May 24, 2016

Medium-Term Management Plan Business Strategy Briefing

＜Retailing Segment＞

Today’s Agenda

1. Transition to SC Business Model

2. Promotion of Omni-Channel

Retailing Strategy

（丸井グループ上席執行役員・丸井取締役社長 佐々木 一）

Transition to SC Business Model

～Co-Creation of Stores～

■Japanese Population (1995 indexed to 100)

Social Trends: Population Trends

4

People

in their 20s

68％

Working-age

population

88％

100

1995 2015

・Population of people in their 20s declining after 1996 peak, declining faster than working-age population

30–64

years old

97％

50

【Peaks】

Working-age

population: 1995

People in their 20s: 1996

Source: Population Estimates, Statistics Bureau, Ministry of Internal Affairs and Communications

Total consumption

Social Trends: Shift from Consumption of Goods to Consumption of Experiences

Clothing

Eating out

Telecommunications services

Newspapers and magazines

Leisure

61％

109％

263％

106％

71％

90％

Source: Family Income and Expenditure Survey, Statistics Bureau, Ministry of Internal Affairs and Communications (two-or-more-person households in which head of household works, “food” excludes “eating out,” “leisure” based on Company data)

Exp

erie

nces

Good

s

・Clothing (apparel) consumption plummeted to 60% of 1995’s level

■Consumption Expenditures (1995 indexed to 100)

100

1995 2015

Food 89％

50

5

Social Trends: Strong Performance of Shopping Centers Able to Cater to Consumption of Experiences

Source: Japan Council of Shopping Centers, Japan Chain Stores Association, and Japan Department Stores Association

Department stores

Chain stores

72％

82％

Shopping centers 136％

1995 2015

・Difficult environment for department stores and chain stores focused on goods

■Sales Amounts by Store Type (1995 indexed to 100)

100

50

6

Difficulties Faced as Prior MARUI Strengths Prove Ineffectual in Changing Operating Environment

Young Fashion Akai Cards × ×

Product sales ¥236.5 billion

Record high ¥525.4 billion

Strengths

Up 2.2 times

FY81 FY92 FY11

Urgent need to transition to new business model

7

2007: Return to the Basics of Creating Products Based on Customer Needs

Young (People in their 20s)

Fashion (Goods) ×

Everyone (All ages)

Lifestyle (Goods and experiences) ×

Corporate philosophy: Continue evolving to better aid our customers

Start of co-creation initiatives for maintaining connection with customers and co-creating customer happiness

8

Co-Creation Store Development and Product Creation

・Expansion of lifestyle category products

・Enlargement of rest areas

・No. 1 in customers per floor area

among all stores (1st fiscal year after opening)

Store Development (October 2007)

Planning meetings held with aggregate total of 150 customers

Product Creation (2010~)

Shoes evolved based on input and desires of more than

80,000 customers

・Comfortable, fashionable, and

reasonably priced

・Expanded size range with 12 sizes

・Massive hit selling 2.5 million pairs

Yurakucho Marui Rakuchin Kirei Pumps

9

Lack of Income Improvement Despite Growth in Customer Base and Numbers

Gross profit

Customer numbers

・Lack of income improvement despite ongoing growth in customer numbers and people over 30 coming to represent 80% of customer base

105%

98%

101%

■Distribution of Customer Base

45％ 80％

100% Up for 8

consecutive years (~FY15)

FY07 FY14

FY07 FY14 FY09

People over 30

■Year-on-Year Increases in Customer Numbers and Gross Profit

10

Introduce lifestyle category tenants

2014: Transition to Fixed-Term Rental Contract Model to Meet Needs and Generate Income

～2006

Young ×

Fashion

Consignment buying

2007～

Everyone ×

Lifestyle

Consignment buying

Met needs ≠ Income Income decrease

2014～

Everyone ×

Lifestyle

Fixed-term rental

Met needs = Income

Consignment buying

Fixed-term rental

Customer needs

Cannot generate

Can generate

Income

Percent commission

Fixed rent

11

Hakata Marui: Next-Generation SC Style Store Using Fixed-Term Rental Contracts

“The wide range of affordable items makes it easy to go every day.” “With an assortment of sundries and food, men and women of all ages can enjoy the store.”

