M A R U I G R O U P CO . , LT D
Financial Results Briefing for theF i s c a l Ye a r E n d e d M a r c h 3 1 , 2 0 2 1 ,And Future Outlook

May 12, 2021

S c h e d u l e f o r t o d a y ’s p r e s e n t a t i o n1Overview of Performance in Fiscal Year Ended
March 31, 2021
Hi rots ug u K ato, D i re cto r, M a n a g i n g Exe c ut i ve Offi ce r, C FO

2

New Medium-Term Management Plan
Hi ro s h i A o i , Pre s i d e n t a n d Re p re s e n tat i ve D i re cto r,
Re p re s e n tat i ve Exe c ut i ve Offi ce r, C E O

1Overview of Performance in Fiscal Year
Ended March 31, 2021
Hirotsugu Kato,
Director,
Managing Executive Officer,
CFO

My name is Kato.
I will give an overview of our financial results and outlook. Allow me to start.

Highlights in Fiscal Year Ended March 31, 2021
1. Three main KPIs (EPS, ROE, and ROIC) fell far short of targets for final
year of medium-term plan due to impact of COVID-19 and increased
expenses for interest repayment
2. Re -examined outlook for requests for interest repayment and booked¥19.4 million yen provision for loss on interest repayment
in fourth quarter
3. COVID-19’s impact on operating income was -¥7.3 billion in Retailingsegment and -¥2.6 billion in FinTech segment
4. Expecting recovery from impact of COVID-19 in fiscal year ending
March 31, 2024. For fiscal year ending March 31, 2022, forecastin g
EPS of ¥79.6 (68% of EPS in fiscal year ended March 31,2020), ROE of
5.9% (-2.9pp vs. fiscal year ended March 31, 2020), and ROIC of 3.2%(-0.5pp vs. fiscal year ended March 31, 2020).

First, here is the digest of the financial results.
While the fiscal year ended March 31, 2021 was the final year of our 5-year mediumterm management plan, due to the impact of COVID-19 and the increase in interest
repayment expenses, all of the 3 major KPIs fell far short of the plan.
I am very sorry about that.
Regarding interest repayments, we increased the provision by ¥19.4 billion in the
fourth quarter, as the amount of repayment has been on a flat trend.

As for the impact of COVID-19, there was a negative impact on operating incomeof ¥7.3 billion in Retailing and ¥2.6 billion in FinTech.

We expect that it will take another 2 years for COVID-19 impact to subside, and we
forecast that EPS, ROE, and ROIC for the fiscal year ending March 31, 2022 will be
70% to 90% of the fiscal year ended March 31, 2020, the pre-COVID-19 level.

4Interest Repayments■ Outlook for number of customers eligible for interest repayments and repayment amount
Customers eligible for interest
repayments(Billions of yen)

140
120

124

70% decrease
forecast in FY2026

Repayments(versus FY2021)

Forecast

100
80
60

¥19.4 billion increase

50

40
20
0
FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

Before we get into the performance, let me explain about the increase of interest
repayment expenses.

The amount of the repayments has been continuously decreasing since the fiscal
year ended March 2017, and we projected the future amount of the repayments
based on the trend, but from the fiscal year ended March 2020 to the fiscal year
ended March 2021, the amount of repayments exceeded this projection due to theincreased advertising activities of some offices.

As a result, although the number of customers subject to interest repayments is
expected to decrease significantly in the future, we expected the amount of
repayments to remain flat for some time, and recorded a shortfall of ¥19.4 billion
based on trial calculations in the fourth quarter.

5

C o n s o l i d ate d Pe r fo r m a n ce
・EPS, ROE, and ROIC fell far below medium-term management plan targets
FY2020

FY2021

YOY
changeYOY
differenceVS.
targetVS.
Mid-t erm
Plan

117.6

10.9

9

－106.7－61.4－119.1

ROE（％）

8.8

0.8

－

－8.0

－4.5

－9.2

ROIC（％）

3.7

1.4

－

－2.3

－1.7

－2.6

Capital costs（％）

6.9

7.8

－

＋0.9

－

－

WACC（％）

3.0

3.5

－

＋0.5

－

－

Billio n s o fyenBillio n s o fyen％Billio n s o fyenBillio n s o fyenTotal Grouptransactions

2903.72919.2

101

＋15.5

－50.8

Revenue

247.6

220.8

89

－26.7

－2.2

Gross Profit

195.7

178.3

91

－17.3

—1.2

〈Recurring gross profit〉

131.1

123.6

94

－7.5

－

SG&A expenses

153.7

163.0

106

＋9.3

＋19.0

Operating income

41.9

15.3

37

－26.6

—20.2

Net income

25.4

2.3

9

－23.1

—13.2

EPS（yen）

The following is a list of specific achievements.

Consolidated operating income fell 63% to ¥15.3 billion due to an increase in interest
repayment expenses and the impact of COVID-19.
Net income for the fiscal year decreased significantly by 91% to ¥2.3 billion, due inpart to the impact of recording fixed costs during the closed period as an
extraordinary loss.

As a result, EPS, ROE, and ROIC were ¥10.9, 0.8%, and 1.4%, respectively, far below
the targets of the medium-term management plan.

6

S eg m e n t I n co m e・Operating income down for second consecutive year in Retailing, and for first time in nine years
in FinTech
Operating income
FY2020

FY2021ROIC

YOYchangeYOY
differenceVS.
targetF Y2 0 2 1

YOY
c ha ng e

Billionsof yenBillionsof yen％Billionsof yenBillionsof yen％％Retailing

10.0

1.5

15

－8.5

－1.5

0.5

△2.9

FinTec h

38.4

20.3

53

－18.1

－18.7

2.5

△2.1

Eliminations/Corporate

－6.5

－6.5

－

0

0

－

－

Consolidated

41.9

15.3

37

－26.6

－20.2

1.4

△2.3
7

Operating income by segment was down sharply in both Retailing and FinTech. In
FinTech, it is the first time in nine years that profits have declined.

