FY2/2013 Results Presentation

April 10, 2013
J. Front Retailing Co., Ltd.
YAMAMOTO Ryoichi
PresidentNew Management Starting Apr 1
J. Front Retailing Co., Ltd.

Chairman

SAMURA Shunichi

President

YAMAMOTO Ryoichi

Daimaru Matsuzakaya Department Stores Co. Ltd.

President

YOSHIMOTO Tatsuya
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Today’s Agenda

Ⅰ． FY2012 Results
Ⅱ． FY2013 Forecast
Ⅲ． Actions to Achieve FY2013 Goals
Ⅳ． Actions for Sustainable Growth
Ⅴ． Increase of ROE andReturn to Shareholders
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FY2012FY2012 ResultsResults3

FY2012 Consolidated Results
Sales recovered to above ¥1 trillion, to which consolidation of ParcoBusiness contributed
Operating profit increased for the 3rd year in a row, achieving ¥30 billion
one year earlier
Year-end dividend of ¥4.5 and annual dividend of ¥9, up ¥1 from last year
(Millions of yen)

YoY
FY2/2013

Sales
Operating profit
Ordinary profit
Net profit

Actual

1,092,756
30,85732,202
12,183Vs. 2Q forecast

ChangePercentagechangeChange151,341
9,263
9,261(6,621)

16.1
42.9
40.4
(35.2)(12,244)(943)
2(517)

Percentagechange(1.1)(3.0)
0.0(4.1)

4FY2012 Consolidated Results
All segments excluding Supermarket Business increased sales and profits
Department Store Business increased profits 26.8% due to floor
expansion and renovations
Added new Parco Business segment in 2H【By segment】(Millions of yen)

Sales
FY2/2013

Department StoreParcoSupermarket
Wholesale
CreditOther

Actual750,335
137,845
101,778
60,174
8,592
90,133Operating profit
YoY (%)

ActualYoY (%)

1.8―(9.6)
18.1
4.5
10.2

18,477
5,898(1,564)
1,592
2,951
3,193

26.8――
0.5
29.4
19.4
5

FY2012 Daimaru Matsuzakaya Department Stores
Big renovation projects to make flagship stores more competitive<1H>
Nagoya ⇒ Phase I renovation (luxury, young fashion, cosmetics, women’saccessories etc.)
Kobe
<2H>
Tokyo

⇒ First full renovation of food floor in 15 years to greatly enhancesweets and delis⇒ Grand opening with 1.4 times more floor space (46,000㎡)(Millions of yen)

FY2012 flagship stores
YoY sales change (%)

YoY
FY2/2013

Sales
Operating profit
Ordinary profit

Net profit

Actual660,521
15,462
14,1905,674

ChangePercentagechange16,991
4,073
4,109
1,146

2.6
35.840.825.3

Shinsaibashi
UmedaTokyo
Kyoto
Kobe
SapporoNagoya
Ueno
Ginza

(1.1)
1.7
21.3
0.0
5.1
1.6
1.9
0.2
0.4

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Sold Shares in Peacock Stores
Background behind the decision to sell Peacock Stores
If J. Front Retailing takes drastic reconstruction measures;(1) The large-scale reestablishment of store network suchas the closure of unprofitable stores will be needed;(2) The reestablishment above will make many workers
redundant temporarily;(3) Additional capital investment will be needed to renovate
surviving stores; and(4) It will take long to improve performance

Decided that it would be better to reconstruct Peacock Stores under the company
that has know-how to operate supermarkets and price response capabilities.

