～No Change, No Full Recovery～

Presentation of Results for
Fiscal Year Ended February 28, 2022

April 12, 2022
YOSHIMOTO Tatsuya
President and Representative Executive Officer
J. Front Retailing Co., Ltd.

Create and Bring to Life “New Happiness.”Today’s Agenda

I. Overview of FY2021 Results
II. H1/Full FY2022 Forecast
III. Progress of Medium-term Business Plan

1

Overview of FY2021 Results (IFRS)

2Consolidated PL (IFRS)Core businesses such as Department Store and SC recovered steadily but impact of COVID-19
was more prolonged than expected
Returned to profitability in all profit/loss items, operating profit and profit were above Octoberforecast
Year-end dividend is ¥15 per share as planned at beginning of year, resulting in annual dividendof ¥29, up ¥2 YoY(Millions of yen, unless otherwise stated)
H1

H2

Fiscal year ended
February 28, 2022

ResultsYoY %Results

Gross sales

402,148)25.4)

473,132

Revenue

157,333)

6.7)

Gross profit (loss)

69,693)

SGA

Full year
Results

YoY %vs. Oct
forecast

5.4)

875,28113.8)(46,719)

174,1511.5)

331,484

3.9)(26,016)

17.2)

78,1484.3)

147,842

10.0)(4,658)66,038)

11.6)

70,084(3.7)

136,123

3.1)(4,377)

Business profit (loss)

3,654)－

8,063

281.0)

11,718395.1)(282)

Other operating income

1,657)(55.1)

9,411

366.0)

11,06893.8)

4,068)

Other operating expenses

6,701)(72.7)

6,705(13.6)

13,406(58.6)(94)

Operating profit (loss)(1,388)－

10,769

－

9,380

－

3,880)

Profit (loss) attributable toowners of parent(1,995)

－

6,316

－

4,321

－

3,321)

Dividend per share (Yen)

14)

5)

15

(3)

29

(Yen)

2)

0)

ROE

－

－

1.2

(RD)

8.3)

(RD)

0.9)

ROIC

－

－

1.2

(RD)

1.0)

(RD)

0.0)

(Yen)

YoY %

(Yen)

3

Segment Performance (1) Department Store (IFRS)
Recovered steadily until December but recovery slowed down due to rapid spread of 6th waveof COVID-19 in January
Returned to business profit due to additional effort to reduce SGA, operating profit (loss) was
greatly affected by restructuring
Revenue

Business profit (loss)

250,000
200,000

Operating profit (loss)
0

3,000
173,831

190,739

1,798

2,000

△5,0001,000

150,000
100,0000△10,000△1,000△15,000△2,00050,000△20,000△3,000(2,936)△4,0000
2020年度FY2020実績
Results(4,594)2021年度FY2021
実績
Results△25,000

2020年度FY2020実績
Results(20,785)

2020年度FY2020Results
実績

2021年度FY2021
実績
Results

2021年度FY2021Results
実績(Millions of yen, unless otherwise stated)

Fiscal year ended
February 28, 2022

H1
Results

H2
YoY %Results

Full year
YoY %Results

YoY %vs. Oct
forecast

Gross sales

247,750)27.7

308,094)8.9

555,845)

16.5(23,355)

Revenue

86,484)16.2

104,255)

4.8

190,739)9.7(10,861)

SGA

54,069)20.0

59,740)1.1

113,809)9.3(2,855)Business profit (loss)(1,507)－

3,306)－

1,798)－(1,202)

Operating profit (loss)(4,566)

－

(28)

－

(4,594)－(3,394)4

Daimaru Matsuzakaya Department Stores Major Store Sales
Sales improved 5.5 points from Q3 to Q4 compared to FY2019 but recovery slowed down
Kobe store that has strong regular customers increased sales in both Q3 and Q4 compared to
FY 2019, Nagoya store also increased sales in Q4
Tokyo store recovered strongly in Q4 but recovery of terminal stores was relatively slow(% change)

Fiscal year ended
February 28, 2022

vs. FY2020

vs. FY2019

Q3
Results

Q4
Results

H2
Results

Q3
Results

Q4
Results

H2
Results

Shinsaibashi

13.1

18.9

16.1

(31.5)(15.6)(23.9)

Umeda

3.8

8.6

6.4

(28.9)(27.1)(27.9)

Tokyo

9.5

22.7

16.3

(33.3)(27.0)(30.0)

Kyoto

1.1

4.9

3.1

(18.7)(13.3)(15.9)

Kobe

10.8

15.7

13.3

0.4)

5.9)

3.3)

Sapporo

14.0

9.8

11.8

(15.3)(21.1)(18.4)

Nagoya

6.4

13.1

10.0

(11.7)

0.7)

(5.4)

Total
Directly managed stores

7.3

12.0

9.8

(19.0)(13.5)(16.1)*Total is on a comparable store basis. (Comparison to FY2020 excludes Yamashina store and comparison to FY2019 excludes Shimonoseki store.)5Daimaru Matsuzakaya Department Stores SGA Analysis (IFRS)

