendations, and is proceeding with the disclosure of
information based on them. Based on the results of ourdomestic business in FY2020 (March 2020 throughFebruary 2021), our estimated greenhouse gas (GHG)
emissions totaled approximately 13,000 tons for Scope 1
and Scope 2. By introducing LED lighting stores and shifting
to paperless operations, we will reduce greenhouse gas
emissions from the business itself and expand our retailbusiness in line with the development of large-scale stores
equipped with maintenance shops.

are circulated.
The production and disposal of cars involves greenhousegas emissions. Given that the shorter the period fromproduction to disposal, the greater the greenhouse gas
emissions will be, longer use of manufactured cars
contributes to reducing emissions.
As I said earlier, cars are part of social infrastructure. As
customer needs are prioritized and their life stages—asshown by factors such as income and family structure—change, the most suitable car for a given customer will also
continue to change. According to one statistical survey, theaverage period of use per car is 6.3 years, which is lower
than the average useful life of a car, at 13 years. As used car
operators, we can extend the period between manufactureand disposal of a single vehicle, ensuring that cars are used
for a longer period of time, by multiple drivers.

ESG

IDOM's business operations include the purchase, sale,
subscription-based provision and leasing of used cars. The
widespread distribution of cars through these business
operations contributes to the maximum utilization of cars as
resources. The value of IDOM's existence as a company isto encourage the circulation of ownership and circulation ofuse of cars, and to play a role in the economic cycle in thefield of automobiles.

Business model

Creating a recycling-oriented society

The Chairperson of the Sustainability Committee

Masaru Ota
30

ESG

Message from the Chairperson of the Sustainability Committee

At IDOM, we disclose details of our approach to diversity.
This says that we will create an environment in which
employees can fully demonstrate their abilities and play anactive role, regardless of attributes such as gender,
nationality, age, years of service or disabilities.

A typical example of this environment at IDOM is the
Challenge Transfer System.
Through the Challenge Transfer System, we are working tocreate an environment where employees can take onchallenges yourself and create their own careers bysubmitting an application each year outlining where theywould like to be transferred and what kind of career path

Giving back to society
As a corporate citizen, we also conduct support activities
nationwide for people with concerns about mobility due tonatural disasters and social turmoil.
In the past, we have provided reconstruction and recovery
support after the 2011 Tohoku earthquake and tsunami, andprovided free vehicles to medical professionals as Gulliver
Car Support during the COVID-19 pandemic.
In response to an accident in September 2022, in which athree-year-old child was left behind on a kindergarten bus,
we cooperated with Octo Corporation, which was one of
the first companies to develop safety devices for commuterbuses, and implemented support measures to installmonitors free of charge to kindergarten operators
throughout Japan. We truly hope that the installation of theinitially planned 100 units will be successfully completed,and that such tragic incidents will be reduced.

Data section

We believe that what is important in creating anenvironment where employees can take on challenges is thequestion of how we eliminate the risk of not being able to
do so, due to employment at a large company, and due toevaluations or career paths determined by the company.

To enable our employee to continue taking onchallenges, as a company, we believe that it isvery important to correct disparities in thetwo-day weekly system for all our stores, theright to choose where to work with the Area
Employee System, the realization of essential
diversity with the Sakura Project, and the creation of anenvironment where people can work with peace of mind.

ESG

As the name IDOM suggests, challenge is our key theme.
(The Japanese word "idomu" means "to challenge" or "totake on" challenges.) We are working to create anenvironment where all employees can take on various
challenges.

Naturally, we are also advancing various
initiatives in terms of improving the working
environment. In terms of our most recent
initiatives, these include the two-day weekly
holiday system for all stores, the introduction of
the Area Employee System, and the Sakura
Project.

Business modelGrowing together with our employees

they wish to take.
What is IDOM?

customers. We believe that the purpose of a used car
distribution business like ours is to contribute to carbon
neutrality while maximizing the use of resources by widelydistributing appropriate vehicles at reasonable prices, in linewith the needs of each individual customer.

The circle of support that connects Gulliver stores with local
communities is gradually expanding, such as through thedisaster response agreement signed with the city ofNarashino in Chiba prefecture, which will enable the use ofvehicles on display at Gulliver stores in the event of adisaster.
Using IDOM's infrastructure, we would like to continue todo whatever we can to promote the development of a safe
and secure environment as much as we can.

31

ESG

Themes of SDGs and Themes IDOM will Address
Themes IDOM will address

Environment(E)- Driving paperless operations (Digitization of sales agreements,

reduction of paper resources by sharing meeting materials online, etc.)- Switching to LED for light fixtures at directly
operated store locations

Data section- Ensuring diversity through considerationfor employee health and healthy working environments
based on the idea of diversity

ESG- Promoting the spread of environmentally friendly cars,
including hybrid vehicles and EVs, in response to consumer needs

Society(S)

Business model- Contributing to the realization of a sustainable society through theused car distribution business (the value of IDOM's existence)

What is IDOM?

