MARUI IR DAY
Progress of Medium-Term Management
Plan Business Initiatives

May 23, 2019

■ Today’s Schedule
16:00–16:15(15min)

16:15–16:30(15min)MARUI GROUP’s Sustainability Management
Hiroshi Aoi, President and Representative Director,
Representative Executive Officer, MARUI GROUP CO., LTD.

Retailing Segment Initiatives and Progress

Toshikazu Takimoto, Managing Executive Officer, Responsible for
Retailing Segment, MARUI GROUP CO., LTD.）
Masahisa Aoki, President and Representative Director,
MARUI CO., LTD.
Miyuki Kawara, Director and Store Manager,
Marui Family Mizonokuchi, MARUI CO., LTD.

16:30–16:50（20min）

16:50–17:05（15min）

Q&A Session(Sustainability Management & Retailing Segment)

FinTech Segment Initiatives and Progress

Masao Nakamura, Director and Senior Managing Executive Officer,
Responsible for FinTech Segment, MARUI GROUP CO., LTD.
Yoshinori Saito, President and Representative Director,
Epos Card Co., Ltd.
Junko Tsuda, Director and General Manager,
Cardholder Service Department, Epos Card Co., Ltd.

17:05–17:25（20min）

Q&A Session (FinTech Segment)

MARUI GROUP’s
Sustainability Management
1. Green Businesses

May 23, 2019

Initiatives to Date
■Environmental Impact Reduction Initiatives
・Greenhouse gas emission reductions initiatives(Scope 1–3)
・Membership in RE100 (Jul. 2018)
・Expansion of carbon footprint initiatives(70 products)
・Ongoing carbon offset initiatives
・Issuance of green bonds (Oct. 2018)
・CSR procurement initiatives pertaining to
private brands
・Reduction of industrial waste andimprovement of recycling rates
3

External Recognition for Environmental Initiatives
・Recognition earned from various institutions with regard toenvironmental initiatives■Major Examples of External Recognition
・First Japanese retailing company ・First Japanese retailingwith certified targets
company included on A-List

・Inclusion in environmental
index used by GPIF・First Japanese retailing company
to announce endorsement

・Japan Green Bond Awards

・Sustainable Finance Awards

4

MARUI GROUP’s 2050 Vision
・Establishment of long-term vision in February 2019
・Expansion of happiness of all people through three businesses
founded on co-creation

Inter-Generational
Businesses

Green Businesses

Happiness
Co-Creative
Businesses

Financial
Inclusion

5

Corporate Value Created through
Co-Creation Sustainability Management
・Expansion of happiness (interests) of future generations
and all other stakeholders
Customers

Investors

Business
partners

Communities
and society

Employees

Futuregenerations

6

Battle Against Climate Change Led by Younger Generations〈Action Kicked Off by a Single Girl〉

Source: CTK NEWS;
Kyodo News Images Inc.

〈Student Demonstrations Across the Globe〉

Source: Deutsche Presse-Agentur;
Kyodo News Images Inc.

Greta Ernman Thunberg

Fridays for Future“We are in the midst of the sixth mass
extinction… The year 2078, I willcelebrate my 75th birthday…
We cannot solve a crisis without treating
it as a crisis.”

Simultaneous global demonstration
held by 1.6 million people in 2,087
locations in 125 countries
on March 15, 2019.
7

Accelerated Action by Younger Generations
・Action by younger generations accelerating in Japan as well
〈Fridays for Future Japan〉

Source: K.K. Kyodo News・Demonstration by 20 students heldin front of the National Diet Building
in February 2019 organized by
Aina Koide (Faculty of Geo-Environmental
Science, Rissho University)
・Increase in participants to 120 for
March 15, 2019, demonstration〈Growing Action Promptedby Younger Generations〉

Source: Greta Ernman Thunberg Abaca Press Agency;
Newscom; Kyodo News Images Inc.

・Climate change summit held in
Europe on April 16, 20198

Revision of Target from 2°C to 1.5°C■Catastrophic damage to the world to occur should average temperate
rise by more than 4°C〈Rising Sea Levels〉〈Food Shortages〉〈Ecosystem Destruction〉

Melting of 80% of polar ice
cap, flooding in New York,
submergence of theNetherlands

Global droughts (covering
40% of earth’s surface),widespread famine deaths

1,000–10,000 times faster
extinction rate due to heatwaves, impacts on water,
etc.

■COP24 Goal of Limiting Warming to 1.5°C・Average temperature currently 1°C above pre-industrial levels with potential toclimb to 4°C above pre-industrial levels if no action is taken
・Reduction in number of people impacted of approx. 400 million achievable bylowering target for limiting warming from 2°C to 1.5°C＜MARUI GROUP’s Policy＞
Limit warming to 1.5°C above pre-industrial levels
in response to needs of future/younger generations
9

MARUI GROUP’s Initiatives
for Combating Climate Change

Background for Focus on Energy
・Largest portion (nearly 60%) of environmental costs represented by electricity
・More than 80% of CO2 emissions from MARUI GROUP’s business
attributable to electricity■Environmental Costs
Cost (yen)Electricity¥3.0 billion■Distribution of Greenhouse
Gas Emissions by Source(Scope 1 + 2)
% of total
59％

Water

¥0.8 billion

16％

Gas

¥0.3 billion

6％

Waste

¥0.2 billion

4％

Other

¥0.8 billion

16％

Total

¥5.1 billion

100％

Others(5,000 tons)
Gas 10%(11,000 tons)

Electricity 84%(95,000 tons)
・Per area electricity use at stores
double that of factories

11

Goal of Using 100% Renewable Energy
・Plan to procure 20% of electricity from renewable sources in FY2020 throughco-creation with new power providers
・Registration as power retailer to procure 100% of electricity from renewable sources
and reduce intermediary costs（Future）（Present）
Renewable energy purchased
through co-creation with new
power providers

Direct procurement of renewableenergy as power retailer
・Reduction of 5%–10% inintermediary commissions costs

Total Electricity
Consumption
200 million kWh

170 million kWh

100%

Ratio ofrenewableenergy usage

20%

1%

・Minna Denryoku
・Company A, etc.