Decrease inpacking andtransportation
costs

112

(16)

Increase in
ad expenses

H2 FY2021
SGA analysis

Decrease indepreciation

89

(22)

Increase inrent expenses

3,464

(58)

Decrease inoperationalcosts(2,597)

Decrease inoperational
costs

(623)
(1,089)Decrease inother SGA

Decrease inother SGA

Increase inpersonnel
expenses(Millions of yen)
Decrease inrent expenses(117)
Decrease indepreciation(1)

Decrease in
ad expenses

(105)

(890)

(33)

Decrease inpacking andtransportation
costs

・Mainly increase due to merger with Daimaru
Matsuzakaya Sales Associates on Sep 1, 2021(¥3.7 bn)
・Increase in bonuses (¥0.3 bn)

Decrease inpersonnel
expenses

56,66753,812

52,841・Mainly decrease in sales outsourcing
expenses due to merger with Daimaru
Matsuzakaya Sales Associates on
Sep 1, 2021 (△¥3.7 bn)¥2,855 million above forecast

Up ¥971 million YoY

H2 LY
Results

H2 FY2021
Results

Oct
Forecast
6

Segment Performance (2) SC Business (IFRS)
Impact of COVID-19 such as closure and reduced business hours was more prolonged than
expected, easing of conditions was partially continued
SGA decreased greatly in both H1 and H2 mainly due to transfer of Neuve A (end of June)
Revenue
60,00055,449

4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

52,55650,00040,00030,00020,00010,0000
2020年度FY2020実績
Results

Operating profit (loss)

Business profit

2021年度FY2021
実績
Results

4,000

3,844

2,055

2,000
0
△2,000△4,000

1,008△6,000△8,0002020年度FY2020実績
Results

2021年度FY2021
実績
Results(6,968)2020年度FY2020実績
Results

2021年度FY2021
実績
Results(Millions of yen, unless otherwise stated)

Fiscal year ended
February 28, 2022

H1
Results

H2
YoY %Results

Full year
YoY %Results

YoY %vs. Oct
forecast

Gross sales

102,979

32.0)

116,192(1.4)

219,172

11.9)(12,328)

Revenue

26,764

16.5)

25,792(20.1)

52,556(5.2)(2,444)

SGA

5,318

(20.7)

3,941(49.3)

9,260(36.0)(740)

Business profit (loss)

2,721

186.4)

1,122

‐

3,844

281.3)(356)

Operating profit

456

－

1,599

－

2,055

－

255)

7

Segment Performance (3) Developer Business (IFRS)Revenue decreased YoY mainly because construction period of J. Front Design & Construction
extended due to COVID-19
Real estate rental was strong, operating profit was above October forecast because gain onsale of real estate was recorded
60,00053,825

Operating profit

Business profit

Revenue
3,500

50,63350,0003,000

40,0002,500

30,00020,000

4,711

5,000

3,134

2,840

4,000

2,000

3,000

1,500

2,000

1,981

1,000

10,000

1,000

500

0

0
2020年度FY2020実績
Results

2021年度FY2021
実績
Results0
2020年度FY2020実績
Results

2021年度FY2021
実績
Results

FY20202020年度Results
実績

FY20212021年度Results
実績(Millions of yen, unless otherwise stated)

Fiscal year ended
February 28, 2022

H1
Results

H2
YoY %Results

Full year
YoY %Results

YoY %vs. Oct
forecast

Gross sales

29,017

6.0)

24,776

5.8

53,794

5.9)(7,106)

Revenue

25,737(21.7)

24,89518.9

50,633(5.9)(5,867)

SGA

3,302

11.9)

3,308

13.2

6,611

12.6)

(189)

Business profit (loss)

1,726

(0.3)

1,408

26.9

3,134

10.3)

(266)

Operating profit

1,807

6.5)

2,903

922.8

4,711

137.7)

1,211)

8

Segment Performance (4) Payment and Finance Business (IFRS)Revenue increased greatly because annual fee income increased due to recovering
performance of Department Store and effect of card renewal
SGA reduction also contributed, both business profit and operating profit were ¥0.7 billion
above October forecast
Business profit

Revenue
10,000Operating profit

2500

11,037

12,000
9,035

2500
1,906

2000

8,000

1500

6,000

1500

1000

4,000

1000
396

500

2,000

500

0

0

2020年度FY2020実績
Results

FY20202020年度Results
実績

2021年度FY2021
実績
Results

1,970

2000

421

0

FY20212021年度Results
実績

FY20202020年度Results
実績

FY20212021年度Results
実績(Millions of yen, unless otherwise stated)

Fiscal year ended
February 28, 2022

H1
Results

H2
YoY %Results

Full year
YoY %Results

YoY %vs. Oct
forecast

Gross sales

6,832

31.1

7,724

22.9

14,556

26.6

56)

Revenue

4,953

7.8

6,084

37.0

11,037

22.2

237)