Investment

amount: ¥5.7 billion

ROI: 12％

NOI yield:

More than 4%

Opened on April 21, 2016

12

Co-Creation Store Development

Lifestyle Apparel

Hakata Marui 70％ 30％

Urban Marui stores 40％ 60％

■Planning Meetings with Customers (600 meetings attended by aggregate total of 15,000 people)

“It’s boring if there is nothing but clothes.”

“I would go more often if the store

had sundries and food.”

■Customer Feedback after Opening

・Distribution of Product Categories

Store Development Based on Customer Needs

■Food Dealers

oeuf TAMACO Sandwiches (Sandwiches)

Tetsu Ojisan no Mise (Cheesecakes)

pao crepe MILK (Crepes)

Dashidokoro Hyoshiro (Soup and seasonings)

FAR EAST BAZAAR (Dried fruits and nuts)

■Three Telecommunications Service Providers

13

【Purchases by Age Group】

Hakata Marui

Yurakucho Marui

20s 80s～

Exceptionally popular among all age groups

Performance of Hakata Marui

Customers

30s 40s 50s 60s 70s

Purchases Card Applications

1.1 times higher 2.3 times higher 2.2 times higher

■Performance in 1st Month after Opening (vs. 1st month performance at Yurakucho Marui, per floor area)

Purchase numbers

・Higher customer numbers due to co-creation store development and it benefits in Fintech segment

14

Increased Revenue-Producing Floor Space due to

Higher Asset Efficiency of SC Style

Consignment buying model stores

(No revenues)

Hakata Marui

Sales floor

Sales floor

Revenue-producing floor space: 1.1–1.2 times larger

15

Walkway Storage

Revenues generated from sales floors,

walkways, and storage

Storage divided and rented Storage space lent free-of-charge

(Revenues) (No revenues)

SC Style Store Operation with High Capital Efficiency

Revenues

Costs

Customers

■Hakata Marui vs. Consignment Buying Model Stores

・Increased income thanks to low-cost operation and higher customer numbers drawn to lifestyle-oriented store

Revenues per floor area

Revenue-producing floor space

Personnel expenses (back-office staff)

Depreciation

Purchases (per floor area)

Credit card applications (per floor area)

Unchanged

1.1–1.2 times larger

Down 50%

Down 40%

2.2 times higher

2.3 times higher

Income Consignment buying SC ＜

16

FY2016 FY2017

Deployment of Two Store Brands: Marui and Modi

■Shibuya Marui

Kashiwa VAT Kashiwa Marui

■Shizuoka Marui Purchases

1.7 times higher

(vs. former Marui City Shibuya)

NOI yield 4.4％ (1st year forecast)

Marui Building

Building A Marui Building B Modi

Open in second half of FY2017 (tentative)

Opened on May 20, 2016

■Kashiwa Marui

17

To reopen as Modi in October 2016 (tentative)

Plan for Transition to Fixed-Term Rental Contracts and Income Improvement Forecasts

Fixed-term rental contract

floor space （200,000 ㎡）

Income improvement

amounts (Aggregate)

¥0.9 billion ¥6.0 billion ¥7.0 billion

Ratio of fixed-term rental contracts

(Average) 3％ 13％ 38％ 74％ 94％ 100％

Ratio of fixed-term rental contracts

(Year-end) 7％ 20％ 60％ 90％ 100％

FY15 FY16 FY17 FY18 FY19 FY20 FY21

15,000 ㎡

Increase value through contract renewals

Five-year aggregate benefit: ¥6.0 billion

・Complete transition to SC and fixed-term rental contracts by FY2019

and then increase value through contract renewals to improve income

25,000 ㎡

85,000 ㎡

55,000 ㎡

20,000 ㎡

* Ratio of fixed-term rental contracts = Fixed-term rental contracted floor space ÷ Total floor space capable of being contracted as fixed-term rental * Sections not applicable for fixed-term rental contracts: Sections not applicable for fixed-term rental contracts based on contracts with building owners, directly managed sales floors, event spaces, food sales floors, etc.