FY19

FY20

（1 store）＋

50%（８ stores）

7万t

・Minna Denryoku

・Minna Denryoku

・Company A・Company A, etc.

・Company B, etc.

・Direct procurement

・Direct procurement

FY21（13 stores）

FY31(All stores)

12

Introduction of Large-Scale Storage Batteriesat Stores Using Renewable Energy
・Reduction of electricity bills by leveling daytime and nighttime
usage amounts (charge at night, use during day)・Reduce renewable energy costs by cutting peak-hour usage

Electricity use

Cut peak-hour usage
Use

ChargeNight Day Night

Day

Night

Day

◎Reduction in annual per store electricity costs: 7% (for store of size of Shinjuku
Marui Main Building)◎Examine possibility of collaboration with wide range of EV and other storage
battery manufacturers

13Renewable Energy Initiatives
・Provision of sustainable options through capital and business alliancewith Minna Denryoku■Capital and Business Alliance with Minna Denryoku Commenced in December 2018
・Introduction of customers seeking to change electricity provider to Minna Denryoku
by MARUI GROUPMARUI GROUP

Customer
Minna Denryoku

EPOS cardholders
6,880,000

Recommend switch torenewable energy(As of March 31, 2019)

Pay monthly electricity bill withEPOS card
14

Customer Interest in Renewable Energy
・Currently low renewable energy usage rates, but approx. 60% of customers
interested in using renewable energy
・Interest in usage shared among all generation
Currently using

Approx. 60%
29
and
below

30–
39

40–
49

50–
59

60
and
above

Currently
using

6％

5％

6％

5％

11％

Interested
in using

64％

59％

59％

57％

54％

No
intention
to use infuture

30％

36％

35％

38％

35％

6％
No intention
to use infuture35％

Interested
in using

59％

Source: Survey of 2,400 EPOS cardholders conducted in April 201915

Risks and Opportunities in Green Businesses

Green businesses

・Potential impact of risks estimated to be ¥3.0 billion and business
opportunities valued at ¥4.5 billion＜Risks＞＜Opportunities＞

Increase in renewableenergy costs

Co-creation withpower retailers

・+¥4 × 200 million kWh= ¥0.8 billion

・Reduced carbon taxes+ Increased card
revenues = ¥4.2 billion

Entry into power
retailing business

Carbon taxes
・¥20,000 × 110,000 tons
= ¥2.2 billion¥3.0 billion

・Reduced intermediary costs= ¥3.0 billion＜

・MinnaDenryoku,
etc.

・Direct
procurement
and sales ofelectricity¥4.5 billion
16

Basis for Risk Calculations
・Financial impact calculated based on projected rise in costs
associated with climate change scenarios■Increase in renewable energy costs: ¥0.8 billion〈Estimates based on current renewable energy prices〉
・Large-scale power providers focusing
on hydropower: +¥3–¥5/kWh・Blockchain: +¥2.5/kWh〈Annual electricity
consumption〉

Maximum increase
Approx.
200 million
estimated to be ×
kWh¥0.8 billion
around +¥4/kWh

Note: Estimates use projections for peak-hour usage around 2030

■Carbon taxes: ¥2.2 billion〈Estimates based on International Energy Agency’s
Sustainable Development Scenario〉

Projections for carbon taxes
in developed countries
・$63/t-CO2 in 2025
・$140/t-CO2 in 2040

Further increase leading totaxes of around¥20,000/t-CO2 in 2050

〈Annual CO2 emissions〉
× 110,000
tons

Approx.
¥2.2 billion

Total: ¥3.0 billion
17

Financial Benefits from Opportunities
・Analyses performed of major opportunities presented by co-creation
with power retailers and entry into power retailing business■Co-creation with power retailers ¥4.2 billion
Increase in recurring payment transactions due to customers
switching to renewable energy

Approx.
¥2.0 billion↓
Rise in Gold cardholders↓
Credit card LTV¥2.2 billion

Reduction in carbon taxes from achieving zero CO2 emissions■Entry into power retailing business: ¥0.3 billion〈Direct procurement as power retailer〉〈Annual power costs〉
×
Reduction in intermediary costs
Approx. ¥3.0 billion(commissions): Approx. 10%

Approx.
¥0.3 billion

Total: ¥4.5 billion
18

MARUI GROUP’s Sustainability Management
・Target corporate value improvements by transforming opportunities foraddressing issues into businesses rather than into higher costs for
CSR activities

CSR(Financial)(Initiatives)
Risks → Higher costs → Limit increase
Issues(Social/environmental)(Financial）(Initiatives)
Opportunities → Creation of new → Earnings
businesses

Improvement of corporate
value

MARUI GROUP’s Sustainability Management

19

MARUI GROUP’s Sustainability Management

Transcends dichotomies throughsustainability management
CSR

Opposition between issue
resolution and cost increases

Sustainability

Improvement of corporate value
driven by issue resolution
20

MARUI GROUP’s 2050 Vision

MARUI IR DAY
Progress of Medium-Term Management Plan
Business Initiatives＜Retailing Segment＞

May 23, 2019Today’s Presenters

Masahisa Aoki

Miyuki Kawara

Senior Executive Officer, MARUI GROUP CO., LTD.
President and Representative Director,
MARUI CO., LTD.