Related SDGs

- Social Contribution Initiatives Made Possible
Through IDOM’ s Business

32

ESG

Circulation Cycle of Used Car Business
Purchasing
new cars(Automakers)

What is IDOM?

Manufacturing new cars

Indirectly encouraging
purchases of EVs

Purchase

Circulation cycle of cars

ESG

4

Vehicledisposalanddisassembly

Purchasing used cars
with proper prices

Business model

1

Utilization of parts
and waste materials

Domain of used
car business

Maintaining
the life of cars

Sales
and
Subscription

2

Data section

3

MaintenanceandInspection

Promoting reuse

IDOM circulates used cars to encourage consumers to replace their cars with EVs,
thus helping society achieve carbon neutrality.
33

ESG

Sustainable Finance
What is IDOM?

Borrowing implemented through sustainable financeBusiness model
ESG

MizuhoSustainability-Linked
Loan Pro

SDGs
Promotion Loan

Positive Impact
Finance
Data section*Sustainable Finance…… It is interpreted as "finance to realize a sustainable society and planet," a broad concept that includes investments and loans (ESG investment and ESG finance),bond issuance, and various other broad financial services that incorporate various considerations to solve environmental (E), social (S), and governance (G) issues.

Banks and third-party evaluation organizations have evaluated
IDOM's used car distribution business as contributing to a recycling-oriented society.

34

ESG

Disclosure in Line with TCFD Recommendations Related to Climate Change

ESG
Data section

Based on the TCFD recommendations, it willcontinue to disclose information regarding
governance, risk management, strategies(analysis of risks and opportunities), indices andgoals.

Business model

IDOM has expressed its support for therecommendations of the Task Force on
Climate-Related Financial Disclosures (TCFD).
IDOM considers the problem of climate change
to be one of the key issues that affect its
businesses.

What is IDOM?

Support for the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations

Disclosure under the TCFD

35

ESG

IDOM Sustainability Declaration

Business model

Since it was founded, IDOM has had a corporate philosophy of “Growing Together” , where we aim to

What is IDOM?

Sustainability Declaration

grow together with our five key stakeholders: society, customers, employees, partners andESG

shareholders.
Based on this corporate philosophy, we believe that our used car distribution business contributes to a

Data section

sustainable society and defines the value of IDOM’ s existence as a company.
Going forward, we will continue to boldly tackle the challenges of transforming the used car distribution
market and continue to create long term value for all our stakeholders into the future.

36

ESG

Approach to Diversity

demonstrate their abilities and play an active role, regardless ofBusiness model

IDOM has created an environment where employees can fully

What is IDOM?

Approach to Diversity

characteristics such as gender, culture, race, religion, sexual orientation,
age or disabilities.
ESG

We have also established various systems and training for employees
to achieve personal growth and self-improvement.
We will continue to respect the human rights of our employees andvarious challenges.

Data section

work actively to create a system that allows employees to attempt

We believe that diversity will be achieved by focusing our efforts on
improving the environment and developing human resources. For thisreason, we have not set numerical diversity targets at this time.

37

ESG

Approach to Diversity and Initiatives

Supporting womenWork styleGrowth support

Reducing total working
hours through efforts
such as increasing thenumber of public
holidays

Operating the Sakura Projectto support active roles andempowerment for all female
employees(since 2008)

Creating an environment where
employees can make maximum
use of their abilities, including
telecommuting, by promoting
work stylereforms

Challenge application systemthat allows employees
to apply for transfers forthemselves, with the aim ofpromoting further
self-growth

Ability development

Qualiﬁcation system

Management training

Theme-specific human resources
development training system,with training that varies
according to job type,position, andexperience

Ability development
support course, inwhich employees canparticipate for the
purpose of developing
their own abilities

Store manager qualification
examination system, forappointment of store
managers by qualitativeand quantitativeevaluation

Store Pro system,a professional store manager
system that challenges
managers to engage in store
management
as business managers

Data section

Training system

ESG

Encouraging employees
to take childcare leave
regardless of gender

Reduction ofworking hours

Business modelChildcare support

What is IDOM?

Initiatives to Improve the Environment and Develop Human Resources Based on “Approach to Diversity”

38

ESG

System to Promote Initiatives Based on the Concept of Diversity
What is IDOM?

System to Promote

such as employee satisfaction and the penetration of measures, and by implementing a PDCA cycle

2 Do

4 Act

3 Check

Improving initiatives
to make themmore effective

Implementinga regular evaluationof the organizational
climate, etc.

