Financial Results Briefing for the
Fiscal Year Ended March 31, 2017,
and Future Outlook
MARUI GROUP CO., LTD.
May 11, 2017

Today’s Agenda

1. Overview of Performance in the Fiscal Year
Ended March 31, 2017, and Forecasts for
the Fiscal Year Ending March 31, 2018
Hirotsugu Kato
Director and Senior Executive Officer,
General Manager, IR Department, MARUI GROUP CO., LTD.

2. Progress of Medium-Term Management
Plan and Future Initiatives
Hiroshi Aoi
President and Representative Director,
Representative Executive Officer, MARUI GROUP CO., LTD.
1

1

Overview of Performance in the Fiscal Year Ended March 31,
2017, and Forecasts for the Fiscal Year Ending March 31, 2018
Hirotsugu Kato, Director and Senior Executive Officer,
General Manager, IR Department, MARUI GROUP CO., LTD.

Highlights in the Fiscal Year Ended March 31, 2017

1. EPS reaches ¥80.2 (up 14% YoY) and ROE reaches 6.7%
(up 0.7 percentage point YoY), both meeting targets due toincome growth and capital measures
2. FinTech segment achieves strong income growth of 6%,
making for 8th consecutive year of increases, despite failingto meet operating income target (by ¥0.2 billion)
3. Record-high annual dividend payments of ¥33 per share(up ¥11 YoY) issued
4. ROIC exceeds WACC due to steady progress of financial
strategies targeting optimal capital structure3

Consolidated Performance
・EPS shows massive 14% increase, ROE achieves target at 6.7%
・8th consecutive year of higher operating income and 6th consecutive yearof higher net income
FY2015FY2016FY2017

EPS (yen)

58.9

70.7

80.2

ROE（％）

5.2

6.0

6.7

－

+0.7

±0.0

ROIC（％）

3.3

3.3

3.1

－

-0.2

-0.1

Billions ofyen

Billions ofyen

Billions ofyen％

Billions ofyen

Billions of
yen

-1.0

YoY
change+14

YoY
difference+9.5

Total Grouptransactions
Revenue

1,469.1
249.8

1,703.4
245.9

1,933.7
237.0

+14
-4

+230.3-8.8

Gross profit

159.4

160.0

166.0

+4

+5.9

vs.
target

+1.0

-16.3
-6.0

(Gross profit margin [%])

（ 63.8）（ 65.1）（ 70.0）（－）（+4.9）（+1.3）

SG&A expenses
OperatingincomeOrdinary income

131.4

130.4

134.7

+3

+4.3

-0.8

28.0

29.6

31.3

+6

+1.6

-0.2

28.0

29.2

31.1

+7

+2.0

+0.1

Net income

16.0

17.8

18.7

+5

+1.0

+0.2

4

Segment Income
・Retailing income down YoY due to poor sales of consignment agreement sales floors
and increase in inactive floor space
・FinTech income up for 5th consecutive year due to strong growth in card
shopping transactions
FY2015FY2016FY2017

YoYchangeYoY
difference

vs.
targetBillions ofyen

Billions ofyen

Billions ofyen％

Billions ofyen

Billions ofyen

Retailing

10.5

10.7

7.8

-27

-2.9

-0.1

FinTech

20.9

23.1

27.1

+17

＋4.0

-0.2

Eliminations/
Corporate

(3.4)

(4.1)

(3.6)

-13

＋0.5

＋0.1

Consolidated

28.0

29.6

31.3

+6

＋1.6

-0.2

*Consignment agreement sales floors = Sales floors not converted to fixed-term rental contracts(Sales prior to conversion + Sales floors that cannot be converted to fixed-term rental contracts)*Inactive floor space = Floor space under renovation + Idle floor space(floor space temporarily used for events, etc., prior to introduction of fixed-term rental tenants)

5

Reasons for YoY Operating Income Changes in Retailing
・Income down YoY due to poor sales of consignment agreement sales floors
and impacts of inactive floor space
・Steady progress in business structure transformations, including transition
to shopping centers and fixed-term rental contracts and expansion ofomni-channel retailing-2.6