Executive Officer, MARUI GROUP CO., LTD.

Career History

Career History

1992 Joined MOVING CO., LTD.
2015 Store Manager, Shinjuku Marui Annex,
MARUI CO., LTD.
2016 General Manager, Anime Business Department
2017 Executive Officer, MARUI GROUP CO., LTD.
2018 General Manager,
New Business Development Department,
In charge of Anime Business,
MARUI GROUP CO., LTD.
2019 Current position

Director and Store Manager,
Marui Family Mizonokuchi, MARUI CO., LTD.
1986 Joined the Company
2007 Store Manager, Kobe Marui, MARUI CO., LTD.
2008 General Manager, Brand Development
Department, MARUI CO., LTD.
2012 General Manager, CSR Promotion Department,
MARUI GROUP CO., LTD.
2016 Executive Officer, MARUI GROUP CO., LTD.
Director and General Manager,
Sales Promotion Department, Epos Card Co., Ltd.
2018 Director and Store Manager, Ueno Marui,
MARUI CO., LTD.
2019 Current position

Highlights
・Operating income rises for second consecutive year,
growing to ¥11.4 billion (up ¥2.6 billion YoY)
・Progress made in transition to shopping centersand fixed-term rental contracts withratio of fixed-term rental contracts of 106%
・Record-high number of customers of 210 million
・Fourth consecutive year of higher transactions
in e-commerce operations achieved throughcollaboration with business partners
2Performance in FY2019
FY2018FY2019YoY change

2.8%

3.8%

+1.0

Billions of yen

Billions of yen％

Billions of yen

Total
Transactions

328.5

337.0

+3

+1.0

Revenue

138.1

131.7

-5

-1.6

Operatingincome

8.8

11.4

+29

-0.1

ROIC

vs. targetー3Factors Affecting Retailing Segment
Operating Income in FY2019
・Increase of ¥2.6 billion in segment operating income driven by transition to
shopping centers and fixed-term rental contracts and income improvements frome-commerce[YoY change]

＋23

＋0.4

±0 +¥2.6 billion

Factors
Incomeimprovements affecting
facilityfrome-commerce managementand distribution
Poor sales of Decline in Improvements
consignment inactive from transition
agreement floor space to fixed-term
rental contracts
sales floors,
etc.

-0.5

Operatingincome＋0.4¥11.4
billion¥8.8
billion
FY18

FY19
4

Transition to Shopping Centers and
Fixed-Term Rental Contracts
・Target achieved with ratio of fixed-term rental contracts of 106% in FY2019,
income improvements of ¥2.3 billion
・Additional 16,000 m2 to be converted following increase in applicablefloor space■Plan for and Increases in Ratio of Fixed-Term Rental Contracts and Income Improvements(As of end of each fiscal year)(10,000 m2)
Ratio offixed-term
rentalcontracts

Incomeimprovement
amounts
(YoY)

7％

20％
¥0.9 billion

62％¥2.0 billion(6,500 m2)

106％

87％

(200,000 m2)¥3.2 billion¥2.3 billion¥1.0 billion Increase value(Forecast)through
contract
renewals

Incomeimprovements¥6.0 billion (five-year aggregate)¥7.0 billion (six-year aggregate)
FY15

FY16

FY17

FY18

FY19

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

FY20

FY21
5

Changes in Store Staff Numbers after Completion of Transition to
Shopping Centers and Fixed-Term Rental Contracts
・Changes in Store Staff Numbers after Completion of Transition to Shopping
Centers and Fixed-Term Rental Contracts

770

100

30

Exploration of
new business fields

Expansion of
New business IT human
FinTech700
human
resourcebusiness
3,550
Resource
investments
Investments
employees
Mandatory
Retirement /natural attrition

1,950
employees(-1,600 employees)

FY14

FY19

6

Expansion of Directly Operated Sales Floors
・Development and expansion of operations in new business fields byleveraging accumulated store operation and customer service expertiseto broaden scope of activities and heighten unique appeal
Sharing Services

Anime / Content

E-commerce-focused
dress rental businessShowroom operated
in Yurakucho MaruiSix-fold Increase intransaction volumes
and 14-fold increasein employee numbers
over three years

In-Store Events

Try-on Stores
Subdivision ofsales floor segments
to heighten per m2
efficiency

Short-term events
held 56 times
a year generating new
card applications
on level with suburban
Marui stores

7

Future Store Strategies

Income Improvements
・Grow earnings through steady income improvements to be realized
through value increases and through differentiation strategies thatprovide experiences and communities■Improvements in Retailing Segment Income(2) Differentiation
strategies(1) Value increases

Incomeimprovement(¥6.0–¥7.0 billion)

FY15

FY16

FY17

Increasedhurdle rate

Incomestabilization

FY18

FY19

FY20

FY21

FY22

FY23

FY24

9

(1) Value Increases
・Pursuit of improved facility value after completion of transition to fixed-term
rental contracts in order to clear NOI yield hurdle rateNOI Yield (FY2019)
Performance vs. hurdle rate

Urban
storesSuburbanstores3.9％

Future Initiatives
Hurdle rate

4.0％
-¥0.8
billion

6.4％

7.0％

・Measures for increasing value
1. Replace existing tenants withnew tenants
2. Renew contracts ofexisting tenants・Contract renewals fortenants accounting for 33,000 m2
of floor space each year
・Five-year value increaseamounting to ¥0.8 billion

