Marui Group Co., Ltd. · TSE:8252
Marui — Marui Group Co Ltd Ord — FY2022 Earnings Presentation
71 slides from Marui's earnings presentation, May 12, 2022
Slide 1: Financial Results Briefing for Fiscal Year Ended March 31, 2022, and Future Outlook
M A R U I G R O U P C O . , LT D Financial Results Briefing for the F i s c a l Ye a r E n d e d M a r c h 3 1 , 2 0 2 2 , And Future Outlook May 12,2022
Slide 2: Schedule for today's presentation
S c h e d u l e f o r t o d a y ’s p r e s e n ta t i o n Overview of Performance and Segment Income in 1 Fiscal Year Ended March 31, 2022 Hirotsugu Kato, Director, Managing Executive Officer ,CFO Human Capital-Focused Management 2 Hiroshi Aoi, President and Representative Director, Representative E
Slide 3: Overview of Performance and Segment Income in Fiscal Year Ended March 31, 2022
1 Overview of Performance and Segment Income in Fiscal Year Ended March 31, 2022 Hirotsugu Kato, Director, Managing Executive Officer, CFO
Slide 4: Overview of Performance and Segment Income
O ve r v i ew of Pe r fo r ma n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Fu l l -Yea r Fo re cast fo r F i s ca l Yea r E n d i n g M a rc h 3 1 , 2 0 23
Slide 5: Full-Year Forecast for Fiscal Year Ending March 31, 2023
O v e r v i e w o f Pe r fo r m a n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 5
Slide 6: Highlights in Fiscal Year Ended March 31, 2022
Highlights in Fiscal Year Ended March 31, 2022 1. Three main KPIs (EPS, ROE, and ROIC) greatly increased year on year, meeting all targets, but EPS and ROE are at about 70% of the level in fiscal year ended March 31, 2020, while ROIC is at about 90% 2. Total group transactions increased 16% year on
Slide 7: Main KPIs
Main KPIs ■ EPS ■ ROE・Capital costs ■ ROIC・WACC 117.0 85.8 （yen） （％） ROE （％） ROIC 8.8% (VS. target 3.7% 100 +6.2) 8 7.8% 3.5% 3.5% 7.7% 3.3% 6.5% 3 (VS. target Capital WACC +0.1％) costs (VS. target 3.0% 6.9% +0.6%) 50 4 2 1.4% 10.6 0.8% FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 FY2020 FY2021 FY2022
Slide 8: Main financial indicators
Main financial indicators ■ Total Group transactions ■ Operating income ■ Net income （Billion yen） （Billion yen） （Billion yen） 3373.4 25.3 (VS. target -36.6) 40 41.8 36.8 3000 (VS. target+0.3) 2903.7 2912.2 20 17.8 (VS. target +1.3) 20 15.2 10 1000 2.3 FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 FY202
Slide 9: Segment Income (Revenue and Operating Income)
Segment Income (Revenue and Operating Income) ■ Retailing ■ FinTech （％） Record High （％） 6 6 250 4.6 5.0％ 3.4 4 4 （Billion yen） 200 ROIC 200 2.5 2 （Billion yen） 2 0.5 0.7％ 150 150 138.1 136.3 138.2 0 0 101.6 100 100 75.3 77.8 Revenue 50 50 38.2 41.2 20.2 10.0 Operating 1.5 2.0 income 0 0 FY2020 FY202
Slide 10: Factors Affecting Operating Income
Factors Affecting Operating Income Increase in operating income E x t r ao r din ar y Retailing -¥1.4billion excluding extraordinary factors ＋¥17.8 billion f ac t o r s FinTech ＋¥19.2billion ＋¥3.8 billion Impacts of extraordinary loss Eliminations (Fixed cost during Provision for /Corporate ¥36.8 st
Slide 11: Recurring revenue and Contracted future recurring gross profit
Recurring revenue and Contracted future recurring gross profit ■ Recurring revenue and Contracted future recurring gross profit （Billion yen） 1.8years 3000 300 Gross 2000 1.2years profit 200 185.5 Contracted future 337.6 recurring gross profit Retailing 68.8 billon FinTech 268.8 billion 100 1000 199
Slide 12: Overview of Performance and Segment Income
O ve r v i ew of Pe r fo r ma n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 12
Slide 13: Revenue and Operating income (quarterly)
Revenue and Operating income（quarterly） While income level rose from the third quarter of the fiscal year under review, it is still at about one-third of pre-pandemic levels ■ Revenue and Operating income trends （Billion yen） （Billion yen） 21.4 20 13 2.5 Revenue 1.5 0.8 0.7 Operating income 1Q 2Q 3Q
Slide 14: Trend in Number of Customers Coming to Stores
Trend in Number of Customers Coming to Stores (Existing Stores) Number of customers coming to stores was 150 million. Aiming to increase this to 210 million by the fiscal year ending March 31, 2026 by increasing the ratio of non-retail tenants that attract a large number of customers ■ Numbers of cu
Slide 15: Progress with Stores that Don't Sell
