Marui Group Co., Ltd. · TSE:8252
Marui — Marui Group Co Ltd Ord — Q2 2024 Earnings Presentation
74 slides from Marui's earnings presentation, Nov 14, 2023
Slide 1: Overview of Performance in Six Months Ended September 30, 2023 and Outlook
Overview of Performance in Six Months Ended September 30, 2023 and Outlook on Achieving the Medium-term Management Plan
Slide 2: Schedule for today's presentation
OlO Schedule for today’s presentation Maru! GROUP Overview of Performance and Segment Income In Six Months Ended September 30, 2023 @ Hirotsugu Kato, Director, Managing Executive Officer, and CFO e< Future Direction and Outlook on Achieving the 4 Medium-term Management Plan e Hiroshi Aoi, President
Slide 3: Overview of Performance and Segment Income
OlO MARUI GROUP 1 Overview of Performance and Segment Income my in Six Months Ended September 30, 2023 Hirotsugu Kato, Director, Managing Executive Officer, and CFO q
Slide 4: Overview of Performance and Segment Income
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 + Consolidated - Retailing * FinTech * Co-creative investment - Balance sheet and Capital allocation Full-Year Forecast for Fiscal Year Ending March 31, 2024
Slide 5: Consolidated
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 * Consolidated
Slide 6: Highlights in the Six Months Ended September 30, 2023
Highlights in the Six Months Ended September 30, 2023 OlO! @ Total group transactions were up 15% year on year to ¥2.1725 trillion (+¥280.1 billion YOY), posting a new record high. @ Operating income decreased 17% to ¥18.7 billion (down ¥3.7 billion year on year) *Down ¥1.2 billion year on year excl
Slide 7: Main financial indicators
Main financial indicators OlOl Maru! Group i Total Group transaction i Operating income i Net income (Trillion yen) Record High ition yen) (Billion yen) 2.1725 18.7 (Voy +0.2801) 25 (WoY-3.7) 25 ' 22.5 na 22.4 (21.2) 2 20.7 21. cL impactot 1 liquidate accounts 11.5 receivables (YoY-1.9) 15 15 |13.9
Slide 8: Factors Affecting Operating Income
Factors Affecting Operating Income OlOl Down ¥2.5 billion Down ¥1.2 billion excluding the Impacts of liquidated impact of liquidated accounts accounts receivables receivables { FinTech(-2.5billion) Retailing FinTech re ¥22.4 +¥0.8billion -¥L.3billion ‘coporate. ‘iquidated erps Ke . iquidated account
Slide 9: Liquidated accounts receivable - Changing the timing of implementation
Liquidated accounts receivable ~ Changing the timing of implementation~ = O!O! Maru! Group To improve capital efficiency and level out capital gains, the timing of liquidating receivables is dispersed on a quarterly basis B@ FY2023 +¥3.7billion -¥3.3billion (capital gain6.4—Amortization2.7) Capital
Slide 10: Impact of liquidated accounts receivables
Impact of liquidated 80 80 accounts receivables 40 40
Slide 11: Retailing
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 - Retailing 11
Slide 12: Retailing: Breakdown of Changes in Operating Income
Retailing: Breakdown of Changes in Operating Income OlOl Maru! Group Tenant rent revenue increased while expenses decreased due to the voluntary withdrawal of private brand. Profit increased by ¥0.8 billion Cost reduction Related and other ess ¥2.0 + illion ~#U. obillion billion (+¥0.8biltion) EC Ev
Slide 13: Tenant Rent Revenue
Tenant Rent Revenue OlO Maru! Group Tenant rent revenue increased by ¥0.9 billion year on year due to an increase in fixed-term rental floor space and unit price of monthly tsubo rent lf Effect of the increase in tenant rent revenue: Revenue=Fixed-term rental floor space X Monthly tsubo rent +¥0.9bi
Slide 14: Unoccupied Section
Unoccupied Section OlO! Unoccupied area in the second quarter was 8,700 tsubo and is expected to shrink, while tenant rent revenue is expected to expand Wi Changes in unoccupied area (operation average) (tsubo) 10,200 -.... 9,700 tsubo 10,000 tubo ag TAQ suo 8,700" 8,400 tsubo _tsubo, i ' ' ' to 4 '
Slide 15: Progress of Stores that Don't Sell (by Category)
Progress of Stores that Don’t Sell (by Category) OlO Maru! Group As of September 2023, the ratio of non-retail tenants was 58% (up 2% from the end of the previous fiscal year). There was progress in category conversion i Changes in category composition and fixed-term monthly tsubo unit price ¥51 tho
Slide 16: Changes in the Number of Customers Coming to Stores