As for the difference from the plan, the amount of Retailing was ¥1.5 billion shortdue to the repeated declaration of state of emergency in the fourth quarter.

The amount of FinTech was ¥18.7 billion short due to an increase of ¥19.4 billion ininterest repayment expenses.

Fa cto rs Af fe ct i n g Op e rat i n g I nco m e・Consolidated operating income excluding extraordinary factors and impacts of COVID-19
increased 5% to ¥2.0 billion
I n c re as e i n ope rati n g i n c om ee x c lu di n g e x traordi n ary f ac tors＋¥2.0 bi lli on （YOY＋5％）

E x t r a o r d i n ar y f a c t o r s－¥28.6 bi lli on

¥43.9

¥41.9

billionbillionRetailing－¥1.2 billion

FinTech＋¥3.2 billion
Impacts of *COVID-19－¥9.9 billion
Provision forloss oninterest
repayment－¥18.7 billion¥15.3
billionRetailing－¥7.3 billion
FinTech－¥2.6 billion

20.3

21.3

8

* Impacts of COVID-19: Difference from the estimated figures assuming that the performance for this term would follow the same trend as before COVID-19 epidemic (April.2019-February.2020)

This is a breakdown of changes in operating income.
This fiscal year, it decreased ¥9.9 billion due to COVID-19 impact, with ¥7.3 billion in
Retailing and ¥2.6 billion in FinTech.
Interest repayments expenses increased ¥18.7 billion and we estimate operating
income increased by 5%, or ¥2 billion excluding these special factors.

Consolidated Balance Sheets
・Operating receivables decreased, but total assets largely unchanged YoY on increase in investment
securities
Mar.31, 2020

Mar.31, 2021

YOY difference

Billions of yen

Billions of yen

Billions of yen

555.6

544.7

－10.9

( Li q ui d a t e d a c c o unt s r e c e i va b l e: O f f - b a l a nc e s he e t )(181.9)(182.2)(＋0.3)[ R a t i o o f l i q ui d a t e da c c o unt s r e c e i va b l e ( %) * 1 ][24.7][25.1][＋0.4]

i ns t a l l m e nt s a l e s a c c o unt s r e c e i va b l e

416.3

426.7

＋10.4

o p e r a t i ng l o a ns o ut s t a nd i ng

139.3

118.0

－21.3

259.2

277.3

＋18.1
＋14.8

O p e r a t i ng r e c e i va b l e s

Fixed assets
I nve s t m e nt s e c ur i t i e s
I nt e r e s t - b e a ri ng d e b t[ R a t i o o f o p e r a t i ng r e c e i va b l e s (%) * 2]

27.4

42.1

479.8

484.6

＋4.7

[86.4][89.0][＋2.6]S ha r e ho l d e r ' s e q ui t y

289.8

290.2

＋0.4

[ E q ui t y r a t i o ( %) ][32.7][32.2][－0.5]

886.0

901.1

＋15.1

Total assets＊1 Ratio of liquidated accounts receivable = Liquidated accounts receivable/(Operating receivables + Liquidated accounts receivable)＊2 Ratio of interest-bearing debt to operating receivables = Interest-bearing debt/Operating receivables

This is the status of the balance sheet.

Even during COVID-19 disaster, shopping credit grew and installment receivables
increased from YoY, but total operating receivables declined by ¥10.9 billion due to adecrease in operating loans as a result of a significant decline in cash advances.

In fixed assets, investment securities increased by ¥14.8 billion, partly due to anincrease in unrealized gains.

Overall, interest-bearing debt was 89% of operating receivables, equity ratio was 32%,
and liquidation ratio was 25%, all of which were generally within the targets of themedium-term management plan.

9Cash flows
・Core operating cash flow decreased by ¥18.4 billion when excluding increase in operating receivables
FY2020

FY2021

Billions of yen

Billions of yen

Billions of yen

39.9

22. 2

－17.7

Net cash provided by (used in)operating activities

YOY difference

0.9

1. 6

＋0. 7

39. 0

20. 6

－18. 4－20.3－16. 2＋4. 1

Purchase of fixed assets－11.0－10. 4＋0. 6

Acquisition of investment securities

－9.0

－6. 6

＋2. 4

Gains on sales of investment securities, etc.

－0.3

0. 8

＋1. 1

－25.5

－5. 6

＋19. 9

Increase(decrease) in operating receivables
Core operating cash flow *3Net cash provided by (used in)investing activities

Net cash provided by (used in)financial activities
Increase(decrease) in interest-bearing dept

－6.9

4. 6

＋11. 5

Cash dividends paid

－11.7

－10. 1＋1. 6

Purchase of treasury stock, etc.

－6.9

－0. 1

＋6. 7

40.8

41. 2

＋0. 4

Cash and cash equivalents at end of period＊3 Core operating cash flow = Net cash provided by (used in) operating activities - Change in operating receivables

This is the status of cash flow.
Core operating cash flow decreased by ¥18.4 billion due to the impact of COVID-19.
On the other hand, in investment cash flow, cash outflow decreased by ¥4.1 billion,
partly due to the sale of investment securities.

10Lifetime Value Management Indicator・Recurring gross profit was ¥123.6 billion, increasing ratio of recurring gross profit to total gross profit
to 67.7%
Contracted Future
Recurring Gross
ProfitRecurring Gross Profit

FY2020

FY2021YOY
Ch an geYOY
differen ce

F r omF Y2 0 2 2VS.
gross profit

Billionsof yenBillionsof yen％Billionsof yenBillionsof yen％Retailing

42.6

35.7

84

－7.0

76.2

141

FinTec h

88.5

87.9

99

－0.5

257.8

201

131.1

123.6

94

－7.5

334.0

183

65.3

67.7

－

＋2.4

Total
Comp os i ti on wi thi n
gr os s p r of i t（%）

11

Recurring gross profit increased by 2.4% to 67.7% as a percentage of total grossprofit, with decreasing in Retailing due to rent reductions and exemptions, andremaining almost unchanged in FinTech from the previous year.

In addition, the contracted future recurring gross profit to be realized from the next
fiscal year onward is ¥334 billion, which is approximately 1.8 times the gross profit of
the current fiscal year.

