Percentage of
total revenue

Revenue (Millions of yen)

Percentage of
total revenue

Revenue (Millions of yen)

Financial/Non-financial Highlights

Percentage of
total revenue

268,233

274,308

275,441

Business Overview
At a Glance
274,308
275,441
268,233

Revenue (Millions of yen)

Operating proﬁt (Millions of yen)
26,65924,194
Operating
22,224 proﬁt (Millions of yen)
26,65924,194
Operating
proﬁt (Millionsof yen)22,224

Business Overview (FY2018) At a Glance
Percentage of%
total revenue

59.8

Store
Business

Business

Business

59.8

Percentage of%
total revenue

59.8

Business

FY2018（IFRS）
275,441

FY2016（IFRS）FY2016 (Millions
FY2017 FY2018
Revenueof yen)（IFRS）
93,780（IFRS）
91,621（IFRS）
89,969FY2016 FY2017 FY2018
Revenue(Millions of yen)
（IFRS）
93,780（IFRS）
91,621（IFRS）
89,969（IFRS）（IFRS）

26,65924,19422,224 proﬁt
FY2016FY2017FY2018Operating(Millionsof yen)（IFRS）
13,021（IFRS）（IFRS）

11,752FY2016 FY2017 FY2018
Operating
proﬁt (Millions of yen)
（IFRS）
13,021（IFRS）（IFRS）

11,752FY20175,445
FY2018Percentage of total%
operating proﬁt

11,752

5,445（IFRS）（IFRS）

Percentage of total%
operating proﬁt

FY2017FY201893,780Percentage of%
total revenue

91,621

89,969Operating(Millionsof yen)（IFRS） proﬁt（IFRS）（IFRS）FY2016 FY2017 FY2018
Revenue(Millions of yen)

FY2016 FY2017 FY2018
Operating
proﬁt (Millions of yen)

Percentage of
total revenue%

FY2016 (Millions
FY2017 FY2018
Revenueof yen)Percentage of
total revenue%

19.4

13,427FY2016 (Millions
FY2017FY2018
Revenueof yen)Percentage of
total revenue%

13,427FY2016 (Millions
FY2017FY2018
Revenueof yen)

19.4（IFRS）（IFRS）（IFRS）（IFRS）

5,004（IFRS）
16,995Percentage of%
total revenue

3.4（IFRS）
16,995FY2016FY2017 FY2018
5,004
13,427
Revenue(Millions
ofyen)（IFRS） （IFRS） （IFRS）

Percentage of%
total revenue

FY2016FY2017FY20185,004
13,427
Revenue(Millionsof yen)

3.4（IFRS）（IFRS）
16,995（IFRS）

16,995（IFRS）（IFRS）（IFRS）
16,995Percentage of
total revenue%

FY2016FY2017FY20185,004
Revenue(Millionsof yen)13,427

Percentage of%
total revenue

10,1769,847
FY2016FY2017 FY2018
5,004
Revenue(Millionsof yen)（IFRS） （IFRS） （IFRS）

Percentage of
total revenue%

3.4

Percentage of%
total revenue

1.4（IFRS）

9,847（IFRS）

10,176（IFRS）
10,573

10,573

FY2016 (Millions
FY2017 FY2018
Revenueof yen)（IFRS）（IFRS） （IFRS）
10,573
10,1769,847
FY2016 FY2017 FY2018
Revenue(Millionsof yen)（IFRS） （IFRS） （IFRS）
9,847

10,176

10,573（IFRS）（IFRS）（IFRS）（IFRS）
13,021

11,7525,445
FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)（IFRS） （IFRS） （IFRS）
4,664
4,131
5,445
FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)（IFRS） （IFRS） （IFRS）
4,664
4,131
FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)（IFRS）（IFRS） （IFRS）
348
4,664
4,131
FY2016 FY2017 FY2018
Operating
proﬁt(Millionsof yen)（IFRS） （IFRS）（IFRS）
348
4,664
4,131
FY2016 FY2017 FY2018
Operating
proﬁt (Millions of yen)
（IFRS） （IFRS） （IFRS）
348
4,664
4,131
FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)（IFRS） （IFRS） （IFRS）
2,856
348
2,742
2,360
FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)（IFRS） （IFRS） （IFRS）
348
2,856
2,742
2,360
FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)（IFRS） （IFRS） （IFRS）
2,856
2,742
2,360
FY2016 FY2017 FY2018

