M A R U I CO . , LT D .
M A R U I I R D AY
N e w M e d i u m -Te r m M a n a g e m e n t P l a n

May 28, 2021

Schedule for today’s presentation
16:00

Overview of New Medium-Term Management Plan
(Retailing Segment)
Masahiro Aono, President and Representative Director

16:15

Q&A

16:30

Overview of New Medium-Term Management Plan
(FinTech Segment)
Yoshinori Saito, President and Representative Director,
EPOS Card Co., Ltd.

16:45

Q&A

M A R U I I R D AY
N e w M e d i u m -Te r m M a n a g e m e n t P l a n＜ R e ta i l i n g S e g m e n t ＞

May 28, 2021

I am Aono.
I will now explain the business plan for the Retailing segment.
I will do my best to make this information as easy to understand as possible,
so please bear with me.

Content of today’s presentation

1.

Results and Review of Fiscal Year Ended March 31, 2021

2.

Strategies Going Forward

3.

Numerical Targets

1
Results and Review of Fiscal Year Ended
March 31, 2021

This shows results and reviews of the fiscal year ended March 2021.

Pe r fo r m a n ce of Reta i l i n g S eg m e n t i n FY 2 0 2 1・Retailing segment posted operating income of ¥1.5 billion;
missed announced forecast because of third wave of COVID-19
FY2020

FY2021

Billions of yen

OperatingincomeYOY change

YOY difference

Billions of yen%

Billions of yen

10.0

1.5

15

-1.5

Total
transactions

320.1

229.2

72

-0.8

Revenue

116.3

88.9

77

-2.1

ROIC (%)

3.4

0.5

-2.9

―
5

Operating income in the Retailing for the fiscal year ended March 2021 was¥1.5 billion, a decrease of ¥8.5 billion from the previous year.
Due to the impact of the third wave at the beginning of the year, we were also
unable to achieve our published plan. We are sorry.

Review of Previous Medium-Term Management Plan
・Achieved fixed-term rental contract transition target for shopping centers,
but profit of Company’s e-commerce and specialty stores slow to improve
Main measures

Transition to 100%
fixed-term rental
contracts

Review

Fixed-term
rentalcontracts
E-commerce

Promote omnichannel strategy

Specialty
stores〇Attained target of 100% fixedterm rental contracts

×

Sluggish growth, because
e-commerce failed to gaincustomer support

×

Lack of profit improvement
despite cost reduction andstreamlining
6

This is a review of the previous medium-term management plan.
Although the conversion to fixed-term rental contracts for SCs achieved theplan, the profit improvement of e-commerce and specialty stores did not
progress.

Omni-Channel Strategy Challenges

Challenges

Customer e-commerce experience did not improve due todelays in UI/UX initiatives

CausesAdvancing omni-channel strategy with a pre-digital department現象面
store type mindset focused on physical stores and manufacturing

現象面

Specialty stores are focused on physical stores and e-commerce
did not expand

7This is the omni-channel strategy challenges.
e-commerce has lagged behind in its UI/UX efforts and has failed to improvethe customer experience.
Specialty stores promoted compression efficiency, but failed to improve
profits, and e-commerce expansion did not proceed.
With regard to these two issues, we have been unable to resolve them formany years, not in a single year.
Therefore, we believe that we need to fundamentally change the way we dothings, rather than that we have made mistakes in our policies.
We believe that this is due to the fact that the traditional omni-channel
strategy was pursued only by retail personnel who are good at creating storesand manufacturing products.
Therefore, we would like to change not only the policies but also theapproaches of both e-commerce and specialty stores.

Revitalize E-commerce
・Transform MARUI GROUP into a digital business by harnessing digital personnel,
targeting total e-commerce transactions of ¥30.0 billion by FY2026[Initiatives]

300

Event-type e-commerce

250

・Expand event-type e-commerce incoordination with retail stores

200

Pre-order/advanced payment,
pick up instore
・Online pre-order and payment,
pick up/use services instore¥30.0
billion[Transaction targets]¥19.2
billion

150
100
50
0

FY2022

FY2023

FY2024FY2025

FY2026
8

In the area of e-commerce, we will utilize digital human resources both insideand outside of the company, such as system engineers and web designers, andshift to a method that allows us to speedily implement the PDCA cycle.
As for specific measures, in addition to improving UI/UX as before, we will
expand event-based e-commerce linked to in-store stores, and work on newservices that allow customers to receive products and services in stores after
making advance reservations and card payments online.
It will take some time, but we are aiming for ¥30 billion in the fiscal year
ending March 2026.

Transform Specialty Stores with New Co-Creation Specialty Store Model・Withdraw, over a two-year period, from all specialty stores for which MARUI GROUP
undertakes all processes from manufacturing through retail. Foster new, co-creation
type specialty stores to take their place.
Up till now

Fr o m n o w

S p e c i a l t y sto r e s

E v e n t a n d sto r e o p e ra t i o n
o u t s o u r c i n g s e r v i ce

Manufacturingfunctions

Logistics
functions

Retailfunctions

Manufacturing

Inventory

Store operation

Purchasing

Product delivery

Customer service

Manufacturingfunctions

All conducted by MARUIRetailfunctions

Logistics
functions

MARUI GROUP+ tenants

Tenants

March 31, 2020

March 31, 2026

Workforce

1,150

650

Floor area

Approx.
12,500m2

Approx.
33,000m2

On the other hand, in terms of specialty stores, we will withdraw from thebusiness of conventional directly managed specialty stores, which have been
doing everything from manufacturing to sales on their own, in 2 years. Instead,we will collaborate with tenants to develop event business and store
management as new directly managed businesses.
We will increase productivity by halving the number of specialty stores
currently operated by 1150 people to 650 people in the fiscal year ending
March 2026, and doubling the floor space from 3800 tsubo(12500㎡) to 10000
tsubo(33000㎡). I will explain the contents of this later.

92Strategies Going Forward

Role of Retailing
・Promote new trinity model comprising Retailing, FinTech, and investing for the
futureR e t a i l i n g ’s s t r e n g t h s
Investing forthe future

Provides contact points
with customers
Retail personnel

Retailing

FinTechSales floor operational
know-how

11

This is the strategy for the future.
While leveraging our strengths in Retailing, we will promote a trinity businessmodel with investing for the future and FinTech.