SGA

4,476

7.9

4,654

3.6

9,131

5.7

(529)

Business profit (loss)

476

6.8

1,430

－

1,906

380.4

766)

Operating profit

506

11.7

1,463

－

1,970

367.8

770)

9

Segment Performance (5) Other (IFRS)Core business Daimaru Kogyo struggled, revenue and profit decreased partly due to transfer
of all shares in J. Front Foods
Dimples’ will be excluded from consolidation after FY2022 because part of its shares weretransferred on February 28, 2022
Business profit

Revenue
70,00062,55960,00050,00040,00030,00020,00010,0000
2020年度FY2020実績
Results

2021年度FY2021
実績
Results

2,000

1,654

1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

61,755

Operating profit

1,252

1,724

1,500

1,199

1,000
500
0
2020年度FY2020Results
実績

FY20202020年度Results
実績

2021年度FY2021Results
実績

FY20212021年度Results
実績(Millions of yen, unless otherwise stated)

Fiscal year ended
February 28, 2022

H1
Results

H2
YoY %Results

Full year
YoY %Results

YoY %vs. Oct
forecast

Gross sales

36,714

3.5)

36,532(9.0)

73,246(3.1)(1,754)

Revenue

31,457

7.3)

30,297(8.9)

61,755(1.3)(2,245)

SGA

10,916

7.3)

10,265(9.8)

21,182(1.8)(1,018)Business profit (loss)

492

1.2)

759

(34.9)

1,252(24.3)

52)

Operating profit (loss)

439

(9.5)

759

(38.7)

1,199(30.5)

99)

10

Consolidated BS (IFRS)
Total assets decreased ¥70.8 billion YoY partly due to reduction of cash and deposits, sale ofassets, depreciation
Started to right-size cash and deposits on hand, reduced interest-bearing liabilities (excluding
lease liabilities) ¥42.2 billion

Ratio of equity attributable to owners of parent was 29.4%, up 1.5 points YoY
Total assets

Interest-bearing liabilities

Equity attributable toowners of parent

1,263,722

Ratio of equity
attributable toowners of parent

1,192,907

29.4△70,81527.9%＋1.5pt562,815502,109
Lease
liabilities
202,885△60,706

Lease
liabilities

352,171

350,368

184,394～ ～Feb 28, 2021

(Millions of yen)

Feb 28, 2022

△1,803
Bonds/
borrowings
359,930

Bonds/
borrowings
317,715

Feb 28, 2021

Feb 28, 2022

Feb 28, 2021

Feb 28, 202211

Consolidated CF (IFRS)
Operating CF was ¥49.8 billion due to increase in working capital in spite of profit improvement
Secured free CF of ¥44.5 billion due to reduction of investment and sale of assets such as
shares of Dimples’
Reduced cash and deposits on hand, which were reserved for COVID-19, to ¥93.2 billion

Operating CF

Investing CF

Free CF

Financing CF

Balance of cash
and deposits
128,925

93,27856,47158,72749,86635,601

44,577＜＋15,581＞＜△6,605＞(5,289)＜＋8,976＞＜△35,647＞(20,870)

Figures in angle brackets represent YoY changes.

Results FY ended February 28, 2021
(Millions of yen)

(80,392)＜△139,119＞

Results FY ended February 28, 2022

12

H1/Full FY2022 Forecast (IFRS)

13

Business Environment Awareness◆ Sales to affluent customers in Japan remain strong, focus store
investment on strengthening luxury◆ Spending by and traffic of middle-class customers are recovering but
slowly◆ Expect inbound not to change visibly until end of current fiscal year
◆ Prepare risk scenarios in preparation for rapid environmental changes

Operating profit in FY2023

Full recovery = ¥40.3 billion
Intention to achieve remains unchanged
14

Consolidated PL Forecast (IFRS)Core businesses such as Department Store and SC are expected to greatly increase top line
and drive improvement in performance
Though costs will increase due to aggressive investment for growth, restructuring will be
accelerated to reduce fixed costs
Plan to pay interim dividend of ¥15 per share, up ¥1, resulting in annual dividend of ¥31, up ¥2(Millions of yen, unless otherwise stated)

Fiscal year ending
February 28, 2023

H1

Forecast

H2

YoY %

Forecast

Full year

YoY %ForecastYoY %Gross sales

492,000

22.3)

528,000

11.6)

1,020,000

16.5)

Revenue

179,000

13.8)

191,600

9.7)

370,000

11.6)

Gross profit

86,50024.1)

88,50013.2)

175,000

18.4)

SGA

75,00013.6)

78,00011.3)

153,000

12.4)

Business profit

11,500214.6)

10,50030.2)

22,00087.7)

Other operating income

1,000(39.7)

1,500(84.1)

2,500(77.4)

Other operating expenses

2,000(70.2)

1,500(77.6)

3,500(73.9)

Operating profit (loss)

10,500－10,500(2.5)

21,000123.9)