Operatingincome¥10.7 billion

FY2016

Poor sales ofconsignment
agreement
sales floors

+0.3
-2.6

+2.0

Impacts ofinactivefloor space

Incomeimprovementsfrom transition
to fixed-term
rental contracts

Incomeimprovementsfrom omnichannel retailing

Operatingincome¥7.8 billion

FY2017
6

Consolidated Balance Sheets
・Operating receivables up ¥74.9 billion due to increase incard shopping transactions
・Interest-bearing debt up ¥75.0 billion, ratio of interest-bearing debt tooperating receivables up 2 percentage points, to 89%
March 31, 2016

March 31, 2017

Billions of yen

Billions of yen

Billions of yen

279.8（68.9）

348.2（64.3）+68.4（-4.6）

134.1

140.6

+6.5

Fixed assets

244.1

247.8

+3.7

Interest-bearing debt

359.3

434.3

+75.0

(% of operating receivables)

(87％)

(89％)

(+2％)

Shareholders’ equity

281.6

273.9

-7.7

Equity ratio (%)

38.6

34.0

-4.6

730.1

806.6

+76.4

Operating receivables
Installment sales
accounts receivable(Factoring accounts
receivable)
Operating loans

Total assets

413.9

488.8

Difference
+74.9

7

ROIC and WACC
・ROIC exceeds WACC due to steady progress of financial strategies
targeting optimal capital structure

Retailing
ROIC
３.5％

Shareholders’equity costs

7.0%-8.0％

FY2016

FinTechLiability
costs

ROIC
3.9％

0.2％

Retailing
ROIC
2.5％

Shareholders’equity costs

FY2017

7.2％

FinTechROIC
4.1％

Retailing
ROIC
5.3％

Liability
costs
0.3-1.0％

Shareholders’equity costs

7.0%-8.0％

FY2021

Interest-bearing debt

0.3％

Total assets:
Approx. ¥800.0 billion

Operating receivables

ROIC
3.9％

3.1％ ＞ 3.0％

Total assets:
Approx. ¥1,000.0 billion

Fixed assets

FinTechLiability
costs

Shareholders′ equity

Fixed assets

Operating receivables

Total assets:
Approx. ¥730.0 billion

Interest-bearing debt

ROIC
WACC
3.3％ ≦ 3.3%-3.7％

WACC

WACC
＞２.0%-３.0％

Shareholders′ equity

ROIC

ROIC
4.0％

8

Cash Flows
・Core operating cash flow (operating cash flow excluding change in operatingreceivables) up ¥1.4 billion
・Net cash provided by investing activities recorded because gains on sales of
fixed assets offset increase in capital investments
FY2016FY2017

YoY
difference

Billions of yen

Billions of yen

Billions of yen

26.8

28.2

+1.4

(9.1)

(18.1)-9.0

Gains on sales of fixed assets

ー

14.6

+14.6

Redemption of guarantees

5.0

5.4

＋0.４

(4.1)

2.0

+6.1

Increase in interest-bearing debt

81.3

74.9

-6.4

Cash dividends paid

(5.4)

(6.4)

-1.0

(35.2)(20.9)+14.3

Net cash provided by financing activities

40.7

47.6

+6.9

Cash and cash equivalents at end of period

32.6

36.2

+3.7

Core operating cash flow
Capital investments

Net cash provided (used in) by investing activities

Purchase of treasury stock, etc.