Benefits

18

Promotion of Omni-Channel Retailing Strategy

～Business Development Focused on E-Commerce～

Marui Specialty Stores: Business Structure Transformation for Establishing Growth Platforms

Select and concentrate on product categories

and PBs to be pursued for the future

・Abolished three categories in FY2016

NB

Expand sales floors to increase sales

Optimize through selection and concentration

PB Fixed-term

rental for NBs PB

・Target profit margin of 3% based on average market rental fees, promote

business structure transformation through selection and concentration

・Optimize sales floors

【vs. FY2014】 70% in FY2016, 60% in FY2021

20

[Consignment buying] [SC style]

PBs: Growth of Women’s Shoes

・Aggregate sales of 2.5 million pairs since 2010 launch of Rakuchin Kirei Pumps (PB co-created with customers)

Comfortable Fashionable

Reasonably priced

Available in various sizes

■Sales Growth on Women’s

Shoes PB Sales Floors

FY10

× Distribution

IT

Company employees

Co-Created PBs Management

Resources

Up 2.2 times

FY16 Uniqueness

21

PBs: Women’s Pants— Next Promising Category after Shoes

■Hakata Marui (Performance in 1st month after opening)

Women’s Pants Market

Extend size range expansion initiatives from shoes to women’s pants

Customers

Dissatisfied with pants

68％

■2014 Market Scale

Skirts

Pants

¥330.0 billion

¥780.0 billion

Up 24% from 2010

[Size range]

12 sizes

(55 cm–88 cm waists)

[Sales]

4.0 times higher (vs. existing stores)

Size % of total population

% of total sales

Regular 75％ 92％

Small, large 25％ 8％

2.4 times higher

22 Source: Women’s Bottoms Market, Apparel Industry 2015, Yano Research Institute Ltd.

Direct Marketing: Transition from Apparel to Accessories

51％

49％

48％

+10％

-4％

+3％

[YoY]

Apparel

Accessories 52％

■Sales Growth and Distribution

・Sales of shoes and other accessories 1.6 times higher than

three years ago, growing to exceed apparel sales

■Accessory Sales (FY13 indexed to 100)

100

+119％

+63％

+38％

Women’s shoes PBs

Shoes

Bags

Total +59％

Total

Higher sales and income for 1st time in 4 years

FY13 FY16 FY16 FY15

23

Encourage Purchase of Multiple Items

Increase Sales

and Income

Conduct Further

Growth Investments

Increase

Female Customers

Enhance AI-powered

recommendation systems

【1st purchases by new customers】

No. 1 Pumps No. 2 Women’s bags No. 3 Women’s leather accessories

Expand Accessory Lineup

Rate of customers purchasing multiple items that remain

customers in following year: 2–4 times higher than Customers purchasing

only one item

Direct Marketing: Virtuous Cycle Arising on Accessories

・Focus on accessories to encourage increased female customers

to purchase multiple items and thereby grow income

24

Room for Future Growth in E-Commerce Market

■Japanese E-Commerce Market

¥3 trillion

1.0％

Ratio of e-commerce to total retail ¥13 trillion

U.K.

China

U.S.

Source: Ministry of Economy, Trade and Industry for Japanese market data, eMarketer Inc. for BtoC market data and ratios of e-commerce to total retail of overseas markets

・E-commerce market quadrupled in size over short period, but ratios of e-commerce sales to total retail sales in overseas markets still greatly exceed Japanese market

2005 2014

4.4％

11.6％

8.3％

5.8％

Japan

25

Start of e-commerce Referrals from stores

■Direct Marketing Sales

Omni-Channel Retailing Strategy Centered on E-Commerce

・Certain catalogs discontinued in FY2015 to transition to pure e-commerce direct marketing, Marui specialty store and direct marketing organizations integrated in FY2016 to advance omni-channel retailing strategy