Changes in the Number of Customers Coming to Stores (Existing Stores)O!O| Maru! Group The number of customers coming to stores was 88 million (109% year on year), and itis expected to be 180 million for the year due to an increase in non-retail tenants Hi Number of customers coming to existing store
Slide 17: Changes in EC Transactions
Changes in EC Transactions O|O! Maru! Group Transactions increased for the seventh consecutive quarter due to further expansion of recruiting Web experts Wl YoY change in EC transactions Use of Web experts 10 116 1 116 114% 100% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2022 FY2023 FY2024 17
Slide 18: Outlook for Retailing Operating Income
Outlook for Retailing Operating Income In 2H, operating profit is expected to increase ¥5.0 billion due to tenant rent revenue growth and reduction of costs and other factors 1H (Actual) 2H (Forecast) Annual (Forecast) OlO! Maru! Group Cost reduction Related business Ec andother and other. ¥2.,0 bil
Slide 19: FinTech
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 * FinTech 19
Slide 20: Fintech: Breakdown of Changes in Operating Income
Fintech: Breakdown of Changes in Operating Income OlO! Maru! Group In the first half, operating income excluding the impact of liquidated accounts receivables was ¥23.5 billion (down ¥1.3 billion) due to a combination of temporary factors Income Expenses -¥7.Qbillion ‘ +¥6.6billion Non- an ane illi
Slide 21: 1. Decline in Ratio of Affiliate Commissions
1. Decline in Ratio of Affiliate Commissions OlO! Maru! Group Although the ratio of revenue from affiliate commissions to transactions declined mainly due to changes in terms for some affiliates, factors that continue to have an impact are limited = Factors behind the decline in the ratio of affilia
Slide 22: 2. Increase in Cash Reward Costs
2. Increase in Cash Reward Costs OlO! Maru! Group Costs increased by ¥1 billion in reaction to the refinement of the reserve calculation method in the first half of the previous fiscal year and due to an increase in prepaid card charges @ Factors behind the increase in cash reward costs (1) Reaction
Slide 23: 3. Other Expenses - Handling Fees, Personnel Costs
3. Other Expenses - Handling Fees, Personnel Costs - OlOl Maru! Group Handling fees increased by ¥0.2 billion due to the foreign exchange impact caused by the weak yen, and personnel costs increased by ¥0.3 billion due to the strategic increase in headcount @ Handling fees (foreign currency-denomina
Slide 24: FinTech Operating Income - YoY Change Excluding Temporary Factors
FinTech Operating Income - YoY Change Excluding Temporary Factors- O!O! Maru! Group There is no change in the profit structure with a profit growing trend. Most of the factors for the decline in profit in the first half were temporary Annual 1H FY2024 2H FY2024 Annual (Consideration of continuing im
Slide 25: Fintech: Breakdown of Changes in Operating Income - Full-year Outlook
Fintech: Breakdown of Changes in Operating Income - Full-year Outlook- OlOl Maru! Group Operating income for the year is expected to be ¥43 billion, ¥3 billion lower than the initial plan mainly due to the impact of the decline in revenue from affiliate commissions Income Expenses ‘ +¥14. 7billion -
Slide 26: Co-creative investment
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 * Co-creative investment 26
Slide 27: Co-creative investment
Co-creative investment OlO Maru! Group Co-creative investments totaled ¥27.2 billion as of September 2023; the total for the first half was ¥0.2 billion Hi Co-creative investment (biion yen) Total amount p ¥27. billion 7.1 7.2 0.9 3.3 4.7 A 4.2 0.9 Funds 1.5 6.3 2.9 3.8 1.9 3.8 gaa 2.7 0.4 0.5 1.0 0
Slide 28: Profit Contributions from Co-Creative Investment
Profit Contributions from Co-Creative Investment OlO! Maru! Group Profit contribution in the Six Months Ended September 30 2023, was ¥1.2 billion (YoY difference +¥0.6 billion).Aiming for profit contribution of ¥5.5 billion in the final year of the Medium-Term Management Plan Bi Profit contripution
Slide 29: Capital allocation and Balance sheet
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 * Capital allocation and Balance sheet 29
Slide 30: Balance Sheet