Data section

1 PlanESG

System design

Adopting initiatives
to improve the environmentand develop
human resources

Business model

Taking effective initiatives by setting quantitative targets based on a regular evaluation of the organizational climate,

Discovering challenges
Employee satisfaction

39

ESG

ESG Initiatives

2011

Provided 100 units ofsafety equipment free ofcharge for kindergartenbuses in responseto an accident in whicha child was left.

2020

2022

Introduction of
Motivation Cloud

Five- to six-day workweek
for all stores

Visualizing Employee
Engagement

Reduction of disparities
in working conditions

Disaster prevention
agreement
Agreement with theNarashino area regarding
support by vehicles
with power supply
facilities in the eventof a disaster.

2023

Data section

Internal Initiatives

When a state of emergency
against covid-19 was declared,
IDOM provided
10,000 units of used cars
free of charge
for three months

Gulliver Car Support
Part 22022

ESG

Provided 1,000 used cars
when the Tohoku
earthquake andtsunami happened

Gulliver Car Support
Part 1

2022

Business model

Support fordisaster areasand victims

2020

What is IDOM?

External Initiatives

Introduced
area employee system
Reform the way of working
or only nationwide transference

40

ESG

Motivation Cloud
What is IDOM?

Best Motivation Company 2023

Improvement
trend
Data section"BBB."ESG

The rating as of February 2023 isFebruary
2023

AAA
AA
A
BBB
BB
B
CCC
CC
C
DDD
DD
D

Business modelAwarded 7th place in the Major
Companies category for some of
IDOM's initiatives

RatingIDOM deﬁnes "human capital" as an important resource in our business strategy
and introduced the Engagement Score as an indicator of human capital.

41

ESG

IDOM's Governance System
What is IDOM?

Directors and Executive Ofﬁcers

Membersof theBoard of Directors

Yusuke Hatori

Director

Jun Sugie

Auditor (Full-time)

Director

Takao Hatori

OutsideIndependent

Takenobu Sugama

Director

Koichi Noda

AuditorTadaaki Kimura

Ryo Nishihata
OutsideData section

Members of the
Audit & Supervisory
Board

President

ESG

President

Business model

A company with an Audit & Supervisory Board consisting of ﬁve Directors (including two outside directors)
and three auditors (including two outside auditors)
The Board of Directors, which has been streamlined through the adoption of an ofﬁcer system,
engages in in-depth discussions and quickly makes decisions.

Independent

OutsideIndependent

Auditor

Kaoru Ninomiya

OutsideIndependent

42

ESG

Two-President System
What is IDOM?

Reason for the two-president system

Business model

Enabling representatives to balance each otherwhile also facilitating quick, sound decision-making processes

President

Yusuke Hatori

Takao Hatori

ESG

President

Data section

Important management decisions are made by two presidents through dialectical discussion
instead of by a president alone, and by doing so, optimal solutions are achieved.
IDOM migrated to the current system in 2008 and will continue to operate under this system going forward.

43

ESG

Corporate Governance Diagram (as of April 14, 2022)
What is IDOM?

General Shareholders’ Meeting
Appointment and dismissal

Appointment and dismissal

Appointment and dismissal

Appointment and dismissal

Accounting Auditor

Cooperation

Audit & Supervisory
Board
ReportAudit

Instructions

Board of Directors

Instructions

Instructions

ReportReportNomination andRemuneration Committee

ESG

ReportConsultation

Business modelSupervision

Auditing TeamInternal audits
Audit

Sustainability Committee

Data section

President

Execution

Management Council

Divisions and subsidiaries

44

ESG

Directors’ Skill Matrix
Industry insightand marketing

Global experience

Finance andaccounting

Sustainability

Reason for the selection of skills

President

Yusuke Hatori

IDOM is engaged in automobile
distribution operations both in Japan andPresident

overseas (in Australia and the UnitedStates, etc.)

Director CFO

The Board of Directors believes that it is

Ryo Nishihata

Director

Koichi Noda

necessary to gain insight and grasp thecharacteristics of the automobile

Outsidedistribution industry, and to discuss andIndependent

supervise medium to long-term businessOutsideESG

Jun Sugie

Business model

Takao Hatori

Director

What is IDOM?

Corporate
management

management issues from a global

Independent

perspective.

Skill

Deﬁnition

Corporate
management

Experience in corporate management and/or administrative management at listed companies,
large-scale corporations or administrative (government) agencies, etc.