10(2) Differentiation Strategies
・Evolution into digital native stores
Post-Digital

Pre-Digital

Department
stores

Shopping
centers

Digital native stores

Sales
Gross profit

Transactions
Rent

Customer numbers
LTV

Digitaltechnologies

Stores

Focus on stores

Digitaltechnologies
Stores

Focus on digitaltechnologies(Inverted
relationship)

Source: After Digital, Yasufumi Fujii and Kazuhiro Obara

11

Initiative Example 1—FABRIC TOKYO・Mutual increases in LTV promoted by providing a venue for customer
engagement and concluding a capital and business alliance agreement
Direct-to-consumer order-made suit brand・Measurements taken in stores,
orders placed online
・Locations in three Marui and Modi stores
Capital and business alliance agreement

・Increasing of locations in Marui and Modi stores・Referral of EPOS cardholders
・Issuance of collaboration cards

12Initiative Example 2—Wacom
・Operation of experience-providing store outsourced to MARUI GROUP toprovide opportunity for opening physical venue

Experiences

Shinjuku Marui Annex

・Hands-on product experience andface-to-face inquiries
・Relaxed, sit-down environment

Customers

Wacom
Direct Interaction

・Ability to incorporate

customer input into
product development

・Outsourcing of store

operation to customer
service professionals

MARUI
GROUP
Improvement ofFacility Value

・Provision of value

utilizing customer
service expertise

Contract operation
services

Operation by MARUI GROUP withprivate brand sales floor
experience

13

Initiative Example 3—Suruga-Ya
・Location opened in Marui store to establish point of contact with customers
outside of traditional baseContents and online sales of used goods
One of Japan’s top e-commercecompanies with more than 70% of sales
from e-commerce

Location openedin Shinjuku Marui Annex in April 2018

Used Hobby Item Sales Ranking (2018)
No. 1 Suruga-Ya¥10.2 billion

No. 2 Mandarake¥3.9 billion

No. 3 AKIBA Liberty¥3.9 billion

Source: The Reuse Business Journal

Ratio offemale customers

Shinjuku Other
Marui stores

70％ 10％

Number of customers andtransaction volume

No. 1

among Suruga-Ya locations

14

Benefits of Differentiation Strategies
・Improvements to business partner revenue and LTV achieved throughprovision of value enabling partners to absorb higher rent prices
Current Physical Stores

Online sales(E-commerce)

Instore
sales

Store
value

STEP 1

Revenue

Digital Native Stores

Experience /community
provision

LTV improvements
through long-term
relationships

Online sales(E-commerce)

Online sales(E-commerce)

In-store
sales

Rent

Store
value

STEP 2

Revenue

Rent

In-store
sales

Store
value

Benefits ofdifferentiation
strategies

STEP 315

Value Provided by MARUI GROUP
・Improvements to business partner LTV achieved by providing
unique MARUI GROUP value

Customerneeds

Customertraffic(D2C, etc.)

× Conversion
×
ratiosCustomerspending
amounts

Improved
× Retention
＝
rates
LTV

Receive

Provide
MARUI
GROUP
value

Point 1

Point 2200 million × EPOS cards (68,800,000 cardholders)customers
Contract operation services
a yearRent revenues
Contract＝ operation
revenue
Credit card LTV

16

Medium-Term Targets for New Store Development Activities
・Expansion of portion of floor space represented by tenants
providing new experience value to 60%% of floor space

Sharing
Food, services, events

30%

25%

60%

70%

Digitizationof entire stores

Experiences /contents

Apple Store Shinjuku,
lululemon, GODZILLA Store Tokyo,
Pokemon Center, etc.

8%
Digital native stores

FABRIC TOKYO,
Direct-toWacom brand store,
consumer, etc. Suruga-Ya, SHIBUYA BASE, etc.

40%

Traditional product sales
FY19

FY24

17

E-Commerce Operations

Performance of E-Commerce Operations in FY2019
・Total e-commerce revenue of ¥24.2 billion in FY2019 (up 5% YoY),
making for fourth consecutive year of revenue growth
E-Commerce Revenue

Initiative Details(Billions of yen)

¥24.2
billion

20
200

20.4

21.3

1. Enhancement of product lineup
Sharing of inventory information
with customers
Applicable sales:

23.0

3.9 times higher than in FY16
2. Expansion of presence on
external websites
Collaboration with KDDI, etc.

100
10Applicable sales:

2.6 times higher than in FY16
0

FY16

FY17

FY18

FY19

3. Improvement of user experienceutilizing stores
Promotion of“click and collect” initiatives

19

“Click and Collect” Initiatives Utilizing Stores
・Increase in in-store product pickups and returns creating benefits
for customers and society

Challenges

Initiative Details

Initiative Benefits

・Desire to pick up ordered products
based around one’s own schedule,
hassle of returning products
・Increase in delivery costs

・Cost reduction

・Customers making purchasewhen picking up / returning

Cost of delivery andreturn to customers

Customers¥0!

FY2019YoYchange % of total

In-store 270,000
pickups

3.6 times
higher11%

In-storereturns

4.6 times
higher19%

70,000¥80 million

Society
Realizationof low-carbon
society

40%

Improveduser
experience

MARUI
GROUP

Reducedcosts
Increasedtransactions
20

Initiatives for Expanding E-Commerce Operations 1
・Development of products in categories with high customer demand
and usage frequencies to foster long-term relationships and thereby
grow income
Target Categories[FY19]¥0.2
billion・Sporting goods ¥0.7
billion・Cosmetics

・Health foods
・Anime・Kids’ items,

etc.