Operating(Millionsof yen)（IFRS） proﬁt（IFRS）（IFRS）
2,856

2,742

2,360

1.4

FY2016 FY2017 FY2018
Revenue(Millions of yen)

FY2016 FY2017 FY2018
Operating
proﬁt (Millions of yen)

Percentage of
total revenue%

10,573
10,1769,847
FY2016 (Millions
FY2017 FY2018
Revenueof yen)（IFRS） 117,845（IFRS） （IFRS）
114,584
104,250

FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)FY2016 FY2017 FY2018
Revenue(Millions of yen)

Percentage of%
total revenue

1.4

Percentage of%
total revenue

1.4

Percentage of%
total revenue

15.9

Percentage of（IFRS）
2,742（IFRS）

Percentage of total
operating proﬁt
%

59.2
13.3
13.3

Percentage of total
operating proﬁt%

13.3

Percentage of total
operating proﬁt%

13.3

Percentage of total
operating proﬁt%

13.3

Percentage of total%
operating proﬁt

11.4

Percentage of total%
operating proﬁt

11.4

Percentage of total
operating proﬁt%

11.4

Percentage of total%
operating proﬁt

11.4

Percentage of total
operating proﬁt%

11.4

Percentage of total
operating %
proﬁt

5.8

Percentage of total
operating %
proﬁt

5.8

（IFRS）

Percentage of total
operating %proﬁt

FY2016 FY2017 FY2018
Operating
2,981 proﬁt (Millions of yen)

3,507
（IFRS）

Percentage of total
operating %proﬁt

FY2016 (Millions
FY2017 FY2018
Revenueof yen)FY2016 proﬁt
FY2017FY20183,507
Operating(Millionsof yen)Percentage of total
operating %proﬁt104,250
FY2016 FY2017 FY2018
Revenue(Millionsof yen)（IFRS） （IFRS） （IFRS）
114,584 117,845
104,2503,507
Operating(Millionsof yen)（IFRS） proﬁt（IFRS）（IFRS）

Percentage of total%
operating proﬁt

FY2016 FY2017 FY2018
Revenue(Millions of yen)

FY2016 FY2017 FY2018
Operating
proﬁt (Millions3,507
of yen)2,981

Percentage of total%
operating proﬁt（IFRS） （IFRS）
114,584 117,845（IFRS） （IFRS）
114,584 117,845（IFRS）（IFRS）（IFRS）

104,250（IFRS）

15.9
revenue（IFRS） （IFRS） （IFRS）
New leasetotal
accounting
standards(IFRS 16)
114,584 117,845%（IFRS）
2,856

59.2

11,752FY2016

13,021

Percentage of total%
operating proﬁt

5,445

Revenueof yen)（IFRS） (Millions（IFRS） （IFRS）

FY2016

59.2（IFRS）

19.4（IFRS）
13,021

59.2（IFRS）

Percentage of%
total revenue（IFRS）
89,96959.2

Percentage of total
operating proﬁt%

FY2018（IFRS）（IFRS）
89,969（IFRS）
91,621

Percentage of total%
operating proﬁt

26,659FY2017（IFRS）（IFRS）
91,621（IFRS）
93,780Percentage of total
operating proﬁt

Percentage of total%
operating proﬁt

FY2016（IFRS）（IFRS）
93,78019.4

Percentage of total
operating proﬁt

24,194
Operating
22,224 proﬁt (Millions of yen)