Industry insightand marketing

Insight relating to automobile distribution and intimate knowledge of the characteristics of marketing activities

Global experience

Experience leading overseas business operations, or highly international work experience

discuss and provide supervision to enable
the Group to achieve sustainable growth

Data section

The Board also believes that it should

while forecasting future environmental
changes and predicting risks andopportunities that may arise in the future.
IDOM places an emphasis on the Board of
Directors performing such functions, andFinance andaccounting

Expertise in finance and accounting

Sustainability

Insight relating to sustainable growth in environmental, social and governance (ESG) issues, etc.

has selected the skills presented on theleft to create a skill matrix for its directors.

45

ESG

Directors, Auditors and Advisers
PresidentInternal

President

Takao Hatori
Internal

Ryo Nishihata
Internal

Director

Jun Sugie
OutsideIndependent Director

Koichi Noda
OutsideIndependent Director

Auditor(Full-time)Worked at Mac Projects Co., Ltd. (currently Media Power Co., Ltd.) before joining AKATORI
Shopping Department Stores Co., Ltd. (currently AKATORI Co., Ltd.) as Senior Managing Director.
Joined the Company in 1996. Appointed an executive ofﬁcer in 2003. Appointed Auditor (full-time)of the Company in 2021.

AuditorCurrently CEO of addlight Inc. since January 2008 .
Registered as a certiﬁed public accountant in May 2008.
Appointed an Audit & Supervisory Board member of the Company in 2020.
Currently serves as Part-time director of KIMURA UNITY CO.,LTD.

Tadaaki Kimura
Outsideto facilitate prompt decision making. Currently, the Board of Directors consists of a total of five directors,
including three directors who have played a central role in IDOM’ s business operations since the time ofits founding, and two outside directors with management experience at other companies. Additionally,
with the introduction of an officer system, a certain degree of authority for execution of business has

Auditor

Kaoru Ninomiya
Outsidebeen delegated to executive officers.
Directors are selected for appointment by the Board of Directors, who evaluate candidates based onwhether they will contribute to increasing the Company’ s corporate value while considering the overallbalance of experience and knowledge of the Board of Directors. Plenty of opportunities for dialogue with

Independent Director

Independent Director

Honorary Chairman

Kenichi Hatori

Data section

The number of directors is specified in IDOM’ s Articles of Incorporation to be no more than five, in order

Born in 1966. Graduated from Harvard Business School. Works for Rakuten, Inc. as an executiveofﬁcer, Walmart Japan Holdings as Chief Human Resources Ofﬁcer and Chief Management Ofﬁcer,
Works Human Intelligence Co., Ltd. as Chief Human Resources Ofﬁcer (CHRO) and WHI Holdings
Co., Ltd as Chief Human Resources Ofﬁcer (CHRO). Appointed director of the Company in 2018.
Currently serves as Executive Ofﬁcer Chief People Ofﬁcer of Shiseido Company, Limited.

Takenobu Sugama

Internal• Explanation of the Board of Directors and Ofﬁcers

Born in 1956. Joined the Ministry of Finance and works as chief of the Tokyo Regional Taxation
Bureau among other important posts. Appointed director of IDOM in 2017. Currently serves as Vice
Chairman and Senior Director of The Investment Trusts Association, Japan and Outside Director of
Sumitomo Mitsui Construction Co., Ltd.

ESG

Director

Born in 1958. After working at Toa Nenryo Kogyo Co., Ltd.(currently ENEOS Co., Ltd.), joined
TERUMO Co., Ltd. and appointed executive ofﬁcer and CAFO (Chief Accounting & Financial
Ofﬁcer).
Joined the Company in March 2020 as CFO (Chief Financial Ofﬁcer). Appointed director of theCompany in 2023.

Business model

Director CFO

Born in 1972. Joined Gulliver in 1995, a year after its foundation and established the ﬁrst store in the
Kanto area. After serving as director, executive director, and senior executive director, appointed
representative director and president in 2008 with the start of the dual president structure.
Currently responsible for corporate strategy and supervises all directly managed stores.

What is IDOM?

Yusuke Hatori

Born in 1971. Joined Gulliver in 1995, a year after its foundation. Established several stores, startingwith the Sapporo store. After serving as director, executive director, and senior executive director,
appointed representative director and president in 2008 with the start of the dual president
structure. Currently responsible for corporate strategy and supervises the overseas business,among other operations.

Joined in the public relations department of Calbee, Inc. in April 1997.
Social Contribution Committee of Calbee, Inc. in April 2021.
Appointed an Audit & Supervisory Board member of the Company in 2021.

Founded the Company in 1994.
Appointed representative director and chairman of the Company in 2008.
Appointed honorary chairman of the Company in 2016.

the candidates are provided before their appointment is decided by the board.
The outside directors frequently exchange opinions from an objective viewpoint with the directors andAudit & Supervisory Board members, and perform their responsibilities as independent outside directorsof the Company.