9Full-Year Forecasts for FY2018
・EPS of ¥91.6 (up 14%), ROE of 7.6%, and ROIC of 3.1%

FY2016
EPS (yen)
ROE（％）ROIC（％）FY2017FY2018YoYchangeYoY
difference

70.7
6.0
3.3

80.2
6.7
3.1

91.6
7.6
3.1

+14
ー
ー

＋11.4
＋0.9
±0.0

Billions of yen

Billions of yen

Billions of yen％

Billions ofyen

Revenue

245.9

237.0

245.5

+14 ＋270.3+4＋8.5

Gross profit

160.0

166.0

177.0

+7

＋11.0

Total Grouptransactions

1,703.4

1,933.7

2,204.0(Gross profit margin [%])

（65.1）（70.0）（72.1）（ー）（+2.1）

SG&A expenses

130.4

134.7

142.0

+5

＋7.3

Operating income

29.6

31.3

35.0

+12

＋3.7

(Operating income margin [%])Net income（12.0）（13.2）(14.3)（－）（+1.1）

17.8

18.7

20.5

+10

＋1.8
10

Segment Income Forecasts for FY2018
・Retailing income to increase ¥1.0 billion, to ¥8.8 billion
FinTech income to increase ¥3.0 billion, to ¥30.1 billion
FY2016FY2017FY2018Billions of yen

Billions of yen

Billions of yen％

Billions ofyen

Retailing

10.7

7.8

8.8

+13

+1.0

FinTech

23.1

27.1

30.1

+11

+3.0

Eliminations/
Corporate

(4.1)

(3.6)

(3.9)

ー

-0.3

+12

+3.7

YoY
changeYoY
difference３

Consolidated

29.6

31.3

35.0

<Reasons for ¥1.0 billion increase in Retailing income>・Disappearance of poor sales of consignment agreement sales floors due to transition
to fixed-term rental contracts
・Temporary increase in inactive floor space and continuation of poor sales at storesthat cannot be converted to fixed-term rental contracts

11

Shareholder Returns
・FY2017 dividends up ¥11, to ¥33 per share, 5th consecutive year of
higher dividends
・Record-breaking dividends of ¥37 per share and share buybacks of¥15.0 billion projected for FY2018¥37■Dividends per Share

¥33

¥14

¥14

¥15

1
FY2011

2

3

¥18

4

¥19

5
FY2015[Payout ratio]

More than30%[Share buybacks]¥15.0
billion¥22

FY201886FY20167FY2017¥35.0
billionMore than40%¥15.0
billion¥20.0(Full-year)
billion(Forecast)()

Total return
Ratio 113%

12

2Progress of Medium-Term Management Plan and
Future Initiatives
Hiroshi Aoi
President and Representative Director,
Representative Executive Officer, MARUI GROUP CO., LTD.

(1) Medium-Term Management Plan
—1st-Year Progress and Future Initiatives(2) Long-Term Operating Environment Changes andInitiatives Targeting New Growth2. Progress of Medium-Term Management Plan and Future Initiatives(1) Medium-Term Management Plan
—1st-Year Progress and Future Initiatives

Progress Highlights of Medium-Term Management Plan

1. Forecast-exceeding income improvements stimulated bysteady progress in transition to shopping centers andfixed-term rental contracts
2. Promotion of omni-channel retailing to achieveGroup integrated operations
3. Ongoing growth in FinTech business driven by strong
increases in revolving and installment payments
4. Commencement of e-commerce and experience-related
initiatives for further increasing cardholder numbers

15Plan for and Progress of Transition to Shopping Centers and
Fixed-Term Rental Contracts
・Steady progress in transition to shopping centers and fixed-term rental contracts
leads to ratio of fixed-term rental contracts of 62% (2% higher than forecast)・Income improvements of ¥2.0 billion in FY2017 (¥0.4 billion higher than forecast)■Plan for and Increases in Ratio of Fixed-Term Rental Contracts and Income Improvements(As of end of each fiscal year)
Ratio offixed-term
rentalcontracts
7%

62％

84%

100%

20%
Aggregate¥6.0 billion

Incomeimprovement
amounts¥2.9
billion¥0.9
billion

FY2015FY2016

Increase value
through contract
renewals¥7.0
billionIncome improvement¥2.0 billion(¥0.4 billion higher than forecast)

FY2017FY2018FY2019Note: Ratio of fixed-term rental contracts = Fixed-term rental contracted floor space ÷ Total floor spacecapable of being contracted as fixed-term rental (200,000 m2)