Profit (loss) attributable toowners of parent

6,000

－

5,540

(12.9)

11,500166.1)

Dividend per share (Yen)

ROE
ROIC

(Interim)

15
－
－

(Yen)

1) (Year-end)
－
－

16
－
－

(Yen)

1)
－
－

(Annual)

31
3.3
2.4

(Yen)
(RD)
(RD)

2)
2.1)
1.2)
15

Segment Performance Forecast (1) Department Store Business
Invest aggressively in renovation of flagship stores, mainly luxury, jewelry, watches, to boost
sales
Driven by spending by affluent customers, followed by middle class due to recovery of traffic,
expect inbound sales to be ¥10.0 billion
Revenue
250,000
200,000

Business profit
12,000223,000
190,739

Operating profit (loss)
10,000
8,000
6,000
4,000
2,000
0
△2,000△4,000△6,00010,50010,0008,000

150,000

6,000

100,000

4,000

50,000

2,000

0

1,798

0
2021年度FY2021Results
実績

2022年度FY2022見通し
Forecast

2021年度FY2021
実績
Results

8,500(4,594)2021年度FY2021
実績
Results

2022年度FY2022見通し
Forecast

2022年度FY2022見通し
Forecast(Millions of yen, unless otherwise stated)

Fiscal year ending
February 28, 2023

H1
Results

Full year

H2
YoY %

ResultsYoY %ResultsYoY %Gross sales

317,400

28.1

348,100

13.0

665,500

19.7

Revenue

106,300

22.9

116,700

11.9

223,000

16.9

SGA

61,50013.7

65,0008.8

126,500

11.2

Business profit

4,500

－

6,000

81.5

10,500483.9

Operating profit

3,500

－

5,000

－

8,500

－

16

Daimaru Matsuzakaya Department Stores SGA Analysis (IFRS)・Increase in reaction to transfer of fixed costs during
closure LY (¥0.8 bn)
・Increase in commissions due to sales increase (¥2.2 bn)
・Increase in repair expenses resulting from renovation (¥1.8 bn)
・Increase in supplies expenses (¥0.5 bn)
・Decrease due to merger with Daimaru Matsuzakaya Sales
Associates on Sep 1, 2021 (△¥3.1 bn)
・Decrease due to insourcing of part of outsourced operations(△¥0.9 bn), etc.
・Increase in computer systemassociated with digital investment
・Increase of ¥0.7 bn in broadcast ad,increase of 0.3 bn in cultural events, etc.

Personnel
expenses

5,620

Packing andtransportationAd
costs
expenses

1,453

75

(119)

FY2021
SGA analysis(8,688)(805)
Depreciation

1,583

(383)

(367)

(409)

9,566

Packing andtransportation
costs

・Decrease in HRs (△5.6 bn)
・Increase in reaction to decrease of ¥4.1 bn in retirement
benefit costs resulting from extension of retirement age
in FY 2019 (¥4.1 bn) and increase due to merger with
Daimaru Matsuzakaya Sales Associates in Sep 2021(¥8.9 bn)
・Increase due to insourcing of part of outsourced
operations (¥2.1 bn), etc.

1,707

Rent
Depreciation
expenses
・Increase in reaction to transfer of fixed costs during
closure LY (¥1.0 bn)
・Increase due to investment in renovation (¥0.7 bn), etc.

114,900

・Mainly decrease due to merger with Daimaru
Matsuzakaya Sales Associates on Sep 1, 2021(△¥8.9 bn)
・Decrease due to insourcing of part of outsourced
operations (△¥2.1 bn), etc.

115,085

Down ¥185 million from 2019*Up ¥12,755 million YoY
LY
Results904

Ad
Personnel
expenses expenses

Rent
expenses

Operational
Other
costs

Operational Other
costs
2,439

・Effect of restructuring (△¥1.6 bn)
・Increase in reaction to transfer of fixed costs during closure LY (¥0.3 bn)
・Mainly increase due to merger with Daimaru Matsuzakaya Sales
Associates on Sep 1, 2021 (¥3.1 bn)
102,145 ・Increase due to insourcing of part of outsourced operations (¥0.9 bn)
・Increase in bonuses resulting from business recovery (¥1.7 bn)
・Strengthening of specialized talents, increase in overtime/insurance(¥1.1 bn), etc.

