FY 2017 to 2021 Medium-term Business Plan

Multi Service Retailer
beyond the Framework of Retailing
We set the term of ﬁve years from ﬁscal year 2017 to ﬁscal year 2021 for theis, a phase of the Group s structural change, we aim to achieve ROE of 8% in

current Medium-term Business Plan when the big development projects

ﬁscal year 2021.

launched under the FY 2014 to 2016 Medium-term Business Plan will be

To this end, we will take a step forward from the past idea of a multifaceted

completed and they will generate revenue. Positioning the period as a turningretailer to expand into new business ﬁelds as a Multi Service Retailer beyond

point to drastically alter the course of the management toward realizing

the framework of retailing while further accelerating our eﬀorts to identify

dramatic growth and discontinuous growth based on the new Group Vision, that

unproﬁtable business ﬁelds and aggressively promoting business reshuﬄe.

Application of International Financial Reporting Standards (IFRS)

Idea on business portfolio

For the purpose of implementing eﬃcient management based on appropriate asset evaluation

The Real Estate Business was newly added as a reportable segment fromand managing our business with a focus on proﬁt for the current period as well as

ﬁscal year 2017. We will decrease the share of the Department Store

strengthening accountability to domestic and overseas investors by improving the international

Business and the Parco Business, which represented almost 90% ofcomparability of ﬁnancial information, we decided to voluntarily apply the International

operating proﬁt of the Group, to around 70%, and instead, strengthen the Real

Financial Reporting Standards (IFRS) from March 2017. (Illustrated on page 58)

Estate Business and expand new business ﬁelds to increase their share.

◆ Image for transforming business portfolio[Consolidated operating proﬁt (IFRS)]¥56

Billions of yen(Operating proﬁt)

60
5040

¥41.7

Credit/Finance, New, Other 18%

bn

Credit/Finance, Other13%

Real Estate12%

Parco

Parco

30

26%

34%

2010bnDepartment StoreDepartment Store

44%

53%

%: percentage constituent of operating proﬁt

FY2 01 6

F Y 2021

Quantitative management objectives (IFRS)◆ Quantitative management objectives

FY2021
TargetResults (approximate)

Consolidated operating proﬁt¥56 bn¥41.7 bn

Consolidated operating margin

10.0％

9.2％

Consolidated ROE(Proﬁt to equity attributableto owners of parent ratio)

8.0% or higher

7.6％

Operating cash ﬂow
Capital investment / growth investment

24

FY2016◆ Financial strategy structure diagram

ＦＣＦ＞

0ＲＯＥ

Total FY 2017 to 2021

Operating margin¥260 bn or more
¥200 bn10%8%Equity ratio

40%Growth strategy to change the Group structure◆ Urban Dominant Strategy (strengthening of Real Estate Business)◆ Innovation of Department Store BusinessWe will further accelerate ongoing initiatives of the Urban Dominant Strategy toPlacing the strengthening of the ability to pull in more customers and the expansion

establish a business model for growing with local communities with our stores at theof customer base at the heart of store strategy, we will strive to realize the Groupcore. By enhancing the collaboration between the Real Estate Division, which wasVision in anticipation of diversiﬁed customer needs. In order to transform our stores

newly created in the Department Store Business, and the real estate development

into the ones that provide attractive experience value, we will overhaul existing sales

division of Parco as well as developing new commercial facilities including Ginza

areas of our own curation, and thereby, introduce and expand newly curated sales

Six and the new south wing of theareas as well as introducing a wide

Ueno store, which is scheduled torange of tenants that provide not justopen in fall this year, and expanding

products but also experiences andleasable ﬂoor area, we will strengthen

services. In addition, the Future

the Real Estate Business as a pillar ofStandard Laboratory was created tothe segments of the Group.

promote open innovation.
Artistʼs impression of main building of Daimaru Shinsaibashi store

Ginza Six

◆ Innovation of Parco Business◆ Expansion of new business ﬁelds

We will expand business ﬁelds for consumers seeking fulﬂling urban lifestyles

We will promote initiatives to expand business domain beyond the framework of retailing withusing Parco s speciﬁc strengths. We will evolve the store brand of Parco by

the aim of realizing the new Group Vision. We will expand into new business areas including

creating new Shibuya Parco and enhance the appeal of urban stores byservice ﬁelds in an eﬀort to resolve the challenges facing customers, including families withpromoting a scrap-and-build approach for stores. Parco will strengthen its ability

small children, double-income families and seniors, and meet their needs. We will also expand

to produce commercial real estates

the domain of highly eﬃcient businesses

such as Zero Gate and thewith market growth potential, for which

Entertainment Business ability to

we can expect to use our resources,develop content. We will also

including the Credit and Financedevelop business outside theBusiness, the staﬃng business and thecompany on a full scale.

design and construction business.
Artistʼs impression of Shibuya Parco◆ ICT strategy

In order to cater to the lifestyles in the IoT era when everythingdevelopment by investing in and sending human resources to ventureconnects to the Internet, we will strive to improve proﬁtability bycapital (VC) ﬁrms to enhance our ability to collect advanced information.

strengthening e-commerce, reinforcing relations with customers using ICT

By carrying out open innovation initiatives using advanced informationand realize new businesses. And we will promote human resource

and knowledge, we will embody new services and businesses.

Strengthening of the business base that supports growth strategy◆ The Group organization and human resource reform◆ Renovation of the Group operation system

We will commit to developing human resources and revitalizing human

We will promote operation process reform centered on the use of ICT andresources and organizations, which will generate high added value, and actively

paperless processing including the automation of operations using ICT and thepromote the employment and use of external talents who have expertise as wellcomputerization of accounting slips and payment. At the same time, with the aim

as establishing a system in which people who take on challenges receiveof realizing working style reform to enhance productivity, we will improve therecognition and changing working styles so as to extract creativity.

oﬃce environment by renovating internal and external communication tools.

◆ Strengthening of corporate governance◆ Promotion of CSR activities

By transitioning to a company with three committees, we will strengthen theWe classify our CSR activities into subjects according to the international standards ISO 26000

management oversight function, promote agile management and maintain and improve

including the environment, human rights, labor practices, business risks and community

audit accuracy. We will strive to clarify the authority and responsibilities of the holding

involvement to promote initiatives for the sustainable growth of the Group and the medium- tocompany and business subsidiaries and strengthen the Group governance. At thelong-term enhancement of corporate value. With the aim of achieving sustainable objectives suchsame time, we will strengthen the management personnel function with highas sustainable society, the sustainable growth of society and business and the long-termtransparency and objectivity and review and strengthen the internal control system.

enhancement of corporate value, we will engage in environmental and social activities.

Integrated Report 201725