Number of Handled Brands[FY24]¥4.0
billion¥2.0
billion[FY19][FY24]

・Cosmetics 100

800 brands

70

200 brands

Develop going
forward・Sporting
goods

21

Initiatives for Expanding E-Commerce Operations 2
・Initiatives advanced in relation to sizes, an area of concern when
making online purchases, to match customers’ sense of fit
Size Matching

1. Integrate in-store purchasehistory data
2. Display size recommendations
based on data×
Clothing sizes

Future Growth Services

Purchased item

Size of previously
purchased clothing
judged to fit

Subjectively comfortable fit

Shop: Marui
Date ofregistration:
May 16, 2019

Closest Size: M
Perfect fit
Details

3. Add feature for searching forsimilar-fitting items
22

Initiatives for Expanding E-Commerce Operations 3
・Shift to e-commerce focus for private brand products developed
through co-creation with customers to grow digital-based LTV
Co-Creation
Rakuchin Kirei
Pumps

Rakuchin Kirei
Skinny Pants

Expanding Scale of E-Commerce Sales
Instagram accountestablished inFeb. 2018
Uploading ofdevelopment stories
Spread byinfluencers

Ratio of e-commerce sales
for women’s shoes

19%(FY15)

39%(FY19)

Ratio of e-commerce sales
for women’s clothing

19%(FY15)

35%(FY19)

23

Income Forecasts

Income Forecasts for FY2020
・Operating income of ¥13.0 billion (up ¥1.6 billion, or 14%, YoY) to
be achieved thanks to income improvements stemming from thetransition to fixed-term rental contracts and e-commerce¥340.0 billion
337.0
Total Grouptransactions

Operatingincome

326.3

7.8

FY17

328.5

8.8

FY18

¥13.0
billion
11.4

FY19[YoY change] [YoY difference]+14%+¥1.6 billion

・Income improvements fromtransition to fixed-term
rental contracts+¥1.0 billion
・Income improvementsfrom e-commerce＋¥0.5 billion
・Income improvements fromfacility management and+¥0.1 billion
distribution operations

FY20

25

Q&A Session(Sustainability Management & Retailing Segment)

MARUI IR DAY

Progress of Medium-Term Management Plan
Business Initiatives＜FinTech Segment＞

May 23, 2019Today’s Presenters

Yoshinori Saito

Senior Executive Officer, MARUI GROUP CO., LTD.
President and Representative Director, Epos Card Co., Ltd.

Career History
1986 Joined the Company
2007 Store Manager, Machida Marui, MARUI CO., LTD.
2008 Executive Officer and General Manager, Financial
Department, MARUI GROUP CO., LTD.
2011 Director and General Manager, Direct Marketing
Department, MARUI CO., LTD2013 Director and General Manager, Sales Promotion
Department, Epos Card Co., Ltd.
2015 Managing Director, Epos Card Co., Ltd.
2016 Current position

Junko Tsuda

Executive Officer, MARUI GROUP CO., LTD.
Director and General Manager, Cardholder Service
Department, Epos Card Co., Ltd.

Career History

1995 Joined the Company
2014 Store Manager, Nakano Marui, MARUI CO., LTD.
2015 Executive Officer, MARUI GROUP CO., LTD
Director and Store Manager, Marui Family Shiki,
MARUI CO., LTD.
2017 General Manager, New Business Development
Department, MARUI GROUP CO., LTD.
2018 Director and Store Manager, Marui Family
Mizonokuchi, MARUI CO., LTD.
2019 Current position

Today’s Agenda
Junko Tsuda■

Performance in FY2019■

Initiatives for Maximizing Share of EPOS Card
Payments in Household Finances■

Progress of Medium-Term
Management Plan■

Numerical Targets

Executive Officer,
MARUI GROUP CO., LTD.
Director and General Manager,
Cardholder Service Department,
Epos Card Co., Ltd.

Yoshinori Saito

Senior Executive Officer,
MARUI GROUP CO., LTD.
President and Representative
Director, Epos Card Co., Ltd.

2

Highlights■Operating income of ¥35.0 billion (up ¥3.6 billion YoY),
increasing for seventh consecutive year, and ROIC
achieving initial medium-term management plan target two
years ahead of schedule■Total transactions exceeding ¥2.0 trillion for first time due togrowth in card shopping transactions and rent guarantee
service revenues■New card applications grow to 810,000 (up 8% YoY)3

Performance in FY2019
・Targets achieved with ROIC of 4.2% and operating income of¥35.0 billion
FY2017FY2018YoYchangeROIC（％）

Invested
capital(Billions of yen)

FY2019YoYchangeYoY
vs.
YoYchange difference target

3.9

－

3.9

－

4.2

－

+0.3

±0

464.0

+17

531.0

+14

569.9

+7

38.9

-5.1

Billions of yen％

Billions of yen％

Billions of yen％

Billions ofyen

Billions of
yen

Total
1,723.3transactions+17 1,972.5+14 2,310.6+17 +338.2

+6.6

97.1

+14

110.4

+12

128.3

+16 +17.9

±0

70.0

+13

79.0

+12

93.3

+18 +14.3

±0

27.1

+17

31.4

+11

35.0

+11

+3.6

±0

* Operating income excluding extraordinary factors

34.5

+10

+3.1

Revenue
SG&A
expenses
Operatingincome*4

■ Progress of Medium-Term
Management Plan
1. Card Shopping Transactions Trends
2. Cardholder Trends
3. Interest Repayment
4. Liquidation of Receivables