Balance Sheet OlO Maru! Group Total assets increased ¥59.8 billion from the end of the previous fiscal year mainly due to an increase in operating receivables (up ¥32.5 billion from the end of the previous fiscal year) Totalassets ¥1.217tritlion Total assets ¥962.Obillion (+¥59.8billion) Current ass
Slide 31: Share Buybacks
Capital Share Buybacks -- optimization Human capital investment ¥4.7 billion(+¥0.8billion)
Slide 32: Full-Year Forecast for Fiscal Year Ending March 31, 2024
Overview of Performance and Segment Income in Six Months Ended September 30, 2023 Full-Year Forecast for Fiscal Year Ending March 31,2024 32
Slide 33: FinTech transaction card credit transaction
intech Transaction Card credit transaction
Slide 34: Forecast for the Fiscal Year Ending March 31, 2024
Forecast for the Fiscal Year Ending March 31, 2024 OlO! Maru! Group Higher revenue and profit will be maintained although the three KPIs - EPS, ROE, ROIC - are expected to be lower than the initial target FY2023 vs. Initial YoY YoY Forecast change difference EPS (yen) 109.4 -12.0 117 +18.6 ROE (%) 3
Slide 35: Dividend per Share
Dividend per Share O|O! Maru! Group Dividend will be ¥101 (up ¥42) for the fiscal year ending March 2024, unchanged from the initial plan (DOE of about 8%) Stable, long-term dividend increases (Yen) weet’ ” eee eeeneeeiete | veer ' 1 veneer ‘ ‘ rane ' ' 101 ms i | eoccons ' ' H t i 1 4 1 100 ' ' ' '
Slide 36: Impact on the Final Fiscal Year of the Medium-term Management Plan
Impact on the Final Fiscal Year (ending March 2026) of the Medium-term elle) Management Plan Manu GRour Due to factors that will continue to have an impact from this fiscal year onward and the review of investment for the future, an impact of about -¥3 billion is expected in the fiscal year ending M
Slide 37: Future Direction and Outlook on Achieving the Medium-term Management Plan
OlO MARUI GROUP 2 Future Direction and Outlook on Achieving my the Medium-term Management Plan Hiroshi Aoi, President and Representative Director, Representative Executive Officer, CEO 4
Slide 38: Proceeding to the Second Half of the Medium-term Management Plan
Proceeding to the Second Half of the Medium-term Management Plan O!O! Maru! Group Two and a half years have passed since the medium-term management plan was started in April 2021. Growth will continue to accelerate despite a temporary impact this period “@ oe os? pe 38
Slide 39: Future Direction
Future Direction OlOl (1) Review of workforce plan and improving human productivity (2) Cards tailored to each individual's interests as a new growth strategy (3) Review of new business and co-creative investment 39
Slide 40: Future Direction: Review of workforce plan
Future Direction (1) Review of workforce plan and improving human productivity 40
Slide 41: Productivity Improvement in line with Business Restructuring
Productivity Improvement in line with Business Restructuring OlOl Maru! Group Improve productivity per employee by business restructuring of shifting the business driver from retailing to FinTech = Productivity per employee Productivity up 1 ° 5 times (thousand yen) 22 000 b] 20,000 15,000 10,000 »)
Slide 42: Productivity of FinTech
Productivity of FinTech OlO! Maru! Group Productivity per employee in FinTech has increased slightly in response to the expansion of transactions @ FinTech transactions and productivity per employee Transactions 4times (trillion yen ) 4 3 trillion yen 4.0 1.Ltrittion Productivity 1.1 times *°. 29,00
Slide 43: Reallocation of Manpower to FinTech
Reallocation of Manpower to FinTech OlO! Reallocate human resources to the FinTech business as upfront investment in conjunction with the Group’s business restructuring . . Completion of @ Changes in manpower for FinTech business restructuring Every period »2, 700 (2.1times) 2,000 FY2014 FY2015 FY20
Slide 44: Increased Productivity Following the Completion of Manpower Reallocation
Increased Productivity Following the Completion of Manpower Reallocation OlO! Maru! Group Future productivity will significantly improve due to the review of the workforce plan and enhanced operational efficiency by DX following the completion of manpower reallocation = Future direction and cost imp
Slide 45: Future Direction: Cards tailored to individual interests
Future Direction OlOl (2) Cards tailored to each individual's interests as a new growth strategy 45