FY2016 proﬁt
FY2017FY2018Operating(Millionsof yen)1.4

Reference

FY2017（IFRS）
274,308

268,233（IFRS）FY2016 (Millions
FY2017 FY2018
Revenueof yen)Percentage of%
total revenue

Other（IFRS）
275,441

26,65924,194
Operating
proﬁt (Millionsof yen)FY201622,224 FY2017 FY2018

Percentage of
total revenue%

3.4

Finance（IFRS）
274,308

Percentage of
total revenue%

3.4

Credit and（IFRS）

268,233

19.4

Real Estate

275,441

Revenue (Millions of yen)

59.8

Parco

274,308

Percentage of%
total revenue

59.8

Department

268,233

Revenue(Millions of yen)
FY2016 FY2017 FY2018

Percentage of total
operating proﬁt（IFRS）
4,744（IFRS）
4,744

2,360

2,981
（IFRS）（IFRS）
4,744（IFRS）FY2016FY2017FY2018

2,981（IFRS）

4,744（IFRS）
4,744（IFRS）

5.8
5.8
5.8

10.3
10.3

104,250●The Group recognized right-of-use assets and lease liabilities
at the date
●As aFY2018
result, in the consolidatedof financial
position on the initial application
FY2016FY2017FY2016statement
FY2017FY20183,507%
of initial application of IFRS 16 for leases%that it previously（IFRS）
classified asassets and liabilities
increasedby ¥210.6（IFRS）
billion and ¥225.2 billion, respectively,（IFRS）date,（IFRS）（IFRS）（IFRS）
2,981

15.9

10.3

15.9

10.3

operating leases under IAS 17. The lease liabilities are measured at theand equity decreased by ¥14.5 billion. In the consolidated statement of profit or loss
present value of outstanding lease payments discounted using thefor fiscal year 2019, operating profit increased by approximately ¥4.6 billion compared
FY2016 FY2017 FY2018
FY2016 FY2017 FY2018
lessee’s incremental borrowing rate at the%date of initial application. The
to former standards (before application of IFRS 16), but its impact on profit is expected%（IFRS） （IFRS） （IFRS）（IFRS） （IFRS） （IFRS）
right-of-use assets are measured retrospectively as if IFRS 16 had been
to be immaterial. Compared to former standards, cash flows from operating activities
applied since the commencement date of the lease contract.
are expected to increase by approximately ¥28 billion and cash flows from financing
are expected FY2016
to decreaseFY2017
by the sameamount in fiscal year 2019.
FY2016 FY2017activities
FY2018FY2018

15.9%

22（IFRS）（IFRS）（IFRS）（IFRS）（IFRS）（IFRS）

10.3%

Financial/Non-financial Highlights●The percentage of total revenue represents the ratio of revenue to external customers after eliminating intersegment transactions.
●Revenue and operating profit include intersegment transactions.
●Calculation of percentage of total operating profit of“Other”segment includes adjustments.

FY2018 results

FY2019 forecast

While spending by inbound tourists and the affluent continued strong, sales of volume zone
items were sluggish as a whole. Stores had to reduce operating hours or temporarily close due
to natural disasters such as record heavy rain mainly in western Japan in July, huge typhoons inAugust and September, and the great earthquake in the Hokkaido area. The“warm winter”trend
from December to January caused heavy damage to sales of winter clothing. As a result,revenue slightly increased by 0.4% year on year but“business profit”decreased by 4.3% due toan increase in cost associated with information systems, etc. and operating profit decreased by
9.2% partly in reaction to gain on sales of real estate recorded in the previous year (¥1.4 billion).

Revenue is forecast to increase by 0.5% year on year because spending by Japanese affluent people andinbound tourists is expected to remain strong and the effect of renovation of urban stores including the measuresagainst weak volume zone items and additional sales from closeout in the north wing of the Shinsaibashi store before
opening of the main building are expected while consumption tax is scheduled to rise in October. In terms of profit,
initial cost and depreciation associated with opening of the new main building of the Shinsaibashi store and anincrease in operational cost due to companywide upgrading of POS systems are expected but they will be offset by
an increase in gross profit as well as reduction of rent expenses and streamlining of personnel expenses. Accordingly,“business profit”is expected to increase by 13.3%. Meanwhile, operating profit is expected to increase by 7.5%
factoring in loss on retirement of fixed assets arising from renovation of the north wing of the Shinsaibashi store.