5

Card Shopping Transaction Trends
・Card shopping transactions rise to ¥1,880.0 billion driven
by premium cardholders■Card Shopping Transactions(Billions of yen)

Average annual growth rateover past five years
for premium cardholders

20,0002,000¥1,880.0
billion＋26%

15,0001,500

Premium
cardholders¥1,440.0 billion
10,000
1,000

5,000
500

Standard VISA

¥440.0 billion
0

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

6

Smartphone Payment Trends
・Smartphone payment transactions up 130% YoY, representing 1.5%of total transactions■Smartphone Payment Transactions
300(Billionsof yen)¥27.5 billion

200
20

Performance

Share oftotal
transactions(Billions of
yen)

％

Total
smartphone
paymenttransactions

27.5

1.5

E-money

24.4

1.3

QR codes

3.1

0.2

11.8

100
10

0

■Breakdown of Smartphone Payment
Transactions in FY2019

3.3

3.6

FY15

FY16

5.0
FY17

FY18

FY19

7

Revolving and Installment Payment Transactions
・YoY growth of 25% in revolving and installment payment
Transactions driven by higher installment payments transactions■Revolving and Installment
Payment Transactions

Expanded number of affiliates at which
installment payments can be used (Mar. 2016)

Introduced services for changing toinstallment payments (Dec. 2017)(Billions of yen)
3000
300

YoY change

+20

+25

(％)
140

+25
120

+10

+9

2000
200

232.5
Revolving
145.7

100

115.5
1000
100

80

Installment
86.8

103.2

0

12.3
FY15

60

FY16

FY17

FY18

FY19
8

Expansion of Installment Payment Transactions
・Balance of revolving and installment payments and revenue 1.6 times higher
than in FY2016 (before installment payment initiatives were stepped up)■Balance of Revolving and Installment Payments
and Revenue
Balance of revolving
payments(Billions2000
of yen)

1000
250

500
200

205.7
199.4

0

Revenue

32.3 (5.1 times
higher)

6.3
FY16

¥26.6
billion

1. Increase in new installment
payment customers
319.4 (1.6 times＋
higher)
2. Expansion of transactions
through higher usage amounts
and frequencies → Increase inaffiliate commissions
287.2 (1.4 times＋
higher)
3. Limiting of bad debt-related
expenses resulting fromchange in balance distribution(vs. FY16)

Balance of installment
payments
1500
300■Benefits of Expansion of Installment
Payment Transactions

FY17

FY18

FY19

¥42.1 (1.6 times
billion higher)

Contributions to higher ROIC
Initial ROIC target achieved two
years ahead of schedule

9New Card Application Trends
・New card applications exceed 800,000 due to strong application
numbers through commercial facilities, Internet, and services■New Card Applicants■Breakdown of New Card Applicants(Thousandsof people)
100

E-commerce

90

810,00080
800

Internet applications

750
730730740
720
710
710

70

180,000(+50,000 YoY)

60

600
50

580
580580550550Content /Sharing

Internet

Goods

Experiences

40

400

510,000

30

20

200

10

0

500,000

700,000

07.3 08.3 09.3 10.3 11.3FY1212.3 13.3 14.3 15.3 16.3 17.3 18.3FY19
19.3
FY07

StoresExternal commercial
facilities

Sales ofGoods

120,000(+10,000 YoY)

PhysicalstoresServices
Services
10Nationwide Expansion
・Rise in ratios of people holding EPOS cards both inside and outside of our business area
due to smooth nationwide expansion achieved through increase in partner facilities■Cardholder Data
FY19

FY15

Total
Insidebusinessarea
Outsidebusiness
areas

Ratio ofpeopleholding
EPOS cards

Cardholders(Prior tonationwide
expansion)

Cardholders
Thousandsof people％％

Thousandsof people

6,880

+16

6.6

5,750

+10

11.5

1,130

+69

2.1

5,910
5,250
670

vs. FY15

vs. FY15
％

+1.0

ppt

+1.0

ppt

+0.9

ppt
Ratio of people
holding EPOS cards

10.0% or more
5.0% or more
1.5% or more

Existing partner facilities

11

Card User Numbers and Usage Rates
・Initiatives emphasizing card user numbers and usage rates toefficiently grow business■Usage Statistics by Card Type

■Card User Numbers and Usage Rates(Thousands of people)
600
6,000

（％）

Usage rate

66

66

65

64
64
400
4,000

3,900

4,150

4,330

4,530
61

200
2,000

Total

67

58

Usage
rates

66

54

92

100

Card
user
numbers

4,530

2,530

1,930

70

(%)

(Thousandsof people)

1. Shift in emphasis from cardholder numbers(card numbers) to LTV

2. Improvement of ratio of Gold cardholders bystepping up initiatives pertaining to rent, otherrecurring payments, and e-commerce
55

0

FY16

FY17

FY18

FY19
12

Interest Repayment
・Amount of interest repayment down 17% YoY, and interest repayments received,
an indicator designated for advanced monitoring, relatively unchanged YoY■Interest Repayment and Interest Repayments Received
200 of yen)(Billions

150

120
（％）

YoY change ininterest repayments received
86
83 ％

100

71

99

100

50

80
60

Interest
repayment¥7.8
billion

40

6.5

5.4

¥4.5 billion(-17% YoY)

0

FY16

FY17

FY18

0

FY19

¥3.3 billion

Payments into
provision
Outstanding
provision

20¥6.1 billion¥4.9 billion

13Liquidation of Receivables
・Liquidated receivables to be raised to approx. 25% of operatingreceivables to achieve optimal capital structure■Off-Balance Sheet Liquidated Receivables and Outstanding Operating Receivables
30（％）(Billions of yen)