Department Store Format Transformation

5

?

4
3
2
1

“Eventful” stores
Stores that don’t sell
Expand food and services

Transition to fixed-term rental contracts
12

We have been working on the transformation of the department store businesssince before COVID-19, and in the new medium-term management plan, we
will proceed to the third and fourth stages.

Initiatives So Far

Fixed-term
rental contracts

Transition to fixed-term
rental contracts

Category transformation

Floor area
breakdownFloor area
breakdown

12%24%
Apparel

44%

70%
Consignment

43%

88%
30%
FY2014FY2021

Other

38%

Food and services

18%
FY201433%
FY2021
13

In the fiscal year ended March 2013, we changed our business model so that
70% of our business consisted of fixed-term rental contracts, whereas in thefiscal year ended March 2014, most of our business consisted of consignment.
As a result, income became stable, and operating income for the fiscal year
ended March 2021 was a surplus of ¥1.5 billion. However, if the businessmodel had not been changed, we would have recorded a loss of over ¥5 billion.
At the same time, we have changed the contents of the store. Apparel, which
was about half of the total, has been reduced to 24%, while food and services
have increased from 18% to 33%.

Ste p 3 : Sto re s t h at D o n’ t S e l l・Turn stores into platforms for online/offline integration
Create new business model through collaboration with companies originating in online businesses
Online services

Storefront e-commerce

D2C brands

mercari station

SHIBUYA BASE

FABRIC TOKYO

Purpose of opening offline stores
Attract new customers

Improve brand recognition

Engage withexisting customers
14

In our recent financial results presentation, we talked about the environmental
changes over the next 10 years that we are focusing on, and how digital technology
is moving from an introduction phase to a transition phase. We expect that digitaltechnology, which has been developed mainly in software and online, will penetrate
the physical realm, and that online and offline will become increasingly integrated.
The third stage, stores that do not sell, is positioned as a platform for the
integration of online and offline.
The photos show tenants that have already opened stores, but we will create new
businesses through collaboration with online companies such as Mercari, an online
service provider; BASE, a storefront e-commerce; and FABRIC TOKYO, a D2C
brand.
These tenants do not aim to sell, but rather to open experiential stores to attract
new customers, increase awareness, and improve customer engagement.
In the future, more and more online companies will emerge, but many of thesecompanies are startups and emerging companies, and they face challenges in termsof funding and human resources.

Ste p 3 : Sto re s t h at D o n’ t S e l l・Help companies originating in online businesses open offline stores throughco-creative investment and outsourced operation
Financial support

Operational support

Investing in collaboration
partners through co-creative
investment

Store operation outsourcing
service utilizing retail personnel

FY2021

FY2026Companies
invested in

28

70

C o m p a ni e s t ha to p e ne d s t o r e s

1234

FY2021

FY2026

Employees

63300Stores16

64
15

Therefore, we will support these companies through our co-creative
investment and management contract.
In terms of funding, we will invest in collaborative partners through cocreative investment. Currently, we have 28 companies, but we are planning tohave 70 companies by the fiscal year ending March 2026.
In terms of operational support, we are currently engaged in shop management
on a contract basis with 63 people utilizing retail personnel, due to the shift
from the directly managed specialty store I explained earlier, but in the fiscal
year ending March 2026, it will be expanded to 300 people.

Ste p 3 : Sto re s t h at D o n’ t S e l l・Steady growth in collaborations with companies originating in online business,
including co-creative investees
Floor area share of
online-to-offline
tenants

Stores opened
Furniture

Products forhealthcare
professionals

Shampoo

Urban centers: 17%
Suburbs: 11%

Chinesemedicine

Cosmetics

30%

Entertainment
13%0%FY2017

FY2021

FY202616

In addition to our co-creative investment partners, we are steadily expanding
our collaborations with companies that have actually started online in real
stores.
The tenants on the left already opened stores.
They are tenants that sell furniture online, tenants that sell products for
medical professionals online, and so on.
The tenant area composition from online, which was zero in the fiscal year
ended March 2017, has now expanded to 13%.
We will expand this to 30% in the fiscal year ending March 2026.
If we add food and beverage and services, the figure is about 70%.

Ste p 4 : “ Eve n t f u l ” Sto re s
・Expanded scope of events tailored to individual interests, with focus on anime[Examples from FY2021]

Sustainability

Entertainment
Kimetsu no Yaiba

Bread festival

Anime

Bread from regional bakeries

KOREAJU

TVXQ

Korean cosmetics

K-Pop

Minna-Denryoku

Pocket Marche

Renewable energy

Produce direct from growers andgrower support

Ecopresso + Kobe City

Reduce waste with edible drink
containers

Caetla + iKASA

Umbrella-making workshop for
future generations

17

The fourth step is to create an eventful store.
With anime at the core, we will expand the range of events that support the“likes” of each individual.
The photo here is from an event we held last year.
There are many events that have been supported by customers, such as

Kimetsu no Yaiba, bread festivals, et cetera, even in the midst of COVID-19.
In addition to these entertainment events, we also hold many sustainable
events such as Minna-Denryoku, Pocket Marche, etc, as shown on the right.

Ste p 4 : “ Eve n t f u l ” Sto re s・Anime business (launched 2016) grows through collaboration with Retailing and
FinTech130,000
Anime business

cards

Investingfor the共創投資
futureRetailing

Instore events

FinTechCards tailored
to individualinterests

EPOS Card
Transaction
volume10,000cards

8.9
billion
3.7
billion
FY2017©BDP ©CraftEgg ©BUSHI

FY2018FY2019FY2020*Transaction volume is the total for instore events, permanent tenants, and e-commerce.

The Animation business, which is the main event, was launched in 2016 andhas grown in tandem with Retailing and FinTech, including changing the face of
the EPOS Card while using in-store events.
In the fiscal year ended March 2020, the transaction volume increased to ¥8.9
billion.

18

Ste p 4 : “ Eve n t f u l ” Sto re s・Growth of cards utilizing instore events leading directly to strong profitability
Cards tailored to individual interests
Rilakkuma

16,000 cards

Sumikko Gurashi

13,000 cards

Evangelion

12,000 cards

Customer feedback

Achieved strong profitability
Percentageof young
cardholders

Retentionrate

・I want to get one of the cards because I’m a fan.
・I love the design and that makes want to use the card.
©2021 San-X Co., Ltd. All Rights Reserved.