Adviser

Hideo Yamada

12th Commissioner General of the National Police Agency.
Appointed advisory of the Company in 2016.

46

4

Data Section

Data section47

Data section

Main Indicators (as of February 28, 2023)

247

billion18.7

billion

9.9

Operating profit

ROIC *1

136

thousand units

Business Model

416.5

Retail sales and sales of used cars

What is IDOM?

Financials

thousand units%
ESG

Number of employees (consolidated)

3,132

Number of stores *2

397

*2

Retail unit salesof used cars *3

Number of usedcars sold *4

Data Section

Net sales

Share in the used car retail market *5

Approx.

5%*1: Calculated based on figures in the consolidated financial statements in FY2023 Operating profit x (1 - Effective tax rate) / (Inventory + Fixed assets, weighted average of beginning and ending balance)*2: Number of directly managed stores excluding*3: Retail unit sales at IDOM's directly managed stores*4: Sum of retail unit sales and wholesale unit sales*5: (Total retail unit sales at IDOM in FY2023) / (Retail unit sales of used cars in 2019 estimated by Yano Research Institute, which is 2.62 million cars)

48

Data section

Principal Financial Data
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

155,681

210,085

251,516

276,157

309,410361,684

380,564

459,532

416,514Gross proﬁt

million yen

36,55439,07551,61061,13365,85964,702

73,95972,81086,01374,549Selling, general andadministrative expenses

million yen

29,46033,75044,06756,63459,08061,30164,86862,23967,52855,865

Operating income

million yen

7,094

5,325

7,542

4,498

6,779

3,400

9,091

10,571

18,485

18,684

Ordinary income

million yen

7,201

5,345

6,835

4,160

5,797

2,072

6,867

9,642

17,561

18,146

Proﬁt attributable toowners of parent

million yen

4,360

3,286

4,111

2,247

3,578

381

3,545

1,484

10,794

14,205

Depreciation

million yen

1,354

1,643

2,449

2,964

3,044

2,984

3,140

2,951

2,797

2,581

yen

43.01

32.42

40.55

22.17

35.29

3.76

34.97

14.77

107.51141.48Net income/equity(ROE)

%

14

9.7

11.5

5.9

9

0.9

8.6

3.4

22

24.5

Ordinary income/total assets (ROA)

%

13.6

9.7

9

4

4.7

1.4

3.8

5.3

9.6

10

Operating income/Net sales

%

4.2

3.4

3.6

1.8

2.5

1.1

2.5

2.8

4

4.5

Net income per share(EPS)

Data Section

169,398

ESG

million yen

Business Model

Net sales

What is IDOM?

Consolidated ﬁnancial results

49Data section

Principal Financial Data

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

million yen

52,77957,153

94,211

114,047

130,181

173,851

183,783

177,222

189,766

173,293

Net assets

million yen

32,846

34,62938,24539,581

41,49440,35742,58645,01555,70962,702

Short–term loans payable

million yen

-

4,797

2,124

3,408

1,201

9,031

935

1,117

1,101

-

Long–term loans payable

million yen

4,000

43

22,851

40,774

52,68068,02379,824

79,16967,52343,000Equitymillion yen

32,841

34,62937,11338,64140,93939,841

42,12643,99654,01562,086

%

62.2

60.6

39.4

33.9

31.4

22.9

22.9

24.8

28.5

35.8

yen

323.99341.49365.98381.05403.71392.88415.42438.18537.97618.34Equity ratio
Net assets per share(BPS)Business Model

Total assets

What is IDOM?

Consolidated ﬁnancial position

ESG

Consolidated cash ﬂows
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

million yen

10,061

56

4,121-4,632

6,989-19,593

13,757

19,508

8,276

2,275

Cash flows from investing activities

million yen

3,734-8,540-17,686-8,262-5,315-11,015-406-1,373-4,500-166

Cash flows from financing activities

million yen-5,981-1,721

17,85818,092

8,731

30,9301,142-12,495-1,332-10,634

Cash and cash equivalents at end of period

million yen

14,661

4,863

9,122

14,33722,763

22,97037,29543,17945,67037,473

Data Section

Cash flows from operating activities

Cash dividends
FY 2014Annual dividends per share*

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

yen

13

15

12.5

12

7

11

1.2

10.6

4.6

42.5

Dividend payout ratio (Consolidated)

%

30.2

46.3

30.8

54.1

19.8

292.2

3.4

71.8

4.3

30

Ratio of dividends to net assets (Consolidated)

%

4.2

4.5

3.5

3.2

1.8

2.8

0.3

2.5

0.9

7.4

50

Data section

Consolidated balance sheets
Current assets

As of February 28,
2023

45,67037,473

Notes and accounts receivable - trade

5,620

3,927

Accounts payable - trade23,618Merchandise

85,36384,432

Short-term borrowings

1,101

–

Other

4,907

6,173

Current portion of long-term borrowings

10,00024,145

(416)