Progress with Stores that Don’t Sell Category transformation progressing with 50% of floor area now occupied by non-retail tenants. Aiming to expand this to 70% by fiscal year ending March 31, 2026 ■ Non-retail tenants composition ■ Numbers of events held 5600events 2900 Experience 70% focused 15％ 7
Slide 16: E-Commerce Transactions
E-Commerce Transactions Has declined for three consecutive years after peaking at ¥24.2 billion in fiscal year ended 2019 ■ E-Commerce Transactions (Billion yen) 30.0 24.2 20 18.6 10 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2026 16
Slide 17: E-Commerce Transaction Volume: Year-on-Year Trends (Monthly)
E-Commerce Transaction Volume: Year-on-Year Trends (Monthly) Established new dedicated UI team that includes specialist personnel, transactions on a recovery path ■ E-Commerce Transaction Volume YoY Newly appointed 11 UI personnel (of which 3 are UI specialists) 86％ 86％ 93％ 101％ 120 1Q 2Q 3Q 4Q （％）
Slide 18: Overview of Performance and Segment Income
O ve r v i ew of Pe r fo r ma n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 18
Slide 19: Revenue and Operating Income
Revenue and Operating Income Despite a fall in gains on liquidated accounts receivable, both revenue and operating income reached record highs ■ Revenue and Operating Income （Billion yen） Gain on transfer of 140 138.1 138.2 liquidated accounts 0.9 136.3 receivable 135 5.1 4.4 Provision Other revenue
Slide 20: Card Credit Transaction Volume
Card Credit Transaction Volume Efforts to maximize the share of household finances such as rent payments proved successful as transaction volume reached ¥3.1 trillion. Targeting ¥5.3 trillion for the fiscal year ending , 2026 ■ Card Credit Transaction Volume 5.3 （Trillion yen） YoY Change from 5 Diff
Slide 21: Installment and Revolving Payments
Installment and Revolving Payments Installment payment transactions grew by approx. 600% compared to fiscal year ended March 31, 2016 thanks to measures promoting installment payments. Total transactions for installment and revolving payments have doubled. ■Installment and Revolving Payments transac
Slide 22: New Cardholders (1)
New Cardholders (1) New cardholder signups increased to 610,000. Promoting credit card applications through Internet-related services and rent payments, etc. on the way to reaching one million new cardholder signups. ■ New Cardholders 120 (million) 100 1 1 0.81 80 0.4 0.24 0.61(＋0.08) 60 0.6 0.53 0.
Slide 23: New Cardholders (2)
New Cardholders (2) New applications for “Cards tailored to each individual’s interests” growing steadily despite impacts of pandemic ■ New Cardholders ■ “Cards tailored to each individual's interests” （million） 27％ 1 100 Chiikawa EPOS Card 16％ “Cards tailored to each individual's interests” 0.27 Si
Slide 24: Cardholder Numbers
Cardholder Numbers Number of cardholders as of March 31, 2022 totaled 7.14 million. Weighting of cards with highly active users to be increased to 59%. ■ Cardholder Numbers （million） 8.5 8 1 Cards tailored to each 7.2 7.09 7.14 individual's interests 7 0.3 0.36 0.45 Composition ratio 59％ 2.5 4 Plati
Slide 25: Bad debt
Bad debt Ratio of bad debt write-offs was at a similar level to past years at 1.8%, due to decline in bad debt write-offs and increase in receivables at the end of period ■ Trends of Ratio of bad debt write-offs （％） 2.1 1.9 1.8% 2 Ratio of bad debt ＊ （-0.3） write-offs 500 （Billion yen） 7500 400 750
Slide 26: Interest repayment
Interest repayment Repayment amount and repayment claims received (a leading indicator) trending downward recently. ■ Year-on-year trends of interest repayment amounts and repayment claims received 130 121 123 （%） 115 120 109 108 108 105 110 100 99 30 （Billion yen） 94 100 91 25 88% 90 20 Repayment c
Slide 27: Overview of Performance and Segment Income
O ve r v i ew of Pe r fo r ma n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 27
Slide 28: Co-creative investment
Co-creative investment Cumulative co-creative investment as of March 31, 2022 stood at ¥22.3 billion. Investment during the fiscal year ended March 31, 2022 declined sharply to ¥2.9 billion. ■ Investment in startups and funds (Billion(億円) yen) Total amount 8 80 7.1 7.2 ￥22.3 billion 0.9 3.3 4.2 4 40
Slide 29: Profit Contributions from Co-Creative Investment
Profit Contributions from Co-Creative Investment Profit contribution of ¥1.0 billion through synergies with co-creative investees. Aiming for profit contribution of ¥5.5 billion in fiscal year ending March 31, 2026. ■ Profit contribution 60 （Billion yen） ￥5.5 billion 50 Fintech - Usage of cards at c