©kharaLifetime
Value (LTV)

60%

Versusstandard
cards

56%

Versusstandard
cards

+18%

+12%

Versusstandard
cards

7x
19

In terms of how this eventful store development will lead to profits, cards
tailored to individual interests of each individual through in-store events havethe characteristics that customers want to join because they like the content
and continue to use the card because it is their favorite design.
As a result, the youth ratio is 60%, which is higher than general occupancy,
and the continuous usage rate is 12% higher than general occupancy.
As a result of these achievements, the lifetime value is 7 times higher thanthat of general operations, and we have achieved high profitability.

Ste p 4 : “ Eve n t f u l ” Sto re s
・Target 370,000 new cardholders in FY2026 by expanding instore events
New cardholders
who sign up instore

370,000

120,000

190,000

350,000

Cards tailored toindividual interests

150,000
Standard cards

230,000

70,000190,000

90,000

FY2020

FY2021

FY2026

Last year, due to the impact of COVID-19 crisis, new memberships at stores
were less than half of what they were, putting us in a very difficult situation.
However, with the containment of COVID-19, we will recover new members at
the store again and change the contents at the same time to enhance thecomposition of cards tailored to individual interests and increase profitability.

20

Ste p 4 : “ Eve n t f u l ” Sto re s
・To grow instore event transactions to ¥25.0 billion in FY2026
29,000m2¥25.0 billion

Floor area

9,250m2

Tr a n s a c t i o n s¥4.1 billion
FY2021

Employees

150

FY2022

FY2023

FY2024FY2025

FY2026320
21

In-store events are currently operated by 150 employees and have a trackrecord of ¥4.1 billion for 9250㎡, but we hope to expand this to ¥25 billion in
the fiscal year ending March 2026 by operating with 320 employees and a total
area of 29000㎡.

Making MARUI stores fun places where customers discover new interests

Services

Spot-on advice

DiningCosmetics

Plenty ofchoiceEasy to try products

D2C

A perfect fit

Music

Technology

Enjoy live concerts

Latest techGames

Community

Limitededition games

Support local
neighborhoods

Anime
Anime-related
experiences

D&I
SharingﾞShare insteadof owning

Sustainability

Diverse values

Protect nature

As for this event, we believe that it will not only contribute to the profits of
the FinTech, but will also significantly increase the value of the Retailfacilities.
Compared to the sales of goods, the number of customers at this event is 1.6
to 1.7 times higher.
Existing tenants are happy, and more importantly, there are always events
going on for customers to meet their individual “likes.” Or, there are
discoveries in Marui that they were not aware of.
We hope that by making people feel this way, Marui will be reborn as a placethat is always fun to visit.

22

3
Numerical Targets

R O I C Fo re ca st
・ Ta rget R O I C of 4 . 3 % i n FY 2 0 2 6 by i n c rea s i n g o p e rat i n g i n co m e a n d
re d u c i n g i n ve ste d ca p i ta l
<March 2026><March 2020>-¥6 billion＋¥2 billion¥202billion¥12 billion¥10 billion

Operatingincome¥196billionInvested
capital

ROIC

3.4%

4.3%
24

This is a numerical plan.
ROIC is expected to increase from 3.4% before COVID-19 to 4.3% in the fiscal
year ending March 2026, due to an increase in operating income and areduction in product inventories and fixed assets.

Post- COVI D - 1 9 O u t l o o k・Improve profit by ¥4.0 billion, factoring in real estate market risks¥12billionOperatingincome¥10billionFY2020-¥2
billion+¥4

billion¥8
billionPost-COVID-19
profit level

Assumed risks
Vacancy rate +2%-¥1.0 billion

Rent -2%-¥1.0 billion

Department store format
transformation

Revenue growth+¥2.0 billion

SG&A expense cuts+¥2.0 billion

FY202625

As for the outlook after the containment of COVID-19,
I think it is too optimistic to say that the Retailing business will be able torecover to its pre-COVID-19 operating income after the containment of
COVID-19.
Based on the expected deterioration of market conditions, we have factored
in an increase in vacancy rates and a decline in rents, and we hope toovercome the negative impact of ¥2 billion, achieve the transformation of thedepartment store business, and build up a profit of ¥4 billion.
We will add ¥2 billion in revenue by realizing the creation of stores that do notsell and eventful stores, and reduce back costs by converting directly
managed specialty stores into new co-creation type directly managed stores,
thus reducing expenses by ¥2 billion.

O pe rat i n g I n co m e Fo re ca st・Target operating income of ¥12 billion in final year of period coveredby Medium-Term Management Plan
Period covered by Medium-Term Management Plan

¥12billion

10
9

FY20201.5

2FY2021

FY2022

FY2023

FY2024FY2025

FY2026This is the plan for operating income by fiscal year.
The fiscal year ending March 2023 will be affected by COVID-19, but COVID19 will be contained in the fiscal year ending March 2024, after which we will
put the business on a growth trajectory and plan to achieve ¥12 billion in thefiscal year ending March 2026.

26

Retailing Segment KPIs (FY2026)

CO2 emission reduction volume

Impact100,000 tons or more

Help facilitate circularconsumption options

600 or more

Hold events throughout the year

5,000 or more

Utilize stores with co-creative investees

Financial
indicators

ROIC 4.3% or more

250 or more

Operating income ¥12 billion or more
27

Lastly, there are KPIs for the Retailing business.
We have set goals of reducing CO2 emissions by more than 100,000 tons,
providing more than 600 options that contribute to circular consumption,
holding more than 5,000 events per year, utilizing stores with co-creation
partners in more than 250 cases, achieving ROIC of more than 4.3%, andoperating income of more than ¥12 billion.
The Retailing business continues to face a difficult environment in both thisfiscal year and the previous fiscal year, and we apologize for any concerns thismay cause you, but we will work to overcome COVID-19, achieve this midterm plan, and grow beyond the plan.
That’s my explanation.