25

,
15000
1,500

10000
1,000

Ratio of off-balance sheet
liquidated receivables tooperating receivables
12
Off-balance
sheet Liquidated
receivables

5000

64

Outstanding
operatingreceivables

21
20

17

12
220
73

548

489

119

10

660

566

0

0

FY17

FY18

FY19

FY20

FY21

14

■ Initiatives for Maximizing Share of EPOS Card
Payments in Household Finances
1. Rent Guarantee Service and Recurring
Payment Initiatives
2. E-Commerce Use Promotion Initiatives
3. EPOS Family Gold Card Initiatives

15

Strategies for Maximizing Share of EPOS Card Payments
in Household Finances

・Maximization of share of EPOS card payments in household finances with uniquefinancial and payment services
・Promotion of initiatives for converting all family members into cardholders with EPOS
Family Gold cards■Breakdown of Customer Household Finances〈Cash Payments〉
E-commerce
Partner

Food〈Bank Transfers〉
Rent guarantee services

Rent

Partnerエイブル

Beauty/fashion
Reservation
applications

Communications/
utilities

Recurring payments

Leisure/learning
Congratulatory and other gifts

Savings/
investment

tsumiki Securities

貯蓄・投資

16

Current Share of EPOS Card Payments in Household Finances■Average Share of Household Finances by
EPOS Card Type

Total
Share ofhousehold 12％
finances
Transactions ¥1,880.0 billion

5％

17％

41％

¥440.0 billion¥1,270.0 billion¥170.0 billion■Share of Payments by Gold Cardholders
20
200

Low share of 40%

Gold cardholders(Thousandsof people)

15
150

17％

10
100
5
50
0

1

3

5

7

9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59
10
20
30
40
50
（％）
Share of household finances
17(% of annual household income represented by EPOS card payments)

Statistics on Share of EPOS Card Payments
in Household Finances

・Higher share of household finances to be pursued by encouraging
customers to use their EPOS card as their main card through ongoinguse to make rent and other■Customers Using EPOS Card to Make Rent or
Other Recurring Payments■Breakdown of EPOS Card Usagein Household Finances(％)
60〈Cash Payments〉

Rent

Food

15

40

Other recurring
payments

Beauty/fashion

7

20

0

Food/leisure

Leisure/learning

30–40

Congratulatory andother gifts

10
Low shareHigh share〈Bank Transfers〉
Rent

180,000
customers

Recurring
payments 1,570,000
customers

Savings/investment

・Rates of conversion to Goldcards and LTV of customers
using card to make ongoing rent
and other recurring payments
4–5 times higher than others

18

Rent Guarantee Services Market
・Revision of Civil Code to grow rent guarantee services market while
intensifying competition■Competition Trends■Rent Guarantee Services Market(Millions ofresidences) ・Approx. 250 rivals in rent guarantee
services industry, including specialists
9.6 million 1000

(Trillionsof yen)15

12

and credit card companies

Residences using rent
guarantee companies

6.0 million(Reference) Sales of Competitors

600
6

Major creditor B: ¥10.9 billion

7

400
4

Rent
3

200
2

0

0

FY15

FY16

Major rent guarantee service specialist A:¥12.8 billion

11

9

6

800
8

FY17

FY18

FY19

・Ongoing intensification of competition
due to market entry by major retail credit
card companies, etc., against backdrop of
market expansion
・Recent increase in new rent guarantee
services businesses targeting growing
number of non-Japanese residents ofJapan※Source: Ministry of Land, Infrastructure, Transport and Tourism
and Japan Housing Construction Management Association(certain estimates made by MARUI GROUP CO., LTD.)19

Outlook for Rent Guarantee Services Operations
・Rapid growth to be achieved with highly unique business model■Revenue from Rent Guarantee Services■MARUI GROUP’s Strengths
Epos Card

RivalsPointsaccrued bypaying rent○－

Operations

Operation
integrated withcredit cards

Systems

Reliability

Customized(Developed in-house)

Trustworthinessof
MARUI GROUP－
Built to desired
specifications(Development
outsourced)

Small tomedium-sizedcompanies(Only top 4
specialists listed)

Swift participation in market serving
non-Japanese residents of Japanthrough investment in GTN(Billionsof yen)120More than

100
10

808

¥10.0 billion

Average annual
growth rateover past five years

＋31%

8.9

6.5

606
4.9

404
3.6
202

0

1.1

1.6

2.2

2.8

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

20

Future Rent Guarantee Service Initiatives
・Expansion of operations by stepping up collaboration with major partners
and promoting use by existing cardholders■Expansion of Partner Network

・Largest customer base of all partners,
enhanced collaboration through operational
streamlining via system coordination

エイブル
・Provision of EPOS card rent guarantee
services at 430 directly operated stores
across Japan (May 2019~)■Promotion of Use by Existing Cardholders
Cardholders living
in rental housing
2,750,000

Total
Cardholders
6,880,000

Rent guarantee users
180,000

Cardholders Living
in Rental Housing
2,750,000

Oheya Sagashi Net (Jun. 2019~)

・Simultaneous start of application for
ABLE EPOS CARD collaboration card21

Initiatives for Expanding EPOS Card Use for Recurring Payments
・Flat growth in share of card shopping transactions despite rise inrecurring payment transactions■Recurring Payment Transactions■Initiatives(Billions of yen)（％）

Share of card
shopping transactions

3000
300

12

12

12

12

14

1.Step up coordination with partners andbenefit providers to enhance cardholder
services