Slide 30: Overview of Performance and Segment Income
O ve r v i ew of Pe r fo r ma n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 30
Slide 31: Impacts
Impacts The Company is currently carefully reviewing some targets and measurement methods, but progress is being made with priority initiatives aimed at making positive impacts. Theme Priorities FY2022 Creating a future Realization of a carbon-free society CO2 emissions reduction – 320,000t for futu
Slide 32: Contributing to Societal Decarbonization
Contributing to Societal Decarbonization The Company is making steady progress with initiatives to reduce CO2 emissions. Will expand measures to promote renewable energy use by customers ■ CO2 emissions reduction volume 1,000,000 t or more Promotion of 320,000 t renewable energy use by customers Com
Slide 33: Supporting Self-actualization of Individuals
Supporting Self-actualization of Individuals Expand co-creation with customers and co-creative investees to support self-actualization of individuals Financial inclusion Diversity & inclusion Social bonds HERALBONY EPOS Card “Supportive investment” balancing “Card that helps propel society forward s
Slide 34: Full-Year Forecast for Fiscal Year Ending March 31, 2023
O v e r v i e w o f Pe r fo r m a n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 34
Slide 35: Balance sheet
Balance sheet Total assets came to ¥920.0 billion, up ¥18.8 billion; operating receivables totaled ¥571.7 billion, up ¥27.0 billion Total assets ￥920 billion Total assets ￥901.2 billion (＋￥18.8 billion) Current assets Liabilities Current assets Liabilities Operating Interest- Operating Interest- rec
Slide 36: Capital allocation
Capital allocation Allocated ¥12.1 billion for investing for growth, ¥30.0 billion for share buybacks aimed at capital optimization, and ¥11.0 billion yen for shareholder returns in the form of dividends ■ Capital allocation（FY2022） Existing investments Core operating Investing for ￥8.5 billion grow
Slide 37: Overview of Performance and Segment Income
O ve r v i ew of Pe r fo r ma n ce a n d S eg m e n t I n co m e i n F i s ca l Yea r E n d e d M a rc h 3 1 , 2 0 2 2 ･ Consolidated ･ Retailing ･ FinTech ･ Co-creative investment ･ Impact ･ Balance sheet and cash flow Full-Year Forecast for Fiscal Year Ending March 31, 2023 37
Slide 38: Full-Year Forecast for FY2023
Full-Year Forecast for FY2023 ・Forecasting 11% increase in operating income year on year to ¥41.0billion and 21% increase in net income to ¥21.5 billion F Y2022 F Y2023 YOY YOY change difference EPS (yen) 85.8 109.1 127 +23.3 ROE (％) 6.5 8.4 - +1.9 ROIC (％) 3.3 3.5 - +0.2 Reduction of CO2 32 34 106
Slide 39: Segment Income Forecasts for Fiscal Year Ending March 31, 2023
Segment Income Forecasts for Fiscal Year Ending March 31, 2023 Forecasting 78% year-on-year increase in Retailing segment to ¥3.5 billion and 7% year-on-year increase in FinTech segment to ¥44.0 billion FY2022 FY2023 YOY change YOY difference Billions of yen Billions of yen ％ Billions of yen Retaili
Slide 40: Planned Dividends
Planned Dividends Annual dividend of ¥52 per share is planned for fiscal year ended March 31, 2022. Planning ¥58 per share for fiscal year ending March 31, 2023, making it the 11th consecutive year of dividend increases. ■ Trend of dividend per share 60 58 （yen） 50 51 52 49 40 38 33 22 20 18 19 14 1
Slide 41: Human-Capital-Focused Management
2 Human-Capital-Focused Management H i ro s h i A o i , P re s i d e n t a n d Re p re s e n tat i v e D i re cto r, Re p re s e n tat i v e Exe c u t i v e O f f i ce r, CEO
Slide 42: Corporate Philosophy: Equate the development of our people with our company
Corporate Philosophy : Equate the development of our people with the development of our company Uniting corporate culture with the development of our people to raise corporate value based on our corporate philosophy Corporate value Development of our people Corporate Human capital culture Corporate
Slide 43: Corporate Culture Reforms (Updating Our Operating System)
Corporate Culture Reforms (Updating Our “Operating System”) Update our “operating system” to move away from focus on earnings performance and restore relationships of trust within the Group Application Sustainability Well-being OS Old corporate culture New corporate culture 43
Slide 44: Corporate Culture that We Aspire to