Shareholder Returns
・Annual dividend of ¥51 per share planned: An increase for the ninth consecutive fiscal year,
continuing our policy of stable, long-term dividend increases
60¥51(planned)

50
40

350
30

38

33

20
10

50

49

14

15

12.3
FY 1 2

13.3
FY
13

18

19 1 5 022350 dividends
Cashper share

200 Sharebuyback

200

150

¥7.0
billion

70

0

EPS

¥19.2

¥48.4

14.3
FY
14

¥56.3

15.3
FY
115.3
5

¥58.9

16.3
FY16.3
16

¥70.7

17.3
17.3
FY
17

¥80.2

18.3
18.3
FY
18

¥93.2

19.3
19.3
FY
1
9

20.3
FY
220.3
0

21.3
21.3
FY
21

¥116.0¥117.6¥10.9

12

As for shareholder returns, the dividend for this fiscal year will be ¥51, the ninth
consecutive year of dividend increases.
We will continue to increase dividends in a stable and long-term manner.

Reflecting on Medium-Term
Management Plan
Fiscal 2017–Fiscal 2021

Next, I will explain the review of our 2020 Medium-Term Management Plan.

Progress with Main KPIs
・Steady progress until COVID-19, but missed targets in final year of period covered by medium-term management
plan (FY2021)

6.7
6.7

3.1

7.6
7.6

3.3

9.1
9.1

8.8
8.8

3.7

3.7

1.4%

(¥)
150

100

116.0
80.2

117.6

¥10.9
2017

17.3

4.0%

ROE target

10.0 %

93.2

50

0

0.8%

ROIC target

2018

18.3

2019

19.3

2020

20.3

EPS target¥130.02021

21.3（予）The major KPIs have been progressing steadily until the latter half of the fourth year
toward achieving the target, but as explained in the summary of financial results, wewere unable to achieve the target for the final year.

14

Reflecting on main measures
Main measures

Review

Retailing
FinTech・ Switch to 100% fixed-term rental contracts for
shopping centers

Ratio of fixed-term contracts was 106% in
fiscal 2019

・ Promote omni-channel strategy

Specialty stores and e-commerce weak;
profit improvement target not reached・ Retail-related services (store remodeling, advertising,logistics)

Poor performance due to weakness of
Retailing and apparel・ Nationwide deployment (partner facility cards, anime
cards)

Sixty-five locations nationwide from Hokkaido
to Okinawa; share of anime cards reach 16% of
all new cards

・ Maximize share of EPOS Card payments in household
finances and expand rent guarantee businessTotal transaction value of ¥2.7 trillion exceeds
target; rent guarantee business grows at
average annual growth rate of 26%

・ Interest repayments

Forecast was incorrect
15

In terms of major measures, switch to fixed-term rental contracts was completed in
Retailing, but specialty stores and e-commerce failed to realize profit improvement.

We expanded FinTech business nationwide and its transaction volume grew steadily,
but we had an optimistic outlook for interest repayments, leading to a large amountof provision recorded in the final year.

Reflecting on main measures
Main measures

Review

Capital policy

Equity ratio of 32%

・ Create optimal capital structure (equity ratio of around 30%)

ROIC > WACC, ROE > capital costs
Value creation achieved since fiscal 2019

・ Build structure whereby ROIC exceeds WACC()

Not achieved in fiscal 2021

Sustainability

Included in DJSI World Index for three years runningWorld no. 1 in retail sector in fiscal 2021; received morethan 20 ESG rankings and awards
・ VISION 2050 declaration (join RE100, support TCFD, etc.)
Share of renewable energy in total consumption exceeds
target at 52%(Used in 15 stores and five facilities)

16

In terms of capital policy, we have achieved an optimal capital structure with anequity ratio of around 30%, and although we did not achieve these in the fiscal year
ended March 31, 2021, we believe that we have basically achieved a structure inwhich ROE and ROIC exceed the cost of capital and WACC, respectively.
In addition, in 2019, we formulated VISION 2050, which looks ahead to the year 2050.
As we have set specific long-term goals and promoted initiatives, our ESG rating has
been increasing.

The above is a review of the medium-term management plan.
In the newly launched mid-term management plan, we will aim to achieve the targetsof the current mid-term plan as soon as possible and achieve further growth.

Full-Year Forecast for Fiscal YearEnding March 31, 2022

This is the forecast for the full year.

Full-Year Forecast for Fiscal Year Ending March 31, 2022
・Forecasting 138% increase in operating income year on year to ¥36.5 billion and 609% increase in

net income to ¥16.5 billion

FY2021

FY2022YOY
c ha ng e

YOY
d i f f e r e nc e

VS . F Y 2 0 2 0d i f f e r e nc e

EPS （yen）

10.9

79.6

733

＋68.7

－38.0

ROE （％）

0.8

5.9

－

＋5.1

－2.9

ROIC（％）

1.4

3.2

－

＋1.8

－0.5

B i l l i o ns o f ye n

B i l l i o ns o f ye n％

B i l l i o ns o f ye n

B i l l i o ns o f ye n

Total Group transactions

2919.23410.0117＋490.8＋506.3

Revenue

207.2

212.0

102

＋4.8

－20.9

Gross Profit

178.3

185.0

104

＋6.7

－10.7

SG&A expenses

163.0

148.5

91

－14.5

－5.2

Operating income

15.3

36.5

238

＋21.2

－5.4

Net income

2.3

16.5

709

＋14.2

－8.9

〈Referenc e〉*Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) has been applied to Revenue forecast figures for fiscal 2021 and fiscal 2022

We assume that the recovery from the impact of COVID-19 will be completed 2
years later, in the fiscal year ending March 31, 2024, and that key indicators for the
fiscal year ending March 31, 2022 will grow substantially YoY.
However, compared to the fiscal year ended March 31, 2020, which was before theimpact of COVID-19, we expect EPS, ROE, and net income to be around 65%, and
ROIC and operating income to be around 85%.