Stagnancy

Catalogs

FY02 FY05 FY16

Both catalogs and e-commerce * Start of e-commerce

Transition to pure e-commerce * Integration of organizations

26

Customer E-Commerce Needs

Confirmation of sizes and materials before purchase

No items or sizes out of stock

Response

Pick up products at stores

Integrated inventories of Internet and physical stores

Purchase online → Pick up at stores

Ability to try on

Try-on events based around MARUI’s unique e-commerce operations

Already addressed through omni-channel retailing strategy

Only possible in physical stores

Acceleration of Omni-Channel Retailing Strategy in Response to E-Commerce Needs

27

Rakuchin Kirei Pumps Try-on Events

Hold short-term event stores

・No new investment or fixed costs, low costs, and low risk

Ship product

Company Internet shopping platform

No inventories

No new store investments or hiring

No fixed costs

Sell via tablet

Allow customers to try on

Display only samples

【Scheme】 【Benefits】

Nagoya Central Park

AMU PLAZA KAGOSHIMA

28

Try-on Store Business Model

* Product sales indexed to 100

＝ － ＋ ＋

* Purchases indexed to 100 (aggregate total)

・Model for improving corporate value by

maximizing earnings without assets

■Customers

■Income Structure

380

Total income

100

Product sales

310

Card revenues

230

Internet revenues

260

Expenses

100

Purchases

＝ ＋ ＋ 225 75

Card applications

50

Internet service registrations

Medium-to-long-term earnings

29

Nationwide Deployment of Try-on Stores

・Deploy nationwide centered on collaboration card facilities

FY2016 FY2017

1. Deploy at collaboration card facilities

2. Transition from try-on store to full-fledged store

3. Extend initiative to other PBs and NBs

30

Chubu

region

Tokai

region

Chugoku

region

Kyushu

region

MALera GIFU

Nagoya Central Park

Kamiyacho Shareo

Nishitetsu-Fukuoka

(Tenjin) Station

Metro area

Hokuriku

Kansai

Kyushu

【Try-on Store Annual Plan: 50 Events】

unimo Chiharadai

KORINBO TOKYU SQUARE

KUZUHA MALL

AMU PLAZA KAGOSHIMA

Omni-Channel Retailing: Income Improvement Forecasts

Specialty stores

PBs

E-commerce

Income improvement

¥1.0 billion

Total income improvement

More than

¥4.0 billion More than

¥3.0 billion

in five years

31 FY21 FY16

・Expand business scope and target ongoing income growth

Retailing: Factors Affecting Operating Income

Income Improvements

from transition to fixed-term

rental contracts

Non-fixed rental

sections, etc.

Operating income

More than

¥18.0 billion

Omni-channel retailing

Facility management

and distribution

¥7.9 billion

-2.5

+6.0

+3.0

+1.0

+2.7

Former Retailing and Store Operation

Former Retailing-Related

Services

FY21 FY16

32

■Operating Income and ROIC Forecasts

■Balance Sheet Forecasts

More than 5.3%

FY21 FY16

･Improve asset efficiency to achieve ROIC of more than 5.3% by FY2021

Total Assets

¥300.0 billion

Liabilities

¥60.0 billion

Shareholders’

equity

¥240.0 billion

Equity ratio

81％

Total Assets

¥320.0 billion

Liabilities

¥100.0 billion

Shareholders’ equity

¥220.0 billion

Equity ratio

Approx. 70%

Retailing: Balance Sheet and ROIC Forecasts

¥10.6 billion

More than

¥18.0 billion

3.5%

FY21 FY16

33

＜Fintech＞

Medium-Term Management Plan Business Strategy Briefing

May 24, 2016

Review of Credit Card Services Development

Today’s Agenda

1

New Medium-Term Management Plan

2

Review of Credit Card Services

Development

0

100

200

300

400

500

600

700

Credit Card Services Transformation 1: Shift from Retailing Support to Cash Advances

■Consolidated Operating Income (Billions of yen)

FY82 FY07 FY91

1980s: Cards for supporting retailing with credit focused on the young and fashion