Corporate Culture that We Aspire to Corporate culture that Contrasting corporate culture we aspire to Compulsion Autonomy Obligation Enjoyment Top-down commands Support Core business + social Contribution to solving contribution social issues through core Earnings performance business enhancement Va
Slide 45: MARUI GROUP's Corporate Culture
MARUI GROUP’s Corporate Culture Advance a variety of measures simultaneously on the way to reforming corporate culture 1 Corporate philosophy 2 A culture of Interaction 3 Work style reforms 4 Embracing diversity 5 A culture of voluntary participation 6 Personnel transfers within Group to different j
Slide 46: Corporate Philosophy
1 Corporate Philosophy “Continue evolving to better aid our customers” “Equate the development of our people with the development of our company” 46
Slide 47: Interaction about Corporate Philosophy
Interaction about Corporate Philosophy More than 4,500 employees have taken part in interaction over the course of more than a decade “What are am I actually working for?” “What did I want to accomplish by joining MARUI?” 47
Slide 48: Foundation for Building Relationship as Equals
Foundation for Building Relationship as Equals As a result of adjusting our corporate philosophy, employee turnover increased at one stage, but has since trended down as acceptance grew ■ Employee turnover rate (excludes mandatory retirees) ■ Employee turnover rate (in first three years after joinin
Slide 49: A Culture of Interaction
2 A Culture of Interaction Transform corporate culture so that all meetings involve two-way interaction rather than one- way communication The rules of Interaction 1 Begin with “safe space” declaration 2 Do not set specific purpose 3 Do not demand a conclusion 4 Listen attentively 5 Speak in respons
Slide 50: Work Style Reforms
3 Work Style Reforms Switch to corporate culture that sharply reduces monthly overtime hours per person and that is based on the idea that the creation of value is the essence of work ■ Monthly overtime hours per person ■ Approach to work 12 （hour） 11hours 10 8 Before Now 6 4.5 Providing Time Provid
Slide 51: Embracing Diversity
4 Embracing Diversity Organizational reform has been ongoing since 2014, with focus on diversity in three areas of “gender”, “age groups”, and “individuals.” Promote exploration of diverse work styles and participation by women in Gender decision-making Age Enable participation of all age groups, fr
Slide 52: Promoting Diversity: Gender diversity
Promoting Diversity: Gender diversity Promote participation of women in decision-making and launch more in-depth initiatives ■ Women’s Empowerment Indexes (excerpt) ■ External assessment FY2014 FY2022 FY2026 Nadeshiko Brand Ratio of female leaders 20 32 40 (selected five years running) Ratio of fema
Slide 53: Medium-Term Management Visionary Committee in 2008
5 A culture of voluntary participation : Medium-Term Management Visionary Committee in 2008 53
Slide 54: Medium-Term Management Visionary Committee Today
A culture of voluntary participation : Medium-Term Management Visionary Committee Today ＊Includes images of meetings before the COVID-19 pandemic 54
Slide 55: Medium-Term Management Visionary Committee
A culture of voluntary participation : Medium-Term Management Visionary Committee Applications open once a month, and 300 applicants are selected from 1,000 applicants after an assessment of essays submitted. Application Selection Participation Applicants submit essays anonymously Each essay is asse
Slide 56: A culture of voluntary participation
A culture of voluntary participation To inspire innovation, build an voluntary organization by encouraging each employee to be independent ■ Initiatives facilitating voluntary participation ■ Percentage of employees voluntary participating Interaction on corporate philosophy Official Groupwide proje
Slide 57: Personnel Transfers Within Group to Different Job Categories
6 Personnel Transfers Within Group to Different Job Categories Help individual employees to grow by experiencing work at different Group companies and departments ■ Personnel transfer image ■ Percentage of employees who change job categories Retailing FinTech 77％77 ％ ＊As of March 2022 IT Logistics M
Slide 58: Appraisal Based on Both Performance and Value
7 Appraisal Based on Both Performance and Value Promote corporate philosophy of appraisal based on both performance and value, which means appraisal is not only based on performance, but also on personal growth and development Performance appraisal Result Short-term appraisal: Bonuses Action Skills
Slide 59: Well-Being