Q&A

M A R U I I R D AY
N e w M e d i u m -Te r m M a n a g e m e n t P l a n＜ F i nTe c h S e g m e n t ＞

May 28, 2021

I am Saito from EPOS Card. Thank you. I would like to explain the mediumterm management plan for FinTech.

Content of today’s presentation
1.

Overview of Performance in Fiscal Year Ended March 31, 2021

2.

Review of Medium-Term Management Plan

3.

New Medium-Term Management Plan

4.

Numerical targets

The contents of today’s session are as shown on the screen.

1

Performance in Fiscal Year Ended
March 31, 2021

First, here are the results for the fiscal year ended March 2021.

Overview・ Operating income and ROIC fell short of medium-term plan targets because ofincreased interest repayment expenses
・ Shopping transactions were flat year on year because of COVID-19, while the rent
guarantee service maintained strong growth to drive service revenue expansion

・ For new cards, the number of cardholders signing up at commercial facilities fell
sharply. The total number of cardholders declined year on year for the first timeto ¥7.09 million.
32

This is the digest.
Both operating income and ROIC fell short of the medium-term targets due tothe increase in interest repayment expenses.
In the previous fiscal year, while shopping transaction volume remained at thesame level as the previous year due to the impact of COVID-19, the rent
guarantee continued to grow strongly, driving growth in service revenue.
As for new cards, the number of members fell below the previous year’s level
for the first time to ¥7.09 million due to a significant decrease in enrollment at
commercial facilities.

FY2021 Numerical Result
・Operating income of ¥20.3 billion (-47% YOY), ROIC of 2.5% (-2.1pp YOY)
FY2019

ROIC (%)
Invested capital(Billions of yen)(excluding liquidated
accounts receivable)

YOY change

FY2021

YOY

4.2

－

4.6

－

2.5

569.8

107

574.5

101

564.0

Billions of yen

Total Grouptransactions

FY2020% Billions of yen

YOY change

YOYdifference

－

-2.1

－

98

-105

－

(108)

(＋553)%

Billions of yen%

VS. Midterm plan

Billions of Billions ofyenyen

2,310.6

117

2,678.8116

2,760.4

103

+81.6

-59.5

Revenue

128.3

116

136.6

108

135.3

99

-1.3

-0.7

SG&A expenses

93.3

118

98.2

105

115.0

117

+16.8

+18.0

Operating income

35.0

111

38.4

110

20.3

53

-18.1

-18.7
33

This is a numerical result of the FinTech segment.
Operating income decreased by ¥18.1 billion to ¥20.3 billion due to theprovision for loss on interest repayments, and as a result, ROIC decreased by
2.1% to 2.5% compared to the previous fiscal year.

Factors Affecting Operating Income
・Operating income was ¥41.6 billion adjusted for interest repayment and COVID-19 impact (+¥3.2
Interest repayment
Real operating
billion YOY)
income growth+¥3.2 billion¥38.4
billion¥41.6
billion-¥18.7billion

Impact of
COVID-19-¥2.6
billionFY2020¥20.3
billionFY2021
34

Looking at the breakdown of changes in operating income, we estimate that
operating income, excluding the impact of increased interest repayments andthe impact of COVID-19, will be ¥41.6 billion, an increase of ¥3.2 billion fromthe previous fiscal year.

2
Review of Medium-Term Management Plan

Next, I would like to review of medium-term management plan.

Shopping・Shopping transactions grew at a faster pace than the domestic shopping market■ Shopping transactions(Trillions of
4.0
yen)

EPOS Card
121

119

117

117

3.0
107

109

109

110

120
102
96

Domestic
market2.0

Five-year
average
growth rate

130（%）

110
100
90
80

2.1

1.0
1.3

EPOS Card

Domestic market+ 15% ＞ + 6%

70
60

0.0

50

FY2017FY2018FY2019FY2020

FY2021

Source: Survey of Selected Service Industries, Ministry of Economy and Industry (METI)
Note: EPOS card transactions are for stores outside of Marui GroupFirst, here are the shopping trends.
Over the past 5 years, EPOS Card’s shopping transaction volume has grown
at a compound annual growth rate of 15%, outpacing the growth of domestic
shopping.
In the previous fiscal year, while domestic credit card transaction volume fell
below the previous year’s level for the first time due to COVID-19, EPOS
Card transaction volume was able to secure the same level as the previous
year.

36

Impact of COVID-19 on Transactions
・Transactions were little changed year on year, because growth in e-commerce and rent compensatedfor declines in travel & entertainment and large commercial facilities■ Shopping + rent transactions¥2.5 trillion¥2.6 trillion

YOY difference

E-commerce¥470 billion+¥120 billion

Rent¥460 billion+¥110 billion

Travel & Entertainment¥190 billion-¥160 billion

Large commercial
facilities¥230 billion-¥40 billion

Other
FY2020

FY2021

As for the impact of COVID-19, we were able to hedge the negative impact bysteadily expanding e-commerce and rent, while handling of travel andentertainment and large commercial facilities declined due to store closuresand refraining from going out.

37

Trends in revolving and installment payments
・Transaction trends are linked to shopping trends; balance declined around ¥10 billion YOY■ Transactions
50(Billions of yen) 5000
0
40
4000
0

Revolving credit andinstallment payments
124

117

121

Shopping

123

140
（％）
（％）

117
119

108

116

120
102
100

30
3000
0

90

60

20
2000
0
10
1000
0

80

¥255.8billion¥183.4billion

40
20

0

0

FY2017

Balance: ¥264.8 billion

FY2018FY2019FY2020¥366.3 billion

FY2021¥356.1 billion＊Shopping transactions are for stores outside of Marui Group

This is the transition of the revolving and installment payments.
Although the transaction volume of revolving and installment payments has
been linked to that of shopping, in the previous fiscal year, the transaction
volume fell below the previous year’s level due to a decrease in the amountused, etc.
As a result, the balance of revolving and installment payments decreased byapproximately ¥10 billion from the end of the previous fiscal year.