(528)

141,146

131,478

Liabilities

Property, plant and equipment
Buildings and structures

Current liabilities

Accounts payable - other

4,713

3,812

Income taxes payable

3,960

864

Advances received

9,548

–

Contract liabilities–

25,336

215

309

1,965

897

37,102

41,306

Accumulated depreciation(16,061)(16,873)

Deposits received

Buildings and structures, net

21,04024,433

Provision for bonuses

298

236

Provision for merchandise warranties

(60)

(148)

Other provisions

VehiclesAccumulated depreciation
Vehicles, net

4,822

884

–

1,327

342

3,750

3,635

Total current liabilities

61,08564,16567,52343,00088
5,077

Accumulated depreciation(3,114)(3,362)Tools, furniture and ﬁxtures, net

1,164

1,715

136

136

Long-term guarantee deposits

587

599

1,083

67

Asset retirement obligations

2,236

2,643

23,663

26,441

Deferred tax liabilities

1,535

–

680

–

Land
Construction in progress
Total property, plant and equipment

Non-current liabilities
Long-term borrowings

Other provisions

Intangible assets
1,465

1,300

5,995

86

Other
Total non-current liabilities

407

183

72,972

46,426

134,057

110,591

Other

4,314

2

Total intangible assets

11,775

1,389

Share capital

4,157

4,157

20

0

Capital surplus

4,361

5,250

Shares of subsidiaries and associates

129

29

Retained earnings

49,67356,738Long-term loans receivable

228

76

Treasury shares(4,344)(4,344)

Leasehold and guarantee deposits

4,405

5,045

Total shareholders' equity

53,84761,801

Construction assistance fund receivables

4,289

3,955

Deferred tax assets

3,677

4,435

438

449

Investments and other assets
Investment securities

Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets

Total liabilities
Net assets

Shareholders' equity

Data Section

Software
Goodwill

ESG

Other

238
4,279

Tools, furniture and fixtures

Business Model

Total current assets

Total assets

As of February 28,
2022

Liabilitie, Net assets

Cash and deposits

Allowance for doubtful accounts
Non-current assets

As of February 28,
2023

What is IDOM?

As of February 28,
2022

Assets

Accumulated other comprehensive income
Foreign currency translation adjustment

168

284

Total accumulated other comprehensive income

168

284

(8)

(6)

Share acquisition rights–

147

13,181

13,984Non-controlling interests

1,693

468

48,62041,815

Total net assets

55,70962,702

189,766

173,293

Total liabilities and net assets

189,766

173,29351

Data section

Consolidated statements of income
As of February 28,2023

As of February 28,2022

As of February 28,
2023

341,964

Loss on valuation of investment securities

109–

86,01374,549Loss on sale of shares of subsidiaries and associates

276–

Selling, general and administrative expenses

67,52855,865

Impairment losses

114

103

Operating proﬁt

18,485

18,684

Loss on store closings

82–

Interest income

31

107

Loss on COVIT19

4–

Subsidy income

54

26

Head office relocation expenses

870

–

Other

106

67

Other

32

76

Total non-operating income

191

202

Total extraordinary losses

1,870

402

Interest expenses

917

571

Proﬁt before income taxes

15,75018,752Foreign exchange losses

72

71

Income taxes - current

4,836

2,859

theft loss

11

87

Income taxes - deferred

(516)

1,621

Share of loss of entities accounted for using equity method

92–

Total income taxes

4,319

4,480

Other

21

9

Proﬁt

11,43014,272

1,115

739

635

67

17,561

18,146

Profit attributable to owners of parent

10,794

14,205Gain on sale of non-current assets

23

54

Proﬁt

11,43014,272Gain on sale of shares of subsidiaries and associates–

795

Other comprehensive income

Foreign currency translation adjustment

(7)

303

Gain on liquidation of subsidiaries–

19

Share of other comprehensive income of entities accounted for using equity method

58–

Subsidy income

591

Total other comprehensive income

50

303

Compensation income

25–

Comprehensive income

11,481

14,576

Other

5

48

Comprehensive income attributable to10,82914,321

Total extraordinary income

59

1,008

651

255

Cost of sales

373,519

Gross proﬁt

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary proﬁt
Extraordinary income

Extraordinary losses

Profit attributable to non-controlling interests

Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Data Section

222

416,514ESG

378

459,532

Business Model

Loss on retirement of non-current assets

Net sales

What is IDOM?