Transferred all shares in Peacock Stores to Aeon Co., Ltd. on April 1, 2013.
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FY2013
FY2013 Forecast
Forecast

8

FY2013 Consolidated Forecast
Expecting the highest operating profit and net profit since JFR wasestablished in 2007
Peacock Stores is excluded from consolidation from 1Q and Parco willcontribute through the year
Negative goodwill arising from merger was amortized and Parco has
generated no equity profit after 1H FY2012(Millions of yen)<For information>
YoY

YoY
FY2/2014

Sales
Operating profit
Ordinary profit

Net profit(Excluding Parco and Peacock)

Forecast

1,150,000
40,00037,00029,000ChangePercentagechangeChangePercentagechange57,2449,143
4,798
16,817

5.2
29.6
14.9
138.0

19,337
1,976－－

2.3
7.4－－
9

FY2013 Consolidated Forecast
Department Store Business expects double-digit profit growth due toexpansion of Tokyo store and renovation of Nagoya store
Closure of stores (two suburban stores and Ginza store) will decreasesales ¥15 billion
Planning to increase dividend ¥1 to ¥10 (interim dividend of ¥5 andyear-end dividend of ¥5)【By segment】(Millions of yen)

Sales

Operating profit

FY2/2014

Department Store
Parco
WholesaleCredit
Other

Forecast

YoY (%)

Forecast

YoY (%)

759,200
275,200
62,0009,100
94,700

1.2
99.6
3.0
5.9
5.1

21,30011,500
1,900
2,600
3,000

15.3
95.0
19.3
(11.9)(6.1)
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Actions
Actions toto Achieve
Achieve FY2013
FY2013 GoalsGoals

11Phase II Expansion of Tokyo Store
Expanded and made its grand opening on Oct 5, 2012 (46,000㎡/1.4 timeslarger)<FY2012>
Traffic increased 41.5% in 2H
Around 100,000 visitors weekdays and around 150,000 visitors weekends and holidays
Sales increased 33.7% in 2H
Even stronger food sales and good sales of luxury items and big specialty shops<FY2013>

Yaesu pedestrian deck was completed in 2H
and access from Tokyo station and surrounding areas improved(persons)

Traffic to Tokyo store for FY2012

200,000
180,000
160,000
140,000
120,000
100,000
80,00060,00040,00020,0000Mar

AprMayJunJulAugSepOctNovDecJanFeb12Renovation of Nagoya StoreMar – Jun 2013 (Phase II)

Renovation of food floors

Creating Nagoya’s number-one food zone “Gochiso Paradise” to cap the big renovation
Schedule
Mar 2 Open part of Japanese and Western sweets
Mar 20 Open fresh foodApr 17

Open specialty zone “Table Plus”

Apr 26

Open Japanese and Western sweets

May 29 Open delis and groceries
Jun 12

Open prestige shops

アラ50

Jun 19 Grand opening of food floors on the 1st and 2nd
basement levels of main building

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Survival in Competition from Umeda Area
Minimized effect of reopening of larger Umeda Hankyu in FY2012(decrease of around ¥1.4 billion)
All 4 stores are expected to increase sales in 2H FY2013 by replacing brands andstrengthening sales promotions
Daimaru Umeda

Daimaru Kobe

(YoY % change)

FY2012 Actual

FY2013 (Forecast)

1H

2H

1H

2H

Shinsaibashi

0.4(2.6)

(3.5)

0.6

Umeda

4.4(0.7)

(2.1)

0.3

Kyoto

0.4

(0.4)

0.8

1.8

Kobe

4.8

5.4

3.2

5.6

Daimaru Shinsaibashi

Daimaru Kyoto

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How We Respond to Abenomics
Stock market has recovered rapidly since end of last year
Consumption is expected to recover due to asset effectWe are overwhelmingly strong in wealthy class in Kansai and Chubu areas
Nikkei Average (Sep 2012 – Feb 2013)140

Our big ticket sales (Sep 2012 – Feb 2013)