8 Well-Being Definition of health in World Health Organization’s charter * “Health is a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity.” * Source: WHO ■ Resilience program for executives ■ Well-being promotion project ■ Selected by METI a
Slide 60: Investment in R&D and Human Resources So Far
Investment: Investment in R&D and Human Resources So Far Invested ¥11.0 billion in total over period covered by previous medium-term plan; increased investment to ¥4.2 billion in FY2022 （billion yen） Total amount ￥11.0billion ￥4.2 billion 4 40 1.0 Investment in human resources 3.4 ・Personnel expense
Slide 61: Redefining Human Capital Investment
Investment: Redefining Human Capital Investment Redefine items in income statement of each fiscal year connected with increasing corporate value in the longer term as “human capital investment” ■ Breakdown of human capital investment in FY2022 ・First year after job STEP 3 category change Additional・
Slide 62: Human Capital Investment as Share of Personnel Expenses
Investment: Human Capital Investment as Share of Personnel Expenses Increase human capital investment that contributes to future earnings to ¥12.0 billion and 35% of personnel expenses 40 35％ （%） 35 Share of personnel 180"00 30 expenses 160"00 22 25 140"00 ￥12.0 billion 20 （billion yen） 120"00 15 10
Slide 63: Evolve into Knowledge-Creation Company
Evolve into Knowledge-Creation Company From in1931 From 2006 From 2019 (Establishment) Labor-intensive Capital-intensive Knowledge-creation Retailing + FinTech + Forward- Business model Retailing-driven FinTech-driven looking investments Assets Fixed Assets Financial assets Intangible assets Tangibl
Slide 64: Challenges on the Way to Evolving into a Knowledge-Creation Company
Challenges on the Way to Evolving into a Knowledge-Creation Company Gap exists between group’s desired direction and nature of current workforce Labor-intensive/capital- Knowledge creation intensive Current human resources Required human resources Operations Gap Production Efficiency Creativity 64
Slide 65: Required Human Resources: Digital Business Creation Personnel
Required Human Resources: “Digital Business Creation Personnel” “Digital Business Creation Personnel” are personnel able to harness the power of digital tools to create new businesses ■Attributes of digital business creator personnel Interested Ability to become absorbed in their work and enjoy it H
Slide 66: Future Initiatives: Expanding Personal Growth Opportunities
Future Initiatives: Expanding Personal Growth Opportunities Expand personal growth opportunities through new businesses, co-creation teams, and Future Leader Development Program ＊ ■ New businesses ■ Co-creation teams ■CMA Deploy new initiatives, including incubation Promote co-creation with startups
Slide 67: Future Initiatives: Digital Transformation Training
Future Initiatives: Digital Transformation Training Identify and train personnel capable of harnessing digital tools to create new businesses with co-creation partners ■ Digital transformation training Initially train directors, then expand program to train new recruits and + existing employees Dire
Slide 68: Future Initiatives: Established Muture
Future Initiatives: Established “Muture” Established “Muture”, a joint venture with leading UX design company Goodpatch Inc., to advance Group’s digital transformation Goodpatch Inc. Muture Corporation Established September 2011 + Representative Naofumi Tsuchiya, CEO/Founder Market TSE Growth （Liste
Slide 69: Governance: Established New HR Strategy Committee
Governance: Established New HR Strategy Committee New committee established as an advisory body, working with Strategy Committee and outside experts to propose HR strategies to board of directors HR Strategy Committee NEW Strategy Committee ・Make recommendations on required ・Tasked with examining hu
Slide 70: Issuance of Shares to Employees
Issuance of Shares to Employees Issue shares to employees to further promote “Management emphasizing Stakeholders” and increase corporate value Performance-linked stock compensation for directors and executives ＋ Issue shares to general employees Promote “Management emphasizing Stakeholders” Conside
Slide 71: Forward-looking statements and IR contact
The forward-looking statements contained in this presentation are based on information available at the 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 a variety
Marui Group Co Ltd Ord — FY2022 Earnings Presentation on 6ix