Slide 46: Rise of the Second Growth Engine
Rise of the Second Growth Engine OlOl Maru! Group Rise in the second growth engine following the gold card which drove growth of FinTech Transaction (trillion) os A “ { Second ' 4: growth Average annual “1 1 engine 4 growth rate yo ' ' +16% 1 i _— Gold Card tot 2 tot tot ' ' t--4 - FY2007 FY2024 fro
Slide 47: Cards Tailored to Each Individual's Interests
Cards Tailored to Each Individual's Interests OlO! Maru! Group | want to support artists who create inspiring art! | want to carry around a memorable movie card! Cards tailored to each | love swords! | want to support e ee ! My favorite individ ual Ss the museum! character! It gives me i nte rests c
Slide 48: Status of Cards Tailored to Each Individual's Interests
Status of Cards Tailored to Each Individual's Interests OlO! Maru! Group Cards tailored to each individual's interests in new membership account for over 40%. LTV is 2 to 7 times higher than that for standard cards § Cards tailored to each individual's interests in new ma LTV cardholders (thousand)
Slide 49: Cards Tailored to Each Individual's Interests
Cards Tailored to Each Individual’s Interests OlO! Maru! Group 60 projects *As of October 2023 cardholders 0 ° T8mittion Largest number of ne cardholders 0.11 mittion Smallest number of cardholders 600 >« As of September 2023
Slide 50: Rapid Expansion of Projects
Rapid Expansion of Projects OlOl| 3 (forecast) print-on-demand Se (age Total of nes 2 60 projects >kAs of October 2023 oes oa we g. er Bes 3 ae Bz ~FY2015 ~FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 50
Slide 51: Group-wide Development Capability
Group-wide Development Capability O|O! Maru! Group Group-wide development of business, including retailing business and investment for the future on top of FinTech = Number of projects tackled together by three parties Co-creative investment Co-creative investment T projects Retail ya segment | segm
Slide 52: Development that Leverages Employees' Interests
Development that Leverages Employees’ Interests OlOl Maru! Group Leveraging the "interests" of employees leads to the "interests" of customers, becoming a driving force for development Employees’ interests Corporate culture 2.0 eFos Srvtol a > de AER [xa interests in [xa Customers’ interests vy 52
Slide 53: Corporate Culture that Encourages Taking On Challenges
Corporate Culture that Encourages Taking On Challenges OlO! Maru! Group With risk of failure becoming smaller than before, the number of employees who take up the challenge of planning cards tailored to each individual's interests expands 5 . . Greater number of employees Print-on-demand Lower risk
Slide 54: Differentiation by the Strength to Recruit New Cardholders
Differentiation by the Strength to Recruit New Cardholders OlO! Other companies also offer anime and character cards, but we differentiate ourselves with the skills to recruit members at store events @ Store events ais TM &©TOHO CO., LTD. Expected number Event-linked cases 1,300 times of customers 1
Slide 55: Synergistic Effect with Eventful Store Development
Synergistic Effect with Eventful Store Development OlO Maru! Group Recruitment ratio at stores is expected to rise to 70%, and online sign-up to also increase due to the effect of social networking by customers who participate in events = New membership of cards tailored to = Number of online sign-u
Slide 56: Cards Tailored to Each Individual's Interests to Become the Main Card
Cards Tailored to Each Individual's Interests to Become the MainCard 9 OlO Maru! Group While the design is well received, the opportunity to use it is limited by the card usage limit = Comments on design for cards tailored to ® Deviation from the needs of customers of cards each individual's interes
Slide 57: Cards Tailored to Each Individual's Interests to Become the Main Card
Cards Tailored to Each Individual's Interests to Become the Main Card = OlO! Maru! Group Change the operation so that cardholders can increase the card usage limit without changing the design ® Increasing the limit of standard cards @ Increasing the limit of cards tailored to each individual's inter
Slide 58: Profit Increasing Effects of New Growth Strategies