(Millions of yen)

FY2022
Forecast*△¥4.2 bn in real terms
excluding increase in reaction to
retirement benefit costs

FY2019Results
17

Segment Performance Forecast (2) SC Business (IFRS)
Large-scale renovation in PARCO flagship stores such as Ikebukuro, Nagoya, Hiroshima andSendaiStrengthen efforts to attract more customers in entertainment and diversify revenue streams
Revenue
60,00052,556

Operating profit

Business profit

57,100

6,502

7,000

50,0006,000

40,000

5,000
4,000

30,00020,00010,000

6,000
5,000

3,844

4,000

3,000

3,000

2,000

2,000

1,000

1,000

0
2022年度FY2022見通し
Forecast

2,055

0

0
2021年度FY2021Results
実績

6,624

7,000

2021年度FY2021
実績
Results

2021年度FY2021
実績
Results

2022年度FY2022見通し
Forecast

2022年度FY2022見通し
Forecast(Millions of yen, unless otherwise stated)

Fiscal year ending
February 28, 2023

H1
Results

Full year

H2
YoY %

ResultsYoY %ResultsYoY %Gross sales

132,27728.5)

135,21116.4

267,488

22.0)

Revenue

28,755

7.4)

28,3449.9

57,100

8.6)

SGA

4,499

(15.4)

4,610

17.0

9,109

(1.6)

Business profit

4,751

74.6)

1,750

55.9

6,502

69.1)

Operating profit

4,824

957.6)

1,800

12.5

6,624

222.3)
18

Segment Performance Forecast (3) Developer Business (IFRS)Revenue is expected to increase in design and construction-related business due to renovation
investment of Department Store and ParcoBusiness profit is expected to decrease partly due to upfront expenses for new project
development, operating profit is expected to decrease in reaction to sale of real estateBusiness profit

Revenue
70,00060,0003,500

57,800Operating profit

3,000

50,63350,0002,500

40,0002,000

30,0001,500

20,0001,000

10,000

500

0

4,000
2,000

2022年度FY2022見通し
Forecast

2,600

3,000
2,000
1,000

0
2021年度FY2021
実績
Results

4,711

5,000

3,134

0
2021年度FY2021
実績
Results

2022年度FY2022見通し
Forecast

2021年度FY2021
実績
Results

2022年度FY2022見通し
Forecast(Millions of yen, unless otherwise stated)

Fiscal year ending
February 28, 2023

H1
Results

Full year

H2
YoY %

ResultsYoY %ResultsYoY %Gross sales

28,300(2.5)

29,50019.1)

57,800

7.4)

Revenue

28,30010.0)

29,50018.5)

57,800

14.2)

SGA

4,000

21.1)

4,400

33.0)

8,400

27.1)

Business profit (loss)

1,000(42.1)

1,000(29.0)

2,000(36.2)

Operating profit (loss)

1,000(44.7)

1,600(44.9)

2,600(44.8)

19

Segment Performance Forecast (4) Payment and Finance Business (IFRS)
Commission income, etc. is expected to increase due to increase in transaction volume
resulting from continuing recovery of Department Store performance
Also factored in steady increase in annual fee income and sales increase of insurance products
Business profit

Revenue
11,037

12,000Operating profit

2,790

3,000

12,83514,0002,500

10,000

2,000

8,000

2,500

1,906

1,500

1,000

1,000

2,000

500

500

0

0

4,000

2021年度FY2021
実績
Results0
2021年度FY2021
実績
Results

2022年度FY2022見通し
Forecast

1,970

2,000

1,500

6,000

2,791

3,000

2022年度FY2022見通し
Forecast

2021年度FY2021
実績
Results

2022年度FY2022見通し
Forecast(Millions of yen, unless otherwise stated)

Fiscal year ending
February 28, 2023

H1
Results

H2
YoY %Results

Full year
YoY %ResultsYoY %Gross sales

6,246

(8.6)

6,589

(14.7)

12,835(11.8)

Revenue

6,246

26.1)

6,589

8.3)

12,835

16.3)

SGA

4,898

9.4)

5,147

10.6)

10,045

10.0)

Business profit

1,348

183.1)

1,442

0.8)

2,790

46.3)

Operating profit (loss)

1,345

165.4)

1,446

(1.2)

2,791

41.7)

20

Segment Performance Forecast (5) Other (IFRS)Expect core business Daimaru Kogyo to improve performance but affected by exclusion of
Dimples’ from consolidation, etc.

Revenue
70,0001,400

61,75554,90060,000Operating profit

Business profit
1,400

1,252

50,000

1,000

1,000

40,000800

800

30,000600

600

20,000400

400

10,000

200

200

0

0

0
FY20212021年度Results
実績

FY2022
2022年度Forecast
見通し

2021年度FY2021
実績
Results

1,199

1,200

1,100

1,200

900

2021年度FY2021Results
実績

2022年度FY2022見通し
Forecast

2022年度FY2022
Forecast
見通し(Millions of yen, unless otherwise stated)

Fiscal year ending
February 28, 2023

H1
Results

H2
YoY %Results

Full year
YoY %ResultsYoY %Gross sales

27,800(24.3)

28,500(22.0)

56,300(23.1)

Revenue

28,200(10.4)

28,700(5.3)

56,900(7.9)

SGA

10,400

(4.7)

9,700

(5.5)

20,100(5.1)

Business profit (loss)

800

62.3)

300

(60.5)

1,100(12.2)

Operating profit (loss)

720

63.7)

180

(76.3)

900(25.0)