18

<Reference> Segment Income Forecasts for Fiscal Year Ending March 31, 2022
・Forecasting 35% year-on-year operating income increase in Retailing segment to ¥2.0 billionand 102% year-on-year increase in FinTech segment to ¥41.0 billion
Operating Income
FY2021

FY2022B i l l i o ns o f ye n

B i l l i o ns o f ye n％

B i l l i o ns o f ye n

Retailing

1.5

2.0

135

＋0.5

FinTec h

20.3

41.0

202

＋20.7

Eliminations /Corporate

－6.5

－6.5

－

0

Cons oli d ate d

15.3

36.5

238

＋21.2

Y O Y c ha ng e

Y O Y d i f f e r e nc e

19

By segment, we expect operating income in Retailing to rise 35% to ¥2.0 billion with aslightly weaker recovery.

On the other hand, that in FinTech is expected to nearly double to ¥41 billion, a newrecord high.

That is all from me. Thank you.

2

New Medium-Term Management Plan
Five-year plan for FY2022 through FY2026
H i ros hi Aoi ,P re s i d e n t an d Re p re s e n tat i ve D i re ctor,
Re p re s e n tat i ve Exe c ut i ve Of f i ce r, CE O

My name is Aoi.
I would like to thank you for your cooperation.

First of all, I would like to apologize for not achieving the goals of the medium-term
management plan that was completed in the previous fiscal year.

We are sorry that we were not able to meet your expectations due to the
misjudgment of the loss of interest repayments, despite the force majeure of
COVID-19 disaster.
In the next medium-term plan, we will make a fresh start and devote ourselves toachieving the plan.

I would now like to explain the new medium-term management plan.
The period is 5 years, from the fiscal year ending March 2022 to the fiscal year
ending March 2026. This corresponds to the first half of the plan for the next 10
years.

Changes in Business Environment in Next Decade (Three Major Shifts)

Until now

From now

Current working-age generations

Future generations

Introduction of digital technologies

Deployment of digital technologies

Tangible assets

Intangible assets

21

The first one is environmental changes.

The 3 medium- to long-term changes we are focusing on are the generational shift
from the current generation to future generations, the transition from theintroduction phase to the expansion phase of digital technologies, and the long-term
shift from tangible assets to intangible assets.

I will explain them one by one.

1. Shift from Current to Next Generation■ Trends in working-age population

Future generations(Born after 1981)

Generation
change61%

Common sense for
Future generations:

・Digital transformation (DX)・Sustainability
・Wellbeing

50％

Risk for companies

45%

Current working-age
generations(Born before 1980)

2021
2021

2024
2024
2024

Companies unable to adapt tofuture generations’ common
sense will lose favor

2030
2030

* Source: Marui Group based on Population Estimates, Statistics Bureau, Ministry of Internal Affairs and Communications

22

The first is the generational shift.
By 2024, the percentage of millennials or younger in Japan's working-age population
will exceed that of older than millennials. It will come just 3 years later.

Companies that fail to respond to the common sense of future generations, who aredigital natives and value sustainability and wellbeing, can be expected to rapidly losefavor.

2. Digital Technologies: From Introduction to Deployment■ 2020 was a turning point in the S curve of innovation2020
Diffusion rate

Introduction

Mainly software and online technologies

Deployment

Penetration into physical domains
Online-offline integration

Time*Source: Marui Group, based on Mirai wo Jisso suru (“Implementing the Future” (Eiji Press) by Takaaki Umada andTechnological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages (Edward Elgar Publishing, 2002) by Carlota Perez

23

What you will see next is what we call the S-curve of technological innovation.

As digital technology shifts from the introduction phase to the expansion phase after
2020, digital technology, which has been developed mainly around software andonline, will penetrate the physical realm, and online and offline will become
increasingly integrated.

In order to create new businesses that integrate online and offline, we can expect tosee more collaboration between online startups and existing offline-based companies.

3. From Tangible Assets to Intangible Assets■ Average intangible investment ratio (intangible investment / tangible investment)(Times)

1.6

US

1.2

UK

0.7

Germany

0.5

Japan

1.0

Five-year period from 1995

系列 1

Market cap of Tokyo
Stock ExchangeFirst Section

Approx. ¥720
trillion（2,186 companies)

Market capof GAFA＋M¥850＜ Approx.
trillion*As of March 31, 2021

10-year period from 2001

系列 2

*Source: Marui Group, based on RIETI Policy Discussion Paper“The Role of Intangible Investment on Economic Growth in Japan“,
by Tsutomu Miyagawa et al. (2015)24

The long-term shift from tangible to intangible assets, which began around 2000, is
expected to progress rapidly in Japan in the future.

In addition to investment in human resources and digital investment, M&A, start-up
investment, and open innovation are expected to accelerate.

Future Direction
1. Earn profits while also solving societal problems through co-creation with
future generations
2. Harness Retailing and FinTech to become an online-offline platform business3. Evolve into a knowledge-creation company through intangible investment in new
businesses and co-creative investments as well as human resources and software
4. Include stakeholders in board of directors to promote co-creation management thatstrives for harmony between profit and happiness
25

This is the future direction based on the above.

1. Through co-creation with future generations, we will strive to both solve social
issues and generate profits.

2. We aim to become a platform that integrates online and offline through storesand FinTech.

3. In addition to human resources and software, we will evolve into a knowledgecreating company by promoting intangible investment in new businesses and cocreative investment.

4. By welcoming stakeholders to the board, we will promote co-creation
management toward the harmony of profit and happiness.

Business Strategy + Capital Policy + Impact

Now let's get down to a main part.

I will explain in the order of business strategy, capital policy, and impact.

Business Strategy + Capital Policy + Impact

First is the business strategy.

Overview of Future Group Business・Seek further enhancement of our corporate value by promoting a new trinity model

Investing for the
futureRetailing

Co-creative investment＋ Investing in new
businesses

FinTech28

In the future, the Group's business will create a trinity business model, adding
Investing for the future to Retailing and FinTech.

Investing for the future includes the co-creative investment and new business
investment that I have talked about so far.