16

Temporary Increase in Inactive Floor Space and Forecast
・Temporary increase in floor space under renovation and idle floor space
due to transition to shopping centers and fixed-term rental contracts
・Decrease to begin in FY2018 followed by progress toward disappearance ofinactive floor space■Portion of Floor Space That is Inactive＜Major reasons behind inactive floor space＞
・Floor space under renovation
・Idle floor space (floor space temporarily used for events, etc.,
prior to introduction of fixed-term rental tenants)
Temporary increase due totransition to shopping centersand fixed-term rental contracts

16％

９％

FY2015FY2016(2% higher
thanforecast)

FY2017

Tenant replacement
accompanying fixed-term
rental contract expirations

12％(5% higher
thanforecast)

FY2018６％(2% higher
thanforecast)

FY2019

1%–3% annually

FY2020~17

Circumstances Regarding Stores after Transition to
Shopping Centers and Fixed-Term Rental Contracts
・Large shift from goods to experiences category through transition to
fixed-term rental contracts
・NOI yield over 4% at Hakata Marui and number of customers visiting similar
to level at Yurakucho Marui■Distribution of Product Categories

Goods(Apparel)Goods(Sundries)

Experiences(Restaurants,
food sales, services)

53％■Hakata Marui (First-Year Performance)

33％
40％

33％
14％
FY14
FY201427％

Number ofcustomers visiting

13.4 million

FY17

Total transactions¥8.8 billion

New card applications

55,000FY2017(Prior to shopping (Ratio of fixed-term
center / fixed-term
rental contracts:
rental transition)
62%)

Restaurants /food sales

11%

18%

Services

3%9%First-year number of customers visiting Yurakucho Marui: 13.5 million

NOI yield

More than 4%18

Measures for Addressing Stores That Cannot Be Converted
to Fixed-Term Rental Contracts
・8% of total floor space represented by stores that cannot be converted
to fixed-term rental contracts
・Measures for resolving issues to be advanced while carefully monitoringmarket environment■Measures for Addressing Stores That Cannot Be Converted to
Fixed-Term Rental Contracts

Past
Limited investment as business structuretransformation to transition to shopping
centers and fixed-term rental contracts
is underway

Present and Future
Measures implemented based onprogress in transition to shopping
centers and fixed-term rental contracts
while carefully monitoring market
environment

Closure of Kawasaki Marui scheduled for January 2018 as changes in regional
business environment present little hope for performance improvement→ Portion of total ﬂoor space that cannot be converted to ﬁxed-term rental
contracts to decline from 8% to 5%(Extraordinary loss of ¥1.2 billion recorded in FY2017)19

Omni-Channel Retailing: Directives for Specialty Stores
・Revision of KPIs to facilitate development of specialty storesthat contribute to improved corporate value■Selection and Concentration of Specialty Stores
Following KPI Revision
Book Value Basis
Earnings over period
Actual costs

Market Value Basis

Corporate Value Basis

Earnings over periodMarket-price rental rates

Earnings over period + LTV
Anticipated NOI yield○○

Profitable

Actualcosts

Profitable
Market-pricerental rates

×

Unprofitable

×

Unprofitable

△

○

×

×

Earnings
over period

LT V

Anticipated NOI yield
Urban stores:
More than 4%
Suburban stores:
More than 7%

Anticipated
NOI yield

NOI yield = (Business earnings + E-commerce income) ÷ (Market price per floor space × Floor space area)
LTV (medium-to-long-term income) = Credit card LTV + E-commerce LTV

20

Omni-Channel Retailing: Overlap of Group Businesses
・Unique business model to be created through overlap of Group businesses■Integrated Group Operations
1. Rakuchin Kirei Shoes
Try-on Stores