37

1990s: Cards for cash advances emphasizing consumer loan revenues

70

60

50

40

30

20

10

40

50

60

70

80

90

100

110

120

98 99 00 01 02 03 04 05

-1000

-500

0

500

1000

1500

2000

2500

3000

Credit Card Services Transformation 2: Cash Advances

■Cash Advance Users and Outstanding Loans (Thousands of people)

Outstanding Loans

・Outstanding loans increase despite decrease in user numbers, loans per customers reach ¥320,000 (increase of ¥200,000) in seven years

Users

38

FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06

・Card withdrawals exceed new applications, decreasing to 3.9 million

4.0 million Cardholders

1,200

1,100

1,000

900

800

700

600

500

400

(Billions of yen)

300

250

200

150

100

50

50

10

4.2 million

0

300

600

Credit Card Services Transformation 3: Money Lending Business Act Revision ・Sharp decline in cash advance revenues, previous supporter of business earnings, following revision of Money Lending Business Act

FY16 FY97 FY08

-¥25.5 billion

■Cash Advance Revenues (Billions of yen)

Money Lending Business Act revision

(2006)

39

・Massive change in earnings structures, alliances, and businesses of credit card companies

・Withdrawals and reorganizations in consumer finance industry

■Impact on Credit Card Industry

60

30

Credit Card Services Innovation 1: Launch of EPOS Card

・Visa license acquired in 2005, began issuing EPOS cards in 2006

・Only issued and valid at Marui stores (In-house credit card)

・Annual fees

・Cash advances

Akai Card

・Issued and valid everywhere

(Multipurpose card)

・No annual fees

・Card shopping

EPOS Card

40

0

1000

2000

3000

-3000

-2000

-1000

0

1000

2000

3000

0

100

200

300

400

500

600

Credit Card Services Innovation 2: Business Model Transformation

FY16 FY12

Consumer loans outstanding

Installment sales accounts

receivable

41

■Installment Sales Accounts Receivable and Consumer Loans Outstanding

FY16 FY07

エポスＮｅｔ

年会費無料化

On-the-spot, in-store issuance of IC chip-equipped Visa cards

Internet services (EPOS Net)

Gold cards

Maruko and Maruo Week

Design cards

Collaboration cards

Platinum cards

Tablets

■Business Evolution

・Transition from cash advance to card shopping, transformation toward business model emphasizing active users

Credit card users

■Credit Card Users

FY06

3.9 million

(Thousands of people)

FY02

300

200

100

(Billions of yen)

3,000

2,000

1,000

Credit Card Services Innovation 3: Pursuit of Further Growth

・Began issuing collaboration cards in 2008, started nationwide expansion in 2014

■Collaboration Cardholders

42

09.3. 10.3 11.3 12.3 13.3 14.3 15.3 16.3

310,000 people

210,000 people

130,000

people

Company partners

Facility partners

2 partners

2,000 people

7 partners

11 partners

13 partners

7 partners

3 partners

14 partners

20 partners

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Strengths Supporting Credit Card Services Growth

【１】Operation by employees with retailing experience

【２】Advanced credit card issuing system

【３】Unique credit expertise and customer assets

【４】Coordination with Group businesses

World’s first on-the-spot, in-store issuance of IC chip-equipped cards, industry’s fastest application system

Cardholder organizations with high ratios of youths, Gold cards with no annual fees

Highly efficient business operation through integration with retailing and in-house system development by Group companies

Assistance for partners and support for facility operation from retailing perspective

43

New Medium-Term Management Plan

45

・Infrastructure development leading up to 2020 to drive industry growth, market scale expected to expand to ¥70–¥80 trillion ・EPOS Card transaction volume growth exceeding industry growth, further growth to be pursued going forward

¥38 trillion

¥70－¥80 trillion

Card Shopping Transaction Trends and Future Credit Card Market

Industry

EPOS Card

＜Credit Transaction Volume and Growth Rates＞

¥50 trillion

FY12 FY16 FY21

Source: Consumer Credit Statistics from Japan (FY11–FY15), Japan Consumer Credit Association