Retailing

1 ) O utl ook for p ost-COV I D-1 9 comme rc i a l rea l e state ma rket re ma i n s un c l ea r
・ 2 % ri se i n va ca n c y rate -¥ 1 . 0 b i l l i on i mpa ct on op e rati n g p rofi t fore ca st・ 2 % fa l l i n re n ts-¥ 1 . 0 b i l l i on i mpa ct on op e rati n g p rofi t fore ca st2 ) A d va n ce sh i ft a wa y from d e pa rtme n t store format a n d e vol ve n e w
b usi n e ss mod e l s for store s to ove rcome n egati ve i mpa ct a n d a c h i e ve
furth e r growth29

The first is Retailing.
The outlook for the post-COVID-19 commercial real estate market remains unclear.
Due to an increase in the vacancy rate and a decline in market rents, the impact on
the operating income basis is expected to be approximately negative ¥2 billion.

In response to these deteriorating market conditions, we will overcome the negative
effects and achieve new growth by further promoting the transformation of thedepartment store business model that we have been working on.

Complete department store format transformation and store evolution

5
4
3
2
1

?
“Eventful” stores
Stores that don’t sell
Expand food and services
Fixed-term rental contracts

30

In the first phase of the transformation of the department store business, we haveshifted from buying sales to fixed-rent leasing, and at the same time, we have
expanded food and service categories.

From now on, we will aim to complete the transformation through stores that do notsell as the third stage, creating eventful stores as the fourth stage, and new
businesses as the fifth stage.

Stores that Don’t Sell

Stores＝Platforms for online/offline integration
・Attract unique tenants such as online services, storefront e-commerce, D2C brands, etc.
・Promote initiatives with 23 companies that we invest in through co-creative investments and172-strong co-creation teammercari station

SHIBUYA BASE

FABRIC TOKYO

The third stage, stores that do not sell, positions the store as a platform for the
integration of online and offline.

Specifically, we will create stores for the future by introducing unique tenants suchas online services like Mercari, storefront e-commerce like BASE, and D2C brands
like FABRIC TOKYO.

A co-creation team of 172 people, working with 23 co-creation partners, will
accelerate this effort.

31

Feedback From Our Co-Creation Partners
mercari, Inc.

Shintaro Yamada

mercari station provides a customers contact point other than our app, and a place
where new customers can experience mercari and existing customers can ask for help
and advice. The store premises operated by the Marui Group help to improve customer
satisfaction.

Sparty, Inc.

Yosuke Miyama

At retail stores, we receive the kind of direct customer feedback that we can’t obtain throughe-commerce channels. Marui Group has an in-depth understanding of D2C brands andprovides extensive support.

FABRIC TOKYO Inc.

Junichi Mukai

The benefit of initiatives targeting EPOS card customers is that we can cultivate new customers
without damaging our brand image. This has made a significant contribution to our businessgrowth.
＊Source: Marui Group Co-Creation Management Report 2020,” otherThanks to their support, the co-creation partners also highly regard us for ouroutsourced store management, sales promotion using EPOS cards, and newcustomer development.

32

“Eventful” Stores

Create variety of events that integrate online and offline approaches
Design fun stores with events motivate consumers to visit
・Hold events for anime business and new businesses(anime/games, food, cosmetics, and social events)
・Collaborate with FinTech to commercialize events so that they can be heldaround the country in commercial facilities other than Marui facilities

33

In the fourth stage, creating eventful stores, we will create a variety of events thatconnect online and offline, focusing on the animation business and new businesses
that I will explain later, to create fun stores where events become a motivation tovisit.

Specifically, in addition to anime and games, each store will host food and beveragerelated events such as bread, vegan, and food tech, K-POP, K-Cosmetics, and evensocial related events such as inclusion festivals.

By collaborating with FinTech, we will commercialize these events with a view todeveloping them not only in MARUI stores but also in commercial facilities
nationwide.

Retailing segment: Operating income outlook
・Forecasting operating income of ¥12.0 billion in final year of medium-term management plan

ROIC

Medium-term management plan

(Average for previous
medium-term plan period)

4.3%

2.6%

(Billionsof yen)10

10.0

FY2020¥12.0
billion

9.0

1.5

2.0

FY2021

FY2022

FY2023

FY2024FY2025

FY2026This is the forecast for Retailing operating income.

Operating income for the fiscal year ending March 2026 is ¥12 billion. ROIC is
expected to be 4.3%.

34

FinTech
1. Risks that have surfaced amid COVID-19 pandemic・ B e f o re t h e p a n d e m i c , a s u b s ta n t i a l 5 5 % o f a l l n e w m e m b e r s s i g n e d u p i n s t o re s
・ Tra n s a c t i o n v o l u m e s h a re o f t h e t ra v e l a n d e n t e r ta i n m e n t s e c t o r, w h i c h i s
v u l n e ra b l e t o c h a n ge s i n e co n o m i c co n d i t i o n s , w a s 1 4 %・ I n c re a s e d s h a re o f n e w m e m b e r s j o i n i n g o n l i n e
・ P ro m ot e m e a s u re s t o m a x i m i ze s h a re o f E P O S C a rd p a y m e n t s i n h o u s e h o l d
f i n a n ce s s u c h a s e - co m m e rce , I n t e r n e t- re l at e d s e r v i ce s , a n d re n t p a y m e n t s

2. Double transaction value in five years by harnessing
unique strategies, taking advantage of the shift to
cashless transactions that has accelerated amid the
pandemic
35

We move on to FinTech. In FinTech, both risks and opportunities have become
apparent due to COVID-19 disaster.

Risks include the still high composition of new memberships at stores (55%) and thehigh proportion of travel and entertainment spending in transaction volume.

To address these issues, we will continue to promote online enrollment and use of
e-commerce and recurring payments.

On the other hand, the opportunity is the acceleration of the cashless society. We
aim to more than double our current transaction volume in 5 years by developing ourown unique strategy while keeping a firm grasp on the major trend of cashlesstransactions.

New Cards

Contactless
payments feature

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

36

This is a unique strategy for FinTech. The new card, which started in April, has asleek vertical design that has been appreciated by customers.