38

Progress with initiatives to maximize EPOS Card payments in household finances
・Share of rent, regular payments, and e-commerce increases to around 50% of transactions¥2.6 trillion¥1.3 trillion

Rent¥460 billion (3.2x)Banktransfers

22%
78%

13％

Cash
payments

72%

FY201628%

Ecommerce
18％

FY2021

Recurring
payments¥280 billion (2.0x)
E-commerce¥470 billion (2.8x)( ) = versus FY2016*Figures in graphs are share of transactions

Next is the progress of initiatives to maximize EPOS Card payments inhousehold finances.
While the transaction volume has doubled in 5 years, rent has increased 3.2
times, recurring payments have doubled, and e-commerce, which we arestrengthening, has increased 2.8 times. Our efforts are steadily progressing,and these components of transaction volume have expanded to 46%.

39

Trends in Rent Guarantee Business・Transactions grew by an average 26% over five years as a result of strategic partnerships
with major companies■ Transactions(Billions of yen)¥441.2billion

5000
500

Three major companies
400
4000

32%

＋26％

New users

3000
300

Five-year average
growth rate¥141.7billion

2000
200

100
1000

0
FY2009FY2010FY2011FY2012FY2013*The major three companies are ABLE Inc., Sumitomo
Forestry Residential & Development, and National
Students Information Center (NASIC).

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

Revenue: ¥2.8 billion

FY2021¥10.5 billion

Particularly in the area of the Rent Guarantee Business, our efforts with major
partners such as ABLE INC. got off to a good start, and the average growthrate of transaction volume was high at 26%, in addition to sales revenue thatexceeded ¥10 billion.

40

New cardholders and total cardholders
・The number of new cardholders signing up at commercial facilities halved. As a result, the total
number of cardholders declined YOY for the first time.
■ New cardholder trends
90
900,000
80
800,00070
700,000
60
600,000
50
500,000

810,000
140,000
230,000

40
400,000
30
300,000
20
200,000

Cardholders at
fiscal year-end

YOY difference

140,000

Services

Unchanged

170,000

Online-60,000

220,000

Commercial
facilities-220,000

440,000

10
100,0000

530,000

FY202020.3

FY2021
21.3

7.2 million

7.09 million

Next is the status of cardholders.
The number of new cardholders decreased by 280,000 from the previous fiscal
year to 530,000 due to the halving of enrollment at commercial facilities such
as Marui and affiliated facilities because of the closure of stores due to
COVID-19, and a decrease in online enrollment via travel websites due to a
decline in overseas travel.
As a result, the total number of members at the end of the fiscal year was
7.09 million, the first time the number of members fell below the previous
year’s level.

41

Nationwide Expansion
・Cardholders outside trade areas increased as a result of promoting nationwide expansion■ Cardholders(Million) 8008

6006

6.13
million930,000

7.09
millionMarui
1.61 Outsidebusiness area
million 1.7x

4004

2
200

(FY2016)(FY2021)

3
7

6
33

● Branches and sales offices● Partner facilities

locationsfacilities

5.2
millionWithin Marui

5.49 business area
million 1.1x

0FY2016FY2021On the other hand, in our nationwide expansion efforts, we were able tosignificantly increase the number of sales offices and affiliated facilities overthe past 5 years, and the number of members outside the Marui business area
increased 1.7 times, exceeding the growth within the business area, efforts to
expand EPOS Card members nationwide have made steady progress.

42

Interest Repayments■ Outlook for number of customers eligible for interest repayments, and repayment amounts
Customers eligible forinterest repayments(Billions of yen)

14
140
120

124

70% decrease

forecast in FY2026(versus FY2021)

Repayments

100
10Forecast

80606¥19.4 billion increase

5.0

40
20
0

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024FY2025

FY2026FY202743

Next is the status of interest repayments.
As explained in the financial results briefing, interest repayments have been on
a downward trend, but in the last 2 years, they have been higher than theprevious year’s results due to more active advertising activities by someoffices. Therefore, as a result of re-estimating the amount to be returned at
the end of the previous fiscal year, we increased the shortfall by ¥19.4 billion.

Interest Repayment Measures
・Increased interest repayment expenses by ¥19.4 billion at end of FY2021, because the amountaccepted for the requests, a leading indicator, increased YOY for two years running■ YOY change in amount accepted for the requests■ Interest repayment provisions in FY2021(%) 140

120

105

109

99

100

Amount ofprovision¥23.2 billion

Balance at
fiscal year-end¥22.8 billion

Reference(Billions of yen)

EPOS

85

83
80

72

60

FY2016FY2017FY2018FY2019(September: ¥3.7 billion;
March: ¥19.4 billion)

FY2020

FY2021CompanyA

Company
B

CompanyC

Repayments

5.0

5.8

7.8

30.9

Balance ofprovisions

22.8

17.1

12.6

56.7

4.6 years

2.9 years

1.6 years

1.8 years

Number ofyears’ worth of
repayments＊FY2021 results

The amount accepted for the requests, which is a leading indicator, has also
been higher than the previous year for the last 2 years, but with the latest
transfer, the balance of the previous is now ¥22.8 billion.
Since other companies are carrying out the transfer in advance, it is currently
at a more conservative level than other companies. However, we believe that
we have been able to mitigate future risks at the start of the new mediumterm management plan.

44

3
New Medium-Term Management Plan

Next, I would like to explain the new medium-term management plan for
FinTech.

Overview of Business Environment1) Impact of COVID-19
Expecting full-fledged recovery in FY2024
2) Shift to cashless transactions and increased
competition
Bolster highly original businesses
3) Shift from current working-age generations tofuture generations
Respond to digital transformation and new values
46

Firstly, organizing the business environment.
The impact of COVID-19 will continue for about 2 years, and we expect fullfledged recovery in the fiscal year ending March 2024.
On the other hand, the shift to a cashless society is expected to make steadyprogress and competition is expected to intensify, making it more important
than ever to accelerate our highly original business.
In addition, we recognize the urgent need to promote digitalization andinitiatives that respond to new values as the generational shift continues fromthe current working-age generations to future generations.

New Medium-Term Management Plan Strategies

１. New cards + new apps
２. Cardholder strategies going forward
３. Strategies to maximize EPOS Card’s share of household
finances
４. Generate synergies with co-creative investment
47

In view of the aforementioned, today, I would like to explain the 4 points of the
new medium-term management plan for FinTech.

New Medium-Term Management Plan Strategies

１ New
１.
Newcards
cards++new
newappsapps
２ 今後の会員戦略
２.
Cardholder strategies going forward
３. Strategies to maximize EPOS Card’s share of household
finances
４ 共創投資とのシナジー創出
４.
Generate synergies with co-creative investment
48

First is the new cards + new apps initiative.