Credit transaction

volume (Industry)

Comparison with Competitors

[Cardholders] [Card Transactions]

[Operating Income]

[Operating Income per Active Card]

6.1 million

25.6 million

25.9 million

¥1,310.0 billion

¥4,530.0 billion

¥4,470.0 billion

¥22.0 billion

¥7.0 billion

¥37.0 billion

¥19,600 ¥13,900

¥5,700 ¥400 ¥2,300

¥10,100 ¥7,800

EPOS Card

Company A

Company B

Revenue Expenses

Income

* Figures from FY2016, segment based * Total for card shopping and cash advance transactions

¥13,700 ¥13,300

46

・Only one-fourth as many cardholders as other companies but incredibly high revenues per active card

EPOS Card

Company A

Company B

EPOS Card

Company A

Company B

EPOS Card Company A Company B

1. Expand business scope to continually grow credit card operations

Fintech Growth Strategies

3. Increase service revenues by leveraging customer assets and expertise

2. Promote highly unique businesses through collaboration with

other Group companies

Increase operating income and

improve capital efficiency

47

Expand cardholder numbers × Improve usage ratio and amounts

＋

48

Rural

Internet, digital content

Stores, products

Previous

Urban

Going forward

Expansion of Business Scope

Internet service applications Collaboration with content creators

Development of collaboration

facilities

49

Credit Card Operations 1: Facility Development, Merging Personnel with Retailing Experience and IT

■Characteristics of EPOS Card

Card application centers and dedicated staff

On-the-spot, in-store issuance of IC chip-equipped Visa cards

Benefits available to all cardholders and referral model sending customers to partners

Tenant relations and other support from retailing perspective

×

×

×

■New Collaboration Partner from First Half of 2016

・Chitose Outlet Mall Rera (partner from April 2016)

Commence collaboration with five to six new facilities each year

・New offices scheduled for establishment in Hokkaido and Nagoya areas

■Expand Office Network

Sapporo

Nagoya

Office

New office

Aim to secure more than 30 facility partners by FY2021

50 50

Credit Card Operations 2: Unique Internet Application, In-Store Pick-up Scheme

FY14 FY15 FY16 vs. FY14

Total 17,000 33,000 56,000 +228%

Outside business

area 4,000 7,000 14,000 +255%

Inside business

area 13,000 26,000 42,000 +220%

＜Number of New Cardholders Applying Online＞

・Deploy expertise to realize card pick-ups at partner facilities and other innovations outside of Marui store business area going forward

Target swift achievement of more than 100,000

new cardholders annually * Same level as six Kansai region prefectures

■Internet Applications

33,000

17,000

Up 3.3

times

Launched in May 2014

FY12 FY13 FY14 FY15 FY16

Same day

Apply online, pick up at store

56,000

51

Credit Card Operations 3: Collaboration with Video Game Content Creators

■Video Game Company Collaboration Partners

・IDEA FACTORY Co., Ltd. (Partner from July 2014)

・CAPCOM CO., LTD. (Partner from September 2015)

・KOEI TECMO GAMES CO., LTD. (Partner from March 2016)

Video game

company X

Marui stores

(Average)

Card usage ratio

○ 95％

Ratio of women ◎ 72％

Ratio of cardholders under 30

◎ 56％

■Cardholder Base Characteristics

* Comparisons to Marui stores (average): Higher ◎ Approx. same ○

■Events Held Across Japan

4,100 applications

* Including events at Marui stores

41 events held in 2015

52

Highly Original Businesses 1: Coordination with Group Businesses

EPOS Card Applicants at AMU PLAZA OITA

30 Card

applicants per day

20 Prior to opening specialty store (October 2015)

After opening specialty store (November 2015–

March 2016)

Synergies AMU PLAZA OITA

EPOS card application center

Marui Shoes store

Marui Shoes store EPOS card application center

・Productivity: 4 times higher

■New applications same as at medium-sized Marui store

(Per employee card issuances at AMU PLAZA OITA / Per employee card issuances at Marui stores)

■Highly efficient cardholder acquisition without substantial assets

* Investment of ¥6–¥8 billion necessary to build store capable of acquiring same number of cardholders

・Investment at AMU PLAZA OITA: ¥30 million

Support community through MARUI GROUP’s integrated operations

E.g., content-related events, try-on stores, facility management, and distribution operations

Facilities (Marui, Collaboration

partners)

Shopping districts

Local companies

Universities, theme parks, sports teams,

etc.

