Marui : Consolidated Financial Results For the Fiscal Year Ended March 31, 2025 (Under Japanese GAAP)

About this update from Marui Group Co., Ltd.

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. May 13, 2025 Consolidated Financial Results For the Fiscal Year Ended March 31, 2025 (Under Japanese GAAP) Company name: MARUI GROUP CO.,LTD. Stock exchange listing: Tokyo Stock Exchange Code number: 8252 URL: https://www.0101maruigroup.co.jp/en/ Representative: Hiroshi Aoi President and Representative Director Contact: Masakazu Iizuka General Manager, Financial Department Phone: +81-3-3384-0101 Scheduled date of ordinary general shareholders' meeting: June 25, 2025 Scheduled date of commencing dividend payments : June 26, 2025 Scheduled date of filing annual securities report: : June 23, 2025 Availability of supplementary briefing material on annual financial results: Yes Schedule of annual financial results briefing session: Yes (For institutional investors and analysts) (Amounts of less than one million yen are rounded down.) Consolidated Financial Results for the Fiscal Year Ended March 31, 2025 (April 1, 2024 to March 31, 2025) Consolidated Operating Results (% indicates changes from the previous corresponding period.) Operating revenue Operating profit Ordinary profit Net income attributable to owners of parent Fiscal year ended March 31, 2025 March 31, 2024 Millions of yen 254,392 235,227 % 8.1 8.0 Millions of yen 44,515 41,025 % 8.5 5.8 Millions of yen 39,916 38,776 % 2.9 6.6 Millions of yen 26,588 24,667 % 7.8 14.9 (Note) Comprehensive income: Fiscal year ended March 31, 2025: ¥ 30,605 million [ 18.9 %] Fiscal year ended March 31, 2024: ¥ 25,736 million [ 15.4 %] Earnings per share Diluted earnings per share Rate of return on equity Ordinary profit to total assets ratio Operating profit to revenue ratio Fiscal year ended March 31, 2025 Yen 143.24 Yen — % 10.6 % 3.9 % 17.5 March 31, 2024 130.70 — 9.9 3.9 17.4 Consolidated Financial Position Total assets Net assets Equity ratio Book value per share As of March 31, 2025 March 31, 2024 Millions of yen 1,053,352 1,003,501 Millions of yen 246,636 253,628 % 23.4 25.2 Yen 1,362.18 1,348.13 (Reference) Equity: As of March 31, 2025: ¥ 246,140 million As of March 31, 2024: ¥ 253,250 million Consolidated Cash Flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of the period Fiscal year ended Millions of yen Millions of yen Millions of yen Millions of yen March 31, 2025 (4,482) (13,665) 2,838 49,250 March 31, 2024 38,003 (18,266) (7,879) 64,560 Dividends Annual dividends per share Total dividend paid Payout ratio (consolidated) Ratio of total amount of dividends to net assets (consolidated) 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Fiscal year ended March 31, 2024 Yen — Yen 50.00 Yen — Yen 51.00 Yen 101.00 Millions of yen 19,124 % 77.3 % 7.6 March 31, 2025 — 53.00 — 53.00 106.00 19,523 74.0 7.8 Fiscal year ending March 31, 2026 (Forecast) — 65.00 — 66.00 131.00 84.5 Dividend on equity ratio (DOE) Fiscal year ended March 31, 2024 7.9% Fiscal year ended March 31, 2025 8.1% Fiscal year ending March 31, 2026 (forecast) 10.0% Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2026 (April 1, 2025 to March 31, 2026) (% indicates changes from the previous corresponding period.) Operating revenue Operating profit Ordinary profit Net income attributable to owners of parent Earnings per share Full year Millions of yen 272,500 % 7.1 Millions of yen 50,000 % 12.3 Millions of yen 42,000 % 5.2 Millions of yen 28,000 % 5.3 Yen 155.00 Forecast of the return on equity ratio (ROE) Fiscal year ending March 31, 2026 (full year): 11.2% * Notes: Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in the scope of consolidation): No New: － Exclusion: － Changes in accounting policies, changes in accounting estimates and retrospective restatement Changes in accounting policies due to the revision of accounting standards:No Changes in accounting policies other than 1) above:No Changes in accounting estimates: No 4)Retrospective restatement:No Total number of issued shares (common shares) Total number of issued shares at the end of period (including treasury shares): As of March 31, 2025: 208,660,417 shares As of March 31, 2024: 208,660,417 shares Number of treasury shares at the end of period: As of March 31, 2025: 27,965,135 shares As of March 31, 2024: 20,806,798 shares Average number of shares outstanding during the period: Fiscal Year ended March 31, 2025: 185,618,703 shares Fiscal Year ended March 31, 2024: 188,736,513 shares (Note ) The number of treasury shares at the end of the period includes shares of the Company held in the BIP Trust and the ESOP Trust. As of March 31, 2025: 482,435 shares As of March 31, 2024: 766,567 shares The shares of the Company held in the BIP Trust and the ESOP Trust are included in the number of treasury shares to be deducted from the total number of issued shares for the calculation of the average number of shares outstanding during the period. Fiscal Year ended March 31, 2025: 428,215 shares Fiscal Year ended March 31, 2024: 766,567 shares Financial Results report are not subject to audit by certified public accountants or an audit corporation. Proper use of earnings forecasts and other special matters The earnings forecasts and other forward-looking statements contained in this document are based on information currently available to the Company and certain assumptions that the Company deems to be reasonable. Actual results may significantly differ due to various factors. Please see “(4) Outlook for the next fiscal year ” on page 7 of the attached document for the assumptions underlying the earnings forecasts and notes on the use of them. Table of Contents - Attachments Overview of Operating Results, etc. for the Period under Review 2 Overview of Operating Results 2 Overview of Financial Position 6 Overview of Cash Flows 6 Outlook for the Next Fiscal Year 7 Shareholder Returns 8 Medium- to Long-term Corporate Management Strategy 10 Sustainability Approach and Initiatives 13 Basic Approach to the Selection of Accounting Standards 30 Consolidated Financial Statements, Etc 31 Consolidated Balance Sheets 31 Consolidated Statements of Income and Comprehensive Income 33 Consolidated Statements of Changes in Equity 35 Consolidated Statements of Cash Flows 36 Notes to Consolidated Financial Statements 37 (Notes on going concern assumption) 37 (Change in presentation method) 37 (Segment information) 38 (Per share information) 39 (Significant Subsequent Events) 40 1. Overview of Operating Results, etc. for the Period under Review Overview of Operating Results (Consolidated business results) EPS was ¥143.2 (+10% or +¥12.5 year on year), exceeding the previous fiscal year's level and reaching a record high due to increased profits. ROE was 10.6% (+0.7% year on year), exceeding cost of equity (6.7%) and exceeding 10% for the first time in 34 years. ROIC was 3.8% (+0.2% year on year), higher than cost of capital (WACC 3.0%). ASBJ Statement No. 29 (Accounting Standard for Revenue Recognition), etc. have been applied to the figures shown above Total Group transactions were ¥4,926.9 billion(+10% or +¥439.7 billion year on year), reaching the highest ever, driven by the growth in credit card transaction volume in the FinTech business. Operating revenue was ¥254.4 billion (+8% year on year), operating profit was ¥44.5 billion (+9% year on year), ordinary profit was ¥39.9 billion (+3% year on year), and net income was ¥26.6 billion (+8% year on year), marking the fourth consecutive quarter of increases in sales and profit. In “1. Overview of Operating Results,” amounts expressed in billions of yen have been rounded off to the first decimal place. * ASBJ Statement No. 29 (Accounting Standard for Revenue Recognition), etc. have been applied to the figures shown above Breakdown of changes in operating profit Operating profit decreased by 0.1 billion yen due to a 0.6 billion yen increase in gain on transfer of receivables (8 billion yen) from liquidated accounts receivables compared to the previous year and a 0.7 billion yen increase in amortisation and expenses (8 billion yen). Excluding the impact of the above liquidated accounts receivables, operating