2. Shops Integrating Sundries
and Card Application Centers

Stores / Events

Credit Card
LTVStores

E-commerce Credit Card
LTV
LTV

＜Deployment History＞
・Marui: 3 stores
・Events: Approx. 50

3. Anime-Related
Ventures・Marui: 3 stores
・Modi: 2 stores

Stores / Events

Credit Card
LTV

E-commerce
LTV・Events: Approx. 200

21

Omni-Channel Retailing: Strategic E-commerce Alliances
・Total e-commerce transactions rise 5% YoY to ¥21.3 billion
・Participation in Wowma! Internet shopping site through alliance with KDDI
■Total E-commerce Transactions¥24.0
billion■Expansion of E-commerce Initiatives
through Alliances×¥21.3
billion・Brand fashion specialty store positioned on
Wowma! site operated by KDDI
(February 2017~)
・Broadening of customer base to be pursued
by utilizing contact points with approx.
38 million au customers under contract

FY2021
Forecast
FY17 FY18(Forecast)

7.3
8.3
9.3
0.3
1.3
2.3
3.3
4.3
5.3
6.3
7.3
8.3

FY07

Net sales ¥4.0–¥5.0 billion
Operating income margin 20%
22

Retailing: Factors Affecting Segment Income over Medium Term
・Income improvements stemming from transition to shopping centersand fixed-term rental contracts and expansion of omni-channel retailingto lead to operating income of more than ¥18.0 billion in FY2021,
as initially forecast

+1.0

+3.8
±0
Operatingincome±0

Poor sales of Impacts ofconsignment inactive floor
agreement
spacesales floors¥10.7
billion

-3.3

+6.0

Incomeimprovements
fromomni-channel
retailing

Facility
managementand distribution
operations

More than¥18.0
billionPoor sales at
Incomestores that
improvements
cannot befrom transition
converted toto fixed-term
fixed-term rental rental contracts
contracts

FY2016
17.3

仕入不振

未稼働

定借化不可不振

定借化

オムニ

プラットフォーム

18.3
FY2021vs. initial
forecast

±0

±0

－0.8

±0

＋0.8

±0

±0
23

FinTech: Transaction Volumes
・Strong growth continues with total transactions of ¥1,723.2 billion(up 17% YoY)
■Total Transactions¥1,723.2 billion(up 17% YoY)

Average annual
growth rate: 17%¥354.9billion

FY07
7.3

FY08
8.3

FY09
9.3

FY10
10.3

FY11
11.3

FY12
12.3

FY13
13.3

FY14 FY15
14.3
15.3

FY16
16.3

FY17
17.3

24

FinTech: Continually Strong Growth of Revolving andInstallment Payment Transactions

・Revolving and installment payment transaction growth exceeds card
shopping transaction growth due to large increase in installment payment
usage outside of Marui Group■Revolving andInstallment Payment Transactions(Outside Marui Group)
Card
shopping■Increase in Installment Payment Usage Outsideof Marui Group＜Previously＞

+27%
+21%

Expansionof scope of
installment
payment
availability

FY14
14.3

More than
1 million stores

Large increase in installment payment usage outsideof Marui Group, which had previously been limited toelectronics and certain other stores■YoY Usage Increase

Revolving andinstallment

FY13
13.3

Approx.
10,000 stores＜From March 2016＞

FY15
15.3

FY16
16.3

FY17
17.3

Revolvingandinstallment
Outside
Marui
Group

+27%

Installment

Revolving

+113%

+20%
25

FinTech: New Cardholders
・New cardholders come to 740,000 due to poor performance of collaboration cards,
contrary to full-year forecast of around 800,000 new cardholders in FY2017 andbeyond following opening of Hakata Marui■New Cardholders
740,000

90(60,000 less than forecast)

80

Change ofapplication benefits

70

71 72 71

Launch of EPOS cards

60
50
40
30

(Ten thousands of people)

52 52 50

58

57

52
46

48

51
44

500,000

39

Opening of
Hakata Marui

55 55

73 73

58 58

43

700,000

More than
800,000

FY2012FY2017
FY199696.109.0 4.3 5.3 08.109.1 6.3 7.3 08.209.2 8.3FY2007
9.3 08.309.310.311.312.313.314.315.316.317.318.3

26

FinTech: Initiatives for Increasing New Cardholder Numbers
・Cards issued within Group up 4% YoY; cards issued by collaboration
partner companies down 28% YoY and 31% lower than target■New Card Issuances （FY2017）17.3月期