21

Consolidated BS Forecast (IFRS)
Total assets are expected to decrease ¥42.9 billion partly due to reduction of cash anddeposits on hand to appropriate level
Reduce interest-bearing liabilities (excluding lease liabilities) to ¥270.0 billion, roughly sameas FY2019 level
Ratio of equity attributable to owners of parent is expected to recover to 30% level
Total assets

Interest-bearing liabilities

Equity attributable toowners of parent
Ratio of equity
attributable toowners of parent

1,192,907
1,150,000

30.7△42,90729.4＋1.3pt502,109
Lease
liabilities
184,394～ ～Feb 28, 2022

Feb 28, 2023
(Forecast)(Millions of yen)

440,000△62,109

Bonds/
borrowings
317,715

Feb 28, 2022

Leaseliabilities
170,000

353,000

350,368＋2,632

Bonds/
borrowings
270,000

Feb 28, 2023
(Forecast)Feb 28, 2022

Feb 28, 2023
(Forecast)22

Consolidated CF Forecast (IFRS)
Operating CF is expected to increase ¥7.1 billion YoY due to profit increase
Mainly Department Store and SC plan aggressive capital investment to ensure profit in futureFree CF is expected to decrease ¥19.5 YoY due to significant increase in investment
expenditure

Operating CF

Investing CF

Free CF

Financial CF

Balance of
cash and deposits
93,27849,86657,00044,57732,00025,000＜△26,711＞＜＋7,134＞(5,289)＜△19,577＞＜△61,278＞(32,000)

Figures in angle brackets represent YoY changes.

Results FY ended February 28, 2022
(Millions of yen)

(80,392) (86,000)＜△5,608＞

Forecast FY ending February 28, 2023

23

FY2021 - FY2023

Progress of Medium-term Business Plan

24

What to Do in 2nd Year of Medium-term Plan ー“Change gear”
for full recovery and regrowth

For full recovery
Accelerate Department Store / SC business model transformation
Management restructuring
For regrowth
Strengthen systems/initiatives to change business portfolio
Investment for future25

For Full Recovery

Department Store ー Promote Digitalization Centering on App
Customer touch points through app are steadily expanding and deepening and sophisticationof CRM is greatly improving

KPI

FY2021Results

YoY

Sales to app users¥187.7 bn+37.6 %

38.8 %+5.8 points

1.3 mn people+0.44 mn people

Share of total sales of Department
Store

Number of app users
Spend per the company-issued
card user who became app user*+15.3 %

*Selected users who became app users in H1 FY2021 and compared sales between before (Sep 2020 –Jan) and after (Sep 2021 - Jan) becoming app users

Promote strengthening of customer base and sophistication of data usage
in conjunction with the company-issued cards

26

For Full Recovery

Department Store ー Expand OMO
Launch the Company’s unique OMO websites, further evolve connaissligne(Millions of yen)

Online sales(by customer category)

45,00040,00035,000Cash, card and other customers

Gaisho customers

30,00025,00020,00015,00010,0005,000
0FY2019FY2020

FY2021

FY2022
TargetFY2023
TargetAim to achieve online sales of ¥40.0 billion in FY2023
by improving website UI, expanding product mix, and securing highly rare content

27

For Full Recovery

Department Store ー Deepen Prime Life Strategy
Develop and deeply cultivate young affluent customers by improving content and using
digital sales
Luxury mall GINZA SIX performs well due to significant increase in purchase share ofcustomers in their 20s
Sales share by age group

Credit sales(Millions of yen)(%)

200,000
50 and older

Under 50100%
150,000

24.4

28.2

75.6

71.8

FY2020

FY2021

100,000

50,0000%

0FY2019FY2020

FY2021

FY2022
TargetExpand product mix such as luxury online/offline and strengthen services in stores
Aim to achieve ¥200.0 billion level of gaisho sales early28

For Full Recovery

Department Store ー Examples of Revitalization of Physical Stores

Daimaru
Kobe Expanded space for luxury items and watches,created lounge Greatly expanded Louis Vuitton as freestanding
boutique with 3 floors (near the department store)
 Strengthen lead from digital media

ＧＩＮＺＡ
ＳＩＸ
 Total sales in December were above FY2019 level,
record high
 Customers in their 30s are spending most briskly Large purchases by customers in their 20s are
remarkably increasing

Focus on strengthening prime content of flagship stores in FY2022

29

For Full Recovery

Department Store ー Hybridization / Revenue Stream Diversification
Need to radically overhaul content provided in stores and floor allocation
Expand content that provides excitement to daily life and brings fulfilling lifestyles
Direction of overhaul

Expand prime content(luxury, art, jewelry/watches)

Redesign and expand content by shifting focus to lifestylee.g. cosmetics ⇒ beauty/wellness

Introduce new content by shifting focus to experiencee.g. education, entertainment, incubation

Decrease originally curated space by half /decrease women’s volume zone clothing

Launch new hybrid model for Nagoya store by end of FY2023

30

For Full Recovery

SC － Intensively Strengthen Key Flagship Stores
Large-scale renovation with focus on 5 stores including Ikebukuro,
Nagoya, Sendai, Hiroshima, Urawa for revenue improvement
Nagoya PARCO
Renovation area share35 Large-scale renovation with genderless and ageless as keywords
 First renewal of entrance center zone on 1st floor of west wing in 17 years
 Baycrew’s on four floors of south wing, strengthen entertainment in east wing%

Ikebukuro PARCO
Renovation area share31% Remodel 1st basement floor and 1st ground floor, which are directly
connected to station
 Change 1st and 2nd floors of main building, which mainly carry ladies
items, to unisex floors
 Expand game and animation culture that have strong affinity with local area

*Renovation area share is cumulative total during period of current Medium-term Plan.