profit increased by 3.6 billion yen (retailing +1.6 billion yen, FinTech +1.8 billion yen). Breakdown of changes in operating profit (Business results by segment) In the Retailing segment, operating profit was ¥8.6 billion (+24% year on year), a year-on-year increase of ¥1.6 billion, and ROIC was 3.1% (+0.5% year on year). In the FinTech segment, operating profit was ¥44.1 billion (+4% year on year), a year-on-year increase of ¥1.7 billion, and ROIC was 4.8% (-0.1% year on year). Operating revenue and operating profit by segment ASBJ Statement No. 29 (Accounting Standard for Revenue Recognition), etc. have been applied to the figures shown above In Marui and Modi stores, aiming to create value that only real stores can offer, we introduced experience-oriented stores, schools, restaurants, and services that do not aim to "sell," and the area occupied by Non-retail tenants accounted for 65% of the total (+4% year on year). Category conversions have made steady progress. The introduction of new tenants resulted in a decrease in unoccupied section. Furthermore, operating profit increased for the fourth consecutive fiscal year due to the progress of value-up of facilities. Change in composition of tenants in non-product sales category We have been putting efforts into creating “eventful stores” so that customers can always enjoy themselves whenever they visit our stores. Among such efforts, Marui’s store opening support service “OMEMIE,” which started in 2022, allows businesses to complete online the whole process from searching for spaces to set up stores at nationwide Marui and Modi stores to signing contracts. The service is widely used by businesses such as direct-to-consumer (D2C) brands and sole proprietors, and has been successful in bringing in new tenants who have never opened stores at Marui before. As a result, the variety of events has expanded, including trial sessions and workshops for services provided by new tenants. The strategic "Maximization of household share" led to growth in rent payments, e-commerce use, and regular payments for utility bills, etc. As a result, credit card transaction volume for the fourth quarter was ¥1.1517 trillion (+10% year on year) and the cumulative total was ¥4.5305 trillion (+10% year on year), each a record high. Changes in card credit transaction volume Transaction volume of installment and revolving payments increased to ¥432.1 billion (+10% year on year), and balance of installment and revolving payment including liquidated receivables reached ¥469.3 billion (+8% year on year). The number of new EPOS cardholders reached 820 thousand (+10 thousand cardholders year on year). The number of cardholders as of the end of period reached a record high of 7,900 thousand (+310 thousand cardholders year on year). In addition to our Gold cards, which have been a driver of our business growth to date, we are also enhancing our measures with respect to EPOS cards that support “Suki”. EPOS cards that support “Suki” are more likely to be held by young people than regular cards, and have a two to seven times higher LTV (lifetime value). Cards created in collaboration with anime, games, and entertainment content have many passionate fans, and they tend to quickly become recognized through social media and are therefore highly compatible with online membership applications. For these EPOS cards that support “Suki”, proposals have been raised from not only employees in the FinTech segment but also those engaged in retailing and co-creative investments. The number of projects has expanded to 115. At stores, we provided hands-on opportunities such as events that are linked with EPOS cards that support “Suki”. For e-commerce, we developed and sold collaboration goods. As exemplified above, we provide unique experience value through initiatives that only a company with credit cards, stores, and e-commerce can undertake. Through these actions, the number of new holders of EPOS cards that support “Suki” reached 340 thousand, and the number of members at the end of the term was 1.11 million (+210 thousand year on year). We will continue to step up our Group-wide efforts to increase the number of highly loyal members and achieve further expansion in transaction volume and the number of new cardholders. *The word “Suki” can mean love, like, favor, passionate about, crazy about, adore, etc. Changes in new memberships Number of cardholders (Indicators of LTV stability) As a result of the change in our business model, “recurring revenue,” which includes rent revenues from our stores and card commissions, has increased to account for a larger proportion of total sales and profits, altering the Group’s revenue structure. Recurring revenue, which is recurring revenue from contracts with customers and business partners, can be viewed as “contracted future recurring gross profit” for the following fiscal year and beyond, and can be used as an indicator to measure the stability of earnings. These are important elements of the Group’s long-term management that emphasizes lifetime profit (LTV). Recurring revenue (on a gross profit basis) for the period was ¥151.5 billion (+8% year on year), and the ratio of recurring revenue to gross profit was 66.8% (-0.2% year on year). At the end of period, contracted future recurring gross profit was ¥398.4 billion (+5% year on year), and it is expected to generate future earnings approximately 1.8 times the gross profit of the current fiscal year. The calculation of contracted future recurring revenue is based on the remaining contract years for rent revenues, the repayment period for installment and revolving fees and interest on cash advances, the card expiration dates for (recurring) affiliate commissions, and the guarantee period for rent guarantees. LTV management indicators * Gross profit used in calculating the gross profit-based recurring revenue and its composition includes selling, general and administrative expenses paid by business partners on a recurring basis. Overview of Financial Position Operating receivables (accounts receivable - installment and operating loans) amounted to ¥629.8 billion (+¥39.6 billion year on year) as a result of an increase in credit card transaction volume, etc. Total assets were ¥1,053.4 billion (+¥49.9 billion year on year). Interest-bearing debt (excluding lease obligation) amounted to ¥636.5 billion (+¥42.1 billion year on year). As a result of the acquisition of treasury shares and the payment of dividends, shareholders’ equity amounted to ¥246.1 billion (-¥7.1 billion year on year), and the equity ratio was 23.4% (-1.8% year on year). Balance sheet Overview of Cash Flows Cash flow from operating activities was an outflow of 4.5 billion yen (compared to an inflow of 38 billion yen in the previous fiscal year). Core operating cash flow, which is operating cash flow minus changes in Operating receivables, etc., was 49.7 billion yen, an increase of 10.6 billion yen from the previous year, mainly due to an increase in pre-tax income. Net cash used in investing activities amounted to 13.7 billion yen (compared to 18.3 billion yen used in the previous year), mainly due to 13.1 billion yen for the acquisition of Property and equipment as well as intangible assets and 6.8 billion yen for the acquisition of investment securities. Financing cash flow was 2.8 billion yen (7.9 billion yen in the previous year), mainly due to 42.0 billion yen in proceeds from an increase in Interest-bearing debt, 18.5 billion yen for the purchase of treasury shares, and 19.5 billion yen in dividend payments. Cash Flows * The Group uses core operating cash flow, which is Net cash provided by (used in) operating activities minus changes in Accounts receivable – installment and Accounting receivable - operating loans, as an indicator of profitability and soundness. Outlook for the Next Fiscal Year We have formulated a new ‘Management Vision & Strategy Narrative 2031’ with the fiscal year ending March 2031 as the final year. We will strive to further enhance corporate value with targets of a PBR of 3 to 4 times, an EPS growth rate of 9% or more, and a TSR growth rate of 12% or more per annum for the final year. For details, please refer to "(6) Medium- to Long-term Corporate Management Strategy" on page 10. For the fiscal year ending March 31, 2026, we plan EPS of ¥155.0 (+8% year on year, +¥11.8 year on year), ROE of 11.2% (+0.6% year on year), and ROIC of 3.9% (+0.1% year on year). Total group transactions are planned to reach ¥5.3900 trillion (+9% year on year) due to the steady expansion of card credit. We plan revenue of ¥272.5 billion (+7% year on year), operating profit of ¥50.0 billion (+12% year on year), and net income of ¥28.0 billion (+5% year on year), and expect increase in income and profit. Operating profit in the Retailing segment is planned at ¥11.0 billion (+28% year on year). Operating profit in the FinTech segment is planned at ¥47.0 billion (+7% year on year). Consolidated financial results forecast for the fiscal year ending March 31, 2026 Shareholder Returns (Basic policy for the current fiscal year) The basic policy for shareholder returns is to continuously distribute appropriate profits. The Company will endeavor to continuously increase the level of dividends based on the long-term growth in EPS to realize high growth coupled with high returns. We aim to achieve a long-term stable increase in dividends, with a target Dividend on Equity (DOE) ratio of around 8%. The Company will flexibly acquire treasury shares as appropriate, financial position, stock price levels, and other factors, with the aim of improving capital efficiency and shareholder value. Treasury shares acquired through share buybacks will, in principle, be cancelled. Dividend standards and treasury stock acquisition policies are regularly verified and revised as appropriate. (Basic policy for the next fiscal year) For future shareholder returns, please refer to “(6) Medium- to Long-term Corporate Management Strategy 4) Capital Policy and Shareholder Returns” on page 12. (Outlook for the current fiscal year and the next fiscal year) The year-end dividend for the current fiscal year is ¥53 per share, as announced at the beginning of the year. The annual dividend, including the interim dividend of ¥53 per share, is ¥106 per share (+¥5 year on year), marking the 13th consecutive year of dividend increase and the 9th consecutive year of record highs, the consolidated payout ratio was 74.0% (-3.3% year on year). During the current fiscal year, the Company acquired 18.5 billion yen worth of treasury shares, resulting in a Dividend on equity ratio (DOE) of 8.1%. The annual dividend for the next fiscal year is expected to be ¥131 per share (+¥25 year on year), an increase for the 14th consecutive year. The Company has set a limit of ¥20.0 billion for share repurchases for the next fiscal year to allow, as announced today. Dividend on equity ratio (DOE) Consolidated dividend payout ratio Acquisition of treasury stock (Billion yen) dividend per share (yen) interim dividend per share (yen) Year-end dividend per share (yen) FY2022 52 26 26 4.0% 60.6% 30 FY2023 59 29 30 4.6% 53.9% 24 FY2024 101 50 51 7.9% 77.3% 3.4 FY2025 106 53 53 8.1% 74.0% 18.5 FY2026 (Forecast) 131 65 66 10.0% 84.0% undecided Annual Medium- to Long-term Corporate Management Strategy Overview of the Company Since its founding in 1931, the Group has evolved its unique business model merging retailing and financial service, and established its strength and position not found in other companies. In recent years, we have added forward-looking investments consisting of Co-Creative investment and investing in new businesses, aiming to create a business model integrating Retailing, FinTech, and Forward-Looking Investments. Currently, we are shifting our business to one that supports "Suki" through events, goods, services, Co-Creative investment, business development, and people, organisations, and workstyles, with a focus on FinTech, aiming to further expand our corporate value. Basic management policies The Group’s mission is to work together with our stakeholders to help build an inclusive society that offers happiness to all, based on our corporate philosophy of “continue evolving to better aid our customers” and “equate the development of our people with the development of our company.” The Group aims to promote harmony and the expansion of the interests and happiness of all stakeholders, including customers, shareholders, investors, communities and society, and business partners, employees and future generations. In order to achieve this goal, we endeavor to create value that we can share with our stakeholders by taking their perspectives into consideration as we deliberate and take action on all matters. We hope to promote “Co-Creation management” to improve our corporate value as a result of these endeavors. For details of the Group’s Co-Creation management, please refer to the Co-Creation Management Report 2023 and the VISION BOOK 2050. Co-Creation Management Report ( https://www.0101maruigroup.co.jp/en/ir/lib/i-report.html ) VISION BOOK 2050 ( https://www.0101maruigroup.co.jp/en/ir/lib/s-report.html ) Corporate value = Intersection of the interests and happiness of all stakeholders Harmonization and expansion of the intersection = Increase in the corporate value Formulation of Management Vision & Strategy Narrative 2031 The Group has formulated its “Management Vision & Strategy Narrative 2031” rather than a medium-term management plan for the 100th anniversary of its founding in 2031. We will set high goals as our management vision and build a strategy narrative by backcasting from there. We will achieve the creation of social value by linking our vision, impact, and business strategy. Management vision We are transitioning from our traditional business model integrating Retailing, FinTech, and Co-Creation Investments—toward a new model centered on FinTech: a business that supports “Suki.” Through this transformation, we aim to realize our vision of “overcoming the perceived trade-off between impact and profit.” This management vision is grounded in the belief that Japan’s deflationary economy, which has persisted for over 30 years, is now at a turning point. As consumer behavior evolves, we see the potential for a new economy driven by “Suki” as opposed to the cost-conscious consumption, as represented by point rewards of the past, and we will grow by creating this new market. Strategy narrative The impact we aim to achieve through our “business that supports ‘Suki’” and the strategies for its realization are as follows: (Consumption that expands for the benefit of others and society through "Suki") The purpose of our “ business that supports ‘ Suki ’” is to achieve both impact and profit by encouraging “ Suki, ” transforming consumption from being “ for oneself, ” to “ for someone else, ” and ultimately “ for society .” With our EPOS cards that support “ Suki, ” the number of members using our cards that allow users to make donations to those they wish to support through their spending is steadily increasing. We anticipate that more and more consumers will continue to find happiness in making “donations” “for someone else .” By pursue promote a differentiation strategy by responding to new types of consumers. Our goal is to reach 3 million cardholders of EPOS cards that support “ Suki ” by the fiscal year ending March 31,2031, furthermore, to surpass the number of Gold Card cardholders by the fiscal year ending March 31,2041. (Financial empowerment that supports “Suki”) Until now, The Group has supported the self-realization of young people. Going forward, we will support the self-actualization of all individuals through financial empowerment that support “ Suki.” In its FinTech business to date, Marui has issued credit cards through the co-creation of creditability, mainly in metropolitan areas where it has stores. But going forward, we will expand the scope and recruit members nationwide through the rollout of a new independent retailing system regardless of location ” . In addition, to address the expanding diversity of work styles, including self-employed individuals, startups, and freelancers, we will expand the number of membership through initiatives such as the “ Owner Card ” and “ Lancers Card. ” For foreign nationals working in Japan, we will also enhance recruitment through