Issuances

YoYchangeTotal new card
issuances742,000+2%-7%

Within Group580,000+4%-5%

Outside of Group

162,000-6%-16%

ROOM iD /License-related
operations
Collaboration
cards

vs.
target53,000+10%-2%109,000

-12%

-21%

Collaboration
partner facilities

55,000+12%-8%

Collaboration
partnercompanies

54,000-28%-31%■Poor Performance of Collaboration
Cards and Future Initiatives
・New card issuances down for companies
focused on physical stores and goods
・Card issuances by collaboration partner
facilities 8% lower than target due todelayed installation of application desks
at partner facilities

・Increase number of e-commerce-,
service-, and contents-related
partner companies
・Continue promoting collaboration
with commercial facilities that canleverage the Group’s know-how
and employees
27

FinTech: Medium-Term Operating Income Targets
・Operating income of more than ¥40.0 billion to be targeted in
FY2021 as initially forecast(Billions of Yen)

More than¥40.0 billion

Target

23.1

FY16

25.5

Actual

27.1

FY17

30.1

FY18

FY19

FY20

FY21
28

2. Progress of Medium-Term Management Plan and Future Initiatives(2) Long-Term Operating Environment Changes
and Initiatives Targeting New Growth29

1. Environment Changes over Next Decade: 7 Growth Trends

1. Transition to e-commerce
2. Shift from goods to experiences
3. Emergence of sharing economy
4. Declining birthrate and aging population
5. Increase in demand from inbound travelers
6. Rise of cashless payment methods
7. Change of focus from saving to investment30

2. Opportunities, Threats, and MARUI’s Response: Retailing

5. Increase in demand frominbound travelers
Inbound travelers:
20 million → Approx. 40 million

Threats

1. Transition to e-commerce
Ratio of e-commerce sales:
5% → 20%
2. Shift from goods to experiences
Continuation of 3% reductions inapparel product selling prices
3. Emergence of sharing economy
Sharing economy usage ratio:
2% → 10%
4. Declining birthrate and aging population
7% reduction in working-age population,
to 71 million＜Business structure transformation＞

MARUI′s Response

Opportunities

Hypothetical scenario in which MARUI continued to operate a department
store-oriented business focused on selling goods in physical storeswithout any innovation (Over next decade)Transition to
shopping centers andfixed-term rental
Expansion ofomni-channel retailing＜Individual responses＞

Diversity and inclusion
initiatives targetingcustomers
Compatibility withsharing economy
through new businesses(Goods, space)31

2. Opportunities, Threats, and MARUI’s Response: FinTech(Over next decade)Threats

1. Transition to e-commerce
2. Shift from goods to experiences
3. Emergence of sharing economy
Continuation of 7% average annual
growth rates in line with past decade

7. Change of focus from saving
to investment
Portion of family financial assets
represented by stocks and investment
trust receivables: of 15% in Japan, and30%–50% in Europe and U.S.
6. Rise of cashless payment methods(cash advances)
Potential contraction of cash advance market
6. Rise of cashless payment methods(diversification of payment methods)
Emergence of payment options otherthan credit cards＜Business structure transformation＞

MARUI′s Response

Opportunities

6. Rise of cashless payment methods

Shift from in-housecredit card to
multipurpose credit card
＜Business redefinition＞

Transition fromcredit card services
to FinTech＜Individual responses＞

・Coordination withomni-channel retailing
operations
・Collaboration withnew businesses32

3. Influence of Opportunities, Threats, and MARUI’s
Response on Performance: Retailing・Threats to Retailing business to be overcome through innovations
including transition to shopping centers and fixed-term rental andexpansion of omni-channel retailing as well as growth initiatives
in new businesses(Influence on Marginal Profit)＜MARUI’s Response＞＜Opportunities＞＜Threats＞

1.
5.
E-commerce
Inbound4.
Decliningbirthrate,
3.
aging
Sharing population
economy2.
Goods→ Experiences