As of February 28,
2022

52

Data section

Consolidated statements of cash ﬂows
Cash ﬂows fromoperating activities

As of February 28,
2023

Profit before income taxes

15,75018,752

Depreciation

2,797

2,581

Amortization of goodwill

454

110

Increase (decrease) in provision for bonuses

858(1,067)

Increase (decrease) in allowance for doubtful accounts

53

197

As of February 28,
2022

Cash ﬂows frominvesting activities

Purchase of property, plant and equipment(4,961)

As of February 28,
2023(5,441)

Proceeds from sale of property, plant and equipment

154

85

Purchase of intangible assets

(463)

(402)

Payments for asset retirement obligations

(681)

(29)

Loan advances(206)(2,910)

147

(884)

Proceeds from collection of loans receivable

200

138

(31)

(107)

Payments of leasehold and guarantee deposits

(277)

(834)

Share of loss (profit) of entities accounted for using equity method

92–

Proceeds from refund of leasehold and guarantee deposits

1,350

196

Share-based payment expenses–

143

Payments of construction assistance fund receivables

(209)

(115)
450

917

571

Proceeds from collection of construction assistance fund receivables

534

51

576

Purchase of shares of subsidiaries and associates(8)–

Subsidy income

(5)

(91)

Proceeds from sale of shares of subsidiaries resulting in change in scope of consolidation

71

8,597

Loss on retirement of non-current assets

378

222

Proceeds from liquidation of subsidiaries–

119

Loss (gain) on valuation of investment securities

109–

Other, net

(2)

(21)
(166)

Loss (gain) on sale of shares of subsidiaries and associates

276

(795)

Net cash provided by (used in) investing activities(4,500)

Impairment losses

114

103

Net increase (decrease) in short-term borrowings

1,285

–

Loss on COVID19

4–

Proceeds from long-term borrowings

82–

Repayments of long-term borrowings

Loss (gain) on liquidation of subsidiaries
Headquarters relocation cost
Decrease (increase) in inventories

(19)
–

3,083

4,660

(13,978)(24,349)(1,932)(10,169)

Purchase of treasury shares00Proceeds from issuance of share acquisition rights

–

3

(768)

(1,856)

ppp

Decrease (increase) in consumption taxes refund receivable

(160)

96

Proceeds from share issuance to non-controlling shareholders

Decrease (increase) in accounts receivable - other(1,021)708

Net cash provided by (used in) financing activities

Increase (decrease) in accrued consumption taxes(3,083)

179

Increase (decrease) in trade payables

2,995

1,847

306
0

Other, net

1,157

3,009

Subtotal

12,141

7,309

Increase (decrease) in accounts payable - other
Increase (decrease) in accrued expenses

Interest and dividends received

31

328

2,474

(8,196)

431

Cash and cash equivalents at beginning of period

43,17945,670431

Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation

107

(915)

(571)

Income taxes paid

(2,980)(4,661)

Subsidies received

5

91

Payments for loss on COVID-19

(4)

–

8,276

2,275

Interest paid

Net cash provided by (used in) operating activities

1,387(10,634)

Net increase (decrease) in cash and cash equivalents

31

Effect of exchange rate change on cash and cash equivalents–(1,332)

Cash and cash equivalents at end of period

16–

45,67037,473

Data Section

Decrease (increase) in trade receivables–
870

Cash ﬂows fromﬁnancing activities

ESG

Interest expenses
Foreign exchange losses (gains)

Business Model

yyy
Interest and dividend income

What is IDOM?

As of February 28,
2022

53

Data section

Financial, Non-Financial Highlights
Operating proﬁt & Operating proﬁt margin

Trend in net sales
1Q

2Q

3Q

FY

(Million Yen)

20,000

2Q

3Q

FY

1Q

Operating profit margin(Million Yen)

(%)

2Q

3Q

FY

(Million Yen)

20,0006

15,000

1Q

2Q

3Q

FY

(Million Yen)

16,00015,00012,00010,0008,000

Business Model

600,000

1Q

Proﬁt attributable to owners of parent

Ordinary proﬁt

What is IDOM?

Financial Highlights

400,000

3

ESG

10,000200,000
5,000

19/2

20/2

21/2

22/2

23/2

0

0

19/2

19/2

20/2

21/2

22/2

23/2

FY

309,410361,684

380,564

459,532

416,5143Q

216,134

272,574

282,082

344,620324,248

2Q
1Q

143,937
71,411

179,276
90,206

178,10983,724

227,775
117,013

225,478
135,601

20/2

19/2

21/2

22/2

20/2

21/2

22/2

23/2

FY

3,400

9,091

10,571

18,485

18,684

3Q

2,835

7,728

8,616

14,760

14,115

2Q

445

4,624

4,053

9,440

8,616

1Q

378

1,510

(153)