New Cards
・New design and materials for the first time in 15 years, improving user convenience by adding
contactless payments features

Contactless payments
features

Made from recycled plastic(a first in Japan)＊From October 2021

Increase card use for small payments
49

This year, for the first time in 15 years, the design and material of EPOS Card
has been renewed and new cards has been issued. The new card is even moreconvenient with its contactless payment function, while offering even greater
security.
This new card is expected to expand the use of credit cards in the area ofsmall payments.

New App・Back up all aspects of customers’ lifestyles through new app (EPOS Lifestyle App)
■ Services available in the Lifestyle App
Old AppCheckpayments
onlineSign up for
App

Card
statements

Cardholders can customize unique
Usage alert

services and features

New App(Lifestyle App)Householdaccounts

Payment
simulation
Investloyaltypoints

Improve UX andLTV

Upgrade toGold Card50

Next, revamping the app.
Along with the issuance of the new card, the EPOS Card application will berenewed. In addition to revamping the app from a credit card app to one that
supports customers’overall lifestyles, we aim to dramatically improve UX andincrease LTV by allowing customers to customize and use unique services andfunctions.

Examples of New App Initiatives
I’m worried about
overspending on my card.

Oh no, I spent a bit too much
this month!

Alerts cardholder when usage
exceeds set limit

Customize payment method using
simulations

Visualize process of
becoming a Gold
cardholder

Usage alert

Crisis aversion

Switch to Gold Card

How can I become a Gold cardholder?

Facilitate customer success by providing cardholders with enjoyable
experiences

Here, I would like to introduce some of the features of the application.
For customers who are worried about overspending on their credit cards, wewill provide them with an alert to let them know when they have reached apredetermined amount, and for customers who have temporarily increased
their payments, we will provide them with a crisis avoidance function thatallows them to customize their payment method using a simulation function.
For customers aiming to become a Gold Card holder, we will aim to facilitatecustomer success by providing a fun experience with a variety of features,such as the to Gold function that shows the path to Gold.

51

Initiatives to Increase Number of Cardholders Using the App
・ Use launch of EPOS Lifestyle App as an opportunity to convert cardholders into App users■ Initiatives to increase number of cardholders using App■ Outlook for Lifestyle App users

・Use smartphone app to complete card
application and renewal process

5 million+
3 million

Annual usage
Cardholders who
do not use the App ＜490,000

Cardholders who use the App

10% to 20% more

Share of active
customers

FY2016FY2021

FY2026

13%

67%

90%+
52

We will also work to expand the number of app members along with therevamped app.
In the past, new memberships and renewals were processed using ourdedicated tablet, but now we have introduced a system that allows customers
to complete the process using their smartphone apps. This initiative has beenvery well received by customers in the midst of COVID-19.
Since app users spend about 10% to 20% more per year than non-app users
due to the expansion of digital contact points, we can expect an increase intransaction volume through app membership.
Over the next 5 years, we will increase the number of app members to morethan 5 million, or 90% of our active customers.

Impact of New Cards + New App
・Expecting New Cards + New App initiatives to increase annual transactions by ¥200 billion
New Cards

Transactions(Trillions of yen)+¥50 billion+¥200 billion

43Increase in card use forsmall payments

New App２+¥150 billion
1

Cardholders sign up for App
App services
FY2021

FY202653

As such, we expect to increase transaction volume by ¥200 billion in the fiscal
year ending March 2026 through the efforts of the new card and new
application.

New Medium-Term Management Plan Strategies

１ New
１.
新カード×新アプリの取組み
Newcards
cards++new
newappsapps
２ Cardholder
２.
今後の会員戦略
Cardholderstrategies
strategiesgoing
goingforward
forward
３. Strategies to maximize EPOS Card’s share of household
finances
４ 共創投資とのシナジー創出
４.
Generate synergies with co-creative investment
54

Next is the future membership strategy.

New Cardholder Target
・ Reorganize issuing locations in view of acquisition cost and profitability per card
■ New cardholder target(Million)

1 million

1
100

80
0.8

0.6
60

0.4
40

■ Acquisition cost and LTV

530,000
0.14

0.30

Services

0.34

Stores
LTV

0.17
20
0.2

0.22

0.36

OnlineAcquisition
cost

0

FY2021

FY2026StoresOnlineServices

First, for future new cards, we will reorganize our issuing locations based on
the acquisition cost and LTV per card for each location.
For online enrollment, which has higher acquisition cost and LTV compared toin-store enrollment, we will expand the number of members while preventing
the cost up, and for service areas such as the Rent Guarantee, which has
lower acquisition cost, we will accelerate the membership expansion. We will
strengthen the internet and services and aim for 1 million new members annually.

55

Unique Features of EPOS Card
Gold Card

Cards tailored to each individual’s interests(Content cards)＋

100 card designs©BanG Dream! Project ©Craft Egg Inc. ©bushiroad All Rights Reserved.,©2021 San-X Co., Ltd. All Rights Reserved., ©khara, Inc., TM ＆ © TOHO CO., LTD,
©Eiichiro Oda/Shueisha Inc., Fuji Television Network, Inc., Toei Animation Co., Ltd., SEGA
©Takeshi Konomi, NAS, The New Prince of Tennis Project, ©CAPCOM CO., LTD. All Rights Reserved.

56

Next, about the unique features of the EPOS Card.
In addition to the Gold Card initiative, which has supported the growth of
EPOS Card to date, we will further promote our highly unique card strategy asa second pillar that supports the “likes” of each individual, represented by theAnime Card.

Gold Card Initiatives
・Gold Cards drive growth of EPOS Card business, accounting for 37% of cardholders and 69%
of transactions■ Original initiatives■ Share of cardholders and transactions in FY2021

Family Cards
Collaboration Goldservices

Gold Cards

37%

All cardholders

2.6 million

Transactions¥1.5 trillion

Instore issuance69%

Exclusive events, no annual fee
FY200957

The Gold Card, which was first issued in 2008, has accumulated a variety of
initiatives to date. As a result, in the last fiscal year, the number of members
grew to 2.6 million, which is 37% of the total number of members, and these
37% of members account for about 70% of the transaction volume, which truly
supports the growth of EPOS Card.

