Marui Group Co Ltd Ord

We will now begin the financial briefing of Marui Group Corporation Limited for the fiscal year ended in March 2023. The financial results will be explained for the first 30 minutes and then there will be a Q&A session. Today's presenters, Hirotsugu Kato, Managing Executive Officer, CFO, will give an overview of the financial results for March 2023 and each business segment. Next, Hiroshi Aoi, President and Representative Director, Representative Executive Officer, CFO, will explain the progress of the medium-term management plan and the future outlook. In addition to the above two speakers for the Q&A session, Yoshinori Saito, President and Representative Director, Eposkart Corporation Limited, Masahiro Aono, President and Representative Director, Marui Corporation Limited, and Nahoko Kutsukake, General Manager, Investor Relations Department, will answer your questions. Here is today's agenda. First, CFO Kato will briefly talk about the financial results for March 2023 and each business segment. I'm Kato. I will now give you an overview of the financial results for the fiscal year and the status of each business segment. There are three financial highlights. First, the three main KPIs of EPS, ROE, and LOIC all achieved their targets. Next is operating income. With fintech falling 1.5 billion yen short of plan, consolidated operating income was 38.8 billion yen, 2.2 billion yen less than planned. We are very sorry. I'll mention the factors behind the shortage later. Finally, net income was lower than forecast, mainly due to lower-than-expected extraordinary losses. The plan was achieved with a 21% increase to 21.5 billion yen. Here are the three main KBIs. All indicators recovered to near their pre-COVID-19 levels. ROE exceeded cost of equity, and ROIC was in line with WACC. The main financial indicators, although the group's total transaction volume grew steadily and reached a record high, operating income fell 2.2 billion yen short of the plan at 38.8 billion yen. We couldn't recover to the pre-COVID-19 level. Net income increased 3.7 billion yen to 21.5 billion yen, achieving the plan partly due to an increase in extraordinary losses. revenue and operating income by segment. Retail sales declined due to the impact of the downsizing of directly managed specialty stores, but operating income was 3.6 billion yen, almost as planned. But while sales revenue in fintech expanded almost a span to 150.6 billion yen, operating income increased only slightly by 1.3 billion yen, short of supply by 1.5 billion yen. The breakdown of changes in operating income. Excluding special factors, the real increase in operating income for this fiscal year was up 10% or 3.4 billion yen, up by 2.7 billion yen in retail and 1.6 billion yen in fintech. Corporate eliminations diluted the income by 0.9 billion yen, mainly due to an increase in human capital investment. Recurring revenue has expanded in conjunction with key measures since the previous medium-term management plan. Contracted deferred revenue remained firm despite COVID-19. As a result, gross profit is up 22% from March 2016, and deferred revenue with future cash flow being assured had a significant increase of 80% from March 2016. ESG status. CO2 emissions were reduced by 340,000 tonnes from March 2017, achieving the plan mainly due to the increased use of renewable energy. In addition, the company has been selected as a component of the DJSI World Index for five consecutive years in external evaluations.

The status of each business.

First, the factors behind ups and downs of retail operating income. Excluding special factors, the actual increase was 2.7 billion yen. In addition to an increase in non-operational floor space and lower fixed-term rental contract income than planned, the rising power cost became a drag on the plan, but the issuance of cars tailored to each individual's interest increased. through events greatly exceeded the plan, resulting in a 1.2 billion yen increase in card insurance fees or internal transactions with EPOS card, and a 0.1 billion yen increase in overall retail sales from the plan. Customer traffic, an important indicator, increased 1.1 times from the previous year to 170 million. We will continue to expand non-retail tenants by an average of 10% per year. Our plan is to exceed the pre-COVID-19 level at 210 million in March 2026. The progress of stores that don't sell, which is the key to increasing customer traffic. The floor area of non-retail tenants increased 6% from the previous year to 56%, showing steady progress in category conversion. By the end of March 2026, we will increase the percentage to 70%.