Accelerate category portfolio transformationsuch as update and reduction of apparel and expansion of luxury and entertainment

31

For Full Recovery

SC － Full Operation and Evolution of Shibuya and Shinsaibashi

Shibuya
PARCO One and only next generation commercial space 3D promotion using SNS and entire building New challenge as symbolic store of PARCO

Shinsaibashi

PARCO Promote acquisition of nouveau riche customers
 Wellness mall as new motivation to visit the store Synergy with adjacent department store

Further seek potential of Shibuya/Shinsaibashi that maintain strong sales since opening32For Full Recovery

Management Restructuring
Reduction of fixed costs (lowering of break-even point)

Business model reform
HR restructuring

Cost restructuring

Reduce fixed costs ¥10.0 bn or more compared to FY2019(FY2021 – 2023 cumulative total target )FY2021 results △¥4.3 billion(Plan at beginning of year △¥3.0 billion)*Including cost, compared to 2019

In view of progress above plan, consider revising up target

33

For Regrowth

Reorganization of Holding Company
Create new divisions and actively invest and fuse Parco’s HRs to strengthen promotion of the Group strategy(Newly created division)(Purpose)

Business Portfolio
Transformation Promotion Div

Prepare/implement plans concerning businessportfolio transformation to realize discontinuous
growth, etc.

CRE Planning Div

Digital Promotion Div

Develop CRE strategy concerning real estatedevelopment and real estate held by the Group,
strengthen collaboration with Parco Developer,
etc.
Increase revenue across the Group using digital,
improve environment to use integrated DB, etc.

Ensure effectiveness and speed up to promote medium- to long-term strategy

34

For Regrowth

Direction of Portfolio Transformation (1)Developer Business
Consider promoting large-scale complex development in prime locations where the Group’s flagship storesare locatedDevelop mixed use including non-commercial such as residence, hotel, office, as well as commercial
Accelerate promotion of initiatives through alliance with outside companies and hiring of specialized talents

Invest ¥30.0 billion under current Medium-term Plan for dramatic growth in FY2024 and beyond
Promote strategy through collaboration between newly created CRE Planning Div and Developer Business

Payment and Finance Business
Promote expansion of acquisition of users of new cards, which were issued in January last year,
in collaboration with Department Store
While expanding insurance products, consider providing new financial products through alliance
Curb outflow to outside the company by consolidating the Group’s merchant contracts through expansion ofmerchant business

Likely to recover operating profit to ¥3.0 billion level under current Medium-term Plan
Achieve ¥5.0 billion level early after FY2024 and develop scheme for further growth35

For Regrowth

Direction of Portfolio Transformation (2)Investment in business development

Growthinvestment*¥10.0
billion

CVC
fund

Development of new businesses

Alliance

Content
management
fund

Return from investment

Innovation of existing businesses

Synergy with existing businesses

M&A*Including capital investment and growth investment of ¥90.0 bn
planned during period of current Medium-term Business Plan

Full-scale examination/development of next growth pole under strengthened system
36

For Regrowth

Direction of Portfolio Transformation (3)Investment in human capitalSet up of HR portfolio
and pool・Select young HRs who leadnext generation
・Tough assignment
・Project assignment
・External education

HR development(Support for growth)・New development plan・Recurrent education, reskilling
・JFR College

Hiring of specialized
talents
・Hire professional career・Ratio of holding company’s
HRs from inside/outside: 50：50
・Acquire HRs who have diverse
experiences/values

Talent Management System
・Visualize HRs
・Grasp organization condition

Take serious action to develop HRs who play a role in value creation
in medium to long term with eye to future37Sustainability Management and Value Creation
Integrate corporate strategy / business strategy
with sustainability management

Corporate Credo

Service before Profit
Abjure all evil and practice all goodGroup Vision

Practice of CSV(Creating Shared
Value) using theGroup’s strengths

Create andBring to Life
“New Happiness”
Sustainability Policy

With People,
with Local Communities,
with Environment

Proposal for
Well-Being Lifeby creating
new value

Ideal company we aim to be and value we aim to provide​

Producing fulfilling lifestyles anddeveloping local areas in a unique waythat coexists with local communities

Management strategy ／ business strategy

38

Sustainability Management and Value Creation
Practice of Corporate Credo ＝ CSV
Financial
capitalHumancapitalManufactured
capitalIntellectual
capitalSocialrelationshipcapitalNaturalcapitalOrganization ability