The new VISA Touch enables contactless payments similar to electronic money,
surpassing QR code payments in speed and convenience.

It is expected to play a leading role in the cashless society in the future byincreasing the use of small-amount payments, such as at convenience stores, where
credit cards have been weak so far.

In addition, as the first card made of discarded plastic material in Japan, it will also
contribute to the reduction of CO2 emissions.

Feedback from Customers

＠ ・・・・・

＠ ・・・・・

＠ ・・・・・

The new EPOS Card

The previous design was

The new EPOS Card

design is so much better!

tacky but the new EPOS

design is awesome!

I received my card today,

Card looks cool!

I’ll be paying with myand it looks great!

EPOS Card from now on.

＊ Excerpts from comments on Twitter (edited)

37

These are responses to the new card.
We are receiving countenancing feedback from the younger generation of customers
on social networking sites.

New App1

Various features that support
each individual’s lifestyleabout EPOS Card services
2 Learningand features is like playing a game3

Aiming to enhance Lifetime ValueManagement (LTV) by upgradinguser experience38

In addition, the EPOS Lifestyle App was launched in April.

The new app, which supports each customer's lifestyle, allows customers tocustomize their own services and functions while having fun just like a game.

By dramatically improving UX through the new app, we will aim to increase LTV.

Cards tailored to each individual’s interests

3 to 15 times greaterthanconventional cards©カラー

Evangelion EPOS Card

©2021 San-X Co., Ltd. All Rights Reserved.

Rilakkuma EPOS Card

LTV
©2021 San-X Co., Ltd. All Rights Reserved.

Sumikko Gurashi
EPOS Card

TM & © TOHO CO., LTD.

Godzilla
EPOS Card

Conventional
cards

Cards tailored to eachindividual’s interests

Gold Cards

39

EVANGELION, Rilakkuma, Sumikko Gurashi, and other content cards issued inconjunction with the anime business are highly popular with customers and havegrown to become the second pillar of our business after the EPOS Gold Card.
In the future, in addition to the Gold Card, we will expand the number of cards that
support the likes of each individual, as represented by the content cards.

Pursue Both Enhanced Impact and Profit by Recommending Renewable Energy

Minna -Denryoku EPOS Plan
ImpactCO2 emissions
reduction
Over 1 million tons

500,000 users
ProfitMaximize EPOS Card’s
share of household finances
through utility bill payments
40

We aim to reach 500,000 users in 5 years in recommending renewable energy,which
is being promoted through co-creation with Minna Denryoku.

The MARUI GROUP's conversion to renewable energy sources alone, mainly in its
stores, will not only reduce CO2 emissions by about 100,000 tons, but also by
encouraging customers to reduce them, we aim to drive social emission reduction, toreduce emissions by more than 1 million tons both internally and externally. In thisway, by promoting co-creation with our customers, we will achieve both profitability
and impacts.

FinTech: Transaction Forecast■ EPOS Card transaction value

More thandouble(Trillionsof yen)5¥5.3 trillion

16%
Average annual
growth rate ¥2.6 trillion

Autonomous
growth
¥3.0 trillion

Transition to
cashlesspayments

15%¥2.3 trillion

F
Y2017
17.3

F18.3
Y2018
18.3

F Y19.3
2019

F Y20.3
2020
20.3

F Y 221.3
021
21.3

F Y 22.3
2022

F Y 223.3
023

F Y24.3
2024
F Y 25.3
225.3
025
F Y26.3
2026
24.3
26.3
＊EPOS Card transaction value＝Shopping + rent

Through the above, we aim to more than double the current volume of FinTech
transactions to ¥5.3 trillion in 5 years.

41

FinTech: Operating income forecast
・Forecasting operating income of ¥53.0 billion in final year of medium-term management plan
(Billionsof yen)Medium-term management plan

ROIC

60 (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

FY2024FY2025We are aiming for an operating income of ¥53 billion and a ROIC of 4.7%.

FY202642

Investing for the Future
Investingfor the FutureInternal
innovation

Investment
in newbusinesses

Co-creative
investment

External
innovation

Enhance both impact and profit(Sustainability, wellbeing, and DX)
43

Next is Investing for the future .
Investing for the future creates innovation with the aim of achieving both impacts
and profitability.
In new business investment, we aim to create innovation from within us, while in cocreative investment we aim to introduce innovations from outside us.

Investment in New Businesses

E-commerce

Storefront e-commerceMedia

Websites, social media, owned media

StoresPop-up stores and events (to complement e-commerce)

FinTechProvide payment and credit services, attract members

44This is a business model for new businesses.

Its core is e-commerce. We create fans through websites, social media, owned
media, etc., and send them to e-commerce. We will use our stores as a complement
to our web media and e-commerce, and conduct pop-up stores and events.

FinTech will be responsible for providing payments and credit services at ecommerce stores, and also for recruiting members. In this way, we will build a unique,high-barrier business model based on e-commerce, while utilizing our strengths instore operations and FinTech.

Co-Creative Investment
・Marui Group practices co-creative investment that creates value together with stakeholders,true to our founding co-creation philosophy.

M&A

Co-creative investment

Acquiring complete businesses

Create value through co-creation

Profitable over the longer term
Immediately profitable

Uncomplicated, but high risk (two-thirds fail?)

1) Profit contribution to existing
businesses
2) Financial returns

Risk is high, but can be controlled(investing by funding round)45

Next is co-creative investment.

Co-creative investment is an alternative strategy to M&A for us.

Based on our philosophy of co-creation that has been in place since the Company's
founding, we will commit to co-creative investment that create value together.

In contrast to M&A, which provides immediate revenue through the acquisition of
established businesses, co-creative investment revenue is realized over the medium
to long term through contribution profits and financial returns to existing businesses.