20.00※Index with a score of 100 representing
the closing price as of Sep 3, 2012

※YoY % change

130

15.00

120

10.00

110

5.00

1000.00

90-5.00

Luxury women’s wear and accessories

8.7

9.2

Feb 18, 2013

Feb 4, 2013

Jan 21, 2013

Jan 7, 2013

Dec 24, 2012

Dec 10, 2012

Nov 26, 2012

Nov 12, 2012

Oct 29, 2012

Oct 15, 2012

Oct 1, 2012Sep 17, 2012

7.5
6.1

5.8

7.5
4.4

3.2

Sep 3, 2012

17.8

15.5

1.0

Jewelry/timepieces/precious metals-0.8

SepOctNovDecJanFeb

Increasing demand for high-end goods including luxury brands andjewelry/precious metals/timepieces
Expanding Hermès at Daimaru Kobe, increasing new gaisho accounts and15
strengthening events

Improvement of productivity and efficiency
Review and reduction of operation cost and promotion of organization and HR structurereform across the Group
Daimaru Matsuzakaya
Sales Associates

Daimaru Matsuzakaya
Department Stores(Established in Sep 2012)

Transferredsales operations

Sales operations

Strengthening
store operations
End of Feb 2012

Improvement ofexpertise of sales
operations

5,300 employees
Employees of JFR GroupEnd of Feb 2013

3,500 employees

End of Feb 2014

2,800 employees

End of Feb 2014

11,500 persons
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Actions
Actions forfor Sustainable
Sustainable Growth
Growth17Overseas Business ①
First Plaza Tokyo shop opened in Taipei, Taiwan on March 29
Planning to open 4 shops in Taipei in FY2013
After putting the business in Taipei on track, expanding into Taichung andKaohsiung, and then, other Asian countries18Overseas Business ②
Basic agreement with Chinese company in May 2012 to open
and operate full-line upscale department store in China<Outline of project>(Land 163 Huangpu District project)Store name: Shanghai New World Daimaru Department Store(tentative)

Size:【Land area】 13,709.3㎡【Total floor area of building】 116,000㎡【No of floors】 7 above ground and 5 below
Department store: 7 above ground and 2 below【Sales floor area】 60,000 - 70,000㎡

Operator: Shanghai Xin Nan Dong Project Management Co., Ltd.
Scheduled to open in early 2015
Supporting and cooperating to create China’s most upscale department store
Accumulating know-how to open and operate a department store in China19Redeveloping Ginza and Rebuilding South Wing of Ueno StoreGinza 6-chome district redevelopment project
End of Jun 2013 Closing Matsuzakaya Ginza

Starting construction2017 Planned to open
New commercial facility
as leading information provider
different from conventional department storesand worthy of “world-famous Ginza”

Rebuilding project of south wing of Matsuzakaya Ueno store
Rebuilding into high-rise complex for commercial and office use
and considering opening Parco in commercial space
Planned to open in 201720

Synergy with Parco
Regular meetings among top managements of Daimaru
Matsuzakaya Department Stores and Parco
Started HR exchanges to use each other’s know-how⇒ 4 employees from Daimaru Matsuzakaya to Parco and 2 vice versa

Major actions to create synergy
Joint invitation of major overseas brands
and introduction of popular Japanese shops
Cost reduction by adopting Parco’s business operation model
Use of Parco’s know-how of tenancy agreement
Operation of Daimaru Matsuzakaya’s original business in Parco※Discussing possible collaboration of affiliates including Daimaru Kogyoand J. Front Design & Construction

21Increase
Increase ofof ROE
ROE andand Return
Return toto Shareholders
Shareholders

22Increase of ROE and Return to Shareholders
Achievement
Achievement ofof operating
operating profit
profit ofof ¥50¥50 billion
billion inin next
next mid-term
mid-term plan
plan (FY2014-2016)(FY2014-2016)

Early and stable achievement of ROE of 8%

Expansion and reproduction of return

Active return to shareholders

Innovation of department store business model

Sustainable dividend increase
focusing on profit levelOverseas business
Redevelopment and new openingM&A and replacement of businesses

Planning to pay FY2013 dividend of ¥10(Increase for 3 consecutive years)
23Website

http://www.j-front-retailing.com
http://www.facebook.com/J.FrontRetailing

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

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