collaborations like the “GTN Card.” (Support strategies) As a new point of contact with customers to replace the independent sales areas and private brands, we will support both impact and profits by developing a new independently operated unit in major cities nationwide that offers events, goods, and cards that support “Suki”, which can be expected to attract customers, recruit members, and increase average customer spend and gross profit margin in a compact space. Furthermore, in our efforts to enhance customer experience through DX, we have newly established a joint venture with Goodpatch Inc. and marui unite Co.,Ltd , a leading UX design company. We have also been actively recruiting specialized talent and building an agile development framework. Going forward, we will promote the development of loyal customers by leveraging the expertise of professional personnel to provide unique experiential value that combines digital UX with real-world experiences through new independently operated units. (Expression of creativity through ‘flow’) At our company, we focus on the concept of “ flow, ” which comprehensively captures the elements that are important for business, such as ability and challenge, creativity and happiness, and have been working to enhance the job satisfaction and organizational vitality of every employee. Going forward, we will increase opportunities for employees to apply their “ Suki ” to their work by organizing contests and other initiatives that support “ Suki ” and encourages creativity. By expanding businesses that leverage intangible assets — such as ideas, knowledge, and know-how, we aim to raise the ratio of intangible assets to over 70% by the fiscal year ending March 31, 2031, thereby enhancing our corporate value. (Business development by social intrapreneurs) In addition to creating innovation with external entrepreneurs, we will establish Business Promotion And Development Office to encourage the activities of “ social intrapreneurs ” (internal entrepreneurs) who can change society while working at the company. We will recruit talent from both inside and outside the company through various employment formats and promote business development. We have established the “ Social Intrapreneur Development Foundation ” to nurture human resources over the medium to long term and will offer courses for university and junior/senior high school students. In the future, we will leverage their knowledge and skills through employment at our company and participation in projects to contribute to the business development of our group. (Exploratory domains) We are working to globalize our “ business that supports ‘ Suki ’ . ” As a first step, we will launch business development initiatives by recruiting talent from around the world under the theme of “ Japan as a 'Suki' in the Eyes of the World.” Risks In response to the rising financial costs driven by interest rate increases, we will undertake initiatives to change fees for installment and revolving payments, and to reduce funding interest rates. We are considering changing the fees for installment and revolving payments during the fiscal year ending March 2026, and expect this to increase revenue. With regard to borrowing rates, we will strive to reduce borrowing rates by shortening the average borrowing period, while also strengthening dialogue with rating agencies with the aim of improving our credit ratings and curbing increases in financial expenses. Capital Policy and Shareholder Returns In the fiscal year ending March 31, 2031, our balance sheet is projected to expand to approximately ¥1.5 trillion. Given that the equity ratio in our Retailing segment is expected to diverge from our optimal level of 35% to around 50%, we plan to implement capital optimization measures totaling ¥30 billion. Through this initiative, we aim to recalibrate our balance sheet and achieve a consolidated equity ratio of 16%. Regarding our shareholder returns policy, considering our target ROE of over 15% for the fiscal year ending March 31, 2031, we will raise our DOE target from 8% to 10%. The plan of capital allocation is to allocate the core operating cash flow of ¥350 billion over the next six years as follows: ¥90 billion for growth investments in existing businesses, ¥60 billion for forward-looking investments such as DX investments and business development, ¥30 billion for the acquisition of treasury shares for capital optimization, and ¥170 billion for shareholder returns. □ Capital allocation (Fiscal year ending March 2026 to fiscal year ending March 2031) KPI For the fiscal year ending March 31, 2031, we aim to achieve high growth and high returns with a PBR of 3 to 4 times, EPS growth of 9% or more, and TSR growth of 12% or more on an annual basis. Sustainability Approach and Initiatives The Group’s idea of sustainability In 2016, the Group took its first steps toward practicing future-oriented sustainability management, an approach that integrates its business with consideration for the environment, the resolution of social issues, and corporate governance initiatives. We have redefined our business approach targeted for “every individual” to that featuring “inclusion” and reorganized our core themes. We believe that these will also contribute to the realization of the United Nations Sustainable Development Goals (“SDGs”). Furthermore, in 2019 we formulated the MARUI GROUP’s 2050 Vision, our long-term vision for 2050, to achieve full-fledged sustainability management, and declared the slogan “Harnessing the power of business to build a world that transcends dichotomies.” In 2021, we defined our targets related to sustainability and well-being as “Impact” based on the 2050 Vision. “Impact” consisted of three co-creation objectives described as “work together with future generations to create the future,” “work together to bring happiness to individuals,” and “create a co-creative ecosystem.” In 2025, we will formulate a new “Management Vision and Strategy Narrative 2031” and redefine our impact in three themes to accomplish an economy driven by “Suki”: “Creating a future of future generations together,” “Creating an economy driven by each individual's ‘Suki',’” and “Creating a society that generates ‘flow’ for workers.” We aim to achieve both the solution of social issues and profits through its business, and some of the key approaches of impacts and profit are defined as main KPIs. Please refer to “(4) Indicators and targets” for specific indicators. Governance We will develop a management structure that is inclusive of stakeholders to promote harmony and the expansion of the interests and happiness of all stakeholders. Stakeholder Management Aiming at co-creation management which realizes the interests and happiness sought by stakeholders together, we will invite stakeholders as board members to evolve the governance structure. Sustainability Management We have been verifying activities as necessary for the promotion of sustainability management, and are confirming our progress on the key performance indicators (KPI) for evaluating sustainability in our businesses. In order to strengthen our sustainability management system, we established Sustainability Advisors and the Sustainability Committee as an advisory body to the Board of Directors in 2019. Committee members, including external experts and members from younger generations, have engaged in deeper dialogue about the future, including issues on Group-wide sustainability strategies and initiatives. The Committee has also actively reported and made recommendations to the Board of Directors. Promotion of Risk Management We established the MARUI GROUP Code of Conduct as the foundation for sustainability management. Under that Code of Conduct, we formulated the MARUI GROUP Human Rights Policy, the MARUI GROUP Occupational Health and Safety Policy, the MARUI GROUP Environmental Policy, etc. In addition, in order to respond to the volatile operating environment while accelerating business structure reforms through digitization and technological innovation, we appointed a Chief Digital Officer (CDO). Moreover, to strengthen measures in response to information security risks, we established the Information