Co-Creative Investment: Synergies with Existing Businesses
・Targeting ¥5.5 billion minimum contribution to Retailing and FinTech in final year of
medium-term plan
■ Estimated profit contributions¥5.5 billion(Billionsof yen)

Revenue fromfixed-term
rental contracts

FinTech5.0

Co-creative
共創投資
investment

Retailing

Increase LTV¥4.0
billionFinTech55billion¥0.5
億円
FY2021¥1.5
billionRetailing

FY2026*Profit contributions included in operating income of Retailing and FinTech businesses

This is the profit contributed by co-creative investment.

In the fiscal year ending March 2026, we expect to generate a total of ¥5.5 billion,
including ¥1.5 billion in Retailing and ¥4 billion in FinTech.

These have been factored into the respective profit plans for Retailing and FinTech.

For your information, this plan is estimated based only on the collaborations thathave been confirmed as of now.

Therefore, if new collaborations occur during the term, we expect the result to
exceed this plan.

46

Co-Creative Investment: Financial Returns
FY2021

FY2026 (Estimated)¥22.3 billion¥43.0 billion

Balance of investment securities¥42.1 billion¥72.0 billion

Unrealized gains¥13.5 billion¥37.0 billion

Companies invested in

28

Approx. 70

Listed companies

2

Approx. 20

71%

20%

Co-creative investment amount

IRR

Exit policy

・Decide on case -by-case basis depending on
1: progress with collaboration, 2:business perfomence, and3: market conditions
・Distribute 50% of profit from sales to shareholders andreinvest the remainderThis shows financial returns.

The total amount of investment in co-creative investment to date is ¥22.3 billion,
and the balance of investment securities in BS, including others, is ¥42.1 billion in
the fiscal year ending March 2021, with unrealized gains of ¥13.5 billion. About 20
companies are scheduled to be listed over the next 5 years, and the balance ofinvestment securities after 5 years is projected to be ¥72 billion, with unrealized
gains of ¥37 billion.
Incidentally, the co-creative investment of ¥43 billion is comparable to the largest
CVCs in Japan.

These are exit policies.
We will make decisions on a case-by-case basis, taking into account the progress ofcollaboration, business performance, and market conditions for each investee.
In the event of a gain on sale, we will return approximately 50% of the gain toshareholders and the remainder will be used for reinvestment.

47

Consolidated operating income forecast
・Target consolidated operating income of ¥60.0 billion in final year of medium-term plan

FY2020

FY2026Bi l l i o ns o f y e n

Bi l l i o ns o f y e n％

Bi l l i o ns o f y e n

Retailing

10.0

12.0

120

2.0

FinTech

38.4

53.0

138

14.6

Investing for the future

―

2.0

―

―

Eliminations/Corporate

-6.5

-7.0

―

-0.5

Consolidated

41.9

60.0

143

18.1

Ch a n g e f r o m
FY 2 020

D i f f erenc e f r o m
FY 2 020

48

Based on the above, the forecast for consolidated operating income is as follows.

For the fiscal year ending March 31, 2026, we plan operating income of ¥60 billion ona consolidated basis, with ¥12 billion in Retailing, ¥53 billion in FinTech, and ¥2 billion
Investing for the future.

Business strategy + Capital policy + Impact

49

Next is a capital policy.

Review
・Achieved balance sheet optimization alongside transformation to a FinTech-led business structure
Total assets¥676 billion¥1 trillion¥900 billion
Liquidated accounts
receivable ¥180 billion

Operatingreceivables¥355 billion

Liabilities¥370
billionEquity ratio

Operatingreceivables¥680 billion

Liabilities¥730
billionOperatingreceivables¥540 billion

Liabilities¥610
billion45%

30% (approx.)

Equity ratio

Equity ratio

Shareholder’sequityShareholder’sequityShareholder’sequity¥306 billion

FY2015¥300 billion

FY2021 (Forecast)

32%¥290 billion

FY2021

50

In the previous mid-term plan, we were able to achieve the balance sheet we wereaiming for in line with the shift to a FinTech-led business structure.

Balance sheet at End Fiscal 2021
・Retailing became stabilized after transition to fixed-term rental contracts, but equity capital remains
at high level<FinTech><Retailing>

70%
¥630
billionEquity ratio

11%

Industry
average

10％¥260
billion<Investment
for the future>
Department
stores40％
Realestate30%¥180billion¥70 billion
Total assets Shareholder’scapital100%¥40 billion ¥40 billion

Resolved surplus
shareholder’s equity
in Retailing51

And here is the balance sheet for the fiscal year ending March 31, 2021.

The Retailing capital ratio is 70%, despite the stabilization of the business structure
through fixed-term debt, which is higher than the department store average of 40%
and the real estate industry average of 30%.

Image of Optimal Capital Structure
Optimalbalance sheet

・Targets based on equity ratio of around 25%<FinTech>¥900
billion<Retailing>

Equity ratio ofaround10%¥120billionTotal assets Shareholder’scapital¥250
billion<Investment
for the future>¥1.2
trillion

Approx.
40%¥100
billion100%¥70–80billion¥70–80billionApprox.
25%¥290
billionTotal assets Shareholder’sequity<FY2026>

52

Therefore, we will proceed with the review of our balance sheet with the aim ofachieving a consolidated capital ratio of around 25% by optimizing the Retailing
capital ratio to 40% and redistributing surplus capital.

Capital Allocation
・Allocate ¥80 billion to investing for growth (including investment for the future),¥50 billion to share buybacks for capital optimization, and ¥100 billion to shareholder returns■ Capital allocation plan (Fiscal 2022–2026)

Investing for
growthCore operating
cash flow¥230 billion

Existing investments¥50 billion

Investment for the future¥30 billion

Capitaloptimization

Share buybacks¥50 billion

Shareholder
returns

Dividends¥80 billion

Share buybacks¥20 billion

53

This shows capital allocation.

The core operating cash flow of approximately ¥230 billion over the next 5 years willbe allocated as follows. ¥50 billion for existing businesses and ¥30 billion for future
investment as investment for growth. ¥50 billion for share buybacks to optimize
capital. For shareholder returns ¥80 billion in dividends and ¥20 billion in sharebuybacks.