Fixed costs

Present

SC /Fixed-term
rentalCustomerNew
diversity
Omnibusinesses
and(sharing)channelinclusion
retailing

約180

10 yearsfrom now33

3. Influence of Opportunities, Threats, and MARUI’s Response
on Performance: FinTech
・Opportunities created by cashless payment options to be steadily
leveraged in the FinTech business while deploying unique initiatives
merging Retailing and FinTech（Influence on Transactions）

6.
Cashless options
1. E-commerce
2. Goods → Experiences
3. Sharing economy＜MARUI’s Response＞＜Threats＞＜Opportunities＞
7.
Saving→ Investment

6.
Cashless options(Cash advances)New
businesses(Payment services)(Diversificationofpayment methods)

Increasein cardholders

Market growthPresent

Usageof EPOS card
as main card

10 yearsfrom now34

Investments Targeting New Growth・¥30.0 billion of ¥90.0 billion worth of growth investment scheduled over next
5 years to be directed at new businesses
・Investment in VB and VC in fields contributing to expansion of Group businesses■Growth Investments under Medium-Term Management Plan (5 Years)<Investment policy>
Rather than focusing on pure investment, engage in investments and alliances that contributeto expansion and innovation of main business

Existing
businesses¥60.0
billionNew
businesses¥30.0
billionTarget Investment Areas

Investment-Based Alliances

・FinTech

・VB (shares vision and possesses
advanced technologies)

・E-commerce
・Sharing
economy■Investment Targets

New
Businesses
Research Department /New Business
Development Department

Payment
services
Assetmanagement

・ VC (possesses vast network anddiscerning eye)

Goods
Space

■Targets of Investments Conducted to Date

＜Investment Standards＞

MARUI …ROI of
more than 10%

ＶＢ…IRR ofmore than 30%

ＶＣ…IRR ofmore than 15%35

Corporate Governance・Measures taken to address two issues identified throughevaluation of the Board of Directors’ effectiveness■Issues Identified through Evaluation of the Board of Directors’
Effectiveness and Response Measures
Failure to link director
compensation to
medium-to-long-term
corporate value
Lack of successor
development programs＜Introduction of medium-to-long-term incentives＞
・Performance-linked, stock-based
compensation system
・Allocation of stocks based on KPIs of medium-term
management plan (EPS, ROIC, ROE)
＜Voluntary establishment of Nominating andCompensation Committee＞
・Committee comprising two external directors and one
internal director＜Commencement of next-generation manager
development program＞
・Program created under guidance of external directors
and Hitotsubashi University graduate school36

Consolidated Balance Sheet and ROIC Forecasts
・Optimal capital structure defined as interest-bearing debt equivalent to 90%
of operating receivables and equity ratio of 30%
・ROIC of more than 4% to be achieved through business structure transformation
in Retailing and expansion of FinTech■Consolidated Balance Sheet Forecasts
Total assets¥1,000.0 billion
Total assets¥806.6 billion
Operatingreceivables¥488.8billionInterestbearing debt
¥434.3billionOperatingreceivables

Interestbearing debt

¥680.0billion¥590.0billionShareholders’equity¥300.0 billion
Equity ratio
Approx. 30%

Shareholders’equity¥273.9 billion
Equity ratio
34%

FY2017

左右FY2021(Forecast)

左右■Operating Income and
ROIC Forecast
More than
4%
3.1%

More than¥50.0billion¥31.3
billion

FY2017

FY2021(Forecast)
37

KPI Targets of Medium-Term Management Plan

EPS
ROIC

FY2016FY2017

FY2021

¥70.7

¥80.2

More than
¥130

3.1％

More than
4%

3.3%

ROE

6.0%

6.7％

More than
10%

Operatingincome¥29.6
billion¥31.3
billionMore than¥50.0 billion

38

Forward-looking statements contained in this presentation are based on information available at the time of
preparation and on assumptions that have been deemed to be rational. Actual performance may differ greatly due toa variety of factors. Any inquiries may be directed to the IR Department (Tel: 03-5343-0075).