Opportunity

Management strategy

Risk

GovernanceImproveinformation
disclosure

Socialvalue

×Economic
value

Strengthen
engagement

Sustainable growth and medium- to long-term corporate value creation

39

Appendix

40

＜Reference＞

FY2021 Results by Segment(Retroactive adjustments due to merger with DMSA)(Millions of yen)
Q1

Q2

H1

Q3

Q4

H2

190,665
114,793
50,44014,874
3,398
17,987(10,828)
74,09739,70013,786
11,6402,335
15,806(9,172)
1,298
(929)
1,486
818
68
224
(368)
(3,819)(3,979)
(955)
876
75
193
(29)

211,483
132,957
52,53914,143
3,434
18,726(10,317)
83,236
46,783
12,97814,096
2,617
15,651(8,891)
2,356
(578)
1,235
907
408
268
115
2,430
(586)
1,411
931
431
246
(3)

402,148247,750
102,979
29,017
6,832
36,714(21,146)
157,333
86,484
26,76425,737
4,953
31,457(18,064)
3,654(1,507)
2,721
1,726
476
492
(253)
(1,388)(4,566)
456
1,807
506
439
(33)

221,199
141,357
55,52812,362
4,115
17,715(9,881)80,146
46,178
12,58012,7072,978
14,446(8,746)
5,228
1,566
1,555
1,070
649
322
64
5,796
1,757
1,647
1,298
664
328
99

251,933
166,736
60,663
12,413
3,608
18,816(10,306)
94,00458,077
13,211
12,1883,105
15,850(8,428)
2,835
1,740
(432)
337
780
437
(28)
4,973
(1,785)
(48)
1,604
798
431
3,972

473,132
308,094
116,192
24,776
7,724
36,532(20,187)
174,151
104,255
25,792
24,895
6,084
30,297(17,174)
8,063
3,306
1,122
1,408
1,430
759
35
10,769
(28)
1,599
2,903
1,463
759
4,072

875,281555,845
219,172
53,794
14,55673,246(41,333)
331,484
190,739
52,55650,633
11,03761,755(35,239)
11,718
1,798
3,844
3,134
1,906
1,252
(217)
9,380
(4,594)
2,055
4,711
1,970
1,199
4,039

*As Daimaru Matsuzakaya Department Stores absorbed and merged Daimaru Matsuzakaya Sales Associates on September 1, 2021,
the previous year’s figures have been retroactively adjusted.

41

Gross sales
Department StoreSC
Developer
Payment and Finance
Other
Consolidation adjustments

Revenue
Department StoreSC
Developer
Payment and Finance
Other
Consolidation adjustments

Business profit (loss)
Department StoreSC
Developer
Payment and Finance
Other
Consolidation adjustments

Operating profit (loss)
Department StoreSC
Developer
Payment and Finance
Other
Consolidation adjustments

FY2021

<Reference> Consolidated total and major subsidiaries

Transfer of Fixed Costs Resulting from Closure (FY2021 and FY2020)(Millions of yen)Transfer to cost

Transfer to SGA

FY2021 FY2020 Change

Total (effect on business profit)

FY2021

FY2020ChangeFY2021

FY2020ChangeConsolidated
Daimaru Matsuzakaya
Department Stores

Parco SC

Personnel
expenses

243

1,124

(881)

464

2,171

(1,707)

707

3,295

(2,588)Rent expenses

20

19

1

21

45

(24)

41

64

(23)

Depreciation

597

2,018

(1,421)

1,064

3,100

(2,036)

1,661

5,118

(3,457)

Other

352

836

(484)

382

2,158

(1,776)

734

2,993

(2,259)

Total

1,213

3,998

(2,785)

1,932

7,475

(5,543)

3,146

11,473(8,327)

Personnel
expenses

0

0

0

354

1,216

(862)

354

1,216

(862)

Rent expenses

20

9

11

15

31

(16)

35

40

(5)

Depreciation

236

527

(291)

991

2,521

(1,530)

1,227

3,048

(1,821)

Other

264

364

(100)

931

2,928

(1,997)

1,195

3,292

(2,097)

Total

521

900

(379)

2,292

6,697

(4,405)

2,814

7,597

(4,783)

Personnel
expenses

50

246

(196)

14

80

(66)

64

326

(262)

Rent expenses

0

0

0

0

0

0

0

0

0

Depreciation

360

1,471

(1,111)

24

108

(84)

384

1,579

(1,195)

Other

86

459

(373)

14

129

(115)

100

588

(488)

Total

497

2,177

(1,680)

52

318

(266)

550

2,496

(1,946)42

https://www.j-front-retailing.com

Create andBring to Life
“New Happiness.”

Forward-looking statements in this document represent our assumptions based on information currently available to us and inherently involve potential
risks, uncertainties and other factors. Therefore, actual results may differ materially from the results anticipated herein due to changes in various factors.