Capital efficiency
・ROE in final year of medium-term management plan forecast to exceed cost of capital at 13%

FY2020

FY2024FY2026V e r sus FY 2 020

EPS (¥)

117.6

140.0

200.0

82.4

ROE (%)

8.8

10.0

13.0

4.2

6.9

8.0

8.0

1.1

3.7

3.8

4.0

0.3

3.0

3.4

3.4

0.4

Capital costs (%)
ROIC (%)
WACC (%)

54

As a result, we plan to achieve ROE of 13%, capital costs of 8%, ROIC of 4%, and
WACC of 3.4% in the fiscal year ending March 2026.

Dividends and Share Buybacks
・Forecasting dividend per share of ¥52 (+¥1 YoY) and ¥30 billion share buyback for capital optimization in FY2022
・To continue stable dividend payments based on dividend payout ratio of 55% and total return ratio of 70%
Total return ratio of approx. 70%

（円）
120

Dividend payout ratio of approx. 55%¥30 billion(planned)

（億円）
300

100
80
60
40
20
0

50

200

¥52
(planned)

Dividend
per shareSharebuyback

51

70
70
F20.3
Y 220.3
020
20.3

F21.3
Y2021
21.3

22.3
FY
2 022.3
22
22.3

F Y23.3
2023
23.3

F Y24.3
2024
24.3

F Y25.3
2025
25.3

F26.3
Y2026
26.3

55

This shows stock share buybacks and dividends. We plan to pay a dividend of ¥52
per share and share buybacks ¥30 billion of our own shares for the fiscal year ending
March 31, 2022.
Thereafter, we will continue to aim for long-term stable dividend increases with atarget payout ratio of 55% and total return ratio of 70%.

Business strategy + Capital policy + Impact

56

Then this shows impacts.

Values that Stakeholders Seek: Profit and Happiness
Customers

investors

Employees

communities

Business
partners

Futuregenerations

ProfitHappiness
57

We will continue to move forward toward co-creation management to realize boththe profits and happiness sought by our stakeholders.

Management with Stakeholders
・Intending to enhance governance structure by inviting stakeholders onto the board of directors,
with external directors accounting for half and women at least one third of all directors

Yasunori NakagamiPeter D. Pedersen

Reiko Kojima

CEO , Mi s a k i Ca pi t a l In c.

R epres en t a t i v e Di rect or, N ex t
L ea ders In i t i a t i v e for
S us t a i n a bi li t y (N EL IS );Ex ecut i v e O ffi cer a n d CWO ,Gen era l Ma n a ger, Wellbei n g
Promot i on Depa rt men t , MA R UIGR O UP

Profes s or, Gra dua t e S ch ool of
L ea ders h i p a n d In n ov a t i on
S h i zen k a n Un i v ers i t y

As a first step, we will evolve our governance system by welcoming stakeholders toour board. We would like to propose the election of Yasunori Nakagami from Misaki
Capital and Peter D. Pedersen, an expert in sustainability, as candidates for new
outside directors, and Reiko Kojima, a company physician and expert in wellbeing, asa candidate for inside director, at the general meeting of shareholders in June.
As a result, the ratio of outside directors on the Board of Directors will be one-half,
and the ratio of female directors will be one-third.

58

Impact

Work together with
future generations
to create the futureWork together tobring happiness toindividuals

Build a co-creation
platform

Priorities

Approach

Help realize a carbon-neutral
society

Reduce societal CO2 emissions through cocreation with customers

Help realize a circular
economyReduce societal waste volume through cocreation with business partners andcustomers

Support self-actualization ofindividuals
Support individuals in
pursuing their interests
Provide venues for co-creation
Facilitate open working styles for
those in and outside the company

Provide financial services based on credit
co-creation
Support entrepreneurs in future
generations
Create new businesses and engage in cocreative investment
Create affinity cards
Utilize stores as venues for co-creation
Utilize cards as tools with which to engage inco-creation
Practice open innovation
Foster an innovative organization
59

At the same time, based on VISION 2050 announced in 2019, we will incorporate
sustainability and wellbeing related goals into our medium-term management plan as our
impacts.
We defined impacts as updating the expression of VISION 2050 to work together with
future generations to create the future, work together to bring happiness to individuals,
build a co-creation platform.
We will break down these 3 objectives into numerical targets for each of the priority
items and approaches.

Main KPIs (Fiscal 2026)
1 million tons or more

CO 2 emission reduction volume

ImpactFinancial
indicators

Help facilitate environment-friendly
lifestyles

1 million people or more

Provide financial services based on
credit co-creation

4.5 million people or more

Support individuals in pursuing theirinterests

3.5 million people or more

( C ust o mers)( C ust o mers)( C ust o mers)

Number of new businesses created( C um ul ativ e t o t a l )20 or more

Number of co-creation projects withmembers of future generations( C um ul ativ e t o t a l )150 or more

EPS ¥200 or higher

ROE 13.0% or higher

ROIC 4.0％ or higher
60

Finally, the major KPIs. We have set 6 impact categories, including more than 1
million tons of CO2 emissions reduction and more than 150 initiatives for cocreation with future generations.
By achieving these goals, we aim to achieve EPS of ¥200 or more, ROE of 13% or
more, and ROIC of 4% or more.
That is all from me. Thank you very much for your attention.

The forward-looking statements contained in this presentation are based on information available atthe 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 avariety of different factors. Please direct any inquiries to the IR Department (Tel: 03-5343-0075)

<Reference> Main KPIs
FY2021

FY2024FY2026－350,000

1 million tons or more

470,000

700,000

1 million people or
more

Provide financial services basedon credit co-creation

2.77 million

3.8 million

4.5 million people or
more

Support individuals in pursuingtheir interests

130,000

1.5 million

3.5 million people or
more

CO2 emissions reduction (vsFY2021)
Help facilitate environmentfriendly lifestyles

Number of new businesses
created0

12

20 or more

Number of co-creation projects
with members of future
generations

37

100

150 or more

EPS

¥10.9

¥140

¥200 or higher

ROE

0.8%

10.0%

13.0% or higher

ROIC

1.4%

3.8%

4.0% or higher

62