5,084

5,256

2.78%

4.02%

4.49%

0

0

23/2

Data Section

0

4,000

5,000

19/2

20/2

19/2

21/2

22/2

23/2

19/2

20/2

21/2

22/2

23/2

20/2

21/2

22/2

23/2

19/2

20/2

21/2

22/2

23/2

FY

2,072

6,867

9,642

17,561

18,146

FY

381

3,545

1,484

10,794

14,205

3Q

2,200

6,432

7,849

14,046

13,698

3Q

1,029

3,597

5,226

8,738

11,219

2Q

(106)

3,634

3,147

9,011

8,280

2Q

(598)

2,124

1,375

5,311

7,516

1Q

103

959

(552)

4,911

5,053

1Q

(146)

447

(914)

2,752

5,377

Operating proﬁt margin

FY

1.10%

2.51%

*Net income is presented as profit attributable to owners of parent from FY2/17.

54

Data section

Financial, Non-Financial Highlights
Financial Highlights
Net income per share (EPS)
1Q

2Q

3Q

FY

(unit)

300,000(unit)

200,000

Business Model

(Yen)

150

Total no. of car purchases

Total no. of car sales & Retail unit volumes
Sales
RetailWhat is IDOM?

Non-Financial Highlights

150,000
200,000
100,000
100,000

50,000

100
0

20/2

21/2

22/2

0

23/2

19/2

20/2

21/2

22/2

23/2

Total no. ofcar sales (unit)

217,235

215,495

219,914

237,489

247,392

Retail unit
volumes (unit)

124,527

132,988

137,382

140,119

135,599

Total no. ofcar purchases

20/2

21/2

22/2

23/2

19/2

20/2

21/2

22/2

23/2

FY

3.76

34.97

14.77

107.51141.48

3Q

10.15

35.48

51.97

87.03

111.74

2Q

(5.9)

21.0

13.7

52.9

74.9

1Q

(1.5)

4.4

(9.1)

27.4

53.6

*EPS is based on the number of shares before the stock split.

(store)

600

21/2

22/2

23/2

165,178

160,963

148,892

161,951

165,529

2,000

19/2

Total no. of directly
mannaged stores

519

21/2

20/2

480

22/2

21/2

460

(persons)

6,000

200

20/2

23/2

20/2

4000

19/2

22/2

19/2

400

0

21/2

Data Section

19/2

20/2

Number of employees (Consolidated)

Total no. of directly mannaged stores

0

19/2

0

23/2

22/2

23/2

445

397*

Number of employees

19/2

20/2

21/2

22/2

ESG

50

19/2

23/2

19/2

20/2

21/2

22/2

23/2

4,450

4,464

4,629

4,347

3,132

*Change in counting standard for the number of directly managed stores from Q4 FY 2023. Stores (specialized in traveling sales and traveling purchases, online sales, product display were removed.

55

Data section

Corporate Proﬁle, Stock Data
Stock Data

What is IDOM?

Corporate ProﬁleIDOM Inc.

Outstanding balance of Issued Stocks

106,888,000

Headquarters

JP Tower 26F, 2-7-2, Marunouchi, Chiyoda-ku,
Tokyo, Japan 100-7026

Total number of authorized shares

400,000,000

Founded

October 12, 1994

Number of shareholders

8,680 (As of February 28, 2023)

Stock Exchange Listing

The Prime Market of the Tokyo Stock Exchange

Major Shareholders

Forward Co.,Ltd.

28,000,000 27.89%

The Master Trust Bank of Japan,Ltd.
(trust account)

8,444,800

8.41%

Yusuke Hatori

5,873,600

5.85%

BIGMOTOR Co.,Ltd.

5,697,600

5.67%

Custody Bank of Japan, Ltd.
(trust account)

5,119,700

5.10%

ForwardY Co.,Ltd.

3,000,000

2.99%

ForwardYT Co.,Ltd.

3,000,000

2.99%

THE BANK OF NEW YORKMELLON 140044

2,070,815

2.06%

Aioi Nissay Dowa Insurance Co.,Ltd.

2,000,000

1.99%

Takao Hatori

1,873,500

1.87%

Capital stock

4,157 million yen (As of February 28, 2023)

416,514 million yen (Fiscal year ended February 28, 2023)

Number of employees (Consolidated)

3,132 (As of February 28, 2023)

Directors and Auditors

President
President

Yusuke Hatori
Takao Hatori

Japan

Tokyo Mycar Co., Ltd.
IDOM CaaS Technology Co., Ltd.
IDOM Business Support Co., Ltd.
Gulliver East, Inc.
Gulliver East, Inc.

Group Companies

U.S.A.

Data Section

Net sales (Consolidated)

ESG(Securities code 7599)

Business Model

Company Name

*Percentage of total number of issued shares excluding treasury shares (%)

56