“Parco_ya,”which opened as the anchor tenant of“Ueno Frontier Tower”inNovember two years ago, performed well. There were additional sales from newly
opened Zero Gate complexes in Harajuku, Sannomiya, etc. However, clothing sales
were sluggish as a whole. There were also sluggish sales of regional stores and areactionary decline in sales of the entertainment business. As a result, total revenueof the Parco Business decreased by 1.8% year on year and“business profit”decreased
by 15.2%. In addition, taking into account changes in competitive environment, we
decided to close Kumamoto Parco and Utsunomiya Parco and recorded loss on
liquidation of business. Accordingly, operating profit significantly decreased by 53.7%.

We expect revenue and“business profit”to increase by 29.2% and 20.4%
year on year, respectively, due to opening of new Shibuya Parco and“Kinshicho Parco”and additional sales from renovation and anniversary
projects of major stores. In addition, compensation income from theredevelopment of Shibuya will increase and there will be an increase inreaction to loss on liquidation of business recorded in the previous fiscal
year after we decided to close Kumamoto Parco and Utsunomiya Parco.
Accordingly, operating profit is expected to increase by 133.2%.

Thanks to continued strong performance of“Ginza Six”(opened in
April 2017) in the 2nd year after opening and full operation of“UenoFrontier Tower”(opened in November in the same year) as well astransfer of many of shops around the Daimaru Kobe store to the Real
Estate Business, revenue and “business profit” significantly
increased by 26.6% and 79.5% year on year, respectively. Operating
profit marked a double-digit growth of 12.9% in spite of a decline inreaction to gain on sales of real estate recorded in the previous year(¥1.6 billion).

Revenue is expected to increase partly due to the effect of transfer ofshops around the Daimaru Kobe store. On the other hand, as the north wingof the Daimaru Shinsaibashi store will be transferred as the“asset of theReal Estate Business”after opening of the new main building of the samestore, fixed asset tax and depreciation on the north wing will be recorded in
the Real Estate Business segment. As a result,“business profit”is expected
to decrease by 13.1% year on year. Operating profit is expected to decreaseby 22.8% because construction cost associated with the renovation of thenorth wing, etc. will be added to other operating expenses.

Revenue increased by 3.9% year on year partly due to an increasein external merchant fees. However,“business profit”and operating
profit decreased by 16.6% and 13.9%, respectively, due to multiple
cost increase factors such as an increase in personnel expenses to
employ specialized human resources and strengthen the organization
for future growth (+¥160 million), card renewal cost incurred every
five years (+¥140 million) and a change in brand fee rate (+100
million).

Revenue is expected to increase by 10.7% year on year due to anincrease in merchant fees and interest income from installment sales.
However,“business profit”and operating profit are expected to decrease by
15.3% each because cost associated with issue of new cards and anincrease in cost to recruit human resources for growth are expected.

J. Front Design & Construction improved profitability and increased
profit in spite of a decline in sales in reaction to the large-scale
project carried out in the previous year. However, revenue,“businessprofit”and operating profit decreased by 11.5%, 19.7% and 26.1%
year on year, respectively, partly due to poor performance of Daimaru
Kogyo and business transfer of a consolidated subsidiary Forest at
the end of August of the previous fiscal year.

Revenue,“business profit”and operating profit are expected to increaseby 14.1%, 35.1% and 37.7% year on year, respectively, factoring in largescale orders, such as for the interior construction of the new main buildingof the Daimaru Shinsaibashi store, which are certainly expected to bereceived by J. Front Design & Construction, and performance improvementof Daimaru Kogyo, which is working on strengthening the order taking anddelivery system.

Integrated Report 201923