Expand Use of Gold Card・Strengthen communications with Gold cardholders to expand card usage further■ Trends after switching to Gold Card

60%

Usage
increases

Expand usage after switching toGold Card by harnessing new App and AI

Switch to Gold Card

Effect on transactions
after five years

250,000 people
per year

40%

Usage
unchanged or
decreases

Between+¥70 billion (+10%)
and+¥140 billion (+20%)
58

In addition to expanding the number of Gold Card members, we will also work
to increase the amount of usage.
As one of our specific initiatives, we currently have about 250,000 members
who switch from a regular card to a Gold Card each year, and of these, 60% ofthem increase the amount of usage after switching, while 40% do not.
Since the increase in usage by this 40% of members will have a significant
effect, we will strengthen our efforts to promote the new app and utilize AI, as
well as work to increase the amount of usage through detailed data-based
communication.

Initiatives for Cards Tailored to Each Individual’s Interests
・Foster loyal cardholder base through original initiatives like instore events and co-creation
with business partners■ Cardholder numbers■ Anime card initiatives

50
500,000

17x

400,000
40

340,000

300,000
30
20
200,000
Pop-up store EVA STORE LIMITED©2021 San-X Co., Ltd. All Rights Reserved.,©khara, Inc. 『EVAEXTRA』

Instore event

Fan club site

Media tie-up

10
100,000

20,0000■ Future initiatives
Strengthen collaboration with new businesses(bread, vegan products, Korean cosmetics, etc.)

FY2017FY2018FY2019FY2020

FY2021

Ratio of young
cardholders:

60% (+18pp)
LTV: 7x＊Comparisons are versus standard card

Next, we are working on cards to support each person’s “likes.”
Although other companies issue cards with the face of anime, we are
expanding the number of loyal members by promoting highly unique initiatives
as our group, such as events at our stores and the operation of fan club sites
through co-creation with our business partners.
This initiative will be expanded to new business areas such as bread, vegan,
and K-cosmetics in the future.
Currently, the number of members of the Anime Card has grown to 340,000,
and as mentioned earlier in the explanation of the Retailing business, the ratioof young people is higher than that of the general card, and the LTV of thecard is the second most profitable after the Gold Card.

59

Cardholder Outlook
・Over 8.5 million cardholders in five years’ time, with Gold and Content Cardholders accounting foraround 60% of total■ Cardholders■ Transactions breakdown(Million)1000
10

8.5 million

8008

6.13 million

7.09 million

Content
Card

6006

100

4004

2002

0

Share of Gold andContent Cards

34

Gold Card

380

1
131

260

FY2016FY2021

FY2026

22%

41%

56%

Transactions¥3
trillion+

80%+

Gold andContent cards

60This is the outlook for the number of members in the future.
In 5 years, we will have more than 8.5 million cardholders, of which 4.8 million
will be Gold Cards and Content Cards, raising the total to 56%. With this 56%
membership, we aim to achieve a transaction volume of over ¥3 trillion anda share of over 80%.

New Medium-Term Management Plan Strategies

１ New
１.
新カード×新アプリの取組み
Newcards
cards++new
newappsapps
２ 今後の会員戦略
２.
Cardholder strategies going forward
３. Strategies to maximize EPOS Card’s share of household
finances
４ 共創投資とのシナジー創出
４.
Generate synergies with co-creative investment
61

Next is the strategies to maximize EPOS Card’s share of household finances.

Strategy to maximize EPOS Card payments in household finances
・Continue strengthening rent, regular payments, and e-commerce transactions to stabilize
earnings and differentiate services¥5.3 trillion+¥2.6 trillion
28%
72%

Bank
transfers

Cashpayments

40%

60%

18%
E-commerce
26%

FY2021

FY2026*Figures in graphs are share of transactions

62

We expect transaction volume to double to ¥5.3 trillion over the next 5 years,
and we will continue to strengthen our efforts in rent, regular payments, ande-commerce to expand transaction volume to 2/3 of the total, stabilize
earnings, and promote business differentiation.

Rent Guarantee Strategy
・Target ¥1.2 trillion in transactions and ¥25 billion in revenue in five years’ time for 10%
market share■ Strategies going forward■ Transaction value target(Billions of yen)
15000
1500

1. Cultivate major business
partners¥1.2 trillion+
1000
10000

2. Expand scope of business
Rent guarantee services for retail tenants andshared offices

500
5000

¥442
billion

3. Promote digital transformation

0
FY2021

Revenue

FY2022

FY2023

FY2024FY2025¥10.5 billion

FY2026¥25 billion+

First is the Rent Guarantee strategy.
In the Rent Guarantee business, which has been performing well, in addition todeveloping the next major partner after ABLE, by utilizing the know-how wehave cultivated so far, we will expand our business domain such as rent
guarantees for store tenants and shared offices. We will also promote DX andstrengthen cooperation with our business partners in the industry that has
been slow to digitize.
As a result, we aim to achieve transaction volume of ¥1.2 trillion, sales
revenue of more than ¥25 billion, and a market share of 10%.

63

Outlook for Recurring Payments
・Seek further expansion of recurring payments thorough co-creation and digitalization■ Recurring payment targets■ Specific initiatives(Billions of yen)
1000
10000

¥800 billion+

8000
800

Five-year averageannual growth rate
+24%

6000
600

centered on partnership with
Minna-Denryoku

Minna-Denryoku

Users:

500,000

2. System linkage and business

4000
400

200
2000

1. Expand use for utility bill payments

coordination with major companies

3. Promote services using¥280
billionLifestyle App

0

FY2021

FY2022

FY2023

FY2024FY2025

FY202664

Next is the approach to recurring payments.
The transaction volume of regular payments is plus 24%, which is higher thanthe overall growth rate, and we hope to achieve a transaction volume of morethan ¥800 billion in 5 years.
As specific initiatives, in addition to expanding the use for utility bills, mainly
through co-creation with Minna-Denryoku, we will promote system
collaboration and business alliances with major companies, and strengthen ourappeal to customers through lifestyle applications.