Highly Original Businesses 2: Evolving Customer Referral Model

Shared cardholders

＜Going forward＞ ＜Previous＞

Collaboration partner

Refer customers

Recruit cardholders

Shared points

Shared benefits

■Initiative Example: Event Held Together with the Community

OSOMATSU ICHI at BonBelta Tachibana (Miyazaki)

・10,000 visitors from across Japan

・Economic benefits related to dining and lodging realized through collaboration with neighboring shopping district

・Contribution to partner facility sales

・Card applications 20 times higher than usual

53

54

Expansion of Service Revenues: Rent Guarantee and Insurance Operations Utilizing Expertise

・Increase earnings through coordination with credit cards

FY16 FY17.3 FY19 FY21

… …

¥2.3 billion

Rent guarantees

¥0.7 billion

Up 3 times

Rent guarantee earnings

Card earnings

+

Rent guarantees Cards

Cards

＜Operating income＞

■Rent Guarantees ■Insurance

・Establish new growth track through co-creation with customers and business partners

Previous

Going forward

Internet sales

Face-to-face sales

PB NB

… …

¥1.2 billion

Insurance

¥0.6 billion

Up 2 times

FY16 FY17 FY19 FY21

＜Operating Income＞

・Expand revenues from services with low financing burdens and high capital efficiency

55

IT Utilization: Sophisticated Credit Card Issuing System and Ongoing Operation Streamlining

Operating income

Inspection / collection expenses

Transactions

(Changes vs. figures from FY2014 indexed to 1)

Up 2.4 times

FY14 FY16 FY21

Up 1.4 times

＜System Development＞

More than 100 orders each year (1 order every 3 days)

Ongoing operation streamlining through

integration with systems

1. Application via tablet

2. On-the-spot card issuance

3. Completion of bank account registration

4. Explanation of usage and benefits

Industry-first, high-speed issuance of IC chip-equipped Visa cards

(patented)

Entire process completed

in as little as 20 minutes

Record high of 1,182 cards issued

in a single day * April 23, 2016 (Sunday)

＜Hakata Marui＞

Up 1.6 times Up 1.2

times

Up 2.6 times

Up 1.4 times

Numerical Targets

Fintech: Medium-Term Transaction Volume and Operating Income Targets

・Target total transactions of more than ¥2,500.0 billion and operating income of more than ¥40.0 billion in FY2021

17.3 18.3 19.3 20.3 21.3

¥2,500.0 billion~

8.0 million~

7.0 million~

Total Fintech Transactions

6.4 million

¥2,000.0 billion~

¥1,724.0 billion

Cardholders

¥40.0 billion~

Operating income ¥30.0 billion~

FY17 FY18 FY19 FY20 FY21

¥25.5 billion

FY21 FY16

■Operating Income and ROIC Forecasts

■Balance Sheet Forecasts

More than 4.1% 3.9%

FY21 FY16

・Increase operating receivables to ¥250.0 billion and achieve ROIC of more than 4.1% by FY2021

FinTech: Balance Sheet and ROIC Forecasts

Operating receivables

¥413.9 billion

Liabilities ¥410.0 billion

of which

interest-bearing debt is

¥359.3 billion

¥23.1 billion

More than

¥40.0 billion

Equity ratio 10％

Former Credit Card Services ¥22.2 billion

Former Retailing-

Related Services ¥0.9 billion

Total assets ¥460.0

billion

58

Operating receivables

¥680.0 billion

Liabilities ¥650.0 billion

of which

interest-bearing debt is

¥590.0 billion

Equity ratio Approx. 10％

Total assets ¥720.0

billion