Security Committee and appointed a Chief Security Officer (CSO) to serve as the highest-level authority on security responsible for managing and protecting Groupwide information assets. Furthermore, to strengthen risk management in our future financial business, we have established a Financial Risk Committee to promote an effective risk culture throughout the organisation. This includes compliance with laws, regulations, and guidelines, such as measures against money laundering, and responses to fraudulent use. To improve management of high-risk areas in sustainability management, we have established a Compliance Promotion Committee, chaired by the Representative Director, to serve as an overarching function for all committees, and to comprehensively manage risks across the Group. The effectiveness of these policies is verified once a year and all Group employees are familiarized with them through training and other activities. We will review them each year as needed and promote risk management suitable for the times in the future. Cultivation of Future Leaders In April 2017, we launched the Co-Creation Management Academy (CMA) future leader development program. Each year 10 to 20 candidates are selected, and through this program we seek to discover and cultivate future leaders under the guidance of our External Directors. Strategy The Group’s mission is to “contribute to co-creating an inclusive society that offers happiness to everyone” guided by the management philosophy of “Continue evolving to better aid our customers” and “Equate the development of our people with the development of our company.” The Group shall offer “happiness” as not only economic affluence but spiritual affluence through merging finance and retailing and aim to realize a society where all people, not just some people, can become “happy.” In line with the formulation of Vision 2050, our long-term vision for 2050, we have defined the social issues that our group should prioritise as areas of impact. From 2025, we will formulate a new ‘Management Vision and Strategy Narrative 2031’ and promote businesses that support ‘Suki’ through events, goods, services, co-creative investment, business development, and people, organisations, and work styles, all based on co-creation, with a focus on FinTech, toward the realisation of an economy driven by ‘Suki.’ We have set three themes and six impact targets for our group to work on, and by promoting initiatives to realise our vision of ‘overcoming the dichotomy between impact and profit,’ we aim to create an inclusive society where everyone can feel happy. Creating a future for future generations together We will connect a sustainable future that coexists with the earth to future generations by “Help realize a carbon-neutral society” and “Support future generations in creating businesses.” Help realize a carbon-neutral society As part of our efforts to reduce greenhouse gas emissions, our new mid- to long-term greenhouse gas reduction target established in September 2019 was recognized as a "1.5°C target" by the Science Based Targets (SBT) Initiative, an international initiative. Furthermore, we obtained a certification for our SBT Net Zero targets in August 2023. Groupwide targets to reduce greenhouse gas emissions are as follows: By 2030, compared to fiscal year ended March 31, 2017 By 2050, reduce the sum of Scope 1 and 2, and Scope 3 of the entire Group by 90% compared to fiscal year ended March 31, 2017, and achieve net zero by removing carbon from the remaining amount. Achievement for the fiscal year ended March 31, 2024 74.1% reduction from the fiscal year ended March 31, 2017 The greenhouse gas emissions per unit of production (*4) Scope1 (*1) ＋ Scope2 (*2) will decrease by 80% Scope3 (*3) will decrease by 35% Scope1 (8,115 tons) ＋ Scope2 (22,483 tons), total 30,599 tons Scope3 (241,570 tons), 50.6% reduction from the fiscal year ended March 31, 2017 was 6.6 (88.0% compared to the previous year). We became a member of RE100 in July 2018 and will source 100% of the electricity used in our business activities from renewable energy by 2030. The ratio of renewable energy for the fiscal year ended March 31, 2024 was 70.7%. *1) Greenhouse gas emissions from its use of fuel *2) Greenhouse gas emissions from its use of electricity, etc. *3) Greenhouse gas emissions from its value chain *4) Calculated based on the ratio of greenhouse gas emissions (tons) to consolidated operating profit (¥1 million) 2 emissions through co-creation with customers> MARUI GROUP launched the Project for Promoting Shift to Renewable Energy with UPDATER, Inc. (previously Minna-denryoku, Inc). We offer card members a service that allows them to easily sign up for renewable energy, and we work with our customers to reduce CO2 emissions in society. Support future generations in creating businesses Our group has been aiming to create innovation through Co-Creative investment with external entrepreneurs. In addition to this, we will work on business creation by internal entrepreneurs. To that end, we will promote and widely disseminate the concept of ‘social intrapreneurs who can change society while working at a company.’ We will establish a social intrapreneur training foundation to promote medium- to long-term human resource development and offer courses for university and high school students. In the future, we will leverage the knowledge and skills of our graduates by hiring them and having them participate in projects to contribute to our group’s business development. Creating an economy driven by each individual's ‘Suki’ We will accelerate the realisation of a society where individuals can empower themselves through supporting each person's ‘Suki.’ Financial empowerment that supports ‘Suki’ Our group has supported young people in achieving self-fulfillment through installment sales of consumer goods such as furniture and fashion. Going forward, we will support everyone in achieving self-fulfillment through financial services that support “Suki.” The target audience includes people engaged in primary industries, construction, and service industries, which are often found in local areas that account for about 70% of the country, as well as people with diverse work styles, such as self-employed people, start-ups, and freelancers, and many foreigners working in Japan. Many of these people do not have a regular, stable income, such as a monthly salary, but rather an irregular and variable income, and as a result, many are unable to obtain credit cards. Focusing on these people, we will promote support to help them realize the potential of living and working in a way that allows them to pursue their passions. Contributing to society through supporting ‘Suki’ We will continue to expand our lineup of cards that allow users to support causes they care about, including Epos Pet Card that allow donations to animal protection organizations, Heralbony Card that allow donations to artist’s creative activities, YAMAP Epos Card that allow donations to mountain protection organizations, and Minna Denryoku Epos Card that allow donations to renewable energy producers. By turning consumption “for oneself” into consumption “for someone else,” and eventually expanding this to consumption “for society,” we aim to contribute to the cultivation of a culture of contribution in Japan and achieve both impact and profit. Creating a society that generates ‘flow’ for workers We will take the lead in promoting initiatives to enhance the motivation of each employee and organizational vitality. A place for co-creation within and outside the company We will establish a Business Production Promotion Office to attract talented people from around the world and promote their activities. We will recruit social intrapreneurs from both inside and outside the company through various employment forms and promote business development toward an economy driven by ‘Suki.’ Our group focuses on the concept of ‘flow,’ which comprehensively captures the four elements essential to business: ability and challenge, creativity, and happiness. We are promoting initiatives to enhance the job satisfaction of each employee and organisational vitality. Specifically, we aim to increase the People and workstyles that enable opportunities for employees to apply what they love to their work creativity through contests that support ‘Suki’ and other initiatives, and to create an organisation where employees can demonstrate their creativity. By expanding businesses that utilise intangible assets such as ideas, knowledge, and know-how, and increasing the ratio of intangible assets to 70% or more, we aim to enhance our corporate value. Risk management The Group identifies risks and opportunities in order to track and assess sustainability-related issues. The identified risks and opportunities are managed in terms of strategy formulation and individual business operations through a promotion system led by the Sustainability Committee. The content of deliberations by the ESG Committee consisting of officers of Group companies (credit card services, retailing, facility management, distribution, general building management, etc.), is regularly reported and discussed at the Compliance Promotion Board chaired by the Representative Director, or at the Sustainability Committee, an advisory body to the Board of Directors. Reports and advice are provided to the Board of Directors as necessary for specific items. Going forward, strategies and measures will be examined based on a myriad of factors at least once a year. External factors on which information will be shared include trends in society that may impact corporate strategies as well as legal and regulatory revisions. Internal factors examined will include progress in the measures of Group companies and future risks and opportunities. Indicators and targets The Group has set three targets as impact-related KPIs for the fiscal year ending March 31, 2031, based on co-creation: “Work together with future generations to create the future”, “Create of an economy driven by each individual's ‘Suki’”, and “Create a society that generates ‘flow’ for workers”. We are carrying out specific initiatives for achieving these KPIs. To quickly make an impact, each group company and department has made a Medium-Term Management Plan, and we check how things are going once a year at a meeting where they report to management. We're currently thinking about specific goals based on the redefined impact, and we'll share them in the Impact Book 2025, which will be out in June 2025. Climate change should be considered as a climate crisis today. Recognizing climate change as one of its most important management priorities, MARUI GROUP aims to “limit the rise in the global temperature to below 1.5°C above pre-industrial levels,” as presented in the Paris Agreement. The Group has strengthened its governance system to actively engage in creating a carbon-neutral society based on the long-term targets of the Paris Agreement in accordance with the MARUI GROUP Environmental Policy as revised in March 2022. At the same time, the Group has analyzed the potential impact of climate change on business, and is promoting initiatives in capturing opportunities for growth and responding appropriately to relevant risks resulting from climate change. The Group endorsed the recommendations of the TCFD, which was established by the Financial Stability Board, and disclosed information in its annual securities report for the fiscal year ended March 31, 2019, based on these recommendations. We conducted repeated analyses and expanded the disclosure of information concerning opportunities and physical risks due to climate change in our annual report for the fiscal year ended March 31, 2020. As we continue to focus on enhancing our information disclosure in the future, we will benchmark the appropriateness of the Group’s responses to climate change using the TCFD recommendations to promote sustainability management. Governance The Sustainability Committee is an advisory body to the Board of Directors, established for the purpose of examining and discussing the Group’s basic policies and major items related to climate change. In addition, the ESG Committee has been established to improve the level of management of relevant risks, and through the Compliance Promotion Board, chaired by the Representative Director, we manage risks for the entire Group. In formulating business strategies and implementing investment and financing, we will strengthen our governance related to climate change based on this system by comprehensively discussing and making decisions with considerations for the MARUI GROUP Environmental Policy and other major items related to climate change. Strategies (Business risks and opportunities) Recognizing that a 4°C rise in the average global temperature resulting from climate change would have an enormous impact on society, we believe it is important to work to help limit global warming to below 1.5°C above pre-industrial levels. In order to strengthen our ability to respond to scenarios below 2°C (with a target of 1.5°C), we will identify the impact of climate-related risks and opportunities on our business, and proceed to formulate relevant strategies. Our group will promote businesses that support “Suki” through events, goods, services, Co-Creative investment, business development, and people, organizations, and work styles, with a focus on FinTech. Climate change would pose such risks as damages to stores, facilities, etc., from floods caused by typhoons and torrential rains, and an increase in costs due to the introduction of carbon taxes along with tightened regulations. On the other hand, we view the provision of goods and services responding to increased consumer environmental awareness and investing in eco-friendly companies as the Group’s business opportunities. (Analysis and calculation of financial impacts) Financial impacts on businesses are analyzed based on our climate change scenario, etc., and calculated by item as the amount of impact on income anticipated within the period through 2050. As physical risks, even if a rise in temperature is held below 1.5°C, we anticipate that flood damage will abruptly occur due to typhoons, torrential rains, etc. These risks are expected to affect rent revenues, etc., due to suspension of store operations (approx. ¥1.9 billion), cause building damages (approx. ¥3.0 billion) and cost impact (approx. ¥0.05 billion) due to higher credit card default rates in the affected areas. We assessed the transition risks by estimating increases in future energy-related costs, which are expected to be renewable power procurement costs (approx. ¥0.8 billion) and the introduction of carbon taxes (approx. ¥2.2 billion). The relevant opportunities are expected to have an impact on store revenue as a result of proposing lifestyles to highly environmentally conscious consumers (approx. ¥1.9 billion), long-term revenue due to an increase in cardholders (approx. ¥2.6 billion), and returns from investment in environmentally friendly companies (approx. ¥0.9 billion). We project long-term revenue owing to an increase in recurring payments due to cardholders using electrical power from renewable energy, leading to the conversion of regular cardholders to Gold cardholders (approx. ¥2.0 billion), curbing bad debt write-offs in event of disasters through a unique credit system that maintains low bad debt ratio below the industry average (approx. ¥0.02 billion), a reduction of procurement costs resulting from entering the power retailing business (approx. ¥0.3 billion), and exemption from carbon taxes (approx. ¥2.2 billion). We will conduct analysis regularly based on various future trends and continue to review our evaluations and disclose relevant information. (Assumptions) Target period 2020 to 2050 Scope All businesses of MARUI GROUP Calculation requirements Analyses based on climate change scenarios (IPCC, IEA, etc.) Calculation of financial impacts assumed during the period by item Calculation of risks in the amount of impact if an event occurs Calculation of opportunities for lifetime value (LTV), in principle Not considering infrastructure enhancements such as public works and technology advancements, etc. (Risks and opportunities associated with climate change) Changes in society Risks faced by MARUI GROUP Description of risks Financial