Profit Increasing Effects of New Growth Strategies Expected profit increase by the final year of the medium-term management plan ¥2.0 to 3.0 billion 58
Slide 59: Review of new business and co-creative investment
Future Direction OlOl Maru! Group (3) Review of new business and co-creative investment 59
Slide 60: Review of New Business
Review of New Business OlO! Profit contribution in the final year of the medium-term management plan is adjusted to ¥1 billion in order to revise the Company’s business development policy to leverage its strengths and resources Previously From now on Business development devel ' New business: 0 > 1
Slide 61: Change of Policy on Co-creative Investment
Change of Policy on Co-creative Investment OlO Maru! Group Impairment in the final year of the medium-term management plan is expected to be -¥1 billion due to the review of investment criteria Previously From now on L . Emphasis on ong-term earnings collaboration Purpose Profit contribution to exis
Slide 62: Financial Impact in the Final Fiscal Year of the Medium-term Management Plan
Financial Impact in the Final Fiscal Year of the Medium-term Management Plan OlO Maru! Group Expecting to achieve targets for the final fiscal year of the medium-term management plan due to improvement in operating income of ¥3 to 4 billion plus ¥1 billion in extraordinary gains and losses Operating
Slide 63: Forward-looking statements
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
Slide 64: Appendix
Appendix
Slide 65: Outlook for Retailing and Related Business and Other
Outlook for Retailing and Related Business and Other OlO! Maru! Group Struggled in the first half as operating income decreased ¥0.3 billion due to the impact of termination of property contract. Expecting an increase of ¥0.2 billion in the second half due to an increase in orders related to commerc
Slide 66: Card Credit Transactions (By Quarter)
Card Credit Transactions (By Quarter) OlOl Maru! Group Transactions in the second quarter reached ¥1170.0 billion (116% year on year), a double-digit increase for the tenth consecutive quarter @ Card Credit Transactions : YoY 3 (%) 116% (billion yen) 2 : 114 120 1,200 > Record High] 109 ; 1.170tritt
Slide 67: New Cardholders
New Cardholders OlOl Maru! Group Cards tailored to each individual’s interests account for 43% of the total membership, up 7% year on year i New Cardholders trend (Thousand) 390 400 410 350 300 36% 200 100 FY2020 2Q FY20212Q FY2022 2Q FY20232Q FY20242Q 67 Cards tailored to each individual’s interest
Slide 68: Cardholder Numbers
Cardholder Numbers OlOl Maru! Group The number of cardholders reached a record high of 7.43 million (up 220,000 year on year) The share of cards tailored to each individual’s interests and platinum and gold cards rose to 55% Mf Cardholder Numbers (Million) Record High 7.60 8.50~ 5 | 7.06 7.21 7.43 n
Slide 69: Including liquidated accounts receivable
（Including liquidated accounts receivable
Slide 70: Changes in the Balance of Cash Advance
Changes in the Balance of Cash Advance OlOl| Maru! Group The balance of cash advance was ¥137.7 billion, up ¥3.9 billion from the end of the previous fiscal year Mi Changes in the balance of cash advance (including liquidated accounts receivable) (billion yen) 152.9 150.0~ 0 ¥137.7 billion 44.9 ro (
Slide 71: Rent Guarantee
Rent Guarantee OlOl Maru! Group Revenue increased to ¥7.7 billion due to an increase in transactions (YoY 109%) YOY change in transactions and revenue 25.0 ae moc (Billion yen) 133 YOY change in transactions H I 126 , oo! 20 120 16.7 1 ot 116% (116%) ! | co-4 ! H H f ! Hl 1 ! 1 1 1 ! ' 1 1 1 I 1 1.7
Slide 72: Bad debt
Bad debt The ratio of bad debt write-offs remained at the same level as the previous year, at 0.84% with OlO! Maru! Group bad debt write-offs restrained, despite an increase in outstanding receivables Bi Trends of Ration of bad debt write-offs 0.96 Ratio of * bad debt write-offs (Billion yen) 850 10
Slide 73: Interest repayment
Interest repayment OlOl Maru! Group Receipts, a leading indicator, are on a downward trend, but we will continue to monitor trends @ Year on year trends of interest repayment amounts and repayment claims received (%) 120 110 100 (Billion yen) 90 15 30 YOY , Repayment claims received 0.5 Interest rep
Slide 74: END
END
Marui Group Co Ltd Ord — Q2 2024 Earnings Presentation on 6ix