12

220.8

2000
200

Prior approach toward usage promotion
centered on information provided in-store

11

196.2
169.0
1000
100

143.3

8

112.6

Providers of benefits to EPOS cardholders

2. Leverage digital pointsof contact to promote
use
0

5

FY15

FY16

FY17

FY18

FY19
22

E-Commerce Use Promotion Initiatives—Partnership with GMO Payment Gateway

・Promote e-commerce use and expand cardholder base throughpartnership with GMO Payment Gateway to commence in June 2019

A

Card registration

Company

B

Card registration

CompanyC

Payment proxyservice company

Card registration Company

User

Standard flow

■Overview of Collaborative Initiatives 1. Promotion of e-commerce use

among EPOS cardholders

・Massive improvement in convenience realized
by enabling payments on all affiliated websites
to be made using same ID and password
Informal agreement affiliates: 30(As of March, 2019)

Cardholder
Non-card
holderCollaboration scheme

2. Expansion of
cardholder base

ID & password

ＩＤ・(Shared)
パスワード

CompanyA

Company

B

Card application Company
C

Immediateusage andpayment processing(Patent pending)・Real-time inspections available 24 hours a
day enabling card application, payment, anduse of application benefits to be conductedsimultaneously
Affiliates
Targets More than 200(Fifth year) New card applicantsMore than 100,000
23

EPOS Family Gold Card Initiatives
・Number of premium cardholders rises to 2,150,000 (up 310,000 YoY)
thanks to contributions from EPOS Family Gold card
■Initiatives to Date

■EPOS Family Gold Card Promotion Scheme
Issuance of
EPOS FamilyGold cards
Launch of Collaboration
Gold cards

Option to select stores atwhich to receive extra points

Husband

Wife(EPOS Family Gold cardholder)

Rival’s card

Standard EPOS cardholder

Start of in-store Gold card
applications
Issuance of Platinum cards

EPOS Family Gold card

Issuance of Gold cards
FY09
Number ofpremium
cardholders 120,000(YoY
difference)

FY18
1,840,000(+270,000)

FY192,150,000(+310,000)

Child

EPOS Family Gold card

Cardholders

Existing

Referred

110,000

50,00060,000(50,000 households)

New

Upgrade30,00030,00024

EPOS Family Gold Card Initiatives
・Conversion of all family members to EPOS Family Gold cardholders to
Increase number of Gold cardholders■Usage in Two-Person Household (Married Couple)■Gold Cardholders(Thousands of people)

Annual income¥8.5 million

400

3,700

300
3,000

+¥0.8
million¥1.2
million¥2.0
million

23％

2,400
200
2,000

100
1,000

Family Gold14％0
入会前（1人）

入会後（2人）

2,090

110

300

FY19

FY20

Households 50,000

150,000

1,000
・・・

FY24
500,00025

Synergies Between Expansion of Share of EPOS Card Payments in
Household Finances and Conversion of All Family Members to Cardholders

・Transaction volume growth to be achieved through benefits of expansion of share of
EPOS card payments in household finances and increase in cardholders(Thousands of people)

17％ 22～25％

20

200

Preliminarily calculatedGold cardholders

Cardholders

15
150

Five
years

10
100

×

3.7 million

transaction growth¥800.0 billion(+1.6 million)–¥1,000.0 billion

Share of household finances

12％ → 16％

505

0

1

91011 13 15 17 1920
21 23 25 27 2930
31 33 35 37 3940
41 43 45 47 49 50
51 53 55 57 59（％）

Share of household finances(% of annual household income represented by EPOS card payments)

26

3

5

7

Forecasts for Total FinTech Segment Transactions
・Total transactions of ¥5.0 trillion forecast in FY2024■Total Transactions¥5.0 trillion(Billions
50,000of yen)

Benefits of strategy of
maximizing share of EPOS
card payments in household
finances

40,0004,000

3,000
30,000¥2.8 trillion

or more¥1.0 trillion¥4.0 trillion¥2.3 trillion
20,0002,000

10,000
1,000

19.3

20.3

21.3

22.3

23.3

24.3
27

■ Numerical Targets

28Forecasts for FY2020
・ROIC of 4.4% and operating income of ¥39.0 billion (up ¥4.0 billion)
FY2018FY2019YoYchangeROIC

FY2020(Forecast)

YoYchangeYoY
YoY
differencechange

3.9

－

4.2

－

4.4

－

+0.2

531.0

+14

569.9

+7

603.0

+6

+33.1

Billions of yen％

Billions of yen

1,972.5+14

2,310.6+172,752.0+19 +441.4

Revenue

110.4

+12

128.3

+16

139.7

+9 +11.4

SG&A
expenses, etc.

79.0

+12

93.3

+18

100.7

+8

+7.4

Operatingincome

31.4

+11

35.0

+11

39.0

+11

+40

（％）

Invested capital(Billions of yen)

Totaltransactions％ Billions of yen％ Billions ofyen

29Medium-Term Targets
・Operating income of more than ¥43.0 billion and total transactionsof more than ¥3.0 trillion in FY2021(％)(Billions of yen)

4.5～
600
60

ROIC

4.4

4.2 ％

4.3

400
40

200
20

4.1

Operatingincome¥35.0
billion

39.0

¥42.0
billion~0

Totaltransactions

4.5

3.9

3.7

3.5

FY19

FY20

¥2.3

2.8

trillion

FY21

¥3.0

trillion~30

Q&A Session(FinTech Segment)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 to a variety of factors. Any inquiries may be directed to
the IR Department (Tel: 03-5343-0075).