impacts Physical risks Flood damage due to typhoons, torrential rains, etc. *1 Suspension of store operations Impact on rent revenues, etc., due to business suspension Approx. ¥1.9 billion Building damages due to flooding (recovery of power supply facilities, etc.) Approx. ¥3.0 billion Stop of system centers Groupwide suspension of business activities due to system outage Impacts on bad debt costs Rise in bad debt ratio of credit card in disaster areas Approx. ¥0.05 billion Transition risks Increase in demand for renewable energy Rise in renewable energy prices Increase in energy costs due to renewable energy procurement Approx. ¥0.8 billion (Annual) Tightening of government’s environmental regulations Introduction of carbon taxes Tax increase due to carbon taxes Approx. ¥2.2 billion (Annual) Changes in society MARUI GROUP’s opportunities Description of opportunities Financial impacts Opportunities Enhanced environmental consciousness and change in lifestyles Propose sustainable lifestyles Revenue from bringing in eco-friendly tenants, or other efforts Approx. ¥1.9 billion *3 Increase in sustainability-minded credit cardholders Approx. ¥2.6 billion *4 Returns from investments in eco-friendly companies Approx. ¥0.9 billion Response to demand from general households for renewable energy Revenue from cardholders using electrical power from renewable energy Approx. ¥2.0 billion *5 Flooding due to typhoons, heavy rain, etc. Amount of bad debt avoided due to low bad debt ratio Due to our company's unique credit system, the bad debt ratio is lower than the industry average, and even in the event of a disaster, the final bad debt write-off amount is kept to a minimum. Approx. ¥0.02 billion Diversification of electricity procurement Entry into the power retailing business Reduction in intermediary costs due to direct procurement of electricity Approx. ¥0.3 billion (Annual) Tightening of government’s environmental regulations Introduction of carbon taxes Exemption from carbon taxes from achieving zero greenhouse gas emissions Approx. ¥2.2 billion (Annual) *1. Assuming flooding of a river that will have the most significant effects based on hazard maps (Arakawa River) (three-month effect on two stores in the watershed areas) *2. Assuming no financial impacts as a backup center has been established *3. Increased rent revenues and credit card usage *4. Calculated revenue from credit card admission and usage *5. Estimated revenue from an increase in the number of Gold card holders after making recurring payments, etc. Risk management MARUI GROUP performs scenario analyses to track and assess the impacts of climate change on its business and identify climate change-related risks and opportunities. The identified risks and opportunities are managed in terms of strategy formulation and individual business operations through a promotion system led by the Sustainability Committee. The content of deliberations by the ESG Committee consisting of officers of Group companies (credit card services, retailing, facility management, distribution, general building management, etc.), is regularly reported and discussed at the Compliance Promotion Board chaired by the Representative Director, or at the Sustainability Committee, an advisory body to the Board of Directors. Reports and advice are provided to the Board of Directors as necessary for specific items at least once a year. Going forward, strategies and measures will be examined based on a myriad of factors. External factors on which information will be shared include climate change and other trends that may impact corporate strategies as well as legal and regulatory revisions. Internal factors examined will include progress in the measures of Group companies and future risks and opportunities. Indicators and targets Our Groupwide greenhouse gas emission reduction targets are as follows: an 80% reduction in emissions attributable to Scope 1 and Scope 2 and a 35% reduction attributable to Scope 3 from the level in the fiscal year ended March 31, 2017 by 2030 (a 90% reduction in emissions attributable to total of Scope1 and Scope2, and Scope3 from the level in the fiscal year ended March 31, 2017 by 2050); and they were certified as “targeting 1.5°C” by the SBT initiative in September 2019. The Group has set a target of procuring 100% of the electricity used in its business activities from renewable power sources by 2030 (medium-term target: 70% by 2025) and became a member of RE100 in July 2018. The Group’s idea of human capital management Based on the philosophy that we should “equate the development of our people with the development of our company," the Group has been working to reform the corporate culture since 2005, with the aim of continuously improving corporate value. In order to reform our corporate culture, we have simultaneously promoted measures related to “Corporate Philosophy,” “Culture of Dialogue,” “Workstyle Reforms,” “Promotion of Diversity,” “Culture of Voluntary Participation,” “Intra-Group Companies Profession Changes and Transfers,” “Dual-Axis Evaluation of Performance and Values,” and “Well-being,” etc. For performance data on the Group’s human capital management, please refer to the “Social” category in the ESG Data Book for the fiscal year ended March 31, 2024 ESG Data Book( https://www.0101maruigroup.co.jp/en/ir/lib/databook.html ) Corporate Philosophy The Group’s human capital management is based on the management philosophy that we should “equate the development of our people with the development of our company.” With regard to this philosophy, by setting up a dialogue forum for employees to discuss their reasons for working and what they wish to accomplish at the Company, we reconciled the Company’s purpose with the purposes of individuals. Over a period of more than ten years, more than 4,500 employees participated in this dialogue forum. As a result, the retirement rate temporarily increased due to the retirement of people who could not share the same philosophy, but since then, the retirement rate (excluding those who retired at the mandatory retirement age) has remained at a low level of around 3.5%. In addition, the turnover rate within three years of joining the Company is about 17%, which is far below the national average, showing that the foundation for the “mutually chosen relationship” between the Company and individual employees has been established. Culture of Dialogue Although communication used to be a one-way street, the Group has fostered a “culture of dialogue” through two-way communication. Discussions and meetings are always conducted interactively in accordance with the following seven guidelines: “1. Start with a declaration that opinions can be safely expressed,” “2. Do not set a particular purpose,” “3. Do not seek conclusions,” “4. Listen attentively,” “5. Speak in response to other people’s remarks,” “6. Do not reject other’s opinions,” and “7. Include intervals to allow discussions to develop.” Workstyle Reforms We are aiming not only to create a comfortable work environment, but also to transform our corporate culture from one in which the essence of work is “providing time” to one in which value is placed on “creating value.” As a result of project activities conducted by employees, overtime per person decreased significantly from 11 hours per month in the fiscal year ended March 31, 2008 to approximately 5.5 hours in the fiscal year ended March 31, 2025. Promotion of Diversity Since 2014, we have been promoting organizational reform by advocating for diversity in three aspects: “gender,” “age group,” and “individuals.” With regard to gender diversity, we started a project to promote women’s participation and advancement in the workplace in the fiscal year ended March 31, 2014. In addition, as a result of promoting initiatives based on our own KPI called the “vitality index of female employees,” the rate of male employees taking childcare leave reached 100% for the seventh consecutive year in the fiscal year ended March 31, 2025, and the percentage of female employees who wish to work in high-level positions also improved to 58%. From the fiscal year ended March 31, 2022, we have set new goals of “encouraging the taking