Outlook for E-commerce Payments
・Target at least ¥1.3 trillion in five years’ time by strengthening initiatives to expand e-commerce use■ Trends in e-commerce transactions(Billions of yen)

¥1.3 trillion+

1500
15000

Five-year average annual growth rate

+24%

10000
1000

+23%

5000
500

0

¥470
billion¥212.9billion
FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024FY2025

FY2026

In addition, e-commerce has been expanding at an average annual growth rateof 23% to date, and by promoting the use of e-commerce and strengthening
cooperation with payment processing companies such as GMO, we expect ecommerce transaction volume to grow at the same level as the previous
medium-term plan over the next 5 years, aiming for more than ¥1.3 trillion.

65

New Medium-Term Management Plan Strategies

１ New
１.
新カード×新アプリの取組み
Newcards
cards++new
newappsapps
２ 今後の会員戦略
２.
Cardholder strategies going forward
３. Strategies to maximize EPOS Card’s share of household
finances
４Generate
共創投資とのシナジー創出
Generatesynergies
with
co-creative
investment
４４.
synergies
with
co-creation
investments
66

The next step is to generate synergies with co-creative investment.

Synergies with Co-Creative Investments
・Target contribution of at least ¥4 billion to FinTech profits from synergies withco-creative investments■ Profit contribution forecast¥5.5 billion(Billions of yen)

FinTech50
5.0

Fixed-term
rental revenue

Co-creative
共創投資
investments

LTV growth¥4 billion

Retailing

FinTech5¥0.5
5億円billion
FY2021¥1.5
billionRetailing

FY2026*Contribution included in Retailing and FinTech operating income

This is a slide from the financial results briefing. In FinTech, we expect tocontribute ¥4 billion in profit in 5 years through collaboration with co-creative
investment partners.

67

Breakdown of Co-creative Investment Profit Contribution
・Generate synergies through increasing transactions at co-creative investee and cardholders

Increased shopping transactions(transactions at co-creative investee total ¥100 billion)

Cardholder increase(Total cardholders to exceed 300,000 in five years’ time)

New financial services¥1.7 billion¥1.6 billion¥4 billion¥700 million

68

As a breakdown, we expect to contribute ¥1.7 billion in profits from the
expansion of the use of EPOS Card at our co-creative investee’s service,and ¥1.6 billion in profits from the recruitment of members at our co-creative
investment partners, and we will steadily proceed with initiatives to createsynergies, such as the consideration of new financial services.

4
Numerical Targets

Finally, a numerical targets.

Transaction Forecast■ EPOS Card transaction value¥5.3
trillion

More thandouble(Trillions of yen)

5

Autonomous
growth:¥3.0 trillion

16%
Average annual
growth rate:

15%

FY2017FY2018FY2019FY2020¥2.6
trillion

FY2021

Transition to
cashlesstransactions:¥2.3 trillion

FY2022

FY2023

FY2024FY2025

FY2026＊EPOS Card transaction value = Shopping + Rent

For the fiscal year ending March 2026, we are aiming to double the transaction
volume from the previous fiscal year to more than ¥5.3 trillion.

70

Revolving Credit and Installment Payments Forecast
・Balance of revolving credit and installment payments to increase as shopping recovers,
forecast to exceed ¥500 billion in FY2026■Revolving credit and installment payments balance forecast(Billions of yen) 6000
600

¥500 billion+
5000
500

¥371
billion

400
4000

3000
300

¥366.3billion¥356.1billionFY2020

FY2021

2000
200

FY2022

FY2023

FY2024FY2025

FY2026

Although the balance of revolving and installment payments temporarily
decreased due to the impact of COVID-19 in the previous fiscal year, thebalance is expected to return to the pre-COVID-19 level in the current fiscal
year in line with the recovery of shopping, and we aim to achieve more than¥500 billion in 5 years.

71Revenue Restructuring
・Achieve more stable earnings structure with high capital efficiency that is not dependent oninterest income■ Revenue structure trends(Billions of yen)¥204.0 billion

2000
200

Services

16%

150
1500

1000
100

500
50

0

Shopping¥135.3 billion

34%

13%

¥82.6 billion

26%

22%
33%
27%
FY201660%

35%

Revolving credit
and installment
payments

51%

34%

16%

Cash advances

FY2021

FY2026

11%

Interest income’sshare of revenue

45%*Revenue includes IT, other72

As for the change in the FinTech revenue, at the time of the fiscal year ended
March 2016, interest income from revolving credit and cash advances
accounted for 60% of total revenue. In the previous fiscal year, the expansionof shopping and services brought its share to 51%, and with the continued
expansion of shopping and services in the fiscal year ending March 2026, its
composition is expected to exceed that of revolving credit and cash advances.
By doing so, we will aim to achieve a more stable and capital-efficient profit
structure that does not depend on interest income.

Operating Income and ROIC Forecasts
・Targeting operating income of ¥53 billion and ROIC of 4.7% in final year of period covered byMedium-Term Management Plan
(Billionsof yen)60

Medium-term management plan

ROIC

(Average for period of previous
medium-term management plan)

4.7%

3.8%

40

20

38.4

¥53.0
billion

46.0

41.0
20.3

FY2020

FY2021

FY2022

FY2023

FY2024FY2025

FY2026

As a result, we plan to post an operating income of ¥53 billion and ROIC of
4.7% for the fiscal year ending March 2026.

73

Main FinTech KPIs (Fiscal 2026)

500,000 or more

Minna-Denryoku customers
Financial services for young people
ImpactFinancial
indicators

4 million people or more
8.5 million or more

Cardholders
Content cardholders

1 million or more

Non-Japanese cardholders

200,000 or more

Operating income ¥53 billion or more

ROIC 4.7% or more
74

Lastly, KPIs.
Regarding impact, in order to reduce CO2 emissions, we will promote theexpansion of Minna-Denryoku customers, and as financial inclusion initiatives,
we will provide financial services to young people and increase the number offoreign members, while also aiming to achieve our financial targets.
That is all from me. Thank you very much for your attention.

Q&A

The forward-looking statements contained in this presentation are based on information available at the time of
preparation of this presentation and certain assumptions that MARUI GROUP deems to be reasonable. The
forward-looking statements may differ materially from actual results due to a variety of different factors. Please
direct any inquiries to the IR Department (Tel: 03-5343-0075).