Tracking of LTV

The completion of the transition to shopping centers and fixed-term rental contracts has granted MARUI GROUP a business structure that enables it to secure consistent earnings. Going forward, the Company will aspire to stabilize LTV while
accurately communicating its business value arising from consistent earnings using the concepts of recurring revenue,
contracted future recurring revenue, and total addressable market.
 lease refer to “Lifetime Value Management Dramatically Transforming Earnings Structures” on Page 34
Pand “Co-Creation Credit Expertise” on page 40 for more information.

Recurring RevenueAn important element of LTV, recurring revenue is revenue thatis generated on a recurring basis through contracts with customers and business partners. Examples of recurring revenue
include rent revenues in the Retailing segment and financecharges on revolving and installment payments and cash
advances, rent guarantee revenues, and annual enrollment feesfrom EPOS card use in the FinTech segment. In the fiscal year
ended March 31, 2019, recurring revenue was 2.1 times
higher than in the fiscal year ended March 31, 2014, largely asa result of the completion of the transition to shopping centersand fixed-term rental contracts in the Retailing segment.
In addition, recurring revenue has been representing an
increasingly large portion of total revenue, with the ratio ofrecurring to total revenue exceeding 50% in the fiscal year
ended March 31, 2019, and projected to surpass 55% in thefiscal year ending March 31, 2020. Meanwhile, recurring grossprofit accounted for more than 60% of total gross profit in thefiscal year ended March 31, 2019, and was 2.3 times higher
than in the fiscal year ended March 31, 2014. The ratio ofrecurring to total gross profit is expected to climb past 65% in
the fiscal year ending March 31, 2020.

Recurring Gross Profit
Retailing (total)
Rent revenues, etc.
OtherFinTech (total) Finance charges on revolving andinstallment payments
Affiliate commissions(Of which, recurring)
Finance charges on cash advancesService revenues
OtherTotal recurring revenue

FY2014FY2018FY2019¥5.9 billion¥2.0 billion¥3.9 billion¥47.0 billion¥34.0 billion¥27.1 billion¥6.8 billion¥74.1 billion¥41.1 billion¥33.6 billion¥7.5 billion¥81.5 billion¥20.7 billion¥39.0 billion¥43.5 billion% of total

vs. FY2018

vs. FY2014

54%+21%+595%¥0.8 billion¥1.7 billion¥1.9 billion

69%

+10%

+73%

¥21.1 billion¥3.6 billion¥0.9 billion¥52.9 billion¥23.9 billion¥8.4 billion¥1.2 billion¥108.0 billion¥24.5 billion¥10.3 billion¥1.3 billion¥122.7 billion

63%

+14%

+132%

Note: Calculated as the ratios of segment income and of a figure combining gross profit and selling, general and administrative expenses paid by business partners

Contracted Future Recurring Revenue
Contracted future recurring revenue is an indicator of theearnings promised by contracts with customers and business partners in the given fiscal year and in subsequentfiscal years and is used to measure the stability of earnings.
For rent revenues, for example, contracted future recurring
revenue is calculated by assessing the future earnings projected based on the remaining number of years in rental
contracts. Meanwhile, repayment periods are used forfinance charges on revolving and installment payments andcash advances, expiration dates are used for (recurring) affiliate commissions, and the number of remaining years of residency is used for rent guarantees. The completion of thetransition to shopping centers and fixed-term rental contracts and the expansion of rent guarantee services in thefiscal year ended March 31, 2019, led to an increase in
future anticipated revenue. As a result, the amount of contracted future recurring revenue promised in subsequentfiscal years was ¥357.2 billion, 1.4 times higher than total
revenue in the fiscal year ended March 31, 2019.

Contracted Future Recurring Revenue
FY2019Recurring revenueRetailing
FinTechNon-recurring revenue
Consolidated revenue + Selling, general andadministrative expenses paid by business partners
100

Contracted future recurring
revenue to be posted in FY2020
and beyond

vs. FY2019¥137.0 billion¥48.8 billion¥88.2 billion¥118.9 billion¥357.2 billion¥90.4 billion¥266.8 billion—+161%
+85%
+203%
—

¥255.9 billion¥357.2 billion+40%