of paternity leave” and “reviewing the gender role division between men and women,” and have embarked on more substantive initiatives. Culture of Voluntary Participation For over a decade, we have promoted a culture of voluntary participation by employees so as to encourage the individual initiatives of our employees and form an autonomous organization where innovation is generated. We provided our employees with a wide range of self-driven opportunities, such as official projects and initiatives, and the Medium-Term Management Visionary Committee. During the fiscal year ended March 31, 2025, the percentage of employees who voluntarily participated reached approximately 90%. Intra-Group Companies Profession Changes and Transfers Based on the culture of voluntary participation by employees, we have been promoting full-fledged intra-Group companies profession changes and transfers that span various businesses across the Group since 2013. By the fiscal year ended March 31, 2025, approximately 86% of all Group employees have experienced profession changes. In a survey conducted in 2016, approximately 86% of the respondents said that changes in professions contributed to their growth. We believe that this system develops a capacity for diversity and resilience of each employee. Going forward, we will further promote the secondment of our employees to other companies, particularly the investees of co-creative investment, to develop human resources that are resilient to change. Dual-Axis Evaluation of Performance and Values In the personnel evaluation system, we aim to realize the corporate philosophy of “developing our people” by conducting evaluations not only based on performance, but also by having superiors, colleagues, and subordinates conduct a comprehensive evaluation related to values. Well-being Since 2016, the Group has been working on the well-being of employees with the aim of creating an organization with vitality that enables each and every employee to engage in work enthusiastically and energetically. Led by Director, Senior Executive Officer and CWO (Chief Wellbeing Officer) Ms. Reiko Kojima, we will aim to realize the happiness of each and every person in their organization through the “Resilience Program for Executives” and the “Well-being Promotion Project” in which employees voluntarily participate. Through eight measures, which include unique Company initiatives, we have updated our corporate culture, which serves as our management OS, creating a new OS. As a result of these measures, employee engagement has improved. Comparing the engagement indicators we measure in-house between 2012 and 2024, work “expectation” scores have risen from 46% to 81%, workplace “respect” scores have risen from 28% to 69%, and scores relating to “leveraging their own strengths” have risen from 38% to 58%, all major improvements. Strategy MARUI GROUP’s 2050 Vision, which was formulated in 2019, sets forth a vision of transcending dichotomies between impact and profit. By reforming our corporate culture, we have become able to create innovation in order to achieve this vision. However, these innovations are still but tiny “seedlings.” We must increase the number of these “seedlings” that bear the twin leaves of impact and profit and grow them into mighty trees bearing many fruit to evolve into a company that solves social issues. To overcome the difficult hurdle of balancing the pursuit of profit with the solving of social issues, it is essential that each person brings their full creativity to bear. This is why we are working to create an organization in which people can experience “flow” through their work. “Flow” is a concept advanced by psychologist Mihaly Csikszentmihalyi, in which people’s abilities and the level of challenges they are tackling are well-matched, so they become completely absorbed in their challenges and lose track of time. By experiencing flow, people can leverage their full creative abilities, surmounting difficult obstacles and achieving personal growth. The experience of flow produces a feeling of happiness. Our goal is to create organizations where people can experience flow through their work, thereby achieving our ideals while contributing to the happiness of each and every worker. We will achieve this through two initiatives: “workstyle and organization innovation” and “DX promotion.” (Innovate the workstyles and organizations) In our workstyle and organization innovation, we are promoting the creation of project-based workstyles and organizations. Employees who wanted to realize an impact have reached out of their own accord and gathered together across Group company lines, promoting innovation by working using a project approach. Until now, this workstyle has been an exceptional one. In the future, we will expand the use of this project approach so that it is no longer a rarity, but instead the standard way of doing work. Expansion of official initiatives We will bring the total number of our official initiatives up to 12 an increase of 3 teams from the previous year. The official initiatives seek to achieve both impact and profit and cover a range of themes. Team members who voluntarily came together to tackle these themes are creating innovation through project-based activities that span organization lines, both inside and outside each company. Organizations without section managers Section managers manage people and team, but is not the head of the team, but a supporter of the team. Instead of being at the top, being side by side to the team members, creating a flat organization. Each member is independent and self-driven, encouraging creativity as a team. Early appointment to managerial positions By revising the personnel system, for those who can be expected to contribute to higher corporate value, early promotion will be encouraged as a part of investment in human capital. Minimum age for promotion to manager has been changed from 29 to 26. Furthermore, in April 2025, we partially revised our personnel system to enable promotion to management positions at the earliest age of 25. Preparing a stage where young talents can play an active role will allow for more innovations. (Promotion of DX) In order to bridge the gap between the status quo and the vision, the power of digital is indispensable. We must utilize the leverage and speed of digital technology to rapidly implement a cycle of hypothesis verification. Hiring professionals with Muture In April 2022, we partnered with a leading UX design company, Goodpatch and established Muture, and began hiring professionals that could not be hired under the Group brand. Some of the best talents in the industry have joined us and are contributing to the development of lifestyle apps and OMEMIE. Inviting a CDXO The development of the product was achieved through the efforts of specialized personnel at Muture, but in order to expand this across the entire company and continue to evolve it, it became necessary to change the vertical decision-making process and organizational structure, which made it difficult to collaborate across departments. To promote our agile organization development, in June 2023 we invited Naofumi Tsuchiya from Goodpatch Inc. to serve as our Chief Digital Transformation Officer (CDXO). Mr. Tsuchiya possesses high level knowledge regarding organization development and can apply the perspectives of both a digital specialist and an enterprise manager. Establishment of a tech organization In order to promote and spread agile product development, we established a new company called marui unite in September 2024. As a tech-specialized organization for product development, we will work together with group operating companies to create new experiential value with a sense of urgency, and we will support the transformation of our group through DX. Human capital investment has been redefined to include, in addition to education and training expenses, which were previously classified as investment in human resources, personnel expenses related to new businesses included in research and development expenses as items that will lead to an increase in corporate value over the

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